TOP GLOVE Exports To More Than 195 Countries Worldwide
ASIA NORTH AMERICA
EUROPE
MIDDLE EAST AFRICA MALAYSIA LATIN AMERICA
OCEANIA
NORTH AMERICA 1. 2. 3.
Canada Puerto Rico USA
LATIN AMERICA 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
II
Anguilla Antigua and Barbuda Argentina Aruba Bahamas Barbados Belize Bolivia Brazil British Virgin Island Cayman Island Chile Colombia Costa Rica Dominica Dominican Republic
20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44.
Ecuador El Salvador Grenada Guadeloupe Guatemala Guyana Haiti Honduras Jamaica Martinique Mexico Montserrat Netherland Antilles Nicaragua Panama Paraguay Peru Saint Bathelemy Saint Kitts and Nevis Saint Lucia Saint Martin Saint Vincent and Grenadines Suriname Trinidad & Tobago Turks and Caicos
45. U.S. Virgin Islands 46. Uruguay 47. Venezuela
69. 70. 71. 72. 73. 74.
EUROPE 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68.
Albania Andorra Austria Azerbaijan Belgium Bosnia Herzegovina Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Georgia Germany Greece Hungary Iceland Ireland Italy
Top Glove Corporation Berhad • Annual Report 2014
75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93.
Kosovo Latvia Liechtenstein Lithuania Luxembourg Macedonia, FYR Malta Moldova Monaco Montenegro Netherlands Norway Poland Portugal Romania Russia San Marino Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey United Kingdom
THE WORLD IS OUR MARKET The World’s Largest Rubber Glove Manufacturer
AFRICA 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120.
Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Chad Comoros Republic of the Congo Djibouti Equatorial Guinea Ethiopia Eritrea Gabon Gambia Ghana Guinea Guinea-Bissau Kenya Lesotho Liberia Madagascar Malawi Mali Mauritania
121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138.
Mauritius Morocco Mozambique Namibia Niger Nigeria Rwanda Sao Tome and Principe Senegal Seychelles Sierra Leone South Africa Swaziland Tanzania Togo Tunisia Uganda Zambia
ASIA 144. 145. 146. 147. 148. 149. 150. 151.
Afghanistan Armenia Bangladesh Bhutan Brunei Cambodia China East Timur
152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165. 166. 167. 168. 169. 170. 171. 172. 173. 174. 175. 176.
Hong Kong India Indonesia Japan Kazakhstan Kyrgyzstan Laos Macau Malaysia Maldives Mongolia Nepal New Caledonia Pakistan Palestine Philippines Singapore South Korea Sri Lanka Taiwan Tajikistan Thailand Turkmenistan Uzbekistan Vietnam
180. 181. 182. 183. 184. 185.
Jordan Kuwait Oman Qatar Saudi Arabia UAE
OCEANIA 189. 189. 190. 191. 189. 189. 189. 189. 189. 189. 189. 192. 193. 194. 195.
American Samoa Australia Fiji Guam Kiribati Marshall Island Micronesia Nauru Palau Tanga Vanuatu New Zealand Papua New Guinea Samoa Solomon Islands
MIDDLE EAST 177. Bahrain 178. Egypt 179. Israel
Top Glove Corporation Berhad • Annual Report 2014
1
CORPORATE VISION AND MISSION
Tan Sri Lim Wee Chai Chairman of Top Glove Corporation Berhad
VISION
MISSION
We strive to be the worldʼs leading manufacturer with excellent quality glove products and services that enrich and protect human lives.
To be a world class glove manufacturer providing top quality products with excellent services through continuous improvement and innovation.
CORPORATE VALUES
BUSINESS ETHICS
• • • •
Global customer satisfaction Do it right first time and every time Integrity and total commitment Excellence in quality and competitiveness • Environmental friendly and social responsibilities
• Honesty • Integrity • Transparency
QUALITY POLICY
BUSINESS RULES
• Quality and productivity are our business • Continuous improvement and innovation are our duties • Towards zero defect is our target • Compliance with customersʼ and regulatory requirements is our responsibility
• • • •
2
Do not lose our shareholdersʼ money; Do not lose our health; Do not lose our temper; and Do not lose our customers.
Top Glove Corporation Berhad • Annual Report 2014
CONTENTS Page
Page 1 Export Markets 2 Corporate Vision and Mission
Page
20 Letter to Stakeholders and Management Discussion & Analysis (English, BM & Mandarin)
3 Contents 4 Corporate Structure 5 International Quality Awards & Certifications
6 Corporate Information 7 Board of Directors 8 Directorsʼ Profile 16 Senior Management Team
17 Financial Highlights 18 6 Years Financial Review 19 Enhancing Shareholdersʼ Value
65
Audit Committee Report
70
Directorsʼ Responsibility Statement
71
Financial Statements for the financial year ended 31 August 2014
37 Corporate Responsibility Statement
40 Financial Calendar 41 Top Glove Corporate Song
153 List of Properties
42 Corporate
164 Analysis of
Governance Statement
Shareholdings
60 Other Compliance
167 Notice of the 16th
Information
62 Statement on Risk
172
Management and Internal Control
Annual General Meeting Administrative Details for the 16th Annual General Meeting
175 Form of Proxy
OUR BUSINESS OFFICES GLOBAL PRESENCE
THAILAND
CHINA
GERMANY
INDONESIA
USA
MALAYSIA SINGAPORE
Top Glove Corporation Berhad • Annual Report 2014
3
CORPORATE STRUCTURE 100% FLEXITECH SDN BHD (Malaysia)
100%
TECHNIGLOVE ASIA SDN BHD (Malaysia)
100% MEDI-FLEX PTE LTD (Singapore)
36.84% SONIC CLEAN PTE LTD (Singapore)
97.5% TOP GLOVE EUROPE GMBH (Germany) TOP GLOVE 100% SDN BHD (Malaysia) TOP GLOVE 100% ENGINEERING SDN BHD (Malaysia) GREAT GLOVE 100% SDN BHD (Malaysia)
100% TG MEDICAL (USA) INC.
TOP GLOVE CORPORATION BERHAD ( Listed on Main Market of Bursa Malaysia )
TOP GLOVE FOUNDATION* (Malaysia)
GMP 100% MEDICARE SDN BHD (Malaysia) TOP QUALITY 100% GLOVE SDN BHD (Malaysia)
100%
TG MEDICAL SDN BHD (Malaysia)
TOP CARE 100% SDN BHD (Malaysia)
100% TG MEDICAL (ZHANGJIAGANG) INCORPORATED (China) 100% GREAT GLOVE (XINGHUA) CO LTD (China) 100% BESTSTAR ENTERPRISE LTD (BVI) 100% TOP GLOVE PROPERTIES SDN BHD (Malaysia) 27%
VALUE ADD SDN BHD (Malaysia)
100%
TOP GLOVE INTERNATIONAL SDN BHD (Malaysia)
100% TOP GLOVE TECHNOLOGY (THAILAND) CO LTD (Thailand) 100% TOP GLOVE MEDICAL (THAILAND) CO LTD (Thailand) 100% B TECH INDUSTRY CO LTD (Thailand) 74%
GREAT GLOVE (THAILAND) CO LTD (Thailand)
TOP QUALITY GLOVES 100% (THAILAND) CO LTD (Thailand) 100%
TOP GLOVE AGRO SDN BHD (Malaysia)
100% BEST ADVANCE RESOURCES LIMITED (Labuan)
100%
99.9%
100% GREEN RESOURCES LIMITED (Labuan) 100% EFFICIENT PLANTATIONS CO LTD (Cambodia)
Notes: 1. Top Glove has in total 33 companies within the group. 2. * Top Glove Foundation is a member of Top Glove Group.
4
Top Glove Corporation Berhad • Annual Report 2014
0.1%
GREAT PLANTATIONS CO LTD (Cambodia) PT. TOPGLOVE INDONESIA (Indonesia)
95% PT. AGRO PRATAMA SEJAHTERA (Indonesia)
INTERNATIONAL QUALITY AWARDS AND CERTIFICATIONS
NEW LEVELS OF EXCELLENCE
2014
2013 N
A PASI FIC SI
DATIO UN O
ANDS F BR
THE WORLD’S
A
BRANDLAUREATE
The BrandLaureate Manufacturer of The Year Award & The BrandLaureate President’s Award
Outstanding Business Awards - Largest Rubber Glove Manufacturer
ISO 14001:2004
N
The Largest Rubber Glove Manufacturer
A
BRANDLAUREATE
The BrandLaureate Best Brands Brand of the Year, Manufacturing - Gloves
Best CFO for IR (Mid Cap)
2011 A PASIFIC SI
ANDS F BR
DATIO UN O
A
2007
2009
2010
THE WORLD’S
Federation of Public Listed Companies Bhd
Introduction of Environmentally-Friendly CPE/TPE Gloves and its Low Carbon Footprint Manufacturing Technology to Malaysia
AWARDS 2010
N
2012
2008
TOP GLOVE “FORMER CARRYING ASSEMBLY” PATENT, Number MY-147689-A
MANAGEMENT SYSTEMS
ANDS F BR
THE WORLD’S
DATIO UN O
PASIFI C SIA
ENVIRONMENTAL SYSTEM
· Winner for Manufacturing: Chemicals & Heavy Industries · Ranked No. 17 in the overall Malaysia’s 100 Leading Graduate Employers 2013
BRANDLAUREATE
2006
2005
2004
PAST AWARDS ~ 1991 to 2003
Top Glove Corporation Berhad • Annual Report 2014
5
CORPORATE INFORMATION
BOARD OF DIRECTORS Tan Sri Lim Wee Chai Chairman
Lee Kim Meow Managing Director
Tan Sri Datoʼ Seri Utama Arshad Bin Ayub Independent Non-Executive Director
Puan Sri Tong Siew Bee Executive Director
Tan Sri Mohd Sidek Bin Haji Hassan Senior Independent Non-Executive Director
Lim Hooi Sin Executive Director
Tan Sri Datoʼ Dr. Lin See Yan Independent Non-Executive Director
Lim Cheong Guan Executive Director
Tan Sri Rainer Althoff Independent Non-Executive Director
Sekarajasekaran a/l Arasaratnam Independent Non-Executive Director Lim Han Boon Independent Non-Executive Director
REGISTERED & CORPORATE OFFICE
STOCK EXCHANGE LISTING
A-11-01, Empire Subang Office, Jalan SS16/1, 47500 Subang Jaya, Selangor D.E., Malaysia. Tel. : +603-5022 2110 Fax : +603-5022 2113 E-mails : (i) sales@topglove.com.my (ii) invest@topglove.com.my (iii)whistleblower@topglove.com.my (iv)media@topglove.com.my Website : www.topglove.com.my
Main Market of Bursa Malaysia Securities Berhad Stock Code : 7113 Stock Name : TOPGLOV Listing Date : 27 March 2001 ADR Programme (Depository Receipt Programme), USA
ADR Symbol
: TGLVY
REGISTRAR
Tan Sri Mohd Sidek Bin Haji Hassan Tel. : +603-5022 2110 E-mail : sidekhassan@topglove.com.my
Securities Services (Holdings) Sdn Bhd Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Malaysia Tel. : +603-2084 9000 Fax : +603-2094 9940 / 2095 0292 E-mail : info@sshsb.com.my
CHARTERED SECRETARIES
PRINCIPAL BANKERS
Chua Siew Chuan (MAICSA No: 0777689)
• • • • • • • • • • • •
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
Chin Mun Yee (MAICSA No: 7019243) Ngian Yoke Fung (MAICSA No: 7049093) Tel. : +603-5022 2110 E-mail : yfngian@topglove.com.my AUDITORS
Bank of China Limited BNP Paribas Malaysia Berhad CIMB Bank Berhad Deutsche Bank (Malaysia) Berhad Hong Leong Bank Berhad HSBC Bank Malaysia Berhad Malayan Banking Berhad OCBC Bank (Malaysia) Berhad Public Bank Berhad Standard Chartered Bank Malaysia Berhad Siam Commercial Bank Public Company Limited The Bank of Nova Scotia Berhad
Ernst & Young Chartered Accountants, Level 16-1, Jaya 99, Tower B, 99 Jalan Tun Sri Lanang, 75100 Melaka, Malaysia.
6
Top Glove Corporation Berhad • Annual Report 2014
BOARD OF DIRECTORS
Our Business Direction is: “ TO PRODUCE CONSISTENTLY HIGH QUALITY GLOVES AT EFFICIENT LOW COST ”
6
5
7
1
4
11
10
9
8
2
1
Tan Sri Lim Wee Chai
6
Lim Han Boon
2
Puan Sri Tong Siew Bee
7
Sekarajasekaran a/l Arasaratnam
3
Tan Sri Datoʼ Dr. Lin See Yan
8
Tan Sri Rainer Althoff
4
Tan Sri Datoʼ Seri Utama Arshad Bin Ayub
9
Lee Kim Meow
5
Tan Sri Mohd Sidek Bin Haji Hassan
10
Lim Cheong Guan
11
Lim Hooi Sin
Top Glove Corporation Berhad • Annual Report 2014
3
7
DIRECTORS’ PROFILE
Tan Sri Lim Wee Chai Chairman
Nationality/ Age
:
Malaysian/ 56
Date of Appointment
:
4 September 2000 (Founder of Top Glove Group of Companies)
Length of Service
:
14 years 3 months
Date of Last Re-election
:
8 January 2013
Board Committees
:
• •
Board meeting attended in the Financial Year
:
4/4
Qualification(s)
:
•
(as at 12 November 2014)
•
Member of Remuneration Committee Chairman of ESOS Option Committee
Master of Business Administration from Sul Ross State University in Texas, United States Bachelor of Science Degree with Honours in Physics from University Malaya, Malaysia
Directorship of Public Companies
:
•
Trustee of Top Glove Foundation
Present Appointment(s)
:
• •
Vice President of the Federation of Malaysian Manufacturers (FMM) since 2013 Council Member of the East Asia Business Council (EABC), appointed by the Minister of International Trade and Industry Malaysia since 2011 Honorary President of the Malaysia-China Chamber of Commerce since 2012 Honorary Advisor of the Klang Chinese Chamber of Commerce since 2011 Honorary Advisor of the Lim Association of Malaysia since 2011
• • • Past Appointment and Working Experience
:
Tan Sri Lim has been actively involved in many glove industry related associations and organisations in Malaysia. He served as the President of the Malaysian Rubber Glove Manufacturersʼ Association (MARGMA) from 1997-1999. Prior to that, he served as the Vice-President, Honorary Secretary and Treasurer of MARGMA for the past seven years. In addition, he was also the Director of the Association of Malaysia Medical Industries (AMMI) and Board Member of the Malaysia Rubber Board in 1998 and 1999.
Family Relationship with any Director and/or Substantial Shareholder of the Company
:
Spouse of Puan Sri Tong Siew Bee and the brother of Mr Lim Hooi Sin, both are the Directors and Substantial Shareholders of the Company.
8
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ PROFILE (cont’d)
Tan Sri Datoʼ Seri Utama Arshad Bin Ayub Independent Non-Executive Director
Nationality/ Age
:
Malaysian/ 86
Date of Appointment
:
4 September 2000
Length of Service
:
14 years 3 months
Date of Last Re-appointment
:
7 January 2014 (Pursuant to Section 129(6) of the Companies Act 1965)
Board Committees
:
• •
Board meeting attended in the Financial Year
:
3/4
Qualification(s)
:
•
(as at 12 November 2014)
Chairman of Audit Committee Chairman of Nomination Committee
•
Postgraduate Diploma in Business Administration from Management Development Institute (IMEDE) (Now IMD), Lausanne, Switzerland Bachelor of Science (Hons.) Economics and Statistics from University of Wales, Aberystwyth, United Kingdom Diploma in Agriculture from College of Agriculture, Serdang, Malaysia
•
Directorship of Public Companies
:
• • • •
Chairman of Malayan Flour Mills Bhd Chairman of Tomypak Holdings Berhad Chairman of Karex Berhad Director of Kulim (M) Berhad
Present Appointment(s)
:
• • • • •
Chairman of Board of Directors of University Malaya Pro Chancellor of UiTM Chancellor of KPJ International University College of Nursing & Health Sciences Chancellor INTI International University College Governor of Tuanku Jaafar College
Past Appointment and Working Experience
:
• • •
President of the Malaysian Rubber Products Manufactures Association (MRPMA) Chairman of Malaysian Rubber Export Promotion Council (MREPC) Member of Lembaga Getah Malaysia
Had a distinguished career in the Malaysian Civil Service, had held various senior position in various Ministries in the Malaysian Government from 1958 till 1983, including serving as Deputy Governor of Bank Negara Malaysia (1975 to 1977), Deputy Director General in the Economics Planning Unit of the Prime Ministerʼs Department (1977 to 1978) and as Secretary General in the Ministry of Primary Industries (1978), Ministry of Agriculture (1979 to 1981) and Ministry of Land and Regional Development (1981 to 1983). Tan Sri Arshad was a Member of Justice Harunʼs Salaries Commission for statutory bodies.
Top Glove Corporation Berhad • Annual Report 2014
9
DIRECTORS’ PROFILE (cont’d)
Tan Sri Mohd Sidek Bin Haji Hassan Senior Independent Non-Executive Director
Nationality/ Age
:
Malaysian/ 63
Date of Appointment
:
14 March 2013
Date of Re-designated as Senior Independent Non-Executive Director
:
14 October 2014
Length of Service
:
1 year 8 months
Date of Last Re-election
:
7 January 2014
Board Committees
:
• •
Board meeting attended in the Financial Year
:
4/4
Qualification(s)
:
•
(as at 12 November 2014)
•
Chairman of Risk Management Committee Member of Nomination Committee
Masters of Business Administration (MBA) from New Hampshire College, United States of America Bachelor of Economics (Honours) Degree in Public Administration from the University of Malaya
Directorship of Public Companies
:
• •
Chairman of Petroliam Nasional Berhad Director of Malayan Flour Mills Berhad
Present Appointment(s)
:
Nil
Past Appointment and Working Experience
:
Tan Sri Sidek began his career in the Administrative and Diplomatic Service on 15 April 1974 as an Assistant Director at the International Trade Division of Ministry of Trade and Industry. He was later appointed as Assistant Trade Commissioner at the Malaysian Embassy in Tokyo, Japan, from May 1977 until July 1980. From August 1980 until 1985, he served in the Implementation Coordination Unit (ICU) of the Prime Ministerʼs Department, initially as a Principal Assistant Director, then later promoted to Deputy Director, Project Analysis Sector and subsequently as the Deputy Director of Research in the same department. Tan Sri Sidek has expansive working experience within the Ministry of International Trade and Industry. During his service in the ministry, he was Malaysiaʼs Trade Commissioner in Sydney, Australia, Deputy Director in the Policy and Research Division, Deputy Director (Operations) in the International Trade Division, Minister Counselor of Economic Affairs at the Embassy of Malaysia, Washington D.C., United States, and the Director of Multilateral Relations Division. He was appointed as Deputy Secretary-General (Trade) on 19 January 2001 and thereon as the Secretary-General of the Ministry of International Trade and Industry on 24 October 2004. He was appointed as the 12th Chief Secretary to the Government of Malaysia by the Yang Di-Pertuan Agong on 3 September 2006 and was in the office until 23 June 2012.
10
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ PROFILE (cont’d)
Tan Sri Datoʼ Dr. Lin See Yan Independent NonExecutive Director
Nationality/ Age
:
Malaysian/ 75
Date of Appointment
:
16 June 2010
Length of Service
:
4 years 5 months
Date of Last Re-appointment
:
7 January 2014 (Pursuant to Section 129(6) of the Companies Act 1965)
Board Committees
:
Nil
Board meeting attended in the Financial Year
:
4/4
Qualification(s)
:
• • •
(as at 12 November 2014)
•
Chartered Scientist, British Science Council, London Chartered Statistician, professionally qualified in UK Eisenhower Fellow, Fellow of The Royal Statistical Society (London), IMF Institute (Washington DC), Malaysian Institute of Bankers, Malaysian Insurance Institute, Malaysian Institute of Management and Malaysian Economic Association Three postgraduate degrees from Harvard University, including a PhD in Economics; a Mason Fellow and a Ford Scholar Graduated from the University of Malaya in Singapore
•
Directorship of Public Companies
:
• • • • •
Director of Genting Berhad Director of Ancom Berhad Director of JobStreet Corporation Berhad Director of Wah Seong Corporation Berhad Chairman of IGB REIT Management Sdn. Bhd.
Present Appointment(s)
:
•
Board Director, Monash University Malaysia Sdn Bhd since 2002 and Sunway University Sdn Bhd since November 2013 Governor, Asian Institute of Management, Manila since1995 Member of Harvard Universityʼs Graduate School Alumni Association Council in Cambridge (USA) since 1993 President, Harvard Club of Malaysia since 2002 Professor of Economics (Adjunct), Universiti Utara Malaysia since 1990 Professor of Business & International Finance (Adjunct), University Malaysia Sabah since 2008 Research Professor, Sunway University since 2013 Trustee of the Tun Ismail Ali Foundation (PNB) since 2001, Harvard Club of Malaysia Foundation since 1991, Malaysian Economic Association Foundation since 1991, The Prime Ministerʼs Fellowship Exchange Program and Jeffrey Cheah Foundation since 2008
• • • • • • •
Past Appointment and Working Experience
:
Prior to 1998, Tan Sri Lin was Chairman/President and Chief Executive Officer of Pacific Bank Group and for 14 years previously, Deputy Governor of Bank Negara Malaysia (the Central Bank), having been a central banker for 34 years. Tan Sri Lin continues to serve the public interest, including Member of the Prime Ministerʼs Economic Council Working Group, Member of Competition Appeal Tribunal, member of a number of key National Committees on Higher Education and Economic Advisor, Associated Chinese Chambers of Commerce & Industry of Malaysia. Top Glove Corporation Berhad • Annual Report 2014
11
DIRECTORS’ PROFILE (cont’d)
Tan Sri Rainer Althoff Independent NonExecutive Director
Nationality/ Age
:
Malaysia Permanent Resident/ 68
Date of Appointment
:
14 March 2013
Length of Service
:
1 year 8 months
Date of Last Re-election
:
7 January 2014
Board Committees
:
Member of Risk Management Committee
Board meeting attended in the Financial Year
:
3/4
Qualification(s)
:
Master degree (Diploma) in Electronics and Electrical Engineering from Bergische University of Wuppertal, Germany
Directorship of Public Companies
:
Nil
Present Appointment(s)
:
• • • • •
(as at 12 November 2014)
• Past Appointment and Working Experience
12
:
Member of the Rotary Club Kuala Lumpur DiRaja since 2001 Chairman of Nokia Networks Sdn. Bhd. since 2009 Chairman of Coriant Malaysia Sdn. Bhd. since 2013 Trustee of Jeffrey Cheah Foundation since 2011 Member of International Advisory Panel to the Board of Directors of CIMB Bank since 2009 Managing Director of ALC International since 2009
Has experience in the field of electrical engineering spans for more than 40 years. He has spent most of his working life with Siemens AG. Tan Sri Rainer was the President and CEO of Siemens Malaysia Sdn Bhd and also the spokesperson for Siemens for all Siemens operations and affiliate companies in Malaysia for almost 11 years.
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ PROFILE (cont’d)
Lee Kim Meow
Puan Sri Tong Siew Bee
Managing Director
Executive Director
Nationality / Age : Malaysian/ 55
Nationality / Age : Malaysian/ 56
Date of Appointment : 15 October 2003
Date of Appointment : 4 September 2000 (Co-Founder of Top Glove Group of Companies)
Date of Re-designated as Managing Director : 7 April 2009
Length of Service : 14 years 3 months (as at 12 November 2014)
Length of Service : 11 years 1 months (as at 12 November 2014)
Date of Last Re-election : 7 January 2014
Date of Last Re-election : 7 January 2014 Board Committees : Nil Board Committees : • Member of Risk Management Committee • Member of ESOS Option Committee
Board meeting attended in the Financial Year : 4/4
Board meeting attended in the Financial Year : 4/4 Qualification(s) : • Bachelor of Law Degree from University of London, U.K. • Bachelor of Commerce Degree from University of New South Wales, Australia majoring in Accounting, Finance and Information System
Qualification(s) : • Master of Business Administration from Sul Ross State University in Texas, USA • Bachelor of Science Degree with Honours in Computer Science from University Sains Malaysia Directorship of Public Companies : Nil Present Appointment(s) : Nil
Directorship of Public Companies : Trustee of Top Glove Foundation Present Appointment(s) : • Chairman of the Asean Rubber Glove Manufacturers Association (ARGMA) since 2013 • Board member of the Malaysian Rubber Export Promotion Council (MREPC) since 2002 Past Appointment and Working Experience : Vast experience in financial services, trading and manufacturing business having worked more than 15 years in established financial institutions and with a well known conglomerate with diversified interest in the Asean region.
Past Appointment and Working Experience : Worked in the banking industry in the information technology field for more than ten (10) years, she was formerly attached to United Overseas Bank Berhad and Utama Bank Berhad. Family Relationship with any Director and/or Substantial Shareholder of the Company : Spouse of Tan Sri Lim Wee Chai and sister in-law of Mr Lim Hooi Sin, both are the Directors and Substantial Shareholders of the Company.
In the last 13 years, Mr. Lee has been actively contributing to the development of the rubber glove industry in Malaysia as well as the ASEAN region. He was a board member of the Malaysian Rubber Board (MRB) and the Tun Abdul Razak Research Centre (TARRC) from 2010 to 2011; and the immediate past President of the Malaysian Rubber Glove Manufacturersʼ Association (MARGMA). Top Glove Corporation Berhad • Annual Report 2014
13
DIRECTORS’ PROFILE (cont’d)
Lim Hooi Sin
Lim Cheong Guan
Executive Director
Executive Director
Nationality / Age : Malaysian/ 52
Nationality / Age : Malaysian/ 49
Date of Appointment : 4 September 2000
Date of Appointment : 31 August 2006
Length of Service : 14 years 3 months
Length of Service : 8 years 3 months
(as at 12 November 2014)
(as at 12 November 2014)
Date of Last Re-election : 8 January 2013
Date of Last Re-election : 10 January 2012
Board Committees : Nil
Board Committees : • Member of Risk Management Committee • Member of ESOS Option Committee
Board meeting attended in the Financial Year : 4/4 Qualification(s) : • Charter Financial Consultant Diploma from American College, PA, USA • Master of Business Administration Degree (Minor in Applied Statistic) from Arizona State University, USA • Bachelor of Science Degree in Management Science from Oklahoma State University, USA
Board meeting attended in the Financial Year : 4/4
Directorship of Public Companies : Nil
Directorship of Public Companies : Director of Malaysian Investor Relations Association Berhad (MIRA) since year 2008
Present Appointment(s) : Nil Past Appointment and Working Experience : Spent fourteen (14) years of his career with MetLife Financial Services, one of the largest insurance & financial services company in the US. Prior to this posting, he was a Management Trainee, Associate Branch Manager, Regional Marketing Specialist, Agency Director and Director of Asian Market. His experience includes product development, marketing, recruiting, training and supervision of a large highly productive sales force. He was a Director of AAAA (Arizona Asian American Association). He is also the founder of TG Medical USA, Inc. in 1994 with vast experiences in the United States glove market. He also sits on the Board of several private limited companies.
Qualification(s) : • Member of Malaysian Institute of Accountants • Member of Malaysian Institute of Certified Public Accountants • Bachelor Degree in Accounting, University of Malaya
Present Appointment(s) : Advisor to the Management Committee of Top Glove Foundation since year 2008 Past Appointment and Working Experience : Began his career with Price Waterhouse in 1990 and subsequently held various key positions in a number of public listed companies in Malaysia, which the business activities spanned over manufacturing, plantation, trading and property development.
Family Relationship with any Director and/or Substantial Shareholder of the Company : Brother of Tan Sri Lim Wee Chai and brother in-law of Puan Sri Tong Siew Bee, both are Directors and Substantial Shareholders of the Company
14
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ PROFILE (cont’d)
Sekarajasekaran a/l Arasaratnam
Lim Han Boon
Independent Non-Executive Director
Independent Non-Executive Director
Nationality / Age : Malaysian/ 86
Nationality / Age : Malaysian/ 57
Date of Appointment : 4 September 2000
Date of Appointment : 21 February 2011
Length of Service : 14 years 3 months
Length of Service : 3 years 9 months
(as at 12 November 2014)
(as at 12 November 2014)
Date of Last Re-appointment : 7 January 2014 (Pursuant to Section 129(6) of the Companies Act 1965)
Date of Last Re-election : 10 January 2012 Board Committees : • Member of Audit Committee • Chairman of Remuneration Committee • Member of Nomination Committee • Member of Risk Management Committee
Board Committees : • •
Member of Audit Committee Member of Remuneration Committee
Board meeting attended in the Financial Year : 4/4 Board meeting attended in the Financial Year : 4/4 Qualification(s) : • • • • • • •
Fellow of the Institution of Engineers Malaysia Member of the Institution of Civil Engineers, United Kingdom Member of the Chartered Institution of Water and Environmental Management, United Kingdom Member of the American Society of Civil Engineers Member of the Association of Consulting Engineers Malaysia Diploma in Public Health Engineering from the Imperial College of Science & Technology, United Kingdom Diploma in Civil Engineering from Technical College, Kuala Lumpur
Qualification(s) : • Attended the Harvard Business School Senior Management Development Program • Master of Business Administration Degree from the University of South Australia, Australia • Member of the Chartered Management Institute, United Kingdom • Member of the Malaysian Institute of Accountants • Fellow of the Association of Chartered Certified Accountants, United Kingdom Directorship of Public Companies : Nil Present Appointment(s) : Treasurer of Outsourcing Malaysia, a Chapter of PIKOM, the National ICT Association
Directorship of Public Companies : Nil Present Appointment(s) : President of Erinco Sdn Bhd since 2004 and advisor since 2014.
Past Appointment and Working Experience : Was with the Public Works Department as the Technical Assistant of Waterworks from 1951 to 1959, thereafter as Assistant Resident Engineer, Executive Engineer and Waterworks Engineer from 1965 to 1966. He joined the Ministry of Health in 1968 as a Senior Public Health Engineer and was promoted to Chief Public Health Engineer in 1972. He was the Director of Engineering Services from 1980 to 1983.
Past Appointment and Working Experience : Has more than twenty (20) years of experience in areas of transport and maritime logistics industry having worked for Kontena Nasional Berhad, Kannaltec Berhad, Northport Malaysia Berhad and NCB Holdings Berhad.
Note : Save as disclosed, all other Directors have no family relationship with any Director and/or Substantial Shareholder of the Company, have no conflict of interest with the Company and have not been convicted of any offence within the past 10 years other than traffic offences, if any.
Top Glove Corporation Berhad • Annual Report 2014
15
SENIOR MANAGEMENT TEAM
5th row
4th row
3rd row
2nd row
Lim Hooi Sin Tan Sri Lim Wee Chai Lim Cheong Guan Puan Sri Tong Siew Bee Lee Kim Meow
2nd row (left to right)
3rd row (left to right)
4th row (left to right)
5th row (left to right)
Wong Chong Ban Datoʼ Ir Haji Ahmad Aaron Lam Jeff Lee Hue Kon Fah Wu Kin Yeap Chookiad Usaha Lew Sin Chiang Thomas Petermoeller Noraziah Mahmud
Tan Chee Hong Ravi Jeremy Liew Lew Choong Teck Eric Hoo Chee Yih Tzuen Puon Tuck Seng Dorothy Ressel Leong Chew Mun Noor Akilah Saidin Hew Hein Hwei
Tan Kian Guan Joanna Ng Saw Eng Kooi Wilawan Sakulsongboonsiri Mansor Bin Daud Thomas Buri Seah Chong Shew Charlie Oh Shanti Michelle Ang
Jimmy Gan Edwyn Poon Aileen Choh Wendy Yeoh Looi Guat Kian Ong Ah Chye Chen Chew Lan Chang Chee Keong Phattaraporn Chaisiri Jack Lim
16
Top Glove Corporation Berhad • Annual Report 2014
FINANCIAL HIGHLIGHTS Revenue (RM million)
2013: RM202.8 million
14
2,275.4
2,313.2
13
Profit Before Tax (RM million) 10
11
12
222.0
240.7
305.0
09
13
145.5
EPS 29 Sen
12
2,314.5
2,053.9
2,079.4
11
14
216.3
Net Profit RM183.6 million
10
242.2
2013 : RM2,313.2 million
1,529.1
Revenue RM2,275.4 million
09
2013: 32 sen
Net Profit (RM million)
207.3
14
115.1
168.1
13
11
12
13
14
157.6
10
308.5
09
158.4
ROE 13.1%
12
Net Cash (RM million)
254.3
million 2013: RM158.4 million
299.9
Net Cash RM157.6
178.0
2013: 16 sen
11
250.4
16 Sen
10
183.6
09
202.8
Net Dividend Per Share
2013: 14.9%
Top Glove Corporation Berhad • Annual Report 2014
17
6 YEARS FINANCIAL REVIEW
“The group registered compounded annual growth rates (CAGR) for revenue and net profit attributable to equity of 26%, since listing in 2001.”
Group
31.8.14 (RMʼ000)
31.8.13 (RMʼ000)
31.8.12 (RMʼ000)
31.8.11 (RMʼ000)
31.8.10 (RMʼ000)
31.8.09 (RMʼ000)
Turnover
2,275,366
2,313,234
2,314,454
2,053,916
2,079,432
1,529,077
Earning Before Interest, Depreciation & Taxation
312,107
323,282
310,002
207,279
364,661
287,484
Profit Before Taxation
216,310
242,204
240,702
145,470
304,961
221,992
32,745
39,375
33,417
30,338
54,550
53,922
Profit After Tax
183,565
202,829
207,285
115,132
250,411
168,070
Profit Attributable to Owners of the Parent
180,523
196,500
202,726
113,091
245,231
169,133
Net Cash / (Borrowings)
157,633
158,390
308,468
254,264
299,921
178,023
Total Equity / Net Assets
1,397,550
1,357,841
1,279,853
1,146,373
1,116,366
845,977
Return on Equity (%)
13.1
14.9
16.2
10.0
22.4
19.9
Net Assets Per Share (RM)*
2.25
2.19
2.07
1.85
1.81
1.39
Basic Earnings Per Share (RM)*
0.29
0.32
0.33
0.18
0.40
0.28
16.00
16.00
16.00
11.00
16.00
22.00
620,664
620,220
618,880
618,513
618,162
303,759
4.79
6.14
5.29
4.86
6.07
6.95
2,972,981
3,808,151
3,273,875
3,005,973
3,752,243
2,111,125
Taxation
Net Dividend (sen) Number of Shares in Issue (ʼ000) Share Price (RM) Market Capitalisation
* The comparative net assets per share and basic earnings per share have been restated taken into account the effect of bonus issue on the basis of one new ordinary share for every one existing ordinary share held in FY2010.
18
Top Glove Corporation Berhad • Annual Report 2014
Enhancing Shareholders’ Value Dividend Payout
16
Dividend Policy : Not less than 50% of Profit After Tax and Minority Interest
11
9.00
11
16
16
16
9.00
9.00
9.00
7.00
7.00
7.00
3.00 6.00 Total Dividend (sen)
4.50
Proposed Final Dividend (sen) Final Dividend (sen)
7.00
Interim Dividend (sen)
5.00
3.50
Special Dividend (sen) Dividend Payment (RM’mil) Payout Ratio (%)
2009
2010
2011
2012
2013
2014
65.9
98.9
68.0
99.0
99.3
99.3
39
40
60
49
50
55
Total dividend payment of RM654.1 million since listed in year 2001.
Equity Holders Structure (Malaysian & Foreigner) as at 31 August 2014 Malaysian Substantial Shareholders 52%
Nominees 50%
Malaysian Bodies Corporate and Individuals 15%
Individuals 31%
Foreign Shareholders 33%
Institutions 19%
3.0
3.3
2.1
3.0
3.8
1,397.6
1,357.8
1,279.9
1,146.4
1,116.4
2009 2010 2011 2012 2013 2014
3.8
Market Capitalisation (RM billion)
Total Equity (RM million)
846.0
Equity Holders Structure (type of holders) as at 31 August 2014
2009 2010 2011 2012 2013 2014
Investor Relations Contact All investors are welcome to contact the Investor Relations (IR) team directly at invest@topglove.com.my or visit the Investor Relations section on our website at www.topglove.com.my
Top Glove Corporation Berhad • Annual Report 2014
19
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS
Tan Sri Lim Wee Chai Chairman of Top Glove Corporation Berhad
Lee Kim Meow Managing Director of Top Glove Corporation Berhad
TOP GLOVE’S BUSINESS PHILOSOPHIES ARE: 1. 2. 3.
4.
20
We work for our CUSTOMERS; We take care of the interest of our SHAREHOLDERS; We ensure that our EMPLOYEES continue to contribute positively to the Company and we take good care of the well-being of our employees; and We work closely with our BANKERS, SUPPLIERS, BUSINESS ASSOCIATES, GOVERNMENT AUTHORITIES and FRIENDS.
Top Glove Corporation Berhad • Annual Report 2014
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d)
Dear Fellow Stakeholders, On behalf of the Board of Directors of Top Glove Corporation Berhad (“Top Glove”), we are pleased to present our annual report for the financial year ended 31 August 2014 (“FY2014”). Business Landscape The financial year in review was a challenging one, marked by increased competition and cost pressure. Nevertheless, at the close of FY2014, Top Glove recorded volume growth in glove sales. We noted robust demand growth in nitrile gloves from developed countries, while demand for natural rubber gloves from emerging markets remained consistent. In FY2014, competition intensified in the nitrile glove segment, as Top Glove along with other major industry players, ramped up their capacity to meet the evergrowing demand. There were also increases in utility costs to contend with. Effective 1 January 2014, the electricity tariff went up by 16%, followed closely by a 19% increase in the natural gas tariff which was implemented on 1 May 2014. The knock-on inflationary costs which followed the rate revisions, invariably affected our bottomline. However,
quality and cost efficiency enhancements via automation, computerisation and technology transformation initiatives which the Group embarked on have served to mitigate the impact of these headwinds. Further softening the impact was a decline in raw material prices, which persisted throughout the year. For FY2014, latex prices contracted by 17.3% to an average of RM4.77/kg while nitrile prices fell by 8.3% to an average of RM3.51/kg versus FY2013, and we expect them to continue trending within this range, which bodes well for our industry. Meanwhile, sporadic outbreaks of infectious diseases such as MERS, various strains of bird flu and swine flu, and more recently on a larger scale, Ebola, continued to bring to the forefront the importance of preventive measures and personal protective equipment in the healthcare industry.
The Top Glove Board of Directors poses for a group photo after a Board Meeting
Top Glove Corporation Berhad • Annual Report 2014
21
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d) While there may be periods of intensified competition, over our years in the business, we have witnessed the industry go through similar business cycles and believe the market will correct itself over time. It may be tougher this round, because there are cost increases in electricity and natural gas to factor in as well, but as we remain steadfast in adhering to our time-honoured business direction of producing high quality gloves at an efficient low cost, we will be able to overcome these challenges successfully. Moreover, with recent developments that have 2 MNCs exiting the glove business and outsourcing their manufacturing activities, we are now seeing signs of industry consolidation. This augurs well for us, as it signifies reduced supply and competition in the future, while also representing new business opportunities. As an indispensable item to the healthcare sector, the world demand for rubber gloves is estimated to be at 170 billion pieces per annum for 2014 according to the Malaysian Rubber Glove Manufacturers Association (MARGMA) and is expected to continue growing by an average of 6% to 8% every year. Increasing healthcare awareness and hygiene standards, along with more stringent healthcare regulations and a growing ageing population, will continue to bolster glove usage, particularly in developing countries where usage is relatively low but rapidly on the rise. Performing In A Challenging Environment At the close of the financial year ended 31 August 2014, our revenue stood at RM2.275 billion, 1.6% lower than FY2013, attributed to a lower average selling price on the back of declining raw material costs and heightened competition. Meanwhile, net profit for FY2014 came in at RM183.6 million, 9.5% short of FY2013. However, in spite of macro-environmental challenges which adversely impacted results, the Group saw a marked increase in sales volume of 3% at the close of the financial year. The improved contribution from higher sales was offset by increased competition, particularly in the nitrile glove segment, as well as cost increases following hikes in electricity and natural gas tariffs which came into effect this year. Unrealised forex losses owing to an unexpected strengthening of the Ringgit at the close of the financial year, also accounted for a softer performance. Our product mix by glove type and geographical breakdown of revenue for FY2014 are depicted below: Product mix by glove type FY2014
Revenue by geography FY2014
Middle East 7% Powderfree latex 20% Powdered Latex 48%
Nitrile 24% Vinyl 6%
Surgical 2%
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Top Glove Corporation Berhad • Annual Report 2014
Africa 4%
Latin America 14% Asia 16%
Europe 31%
North America 28%
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d)
Simply the best: Factory Heads Mr Hue (Factory 12) and Mr Ravi (Factory 14) receive the Best Factory Award from Tan Sri Lim and Mr KM Lee
Nevertheless, the Group achieved considerable operational improvements in the financial year, mainly attributed to enhanced capacity utilisation arising from an increase in the sales volume of nitrile gloves, which grew substantially by 24% compared with last year. Nitrile glove sales contribution to total Group sales grew from 20% in FY2013 to 24% in FY2014, following buoyant demand, indicating favourable growth prospects in developed markets, particularly the US and Europe. At the same time, we recorded increased sales in Asia where market share expanded to 16%, in line with the general uptrend in usage for natural rubber gloves within emerging markets. Indeed, with our comprehensive range of gloves and balanced product mix, we are wellpositioned to fulfil the various requirements of different regions.
The use of robotic arms in R&D Center
In upholding our commitment to our valuable shareholders, the Board of Directors has recommended a final tax-exempt dividend of 9 sen per share (single tier) amounting to approximately RM55.9 million for FY2014, pending shareholdersʼ approval at the forthcoming 16th Annual General Meeting in January 2015. The Group had also earlier declared an interim dividend of 7 sen per ordinary share amounting to RM 43.4 million, payment of which was made on 17 July 2014. On a full year basis, this enables a total dividend payout of 16 sen, on par with FY2013, representing a 55% dividend payout ratio. In line with its commitment to increasing shareholder value, the Group also established a dividend policy to crystalise a payout ratio of not less than 50% of its profit after tax and minority interest in respect of future financial years. Corporate Developments
In terms of growth, the Group outperformed Malaysiaʼs total exports. While total exports of both natural rubber and nitrile gloves from Malaysia increased by 2.0% in the first half of the calendar year 2014 (1HCY2014) versus 1HCY2013, Top Gloveʼs Malaysian operations (TGM) showed a substantially higher growth of 9.7% in exports within the same period. This was mainly attributed to larger growth in the nitrile gloves segment, where TGMʼs exports increased by 32.9% while Malaysian exports grew only by 1.5% in 1HCY2014. The Group also continued to generate free cash flows and was able to maintain a strong balance sheet position with net cash and short term investments of RM157.6 million as at 31 August 2014. Meanwhile, total shareholdersʼ equity was RM1.40 billion and net asset per share stood at RM2.25.
To ensure we are able to fully tap the growing demand for rubber gloves, investing in quality expansion is a key focus area on our corporate agenda. Our emphasis is on building more efficient manufacturing facilities, which adopt the latest technology and automation capabilities available. In tandem, we will also be enhancing the productivity of our existing factories: reviewing, upgrading and retiring lines and plants, where required. Keeping this in view, we are proceeding with our plans to increase the number of nitrile glove production lines. An additional 6 nitrile glove production lines at Factory 27 in Lukut, Port Dickson came on-stream in September 2014, while the installation of production lines at Factory 29 in Klang is targeted to be completed and operational by January 2015. Factory 29 will be installed with faster, more efficient and technologically advanced production lines.
Top Glove Corporation Berhad • Annual Report 2014
23
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d) This will boost the number of production lines from 464 to 484 and increase production capacity from 42.0 billion to 44.6 billion pieces of gloves per annum. To meet increasingly diverse and specialised needs, we will also continue to expand our extensive product range (currently encompassing latex, surgical, nitrile, household, cleanroom, vinyl and cast polyethylene gloves) which has already earned Top Glove a name as the preferred one-stop glove sourcing centre. On 24 March 2014, the Group also successfully completed the privatisation of its subsidiary Medi-Flex Limited, an exercise envisioned to have a positive impact on the Groupʼs earnings, as it is now able to garner an additional 20.3% of the entityʼs profits. This is especially positive in view of the anticipated improvement in performance going forward. As part of its on-going cost rationalisation and business streamlining strategy to enhance efficiency, the Group also consolidated its China operations into a single factory (Factory 15) at Xin Hua, and subsequently disposed of Factory 8 in Zhangjiagang on 13 June 2014. With this exercise, the Group successfully turned around its China operations, which in Q4FY2014 contributed some RM1.09 million to total group profit. The construction of our corporate headquarters, Top Glove Tower, is well underway and expected to be ready for occupancy by March 2015. This will meet future office space requirements, in view of our aggressive manpower and capacity expansion plans that are in the pipeline. We will only be occupying a part of the tower and leasing out the other floors to generate recurring income. Strategically located opposite Setia City Mall, the towerʼs proximity to our manufacturing facilities will also be an advantage for monitoring purposes.
Corporate Citizenship and Social Responsibility One of the most rewarding aspects of business is being able to contribute to society. Indeed, we aim to make a meaningful difference in the communities where we operate, by investing our time, effort and resources towards their betterment. Only then can we say we have truly succeeded as a responsible corporate citizen. It is always with great joy and pride that we witness so many of our people take to our various corporate responsibility activities with such enthusiasm. This is precisely the kind of energy that will propel our CR initiatives and even our organisation to greater heights, year after year. To learn more about how we are impacting the lives around us, please see our Corporate Responsibility Statement on page 37 to page 39. R&D and Technological Advancement It is important that even amidst the most difficult times, businesses do not lose sight of the need to constantly innovate, both to protect existing market share and to create growth. Today, innovation is no longer a ʻnice to haveʼ, it is a ʻmust haveʼ. This is especially true in manufacturing industries like ours where customersʼ standards are increasingly exacting and competition is getting more intense. As such, Top Glove continues to believe that focused investment in R&D is critical to our future growth and maintaining a competitive position in the glove manufacturing industry.
Top Glove’s R&D efforts
24
Top Glove Corporation Berhad • Annual Report 2014
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d)
The attendees of Top Glove’s 15th Annual General Meeting sit in rapt attention
Since its inception, the overriding goal of our R&D Department has been to develop new technologies to enhance existing products and also ensure timely introduction of competitive new products. Accordingly, Top Glove has invested in new technologies and the latest instruments that allow for highly advanced analytical testing, as seen in our newly established wastewater testing laboratory. Our R&D team is dedicated to the development of competitive, affordable and high quality products to satisfy the needs of customers worldwide. We pride ourselves on delivering top quality results, as proven in our newly developed low weight 2.7g nitrile gloves. In the past year, we have also achieved several notable breakthroughs in our manufacturing process, enabling us to achieve higher production quality and efficiency. In line with Top Gloveʼs Quality Policy “Continuous improvement and innovation are our duties”, we are committed to make further advancements especially in quality enhancement and energy-saving projects in view of the increased electricity and natural gas tariff. Recognising the widespread impact the Goods and Services Tax (GST) will have on our business, we have also duly commenced our GST implementation projects in advance. We are presently working with a consultant to help us identify the critical issues that may arise during the transition and to ensure full compliance before the stipulated GST implementation date of 1 April 2015. Moving Forward As the worldʼs largest rubber glove manufacturer, our foremost priority is now optimising the efficiency of our manufacturing facilities through automation, innovation and extensive R&D, towards serving both our customers and shareholders. Our industry remains one with high growth potential and we are aggressively pursuing market expansion both in emerging and developed countries, where demand for natural and nitrile rubber gloves respectively, continues to rise. Accordingly, our product mix will be strategically planned to cater to market requirements. In all this, Top Gloveʼs many talented staff remain important to our on-going success. We are continuously investing in our people through training and development, equipping them with the skills and capabilities that will enable them to drive quality growth and improvements across all aspects of our operations. We are also raising up a new generation of leaders who share a passion for our vision and whose hearts are set on taking our business to the next level of success.
Top Glove Corporation Berhad • Annual Report 2014
25
LETTER TO STAKEHOLDERS AND MANAGEMENT DISCUSSION & ANALYSIS (cont’d)
Top Glove offers an extensive range of gloves to fulfil demand from every market segment
We recognise that there is still much for us to do in order to realise the ambitious targets we have set for ourselves, particularly as the glove business environment continues to be challenging. However, with our unwavering focus on quality, innovation, automation, prudent cost control and efficiency, we believe we are poised and well able to deliver a stronger performance in the year ahead. In Appreciation The year has not been without adversity, but we count ourselves fortunate to have so many quality people in our fold, who have worked tirelessly to deliver results and continue to do so, to ensure our future success. Our sincere gratitude to our capable management and staff for your unwavering commitment. We also wish to record our utmost appreciation to our valued shareholders, customers, vendors and business associates for your support and strong confidence, without which we would not have attained the level of success we have today. We also would like to convey our thanks to all the Directors of the recently-delisted Medi-Flex Limited, who have served with distinction throughout their tenure. Last, but not least, we are deeply appreciative to our fellow board members for their valuable services and having so wisely guided the Group forward. We believe our best days are ahead of us and look forward to your continued support, as we work with utmost determination to deliver the results you have come to expect of us.
Thank you.
TAN SRI LIM WEE CHAI Chairman Top Glove Corporation Berhad 31 October 2014
26
LEE KIM MEOW Managing Director Top Glove Corporation Berhad 31 October 2014
Top Glove Corporation Berhad • Annual Report 2014
PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version
Para Pihak Berkepentingan, Bagi pihak Lembaga Pengarah Top Glove Corporation Berhad (“Top Glove”), kami dengan sukacitanya membentangkan laporan tahunan bagi tahun kewangan berakhir 31 Ogos 2014 (“TK2014”).
Majlis Makan Malam Ulangtahun dan Penghargaan ke-23 2014 Top Glove di Pusat Konvensyen Setia City
Landskap Perniagaan Tahun kewangan ini memang mencabar, dilandai persaingan hebat serta tekanan kos. Walau bagaimanapun, pada penutup TK2014, Top Glove mencatatkan peningkatan volum dalam jualan sarung tangan. Kami juga melihat pertumbuhan kuat dalam permintaan bagi sarung tangan nitril daripada negaranegara maju, sementara permintaan bagi sarung tangan getah asli adalah konsisten dari pasaran baru muncul. Pada TK2014, persaingan bertambah intensif berikutan perluasan kapasiti pengeluaran oleh Top Glove serta pengeluar-pengeluar utama di dalam industri, demi memenuhi permintaan pasaran yang semakin meningkat. Selain itu, terdapat juga peningkatan kos utiliti yang perlu dihadapi syarikat. Bermula 1 Januari 2014, terdapat peningkatan tarif elektrik sebanyak 16%, diikuti kenaikan tarif gas asli sebanyak 19% yang dilaksanakan pada 1 Mei 2014. Kos inflasi yang mengikuti semakan kadar yang dinyatakan menjejaskan pendapatan kami.
Walau bagaimanapun, peningkatan kualiti dan kecekapan kos melalui inisiatif automasi, pengkomputeran dan transformasi teknologi yang mana telah diimplimentasi oleh Kumpulan telah mengurangkan kesan dari halangan ini. Penurunan harga bahan mentah yang berterusan sepanjang tahun juga telah mengurangkan impak kepada kami. Pada TK2014, harga latek asli menguncup sebanyak 17.3% kepada purata RM4.77/kg manakala harga latek nitril jatuh sebanyak 8.3% kepada purata RM3.51/kg berbanding TK2013, dan kami menjangka harga bahan mentah tersebut akan terus berada dalam aliran julat ini, suatu petanda baik bagi industri kami. Sementara itu, wabak sporadis penyakit berjangkit seperti MERS, pelbagai jenis selesema burung dan selesema khinzir dan terbaru penularan wabak Ebola, sekaligus memberikan kesedaran masyarakat akan pentingnya mengambil langkah-langkah pencegahan dan peralatan pelindung diri, khususnya dalam industri penjagaan kesihatan dan perubatan.
Top Glove Corporation Berhad • Annual Report 2014
27
PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version (SAMB.) Walaupun berhadapan dengan persaingan yang hebat, dengan pengalaman kami di dalam perniagaan ini bertahun lamanya, kami telah menyaksikan beberapa kitaran perniagaan industri yang serupa dan percaya pasaran akhirnya akan stabil dengan sendiri. Ianya mungkin lebih sukar pada kitaran kali ini, kerana kami juga menghadapi kenaikan kos elektrik dan gas asli, tetapi kami kekal teguh dalam mematuhi hala tuju perniagaan bagi menghasilkan sarung tangan yang berkualiti tinggi pada kos yang rendah serta cekap, dan yakin akan dapat mengatasi cabaran ini dengan jayanya.
Campuran jenis sarung tangan serta pecahan pendapatan mengikut geografi bagi TK2014 adalah dilampirkan di bawah:
Campuran produk mengikut jenis sarung tangan TK2014
Getah Bebas Serbuk 20%
Tambahan pula, dengan perkembangan baru-baru ini yang menyaksikan 2 buah syarikat antarabangsa keluar dari perniagaan sarung tangan dan aktiviti pengilangan mereka, kita kini melihat tanda-tanda penggabungan industri. Ini merupakan petanda baik untuk kita, kerana ia menandakan bekalan dan saingan akan dikurangkan, sementara itu juga mewakili peluang perniagaan baru.
Getah Berserbuk 48%
Sarung tangan adalah sebagai satu keperluan dalam sektor penjagaan kesihatan. Permintaan dunia bagi sarung tangan getah dianggarkan 170 bilion pasang setahun pada 2014 menurut Persatuan Pengeluar Sarung Tangan Getah Malaysia (MARGMA) dan dijangka akan terus berkembang pada kadar purata 6% ke 8% setiap tahun. Kesedaran penjagaan kesihatan dan standard kebersihan yang lebih tinggi, bersama peraturan kesihatan yang lebih ketat serta peratusan penduduk yang berumur semakin meningkat, akan terus meluaskan penggunaan sarung tangan, terutamanya di negara-negara membangun di mana penggunaan adalah rendah malah pesat meningkat.
Pendapatan mengikut geografi TK2014
Timur Tengah 7%
Walaupun cabaran makro alam sekitar memberi kesan buruk kepada keputusan, Kumpulan menyaksikan peningkatan yang ketara dalam volum jualan sebanyak 3% pada penghujung tahun kewangan. Sumbangan lebih baik daripada jualan yang lebih tinggi terjejas disebabkan peningkatan persaingan, terutamanya dalam segmen sarung tangan nitril dan juga kenaikan kos berikutan penstrukturan dalam tarif elektrik dan gas asli yang berkuat kuasa tahun ini. Kerugian forex yang belum direalisasi disebabkan pengukuhan Ringgit yang tidak dijangka pada penutupan tahun kewangan.
28
Vinil 6%
Pembedahan 2%
Prestasi Dalam Persekitaran yang Mencabar Pada akhir tahun kewangan berakhir 31 Ogos 2014, pendapatan kami berjumlah RM2.275 bilion, 1.6% lebih rendah berbanding TK2013, disebabkan oleh purata harga jualan yang lebih rendah berikutan penurunan kos bahan mentah dan persaingan hebat. Sementara itu, keuntungan bersih bagi TK2014 berjumlah RM183.6 juta, 9.5% kurang dari TK2013.
Nitril 24%
Top Glove Corporation Berhad • Annual Report 2014
Afrika 4%
Eropah 31%
Amerika Latin 14% Asia 16%
Amerika Utara 28%
PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version (SAMB.) Walau bagaimanapun, Kumpulan telah mencapai peningkatan operasi yang besar dalam tahun kewangan, terutamanya dalam penggunaan kapasiti daripada peningkatan dalam jumlah jualan sarung tangan nitril, yang mengembang dengan ketara sebanyak 24% berbanding tahun lepas. Sumbangan jualan sarung tangan nitril kepada jumlah jualan Kumpulan meningkat daripada 20% dalam TK2013 kepada 24% dalam TK2014, berikutan permintaan yang menggalakkan, menunjukkan prospek pertumbuhan yang baik di pasaran maju, terutamanya Amerika Syarikat dan Eropah. Pada masa yang sama, kami mencatatkan peningkatan jualan di Asia di mana bahagian pasaran kami berkembang sebanyak 16%, sejajar dengan kenaikan dalam penggunaan sarung tangan getah asli dalam pasaran baru muncul. Sesungguhnya, dengan adanya rangkaian komprehensif sarung tangan dan campuran produk seimbang, kami berada dalam kedudukan yang baik untuk memenuhi pelbagai keperluan dari mana-mana. Dari segi pertumbuhan, eksport Kumpulan telah melebihi jumlah eksport dari Malaysia. Walaupun jumlah eksport kedua-dua sarung tangan getah nitril dan sarung tangan getah asli dari Malaysia meningkat sebanyak 2.0% pada setengah tahun kalendar 2014 berbanding dengan setengah tahun kalendar 2013, operasi Malaysia Top Glove (TGM) masih menunjukkan peningkatan yang ketara sebanyak 9.7% dalam jumlah eksport bagi tempoh yang sama. Ini disebabkan pertumbuhan yang ketara bagi segmen sarung tangan nitril dimana eksport TGM meningkat sebanyak 32.9% manakala eksport Malaysia meningkat sebanyak 1.5% sahaja pada setengah tahun kalendar pertama 2014. Kumpulan juga terus menjana aliran bebas tunai dan dapat mengekalkan kedudukan kunci kira-kira yang kukuh dengan tunai bersih dan pelaburan jangka pendek sebanyak RM157.6 juta pada 31 Ogos 2014. Sementara itu, jumlah ekuiti pemegang saham adalah RM1.40 bilion dan aset bersih sesaham adalah RM2.25. Dalam menegakkan komitmen kami kepada para pemegang saham kami yang dihargai, Lembaga Pengarah telah mengesyorkan dividen akhir dikecualikan cukai sebanyak 9 sen sesaham (satu peringkat) berjumlah kira-kira RM55.9 juta bagi TK2014, sementara menunggu kelulusan para pemegang saham pada Mesyuarat Agung Tahunan yang akan datang ke-16 pada Januari 2015. Kumpulan sebelum ini mengisytiharkan dividen interim sebanyak 7 sen sesaham biasa berjumlah RM 43.4 juta, bayaran yang telah dibuat pada 17 Julai 2014. Berasaskan setahun penuh, ini membolehkan pembayaran dividen sebanyak 16 sen, setanding dengan TK2013, mewakili bayaran nisbah dividend 55%. Selaras dengan komitmen untuk meningkatkan nilai bagi pemegang saham, Kumpulan juga telah menerima pakai Dasar Dividen untuk mengisytiharkan dan membayar dividen tahunan tidak kurang daripada 50% daripada keuntungan selepas cukai dan kepentingan minoriti bagi tahun-tahun kewangan akan datang. Perkembangan Korporat Bagi memastikan kita memperoleh manfaat sepenuhnya daripada permintaan sarung tangan getah yang semakin meningkat, pelaburan dalam pengembangan kualiti adalah tumpuan utama agenda korporat kami. Penekanan kami adalah untuk membina kilang yang lebih cekap, dimana kami dapat menggunakan teknologi serta automasi keupayaan terkini. Selaras dengan ini, kami juga akan meningkatkan produktiviti perkilangan yang sedia ada: mengkaji semula dan menaik taraf serta menutup kilang yang mana perlu. Memandangkan ini, kami meneruskan perancangan untuk meningkatkan bilangan baris pengeluaran sarung tangan nitril. Pertambahan sebanyak 6 baris talian pengeluaran sarung tangan nitril di Kilang 27 di Lukut, Port Dickson telah mula beroperasi pada bulan September 2014, manakala pemasangan baris talian pengeluaran Kilang 29 di Klang disasarkan siap dan boleh beroperasi pada Januari 2015.
Tan Sri Lim memberi ceramah bertajuk “Building on the Best: Facing the Challanges� di Tech Mahindra, Cyberjaya
Kilang 29 akan dilengkapi dengan baris talian pengeluaran yang lebih cepat, lebih cekap serta berteknologi maju. Ini sekaligus akan meningkatkan bilangan talian pengeluaran dari 464 ke 484, dan meningkatkan kapasiti pengeluaran dari 42.0 bilion ke 44.6 bilion helai sarung tangan setahun.
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PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version (SAMB.)
Kempen kesedaran keselamatan dan pencegahan jenayah di Top Glove yang dilancarkan dengan kerjasama daripada Jabatan Bomba Malaysia
Bagi memenuhi pelbagai keperluan, kami juga akan terus memperluaskan rangkaian produk kami (yang kini meliputi sarung tangan getah, pembedahan, nitril, isi rumah, “cleanroom”, vinil dan polietilena “cast”) yang sudah pun memperolehkan Top Glove pengiktirafan sebagai pusat sehenti sarung tangan terpilih. Pada 24 Mac 2014, Kumpulan juga telah berjaya menyempurnakan penswastaan anak syarikat Medi-Flex Limited, latihan korporat yang dijangka dapat memberi kesan positif kepada pendapatan Kumpulan kerana ianya meraih kembali keuntungan sebanyak 20.3% lagi. Ini adalah satu petanda yang baik memandangkan prestasi yang makin hebat seperti diharapkan. Sebagai sebahagian daripada usaha berterusan rasionalisasi kos dan memperkemas strategi perniagaan untuk meningkatkan kecekapan, Kumpulan juga menyatukan operasi China kepada sebuah kilang tunggal (Kilang 15) di Xin Hua, dan seterusnya melupuskan Kilang 8 dalam Zhangjiagang pada 13 Jun 2014. Dengan latihan ini, Kumpulan berjaya memulihkan operasi di China, dimana pada 4STK2014 menyumbang sebanyak RM1.09 juta kepada jumlah keuntungan Kumpulan. Pembinaan ibu pejabat korporat kami, Menara Top Glove mengikut perancangan dan dijangka siap untuk diduduki pada Mac 2015. Ini akan memenuhi keperluan ruang pejabat pada masa depan, memandangkan pengembangan tenaga kerja dan kapasiti agresif yang dalam perancangan. Kami hanya akan menduduki sebahagian daripada menara tersebut dan menyewakan tingkat-tingkat lain untuk menghasilkan pendapatan berulang. Terletak di lokasi strategik berhadapan Setia City Mall, dekatnya menara ini dengan kemudahan pengeluaran kami juga merupakan satu kelebihan untuk tujuan pemantauan. Kewarganegaraan Korporat dan Tanggungjawab Sosial Salah satu aspek perniagaan yang paling memuaskan adalah mampu menyumbang kepada masyarakat. Sesungguhnya, kami berhasrat untuk membawa perubahan yang bermakna kepada masyarakat di mana kami beroperasi, dengan meluangkan masa, usaha dan sumber ke arah kebajikan mereka. Barulah kita boleh mengatakan bahawa kita telah benar-benar berjaya sebagai warga korporat yang bertanggungjawab. Kami amat gembira dan bangga melihat begitu ramai di antara kakitangan Top Glove mengambil bahagian dalam pelbagai aktiviti tanggungjawab korporat kami, dengan begitu bersemangat. Tenaga inilah yang akan menggerakkan inisiatif tanggungjawab korporat kami, malahan organisasi kami ke tahap lebih tinggi, tahun demi tahun. Untuk mengetahui lebih lanjut mengenai bagaimana kami membuat perbezaan positif kepada masyarakat kita, sila lihat Penyata Tanggungjawab Korporat (Corporate Responsibility Statement) kami di muka surat 37 hingga 39.
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Top Glove Corporation Berhad • Annual Report 2014
PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version (SAMB.) Penyelidikan & Pembangunan (R&D) dan Kemajuan Teknologi Walaupun dalam keadaan yang mencabar, perniagaan seharusnya terus berinovasi secara terus menerus, untuk melindungi bahagian pasaran yang sedia ada dan mewujudkan pertumbuhan jualan. Hari ini, inovasi bukan lagi pilihan, tetapi merupakan sesuatu kewajipan, terutamanya dalam industri pengilangan seperti kami di mana tahap tuntutan pelanggan semakin tinggi dan persaingan adalah hebat. Oleh itu, Top Glove terus percaya bahawa pelaburan dalam R & D adalah penting untuk pertumbuhan masa depan dan mengekalkan kedudukan berdaya saing dalam industri pembuatan sarung tangan. Sejak penubuhannya, matlamat utama Jabatan R&D kami adalah menghasilkan teknologi baru untuk menyempurnakan lagi produk-produk sedia ada dan juga melancarkan produk baru yang lebih kompetitif. Oleh itu, Top Glove telah melabur dalam teknologi baru dan instrumen paling maju yang membolehkan pengujian analisis lanjutan seperti yang dilihat dalam makmal ujian air sisa kami yang baru ditubuhkan. Pasukan R&D kami berdedikasi mencipta produk yang berdaya saing, mampu milik dan berkualiti tinggi, demi memenuhi keperluan pelanggan di seluruh dunia. Kami bangga boleh menyampaikan hasil yang berkualiti tinggi, seperti yang terbukti dengan produk baru sarung tangan nitril teringan iaitu 2.7g. Pada tahun yang lalu, kami juga telah mencapai beberapa kejayaan ketara dalam proses pengilangan, membolehkan kami mencapai kualiti pengeluaran yang lebih tinggi serta cekap. Selaras dengan Polisi Kualiti Top Glove "Penambahbaikan dan inovasi yang berterusan adalah tugas kami", kami komited untuk membuat kemajuan lanjut terutamanya dalam peningkatan kualiti dan projekprojek penjimatan tenaga, memandangkan kenaikan tarif tenaga elektrik dan gas asli. Menyedari kesan yang meluas Cukai Barangan dan Perkhidmatan (GST) kepada perniagaan, kami juga telahpun memulakan projek-projek pelaksanaan GST. Kami kini bekerjasama dengan perunding untuk mengenal pasti isu-isu kritikal yang mungkin timbul semasa peralihan dan untuk memastikan pematuhan penuh sebelum tarikh implementasinya pada 1 April 2015.
Mr. KM Lee menerima anugerah “The BrandLaureate Best BrandsBrand of the Year, Manufacturing-Gloves�
Selangkah ke Hadapan Sebagai pengeluar sarung tangan getah terbesar di dunia, keutamaan kami kini mengoptimumkan kecekapan kilang kami melalui automasi, inovasi dan Penyelidikan & Pembangunan (R&D) meluas, ke arah memuaskan pelanggan dan pemegang saham. Industri kami masih mempunyai potensi pertumbuhan tinggi dan kami berusaha secara agresif untuk mengembangkan pasaran kami di negara-negara baru muncul dan maju, di mana permintaan bagi sarung tangan latek dan nitril masing-masing terus meningkat. Oleh itu, campuran produk kami akan dirancang secara strategik sejajar bagi memenuhi keperluan pasaran. Dalam semua ini, kakitangan Top Glove yang berkaliber kekal penting bagi kejayaan kami secara berterusan. Kami akan terus melabur dalam sumber manusia kami melalui latihan dan pembangunan, melengkapkan mereka dengan kemahiran dan keupayaan yang akan membolehkan kami untuk memacu pertumbuhan dan peningkatan kualiti dalam semua aspek operasi kami. Sementara itu, kami juga sedang berusaha membentuk satu generasi baru pada peringkat pimpinan yang turut bersemangat untuk sama berganding bahu dalam menerajui wawasan kami dan mampu membawa perniagaan kami ke tahap kejayaan yang seterusnya. Kami sedar bahawa masih terdapat banyak perkara yang perlu dilaksanakan dalam merealisasikan sasaran yang telah kami tetapkan, terutamanya dalam persekitaran perniagaan sarung tangan yang terus mencabar.
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PERUTUSAN KEPADA PIHAK BERKEPENTINGAN & perbincangan dan analisis pihak pengurus > LEtter to stakeholders : Bahasa Malaysia version (SAMB.) Walau bagaimanapun, dengan tumpuan tidak berbelah bahagi kami kepada kualiti, inovasi, automasi, kawalan kos berhemah dan kecekapan, kami percaya bahawa kami berkedudukan baik dan juga mampu untuk memberikan prestasi yang lebih kukuh pada tahun hadapan. Penghargaan Tidak dinafikan tahun ini adalah penuh dengan cabaran, tetapi kami beruntung kerana mempunyai begitu ramai kakitangan yang berkualiti dikalangan kami, yang telah bekerja tanpa mengenal erti penat dan lelah dalam mencapai keputusan positif dan akan terus berbuat demikian, bagi memastikan kejayaan kami di masa hadapan. Ucapan ribuan terima kasih kami kepada pihak pengurusan dan kakitangan kerana mampu menggalas komitmen yang tidak berbelah bahagi. Kami juga ingin merakamkan setinggi penghargaan kepada para pemegang saham, pelanggan, pembekal dan rakan perniagaan di atas sokongan dan keyakinan teguh, tanpanya kita tidak akan mampu mencapai kejayaan ditahap ini. Kami juga ingin menyampaikan ucapan terima kasih kepada para Pengarah Medi-Flex Limited yang baru-baru ini dinyahsenaraikan, yang telah berkhidmat dengan cemerlang sepanjang tempoh perkhidmatan mereka. Tidak dilupakan juga, kami amat menghargai Lembaga Pengarah syarikat kami bagi perkhidmatan tanpa jemu mereka yang telah bijak membimbing Kumpulan ke hadapan. Kami yakin masa depan sememangnya cerah dan menghargai sokongan yang berterusan daripada anda, sementara kami bekerja dengan penuh kesungguhan untuk menyampaikan prestasi sepertimana yang anda harapkan.
Terima kasih.
TAN SRI LIM WEE CHAI Pengerusi Top Glove Corporation Berhad 31 Oktober 2014
LEE KIM MEOW Pengarah Urusan Top Glove Corporation Berhad 31 Oktober 2014
Lawatan daripada Badan Pengawas Pemegang Saham Minoriti Berhad (MSWG) ke ibu pejabat Top Glove di Klang
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Tan Sri Lim membawa Yang Amat Berbahagia Datuk Amar Douglas Uggah Embas, Menteri Perusahaan Perladangan dan Komoditi untuk lawatan berpandu di kilang Top Glove
Top Glove Corporation Berhad • Annual Report 2014
致权益持有人的信函及管理层讨论与分析 > letter to stakeholders : Mandarin version
诸位权益持有人， 我们谨此代表顶级手套集团向诸位权益持有人呈报 顶级手套集团截至2014年8月31日的财务年度报告。 商业概述 这个财务年是充满挑战的一年，由于竞争加剧和成本压 力。然而在2014财务年，顶级手套集团在销售量持续增 长。我们发现发展国家对丁腈手套有着稳定及庞大的需 求量，以及乳胶手套销售在新兴市场也有健全增长的蓬 勃现象。 在2014财务年，为了满足不断增长的市场需求及各大业 者也加强了各自的产能，从而导致了丁腈手套的竞争 加剧。 除此，水、电费与液化天然气的调涨也增加了生产成 本。随着电费从2014年1月1日起上调了16%，液化天然 气价格也在2014年5月1日调整了19%，加上随后的汇率 调整，导致连锁成本的增加以致都影响了集团的盈 利。但是，集团的品质和成本效率通过自动化，电脑化 和科技的提升将有助于减轻这些不利因素的影响。
随着竞争将更激烈，多年在手套营运的经验告诉我 们，这只是一个商业周期，我们相信市场会随着时间的 推移而自行修复。由于电费和液化天然气的调涨导致生 产成本的增加，这或许会是更严峻的一次挑战。但我们 坚定我们的企业方针，即以有效及低成本生产高品质手 套，我们将能够成功的一一克服。 此外，在2间跨国公司退出手套业务并外包其制造业务 后，我们正目睹此行业整合的迹象。这对我们来说是好 的现象，在供应和竞争减少的同时也展示了新的商机。 作为医疗保健行业不可或缺的产品，马来西亚橡胶手套 制造商协会（MARGMA）估计在2014年乳胶手套的世 界需求量将达到每年1,700亿只，预计将以每年平均持续 增 长 6% 至 8％。 由 于 医 疗 保 健 意 识 和 卫 生 标 准 的 提 高，以及更严格的医疗法规和人口老化的增长，手套的 使用将继续普遍及扩大，特别是在使用率比较低的发展 中国家，将呈现快速上升的趋势。
庆幸的是，原材料价格的下降缓和了部份生产成本的提 高所带来的冲击相比于2013财务年。在2014财务年里， 乳胶价格下滑17.3％，至平均每公斤马币4.77，而丁腈 价格也下滑了8.3％, 至平均每公斤马币3.51。我们预期 原料价格继续维持在此价格范围内，并展望我们的行业 将有良好的发展趋势。同时，偶发感染性疾病如禽流感 和猪流感等各种病菌，以及最近规模较大的埃博拉病菌 的爆发，体现了医疗保健行业将持续扮演重要的角色， 提供最前线的预防和个人防护设备。
客户到访顶级手套于江苏省兴化市的第十五厂
顶级手套季度业绩汇报会
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致权益持有人的信函及管理层讨论与分析（继续） > letter to stakeholders : Mandarin version
丹斯里林伟才在李金谋的陪同下颁发2013年年度最佳员工奖状 在充满挑战环境下的表现 截至2014财务年8月31日，集团营业额达马币22亿7500万，相比于2013财务年略低了1.6%，这有赖于原材料价格的 下滑影响了平均售价。同时， 2014财务年的净利润为马币1亿836万，相比于2013财务年下滑了9.5%。 虽然宏观环境的挑战冲击着集团的表现，顶级手套的销售量依然在2014财务年显著增加了3%。然而高销售量的表现 被竞争的加剧抵消了，特别是丁腈手套，因为电费和液化天然气的上涨导致成本的提高。除此，随着马币汇率提升并 发生在本财务年后期，也导致较弱的表现。 在2014财务年，集团的销售产品分类和营业额分析描述如下：
2014财务年销售产品分类
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Top Glove Corporation Berhad • Annual Report 2014
2014财务年营业额分析
致权益持有人的信函及管理层讨论与分析（继续） > letter to stakeholders : Mandarin version
然而，集团在今年取得了可观的运营改进，主要归功于 丁腈手套销售量的增长，相比去年以24% 大幅增长。丁 腈手套销售额从2013财务年占集团总额的20%增加至 2014财 务 年 的 24%。 有 此 强 盛 需 求 ， 展 示 了 先 进 市 场，特别是美国和欧洲将有良好的增长前景。与此同 时，亚洲地区的销售额增长使集团的市场份额扩大至 16％，与我们预测新兴市场对乳胶手套需求增加的情况 相符。实际上，齐全的手套系列和平均的销售产品分类 使集团处于非常有利的地位，可以满足不同地区的不同 需求。 在出口量增长方面，集团的表现优越于马来西亚的全国 出口量总额。在2014年的首半年，马来西亚出口的乳胶 手套和丁腈手套总额上升了2.0%。同一季度，顶级手套 的马来西亚业务（TGM）的出口仍上升。在2014年的首 季度，顶级手套马来西亚业务（TGM）的出口上升了 32.9%，而马来西亚的出口仅增长了1.5%。这主要归功 于丁腈手套大幅度的增长。 截至2014年8月31日，集团的净现金流量及短期投资为 马币1亿5760万，持续保持着稳健的现金流量及资产负 债表。 同 时 ， 总 股 东 权 益 为 马 币 14亿 ， 每 股 净 资 产 为 马 币 2.25。 集团为了遵守对股东的承诺，董事会已建议在2014财务 年派发每股9仙终期股息，总额为马币5590万。上述所 建议的股息会在即将召开的股东常年大会中提呈与批 准。集团也宣布派发每股7仙的中期股息， 总额为马币 4340万。上述中期股息已在2014年7月17日支付。与此 同时，集团维持与2013财务年相同的股息幅度， 全年总 派息为16仙,同等于55%的派息率。为了增加股东价值的 承诺，集团也采用了股息政策，在扣除税后利润及少数 股东权益后，宣布在未来的财政年支付股东至少50%的 股息。
许多股东踊跃参与顶级手套的年度股东大会
企业发展 为了确保能够充份迎合乳胶手套需求的不断增长，有质 量的企业拓展将是集团的重点策略。集团着重于建造更 有效率的生产设备，采用最新的技术和自动化功能。与 此同时，集团也将通过审查，更新及如有必要时关闭残 旧的生产线，以提高现有工厂的生产效率。 有鉴于此，集团正计划提高丁腈手套生产线的数量。在 2014年9月，位于波德申芦骨的第27厂增添6条丁腈手套 生产线，而位于巴生新设的第29厂，将于2015年1月完 工。第29厂将安装更快速、更好的品质和技术先进的生 产线。集团总生产线将从464条增加至484条，年总产能 将从420亿只手套增加至446亿只手套。 为了满足日益多样化和专业化的需求，集团也将继续对 现有的产品范围扩大（目前包括乳胶手套，手术手 套，丁腈手套，家用手套，无尘室手套，PVC手套和 CPE手套），从而使集团成为首选的一站式手套采购 中心。 集团于2014年3月24日成功将Medi-Flex私有化，这对集 团的盈利产生了正面的影响，也替集团争取了额外20.3% 的利润。这预示着业绩将向前迈进。 基于集团精简成本和业务整合策略以提高营运效率的方 针，集团将旗下的中国业务合并成一间工厂，即位于江 苏省兴化市的第十五厂，同时于2014年6月13日完成出 售位于中国张家港的分厂(第八厂)。随后，集团成功将 中国业务转型，并在2014财务年第4季度，对集团的利 润贡献了马币109万。 集团未来的新总部即顶级手套大厦的建设正有条不紊地 进行，预计将在2015年3月使用。鉴于我们正积极地进 行人力资源和产能的扩张，这将满足未来办公室空间的 内部需求。集团将使用一部份的楼层，并出租其他楼层 以赚取额外的收入。大厦的地理位置优越，毗邻实达城 购物中心及靠近集团的生产工厂及便于我们管理。
拿督李耀昇被邀请到顶级手套总公司分享其企业经营模式
Top Glove Corporation Berhad • Annual Report 2014
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致权益持有人的信函及管理层讨论与分析（继续） > letter to stakeholders : Mandarin version
企业公民与企业社会责任
展望未来
衡量一个成功企业的存在价值关乎其对社会做出的贡 献，我们期望通过付出我们的时间，精力和资源来改善 我们企业所在的社区。唯有这样，作为一个负责任的企 业公民，我们才能说我们真正的成功。
作为全球最大的乳胶手套制造商，我们的首要任务是通 过自动化、创新和研发来改良生产设施效率以提高客户 和股东的权益。
我们看见许多内部职员怀着满腔热情去进行多元的企业 社会责任活动，脸上挂着的是喜悦与自豪。这恰恰是一 种正能量推动我们的企业责任计划，使我们的企业更上 一层楼。
手套行业保持着增长的潜力，我们分别期望乳胶和丁晴 手套在发展中国家和发达国家的需求量持续上升 。同 时，确保我们的产品结构可以满足市场需求。
科技研发
这一切的措施，有赖于顶级手套许多有才华的职员，他 们是我们持续成功的关键因素。我们通过培训和教育发 展人力资源，使他们具备足够的能力与技能，足以推动 质量的改善和企业运营各个方面的改进。我们也提拔秉 持公司宏愿及致力带动公司朝向更成功的新一代领 导者。
即使是在最困难的时候，企业也没有忽略不断创新，这 是至关重要的以便维持现有的市场份额同时又创造增 长。如今，创新不再是“可有可无”，而是'必备'。特别 是对制造行业更为重要：客户的标准越来越严格，竞争 也越来越激烈。
我们意识到，我们距离实现已设定的目标还有一段长远 的路程，特别是在手套的经营环境仍然充满挑战的情况 下。然而，我们坚定不移地专注于品质监控，创新，自 动化，高效力的成本控制和营运，我们相信我们已准备 好在新的一年里取得更佳的业绩。
因此，顶级手套仍然相信着重于投资研发对我们的未来 发展以及在手套制造行业中保持竞争地位扮演着关键 角色。
鸣谢
欲知更多有关集团的企业社会责任活动，请参阅第37至 39 页的企业社会责任报告。
公司自成立以来，我们的研发部门的首要目标就是开发 新技术，以提高现有产品，并确保及时推出具有竞争力 的新产品。因此，顶级手套投资于新技术和先进仪 器，进行先进的高度分析测试，其中包括了我们新成立 的废水检测实验室。 我们的研发团队致力于研发具有竞争力，价格实惠，高 品质的产品，以满足全球客户的需求。我们自豪地呈现 最优质的成果即市场认可的新开发低克重2.7克丁腈手 套。在过去的一年中，我们也在现有的生产线改进取得 了几个显着的突破，使我们能够达到更高的生产质量和 效率。 随着电费及液化天然气价格的调涨及为了符合集团的品 质政策，即：持续改进和创新是我们的职责，我们承诺 将在质量提升及能源节约计划中作进一步的改善。
今年并非没有逆境，但我们庆幸有这么多优秀的人 才，努力付出及不断展示成果。我们会持之以恒，确保 我们的未来同样取得成功。我们真诚地感谢我们尽责及 优秀的管理团队和工作人员那份坚定不移的信念。 我们也衷心感谢全体股东、客户、供应商和商业伙伴给 予本集团无限的支持与信任。有你们的支持，我们才会 有今天的成就。 我们也谨此对最近私营化的Medi-Flex有限公司各位独立 董事在整个任期的优越表现致于谢意。 最后，我们衷心感谢各位董事宝贵的意见与服务，以引 导集团向前迈进。 我们坚信未来会更好，并期盼有您持续的支持及我们的 努力将会达至您期望的成绩。 谢谢。
众所周知，消费税(GST)对社会的广泛影响也将会影响我 们的业务。我们也正式提前开始了应对消费税实施的项 目。目前，我们正在与相关顾问公司合作，以帮助我们 锁定在过渡期间可能出现的问题，并确保在2015年4月1 日消费税实行前完全遵守。
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丹斯里林伟才 董事主席 顶级手套集团 2014年10月31日
Top Glove Corporation Berhad • Annual Report 2014
李金谋 董事经理 顶级手套集团 2014年10月31日
CORPORATE RESPONSIBILITY STATEMENT
“The businesses of today play a key role in ensuring a sustainable future. As a responsible corporate citizen, we, Top Glove, have embraced this responsibility with the commitment to make a positive contribution to society.” Tan Sri Lim Wee Chai, Chairman, Top Glove Corporation Berhad
Top Glove participated in the KL Rat Race 2014, a yearly corporate run for charity, organised by The Edge Communications
The Staff Children’s Academic Excellence Award rewards academic achievements, underscoring Top Glove’s commitment to employees and education
As a business, we recognise that what we do affects the communities in which we operate. Even as we expand our footprint, we are mindful of our duty to uphold responsible business practices, as well as to add value to society. Accordingly, every decision that we make takes into account the creation of a better and more sustainable future. While encompassing a wide breadth of activities, Corporate Responsibility initiatives at Top Glove focus on four key areas of community, environment, employees and good business ethics. As with previous years, in 2014, we were privileged to have been able to make a difference in many lives, via the many projects that we are undertaking. Community We are involved in a broad-ranging community engagement program, with a primary emphasis on the promotion of education. Some of the yearʼs highlights include the following: • • •
•
Awarding scholarships to undergraduates with financial difficulties, enabling them to pursue degree courses at local public universities. Providing educational aid to schools for instance, towards the construction or expansion of new facilities. Amongst the beneficiary schools were SK Jalan Meru, SJKC Kuen Cheng 1, SM Hin Hua and SMK Perempuan Methodist. Channeling donations in cash and kind to NGOs and beneficiary associations which include Persatuan Kebajikan Batu 3 Jalan Kapar Klang, Lovely Disabled Home, Spastic Childrenʼs Association of Selangor and Federal Territory, Malaysia Mental Health Association, Pertubuhan Penderma Darah Malaysia, National Kidney Foundation of Malaysia and Society of the Blind in Malaysia. Contributions were also made to Pudu Rotary Clubʼs Stop Hunger Now, a charity meal packing project, for which Top Glove provided both funds and manpower. Organising festive season charity events such as visits to old folksʼ homes and orphanages during Hari Raya Aidilfitri, Deepavali, Christmas and Chinese New Year, which also gave our staff the opportunity to support worthy causes hands-on.
In September this year, we were privileged to be part of a Government initiative to help stem the spread of Ebola. The timely endeavour amassed a donation of 20.9 million gloves, collected from a number of Malaysian glove manufacturers under the umbrella of the Malaysian Rubber Glove Manufacturers Association (MARGMA) and private
Top Glove Corporation Berhad • Annual Report 2014
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CORPORATE RESPONSIBILITY STATEMENT (cont’d)
companies, for West African nations stricken by the virus. In addition to contributing gloves, we also projectmanaged the shipping of these rubber gloves, some of which are already on their way to the affected countries of Liberia, Sierra Leone, Guinea, Nigeria and The Democratic Republic of Congo.
•
Environment • We strive to continuously develop and implement ecologically sound measures and strategies and at the same time, generate product quality and shareholder value at the highest levels.
to maintain cleanliness and prevent the outbreak of diseases, ensure a healthy working and living environment, while also cultivating a harmonious relationship between employers and employees. Towards reducing usage of plastic bottles, bottled mineral water is no longer provided for in-house training sessions, for which employees are encouraged to bring their own water. Boilers at our factories utilise only biomass fuel, towards reducing greenhouse gas emissions and global warming. A renewable energy source, biomass fuels utilise unwanted organic waste that would otherwise be sent to landfill sites.
Waste Management
Employees
•
At Top Glove, we draw on the capabilities of 10,000 committed individuals across Malaysia, Thailand, China, Indonesia, Germany and the USA. We believe a company is a reflection of its people and strive to nurture our diverse talent pool to ensure they reach their full potential and contribute positively to our business growth.
In compliance with Department of Environment (DOE) requirements, wastewater is treated in an Industrial Effluent Treatment System (IETS) plant, which is available at each factory, before it is discharged. The gas/smoke discharged from factory chimneys is monitored by a real time 24-hour system linked directly to the DOE. A high-efficiency scrubber system is installed at every factory to neutralise chlorine gas discharge.
• •
Green Initiatives •
To encourage employees to "Reduce, Reuse and Recycle", activities such as inter-factory recycling competitions and waste segregation training are frequently held. Our on-going campaign To Pick Up At Least One Rubbish Per Day instills in staff the good habit of picking up rubbish daily in order to achieve a cleaner environment. We organise “Gotong-Royong” (mutual cooperation) activities every quarter, in close collaboration with Majlis Perbandaran Klang, the local town council for Klang to clean the drains and land around the neighbourhood. This activity aims
•
•
Top Glove brings festive cheer to an orphanage during Hari Raya Aidilfitri
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Talent Recruitment and Attraction Our employment proposition is simple in that we hire the right talent locally, whilst providing career opportunities to grow and contribute positively within the Group. Our core principle is to engage future leaders who are wellrounded in health, character and capabilities for the continued success of our organisation. Learning and Development Top Glove has a remarkably talented base of employees for whom we strive to provide the culture of continuous learning and development. We are moving from the traditional approach of classroom learning and development and have adopted experiential, networking and guidance learning strategies. Our training platform includes e-learning via an in-house learning portal,
Top Glove contributed in terms of funding and manpower to the Pudu Rotary Club’s ‘Stop Hunger Now’ programme
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE RESPONSIBILITY STATEMENT (cont’d)
Healthy Staff Programmes
The Blood Donation Campaign, an annual event on the Top Glove calendar, is well-supported by staff
online books, instructor led-classes as well as educational and inspirational movie screenings. Our 2014 training calendar comprised 123 sessions, focusing on key areas of Soft Skills, Computer Applications/Systems and Functional training. The topics covered encompassed Working Together to Combat Corruption, Sun Tzuʼs Strategies for Winners, Effective Problem Solving and Decision Making, Lean Manufacturing, Internal Quality Audit, Risk Management, various international standards as well as Microsoft applications.
We are committed to creating a ʻculture of good healthʼ among our people, which advocates a long term commitment to a healthy lifestyle. To this end, monthly sports tournaments, recreational and corporate level activities and campaigns are organised. Regular health talks are also conducted by our resident doctor, nutritionists and healthcare specialists from our panel. In FY2014 alone, 8 such health talks were organised on topics which included the prevention of coronary heart disease, stroke and diabetes as well as the importance of a healthy diet. Our efforts to promote a healthy and alert workforce also include a daily 15-minute morning exercise session, as well as paying attention to the Body Mass Index (BMI) of all employees. Good Business Ethics In line with our Business Ethics of honesty, integrity and transparency, we hold ourselves as well as our business associates to the highest standards of behaviour in the conduct of business transactions. With this in mind: •
• A series of programmes has also been initiated for younger generations to learn from the insights of their Senior Managers. The Sharing is Caring series for example, combines leadership and motivation, enabling younger generation employees to learn the best practices that are key to achieving our business aspirations. Sharing sessions by subject matter experts from other well-managed companies are also regularly organised as benchmarking initiatives.
•
Performance Management and Reward In 2011, we endeavoured to further strengthen our Performance Management System based on employee feedback. All KPIs set are now measurable towards promoting ownership and accountability of the employee. With this enhancement, individual employee performance is tied to the business unit and overall group performance, which serves to help attract, recruit and ultimately, retain top talents. Our compensation structure gives us a competitive edge in the market. It incorporates both fixed and variable elements, as well as short and long term components namely basic salary, benefits, incentives and an Employee Share Option Scheme (ESOS). The package also includes non-financial elements such as development opportunities. To inculcate a pay-forperformance culture, high performance is well-rewarded.
•
We adopt a rigorous selection process for our vendors. All suppliers and business associates are required to sign a Letter of Enforcement of Corporate Culture (LECC) twice a year, to affirm their adherence to our policy and practice of noncorruption. The Top Glove Prevention and Anti-Corruption Committee (TGPAC) continuously benchmarks whistle-blowing policies adopted by other companies to ensure our employees and the public have the most effective avenue to raise issues pertaining to corrupt practices within the organisation. Several talks on integrity by organisations such as the Malaysian Anti-Corruption Commission (MACC) and Transparency International (TI), were organised to promote an anti-corruption mindset and to instill honest and transparent practices amongst all Top Glove employees, in line with Top Gloveʼs core business principles and policies which reflect its focus on making ethics and anti-corruption an integral part of Top Gloveʼs business operations. Underscoring our commitment to good ethical business practices and zero-tolerance for corruption, Top Glove was amongst the first to sign the Corporate Integrity Pledge in 2011, a government initiative aimed at promoting anticorruption behavior amongst corporates.
We believe that every corporation and every individual within it is capable of bringing about meaningful change, through corporate responsibility. We feel privileged at every opportunity to channel our resources towards worthy causes and will continue to deepen our commitment in this very important area.
Top Glove Corporation Berhad • Annual Report 2014
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FINANCIAL CALENDAR
DECEMBER (3rd week)
2015
JANUARY, 8
Announcement of the consolidated results for the 1st quarter ending 30 November 2014
RE
2014
LTS 5 SU 201 FY r e art Qu
1st
16th Annual General Meeting Time : 11.30 a.m. Venue : Setia City Convention Centre
(3rd week)
Announcement of the consolidated results for the 3rd quarter ending 31 May 2015
OCTOBER (3rd week) Announcement of the consolidated results for the 4th quarter and financial year ending 31 August 2015
DECEMBER (3rd week) Announcement of the consolidated results for the 1st quarter ending 30 November 2015
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Top Glove Corporation Berhad • Annual Report 2014
RE
2nd
Q
LTS SU 015 Y2 F er art Qu
RE
JUNE
LTS SU 015 Y2 F r te uar
3rd
LTS SU 015 Y2 F er art Qu
RE
Announcement of the consolidated results for the 2nd quarter ending 28 February 2015
4th
LTS SU 016 Y2 rF e t ar Qu
RE
MARCH (3rd week)
1st
TOP GLOVE CORPORATE SONG
ENGLISH
BAHASA MALAYSIA
All over the world, We are known, For our superior quality gloves, Through the years we have grown, We have shown, Our gloves stand out superior in the world, Top Glove is the best, Better than the rest, Quality, Reliability and Consistency, Remain our policy, At Top Glove’s Group of Companies.
Dari mulanya, hingga terkini, Nama Top Glove diberi, Pengeluar sarung tangan yang berkualiti, Yakinlah hasil pengeluaran kami, Yang bermutu dan berkualiti tinggi, Sentiasa menuju kejayaan, Untuk mencapai keunggulan.
MANDARIN
THAI
Top Glove Corporation Berhad • Annual Report 2014
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CORPORATE GOVERNANCE STATEMENT
The Board of Top Glove Corporation Bhd ("the Board") is committed in ensuring a high standard of corporate governance is practised whilst pursuing its corporate objectives in enhancing the shareholdersʼ value and competitiveness. The Board is mindful of the importance of governance and acknowledges to continue delivering sustainable performance and instilling best corporate governance practices in building a sustainable business. The Group will continue its efforts in evaluating its governance practices in response to evolving best practices and the changing requirements of the Group. The Board is pleased to present the Corporate Governance Statement for the year ended 31 August 2014 outlining the application of the principles and recommendations as set out in the following guides: 1. 2. 3. 4.
Companies Act, 1965 (“CA 1965”); Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”); Malaysian Code on Corporate Governance 2012 (“the MCCG 2012”); and Second Edition of Corporate Governance Guide issued by Bursa Malaysia Berhad.
The Group has noted the principles and recommendations of the above-mentioned guides and will further review its corporate governance practices to bring the same in line with the recommendations under those guides. As part of its efforts to enhance its practices, Top Glove Corporation Bhd (“Top Glove”) has also taken the initiative to benchmark itself against leading corporate governance standards of reputable Malaysia Public Listed Companies.
PRINCIPLE 1 : ESTABLISH CLEAR ROLES AND RESPONSIBILITIES The responsibilities of the Board, which should be set out in a Board Charter, include Management oversight, setting strategic direction premised on sustainability and promoting ethical conduct in business dealings. Top Glove is led by experienced Board comprising members who are specialised in the glove manufacturing and various business sectors supported by a wide range of other professionals in the economics, engineering and accounting sectors. This wide spectrum of skills and experience provide the strength that is needed to lead the Company to meet its objectives and enable the Company to rest in the firm control of an accountable and competent Board of Directors. Board Charter Board Charter established clearly the functions reserved for the Board, Directors roles and responsibilities and those delegated to the Management. It is a reference and induction literature in providing the Board members and Management insight into the functions of the Board of Directors. The core areas of the Board Charter are as follows: 1. Company Goals, Mission and Vision 2. Board Governance Process 3. Board and Management Relationship 4. Board and Shareholders Relationship 5. Stakeholders Relationship 6. Schedule of Board Matters The Charter was adopted on 28 August 2012 and will be reviewed from time to time to ensure its consistency with the Boardʼs objectives and current laws and practices. The Board Charter is accessible through the Companyʼs website at https://www.topglove.com.my/index.php/aboutus/corporate-governance
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Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
Board Composition and Balance The Board currently comprises eleven (11) members, made up of five (5) Executive Directors including the Chairman and Managing Director and six (6) Independent Non-Executive Directors (“INED”). The roles of the Chairman and the Managing Director are distinct and separate so as to ensure balance of power and authority. The composition reflects a balance of Executive Directors and Non-Executive Directors (including INEDs) such that no individual or small group of individuals can dominate the Board's decision making. The Board comprises majority of INEDs on Board which is in line with the recommendation 3.5 of the MCCG 2012 where the Chairman is a Non-Independent Chairman. The majority number of INEDs helps to ensure effective check and balance of the Board function as the INEDs are often the carers of the minority shareholders in providing constructive feedbacks to the proposals for the Company. Board Mix and Skillsets Matrix A Board skill assessment was carried out to determine the knowledge, skills and experience of the Board Members, in line with the Companyʼs business and strategies. The assessment results indicated that all the Board Members have knowledge, skills and experience in following areas: (a) (b) (c) (d) (e) (f) (g)
Strategy Entrepreneurship, Legal, Corporate Governance, Risk Management & Internal Control, Audit, Accounting, Financial Reporting & Taxation, Human Capital, Sales & Marketing, and Production & Quality Assurance.
The assessment result allows the Nomination Committee to address the evaluation assessment and the training needs of Directors effectively. Independence The importance of INEDs has not been neglected. The Board recognises the significant contribution by them to the Company in bringing independent and objective judgement to the Board in decision making. The Independence is as prescribed under the Main LR which states that INEDs should be independent and free from any business or other relationships that could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company and is willing to express his/her opinion at the Board free of concern about his/her position or the position of any third party. Nevertheless, none of the INEDs engage in the day-to-day management of the Company, participate in any business dealings or are involved in any other relationships with the Company (other than in situations permitted by the applicable regulations). The independency assessment is based on the provisions of the Main LR which covers a list of questions is asked to evaluate independency. The independent confirmation is obtained based on the independency assessment before the appointment of Director and Directors are assessed annually to re-affirm their independence based on the provisions of the Main LR. During the financial year 2014, the Board was satisfied that none of the INEDs had any relationships that could materially interfere with, or be perceived to materially interfere with their unfettered and independent judgement and ability to act in the best interests of the Company.
Top Glove Corporation Berhad • Annual Report 2014
43
CORPORATE GOVERNANCE STATEMENT (cont’d)
Key information on Directors A brief description of the background of each Director is presented on page 8 to 15 of this Annual Report. The Directors proposed for re-election and re-appointment are stated in the Notice of Annual General Meeting (“AGM”). No alternate Directors have been appointed in respect of any of the Directors. The Board has on 14 October 2014 appointed Tan Sri Mohd Sidek bin Haji Hassan as the Senior Independent NonExecutive Director of the Board to whom concerns may be conveyed where it could be inappropriate for the concerns to be dealt with by the Chairman and Managing Director. The Senior Independent Non-Executive Director may be contacted at Tel: +603-5022 2110. Duties and Responsibilities of the Board The Non-Executive Directors are to deliberate and discuss policies and strategies formulated and proposed by Management with the view of the long-term interests of all stakeholders. They contributed to the formulation of policies, and decision-making using their expertise and experience. They also provide guidance and promote professionalism to the Management. The INEDs fulfilled a pivotal role in corporate accountability; providing independent and unbiased view, advice and judgement to ensure a balanced and unbiased decision making process to ensure that the long term interests of all stakeholders and the community are well protected. Succession Planning The Board is responsible for reviewing candidates for key positions namely, the Executive Chairman, Managing Director, Executive & Non-Executive Directors and all head of divisions; the succession planning to ensure all candidates appointed to senior management positions are of sufficient caliber. The Board had during the financial year, adopted a Succession Planning Policy to ensure that there are platforms in place to provide for the orderly succession of senior management. The Succession Planning Policy is available online at the Companyʼs website at https://www.topglove.com.my/ index.php/about-us/corporate-governance Ethical Standards, the Codes and Policy The Directorsʼ Code of Conduct (“the Directorsʼ Code”) was adopted by the Board in September 2013. Directors are expected to conduct themselves with the highest ethical standards, to behave ethically and professionally at all times to promote and protect reputation and performance of the Company. The Directorsʼ Code covers the principles of conflict of interest, insider dealings, integrity, compliance to law and etc. The said Code was adopted by the Board in September 2013. Part of the enforcement, Directors are required to submit their declaration adhering and observing to the provisions in the Directorsʼ Code annually. The Directorsʼ Code is accessible through the Companyʼs website at https://www.topglove.com.my/index.php/aboutus/corporate-governance Employee Code of Conduct and Ethics (“the Employeeʼs Code”) is a manual applicable to employees of Top Glove Group of Companies. It guides the employeeʼs conduct in the workplace, business conduct when dealing with external parties, key issues such as bribery, conflict of interests, insider trading as well as data integrity and retention. The Employeeʼs Code is disseminated to Top Gloveʼs employees through its intranet. Employees are also required to submit their declarations to adhere and observe to its provisions annually as part of the enforcement.
44
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
The Employeeʼs Code is accessible through the Companyʼs website at https://www.topglove.com.my/index.php/aboutus/corporate-governance The Board believed that having a Whistle-Blowing Policy and Procedure in place will strengthens, supports good management and at the same time demonstrates accountability, good risk management and sound corporate governance practices. A Whistle-Blowing Policy was adopted by the Board, recommended by the Audit Committee (“AC”) in year 2011. The Board aimed to provide a platform and to act as a mechanism for parties to channel their complaints or to provide information on fraud, wrongdoings or non-compliance to any rules or procedures by the employee or Management of the Company. The policy outlines when, how and to whom a concern may be properly raised, distinguishes a concern from a personal grievance and allows the whistle-blower the opportunity to raise a concern outside their management line and in confidence. The identity of the whistle-blower is kept confidential and protection is accorded to the whistle-blower against any form of reprisal or retribution. Any concerns raised will be investigated by Top Glove Prevention & Anti-Corruption and Whistle Blowing Committee and a report and update is provided to the Board of Directors, through the AC. The Whistle-Blowing Policy is accessible through the Companyʼs website at https://www.topglove.com.my/ index.php/about-us/corporate-governance Sustainability and Corporate Social Responsibility The Board takes strong commitment to business sustainability seriously and seek to contribute positively to the wellbeing of stakeholders. The detail Corporate Responsibility Statement can be found on page 37 to 39 of this Annual Report. Qualified and Competent Company Secretaries The Board has direct access to the advice and services of the Company Secretaries who are experienced, competent and knowledgeable on the laws and regulations, as well as directives issued by the regulatory authorities. The Company Secretaries are responsible to the Board for ensuring that all governance matters and Board procedures are followed and that applicable laws and regulations are complied with. These include obligations on Directors relating to disclosure of interests and disclosure of any conflicts of interest in transactions with the Group. The Company Secretaries also highlights all compliance and governance issues which they feel ought to be brought to the Boardʼs attention. The Company Secretaries also facilitate the communication of key decisions and policies between the Board, Board Committees and senior management. In ensuring the uniformity of Board conduct and effective boardroom practices throughout the Group, the Company Secretaries have oversight on overall corporate secretarial functions of the Group in Malaysia and Singapore. All Company Secretaries of Top Glove are persons with Chartered Secretaries qualifications and are qualify to act as chartered secretaries under Section 139A of the CA 1965. The Companies Secretaries had and will constantly keep themselves abreast, through continuous training on the regulatory changes and development in corporate governance. Independent Professional Advice The Directors, whether as a group or individually, are entitled to take independent professional advice at the expense of the Company, in furtherance of their duties and in the event that circumstances warrant the same. The Company has in place guidelines allowing the Directors to seek independent professional advice through the Board Charter.
Top Glove Corporation Berhad • Annual Report 2014
45
CORPORATE GOVERNANCE STATEMENT (cont’d)
Diversity Policy and Targets The Company takes diversity not only in Boardroom but also workplace as it is an essential measure of good governance, critically attributing to a well-functioning organisation and sustainable development of the Company. Diversity encapsulates not only gender but also age and ethnicity, if well-managed, can drive performance and strengthen governance. Despite of the importance of Boardroom diversity, the Board is of the view that the selection criteria of a Director, based on effective blend of competencies, skills, extensive experience and knowledge in areas identified by the Board, should remain a priority, not to compromise on qualification, experience and capabilities. As for the target set out under the Corporate Governance Blueprint 2011 for women participation on Board to reach 30% by year 2016, the Board, having deliberated, on the same, decided not to set specific targets but Nomination Committee (“NC”) will endeavor working towards achieving the said target and shall ensure sufficient number of women candidates be included in the pool of candidates evaluated for new appointments to the Board. Below sets the summary of the gender, ethnicity and age mix of our Management Team, excluding workers: A) Gender
(data compiled as at 1 September 2014)
Category
Total Headcount
Male Employees
Female Employees
Headcount
%
Headcount
%
1,727
764
44
963
55
Management staff (Manager & above)
180
86
48
94
52
Directors on Board
11
10
91
1
9
All Staff
B) Ethnicity Category
Malay
Total Headcount
Chinese
Headcount
Indian
% Headcount
% Headcount
Others % Headcount
%
1,727
753
43
322
19
175
10
477
28
Management staff (Manager & above)
180
32
18
114
63
14
8
20
11
Directors on Board
11
2
18
7
64
1
9
1
9
All Staff
C) Age Category
Total Headcount
70 & Above Headcount
60 to 69
50 to 59
% Headcount
%
Headcount
40 to 49 % Headcount
30 to 39 % Headcount
20 to 209 % Headcount
%
1,727
0
0
9
1
70
4
192
11
484
28
969
56
Management Staff (Manager & above)
180
0
0
9
5
16
9
65
36
77
43
13
7
Directors on Board
11
3
27
2
18
5
46
1
9
0
0
0
0
All Staff
46
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
PRINCIPLE 2 : STRENGTHEN COMPOSITION The Board should have transparent policies and procedures that will assist in the selection of Board members. The Board should comprise members who bring value to Board deliberations. Nomination Committee The NC was established to assist the Board of Directors in nominating suitable candidates to the Board. NC shall assess the performance of the Directors of the Company on an on-going basis. The members of the NC are as follows: 1) Tan Sri Datoʼ Seri Utama Arshad Bin Ayub (INED) ~ Chairman 2) Tan Sri Mohd Sidek Bin Haji Hassan (SINED) (Appointed on 14 October 2014) 3) Lim Han Boon (INED) 4) Sekarajasekaran a/l Arasaratnam (INED) (Resigned on 14 October 2014) Board Membership Criteria In reviewing and recommending to the Board any new Director appointments, the NC considers: (a) Age, skills, knowledge, expertise, experience, professionalism, integrity, capabilities and such other factors which would contribute to the Boardʼs collective skills; (b) Competing time commitments if the candidate has multiple board representations; (c) Composition requirements for the Board and Committees; and (d) Independence, for appointment of an INED. Boardroom Appointments The selection, nomination and appointment of suitable candidates to the Board follow a transparent process. Review of candidates for Board appointment has been delegated to the NC. NC is also responsible to review the existing composition of the Board, identifying the gaps and subsequently review and recommend to the Board a suitable candidate with the relevant skillsets, expertise and experience. Top Gloveʼs Boardroom appointment process is as follows:
NC conducts annual assessment and review, identify gaps/ vacancy
NC identifies the “Potential Candidates”
Evaluation on the “Potential Candidates”
Interviews the shortlisted candidates
Final recommendation to the Board
Board approves the appointment of Director
Board Induction Programme The Boardʼs Induction is a programme coordinated by the Company Secretary together with the Executive Director (Finance) with the objectives of providing newly appointed Directors the necessary information and overview to assist them in understanding the operations, corporate strategies, current issues and challenges, structure and management of the Company; as well as on-site briefings or site visits for better understanding of the operations aspect of the Company.
Top Glove Corporation Berhad • Annual Report 2014
47
CORPORATE GOVERNANCE STATEMENT (cont’d)
Board, Committees and Individual Director Assessment NC conducts review annually its required mix of skills and experience and other qualities, including core competencies which the Directors should bring to the Board. The Directors have always been assessed annually and feedback to the Board on the effectiveness of the Board as a whole, Director Self and Peersʼ Evaluation, Contribution of each individual Director and Independency of Independent Director. During financial year 2014, the NC has extended its scope of responsiblities to assess the Boardʼs mix and skillset, the AC effectiveness evaluation as a whole and member self and peersʼ evaluation, Internal Audit function and the External Auditors performance and independence. The NC is entrusted with the responsibility carrying out annual Board Effectiveness Evaluation and to authorise the evaluation process to ensure it meets the objectivity, including to review and approve all the evaluation forms/questionnaires, review the results of the evaluation and finally to convey the results to the respective parties for improvement and enhancement. The evaluations were facilitated by the Company Secretary making references to the guides available and the good corporate governance compliance companies. Evaluations are done on the Board Structure, Operations, Roles & Responsibilities, Training, Meeting Administration and Conduct at Meetings, Engagement and Communication with Shareholders, Board Committees and Peersʼ Review. The results of the evaluations indicated that the Board comprised high competent Directors and has been effective in discharging its oversight responsibilities. Suggested areas for improvement were in respect of the succession planning for the Senior Management staff and reviewing the Companyʼs overall Strategic Plans. The results and comments from the Directors, concerning the Board as a whole and the general performance of the Directors, were also presented to the Board upon reviewed by the NC. Re-election and Re-appointment of Directors In accordance with the Company's Articles of Association, all Directors who are appointed by the Board are subject to retirement at the first AGM of the Company subsequent to their appointment. One third (1/3) of all the other Directors shall retire by rotation at each AGM provided always that all Directors shall retire from office at least once in every three (3) years. The Directors retiring from office shall be eligible for re-election by the shareholders. Pursuant to Section 129 of the CA 1965, Directors who have attained or are over the age of seventy (70) years shall retire at every AGM and may offer themselves for re-appointment to hold office until the next AGM. The Directors due for re-election by rotation pursuant to Article 94 of the Articles of Association of the Company at the forthcoming AGM are Tan Sri Lim Wee Chai, Mr Lim Cheong Guan and Mr Lim Han Boon. Their profiles are set out on pages 8, 14 and 15 of this Annual Report. The Directors who are due for retirement and re-appointment in accordance to Section 129 of the CA 1965 at the forthcoming AGM are Tan Sri Datoʼ Seri Utama Arshad Bin Ayub, Tan Sri Datoʼ Dr. Lin See Yan and Mr. Sekarajasekaran a/l Arasaratnam. Their profiles are set out on pages 9, 11 and 15 of this Annual Report. The Board believes in having a healthy mix of age and experience and therefore does not prescribe a minimum or maximum age limit for its Board members apart from what is prescribed under Section 129 of the CA 1965. The Board does not impose a limit on the length of service of the Independent Directors as their attributes in terms of skills, experience, professionalism, integrity including core competencies in exercising their objectivity and independent judgement to discharge their responsibilities in good faith in the best interest of the Company are more critical in ascertaining the function and effectiveness of their independence than the number of years served on the Board. The on-going evaluation also further ensure the effectiveness of the Board as a whole in discharging their duties and responsibilities despite the duration of service for two (2) INEDs has exceeded nine (9) years.
48
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
Activities of Nomination Committee During the year, the NC met once and resolved a few matters via circular resolutions, the key activities were as follows: (a) (b) (c) (d)
Reviewed and recommend to revise the Term of Reference of the NC; Adopted new evaluation forms and revised the existing evaluation forms; Reviewed and recommend to revise Succession Planning Policy; and Deliberated on the findings of the assessments and reported the findings to the Board.
The Board through the NC also reviewed its required mix of skills and experience and other qualities, including core competencies which the Directors should bring to the Board. The Board has also implemented a process to be carried out by the NC annually for continuous assessment and feedback to the Board on the effectiveness of the Board as a whole, the Board Committees and the contribution of each individual Director. During the deliberation of the performance of a particular Director who is also a member of the NC, that member abstains from the discussions in order to avoid any conflict of interests. Remuneration Committee The Remuneration Committee (“RC”) was established to assist the Board of Directors in their responsibilities in assessing the Directorsʼ fees, allowances and other benefits of the Board of Directors. The members of the RC are as follows: 1) Lim Han Boon (INED) ~ Chairman (Redesignated as Chairman on 14 October 2014) 2) Tan Sri Lim Wee Chai (Executive Chairman) (Redesignated as Member on 14 October 2014) 3) Sekarajasekaran a/l Arasaratnam (INED) The remuneration of the Executive Directors is structured to align with the business strategy and long-term objectives of the Company and to link rewards to individual performance and performance of the Group. Directorsʼ Remuneration The details of the Directorsʼ remuneration comprising remuneration received/ receivable from the Company and subsidiaries during the financial year ended 31 August 2014 are as follows: 1) Aggregate remuneration of Directors categorised into appropriate components are as follows:
Executive Directors Non-Executive Directors
Salaries
Fees
Bonus
Benefit-in-kind
Total
RMʼ000
Employeesʼ Share Option Scheme RMʼ000
RMʼ000
RMʼ000
RMʼ000
RMʼ000
3,240
826
303
17
74
4,460
-
353
-
-
-
353
Top Glove Corporation Berhad • Annual Report 2014
49
CORPORATE GOVERNANCE STATEMENT (cont’d)
2) Directors' remuneration are broadly categorised into the following bands:
Range of Remuneration
Number of Directors Executive
Non-Executive
1 1 1 1 1
6 -
RM50,000 to RM100,000 RM200,000 to RM250,000 RM450,000 to RM500,000 RM600,000 to RM650,000 RM700,000 to RM750,000 RM2,400,000 to RM2,450,000 Employeesʼ Share Option Scheme Committee
The Company, with approval from shareholders in its Extraordinary General Meeting held on 9 January 2008, had established the Employeesʼ Share Option Scheme (“ESOS”) and the ESOS was officially implemented on 1 August 2008. The Company had also obtained its shareholdersʼ approval on the amendments to the By-laws of the ESOS during its AGM held on 10 January 2012. ESOS Committee appointed by the Board on 11 April 2003 continued to oversee the administration as well as to ensure proper implementation of ESOS according to the By-laws of ESOS. Currently, the ESOS Committee comprises the following members: 1) 2) 3) 4) 5) 6)
Tan Sri Lim Wee Chai ~ Chairman Lee Kim Meow Lim Cheong Guan Wu Kin Yeap Hue Kon Fah Ngian Yoke Fung
During financial year 2014, the ESOS Committee had considered and approved the vesting of options and offer factors under the ESOS to the eligible employees of the Group. PRINCIPLE 3 : REINFORCE INDEPENDENCE The Board should have policies and procedures to ensure effectiveness of INEDs. Review of Directorsʼ Independence The NC reviews the independence of Directors annually according to the criteria on independence set out in the Main LR and Practice Notes of Bursa Securities on independence. In addition to the annual review by the NC of the Directorsʼ independence, each INED also submits an annual declaration regarding his independence. All of the Independent Non-Executive Directors are also independent from the substantial shareholders of the Company, not being substantial shareholders themselves nor directly associated with any substantial shareholder. Tenure of Independent Directors The Board is mindful of the recommendation of the MCCG 2012 on limiting the tenure of INED to nine (9) years of service. However, the Board may, in appropriate cases and subject to the assessment of the NC on an annual basis, retain an INED who has served a consecutive or cumulative term of nine (9) years to continue to serve as INED subject to shareholdersʼ approval.
50
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
Currently, the Company has two (2) long-serving INEDs, Tan Sri Datoʼ Seri Utama Arshad Bin Ayub and Mr. Sekarajasekaran a/l Arasaratnam, whose tenure is more than nine (9) years. The NC has reviewed and recommended to the Board for them to continue to act as INEDs of the Company. The NC was of the view that the Independent Directors have carried out their responsibilities in good faith in the best interest of the Company and have safeguarded the interests of the minority shareholders of the Company. There are significant advantages to be gained from the long-serving Independent Directors who possess tremendous insight and knowledge of the Companyʼs affairs. Chairman and Managing Director The Chairman, Tan Sri Lim Wee Chai is primarily responsible for the orderly conduct of the Board meetings and ensure effectiveness of the Board and the Managing Director, Mr Lee Kim Meow will assist the Chairman in the effectiveness of implementation of Board policies, making operational decisions and monitoring the day-to-day running of the business, including defining the limits of the Management's responsibilities. Whereas, the Executive Directors are responsible for the day-to-day operations of the Group whereby operational issues and problems are discussed, major transactions and matters relating to the Group are reviewed and also to formulate operational strategies. PRINCIPLE 4 : FOSTER COMMITMENT Directors should devote sufficient time to carry out their responsibilities, regularly update their knowledge and enhance their skills. Board Meetings ~ Time Commitment The Board meeting calendar scheduling the meeting dates of the Board, Board Committee and AGM for each financial year were fixed in advance for the whole year to ensure all Directorsʼ dates are booked and also enable Managementʼs planning for the whole financial year. The Board meets quarterly to review its quarterly performances and discuss new policies and strategies. Additional meetings will be called as and when necessary. During the financial year ended 31 August 2014, four (4) Board Meetings were held and the attendance of the Board members is as follows: Name of Directors
Board of Directors
Tan Sri Lim Wee Chai (Chairman) Tan Sri Datoʼ Seri Utama Arshad Bin Ayub Tan Sri Mohd Sidek Bin Haji Hassan Tan Sri Datoʼ Dr. Lin See Yan Tan Sri Rainer Althoff Puan Sri Tong Siew Bee Lee Kim Meow Lim Hooi Sin Sekarajasekaran a/l Arasaratnam Lim Cheong Guan Lim Han Boon Total no. of Meetings :
4/4 3/4 4/4 4/4 3/4 4/4 4/4 4/4 4/4 4/4 4/4 4
Board Committees AC@
RMC*
NC
RC 1/1#
7/7#
1/1# 4/4# 3/4§ 4/4§
7/7§
1/1§
1/1§
7/7§
4/4§ 4/4§
1/1§
1/1§
7
4
1
1
Note: # : Chairman § : Member @ : the seven (7) AC Meetings reported, includes two (2) meetings with External Auditors (without Executive Directorsʼ and Management presence). * : Risk Management Committee Top Glove Corporation Berhad • Annual Report 2014
51
CORPORATE GOVERNANCE STATEMENT (cont’d)
The above meetings were held either in the Company's Conference Room at Lot 4969, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan; or A-11-01, Empire Subang Office, Jalan SS16/1, 47500 Subang Jaya, Selangor Darul Ehsan. In the intervals between Board meetings, any matters requiring urgent Boardʼs decisions or approvals will be sought via circular resolutions which are supported with all the relevant information and explanations required for an informed decision to be made and the same for the Board Committees. The Board decisions made at the Board meetings shall be by a majority as prescribed by the Articles of Association of the Company. During the financial year 2014, some of the Board agenda items are as follows: a) b) c) d) e) f) g) h) i) j) k) l) m) n)
Quarterly Unaudited Consolidated Results; Half-year financial performance report; Business Plan; Proposals and updates on investment projects; Delisted of a subsidiary listed on Singapore Stock Exchange; Disposal of a wholly-owned subsidiary in China; Regulatory updates; Investor relations updates; Succession Planning Policy; Directorsʼ Code of Conducts; Corporate Disclosure Policy; Financial Authority Limits; External Auditors Assessment Policy; and Capital structure review and balance sheet management.
All AC members are financially literate, Mr Lim Han Boon is a member of Malaysian Institute of Accountants, the Chartered Management Institute, UK and fellow of Association of Chartered Certified Accountant, UK, fulfilled the financial expertise as required by the Main LR. Our Executive Director (Finance) and General Manager (Finance) attend all meetings of the AC, other than meetings held between the AC and External Auditors (without Executive Directorsʼ and Managementʼs presence). The AC met with the External Auditors (without Executive Directorsʼ and Managementʼs presence) twice during the financial year. Further details on the summary of activities of the AC during the financial year 2014 and its term of reference are set out separately in the AC Report on page 65 to 69 of this Annual Report. Supply of Information to the Board All Directors are provided with an agenda of the meeting and board papers which contain the Company's financial performance, business outlook, various Committees' reports and disclosures by Directors of their interest in the shares and their interest in contracts, properties and offices pursuant to Section 135 and Section 131 of the CA 1965 respectively prior to the Board meeting. The board papers are issued in advance to facilitate informed decision making. The Managing Director and Executive Directors will lead the presentation of board papers and provide comprehensive explanations of pertinent issues. Any proposals and recommendations by the Management will be deliberated and discussed by the Board before a decision is made. Minutes are prepared on all Board proceedings and will be signed by the Chairman of the meeting in accordance with the provision of Section 156 of the CA 1965. The Board is kept updated on the Company's financial activities and operations on a regular basis. The Notices of the Board and Committeesʼ meetings were sent in average twelve (12) days prior to meetings and had at all times endeavour to deliver the meeting papers within five (5) business days. The Directors are also notified of any corporate announcement released to Bursa Securities and the impending restriction on dealing with the securities of the Company prior to the announcement of the quarterly financial results. All Directors and Company Secretaries have been issued with Code of Conducts for Directors and Secretaries. The Company Secretaries also act as the Secretaries for all the Board Committees. Directorsʼ Training All the Board members have attended the Mandatory Accreditation Programme and are mindful that they shall receive appropriate training which may be required from time to time to keep abreast with current developments of the industry as well as new statutory and regulatory requirements.
52
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
During the financial year ended 31 August 2014, the Directors have continued to participate in training programmes to equip themselves and to effectively discharge their duties as Directors as and when beneficial. The Directors have constantly kept themselves updated on both local and international affairs, and to changes in regulations affecting the Company through advisories from regulatory bodies, the Management and through self-reading. The Directors are also updated by the Company Secretaries on any changes to legal and governance practices of the Group and which affect themselves as Directors at every AC and Board meetings. It is the Companyʼs intention that each new Director is given a comprehensive briefing on the Company's history, operations, financial control system and plant visit to enable him/her to have first-hand understanding of the Company's operation. During the financial year, all Directors had collectively or individually attended/participated in the following seminars/ forum/ conference/ training programmes: Directors
Seminars/Forum/Conference/Training
Date
Tan Sri Lim Wee Chai
• • • • • • •
Forbes Global CEO Conference at Bali, Indonesia FMM innovation Conference at KLCC APEC CEO Summit at Bali, Indonesia Education talk by Dr. Eddie Chan (Tzu Chi ) 12th Asia Business Leaders Award (ALBA) at Bangkok Dialogue session with YAB Prime Minister Dialogue with YB Senator Datuk Paul Low Seng Kuan, Minister in the Prime Ministerʼs department Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers Speaker at the “Building a 100 year family enterprise” with Professor Dennis Jaffe (by Bank of Singapore) EABC meeting at Haikou, Hainan China Speaker at the Young President Organisation Malaysia Economic Summit at Beijing Invest Malaysia KL 2014 Given talk to more than 800 Malaysia businessmen
3 to 5 September 2013 1 October 2013 5 to 7 October 2013 27 October 2013 11 to 15 November 2013 9 April 2014 30 April 2014
Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers 2014 Malaysian Accounting Standards Board Roundtable on Financial Reporting
18 March 2014
• • • • • • • Tan Sri Datoʼ Seri Utama Arshad Bin Ayub
•
Tan Sri Mohd Sidek Bin Haji Hassan
• •
•
• Tan Sri Datoʼ Dr. Lin See Yan
•
• • • •
6 May 2014 6 May 2014 13 May 2014 23 May 2014 31 May 2014 10 June 2014 9 August 2014
24 April 2014
Forbes Global CEO Conference 2013, Bali, Indonesia Audit Committee Institute (ACI) Breakfast Roundtable 2013 (KPMG) Risk Management & Internal Control Workshop for Audit Committee members
2 to 5 September 2013 13 December 2013
PNB Nominee Directorsʼ Convention 2014 on Managing Stakeholdersʼ Expectations in the Fast Changing Business Trends Towards Value Creation organised by PNB Investment Institute Sdn. Bhd. Panelist at the Inaugural Conference of the Jeffrey Cheah Institute on Southeast Asia on “Human Capital Needs for the 21st Century: The Role of Higher Education” Keynote speaker at a luncheon talk on “Current Economic Situation in Malaysia organised by the Hawaii Asia Pacific Association (HAPA) Attended Roundtable discussion on Financial Reporting organised by Malaysian Accounting Standards Board (MASB) Speaker at the Shanghai Forum organised by Fudan University and at the Fudan FTZ Forum organised by the School of Economics, Fudan University, Shanghai
18 February 2014
5 June 2014
19 March 2014 2 April 2014 24 April 2014 23 to 26 May 2014
Top Glove Corporation Berhad • Annual Report 2014
53
CORPORATE GOVERNANCE STATEMENT (cont’d)
Directors
Seminars/Forum/Conference/Training
Date
Tan Sri Rainer Althoff
•
Corporate Directors Advanced Programme 2013: “Human Capital” Appreciation and Application of ASEAN Corporate Governance Scorecard
18 & 19 September 2013
•
21 August 2014
Puan Sri Tong Siew Bee
• • •
Education talk by Dr. Eddie Chan (Tzu Chi ) Healthy Lifestyle Sharing & Interaction Program Looking Beyond Financial Statements
27 October 2013 23 November 2013 7 August 2014
Lee Kim Meow
• •
“Our Environment, Our Health” at SCCC FMM National Export Conference 2013 ~ Sharing of Corporate Experience : Growing Your International Business Crime Awareness & Prevention Talk Toastmasters Talk Invest Malaysia KL 2014 Talk by MACC on “Integrity” Good Management Practice of Samsung Entrepreneur Sharing Session by ACCCIM PKNS Integrity Pledge Conference Program Education Seminar : Overview of ESG Index and ICB
27 October 2013 31 October 2013
• • • • • • • •
5 March 2014 18 March 2014 10 June 2014 21 June 2014 5 August 2014 10 August 2014 19 August 2014 20 August 2014
Lim Hooi Sin
•
AMLA, FATCA, Chinese Wall & Prevention of Insider Trading
5 August 2014
Lim Cheong Guan
• • • • • •
UBS ASEAN Conference 2013 CLSA ASEAN Corporate Access Days Nomura Investment Forum CIMB 2nd Annual Asia Pacific Leaders' Conference Invest ASEAN 2014 Conference Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers Invest Malaysia KL 2014 Enhanced Understanding of Risk Management and Internal Control for CFOs, IAs & ROs
15 to 17 September 2013 18 to 20 November 2013 3 to 6 December 2013 3 to 4 March 2014 2 April 2014 6 May 2014
• •
Sekarajasekaran a/l Arasaratnam
• •
Lim Han Boon
• • • • • • • • •
54
10 June 2014 19 June 2014
Risk Management & Internal Control Workshops for Audit Committee Members Audit Committee Breakfast Series, “Enhancing Internal Audit Practice”
27 November 2013
FMM Innovation Conference 2013 Leadership Series by KWAP, Tan Sri Gnanalingam Leadership Summit, “4th Global Entrepreneurship Summit” Asia Pacific Outsourcing Summit Risk Management & Internal Control Workshops for Audit Committee Members Audit Committee Institute Breakfast Roundtable 2013 Audit Committee Breakfast Series, “Enhancing Internal Audit Practice” Nominating Committee Programme 2: Board Effectiveness and Succession Planning Appreciation and Application of ASEAN Corporate Governance Scorecard
1 October 2013 8 October 2013 9 October 2013 21 to 24 October 2013 27 November 2013
Top Glove Corporation Berhad • Annual Report 2014
13 August 2014
13 December 2013 13 August 2014 18 August 2014 21 August 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
PRINCIPLE 5 : UPHOLD INTEGRITY IN FINANCIAL REPORTING The Board should ensure financial statements are a reliable source of information. Financial Reporting The Board is committed to provide a balanced, fair and comprehensive assessment of the Companyʼs state of affairs in its financial statements. To ensure this, adequate financial processes are in place, aimed at keeping the Groupʼs accounting records and transactions in accordance with accepted accounting standards. This also helps to safeguard the preparation of annual financial statements which present a true and fair view of the state of affairs of the Group and the Company at the reporting dates. The Board is also committed to ensure that it presents a balanced and comprehensive assessment of the operation and financial results of the Group on a quarterly basis. It releases the quarterly financial report upon the Boardʼs approval and in any event not later than two (2) months after the end of each quarter of its financial year for public announcement together with the required disclosure of the Main LR. These quarterly reports are published in a condensed format with full financial statements prepared. The AC was established to assist the Board of Directors in overseeing the Group's activities within its clearly defined terms of reference. Principle 5 of the MCCG 2012 and Paragraph 15.12 of the Main LR spelled out the duties of the AC. The scope of duties of the Top Glove's AC includes primarily the duties detailed therein. Pursuant to Paragraph 15.15 of the Main LR, the AC Report for the current financial year can be found on page 65 to 69 of this Annual Report which also contain other information as required under the MCCG 2012. The Directorsʼ Responsibility Statement for the Audited Financial Statements of the Company is set out on page 70 of this Annual Report. The details of the Companyʼs and Groupʼs Financial Statements for the financial year 2014 can be found on page 71 to 152 of this Annual Report. The Board of Directors shall review the term of office and performance of the AC and each of its members at least once every three (3) years to determine whether such AC and its members have carried out their duties in accordance with their terms of reference. The Board of Directors has full access to both Internal and External Auditors and receives reports on all audits performed via the AC. External Auditors and its Independence The AC maintains a transparent and professional relationship with the External Auditors of the Company. The AC is assigned to assess, review and supervise the performance, suitability and independence of external auditors. An External Auditors Assessment Policy was adopted by the AC which outlined the guidelines and procedures for the AC to assess and review the External Auditors. The AC invites the External Auditors to attend all its meetings and as and when required. The External Auditors had met the AC seven (7) times this year. During the meetings, the External Auditors highlight and discuss the nature, scope of the audit, audit programme, internal controls and issues that may require the attention of the AC or the Board. The AC had met with the External Auditors separately without the presence of Executive Directorsʼ and Management twice (2) during financial year 2014 on any matters relating to the Group and its audit activities. The External Auditors Assessment Policy adopted by the Company restricts the type of non-audit services that can be provided by the External Auditors of the Group and the approval process related to them. Under this policy, only non-audit services which are able to provide clear efficiencies and value-added benefits to the Group were accepted by the AC. The Policy in place also ensures the External Auditorsʼ independence and the provision of non-audit work does not impede the External Auditors audit works. The AC remains confident that the objectivity and independence of the External Auditors are not in any way impaired by reason of the non-audit services provided to the Group. The External Auditors have confirmed to the AC that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the independence criteria set out by the Malaysian Institute of Accountants. Top Glove Corporation Berhad • Annual Report 2014
55
CORPORATE GOVERNANCE STATEMENT (cont’d)
Details of statutory audit, audit-related and non-audit fees paid/payable in the financial year 2014 to the External Auditors are set out below: Type of Fee A) Audit fee (i) E&Y Malaysia (ii) Member firms of E&Y international B) Other audit services rendered by E&Y Malaysia and its members (i) Review of statement of internal control (ii) IT annual review (iii) SAP data migration and post implementation review C) Tax and Tax Related Fee
Total (RM) 234,000 11,521 10,000 18,000 148,000 421,521 34,000 455,521
PRINCIPLE 6 : RECOGNISE AND MANAGE RISKS The Board should establish a sound risk management framework and internal controls system. Risk Management and Internal control The Board has established a framework to formulate and review risk management policies and risk strategies. Information on the Groupʼs internal control is presented in the Statement on Risk Management and Internal Control. Risk Management Committee The Risk Management Committee (“RMC”) was established in year 2013 and the members are as follows: 1) 2) 3) 4) 5)
Tan Sri Mohd Sidek Bin Haji Hassan (Senior INED) ~ Chairman Tan Sri Rainer Althoff (INED) Lim Han Boon (INED) Lee Kim Meow (Managing Director) Lim Cheong Guan (Executive Director)
The primary responsibility and purpose of the RMC is to assist the Board in fulfilling its responsibility with respect to review and monitor Groupʼs risk management framework and activities. RMC reports to the Board of Directors regarding the Groupʼs risk exposures, including review risk assessment model used to monitor the risk exposures and Managementʼs views on the acceptable and appropriate level of risks faced by the Groupʼs Business Unit. Internal Audit The Internal Audit (“IA”) Department carries out the internal audit function, which reports directly to the AC on its activities based on the approved annual IA plan. The Board acknowledges its responsibility for maintaining a sound system of internal controls, which provides reasonable assessment of effective and efficient operations, internal financial controls, and compliance with laws and regulations as well as with internal procedures and guidelines. The appointment, resignation and dismissal of the Head of IA is reviewed and approved by the AC and the Head of IA has unfettered access to the AC, the Board and the Management. An IA Charter was adopted in year 2013 aimed to formalise the mission statement of the Top Gloveʼs IA Department and established its position within the Company to ensure its access to various records, departments and activities, its responsibility and independence. The Mission Statement of IA is to provide an independent, objective assurance and consulting activity designed to add value and improve Top Gloveʼs operations and internal controls and assist the Company to accomplish its effectiveness of risk management, control and governance processes. An overview of the state of internal control within the Group, which includes the risk and key internal control structures, are set out in the Statement on Risk Management and Internal Control on page 62 to 64 of this Annual Report.
56
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY DISCLOSURE Companies should establish corporate disclosure policies and procedures to ensure comprehensive, accurate and timely disclosures. Corporate Disclosure The Board reviews and approves all quarterly and other important announcements. The Company announces its quarterly and full year results within the mandatory period. The financial statements and press releases including material and price sensitive information are disseminated and publicly released via BURSA LINK on a timely basis to ensure effective dissemination of information relating to the Group. The Board has formalised a set of Corporate Disclosure Policy to ensure that communications to the public regarding the Group are timely, factual, accurate and complete. The said Policy outlines the central principles and practices in communicating with the investors, shareholders, media and regulator. Effective Dissemination of Information An effective communication channel between the Board, stakeholders, institutional investors and the investing public at large is essential to provide a clear and complete picture of the Groupʼs performance and development, in a comprehensive, timely and continuing disclosure manner. Essentially, the Board is fully committed to maintaining a high standard in the dissemination of relevant and material information on the development of the Group. The Company had always been providing as much information on a voluntary basis in addition to complying to the Main LR through media releases. The Board is mindful of the legal and regulations governing the release of materials and sensitive information so as not to mislead the shareholders. Therefore, information that is price-sensitive or any undisclosed material information about the Group is not disclosed to any party until it is already for simultaneous distributions. The Company has been using the following formal channels to communicate with shareholders and stakeholders: a) Annual Report The Annual Report remains a major channel of communication disclosing information not only on the Groupʼs business, financials and additional information such as the Companyʼs mission and vision, operations performance, outlooks and Senior Management Team. The Board places great importance on the content of the Annual Report to ensure the accuracy of the information as the Annual Report is a vital source of information for investors, shareholders and the general public. Management constantly improved the contents of Annual Report to incorporate developments amongst others, in corporate governance and Reports of Committees. The Chairman and Executive Director (Finance) oversee the production of the Annual Report and reviews its contents before it is published. Annual Reports of the Company are available online at the Companyʼs website at https://www.topglove.com.my/ index.php/annual-report Corporate related queries may be referred to the Company Secretary, Ms Ngian Yoke Fung (Tel: +603-5022 2110, Fax: +603-5022 2113, e-mail: yfngian@topglove.com.my). b) Announcements to Bursa Securities All announcements are made via Bursa LINK. Announcements examples are the quarterly financial results, circulars, corporate exercise, corporate changes and others. Chairman and Directors are entrusted to review and approve the announcements ensuring its full compliance with regulatory authoritiesʼ disclosure requirements. All announced announcements are also made available on Top Gloveʼs own corporate website. Filings and announcements to Bursa Securities are available online at the Companyʼs website at https://www.topglove.com.my/index.php/investor-relations/bursa-announcements Announcements related queries may be referred to the Company Secretary, Ms Ngian Yoke Fung (Tel: +603-5022 2110, Fax: +603-5022 2113, e-mail: yfngian@topglove.com.my).
Top Glove Corporation Berhad • Annual Report 2014
57
CORPORATE GOVERNANCE STATEMENT (cont’d)
c) Quarterly Results and Analyst Briefings Analyst briefing via conference call will usually be held immediately after release of quarterly results to Bursa Securities or an actual briefing will be held a week after the release of the quarter results chaired by the Chairman, Managing Director and Executive Director (Finance). This briefing provides an avenue for the fund managers and research analysts to have dialogue with the Groupʼs Management to facilitate receiving a balanced and complete view of the Groupʼs performance and challenges at the most timely manner. d) Investor Relations The Investor Relation (“IR”) team has been scheduling regular engagement sessions with investors and are usually attended by Executive Director (Finance) and IR team. The IR team also attends to conferences, non-deal roadshows, and one-on-one meetings with equity analysts, fund managers and institutional shareholders to provide updates on the Companyʼs quarterly financial performance, corporate and regulatory developments as well as to discuss strategic matters and address issues that the investing community may have with respect to the business or operations of the Company. Some of the investor conferences and roadshows attended by our IR team were as follow: • • • • • • • • • • • • •
JP Morgan Asia Pacific Conference - September 2013 CLSA ASEAN Access Day - November 2013 Nomura Investment Forum 2013 - December 2013 DBS Vickers Pulse of Asia 2014 - January 2014 Nomura ASEAN All Access 2014 - February 2014 CIMB 2nd Annual Asia Pacific Leaders' Conference - March 2014 Taiwan ASEAN Conference Day (UOB Kay Hian) - March 2014 Invest ASEAN 2014 Conference (Maybank) - June 2014 CLSA ASEAN Forum - May 2014 Invest Malaysia 2014 - June 2014 ASEAN Investor Conference 2014 (Citi Research) - June 2014 RHB ASEAN & Hong Kong Corporate Day - June 2014 ASEAN Conference Singapore (Macquarie) - August 2014
Investor queries pertaining to financial performance or Company developments may be directed to the Executive Director (IR) of Top Glove, Mr Lim Cheong Guan (Tel: +603-5022 2110, Fax: +603-5022 2113, e-mail: invest@topglove.com.my) e) Company website The Group has established a comprehensive website at www.topglove.com.my which includes a dedicated section on IR to further enhance shareholder communication. The Group has also included a Corporate Governance section on its website where information such as the Board Charter, Directorsʼ Code, Employeesʼ Code, Succession Planning Policy, Corporate Disclosure Policy, Whistle-Blowing Policy and various good governance compliance statements are made available to the shareholders and public at https://www.topglove.com.my/index.php/about-us/corporate-governance To better serve stakeholders of the Group, a feedback page on the website provides an avenue for stakeholders to suggest improvements to the Group via email: invest@topglove.com.my. In addition, stakeholders who wish to reach the respective divisions of the Group can do so through the ʻContact Usʼ. PRINCIPLE 8: STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS The Board should facilitate the exercise of ownership rights by shareholders. Encourage shareholder participation at general meetings The Company despatches annual report to all shareholders of the Company, includes the notice of AGM, which notice is also advertised in the press and released via BURSA LINK. The notices of AGMs and the annual reports are sent out to shareholders at least twenty one (21) days before the date of the meeting in accordance with the Companyʼs Articles of Association.
58
Top Glove Corporation Berhad • Annual Report 2014
CORPORATE GOVERNANCE STATEMENT (cont’d)
At Top Glove, a member of the Company entitled to attend and vote at the meeting is entitled to appoint one (1) or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Sections 149(1) (a), (b), (c) and (d) of the CA 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the meeting shall have the same rights as the member to speak at the meeting. The AGM is the principal forum for dialogue with shareholders. At each AGM, a presentation is given by the Chairman and Managing Director to explain the Groupʼs strategy, performance and major developments to shareholders. The Board encourages shareholders to participate in the question and answer sessions at all general meetings. The Directors also shared with the shareholders of the Companyʼs responses to questions by Minority Shareholder Watchdog Group, submitted in advance of the AGM. Status of all resolutions proposed at the AGM is submitted to Bursa Securities at the end of the meeting day. The Board has ensured that each item of special business included in the notice of the AGM is accompanied by a full explanation of the effects of a proposed resolution. Encourage poll voting At the last AGM of the Company, no substantive resolutions were put forth for shareholdersʼ approval, except the routine resolutions pertaining to receiving of audited financial statements, re-appointment and re-election of Directors, payment of dividends and Directorsʼ fees and re-appointment of Auditors. In view thereof, all resolutions were voted on by show of hands by shareholders. The Board will consider adopting electronic voting to facilitate greater shareholder participation at general meetings, and to ensure accurate and efficient outcomes of the voting process. Effective communication and proactive engagement The Company endeavours to maintain an open and transparent channel of communication with its stakeholders, institutional investors and the investing public at large with the objective of providing as clear and complete picture of the Groupʼs performance and financial position as possible. At the last AGM, the Chairmen of the AC, NC and RC and the External Auditors were present and will endeavour to be present at the forthcoming AGM to assist the Directors in addressing queries raised by the shareholders. Based on the past, the Companyʼs AGM have been well attended. It has always been the practice for the Chairman to provide ample time for the questions and answers sessions in the AGM. The proceedings of the AGM normally commences with a presentation by the Executive Director on the financial performance of the Company for the preceding financial year and the Companyʼs vision and prospect. The presentation is supported by visual illustrations to facilitate shareholdersʼ understanding. The Executive Director also shares the responses to questions submitted in advance by the MSWG, which is also visual illustrated. The Board, Management and the Companyʼs Auditors, Ernst & Young Malaysia, is in attendance to respond to questions raised and provide clarification as required by the shareholders. Shareholders were given a copy of suggestion form to invite feedbacks and comments by the Management for consideration. A help desk was also set up to assist and answer any queries raised by shareholders by our officers. During the year, the Company also had regular meetings with analysts and institutional fund managers, participated roadshows and investors conferences, both domestically and internationally; and hosted teleconferences with investors and analysts. COMPLIANCE STATEMENT The Board has deliberated, reviewed and approved this Corporate Governance Statement. The Board considers that the Corporate Governance Statement provides the information necessary to enable shareholders to evaluate how the MCCG 2012 has been applied. The Board considers and is satisfied that the Company has fulfilled its obligation under the MCCG 2012, the Main LR and all applicable laws and regulations throughout the financial year ended 31 August 2014. This Statement is made in accordance with a resolution of the Board of Directors dated 14 October 2014.
Top Glove Corporation Berhad • Annual Report 2014
59
OTHER COMPLIANCE INFORMATION
1. Utilisation of Proceeds The Company did not raise funds through any corporate proposal during the financial year. 2. Recurrent Related Party Transactions During the financial year, there were no recurrent related party transactions of a revenue or trading nature involving the Directors and/or substantial shareholders of the Company. 3. Share Buy-Back During the financial year, the Company had not purchased any of its own shares. 4. Depository Receipt Programme A Sponsored Level-1 ADR Programme (Depository Receipt Programme) for shares of the Company was registered with the Securities and Exchange Commission of the United States of America since 27 December 2005. Under the Depository Receipt Programme, a maximum of 5% of the total issued and paid-up capital of the Company will be traded in the Depository Receipts in the United States of America, in the ratio of four (4) shares to one (1) Depository Receipt. The Depository Bank for the Depository Receipt Programme is The Bank of New York and the sole custodian of the Company's shares for the Depository Receipt Programme is Malayan Banking Berhad, Kuala Lumpur. As at 30 September 2014, the total number of Depository Receipts sold under the Depository Receipt Programme was amounted to 78,888 shares. 5. Imposition of Sanctions/ Penalties There were no sanctions/penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year. 6. Non-Audit Fees During the financial year, the amount of non-audit fees paid to the External Auditors amounted to RM34,000.00. 7. Variation in Results There was no material variance between the results of the financial year and the unaudited results previously announced. The Company did not make any release on the profit estimate, forecast or projections for the financial year. 8. Profit Guarantees During the financial year, there were no profit guarantees given by the Company. 9. Material Contracts During the financial year, there were no material contracts entered into by the Company and its subsidiaries involving Directorsʼ and/or substantial shareholdersʼ interests. 10. Contracts Relating to Loans There was no material contracts relating to loans entered into by the Company involving Directors and/or substantial shareholders.
60
Top Glove Corporation Berhad • Annual Report 2014
OTHER COMPLIANCE INFORMATION (cont’d)
11. Insider Trading During the financial year, there was no insider trading reported. 12. Options or Convertible Securities During the current financial year ended 31 August 2014, a total of 444,100 new ordinary shares were issued and allotted pursuant to the exercise of the Employeesʼ Share Option Scheme (“ESOS”). The details of the issued and paid-up share capital of the Company as at 31 August 2014 are as follows: No. of Shares
RM
As at 1 September 2013 Ordinary shares of RM0.50 each issued pursuant to the ESOS
620,219,962 444,100
310,109,981.00 670,100.00
As at 31 August 2014
620,664,062
310,332,031.00
During the financial year, the number of ESOS option granted was 2,737,300, vested for duration of one (1) to two (2) years. The percentage of ESOS option granted to the director and senior management was 18.4% of the total ESOS option granted. The number of ESOS options granted to the directors are disclosed in page 74 of this Annual Report. For the financial year ended 31 August 2014, the actual percentage of ESOS option granted to the directors and senior management of the Group was 24.8% of the total ESOS option granted. No options were granted to the Non-Executive Directors. Other than the above, there was no issuance of convertible securities during the financial year.
Top Glove Corporation Berhad • Annual Report 2014
61
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL THE BOARDʼS RESPONSIBILITIES The Board is committed to establish a sound, efficient and effective system of internal control covering not only financial controls but also operational compliance and risk management to safeguard Shareholdersʼ investment and the Groupʼs assets. There is an on-going review process by the Board to ensure the adequacy and integrity of the system. Such a system is designed to identify and to manage the Groupʼs risk within the acceptable risk profile, rather than eliminate the risk of failure. Accordingly, the system can only provide reasonable and not absolute assurance against material misstatement, loss or fraud. RISK MANAGEMENT FRAMEWORK The Board regards risk management as an integral part of business operations. The Board explicitly assumes the responsibility of identifying principal risks and ensuring implementation of a risk management system, and reviewing the adequacy and integrity of the Companyʼs internal control and management information system. To fulfill its oversight responsibility, the Board as a whole or through delegation to the Risk Management Committee (“RMC”), should review adequacy, integrity and implementation of appropriate systems for risk management and internal controls. RMCʼS RESPONSIBILITIES The primary responsibility and purpose of the RMC is to assist the Board in fulfilling its responsibility with respect to review and monitor the Groupʼs risk management framework and activities. The members of the RMC are as follows: 1) 2) 3) 4) 5)
Tan Sri Mohd Sidek Bin Haji Hassan Tan Sri Rainer Althoff Lim Han Boon Lee Kim Meow Lim Cheong Guan
: : : : :
Chairman Member Member Member Member
RMC reports to the Board of Directors regarding the Groupʼs risk exposures, including review of risk assessment model used to monitor the risk exposures and Managementʼs views on the acceptable and appropriate level of risks faced by Groupʼs Business Unit. THE RISK MANAGEMENT PROCESS The Group had formed a Risk Working Committee (“RWC”) in May 2013 to assess risks contained at the respective business unit level by complying with the Risk Management Framework laid down by the RMC. The RWC consists of standing members comprising Executive Director as Chairman and key Management staff and submits its Risk Report to the RMC on a quarterly basis. The RWC, subject to the general supervision of RMC, has in the past one (1) year conducted the following: • Identified risks and corresponding controls in place to mitigate these risks for each significant business process; • Compiled Risk Management Report and submitted to RMC for review, deliberation and recommendation for approval by the Board; • Presented and discussed Extreme and High Risks identified to RMC members during quarterly RMC meetings; and • Followed-up on queries and suggestions raised by the RMC and reported the status of follow-up to the RMC. The RWC assessed risks contained in the Group by referring to risk categorisation laid down in the Risk Management Framework. The Group has categorised risks into Business, Information, Production, Credit, Financial, Operational, System and Human Resource.
62
Top Glove Corporation Berhad • Annual Report 2014
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d) The key risk areas for 2014 are outlined below: 1.
Technology An inability to leverage rapid technological advancements to improve production efficiency represents a threat to the Groupʼs competitiveness. To mitigate this risk, the Group continuously invests in Research & Development and allocates sufficient budget for machine and equipment upgrades. It also ensures change-readiness through constant market surveillance and intelligence, which enables the Group to continue producing consistently high quality gloves at efficient low cost.
2.
Production Interruptions to production is a risk that can cause a temporary shutdown of factory operations resulting in financial losses to the Group. The three major risks i.e. fire, water and flood identified by the RWC as being able to cause interruption to production, are closely monitored by the respective Risk Owners, with risk mitigation plans proposed and implemented as follows: a. b. c. d.
3.
Explored alternative water source; Treated tube wells water, built on-site retention for rain water and recycled water to reduce water usage; Strengthened fire prevention controls, improved housekeeping and cleaning routine and performed daily checks on high risk areas; and Cleaned main drainage system periodically to prevent flooding during the rainy season.
Energy The Group has to absorb any increase in the cost of energy that would result in higher production costs. To mitigate this risk, the Group embarked on energy efficiency improvement projects at factories to reduce energy consumption to stay competitive and efficient.
THE INTERNAL CONTROL PROCESS The Groupʼs internal control mechanism is embedded in the various work processes and procedures at appropriate levels in the Group. The Management Team led by the Managing Director and Executive Director comprising experienced personnel with vast specialised industry experience, is assigned with the responsibility of managing the Group. They are accountable for the conduct and performance of their operations within their respective businesses. The Management Team monitors the day-to-day affairs of the Group through review of performance and operations reports, as well as attending management meetings. Any significant issues are immediately brought to the attention of the Executive Director, Managing Director and Chairman, who in turn will bring these matters before the Board. The Audit Committee (“AC”) is also responsible for reviewing and monitoring the effectiveness of the Groupʼs internal control system. In this respect, the Companyʼs Internal Audit department was set up in the financial year ended 31 August 2003 to undertake the obligation to conduct regular reviews on the Groupʼs various operations and reports directly to the AC. The External Auditors provide assurance in the form of their annual statutory audit of the financial statements. Further areas for improvement identified during the course of the statutory audit by the External Auditors were brought to the attention of the AC through management letters, or discussed at AC meetings.
Top Glove Corporation Berhad • Annual Report 2014
63
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d) THE INTERNAL AUDIT FUNCTION The Internal Audit function is headed by Mr. Lim Lung Fui @ Jack and provided by the Groupʼs Internal Audit department (“GIA”) based on the audit plan approved by AC. The scope of work of GIA encompasses the examination and evaluation of the adequacy, existence and effectiveness of the system of internal control, risk management framework and corporate governance of the Group, which include, inter alia, the following: •
Reviewing the reliability and integrity of financial and operating information and the means used to identify, measure, classify and report such information; Evaluating the system established to ensure compliance with policies, plans, procedures, laws, and regulations which could have significant impact on operations; Examining the means of safeguarding assets and, as appropriate, verifying the existence of such assets; Assessing the economy and efficiency with which resources are employed; Appraising operations to ascertain whether results are consistent with established objectives and goals and whether the operations are being carried out as planned; Reporting significant issues related to the business and operational processes for controlling the activities of the Group together with recommendations for improvements by issuing periodic audit reports summarising results of audit activities and follow-up reports on a timely basis to the AC and Management; and Assisting in the investigation of suspected fraudulent activities and notifying the AC of the results.
• • • • •
•
Furthermore, GIA works closely with and briefs salient audit issues to Top Management during bi-monthly Internal Audit meetings. Relevant Heads of Factories or Heads of Departments will be called to attend these meetings to explain to the Chairman, Managing Director and Executive Director and to develop action plans with timelines to rectify issues where the factories or departments are found not complying with the Companyʼs Procedures, Guidelines and Direction by the factories or Departments. During the year, control weaknesses which were mainly related to operational controls had been highlighted to Management and the AC but there were no material issues which had to be disclosed in this statement. Subsequent follow-up audits conducted by GIA also revealed that measures had been or are being taken by the Management Team to address these weaknesses. REVIEW OF EFFECTIVENESS The Board is dedicated to operating a sound system of internal control and recognises that the system must continuously evolve to support the business and the size of the Group. The process for identifying, evaluating and managing risk as outlined in this statement has been in place for the year under review and up to the date of approval of this statement. During the financial year, a number of improvements to internal controls were in place/implemented. There have been no significant material internal control failures, which have resulted in material losses or contingencies. Pursuant to paragraph 15.23 of Bursa Malaysia Securities Berhad Main Market Listing Requirements, the External Auditors have reviewed this statement for inclusion in the Annual Report for the financial year ended 31 August 2014 and reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adequacy and integrity of the system of internal control. The Board has also received assurance from the Chairman, Managing Director and Executive Director (Finance) that the Groupʼs 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. This statement does not include the state of internal control in associate companies, which has not been dealt with as part of the Group and was made in accordance with a resolution of the Board of Directors dated 14 October 2014.
64
Top Glove Corporation Berhad • Annual Report 2014
AUDIT COMMITTEE REPORT
The Audit Committee (“AC”) of Top Glove Corporation Bhd is pleased to present the AC Report for the financial year ended 31 August 2014.
COMPOSITION AND MEETINGS In 2014, the AC has met seven (7) times, two (2) of which was meeting with the External Auditors, without Executive Directorsʼ and Managementʼs presence. The composition and the attendance record of AC members are as follows: Directors
Directorship
Meeting Attendance
Tan Sri Datoʼ Seri Utama Arshad Bin Ayub (Chairman of AC)
Independent Non-Executive Director
7 out of 7
Sekarajasekaran a/l Arasaratnam
Independent Non-Executive Director
7 out of 7
Lim Han Boon
Independent Non-Executive Director
7 out of 7
The Board shall elect the AC members from amongst themselves, comprising no fewer than three (3) Non-Executive Directors. The majority of the AC members shall be Independent Directors. In this respect, the Board adopts the definition of “Independent Director” as defined under Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“MMLR”). Tan Sri Datoʼ Seri Utama Arshad Bin Ayub (“Tan Sri Arshad”), the Chairman of AC, has distinguished career in the Malaysian Civil Service, held various positions, including Deputy Governor of Bank Negara Malaysia, Deputy Director General in the Economics Planning Unit in Prime Ministerʼs Department. Nevertheless, Tan Sri Arshad has other directorships in few public listed companies where he is also the Chairman and Member of AC. All members of the AC shall be financially literate and at least one (1) member of the AC must be: a) b)
a member of the Malaysian Institute of Accountant (“MIA”); or if he is not a member of MIA, he must have at least three (3) years of working experience; and i) ii)
c)
he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or he must be a member of one of the associations of the accountants specified in Part II of the First Schedule of the Accountants Act 1967; or
fullfils such other requirements as prescribed or approved by Bursa Securities.
Mr Lim Han Boon is a member of MIA, the Chartered Management Institute, UK and fellow of Association of Chartered Certified Accountant, UK, fulfills the financial expertise as required by the MMLR. He also has vast working experience in area of corporate finance. During the reporting year, the AC had constantly engaged with the External Auditors and the Senior Manager of Internal Audit to keep abreast with the key audit issues and audit concerns of the Company affecting the Company. The Company Secretaries acts as the secretaries to the AC. Minutes of each AC meeting are noted by the Board via distribution to each Board member and the Chairman of the AC reports key issues at each Board Meeting. The performance of AC would be assessed annually through the AC evaluation by the NC and the Board reviews the term of office of the AC members annually. During the Financial Year, the Board is satisfied that the AC and its members have been able to discharge their functions, duties and responsibilities in accordance with the Terms of Reference of AC.
Top Glove Corporation Berhad • Annual Report 2014
65
AUDIT COMMITTEE REPORT (cont’d)
Notice of AC meetings shall be given to all the AC members unless the AC waives such requirement. All Notice of meeting was issued in average of twelve (12) days and meeting papers has been delivered by hand within five (5) days and the remaining papers be sent electronically within three (3) days. The Finance Director, the head of internal audit and a representative of the External Auditors should normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the AC.
TERM OF REFERENCE The AC had discharged its function and carried out its duties as set out in the Term of Reference (“TOR”), append herewith as Appendix A. The TOR of the AC is accessible through the Companyʼs website at https://www.topglove.com.my /index.php/aboutus/corporate-governance
SUMMARY OF ACTIVITIES FOR THE FINANCIAL YEAR 1.
Financial Reporting (a) Reviewed all the four (4) quarterʼs Financial Statements and the annual Audited Financial Statements of the Company at AC meeting. Discussion focused particularly on any change in accounting policies and practices, significant adjustments arising from the audit, the going concern assumption; and compliance with accounting standards and other legal requirements. Upon reviewed, the AC will recommend the same for the Boardʼs approval. (b) Reported its findings on the financial and Management performance, and other material matters to the Board.
2.
Internal Audit (a) Reviewed and approved the Annual Audit Plan for 2014 proposed by the Internal Auditors to ensure the adequacy of the scope, coverage of work and that it has the necessary authority to carry out its work. (b) Reviewed the internal audit programme and results of internal audit together with the recommendations from Internal Auditors. The AC will consider Internal Auditorsʼ recommendations taken into account the managementʼs responses and upon which will approve Internal Auditorsʼ proposals for rectification and implement the recommendations for improvement. (c) Undertook assessment of the performance of the Internal Audit Function and reviewing its effectiveness of the audit process and assessed the performance of the overall Internal Audit department. The results of assessment was being discussed with the Internal Auditors. (d) Discussed with Internal Audit, Senior Manager on the resources allocation and taken cognisance of resignations of internal audit staff members and noted the reasons for resignation.
3.
External Audit (a) Discussed with the External Auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one (1) audit firm is involved; as well as the External Auditorsʼ evaluation of the system of internal controls and audit report. (b) Discussed and deliberated on the External Auditorsʼ report and recommendations regarding opportunities for improvement to the significant risk areas, internal control and financial matters areas based on observations made in the course of interim and final audit. (c) Held two (2) private meetings with the External Auditors without the presence of the Executive Directors, Management and Internal Auditors.
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Top Glove Corporation Berhad • Annual Report 2014
AUDIT COMMITTEE REPORT (cont’d)
(d) Undertook an annual assessment on the suitability and the independence of the External Auditors pursuant to the Companyʼs External Auditorsʼ Policy. (e) Reviewed the performance of the External Auditors and recommend its re-appointment and remuneration to the Board. 4.
Related Party Transactions Reviewed if there is any related party transactions that are required to be transacted at an armʼs length basis and are not detrimental to the interest of minority shareholders.
5.
Annual Reporting Reviewed the Annual Report to ensure adherence to legal and regulatory reporting requirements and appropriate resolution of all accounting matters requiring significant judgement.
6.
Others (a) (b) (c) (d)
Reviewed and approved the adoption of the Internal Audit Charter. Reviewed and agreed the revisions of the ACʼs TOR for approval of the Board. Reviewed the progress of all investment projects of the Company. Deliberated the emerging financial reporting issues pursuant to the introduction of new accounting standards and additional statutory/regulatory disclosure requirements. (e) Considered and discussed the proposal to delist the subsidiary of the Group, which was listed on Singapore Stock Exchange for the Boardʼs approval. (f) Considered and discussed the proposal to dispose the Groupʼs wholly-owned China subsidiary for the Boardʼs approval. (g) Verified the allocation of employeesʼ share option scheme (“ESOS”) in compliance with the criteria as stipulated in the by-laws of ESOS of the Company.
TRAINING During the year, all the AC members have attended various seminars, training programmes and conferences. The list of trainings attended is disclosed in the Corporate Governance Statement at page 53 to 54 of the Annual Report.
INTERNAL AUDIT FUNCTION The Company has an Internal Audit department whose principal objective is to undertake regular reviews of the systems of controls, procedures and operations so as to provide reasonable assurance that the internal control system is sound, adequate and satisfactory. The Internal Audit department reports directly to the AC. Its role is to provide the AC with independent and objective reports on the state of internal controls of the operating units within the Group and the extent of compliance by such units with the Groupʼs established policies and procedures and the regulatory requirements of the relevant authorities. The AC reviews and approves the internal audit plan of the Group submitted by the Internal Audit Manager. During the financial year ended 31 August 2014, the areas audited included audits of the various departments covering all the factories and subsidiaries within the Group. Internal Audit reports were issued to the AC regularly and tabled in the AC meetings. The reports are also issued to the respective operations management, incorporating audit recommendations and Managementʼs responses with regards to any audit findings on the weaknesses in the systems and controls of the operations. The Internal Audit department also follows up with Management on the implementation of the agreed audit recommendations. The costs incurred in maintaining the Internal Audit Function which is performed in-house for the financial year under review was RM501,472.00 (2013: RM397,840.00).
Top Glove Corporation Berhad • Annual Report 2014
67
AUDIT COMMITTEE REPORT (cont’d)
RISK MANAGEMENT The Board and Management have embarked on the risk management culture and endeavour to ensure that the Groupʼs employees have a good understanding and application of risk management principles towards cultivating a sustainable risk management culture. The Board undertakes to conduct regular risk awareness sessions at the operational level to promote the understanding of risk management principles and practices across different functions within the Group. This is elaborated in details under a separate statement called “Statement on Risk Management and Internal Control” on page 62 to 64 of this Annual Report.
APPENDIX A Key Summary of Terms of Reference of AC The key roles of AC in performing its duties and discharging its responsibilities are summarised as follows: 1.
Objectives The principal objectives of the AC are to assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries. In addition, the AC shall: (a) (b) (c) (d)
2.
evaluate the quality of the audits performed by the Internal and External Auditors; provide assurance that the financial information presented by management is relevant, reliable and timely; oversee compliance with laws and regulations and observance of a proper code of conduct; and determine the quality, adequacy and effectiveness of the Group's control environment.
Authority The AC shall, in accordance with a procedure to be determined by the Board and at the expense of the Company: (a) have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full access to information. All employees shall be directed to co-operate as requested by members of the AC. (b) have full and unlimited/unrestricted access to all information and documents/resources which are required to perform its duties as well as to the Internal and External Auditors and Senior Management of the Company and Group. (c) obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary. (d) have direct communication channels with the External Auditors and person(s) carrying out the Internal Audit Function or activity (if any). (e) where the AC is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements, the AC shall promptly report such matter to Bursa Securities.
3.
Duties and Responsibilities The duties and responsibilities of the AC are as follows: (a) To consider the appointment and re-appointment of the External Auditor, the audit fee and any question of resignation or dismissal; (b) To discuss with the External Auditor before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;
68
Top Glove Corporation Berhad • Annual Report 2014
AUDIT COMMITTEE REPORT (cont’d)
(c) To review with the External Auditor his evaluation of the system of internal controls, audit plan, audit report and assistance given by the employees of the Company to the External Auditor; To review the quarterly results and year-end financial statements of the Board, prior to the approval by the Board of Directors, focusing particularly on: • • • • •
any changes in or implementation of accounting policies and practices; significant and unusual events; significant adjustments arising from the audit; the going concern assumption; and compliance with accounting standards and other legal requirements.
(d) To discuss problems and reservations arising from the interim and final audits, and any matter the Auditor may wish to discuss (in the absence of management, where necessary); (e) To review the External Auditorʼs management letter and managementʼs response; (f) To do the following, in relation to the Internal Audit Function: • •
• • •
review the adequacy of the scope, functions, competency and resources of the Internal Audit Function, and that it has the necessary authority to carry out its work; review the internal audit programme, processes and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the Internal Audit Function; review any appraisal or assessment of the performance of members of the Internal Audit Function; approve any appointment or termination of senior staff members of the Internal Audit Function; and take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.
(g) To consider any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity; (h) To report its findings on the financial and management performance, and other material matters to the Board; (i) To consider the major findings of internal investigations and managementʼs response; (j) To verify the allocation of employeesʼ share option scheme (“ESOS”) in compliance with the criteria as stipulated in the by-laws of ESOS of the Company, if any; (k) To determine the remit of the Internal Audit Function; (l) To consider other topics as defined by the Board; (m) To consider and examine such other matters as the AC considers appropriate; and (n) To review the annual Statement on Risk Management and Internal Control to be published in the Annual Report.
Top Glove Corporation Berhad • Annual Report 2014
69
Directors’ Responsibility Statement for the audited financial statements
The Directors are required under the Companies Act 1965 to prepare financial statements for each financial year in accordance with applicable approved accounting standards and which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company at the financial year. In preparing the financial statements, the Directors have: • • •
adopted appropriate accounting policies and applied them consistently; made judgements and estimates that are reasonable and prudent; and prepared the financial statements on a going concern basis.
The Directors are responsible to ensure that the Group and the Company keep proper accounting records which disclose with reasonable accuracy the financial positions and results of the Group and the Company. The Directors are also responsible for taking reasonable steps to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.
70
Top Glove Corporation Berhad • Annual Report 2014
FINANCIAL STATEMENTS for the financial year ended 31 August 2014
Page
72 76 76 77 79 80 81 83 86 88 152
Directors’ Report Statement by Directors Statutory Declaration Independent Auditors’ Report Income Statements Statements of Comprehensive Income Statements of Financial Position Statements of Changes in Equity Statements of Cash Flows Notes to the Financial Statements Notes to the Financial Statements - Supplementary Information
Top Glove Corporation Berhad • Annual Report 2014
71
DIRECTORS’ REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 August 2014.
Principal activities The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are described in Note 18 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.
Results Group RM'000
Company RM'000
Profit net of tax
183,565
58,043
Profit attributable to: Owners of the parent Non-controlling interest
180,523 3,042
58,043 -
183,565
58,043
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.
Dividends The amount of dividends paid by the Company since 31 August 2013 were as follows: RM'000 In respect of the financial year ended 31 August 2013: Final single tier dividend of 18%, paid on 24 January 2014
55,848
In respect of the financial year ended 31 August 2014: First interim single tier dividend of 14%, paid on 17 July 2014
43,444 99,292
At the forthcoming Annual General Meeting, a single tier final dividend of 18% on 620,664,062 ordinary shares amounting to RM55,859,765 (9.00 sen per share) in respect of the financial year ended 31 August 2014 will be proposed for shareholders' approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 August 2015.
72
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ REPORT (cont’d)
Directors The names of the directors of the Company in office since the date of the last report and at the date of this report are: Tan Sri Lim Wee Chai Puan Sri Tong Siew Bee Lee Kim Meow Lim Hooi Sin Lim Cheong Guan Tan Sri Dato' Seri Utama Arshad bin Ayub Sekarajasekaran a/l Arasaratnam Lim Han Boon Tan Sri Dato' Dr. Lin See Yan Tan Sri Mohd Sidek Bin Haji Hassan Tan Sri Rainer Althoff
Directors' benefits Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the Employee Share Options Scheme ("ESOS"). Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 13 to the financial statements) by reason of a contract made by the Company or a related corporation with a director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
Directors' interests According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares and options over shares in the Company during the financial year were as follows: Number of ordinary shares of RM0.50 each 1 September 31 August 2013 Acquired Sold 2014 Tan Sri Lim Wee Chai - direct - indirect Puan Sri Tong Siew Bee - direct - indirect Lee Kim Meow - direct - indirect Lim Hooi Sin - direct - indirect Lim Cheong Guan Tan Sri Dato' Seri Utama Arshad bin Ayub Sekarajasekaran a/l Arasaratnam
179,061,138 56,934,904
-
1,000,000
179,061,138 55,934,904
9,195,748 226,800,294
4,650,000 -
5,650,000
13,845,748 221,150,294
641,600 10,000
-
200,000 -
441,600 10,000
10,935,362 225,060,680 20,000 1,200,000 11,785,118
45,000
1,000,000 20,000 -
9,935,362 225,060,680 1,200,000 11,830,118
Top Glove Corporation Berhad • Annual Report 2014
73
DIRECTORS’ REPORT (cont’d)
Number of options over ordinary shares of RM0.50 each 1 September 31 August 2013 Granted Exercised 2014 Tan Sri Lim Wee Chai Puan Sri Tong Siew Bee Lee Kim Meow Lim Hooi Sin Lim Cheong Guan
588,000 235,200 352,800 128,000 293,100
84,000 24,000 50,400 33,600 33,600
-
672,000 259,200 403,200 161,600 326,700
Tan Sri Lim Wee Chai, Puan Sri Tong Siew Bee and Lim Hooi Sin by virtue of their interest in shares of the Company are also deemed interested in shares of all the subsidiaries to the extent the Company has an interest. The other directors in office at the end of the financial year had no interest in shares in the Company or its related corporations or in share options in the Company during the financial year.
Issue of shares During the financial year, the Company increased its issued and paid-up share capital from RM310,110,000 to RM310,332,000 by way of issuance of 444,100 ordinary shares of RM0.50 each pursuant to the exercise of ESOS at an option price between RM2.01 and RM5.79 per ordinary share. The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company.
Employee share options scheme The Company's ESOS is governed by the by-laws which was approved by the shareholders at the Extraordinary General Meeting held on 9 January 2008 and became effective on 1 August 2008. The main features and other terms of the ESOS are disclosed in Note 35 to the financial statements. The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of employees who have been granted options to subscribe for less than 95,900 ordinary shares. Other statutory information (a) Before the income statements, statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision have been made for doubtful debts; and (ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
74
Top Glove Corporation Berhad • Annual Report 2014
DIRECTORS’ REPORT (cont’d)
Other statutory information (continued) (b) At the date of this report, the directors are not aware of any circumstances which would render: (i) it necessary to write off any bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; and (ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading. (c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. (d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. (e) At the date of this report, there does not exist: (i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or (ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year. (f) In the opinion of the directors: (i) no contingent or other liability has 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 affect the ability of the Group or of the Company to meet its obligations when they fall due; and (ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.
Significant events Details of significant events are disclosed in Note 18 and 44 to the financial statements.
Auditors The auditors, Ernst & Young, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors dated 31 October 2014.
Lee Kim Meow
Lim Han Boon
Top Glove Corporation Berhad • Annual Report 2014
75
Statement by directors Pursuant to Section 169 (15) of the Companies Act, 1965
We, Lee Kim Meow and Lim Han Boon, being two of the directors of Top Glove Corporation Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 79 to 152 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 August 2014 and of their financial performance and cash flows for the year then ended. The information set out in Note 46 on page 152 of the financial statements have been prepared 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. Signed on behalf of the Board in accordance with a resolution of the directors dated 31 October 2014.
Lee Kim Meow
Lim Han Boon
Statutory declaration Pursuant to Section 169 (16) of the Companies Act, 1965 I, Lee Kim Meow, being the director primarily responsible for the financial management of Top Glove Corporation Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 79 to 152 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed, Lee Kim Meow on 31 October 2014 Lee Kim Meow Before me,
Goh Cheng Teak Commissioner for Oaths
76
Top Glove Corporation Berhad • Annual Report 2014
Independent auditors’ report to the members of Top Glove Corporation Bhd. (Incorporated in Malaysia)
Report on the financial statements We have audited the financial statements of Top Glove Corporation Bhd., which comprise the statements of financial position of the Group and of the Company as at 31 August 2014, and the income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 79 to 152. Directorsʼ responsibility for the financial statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditorsʼ 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 judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of the 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 31 August 2014 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia
Top Glove Corporation Berhad • Annual Report 2014
77
Independent auditors’ report to the members of Top Glove Corporation Bhd. (Incorporated in Malaysia) (cont’d) Report on other legal and regulatory requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. (b) We have considered the financial statements and the auditorsʼ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 18 to the financial statements, being financial statements that have been included in the consolidated financial statements. (c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. (d) The auditorsʼ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act. Other reporting responsibilities The supplementary information set out in Note 46 to the financial statements on page 152 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information has been prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Ernst & Young AF: 0039 Chartered Accountants Kuala Lumpur, Malaysia Date: 31 October 2014
78
Top Glove Corporation Berhad • Annual Report 2014
Ong Chee Wai 2857/07/16(J) Chartered Accountant
Income statements For the financial year ended 31 August 2014
Group Note
Revenue Cost of sales
8
Gross profit Other items of income Interest income Other income
9 10
Other items of expense Distribution and selling costs Administrative and general expenses Finance costs Share of results of associates
2014 RM'000 2,275,366 (1,891,915)
2013 RM'000 2,313,234 (1,950,016)
Company 2014 2013 RM'000 RM'000 62,732 -
119,382 -
383,451
363,218
62,732
119,382
10,307 32,464
12,664 36,251
13 23
39 -
(70,158) (138,794) (4,226)
(67,001) (99,723) (733)
(3,651) -
(2,472)
-
216,310 (32,745)
242,204 (39,375)
58,039 4
115,770 (2,281)
Profit net of tax
183,565
202,829
58,043
113,489
Profit attributable to: Owners of the parent Non-controlling interest
180,523 3,042
196,500 6,329
58,043 -
113,489 -
183,565
202,829
58,043
113,489
29.09 29.05
31.72 31.68
Profit before tax Income tax expense
Earnings per share attributable to owners of the parent (sen): Basic Diluted
3,266
(4,729) -
11 14
15 15
-
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Top Glove Corporation Berhad • Annual Report 2014
79
statements of comprehensive income For the financial year ended 31 August 2014
Group
Profit net of tax
2014 RM'000
2013 RM'000
183,565
202,829
Company 2014 2013 RM'000 RM'000 58,043
113,489
Other comprehensive income/(loss): Net movement on available-for-sale financial assets Net movement on cash flow hedge (Note 33) Foreign currency translation
(584) 31,393 (4,461)
(2,543) (31,393) 5,859
-
-
Other comprehensive income/(loss) for the year, net of tax
26,348
(28,077)
-
-
Total comprehensive income for the year
209,913
174,752
58,043
113,489
Total comprehensive income attributable to: Owners of the parent Non-controlling interest
206,759 3,154
168,262 6,490
58,043 -
113,489 -
209,913
174,752
58,043
113,489
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
80
Top Glove Corporation Berhad • Annual Report 2014
Statements of financial position As at 31 August 2014
Note
2014 RM'000
Group 2013 RM'000
Company 2014 2013 RM'000 RM'000
16 17 18 19 20 21 22
995,242 42,068 20,058 12,825 145 22,805
928,802 45,647 17,022 19,165 145 25,183
580,503 -
580,503 -
1,093,143
1,035,964
580,503
580,503
207,377 288,863 2,770 154,322 2,662 184,030
219,685 295,141 3,853 93,669 123,111
2,841 638
24,814 521 1,575
840,024
735,459
3,479
26,910
1,933,167
1,771,423
583,982
607,413
178,179 267,006 38,112 2,530 -
55,581 234,074 28,504 6,013 40,852
16,197 -
1,227 -
485,827
365,024
16,197
1,227
354,197
370,435
(12,718)
25,683
Top Glove Corporation Berhad • Annual Report 2014
81
Assets Non-current assets Property, plant and equipment Land use rights Investment in subsidiaries Investment in associates Deferred tax assets Investment securities Goodwill
Current assets Inventories Trade and other receivables Other current assets Tax recoverable Investment securities Derivative financial instruments Cash and bank balances
23 24 25 21 26 27
Total assets
Equity and liabilities Current liabilities Loans and borrowings Trade and other payables Other current liabilities Income tax payable Derivative financial instruments
Net current assets/(liabilities)
28 29 30 26
Statements of financial position As at 31 August 2014 (cont’d) Group
Non-current liabilities Loans and borrowings Deferred tax liabilities
Company 2014 2013 RM'000 RM'000
Note
2014 RM'000
2013 RM'000
28 20
2,540 47,250
2,809 45,749
-
-
49,790
48,558
-
-
535,617
413,582
16,197
1,227
1,397,550
1,357,841
567,785
606,186
310,332 180,673 10,200 66,580
310,110 180,174 11,054 104,848
Total liabilities Net assets
Equity attributable to owners of the parent Share capital Share premium Other reserves Retained earnings
31 32 33 34
310,332 180,673 21,520 880,864
310,110 180,174 (3,209) 844,777
Non-controlling interest
1,393,389 4,161
1,331,852 25,989
567,785 -
606,186 -
Total equity
1,397,550
1,357,841
567,785
606,186
Total equity and liabilities
1,933,167
1,771,423
583,982
607,413
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
82
Top Glove Corporation Berhad • Annual Report 2014
-
(99,292)
(579)
(99,292)
1,397,550
(2,981)
(2,981)
Closing balance at 31 August 2014
(48,778) (2)
(73,181) (2)
Top Glove Corporation Berhad • Annual Report 2014 222
-
-
-
-
-
-
222
-
1,393,389 310,332
(145,222)
2,981
2,981
(170,204)
873
873
Total transactions with owners
1,977
206,759
1,331,852 310,110
1,977
209,913
Total comprehensive income
Transactions with owners Issuance of ordinary shares pursuant to ESOS Share options granted under ESOS Transfer from share option reserve Accretion of subsidiary (Note 44) Share issue expenses Transfer to retained earnings Dividends paid to noncontrolling interest Dividends on ordinary shares (Note 42)
1,357,841
Opening balance at 1 September 2013
2014 Group
180,673
499
-
-
(1,728)
(2)
474
-
1,755
-
180,174
6,485
-
-
-
-
-
-
-
-
(4,573)
11,058
3,781
(653)
-
-
(653)
-
-
-
-
-
4,434
10,200
(854)
-
-
(1,253)
-
( 474)
873
-
-
11,054
1,054
-
-
-
-
-
-
-
-
(584)
1,638
(99,292)
-
653
(48,778) -
2,981
-
-
180,523
-
880,864
- (144,436)
-
-
-
-
-
-
-
31,393
(31,393) 844,777
4,161
(24,982)
-
(579)
-
(24,403) -
-
-
-
3,154
25,989
Attributable to owners of the parent Equity attributable Non-distributable Distributable to owners Foreign Share Fair value Cash flow NonEquity, of the parent Share Share exchange Legal option adjustment hedge Retained controlling total total capital premium reserve reserve reserve reserve reserve earnings interest RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Statements of changes in equity For the financial year ended 31 August 2014
83
84
Top Glove Corporation Berhad • Annual Report 2014
1,867 (4) -
(99,134)
1,867
(4)
1,228
(6,228)
(99,134)
(96,764)
1,357,841
Total transactions with owners
Closing balance at 31 August 2013
670
-
-
-
-
-
670
-
180,174
5,977
-
-
-
1,144 (4)
-
4,837
-
174,197
11,058
-
-
-
-
-
-
-
5,698
5,360
4,434
-
-
-
-
-
-
-
-
4,434
11,054
723
-
-
-
(1,144) -
1,867
-
-
10,331
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
1,331,852 310,110
(91,764)
5,507
168,262
5,507
174,752
Total comprehensive income
1,255,354 309,440
Transactions with owners Issuance of ordinary shares pursuant to ESOS Share options granted under ESOS Transfer from share option reserve Share issue expenses Acquisition of a subsidiary Dividends paid to noncontrolling interest Dividends on ordinary shares (Note 42)
1,279,853
Opening balance at 1 September 2012
2013 Group
1,638
-
-
-
-
-
-
-
(2,543)
4,181
747,411
(99,134)
(99,134)
-
-
-
-
-
(31,393) 844,777
-
-
-
-
-
-
-
(31,393) 196,500
-
25,989
(5,000)
-
(6,228)
1,228
-
-
-
6,490
24,499
Attributable to owners of the parent Equity attributable Non-distributable Distributable to owners Foreign Share Fair value Cash flow NonEquity, of the parent Share Share exchange Legal option adjustment hedge Retained controlling total total capital premium reserve reserve reserve reserve reserve earnings interest RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Statements of changes in equity
For the financial year ended 31 August 2014 (cont’d)
Statements of changes in equity For the financial year ended 31 August 2014 (cont’d) Non-distributable
Distributable
Equity, total RM'000
Share capital RM'000
Share premium RM'000
Share option reserve RM'000
606,186
310,110
180,174
11,054
104,848
58,043
-
-
-
58,043
Retained earnings RM'000
Company Opening balance at 1 September 2013 Total comprehensive income Transactions with owners Issuance of ordinary shares pursuant to ESOS Share options granted under ESOS Transfer from share option reserve Share issue expenses Transfer to retained earnings Dividends on ordinary shares (Note 42)
1,977 873 2,981 (2) (2,981) (99,292)
222 -
Total transactions with owners
(96,444)
222
499
Closing balance at 31 August 2014
567,785
310,332
180,673
10,200
66,580
Opening balance at 1 September 2012
584,461
309,440
174,197
10,331
90,493
Total comprehensive income
113,489
-
-
-
113,489
Transactions with owners Issuance of ordinary shares pursuant to ESOS Share options granted under ESOS Transfer from share option reserve Share issue expenses Dividends on ordinary shares (Note 42)
5,507 1,867 (4) (99,134)
670 -
4,837 1,144 (4) -
Total transactions with owners
(91,764)
670
5,977
723
Closing balance at 31 August 2013
606,186
310,110
180,174
11,054
1,755 474 (2) (1,728) -
873 (474) (1,253) -
2,981 (99,292)
(854)
(96,311)
1,867 (1,144) -
(99,134) (99,134)
104,848
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Top Glove Corporation Berhad • Annual Report 2014
85
Statements of cash flows For the financial year ended 31 August 2014
Group 2014 RM'000
2013 RM'000
216,310
242,204
-
-
Company 2014 2013 RM'000 RM'000
Operating activities Profit before tax Adjustments for : Gross dividends Depreciation and amortisation - Property, plant and equipment - Amortisation of land use rights Loss on disposal of property, plant and equipment Gain on disposal of investment securities Property, plant and equipment written off Share options granted under ESOS Unrealised foreign exchange gain Gain on disposal of a subsidiary Gain on disposal of land use rights Share of results of associate Net fair value gain on derivative Finance costs Interest income
58,039
115,770
(59,950)
(117,626)
873 (13)
1,867 (39)
90,863 708 12,677 (6,962) 2,009 873 (1,856) (10,537) (494) (3,266) (2,394) 4,226 (10,307)
79,695 650 150 (9,062) 1,649 1,867 (3,753) 2,472 (886) 733 (12,664)
75,540
60,851
(59,090)
(115,798)
291,850
303,055
(1,051)
(28)
12,308 1,289 1,086 45,065
(40,213) 8,434 22,086 (1,091)
10 205
(10) 184
59,748
(10,784)
215
174
Cash flows from operations Interest paid Income taxes (paid)/refunded
351,598 (4,226) (38,852)
292,271 (733) (44,530)
(836) 525
146 382
Net cash flows generated from/(used in) operating activities
308,520
247,008
(311)
528
Total adjustments Operating cash flows before changes in working capital Changes in working capital Decrease/(increase) in inventories Decrease/(increase) in receivables Decrease in other current assets Increase/(decrease) in payables Total changes in working capital
86
Top Glove Corporation Berhad • Annual Report 2014
Statements of cash flows For the financial year ended 31 August 2014 (cont’d) Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
(192,238) (171) (212,027) 216,256 1,675 (35,757) 10,307 -
(255,760) (23,602) (165,184) 223,075 (18,529) 9,881 -
13 59,950
39 114,566
3,815 (73,181) 21,020 -
7,699 (12,204) (23,384)
36,728 -
(23,471) 2,670 -
(260,301)
(258,008)
96,691
93,804
1,977 (2) (99,292) (579) (75) 130,129
5,507 (4) (99,134) (6,228) (57) 51,901
1,977 (2) (99,292) -
5,507 (4) (99,134) -
32,158
(48,015)
(97,317)
(93,631)
Net increase/(decrease) in cash and cash equivalents Effects of foreign exchange rate changes Cash and cash equivalents at 1 September
80,377 2,705 104,582
(59,015) (3,649) 167,246
(937) 1,575
Cash and cash equivalents at 31 August
187,664
104,582
638
Investing activities Purchase of property, plant and equipment Purchase of land use rights Purchase of investment securities Proceeds from disposal of investment securities Proceeds from disposal of land use rights Placement of deposits pledged with banks Interest received Dividends income from subsidiaries Proceeds from disposal of property, plant and equipment Additional investment in a subsidiary Repayment from subsidiaries Additional investment in an associate Net cash inflow on disposal of a subsidiary Net cash outflow on acquisition of a subsidiary Net cash flows (used in)/generated from investing activities Financing activities Proceeds from issuance of ordinary shares Share issue expenses Dividends paid on ordinary shares Dividends paid to non-controlling shareholders Repayment of obligations under finance leases Proceeds from loans and borrowings Net cash flows generated from/(used in) financing activities
701 874 1,575
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Top Glove Corporation Berhad • Annual Report 2014
87
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014
1. Corporate information Top Glove Corporation Bhd. ("the Company") is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The principal place of business of the Company is located at Lot 4969, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor. The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are described in Note 18. There have been no significant changes in the nature of the principal activities during the financial year.
2. Basis of preparation These financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards ("MFRS") as issued by the Malaysian Accounting Standards Board ("MASB"), International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and the requirements of the Companies Act, 1965 in Malaysia. The financial statements have also been prepared on a historical basis, unless otherwise indicated in the accounting policies below. The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM'000) except when otherwise indicated.
3. Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and of its subsidiaries as at 31 August 2014. Control is achieved when the Group 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. Specifically, the Group controls an investee if and only if the Group has: -
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); Exposure, or rights, to variable returns from its involvement with the investee; and The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: -
The contractual arrangement with the other vote holders of the investee; Rights arising from other contractual arrangements; and The GroupĘźs voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in profit or loss from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the GroupĘźs accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
88
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 3. Basis of consolidation (continued) A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: -
Derecognises the assets (including goodwill) and liabilities of the subsidiary; Derecognises the carrying amount of any non-controlling interests; Derecognises the cumulative translation differences recorded in equity; Recognises the fair value of the consideration received; Recognises the fair value of any investment retained; Recognises any surplus or deficit in profit or loss; and Reclassifies the parentʼs share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
4. Summary of significant accounting policies 4.1 Business combinations and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquireeʼs identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the previously held equity interest is re-measured at its acquisition date fair value and any resultant gain or loss is recognised in profit or loss. It is then considered in the determination of goodwill. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognised either in profit or loss or as a change to OCI. If the contingent consideration is not within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
Top Glove Corporation Berhad • Annual Report 2014
89
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.1 Business combinations and goodwill (continued) After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groupʟs cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. Business combinations involving entities under common control are accounted for by applying the pooling on interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any difference between the consideration paid and the share capital of the "acquired" entity is reflected within equity as merger reserve. The statement of comprehensive income reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities have always been combined since the date the entities had come under common control. 4.2 Current versus non-current classification Assets and liabilities in statement of financial position are presented based on current/non-current classification. An asset is current when it is: -
Expected to be realised or intended to sold or consumed in normal Held primarily for the purpose of trading; Expected to be realised within twelve months after the reporting period, or Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is current when: -
It is expected to be settled in normal operating cycle; It is held primarily for the purpose of trading; It is due to be settled within twelve months after the reporting period; or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
90
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.3 Fair value measurement 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: -
In the principal market for the asset or liability; or In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available, are used to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1
-
Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2
-
Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3
-
Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Policies and procedures are determined by senior management for both recurring fair value measurement and for non-recurring measurement. External valuers are involved for valuation of significant assets and significant liabilities. Involvement of external valuers is decided by senior management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The senior management decides, after discussions with the external valuers, which valuation techniques and inputs to use for each case.
Top Glove Corporation Berhad • Annual Report 2014
91
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.3 Fair value measurement (continued) At each reporting date, the senior management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed according to the accounting policies of the Company. For this analysis, the senior management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The senior management, in conjunction with the external valuers, also compares the changes in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. For the purpose of fair value disclosures, classes of assets and liabilities are determined based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. 4.4 Transactions with non-controlling interest Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Changes in the Company ownersʼ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent. 4.5 Foreign currencies (a) Functional and presentation currency The Groupʼs and the Company's financial statements are presented in Ringgit Malaysia which is also the Companyʼs functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (b) Transactions and balances Transactions in foreign currencies are initially recorded by the Group entities at the functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items that are designated as part of the hedge of the Group's net investment of a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in OCI. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.
92
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.5 Foreign currencies (continued) (c) Group companies On consolidation, the assets and liabilities of foreign operations are translated into RM at the rate of exchange prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss. 4.6 Revenue and other income recognition Revenue and other income are recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue and other income can be reliably measured, regardless of when the payment is being made. Revenue and other income are measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group and the Company have concluded that they are the principals in all of its revenue arrangements since they are the primary obligors in all the revenue arrangements, have pricing latitude and are also exposed to inventory and credit risks. The specific recognition criteria described below must also be met before revenue is recognised. (a) Sale of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. (b) Dividend income Dividend income is recognised when the Groupʟs and the Company's right to receive payment is established. (c) Management fees Management fees are recognised when services are rendered. (d) Interest income For all financial instruments measured at amortised cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in profit or loss. (e) Rental income Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.
Top Glove Corporation Berhad • Annual Report 2014
93
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.7 Employee benefits (a) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. (b) Defined contribution plans The Group makes contributions to the Employees Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed. (c) Employee share option plans Employees of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Groupʟs best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised at the beginning and end of that period. No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the options are exercised, the employee share option reserve is transferred to share premium if new shares are issued. The employee share option reserve is transferred to retained earnings upon forfeiture or expiry of the share options. 4.8 Taxes (a) Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
94
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4. Summary of significant accounting policies (continued) 4.8 Taxes (continued) (b) Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences, except: (i) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and (ii) in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: (i) where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and (ii) in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Top Glove Corporation Berhad • Annual Report 2014
95
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.8 Taxes (continued) (c) Sales tax Revenues, expenses and assets are recognised net of the amount of sales tax except: (i)
where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
(ii) receivables and payables that are stated with the amount of sales tax included. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position. 4.9 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 4.10 Property, plant and equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing component parts of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group derecognises the replaced part, and recognises the new part with its own associated useful life and depreciation. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit or loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Freehold land has an unlimited useful life and therefore is not depreciated. Capital work-in-progress are not depreciated as these assets are not available for use. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows: Buildings Plant and equipment Other assets
20 to 50 years 10 years 5 to 10 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised. The assetsĘź residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
96
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.11 Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. (a) Group as lessee Finance leases which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in profit or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an operating expense in the profit or loss on a straightline basis over the lease term. Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less accumulated amortisation and accumulated impairment losses. The land use rights are amortised over their lease terms. (b) Group as lessor Leases in which the Group do not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned. 4.12 Investment in subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the CompanyĘźs separate financial statements, investment in subsidiaries is accounted for at cost less impairment losses.
Top Glove Corporation Berhad • Annual Report 2014
97
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.13 Investment in associates An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. The Groupʼs investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Groupʼs share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Groupʼs share of the net fair value of the associateʼs identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Groupʼs share of the associateʼs profit or loss for the period in which the investment is acquired. When the Groupʼs share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Groupʼs investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss. The financial statements of the associates are prepared as of the same reporting date as the Company unless it is impracticable to do so. When the financial statements of associates used in applying the equity method are prepared as of a different reporting date from that of the Company, adjustments are made for the effects of significant transactions or events that occur between that date and the reporting date of the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. In the Companyʼs separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. 4.14 Inventories Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows: -
Raw materials, packing materials and consumables: purchase costs on a weighted average basis.
-
Former: purchase costs on a first in, first out basis.
-
Finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, excluding borrowing costs. These costs are assigned on a weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale. Prior to 1 September 2013, the cost of raw materials, packing materials, consumables, work-in-progress and finished goods was determined on the first in, first out basis. The change to the weighted average basis was due to the change in the accounting system of the Group. This change in accounting policy has not been accounted for retrospectively as the effects of the change is not significant to the financial statement of the Group.
98
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.15 Impairment of non-financial assets At each reporting date, an assessment is made as to whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the assetʼs recoverable amount is estimated. An assetʼs recoverable amount is the higher of an assetʼs or cash-generating unitʼs (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. Impairment calculation are based on detailed budgets and forecast calculations, which are prepared separately for each CGU to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses of continuing operations, including impairment on inventories, are recognised in profit or loss in expense categories consistent with the function of the impaired asset. Goodwill is tested for impairment annually at reporting date and when circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. For assets other than goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the recoverable amount of the asset or CGU is estimated. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetʼs recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. 4.16 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Top Glove Corporation Berhad • Annual Report 2014
99
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.17 Financial assets (a) Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. The GroupĘźs financial assets include cash and short-term deposits, trade and other receivables, investment securities and derivative assets. (b) Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: (i)
Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by MFRS 139. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income or finance costs in the profit or loss. Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Re-assessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss. The Group and the Company have designated derivatives that do not qualify for hedge accounting and money market funds as at fair value through profit or loss.
(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. The category generally applies to trade and other receivables.
100
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.17 Financial assets (continued) (b) Subsequent measurement (continued) (ii) Loans and receivables (continued) Loans and receivables of the Group and Company comprise of trade and other receivables (other than prepaid operating expenses and tax recoverable), due from related companies and cash and bank balances. (iii) Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held to maturity when the Group has the positive intention and an ability to hold them to maturity. After initial measurement, held to maturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in profit or loss. The losses arising from impairment are recognised in profit or loss as finance costs. The Group and the Company did not have any held-to-maturity investments during the years ended 31 August 2014 and 2013. (iv) Available-for-sale (AFS) financial investments AFS financial investments include equity investments and debt securities. Equity investments classified as AFS are those that are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions. After initial measurement, AFS financial investments are subsequently measured at fair value with unrealised gains or losses recognised in OCI and credited in the AFS reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the AFS reserve to profit or loss in finance costs. Interest earned whilst holding AFS financial investments is reported as interest income using the EIR method. The Group evaluates whether the ability and intention to sell its AFS financial assets in the near term is still appropriate. When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets, the Group may elect to reclassify these financial assets if the management has the ability and intention to hold the assets for foreseeable future or until maturity. For a financial asset reclassified from the AFS category, the fair value carrying amount at the date of reclassification becomes its new amortised cost and any previous gain or loss on the asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortised cost and the maturity amount is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to profit or loss. All quoted debts securities and golf club membership of the Group and the Company are designated as AFS financial investments.
Top Glove Corporation Berhad • Annual Report 2014
101
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.17 Financial assets (continued) (c) Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the statements of financial position) when: -
The rights to receive cash flows from the asset have expired;
-
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ʻpass-throughʼ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. (d) Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ʻloss eventʼ), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortised cost For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. The amount of any impairment loss identified is measured as the difference between the assetʼs carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assetʼs original effective interest rate.
102
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.17 Financial assets (continued) (d) Impairment of financial assets (continued) Financial assets carried at amortised cost (continued) The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in profit or loss. Interest income (recorded as finance income in profit or loss) continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in profit or loss. Available-for-sale ("AFS") investments For AFS financial investments, an assessment is made at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as AFS, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. ʻSignificantʼ is evaluated against the original cost of the investment and ʻprolongedʼ against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss) is removed from other comprehensive income and recognised in the statement of profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairment are recognised in other comprehensive income. In the case of debt instruments classified as AFS, the impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.
Top Glove Corporation Berhad • Annual Report 2014
103
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.18 Financial liabilities (a) Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Groupʼs financial liabilities include trade and other payables, loans and borrowings and financial guarantee contracts. (b) Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: (i)
Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by MFRS 139. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in profit or loss. The Group and the Company have designated derivatives that do not qualify for hedge accounting as at fair value through profit or loss.
(ii) Other financial liabilities The Groupʼs and the Company's 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. Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit or loss.
104
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.18 Financial liabilities (continued) (c) Financial guarantee contracts Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation. (d) Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss. (e) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 4.19 Derivative financial instruments (a) Initial recognition and subsequent measurement The Group uses forward foreign currency contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the profit or loss, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income. For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment. At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.
Top Glove Corporation Berhad • Annual Report 2014
105
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.19 Derivative financial instruments (continued) (a) Initial recognition and subsequent measurement (continued) Hedges which meet the strict criteria for hedge accounting are accounted for as described below: Cash flow hedges The effective portion of the gain or loss on the hedging instrument is recognised directly as other comprehensive income in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the profit or loss as other operating expenses. Amounts recognised as other comprehensive income are transferred to the profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expenses is recognised or when a forecast sales occurs. Where the hedged item is the cost of a nonfinancial asset or non-financial liability, the amounts recognised as other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability. If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity is transferred to the profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedged is revoked, any cumulative gain or loss previously recognised in other comprehensive income remains in other comprehensive income until the forecast transaction or firm commitment affects profit or loss. The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecasted transactions and firm commitments. Refer to Note 26 for more details. 4.20 Cash and short-term deposits Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less. Money market funds are investments in extremely short-term money market securities, undergo only minor value fluctuations and can be readily converted within one day into known amounts of cash. For the purpose of the statement cash flows, cash and cash equivalents consist of cash and short-term deposits and money market funds as defined above. 4.21 Share capital and share issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Ordinary shares are equity instruments and are recorded at the proceeds received, net of directly attributable incremental transaction costs. 4.22 Cash dividend and non-cash distribution to equity holders of the Group The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. A distribution is authorised when it is approved by the shareholders and a corresponding amount is recognised directly in equity. Non-cash distributions are measured at the fair value of the assets to be distributed with fair value remeasurement recognised directly in equity. Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in profit or loss.
106
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 4.
Summary of significant accounting policies (continued) 4.23 Provisions Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When it is expected that some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statements of profit or loss net of any reimbursement. 4.24 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 and of the Company. 4.25 Segment reporting For management purposes, the Group is organised into operating segments based on their geographical location which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 41, including the factors used to identify the reportable segments and the measurement basis of segment information.
5.
New and amended standards and interpretations The following new and amended standards and interpretations, which became effective during the year, are applied for the first time: MFRS 1 MFRS 1 MFRS 3 MFRS 7 MFRS 10 MFRS 10 MFRS 11 MFRS 11 MFRS 12 MFRS 12 MFRS 13 MFRS 101 MFRS 101 MFRS 116
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (Government Loans) Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009 - 2011 Cycle) MFRS 3 Business Combinations (IFRS 3 issued by IASB in March 2004) Amendments to MFRS 7 Financial Instruments: Disclosures (Offsetting Financial Assets and Financial Liabilities) Consolidated Financial Statements Amendments to MFRS 10 Consolidated Financial Statements (Transition Guidance) Joint Arrangements Amendments to MFRS 11 Joint Arrangements (Transition Guidance) Disclosure of Interests in Other Entities Amendments to MFRS 12 Disclosure of Interests in Other Entities (Transition Guidance) Fair Value Measurement Amendments to MFRS 101 Presentation of Financial Statements (Presentation of Items of Other Comprehensive Income) Amendments to MFRS 101 Presentation of Financial Statements (Annual Improvements 2009 - 2011 Cycle) Amendments to MFRS 116 Property, Plant and Equipment (Annual Improvements 2009 2011 Cycle)
Top Glove Corporation Berhad • Annual Report 2014
107
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 5.
New and amended standards and interpretations (continued) MFRS 119 MFRS 127 MFRS 127 MFRS 128 MFRS 132 MFRS 134 IC Int. 2 IC Int. 20
Employee Benefits Consolidated and Separate Financial Statements (IAS 27 as revised by IASB in December 2003) Separate Financial Statements Investments in Associates and Joint Ventures Amendments to MFRS 132 Financial Instruments: Presentation (Annual Improvements 2009 - 2011 Cycle) Amendments to MFRS 134 Interim Financial Reporting (Annual Improvements 2009 - 2011 Cycle) Amendments to IC Int. 2 Members' Shares in Co-operative Entities and Similar Instruments (Annual Improvements 2009 - 2011 Cycle) Stripping Costs in the Production Phase of a Surface Mine
Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except for those discussed below: Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009 - 2011 Cycle) These amendments clarify whether an entity can apply MFRS 1 if it meets the criteria for applying MFRS 1 and has applied (a) MFRS 1 in a previous reporting period or (b) MFRSs in a previous reporting period when MFRS 1 did not exist. The amendments also address the treatment of borrowing cost previously capitalised and the accounting treatment after the transition date for borrowings costs that relate to qualifying assets under construction at transition date. These amendments further provide clarification on the requirements for comparative information (consequential amendment to MFRS 101). MFRS 12 Disclosures of Interests in Other Entities MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Groupʼs financial position or performance. MFRS 13 Fair Value Measurement MFRS 13 establishes a single source of guidance under MFRS for all fair value measurements. MFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under MFRS when fair value is required or permitted. Upon adoption of MFRS 13, the Group will take into consideration the highest and best use of certain properties in measuring the fair value of such properties. The adoption of MFRS 13 is expected to result in higher fair value of certain properties of the Group. Amendments to MFRS 101: Presentation of Financial Statements (Presentation of Items of Other Comprehensive Income) The amendments to MFRS 101 change the grouping of items presented in other comprehensive income. Items that could be reclassified (or recycled) to profit or loss at a future point in time would be presented separately from items which will never be reclassified. The amendments affect presentation only and have no impact on the Group's financial position and performance.
108
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 5.
New and amended standards and interpretations (continued) Amendments to MFRS 101: Presentation of Financial Statements (Annual Improvements 2009 - 2011 Cycle) These amendments clarify the requirements for comparative information for the statement of financial position when an entity (a) changes accounting policies or makes retrospective restatements or reclassification; and (b) provides financial statements beyond the minimum comparative information requirements. MFRS 127 Separate Financial Statements As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements
6.
New and amended standards issued but not yet effective New and amended standards issued but not yet effective up to the date of issuance of these financial statements are as follows:
Description
Effective for annual periods beginning on or after
Amendments to MFRS 10 Consolidated Financial Statements (Investment Entities) Amendments to MFRS 12 Disclosure of Interests in Other Entities (Investment Entities) Amendments to MFRS 127 Consolidated and Separate Financial Statements (Investment Entities) Amendments to MFRS 132 Financial Instruments: Presentation (Offsetting Financial Assets and Financial Liabilities) Amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets Amendments to MFRS 139 (Novation of Derivatives and Continuation of Hedge Accounting) IC Interpretation 21 Levies Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions Annual Improvements to MFRSs 2010–2012 Cycle Annual Improvements to MFRSs 2011–2013 Cycle MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) MFRS 9 Financial Instruments: Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139
1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 July 2014 1 July 2014 1 July 2014 To be announced To be announced To be announced
The directors expect that the adoption of the above standards and interpretations will have no material impact on the financial statements in the period of initial application except as disclosed below: MFRS 9 Financial instruments MFRS 9, as issued, reflects the first phase of the work on replacement of MFRS 139 and applies to classification and measurement of financial assets and financial liabilities as defined in MFRS 139. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to MFRS 9: Mandatory Effective Date of MFRS 9 and Transition Disclosures, issued in March 2012, moved the mandatory effective date to 1 January 2015. Subsequently, on 14 February 2014, it was announced that the new effective date will be decided when the project is closer to completion. The adoption of the first phase of MFRS 9 will have an effect on the classification and measurement of the financial assets, but will not have an impact on classification and measurements of the financial liabilities. The effect will be quantified in conjunction with the other phases, when the final standard including all phases is issued.
Top Glove Corporation Berhad • Annual Report 2014
109
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 6.
New and amended standards issued but not yet effective (continued) Amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. No derivatives were novated during the current period. However, these amendments would be considered for future novation.
7.
Significant accounting judgments, estimates and assumptions The preparation of financial statements requires management to make judgments, 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 require a material adjustment to the carrying amount of the asset or liability affected in future periods. 7.1 Judgments made in applying accounting policies In the process of applying the GroupĘźs accounting policies, management has not made any critical judgments, apart from those involving estimations, which could have a significant effect on the amounts recognised in the financial statements. 7.2 Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. (a) Impairment of goodwill Goodwill is tested for impairment annually and at other times which such indicators exist. This required an estimation of the value in use of the cash-generating units to which goodwill is allocated. When value in use calculations are undertaken, management must estimate future cash flows from the cash-generating unit and choose a suitable discount rate in order to calculate the present values of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment and sensitivity analysis to changes in the assumptions are disclosed in Note 22. (b) Impairment of loans and receivables The impairment loss on trade receivables of the Group is based on the evaluation of collectability and ageing analysis of the receivables and on management's judgment. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including the current credit-worthiness and the past collection history on each receivables. If the financial conditions of the receivables of the Group were to deteriorate, additional provision may be required.
110
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 7.
Significant accounting judgments, estimates and assumptions (continued) 7.2 Estimates and assumptions (continued) (c) Useful lives of plant and equipment The cost of plant and equipment for the manufacture of gloves is depreciated on a straight-line basis over the assetsʼ estimated economic useful lives. Management estimates the useful lives of these plant and equipment to be 10 years. These are common life expectancies applied in the gloves manufacturing industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (d) Taxes Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group and its subsidiaries domicile. As the Group assesses the probability for litigation and subsequent cash outflow with respect to taxes as remote, no contingent liability has been recognised. Deferred tax assets are recognised for all unutilised tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the losses and credits can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The amount of deferred tax assets recognised in respect of unutilised tax losses, capital allowances and reinvestment allowances and the amounts of such losses and allowances for which deferred tax assets were not recognised are disclosed in Note 20.
8.
Revenue Group
Sales of goods Management fees from subsidiaries Dividend income from subsidiaries
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
2,275,366 -
2,313,234 -
2,782 59,950
1,756 117,626
2,275,366
2,313,234
62,732
119,382
Top Glove Corporation Berhad • Annual Report 2014
111
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 9.
Interest income Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
8,382 1,811 114
8,423 1,458 2,783
13 -
39 -
10,307
12,664
13
39
Interest income from: Available-for-sale-financial assets Loans and receivables Others
10. Other income Group
Gain on foreign exchange - realised - unrealised Net gain on fair value changes of derivatives Rental income Gain on disposal of investment securities Gain on disposal of land use rights Gain on disposal of a subsidiary Sundry income
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
1,856 2,394 114 6,962 494 10,537 10,107
12,814 3,753 886 73 9,062 9,663
23
-
32,464
36,251
23
-
11. Profit before tax The following items have been included in arriving at profit before tax: Group
Auditorsʼ remuneration: - Statutory audit Company's auditors - Current year - Under provision in prior year Other auditors - Current year Depreciation and amortisation: - Property, plant and equipment - Land use rights Net loss on foreign exchange - realised Employee benefits expense (Note 12) Non-executive directors' remuneration (Note 13) Operating lease - Minimum lease payment for building and machinery Loss on disposal of property, plant and equipment Property, plant and equipment written off
112
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
233 1
336 -
55 -
55 -
258
242
-
-
90,863 708 18,520 272,137 567
79,695 650 275,060 543
4,053 353
2,273 263
771 12,677 2,009
1,000 150 1,649
-
-
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 12. Employee benefits expense Group
Wages and salaries Social security costs Pension costs - defined contribution plan Share options granted under ESOS Other staff related expenses Directors' fees
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
252,116 1,601 10,476 873 6,215 856
252,344 2,624 9,368 1,867 7,986 871
2,484 2 271 149 7 1,140
1,272 3 158 64 14 762
272,137
275,060
4,053
2,273
Included in employee benefits expense of the Group and of the Company are executive directors' remuneration amounting to RM7,435,000 (2013: RM7,546,000) and RM3,118,000 (2013: RM1,839,000) respectively as further disclosed in Note 13.
13. Directors' remuneration Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
3,209 333 1 17 826 74
3,228 318 1 230 837 97
2,070 248 1 12 787 49
931 111 1 34 762 49
4,460
4,711
3,167
1,888
353
263
353
263
2,766 238 7 8 30 43
2,607 203 7 81 34 28
-
-
3,092
2,960
-
-
Directors of the Company Executive: Salaries and other emoluments Pension costs - defined contribution plan Social security contributions Share options granted under ESOS Fees Benefits-in-kind
Non-executive: Fees Other directors Executive: Salaries and other emoluments Pension costs - defined contribution plan Social security contributions Share options granted under ESOS Fees Benefits-in-kind
Top Glove Corporation Berhad • Annual Report 2014
113
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 13. Directors' remuneration (continued) Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
214
280
-
-
Analysis excluding benefits-in-kind: Total executive directors' remuneration (Note 12) Total non-executive directors' remuneration
7,435 567
7,546 543
3,118 353
1,839 263
Total directors' remuneration
8,002
8,089
3,471
2,102
Non-executive: Fees
14. Income tax expense Major components of income tax expense The major components of income tax expense for the years ended 31 August 2014 and 2013 are: Group 2014 RM'000 Current income tax: - Malaysian income tax - Foreign tax - Real property gain tax - Overprovision in respect of previous years
Deferred income tax (Note 20): - Relating to origination and reversal of temporary differences - Under/(over)provision in respect of previous years
Income tax expense recognised in profit or loss
114
2013 RM'000
Company 2014 2013 RM'000 RM'000
35,929 2,777 115 (3,452)
44,495 1,882 2 (4,884)
(4)
3,060 (779)
35,369
41,495
(4)
2,281
(3,776)
(87)
-
-
1,152
(2,033)
-
-
(2,624)
(2,120)
-
-
32,745
39,375
(4)
Top Glove Corporation Berhad • Annual Report 2014
2,281
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 14. Income tax expense (continued) Reconciliation between tax expense and accounting profit The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 August 2014 and 2013 are as follows: Group
Profit before tax
Tax at Malaysian statutory tax rate of 25% (2013: 25%) Adjustments: Different tax rates in other countries Effects of tax incentives claimed by foreign subsidiaries Income not subject to tax Effect of change in tax rate Non-deductible expenses Effect of income subject to real property gain tax Deferred tax assets not recognised in respect of previous year's tax losses and unabsorbed capital allowance Deferred tax assets recognised in respect of previously unabsorbed capital allowance and reinvestment allowance Deferred tax assets recognised in respect of current year unabsorbed export allowance Share of results of associate Under/(over)provision of deferred tax in respect of previous years Overprovision of income tax in respect of previous years Income tax expense recognised in profit or loss
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
216,310
242,204
58,039
115,770
54,078
60,551
14,510
28,943
-
-
(1,327)
(214)
(1,979) (8,244) (230) 842
(3,805) (4,957) 3,709
(14,988) 478
(26,347) 464
115
2
-
-
5,669
1,300
-
-
(9,307)
(10,244)
-
-
(3,756) (816)
(50)
-
-
1,152
(2,033)
-
-
(3,452)
(4,884)
(4)
32,745
39,375
(4)
(779) 2,281
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2013: 25%) of the estimated assessable profit for the year. The Malaysian statutory tax rate will be reduced to 24% from the current year's rate of 25%, effective year of assessment 2016. The computation of deferred tax as at 31 August 2014 has reflected these changes. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdiction. During the 2014 financial year, the income tax rate applicable to the subsidiaries in Thailand was reduced from 23% to 20%. The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.
Top Glove Corporation Berhad • Annual Report 2014
115
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 15. Earnings per share Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The following reflect the profit and share data used in the computation of basic and diluted earnings per share for the years ended 31 August: Group 2014
2013
Profit net of tax attributable to owners of the parent used in the computation of basic and diluted earnings per share (RM'000)
180,523
196,500
Weighted average number of ordinary shares for basic earnings per share computation ('000) Effects of dilution - share options ('000)
620,475 1,028
619,493 794
Weighted average number of ordinary shares for diluted earnings per share computation ('000)
621,503
620,287
Basic earnings per share (sen)
29.09
31.72
Diluted earnings per share (sen)
29.05
31.68
Capital work-inprogress RM'000
Total RM'000
16. Property, plant and equipment * Land and buildings RM'000
Group
Plant and equipment RM'000
** Other assets RM'000
Cost At 1 September 2012 Acquisition of a subsidiary Additions Disposals Written off Reclassification Exchange differences
359,515 33,657 71,790 (6,904) (143) 5,691 3,826
697,192 3,102 95,107 (2,961) (7,319) 29,650 7,541
58,739 250 11,304 (1,223) (1,501) 126 593
38,165 77,559 (21) (35,467) 91
1,153,611 37,009 255,760 (11,109) (8,963) 12,051
At 31 August 2013 and 1 September 2013 Additions Reclassification Written off Disposals Disposal of a subsidiary Exchange differences
467,432 51,098 (8,558) (46) (3,381) (13,780) (3,239)
822,312 52,839 54,233 (4,233) (40,464) (5,856)
68,288 11,775 13,489 (633) (1,760) (237) (232)
80,327 76,526 (59,164) (256) (170)
1,438,359 192,238 (4,912) (45,861) (14,017) (9,497)
At 31 August 2014
489,526
878,831
90,690
97,263
1,556,310
116
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 16. Property, plant and equipment (continued)
Group
* Land and buildings RM'000
Plant and equipment RM'000
** Other assets RM'000
Capital work-inprogress RM'000
Total RM'000
Accumulated depreciation At 1 September 2012 Acquisition of a subsidiary Depreciation charge for the year Disposals Written off Reclassification Exchange differences
30,446 15,157 5,910 (19) 515
361,507 741 65,075 (2,171) (5,942) (12) 5,714
27,272 165 8,710 (1,089) (1,353) 12 (1,081)
-
419,225 16,063 79,695 (3,260) (7,314) 5,148
At 31 August 2013 and 1 September 2013 Depreciation charge for the year Disposals Written off Reclassification Disposal of a subsidiary Exchange differences
52,009 5,938 (4) (2) (4,737) (2,925) (276)
424,912 74,304 (27,912) (2,370) 2,450 (3,368)
32,636 10,621 (1,453) (531) 2,287 (160) (351)
-
509,557 90,863 (29,369) (2,903) (3,085) (3,995)
At 31 August 2014
50,003
468,016
43,049
-
561,068
At 31 August 2013
415,423
397,400
35,652
80,327
928,802
At 31 August 2014
439,523
410,815
47,641
97,263
995,242
Net carrying amount
** Other assets comprise of motor vehicles, computer and software system, office equipment, signage, small value of assets, fire extinguisher, furniture and equipment. * Land and buildings Freehold land RM'000
Buildings RM'000
Total RM'000
Cost At 1 September 2012 Acquisition of a subsidiary Additions Reclassification Written off Disposals Exchange differences
127,471 6,800 37,225 (6,904) 405
232,044 26,857 34,565 5,691 (143) 3,421
359,515 33,657 71,790 5,691 (143) (6,904) 3,826
Top Glove Corporation Berhad • Annual Report 2014
117
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 16. Property, plant and equipment (continued) * Land and buildings (continued) Freehold land RM'000
Buildings RM'000
Total RM'000
At 31 August 2013 and 1 September 2013 Additions Reclassification Written off Disposals Disposal of a subsidiary Exchange differences
164,997 44,905 1,788 (3,242) (448)
302,435 6,193 (10,346) (46) (139) (13,780) (2,791)
467,432 51,098 (8,558) (46) (3,381) (13,780) (3,239)
At 31 August 2014
208,000
281,526
489,526
Accumulated depreciation At 1 September 2012 Acquisition of a subsidiary Depreciation charge for the year Written off Exchange differences
-
30,446 15,157 5,910 (19) 515
30,446 15,157 5,910 (19) 515
At 31 August 2013 and 1 September 2013
-
52,009
52,009
Depreciation charge for the year Disposals Written off Disposal of a subsidiary Reclassification Exchange differences
-
5,938 (4) (2) (2,925) (4,737) (276)
5,938 (4) (2) (2,925) (4,737) (276)
At 31 August 2014
-
50,003
50,003
At 31 August 2013
164,997
250,426
415,423
At 31 August 2014
208,000
231,523
439,523
Accumulated depreciation
Net carrying amount
(a) Property, plant and equipment of the Group with the following net carrying amounts are pledged to banks for banking facilities granted to the Group as referred to in Note 28.
Land and buildings
2014 RMʼ000
2013 RMʼ000
16,988
18,030
(b) The net carrying amounts of motor vehicles held under finance lease arrangements amounted to RM138,000 (2013: RM205,000).
118
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 17. Land use rights Group 2014 2013 RMʼ000 RMʼ000 Cost At 1 September 2013/2012 Additions Disposals Disposal of a subsidiary Exchange differences
48,032 171 (1,185) (2,085) (278)
24,129 23,602 301
At 31 August
44,655
48,032
Accumulated amortisation At 1 September 2013/2012 Amortisation for the year Disposals Disposal of a subsidiary Exchange differences
2,385 708 (4) (452) (50)
1,688 650 47
At 31 August
2,587
2,385
Net carrying amount
42,068
45,647
Amount to be amortised: - Not later than one year - Later than one year but not later than five years - Later than five years
648 2,593 38,827
655 2,622 42,370
42,068
45,647
18. Investment in subsidiaries Company 2014 2013 RMʼ000 RMʼ00 Unquoted shares, at cost: - In Malaysia Less: Accumulated impairment losses
581,620 (4,845)
581,620 (4,845)
- Outside Malaysia
576,775 3,728
576,775 3,728
580,503
580,503
Top Glove Corporation Berhad • Annual Report 2014
119
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 18. Investment in subsidiaries (continued) Details of the subsidiaries are as follows:
Country of incorporation
Name
Proportion of ownership interest (%) 2014 2013
Principal activities
Held by the Company: Top Glove Sdn. Bhd. ("TGSB")*
Malaysia
100
100
Manufacturing and trading of gloves
TG Medical Sdn. Bhd. ("TGMSB")#
Malaysia
100
100
Manufacturing and trading of gloves
Great Glove Sdn. Bhd.#
Malaysia
100
100
Provision of management services
Top Glove Engineering Sdn. Bhd.#
Malaysia
100
100
Property investment and trading of machinery
United States of America
100
100
Trading of gloves
Top Quality Glove Sdn. Bhd.*
Malaysia
100
100
Manufacturing and trading of gloves
Top Care Sdn. Bhd.*
Malaysia
100
100
Investment holding
GMP Medicare Sdn. Bhd.*
Malaysia
100
100
Manufacturing and trading of gloves
Great Glove (Thailand) Co. Ltd.#
Thailand
74
74
Manufacturing of gloves
Top Glove Medical (Thailand) Co. Ltd.#
Thailand
100
100
Manufacturing of gloves
Top Glove Technology (Thailand) Co. Ltd.#
Thailand
100
100
Producing and selling concentrate latex
B Tech Industry Co. Ltd.#
Thailand
100
100
Producing and selling concentrate latex
Top Quality Gloves (Thailand) Co Ltd.#
Thailand
100
100
Dormant
Top Glove Europe GmbH #
Germany
98
98
Trading of gloves
Top Glove (Zhangjiagang) Co. Ltd.#
The People's Republic of China
-
100
Manufacturing of gloves
Great Glove (Xinghua) Co. Ltd.#
The People's Republic of China
100
100
Manufacturing of gloves
TG Medical (U.S.A.) Inc#
Held through TGSB:
120
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 18. Investment in subsidiaries (continued)
Name
Country of incorporation
Proportion of ownership interest (%) 2014 2013
Principal activities
Held through TGSB (continued): TG Medical (Zhangjiagang) Incorporated #
The People's Republic of China
100
100
Trading of gloves
Top Glove International Sdn. Bhd.#
Malaysia
100
100
Dormant
Top Glove Properties Sdn. Bhd.#
Malaysia
100
100
Property investment
Singapore
100
80
Investment holding
The British Virgin Islands
100
100
Investment holding
Malaysia
100
-
Malaysia
100
100
Dormant
Malaysia
-
80
Manufacturing of gloves
Malaysia
100
80
Temporarily ceased operations
Best Advance Resources Limited ("Best Advance")*
Malaysia
100
100
Investment holding
Green Resources Limited ("Green Resources")*
Malaysia
100
100
Investment holding
Cambodia
100
100
Plantation of rubber trees
Great Plantations Co., Ltd.*
Cambodia
100
100
Plantation of rubber trees
PT. Topglove Indonesia ("PT Top Glove")# ^
Indonesia
100
100
Investment holding
Medi-Flex Limited ("Medi-Flex")** BestStar Enterprise Ltd.*
Flexitech Sdn. Bhd. ("Flexitech")*
Manufacturing of gloves
Held through TGMSB Top Glove Agro Sdn. Bhd.#
Held through Medi-Flex: Flexitech Sdn. Bhd. ("Flexitech")*
Held through Flexitech: Techniglove Asia Sdn. Bhd.*
Held through Top Care Sdn. Bhd.:
Efficient Plantations Co., Ltd.*
Held through Best Advance:
Top Glove Corporation Berhad • Annual Report 2014
121
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 18. Investment in subsidiaries (continued)
Country of incorporation
Name
Proportion of ownership interest (%) 2014 2013
Principal activities
Held through PT Top Glove: PT. Agro Pratama Sejahtera# * ** # ^
Indonesia
95
95
Plantation of rubber trees
Audited by Ernst & Young, Malaysia Audited by member firms of Ernst & Young Global in the respective countries Audited by firms other than Ernst & Young The total equity interests held by the Group is 100% and it is held by the following subsidiaries:
(i) Best Advance Resources Limited (ii) Green Resources Limited
2014
2013
99.90% 0.10%
99.90% 0.10%
(a) Acquisition of a Subsidiary in prior year On 17 December 2012, the Company acquired 24,000,000 ordinary shares representing 100% of the equity interest in GMP Medicare Sdn. Bhd. ("GMP"), a company incorporated in Malaysia for a cash consideration of RM23,471,000, resulting in the Company became the holding company of GMP. The acquired subsidiary has contributed the following results to the Group: 2013 RMʼ000 Revenue Loss for the year
11,574 (1,580)
If the acquisition had occurred on 1 September 2012, the Group's revenue and profit for the year ended 31 August 2013 would have been RM2,320,102,000 and RM201,520,000 respectively. The fair values of the identifiable assets and liabilities of GMP as at the date of acquisition were:
Property, plant and equipment Trade and other receivables Inventories Tax recoverable Cash and bank balances
122
Top Glove Corporation Berhad • Annual Report 2014
Fair value RM'000
Carrying amount RM'000
20,946 268 32 7 87
13,279 268 32 7 87
21,340
13,673
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 18. Investment in subsidiaries (continued) (a) Acquisition of a Subsidiary in prior year (continued)
Fair value RM'000
Carrying amount RM'000
1,022 76 1,841
1,022 76 -
2,939
1,098
Net identifiable assets
18,401
12,575
Group's interest in the fair value of net identifiable assets Goodwill on acquisition
18,401 5,070
Total cost of acquisition
23,471
Trade and other payables Loans and borrowings Deferred tax liabilities
The effect of the acquisition on cash flows is as follows: RMʼ000 Consideration settled in cash Cash and cash equivalents of subsidiary acquired
23,471 (87)
Net cash outflow on the acquisition
23,384
(b) Disposal of a subsidiary On 13 June 2014, the Group disposed of its 100% equity interest in Top Glove (Zhangjiagang) Co. Ltd. for a total consideration of RM21,510,000. The disposal had the following effects on the financial position of the Group as at the end of the year: 2014 RMʼ000 Property, plant and equipment Land use rights Cash and bank balances Trade and other payables
10,932 1,633 490 (2,107)
Net assets disposed Attributable goodwill Transfer from foreign exchange reserve
10,948 2,379 (2,353)
Total disposal proceeds
10,973 21,510
Gain on disposal to the Group
10,537
Top Glove Corporation Berhad • Annual Report 2014
123
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 18. Investment in subsidiaries (continued) (b) Disposal of a subsidiary (continued) 2014 RMʼ000 Disposal proceeds settled by: Cash
21,510
Cash inflow arising from disposal: Cash consideration Cash and bank balances of the subsidiary disposed
21,510 (490)
Net cash inflow to the Group
21,020
(c) As at reporting date, the Group did not have any material non-controlling interests.
19. Investment in associates Company 2014 2013 RMʼ000 RMʼ000 Unquoted shares at cost Share of post-acquisition reserves Foreign currency translation
21,217 1,011 676
21,217 (2,255) 906
Less: Accumulated impairment losses
22,904 (2,846)
19,868 (2,846)
20,058
17,022
Details of the associates are as follows:
Country of incorporation
Name
Proportion of ownership interest (%) 2014 2013
Principal activities
Held through Medi-Flex: Sonic Clean Pte. Ltd.
Singapore
37
29
Provide all kinds of aqueous cleaning services, consumable cleaning and sub-assembly work in clean room environment and investment holding
Malaysia
27
27
Investment holding
Held through TGSB: Value Add Sdn. Bhd.
124
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 19. Investment in associates (continued) The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows: Group 2014 2013 RMʼ000 RMʼ000 Assets and liabilities Total assets Total liabilities Results Revenue Profit/(loss) for the year
253,387
258,406
(186,306)
(202,865)
28,588 12,163
22,427 (9,448)
Reconciliation of the summarised financial information presented above to the carrying amount of the Groupʼs interest in associates: 2014 2013 RMʼ000 RMʼ000 Net assets of associates at 1 September Additional investment in an associate Profit/(loss) for the year Other comprehensive (loss)/income
55,541 12,163 (623)
18,265 45,201 (9,448) 1,523
Net Assets of associates at 31 August
67,081
55,541
Groupʼs share of net assets
22,904
19,868
Deferred tax assets Unabsorbed increase export allowance, capital allowance and reinvestment Cash flow allowance hedge RM'000 RM'000
Total RM'000
20. Deferred tax (assets)/liabilities Deferred income tax as at 31 August 2014 relates to the following: Deferred tax liabilities
Group
Property, plant and equipment RM'000
Provisions RM'000
At 1 September 2012 Recognised in profit or loss Recognised in other comprehensive income Acquisition of a subsidiary
49,062 (5,200)
(1,362) 3,080
-
1,841
At 31 August 2013 Recognised in profit or loss Recognised in other comprehensive income
43,862 10,239
3,559 1,442
-
-
At 31 August 2014
54,101
5,001
(10,372) (10,372) (14,305) (24,677)
-
37,328 (2,120)
(10,465) -
(10,465) 1,841
(10,465) -
26,584 (2,624)
10,465
10,465
-
34,425
Top Glove Corporation Berhad • Annual Report 2014
125
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 20. Deferred tax (assets)/liabilities (continued) Presented after appropriate offsetting as follows: Group 2014 2013 RMʼ000 RMʼ000 Deferred tax assets Deferred tax liabilities
(12,825) 47,250
(19,165) 45,749
34,425
26,584
Deferred tax assets have not been recognised in respect of the following items: Group 2014 2013 RMʼ000 RMʼ000 Unutilised tax losses Unabsorbed capital allowance Unabsorbed increase in export allowance Unabsorbed reinvestment allowance
96,417 8,466 164 16,409
104,675 40,165 16,840
121,456
161,680
21. Investment securities Group 2014 2013 RMʼ000 RMʼ000 Current Available-for-sale financial assets - Debt securities (quoted outside Malaysia)
96,402
93,669
Fair value through profit and loss financial assets - Money market funds (quoted in Malaysia)
57,920
-
154,322
93,669
145
145
154,467
93,814
Total current investment securities Non-current Unquoted investments - golf club membership
Investment securities of the Group amounting to RM71,400,000 (2013: RM89,850,000) are pledged to bank for credit facility granted to the Group as disclosed in Note 28. 22. Goodwill Goodwill has been allocated to the Group's CGUs identified according to the subsidiaries, as follows: Group 2014 2013 RMʼ000 RMʼ000 Top Glove (Zhangjiagang) Co. Ltd. Top Glove Medical (Thailand) Co. Ltd. B Tech Industry Co. Ltd. GMP Medicare Sdn. Bhd.
126
Top Glove Corporation Berhad • Annual Report 2014
2,946 14,789 5,070
2,378 2,946 14,789 5,070
22,805
25,183
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 22. Goodwill (continued) Movement in goodwill: 2014 RMʼ000
2013 RMʼ000
As at 1 September Acquisition of a subsidiary Disposal of a subsidiary (Note18 (b))
25,183 (2,378)
20,113 5,070 -
As at 31 August
22,805
25,183
Key assumptions used in value-in-use calculations The recoverable amount of a CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a five years period. The key assumptions used for value-in-use calculations are as follows: Gross Margin 2014 2013 Top Glove (Zhangjiagang) Co. Ltd. Top Glove Medical (Thailand) Co. Ltd. B Tech Industry Co. Ltd. GMP Medicare Sdn. Bhd.
10% 7% 20%
6% 10% 7% 14%
Discount Rate 2014 2013 8% 8% 8%
10% 10% 10% 10%
The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill: (i)
Budgeted gross margin The basis used to determine the value assigned to the budgeted gross margins is the average gross margins achieved in the year immediately before the budgeted year increased for expected efficiency improvements.
(ii) Discount rate The discount rates used are pre-tax and reflect specific risks relating to the relevant segments. The Group believes that any reasonably possible change in the above key assumptions applied are not likely to materially cause recoverable amount to be lower than its carrying amount. 23. Inventories Group 2014 2013 RMʼ000 RMʼ000 Cost Raw materials Consumables and hardware Work-in-progress Finished goods Net realisable value Finished goods
41,219 22,159 36,021 105,708
45,792 21,263 19,403 131,580
205,107
218,038
2,270
1,647
207,377
219,685
During the year, the amount of inventories recognised as an expense of the Group amounted to RM1,892 million (2013: RM1,950 million)
Top Glove Corporation Berhad • Annual Report 2014
127
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 24. Trade and other receivables Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
Trade receivables Third parties Less: Allowance for impairment
268,842 (975)
283,826 (975)
-
-
Trade receivables, net
267,867
282,851
-
-
12,258 8,738
9,528 2,762
2,827 14 -
24,790 24 -
20,996
12,290
2,841
24,814
Total trade and other receivables
288,863
295,141
2,841
24,814
Total trade and other receivables Add: Cash and bank balances (Note 27)
288,863 184,030
295,141 123,111
2,841 638
24,814 1,575
Total loans and receivables
472,893
418,252
3,479
26,389
Other receivables Amounts due from subsidiaries Sundry receivables Refundable deposits
(a) Trade receivables Trade receivables are non-interest bearing and are generally on 30 to 90 days (2013: 30 to 90 days) terms. Other credit terms are assessed and approved on a case-by-case basis. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Ageing analysis of trade receivables The ageing analysis of the Groupʼs trade receivables is as follows: Group 2014 2013 RMʼ000 RMʼ000 Neither past due nor impaired
128
224,455
256,119
1 to 30 days past due not impaired 31 to 60 days past due not impaired 61 to 90 days past due not impaired 91 to 120 days past due not impaired More than 121 days past due not impaired
25,905 899 562 2,039 14,007
12,113 4,215 4,398 2,065 3,941
Impaired
43,412 975
26,732 975
268,842
283,826
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 24. Trade and other receivables (continued) (a) Trade receivables (continued) Receivables that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and mostly are regular customers that have been transacting with the Group. None of the Group's trade receivables that are neither past due nor impaired have been renegotiated during the financial year. Receivables that are past due but not impaired The Group has trade receivables amounting to RM43,412,000 (2013: RM26,732,000) that are past due at the reporting date but not impaired. These receivables are unsecured in nature. Receivables that are impaired The Group's trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:Group 2014 2013 RMʼ000 RMʼ000 Trade receivables-nominal amounts Less: Allowance for impairment loss
2,802 (975)
2,802 (975)
1,827
1,827
Movements in the allowance accounts: Group 2014 2013 RMʼ000 RMʼ000 1 September/31 August
(975)
(975)
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. (b) Related party balances Amounts due from subsidiaries are unsecured, non-interest bearing and are repayable upon demand.
Top Glove Corporation Berhad • Annual Report 2014
129
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 25. Other current assets Group 2014 2013 RMʼ000 RMʼ000 Advances to suppliers of property, plant and equipment Prepaid operating expenses
145 2,625
3,853
2,770
3,853
26. Derivative financial instruments and hedging activities Group 2014 2013 RM'000 RM'000 Contract/ Contract/ Notional Fair value Notional Fair value Amount Assets Amount Liabilities Forward currency contracts
275,334
2,662
819,798
(40,852)
At 31 August 2014, the Group held forward currency contracts designated as hedges of expected future sales to customers for which the Group has firm commitments. Forward currency contracts are used to hedge the Companyʼs sales denominated in USD for which firm commitments existed at the reporting date, extending to December 2014 (2013: July 2014). The cash flow hedges of the expected future sales were assessed to be highly effective and a net unrealised gain of RM219,000 (2013: loss RM41,858,000), with deferred tax liability of RM55,000 (2013: deferred tax asset of RM10,465,000) relating to the hedging instruments is included in other comprehensive income. During the financial year, the Group recognised a profit of RM2,394,000 (2013: RM886,000) in the profit or loss arising from ineffectiveness recognised in the profit or loss.
27. Cash and bank balances Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
Cash on hand and at banks Deposits with licensed banks and other financial institutions Money market funds
176,058
91,254
638
1,575
7,972 -
26,822 5,035
-
-
Cash and bank balances Add: Cash and cash equivalents included in fair value through profit or loss financial assets Less: Deposits pledged with banks
184,030
123,111
638
1,575
57,920 (54,286)
(18,529)
-
-
Cash and cash equivalents
187,664
104,582
638
1,575
130
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 27. Cash and bank balances (continued) Cash at banks and deposits with licensed banks and other financial institutions of the Group amounting to RM54,286,000 (2013: RM18,529,000) are pledged to banks for credit facility granted to the Group as disclosed in Note 28. The weighted average effective interest rates and average maturities of deposits with licensed banks and other financial institutions at the reporting date were as follows: Group 2014 2013 RMʼ000 RMʼ000 Weighted average effective interest rates (%) Average maturities (days)
1.50
2.51
7
195
There is no maturity period for money market funds as these money are callable on demand. 28. Loans and borrowings
Maturity
Group 2014 2013 RMʼ000 RMʼ000
Current Unsecured: Trust receipt at 3.38% Revolving credit at 0.84% to 1.32% p.a.
2014 2015
Secured: Bank loans: - USD loan at 0.94% (2013: 0.96%) p.a. - USD loan 0.65% (2013: 0.68%) p.a. - 3.25% p.a. fixed rate USD bank loan Obligations under finance leases (Note 37(c))
2015 2015 2015 2015
142,132
9,135 -
142,132
9,135
22,465 13,430 134 18
26,449 19,787 135 75
36,047
46,446
178,179
55,581
2,540 -
2,791 18
2,540
2,809
180,719
58,390
Non-current Secured: Bank loan: -3.25% p.a. fixed rate USD bank loan Obligations under finance leases (Note 37(c))
Total loans and borrowings
2016 - 2030 2015
Top Glove Corporation Berhad • Annual Report 2014
131
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 28. Loans and borrowings (continued) The remaining maturities of the loans and borrowings as at 31 August 2014 as follows: Group 2014 2013 RMʼ000 RMʼ000 On demand or within one year More than 1 year and less than 2 years More than 2 years and less than 5 years 5 years or more
178,179 138 291 2,111
55,581 159 448 2,202
180,719
58,390
Obligations under finance leases These obligations are secured by a charge over the leased assets (Note 16). The average discount rate implicit in the leases is 3.45% (2013: 3.9%) per annum. These obligations are denominated in the respective functional currencies of the relevant entities in the Group. 3.25% p.a. fixed rate USD bank loan The loan is secured by way of fixed charges over certain property, plant and equipment as disclosed in Note 16. USD loan at 0.94% p.a. and USD loan 0.65% p.a. The loans are secured by way of charges over cash at banks and deposits with licensed banks and other financial institutions and investment securities of the Group as disclosed in Note 21 and 27.
29. Trade and other payables Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
131,233
117,619
-
-
61,400 74,373
37,616 78,839
14,765 1,432 -
1,227 -
135,773
116,455
16,197
1,227
Total trade and other payables Add: Loans and borrowings (Note 28)
267,006 180,719
234,074 58,390
16,197 -
1,227 -
Total financial liabilities carried at amortised cost
447,725
292,464
16,197
1,227
Trade payables Other payables Amounts due to subsidiaries Accrued operating expenses Sundry payables
132
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 29. Trade and other payables (continued) (a) Trade payables These amounts are non-interest bearing.The normal trade credit term granted to the Group ranges from 30 to 90 days (2013: range from 30 to 90 days). (b) Other payables These amounts are non-interest bearing. Other payables are normally settled on an average term of 30 to 90 days (2013: range from 30 to 90 days). (c) Amounts due to subsidiaries These amounts are unsecured, non-interest bearing and repayable on demand. 30. Other current liabilities These amounts represent advances received from customers for goods purchased. 31. Share capital Group and Company Number of ordinary shares of RM0.50 each Amount 2014 2013 2014 2013 '000 '000 RM'000 RM'000 Authorised At 31 August
800,000
800,000
400,000
400,000
Issued and fully paid At 1 September Exercise of ESOS
620,220 444
618,880 1,340
310,110 222
309,440 670
At 31 August
620,664
620,220
310,332
310,110
The new ordinary shares ranked pari passu in all respects with the existing ordinary shares of the Company. 32. Share premium This is a non-distributable reserve which arose from the issue of the Company's shares at a premium: Group and Company 2014 2013 RMʼ000 RMʼ000 At 1 September Issuance of ordinary shares pursuant to ESOS Transfer from share option reserve Transfer to retained earnings Share issue expenses
180,174 1,755 474 (1,728) (2)
174,197 4,837 1,144 (4)
At 31 August
180,673
180,174
Top Glove Corporation Berhad • Annual Report 2014
133
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 33. Other reserves Foreign exchange reserve RM'000
Legal reserve RM'000
Share option reserve RM'000
Fair value Cash flow adjustment hedge reserve reserve RM'000 RM'000
At 1 September 2012 Loss on fair value changes Foreign currency translation Share options granted under ESOS Transfer to share premium
5,360 5,698
4,434 -
10,331 -
-
-
At 31 August 2013 Reclassification during the year to profit or loss Gain on fair value changes Net gain during the year of not-yet matured contract Reclassification adjustment Foreign currency translation Gain reclassified to profit or loss on disposal of foreign operation Share options granted under ESOS Transfer to retained earnings Transfer to share premium
11,058
4,434
11,054
-
-
-
(2,220)
-
-
-
(2,353)
-
-
-
-
(2,353)
-
-
873 (1,906) (474)
1,054
-
21,520
Total RM'000
Group
At 31 August 2014
6,485
(653) 3,781
1,867 (1,144)
873 (1,253) (474) 10,200
4,181 (2,543) -
(31,393) -
24,306 (33,936) 5,698 1,867 (1,144)
1,638
(31,393)
(3,209)
(1,630) 1,046
31,393 -
29,763 1,046
(219) 219 -
(219) 219 (2,220)
Share option reserve RM'000 Company At 1 September 2012 Share options granted under ESOS Transfer to share premium
10,331 1,867 (1,144)
At 31 August 2013 Share options granted under ESOS Transfer to share premium Transfer to retained earnings
11,054 873 (474) (1,253)
At 31 August 2014
10,200
134
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 33. Other reserves (continued) (a) Foreign exchange reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Groupʼs presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Groupʼs net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (b) Legal reserve This represents a general reserve provided for in respect of subsidiaries incorporated in the Peopleʼs Republic of China and Thailand. Under the Wholly Foreign Owned Enterprise (“WFOE”) Law in the Peopleʼs Republic of China, at least 10% of the net profit after taxation in each financial year must be credited to this reserve, until it reaches 50% of the registered paid up capital of the subsidiary. Under the Civil and Commercial Code in Thailand, a company is required to set aside a statutory reserve equal to at least 5% of its net profit each time when the company pays out a dividend, until it reaches 10% of the registered share capital of the company. (c) Share option reserve The share option reserve represents the equity-settled share options granted to employees. This reserve is made up of the cumulative value of services received from employees recorded on grant of share options. (d) Fair value adjustment reserve Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired. (e) Cash flow hedge reserve The cash flow hedge reserve represents the cumulative portion of gains and losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative deferred gain or loss arising on changes in the fair value of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the non-financial hedged item, consistent with the relevant accounting policy. 34. Retained earnings The Company has elected for the irrevocable option under the Finance Act 2007 to disregard the 108 balance as at 31 December 2007. Hence, the Company will be able to distribute dividends out of its entire retained earnings as at 31 August 2014 and 2013 under the single tier system.
Top Glove Corporation Berhad • Annual Report 2014
135
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 35. Employee Share Options Scheme (ESOS) The Company ESOS is governed by the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 9 January 2008 and became effective on 1 August 2008. The main features of the ESOS are as follows: (a) The ESOS shall be in force for a period of ten years from the date of the receipt of the last of the requisite approvals. (b) Eligible persons are employees of the Group (including executive directors) who have been confirmed in the employment of the Group and have served for at least one year before the date of the offer. The eligibility for participation in the ESOS shall be at the discretion of the Options Committee appointed by the Board of Directors. (c) The total number of shares to be issued under the ESOS shall not exceed in aggregate 15% of the issued and paid up share capital of the Company at any point of time during the tenure of the ESOS. (d) The option price for each share shall be the 5-days weighted average market price of the underlying shares at the time the ESOS Options are granted, with either a premium or a discount of not more than ten percent (10%), or the par value of the ordinary shares of the Company of RM0.50, whichever is higher. (e) No option shall be granted for less than 100 shares to any eligible employee. (f)
An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company commencing from the vest date but before the expiry on 1 August 2018.
(g) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respect with the existing ordinary shares of the Company other than as may be specified in a resolution approving the distribution of dividends prior to their exercise dates. (h) No eligible person shall participate at any time in more than one share option scheme implemented by any company within the Group unless otherwise approved by the Options Committee. (i)
136
The options shall not carry any right to vote at a general meeting of the Company.
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 35. Employee Share Options Scheme (ESOS) (continued) The terms of share options outstanding as at end of the financial year are as follows: 2014 Grant Date
Expiry Date
5.9.2008 5.10.2008 5.3.2009 6.4.2009 5.6.2009 5.8.2009 5.9.2009 5.10.2009 5.11.2009 4.12.2009 5.1.2010 5.2.2010 5.3.2010 5.4.2010 6.5.2010 5.6.2010 5.7.2010 6.8.2010 5.10.2011 3.4.2013 2.8.2014
1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018
Exercise Price RM 2.01 1.99 2.26 2.45 2.95 3.58 3.52 3.60 4.12 4.60 5.04 5.64 5.79 6.97 6.16 6.12 6.85 6.51 4.15 5.51 4.64
Number of share options over the ordinary shares of RM0.50 each At beginning At end of year Granted Exercised Lapsed of year '000 '000 '000 '000 '000 30.2 0.8 50.2 0.8 2.0 0.4 676.2 0.8 34.8 31.6 43.6 83.8 4,690.9 128.4 171.6 267.4 149.0 76.1 975.4 2,441.4 -
2,734.4
(13.4) (6.6) (2.0) (0.4) (84.3) (5.0) (4.0) (3.0) (102.6) (180.7) (42.1) -
(0.2) (45.9) (3.0) (5.0) (18.6) (511.6) (13.6) (28.8) (36.0) (31.0) (10.8) (46.0) (345.7) -
16.8 0.8 43.4 0.8 546.0 0.8 29.8 24.6 35.6 65.2 4,076.7 114.8 142.8 231.4 118.0 65.3 748.7 2,053.6 2,734.4
9,855.4
2,734.4
(444.1)
(1,096.2)
11,049.5
77.2 0.8 158.2 0.8 2.0 2.4 1,116.2 0.8 41.4 62.0 60.7 88.0 4,947.0 130.8 202.0 303.6 180.2 83.2 1,645.1 -
2,546.8
(14.6) (49.2) (2.0) (395.0) (6.6) (30.4) (15.1) (0.8) (108.7) (634.8) (83.0)
(32.4) (58.8) (45.0) (2.0) (3.4) (147.4) (2.4) (30.4) (36.2) (31.2) (7.1) (34.9) (22.4)
30.2 0.8 50.2 0.8 2.0 0.4 676.2 0.8 34.8 31.6 43.6 83.8 4,690.9 128.4 171.6 267.4 149.0 76.1 975.4 2,441.4
9,102.4
2,546.8
(1,340.2)
(453.6)
9,855.4
2013 5.9.2008 5.10.2008 5.3.2009 6.4.2009 5.6.2009 5.8.2009 5.9.2009 5.10.2009 5.11.2009 4.12.2009 5.1.2010 5.2.2010 5.3.2010 5.4.2010 6.5.2010 5.6.2010 5.7.2010 6.8.2010 5.10.2011 3.4.2013
1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018 1.8.2018
2.01 1.99 2.26 2.45 2.95 3.58 3.52 3.60 4.12 4.60 5.04 5.64 5.79 6.97 6.16 6.12 6.85 6.51 4.15 5.51
Top Glove Corporation Berhad • Annual Report 2014
137
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 35. Employee Share Options Scheme (ESOS) (continued) Details of share options exercised during the financial year and the fair value, at exercise date, of ordinary shares issued are as follows:
Exercise price RM
Fair value of ordinary shares RM
Number of share options '000
Considerations received RM'000
2.01 2.26 2.95 3.58 3.52 4.12 4.60 5.04 5.79 4.15 5.51
4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88 4.5 - 4.88
13.4 6.6 2.0 0.4 84.3 5.0 4.0 3.0 102.6 180.7 42.1
26.9 14.9 5.9 1.4 296.7 20.6 18.4 15.1 594.1 749.9 232.6
444.1 Less: Par value of ordinary shares
1,977 (222)
Share premium
1,755
Exercise Date
2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014 September 2013 - August 2014
2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013 September 2012 - August 2013
2.01 2.26 3.58 3.52 4.12 4.60 5.04 5.64 5.79 4.15 5.51
4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60 4.84 - 6.60
14.6 49.2 2.0 395.0 6.6 30.4 15.1 0.8 108.7 634.8 83.0 1,340.2
29.3 111.2 7.2 1,390.4 27.2 139.8 76.1 4.5 629.4 2,634.4 457.3
Less: Par value of ordinary shares
5,507 (670)
Share premium
4,837
138
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 35. Employee Share Options Scheme (ESOS) (continued) Fair value of share options granted during the year The fair value of share options granted during the year were estimated by using a binomial model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured at grant date and the assumptions are as follows: 2014
2013
-
0.90, 1.01, 1.02, 1.03, 1.10, 1.11, 1.15, & 1.16 -
Fair value of share options at the following grant dates (RM) April 2013
2 August 2014 Weighted average share price (RM) Weighted average exercise price (RM) Expected volatility (%) Expected life (years) Risk free rate (%) Expected dividend yield (%)
0.85, 0.88, 0.89, 0.91 & 0.92 5.70 4.40 25.41 4.00 3.54 3.35
5.83 4.11 28.59 5.33 3.22 3.32
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of the option were incorporated into the measurement of fair value.
36. Related party transactions (a) Sales and purchase of goods In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year: Company 2014 2013 RMʼ000 RMʼ000 Gross dividends from subsidiaries Management fees from subsidiaries
59,950 2,782
Top Glove Corporation Berhad • Annual Report 2014
117,626 1,756
139
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 36. Related party transactions (continued) (b) Compensation of key management personnel There are no other key management personnel other than the executive directors. The remuneration of executive directors during the year were as follows: Group
Salaries and other emoluments Pension costs - defined Social security contributions Share options granted under ESOS Fees
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
5,975 571 8 25 856
5,835 521 8 311 871
2,070 248 1 12 787
931 111 1 34 762
7,435
7,546
3,118
1,839
37. Commitments (a) Capital commitments Capital expenditure as at the reporting date is as follows: Group 2014 2013 RMʼ000 RMʼ000 Property, plant and equipment: Approved and contracted for
107,154
129,483
(b) Operating lease arrangements In addition to the land use rights disclosed in Note 17, the Group has entered into commercial leases on certain office equipment. These leases have an average tenure of between one and five years. Future minimum rentals payable under non-cancellable operating leases (excluding land use rights) at the reporting date are as follows: Group 2014 2013 RMʼ000 RMʼ000 Future minimum rentals payments: Not later than 1 year Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years
140
Top Glove Corporation Berhad • Annual Report 2014
851 665 219
855 774 782
1,735
2,411
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 37. Commitments (continued) (c) Finance lease commitments The Group has finance leases for certain items of property, plant and equipment (Note 15). Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows: Group 2014 2013 RMʼ000 RMʼ000 Minimum lease payments: Not later than 1 year Later than 1 year and not later than 2 years
19 -
83 19
Total minimum lease payments Less: Amount representing finance charges
19 (1)
102 (9)
Present value of minimum lease payables
18
93
Present value of payments: Not later than 1 year Later than 1 year and not later than 2 years
18 -
75 18
18 (18)
93 (75)
Present value of minimum lease payments Less: Amount due within 12 months (Note 28) Amount due after 12 months (Note 28)
-
18
38. Fair value of financial instruments Determination of fair value Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation 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: Note Trade and other receivables Loans and borrowings (current) Loans and borrowings (non-current) Trade and other payables
24 28 28 29
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 on or near the reporting date. The carrying amounts of the loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting. The fair values of loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.
Top Glove Corporation Berhad • Annual Report 2014
141
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 38. Fair value of financial instruments (continued) Quoted equity instruments Fair value is determined directly by reference to their published market bid price at the reporting date. Derivatives Forward currency contracts are valued using a valuation technique with market observable inputs. The most frequently applied valuation techniques include forward pricing, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates. Fair value hierarchy The following table provides the fair value measurement hierarchy of the Groupʼs assets and liabilities as at reporting date:
Group As at 31 August 2014 Current Assets measured at fair value Available-for-sale financial assets Fair value through profit and loss financial assets Derivative asset
Quoted prices in active market (Level 1) RM'000
Significant Significant observable unobservable inputs inputs (Level 2) (Level 3) RM'000 RM'000
Total RM'000
96,402
-
-
96,402
57,920 -
2,662
-
57,920 2,662
-
-
145
145
93,669
-
-
93,669
Liabilities measured at fair value Derivative liabilities
-
40,852
-
40,852
Non-current Assets measured at fair value Unquoted investment - golf club membership
-
-
145
145
Non-current Assets measured at fair value Unquoted investment - golf club membership As at 31 August 2013 Current Assets measured at fair value Available-for-sale financial assets
During the reporting period ended 31 August 2014 and 2013, there were no transfers between Level 1 and Level 2 fair value measurements.
142
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 39. Financial risk management objectives and policies Financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Groupʼs and the Company's operations and to provide guarantees to support its operations. Financial assets include trade and other receivables and cash and short-term deposits that derive directly from its operations. The Group is exposed to market risk, credit risk and liquidity risk. The Groupʼs senior management oversees the management of these risks and ensures that the Groupʼs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Groupʼs policies and risk objectives. All derivative activities for risk management purposes are carried out by senior management who have the appropriate skills, experience and supervision. It is the Groupʼs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below: (a) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign exchange currency risk and other price risk such as equity price risk. Financial instruments affected by market risk include trade and other receivables, trade and other payables, loans and borrowings, deposits, available-for-sales and derivative financial instruments. (b) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Groupʼs and the Companyʼs exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, cash and bank balances and derivatives), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties. The Groupʼs objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Groupʼs policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Groupʼs exposure to bad debts is not significant. Exposure to credit risk At the reporting date, the Groupʼs and the Companyʼs maximum exposure to credit risk is represented by: -
The carrying amount of each class of financial assets recognised in the statements of financial position, including derivatives with positive fair values.
-
A nominal amount of RM32,102,000 (2013: RM28,554,000) relating to a bank guarantee provided by the Group to utilities suppliers.
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 24. Deposits with banks and other financial institutions, debt securities and derivatives that are neither past due nor impaired 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 financial assets that are either past due or impaired is disclosed in Note 24.
Top Glove Corporation Berhad • Annual Report 2014
143
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 39. Financial risk management objectives and policies (continued) (c) 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 Groupʼs and the Companyʼs exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Groupʼs and the Companyʼs objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Groupʼs and the Companyʼs liabilities at the reporting date based on contractual undiscounted repayment obligations. 2014 RM'000 On demand or within one year
One to five years
Over five years
Total
Financial liabilities Trade and other payables, excluding bank guarantees * Loans and borrowings
267,006 178,179
724
2,469
267,006 181,372
Total undiscounted financial liabilities
445,185
724
2,469
448,378
Financial liabilities Trade and other payables excluding bank guarantees *
16,197
-
-
16,197
Total undiscounted financial liabilities
16,197
-
-
16,197
Group
Company
2013 RM'000 On demand or within one year
One to five years
Over five years
Total
Financial liabilities Trade and other payables, excluding bank guarantees * Loans and borrowings
234,074 55,581
934
2,646
234,074 59,161
Total undiscounted financial liabilities
289,655
934
2,646
293,235
Group
144
Top Glove Corporation Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 39. Financial risk management objectives and policies (continued) (c) Liquidity risk (continued) 2013 RM'000 On demand or within one year
One to five years
Over five years
Total
Financial liabilities Trade and other payables excluding bank guarantees *
1,227
-
-
1,227
Total undiscounted financial liabilities
1,227
-
-
1,227
Company
*
d)
At the reporting date, the counterparties to the bank guarantees do not have a right to demand cash as the default has not occurred. Accordingly, financial guarantees under the scope of MFRS 139 are not included in the above maturity profile analysis.
Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Groupʼs and the Companyʼs financial instruments will fluctuate because of changes in market interest rates. The Group's and the Company's exposure to interest rate risk arises primarily from their loans and borrowings. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes. Sensitivity analysis for interest rate risk At the reporting date, if interest rates had been 10 basis point lower/higher, will all other variables held constant, the Group's profit before tax would have been RM178,000 (2013: RM91,000) higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.
(e) Equity price risk The Group's quoted investment securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyʼs senior management on a regular basis. The Companyʼs Board of Directors reviews and approves all equity investment decisions. At the reporting date, the exposure to quoted investment securities at fair value was disclosed in Note 21.
Top Glove Corporation Berhad • Annual Report 2014
145
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 39. Financial risk management objectives and policies (continued) (f)
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 mainly arising from revenue that are denominated in a currency other than the respective functional currencies of the Group entities, primarily RM, Thailand Baht ("Baht"), Chinese Renminbi ("RMB") and Australian Dollars ("AUD"). The foreign currencies in which these transactions are denominated are mainly United States Dollars (“USD”), Australlian Dollars, Euro and Chinese Renminbi. The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows: Net financial assets/(liabilities) held in non-functional currency USD Euro RMB Total RM'000 RM'000 RM'000 RM'000 Functional currency of Group companies At 31 August 2014: Ringgit Malaysia Thailand Baht Chinese Renminbi Australian Dollars
(96,256) 11,918 12,254 (12,470)
895 -
(1,645) (44) -
(97,006) 11,874 12,254 (12,470)
(84,554)
895
(1,689)
(85,348)
Net financial assets/(liabilities) held in non-functional currency USD AUD Total RM'000 RM'000 RM'000 At 31 August 2013: Ringgit Malaysia Thailand Baht Chinese Renminbi Australian Dollars
146
Top Glove Corporation Berhad • Annual Report 2014
51,704 29,123 14,334 (43,644)
5,761 -
57,465 29,123 14,334 (43,644)
51,517
5,761
57,278
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 39. Financial risk management objectives and policies (continued) (f)
Foreign currency risk (continued) Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Groupʼs profit net of tax to a reasonably possible change in the USD and AUD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant. 2014 RM'000 USD/RM USD/Baht USD/RMB USD/AUD AUD/RM EUR/RM RMB/RM
- strengthened 5% - weakened 5% - strengthened 5% - weakened 5% - strengthened 5% - weakened 5% - strengthened 5% - weakened 5% - strengthened 5% - weakened 5% - strengthened 5% - weakened 5% - strengthened 5% - weakened 5%
(4,813) 4,813 596 (596) 613 (613) (624) 624 45 (45) (82) 82
2013 RM'000 2,585 (2,585) 1,456 (1,456) 717 (717) (741) 741 288 (288) -
40. Capital management The primary objective of the Groupʼs capital management is to ensure that it maintains a strong credit rating and healthy capital ratios 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 31 August 2014 and 31 August 2013. As disclosed in Note 33(b), subsidiaries of the Group incorporated in the People's Republic of China and Thailand are required to set aside a statutory reserve fund under local regulations. This externally imposed capital requirement has been complied with by the above-mentioned subsidiaries for the financial years ended 31 August 2014 and 31 August 2013. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital includes equity attributable to the owners of the parent less the fair value adjustment reserve, cash flow hedge reserve, and the above-mentioned restricted statutory reserve fund.
Top Glove Corporation Berhad • Annual Report 2014
147
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 40. Capital management (continued) Group
Company 2014 2013 RM'000 RM'000
Note
2014 RM'000
2013 RM'000
28 29 29 27
180,719 267,006 38,112 (187,664)
58,390 234,074 28,504 (104,582)
16,197 (638)
298,173
216,386
15,559
1,393,389
1,331,852
567,785
606,186
-
-
Loans and borrowings Trade and other payables Other current liabilities Less: cash and cash equivalents Net debt Equity attributable to the owners of the parent (Less)/add: - Fair value adjustment reserve - Cash flow hedge reserve - Statutory reserve fund
33 33 33
(1,054) (3,781)
(1,638) 31,393 (4,434)
1,227 (1,575) (348)
Total capital
1,388,554
1,357,173
567,785
606,186
Capital and net debt
1,686,727
1,573,559
583,344
605,838
17.68%
13.75%
2.67%
-0.06%
Gearing ratio
41. Segment information For management purposes, the Group is organised into business units based on their geographical areas, and has four reportable operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs), income taxes and share of results of associate are managed on a group basis and are not allocated to operating segments. The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and have been established on negotiated and mutually agreed terms. 31 August 2014 The People's Republic of Malaysia Thailand China RM'000 RM'000 RM'000
Others Eliminations Notes Consolidated RM'000 RM'000 RM'000
Revenue External sales Inter-segment sales
1,842,211 40,762
213,163 326,207
101,961 3,222
118,031 -
(370,191)
Total revenue
1,882,973
539,370
105,183
118,031
(370,191)
148
Top Glove Corporation Berhad • Annual Report 2014
A
2,275,366 2,275,366
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 41. Segment information (continued) 31 August 2014 (continued) The People's Republic of Malaysia Thailand China RM'000 RM'000 RM'000 Results Interest income Depreciation and amortisation Segment profit/(loss)
7,403
87
72,441 196,858
14,758 23,463
186,158 1,380,871
5,678 202,787
Liabilities Segment liabilities
396,226
31,452
9,043
Other segment information Capital commitments
103,796
3,358
-
Assets Additions to non-current assets Segment assets
114 3,493 (18,499)
Others Eliminations Notes Consolidated RM'000 RM'000 RM'000
7,479
(4,776)
879 15,448
(960)
10,307
B
91,571 216,310
55,688
C D
192,409 1,933,167
49,116
49,780
E
535,617
-
-
92 481 59,334 234,487
107,154
31 August 2013 The People's Republic of Malaysia Thailand China RM'000 RM'000 RM'000
Others Eliminations Notes Consolidated RM'000 RM'000 RM'000
Revenue External sales Inter-segment sales
1,841,221 43,834
215,571 346,415
135,211 121,231 22,297 -
(412,546)
Total revenue
1,885,055
561,986
157,508 121,231
(412,546)
2,313,234
14,164
167
11
2,766
(4,444)
12,664
58,667 215,779
14,777 25,476
6,282 562
619 3,592
(3,205)
Results Interest income Depreciation and amortisation Segment profit/(loss)
A
B
Top Glove Corporation Berhad • Annual Report 2014
2,313,234 -
80,345 242,204
149
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 41. Segment information (continued) 31 August 2013 (continued) The People's Republic of Malaysia Thailand China RM'000 RM'000 RM'000
Assets Additions to non-current assets Segment assets
228,367 1,179,622
14,425 206,457
Liabilities Segment liabilities
247,491
26,975
26,902
Other segment information Capital commitments
128,152
1,142
-
Others Eliminations Notes Consolidated RM'000 RM'000 RM'000
2,399 34,171 128,358 195,616
61,370
C D
279,362 1,771,423
60,452
51,762
E
413,582
189
-
129,483
A
Inter-segment revenues are eliminated on consolidation.
B
The following items are added to/(deducted from) segment profit to arrive at "profit before tax" presented in the consolidated statement of comprehensive income. 2014 RM'000 Share of results of associates Finance costs
C
3,266 (4,226)
(2,472) (733)
(960)
(3,205)
Additions to non-current assets consist of:
Property, plant and equipment Land used rights
150
2013 RM'000
Top Glove Corporation Berhad • Annual Report 2014
2014 RM'000
2013 RM'000
192,238 171
255,760 23,602
192,409
279,362
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 41. Segment information (continued) D
The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:
Deferred tax assets Investments in associates Goodwill
E
2014 RM'000
2013 RM'000
12,825 20,058 22,805
19,165 17,022 25,183
55,688
61,370
The following items are added to/(deducted from) segment liabilities to arrive at total liabilties reported in the consolidated statement of financial position:
Income tax payable Deferred tax liabilities
2014 RM'000
2013 RM'000
2,530 47,250
6,013 45,749
49,780
51,762
42. Dividends Group and Company 2014 2013 RMʼ000 RMʼ000 Recognised during the financial year: Dividends on ordinary shares: - Final single tier dividend for 2013: 9.00 sen per share - First interim single tier dividend for 2014: 7.00 sen per share - Final single tier dividend for 2012: 9.00 sen per share - First interim single tier dividend for 2013: 7.00 sen per share
55,848 43,444 -
55,730 43,404
99,292
99,134
At the forthcoming Annual General Meeting, a single tier final dividend of 18% on 620,664,062 ordinary shares amounting to RM55,859,765 (9.00 sen per share) in respect of the financial year ended 31 August 2014 will be proposed for shareholders' approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 August 2015.
Top Glove Corporation Berhad • Annual Report 2014
151
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 August 2014 (cont’d) 43. Contingent liabilities Certain subsidiaries of the Company, namely Top Glove Sdn. Bhd., TG Medical Sdn. Bhd. and Flexitech Sdn. Bhd. were served a writ of summons on 18 January 2013 by Sentinel Engineering Sdn. Bhd. and Hartalega Sdn. Bhd., claiming damages (unspecified) on the alleged infringement of the arrangement of assembling former holders, claimed in features of Patent No. MY 140770-A. The writ of summons was also served on 3 other third party glove manufacturing companies and 2 suppliers of glove machinery parts or components. During the financial year, the legal suit pertaining to the alleged patent infringement has been amicably resolved wherein all claims and counterclaims have been withdrawn. 44. Significant event On 11 October 2013, Top Glove Sdn. Bhd.("TGSB"), a wholly-owned subsidiary of the Company announced the proposal of voluntary delisting of its 79.77% owned subsidiary, Medi-Flex Limited ("Medi-Flex"), a company incorporated in Singapore and listed at the Singapore Exchange Trading Limited Dealing and Automated System ("SGX-ST"). On 20 March 2014, TGSB completed the exercise of its right of compulsory acquisition under Section 215(1) of the Singapore Companies Act. Following the compulsory acquisition, Medi-Flex becomes a wholly-owned subsidiary of TGSB. Subsequently, Medi-Flex had been delisted from the official list of the SGX-ST on 24 March 2014. The total consideration of RM73,181,000 was paid for the additional shares acquired from noncontrolling interest and the share of net assets of the Group in Medi-Flex has been increased by RM24,403,000 subsequent to the accretion of shareholdings. The premium paid on the acquisition of the above shares amounting to RM48,778,000 has been debited to equity. 45. Authorisation of financial statements for issue The financial statements for the year ended 31 August 2014 were authorised for issue in accordance with a resolution of the directors on 31 October 2014. 46. Supplementary information – Breakdown of realised and unrealised profits and losses The breakdown of the retained earnings of the Group and of the Company as at 31 August 2014 into realised and unrealised profits and losses is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants. Group
Company 2014 2013 RM'000 RM'000
2014 RM'000
2013 RM'000
Total retained earnings of the Company and its subsidiaries - Realised - Unrealised
903,708 (32,569)
863,956 (22,831)
66,580 -
104,848 -
Less: Consolidated adjustments
871,139 9,725
841,125 3,652
66,580 -
104,848 -
Total Group's retained earnings as per consolidated financial statements
880,864
844,777
66,580
104,848
152
Top Glove Corporation Berhad • Annual Report 2014
LIST OF PROPERTIES For the financial year ended 31 August 2014
PARTICULARS OF PROPERTY A) Top Glove Sdn Bhd 1) 18, Jalan Mempari 10, Taman Bayu, Batu 5½, Jalan Meru, Klang, Selangor.
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
HS (M) 15256, PT 8368, Mukim of Kapar, District of Klang, State of Selangor.
23/10/1997 (A)
17
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
100
2)
36, Jalan Mempari 1, Taman Bayu, Batu 5½, Jalan Meru, Klang, Selangor.
HS (M) 15297, PT 8411, Mukim of Kapar, District of Klang, State of Selangor.
13/02/1998 (A)
16
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
99
3)
11, Jalan Mempari 11, Taman Bayu, Batu 5½, Jalan Meru, Klang, Selangor.
HS (M) 15238, PT 8349, HS (M) 15238, PT 8445, Mukim of Kapar, District of Klang, State of Selangor.
15/09/1997 (A)
17
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
94
4)
Lot 4968, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor.
EMR 6629, Lot 4968, Mukim of Kapar, District of Klang, State of Selangor.
13/10/1993 (A)
20
Freehold
Factory/Glove manufacturing
3 acres/ 66,980 square feet
5,902
5)
4, Jalan Seri Kenangan 8, HS (M) 10354, PT 15485, Taman Meru 3, Meru, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
29/07/1995 (A)
19
Freehold
Terrace house/ Accommodation for staff
1,640 square feet/1,400 square feet
63
6)
6, Jalan Seri Kenangan 8, HS (M) 10355, PT 15486, Taman Meru 3, Meru, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
29/07/1995 (A)
19
Freehold
Terrace house/ Accommodation for staff
1,640 square feet/1,400 square feet
63
7)
23, Jalan Seri Kenangan 8, HS (M) 10314, PT 15442, Taman Meru 3, Meru, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
23/05/1996 (A)
18
Freehold
Terrace house/ Accommodation for staff
1,608 square feet/1,350 square feet
79
8)
22, Jalan Mempari 1, Taman Bayu, Batu 5½ Jalan Meru Klang, Selangor.
HS (M) 15304, PT 8419, Mukim of Kapar, District of Klang, State of Selangor.
15/09/1997 (A)
17
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
100
9)
Lot 5987, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor.
EMR 8780, Lot No 5987, Mukim of Kapar, District of Klang, State of Selangor.
18/04/1996 (A)
14
Freehold
Factory/Glove manufacturing
2.8 acres/ 57,250 square feet
5,315
10) Lot 4969, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor.
G.M. 2143, Lot No 4969, Mukim of Kapar, District of Klang, State of Selangor.
11/10/2000 (A)
12
Freehold
Factory/Office building
3 acres/ 41,274 square feet
7,849
11) Lot 18, 27, 38 & 57, Medan Tasek, Kawasan Perindustrian Tasek, Ipoh, Perak.
Lot 18, 27, 38 & 57, Medan Tasek, Kawasan Perindustrian Tasek, Ipoh, Perak.
22/11/1999 (A)
26
Leasehold Factory/Glove (expiring on: manufacturing Lot 18-30/9/2072 Lot 27-28/12/2063 Lot 38-23/12/2069 Lot 57-1/10/2064)
311,192 square feet/197,675 square feet
10,094
12) No. 3,5,7,9,11,13,15,17, 19,21,23,25 & 27, Taman Mutiara, Tasek, Ipoh, Perak.
Plot No. 332-344, (Lot No.211196 -2111208) Tasek Mutiara, Ipoh, Perak.
02/11/2007 (A)
7
Freehold
Double story terrace house/ Hostel for workers – 13 units
1,400 square feet/1,625 square feet
1,830
13) Lot 39, Medan Tasek, Kawasan Perindustrian Tasek, Ipoh, Perak.
HS (D) 21524, PT 1002 Mukim Hulu Kinta, Daerah Kinta, Perak.
08/10/2007 (A)
7
Leasehold (expiring on: 28/7/2069)
Biomass store
3 acres/ 62,657 square feet
2,009
14) Lot 12, Medan Tasek, Kawasan Perindustrian Tasek, 31400 Ipoh, Perak.
PN 00001308, Lot 056530, Mukim Hulu Kinta, Daerah Kinta, Perak.
04/02/2010 (A)
4
Leasehold (expiring on: 05/04/2066)
Factory/Office building
213,889 square feet/131,576 square feet
10,637
15) Lot 30 & 42, Persiaran Tasek, Kawasan Perindustrian Tasek, Ipoh, Perak.
PN 00240047, Lot 047962 Mukim Hulu Kinta, Daerah Kinta, Perak.
25/11/2009 (A)
N/A
Leasehold (expiring on: Lot 47962 – 02/02/2063
Vacant
10 acres
4,923
Top Glove Corporation Berhad • Annual Report 2014
153
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
16) Plot 7, Medan Tasek, HS (D) 889/68, Lot No. 927, Kawasan Perindustrian Mukim Hulu Kinta, Tasek, 31400 Ipoh, Perak. Daerah Kinta, Perak.
05/07/2011 (A)
3
Leasehold (expiring on: 02/05/2067)
Factory/Glove manufacturing
80,937 square feet/48,352 square feet
2,959
17) Lot 4960, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor.
GM 2326, Lot No. 4960, Mukim of Kapar, District of Klang, State of Selangor.
24/09/2003 (A)
9
Freehold
Factory/Glove manufacturing
3 acres/58,240 square feet
7,748
18) Lot 4970, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor.
HS (M) 38148, PT Nos. 63271, Mukim of Kapar, District of Klang, State of Selangor.
20/11/2003 (A)
11
Freehold
Factory/Glove manufacturing
3 acres/ 67,924 square feet
6,754
19) Lot 4967, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor.
GM 5584, Lot No. 4967, Mukim of Kapar, District of Klang, State of Selangor.
19/03/2004 (A)
10
Freehold
Factory/Glove manufacturing
3 acres/ 58,240 square feet
7,404
20) 21, Jalan Mempari 11, Taman Bayu, Batu 5 ½ , Jalan Meru, Klang, Selangor.
HS (M) 15324, PT 8441, HS (M) 15242, PT 8353, Mukim Kapar, District of Klang, State of Selangor.
12/05/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
107
21) 37, Jalan Mempari 1, Taman Bayu, Batu 5 ½ , Jalan Meru, Klang, Selangor.
HS (M) 18522, PT 24689, Mukim Kapar, District of Klang, State of Selangor.
12/05/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
122
22) 26, Jalan Abadi 10A/KU8, Taman Daya Maju, 41050 Klang, Selangor.
HS (M) 26112 PT 39636, Mukim Kapar, District of Klang, State of Selangor.
21/03/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
129
23) 21, Jalan Sesenduk 20, Off Taman Meru Jaya, 41050 Klang, Selangor.
GM 7798, Lot No. 37307, Mukim Kapar, District of Klang, State of Selangor.
13/05/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
130
24) 23, Jalan Sesenduk 20, Off Taman Meru Jaya, 41050 Klang, Selangor.
GM 7797, Lot No. 37306, Mukim Kapar, District of Klang, State of Selangor.
13/05/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
130
25) 27, Lorong Tempinis 1, Pekan Meru, 42200 Klang, Selangor.
HS (M) 3773, PT 1286 & HS (M) 3685, PT 1285, Mukim Kapar, District of Klang, State of Selangor.
25/05/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
106
26) 57, Jalan Sesenduk 5, Taman Meru Utama, 41050 Klang, Selangor.
GM 7330, Lot No 43375, Mukim Kapar, District of Klang, State of Selangor.
19/07/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
130
27) 51, Jalan Sesenduk 5, Taman Meru Utama, 41050 Klang, Selangor.
GM 7327, Lot No 43372, Mukim Kapar, District of Klang, State of Selangor.
19/07/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
130
28) 67, Jalan Sesenduk 6, Taman Meru Utama, 41050 Klang, Selangor.
GM 7311, Lot No 43353, Mukim Kapar, District of Klang, State of Selangor.
19/07/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square feet
122
29) 65, Jalan Sesenduk 6, Taman Meru Utama, 41050 Klang, Selangor.
GM 7310, Lot No 43352, Mukim Kapar, District of Klang, State of Selangor.
19/07/2005 (A)
9
Freehold
Terrace house/ Accommodation for staff
1,300 square feet/1,100 square fee
122
30) Lot 4947, Jalan Teratai, Batu 5 ½ Off Jalan Meru, 41050 Klang, Selangor.
GM 5101, Lot No 4947, Mukim Kapar, District of Klang, State of Selangor.
23/11/2004 (A)
10
Freehold
Factory/Glove manufacturing
3 acres/ 58,240 square feet
7,801
154
Top Glove Corporation Berhad • Annual Report 2014
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY 31) 1,3,5 & 7, Jalan Abadi 1A/KU8,
HS(M) 10598 – 10601 (PT No. 49525 – 49528)
1 – 8, Jalan Abadi 1B/KU8,
HS(M) 10605– 28476 (PT No. 40356 – 40363)
1,3,5 & 7, Jalan Abadi 1C/KU8,
HS(M) 28477 – 28480 & 28484 (PT No. 40367 – 40370 & 40374)
60,62,64,66,67,69,71, 73,75 & 77, Jalan Abadi 4/KU8,
HS(M) 28481 – 28483 & 28486 – 28491 (PT No. 40371 – 40373 40376 – 40381)
49, 51, 53, 55, 57, 59, 62, 64, 66, 68, 70 & 72, Jalan Abadi 5/KU8
HS(M) 28492 – 28497 & 28499 – 28504 (PT No. 40382 - 40387 & 40389 – 40394)
46, 48, 50, 52, 54 & 56, Jalan Abadi 6/KU8, Taman Daya Maju, 41050 Klang, Selangor.
HS(M) 28505 – 28510 (PT No. 40395 – 40400), Mukim Kapar, District of Klang, State of Selangor.
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
29/04/2006 (A)
8
Freehold
Terrace house/ Accommodation for staff
70,995 square feet
5,879
32) 41, Jalan Abadi 3, Taman Daya Meru, 41050 Klang, Selangor.
HS (M) 18218, PT 24467, Mukim Kapar, District of Klang, State of Selangor.
02/12/2005 (A)
8
Freehold
Terrace house/ Accommodation for staff
1,098 square feet
100
33) 25, Jalan Sesenduk 20, Taman Meru Jaya, 41050 Klang, Selangor.
GM 7799, Lot 37308, Mukim Kapar, District of Klang, State of Selangor.
31/07/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
121 square meter
148
34) 7, Lorong Abadi 2, Batu 5 ½ Off Jalan Meru, Taman Daya Meru, 41050 Klang, Selangor.
GM 16575, Lot 31111, Batu 6, Jalan Sungai Binjai, Mukim Kapar, District of Klang, State of Selangor.
04/12/2009 (A)
5
Freehold
Terrace house/ Accommodation for staff
111 square meter
111
35) 20, Jalan Sesenduk 19, Taman Meru Jaya, 41050 Klang, Selangor.
GM 7804, Lot 37313, Batu 6 ½ , Jalan Sungai Binjai, Mukim of Kapar, District of Klang, State of Selangor.
08/02/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
111 square meter
146
36) 31, Jalan Mempari 12, Taman Bayu, Batu 5, Jalan Meru, 41050 Klang, Selangor.
GM 14268, Lot 38295 & HS(M) 15348, PT No. 8466, Batu 6, Jalan Sungai Binjai, Mukim of Kapar, District of Klang, State of Selangor.
11/03/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
121 square meter
106
37) 8, 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, 30, 32, 34, 36, 40, 42, 44 & 46, Jalan Sesenduk 21, Taman Meru Jaya, 41050 Klang, Selangor.
GM 7790,7789,7788,7787, 7786,7785,7784,7783, 7782,7781,7780,7779, 7778,7777,7776,7774, 7773,7772,7771, Lot: 37299,37298,37297, 37296,37295,37294, 37293,37292,37291, 37290,37289,37288, 37287,37286,37285, 37283,37282,37281, 37280, Mukim of Kapar, District of Klang, State of Selangor.
05/02/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
190 square meter/unit
3,396
38) 47, Jalan Sesenduk 7, Taman Meru Utama, 41050 Klang, Selangor.
GM 7295, Lot 43337, Mukim of Kapar, District of Klang, State of Selangor.
13/08/2010 (A)
4
Freehold
Terrace house/ Accommodation for workers
121 square meter
154
39) 46, Jalan Sesenduk 7, Taman Meru Utama, Off Jalan Meru, 41050 Klang, Selangor.
GM 12533, Lot 33910, Mukim of Kapar, District of Klang, State of Selangor.
31/07/2010 (A)
4
Freehold
Terrace house/ Accommodation for workers
121 square meter
144
Top Glove Corporation Berhad • Annual Report 2014
155
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
40) No.1, 2, Jln Sesenduk 3A, No.1, 2, Jln Sesenduk 3B, No.1, Jln Sesenduk 3C, Taman Meru Utama 5, 41050 Klang, Selangor.
GM 15282, 15278, 15274, 15270, 15266, Lot 45058, 45054, 45050, 45046, 45042, Mukim of Kapar, Tempat Batu 5 ½, Jln Sg Binjai, District of Klang, State of Selangor.
27/05/2010 (A)
4
Freehold
Terrace house/ Accommodation for workers
41) No.69 Jln Sesenduk 6, No.57 Jln Sesenduk 7 & No.59 Jln Sesenduk 5, Tmn Meru Utama, 41050 Klang, Selangor.
GM 7312, 7300, 7331, Lot 43354, 43342, 43376, Mukim of Kapar, Tempat Batu 5, Jln Sg Binjai, District of Klang, State of Selangor.
25/01/2010 (A)
4
Freehold
Terrace house/ 133 square meter Accommodation 193 square meter for workers 133 square meter
42) No.7, 9, 11, 17, 19 & 21, Jln Sesenduk 3, No.5 Jln Sesenduk 3B & No.3 Jln Sesenduk 3C, Tmn Meru Utama 55, 41050 Klang, Selangor.
GM 15248, 15247, 15246, 15244, 15243, 15242, 15272, 15265, Lot 45024, 45023, 45022, 45020, 45019, 45018, 45048, 45041, Mukim of Kapar, Tempat Batu 5, Jln Sg Binjai, District of Klang, State of Selangor.
21/04/2010 (A)
4
Freehold
Terrace house/ Accommodation for workers
No.7-21 : 110 square meter/unit No.3&5 : 127 square meter/unit
1,087
43) Lot 4908, Jalan Teratai, EMR No. 6605, Batu 5 ½ Off Jalan Meru, Lot No 4908, 41050 Klang, Selangor. Mukim of Kapar, District of Klang, State of Selangor.
08/07/1997 (A)
7
Freehold
Hostel/ Accommodation for workers
3 acres/54,140 square feet
2,063
44) Lot 4988, Mukim Kapar, Klang, Selangor.
GM 1584, Lot 4988, Mukim Kapar, District of Klang, State of Selangor.
10/10/2005 (A)
4
Freehold
Factory/Glove manufacturing
3 acres/12,141 square meter
8,777
45) Lot 4989, Mukim Kapar, Klang, Selangor.
GM 703, Lot 4989, Mukim Kapar, District of Klang, State of Selangor.
10/10/2005 (A)
4
Freehold
Factory/Glove manufacturing
3 acres/12,267 square meter
10,448
46) Lot 4986, Batu 5, Jalan Sungai Binjai, Mukim Kapar, Klang, Selangor.
GM 1102, Lot 4986, Mukim Kapar, District of Klang, State of Selangor.
24/02/2006 (A)
3
Freehold
Factory/Glove manufacturing
3 acres/12,141 square meter
10,856
47) Lot 4987, Batu 5, Jalan Teratai, Mukim Kapar, Klang, Selangor.
GM 2619, Lot 4987, Mukim Kapar, District of Klang, State of Selangor.
24/05/2006 (A)
5
Freehold
Factory/Glove manufacturing
3 acres/12,141 square meter
7,974
48) Lot 4990, Jalan Bunga Raya, Batu 5 ½, Off Jalan Meru, 41050 Klang, Selangor.
GM 5116, Lot No. 4990, Mukim of Kapar, District of Klang, State of Selangor.
05/03/2007 (A)
4
Freehold
Factory/Glove manufacturing
3 acres/12,267 square meter
10,433
49) Lot 4946, Jalan Teratai, Batu 5 ½ Off Jalan Meru, 41050 Klang, Selangor.
GM 2574, Lot No. 4946, Mukim of Kapar, District of Klang, State of Selangor.
14/01/2008 (A)
N/A
Freehold
Vacant
3 acres
2,744
50) Lot 4949, Jalan Teratai, Batu 5 ½ Off Jalan Meru, 41050 Klang, Selangor.
GM 1728, Lot No 4949, Mukim of Kapar, District of Klang, State of Selangor.
18/01/2008 (A)
N/A
Freehold
Vacant
3 acres
2,978
51) Lot 4962, Tempat Batu 5, Jalan Binjai, 41050 Klang, Selangor.
GM 5100, Lot No 4962, Mukim of Kapar, District of Klang, State of Selangor.
05/09/2008 (A)
N/A
Freehold
Vacant
3 acres
3,077
52) Lot 5094, Tempat Batu 4½, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 4326, Lot No 5094, Mukim of Kapar, District of Klang, State of Selangor.
03/10/2008 (A)
N/A
Freehold
Vacant
3 acres 5 pole
2,532
156
Top Glove Corporation Berhad • Annual Report 2014
1,305 square meter
1,260
474
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
53) Lot 5977 & 5975, Tempat Batu 4 ½, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 4436 & 4437, Lot 5977 & 5975, Mukim of Kapar, District of Klang, State of Selangor.
03/10/2008 (A)
N/A
Freehold
Vacant
1.794 & 0.068 acres
1,584
54) Lot 4941, Tempat Batu 6, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 2082, Lot 4941, Mukim of Kapar, District of Klang, State of Selangor.
01/06/2009 (A)
N/A
Freehold
Vacant
3 acres
1,698
55) Lot 5139, Tempat Batu 6, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5863, Lot 5139, Mukim of Kapar, District of Klang, State of Selangor.
07/09/2009 (A)
N/A
Freehold
Vacant
4 acres 2 rood 25 pole
3,647
56) Lot 5140, Tempat Batu 6, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 1657, Lot 5140, Mukim of Kapar, District of Klang, State of Selangor.
30/11/2009 (A)
N/A
Freehold
Vacant
4 acres 3 rood
3,838
57) Lot 4985, Tempat Batu 5, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 2321, Lot 4985, Mukim of Kapar, District of Klang, State of Selangor.
18/06/2010 (A)
N/A
Freehold
Vacant
3 acres
4,211
58) Lot 5060, Tempat Batu 5, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5108, Lot 5060, Mukim of Kapar, District of Klang, State of Selangor.
01/09/2010 (A)
N/A
Freehold
Vacant
1.2141 hectares
3,451
59) Lot 5061, Tempat Batu 5, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5105, Lot 5061, Mukim of Kapar, District of Klang, State of Selangor.
01/09/2010 (A)
N/A
Freehold
Vacant
1.2141 hectares
3,451
60) Lot 4956, Tempat Batu 6, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 2580, Lot 4956, Mukim of Kapar, District of Klang, State of Selangor.
19/11/2010 (A)
N/A
Freehold
Vacant
1.2141 hectares
7,223
61) Lot 5013, Tempat Batu 5, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 153, Lot 5013, Mukim of Kapar, District of Klang, State of Selangor.
15/07/2011 (A)
N/A
Freehold
Vacant
1.2141 hectares
4,056
62) Lot 5062, Tempat Batu 5, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5592, Lot 5062, Mukim of Kapar, District of Klang, State of Selangor.
30/09/2010 (A)
N/A
Freehold
Vacant
1.2141 hectares
3,698
63) Lot 5991, Tempat Batu 4½ , Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5591, Lot 5991, Mukim of Kapar, District of Klang, State of Selangor.
30/09/2010 (A)
N/A
Freehold
Vacant
1.1331 hectares
3,278
64) HSD129441, PT 62956, Jalan Bukit Kapar, 41050 Klang, Selangor.
HSD129441, PT 62956, Mukim of Kapar, District of Klang, State of Selangor.
28/02/2011 (A)
N/A
Freehold
Vacant
131,730 square meter
14,288
65) 6, Jalan Sesenduk 3A, Taman Meru Utama, 41050 Klang, Selangor.
GM 15276, Lot 45052, Mukim of Kapar, District of Klang, State of Selangor.
01/09/2010 (A)
3
Freehold
Terrace house/ Accommodation for staff
127 square meter
161
66) 22, Jalan Sesenduk 19, Taman Meru Utama, 41050 Klang, Selangor.
GM 7805, Lot 37314, Mukim of Kapar, District of Klang, State of Selangor.
03/09/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
111 square meter
135
67) 55, Jalan Sesenduk 7, Taman Meru Utama, 41050 Klang, Selangor.
GM 7299, Lot 43341, Mukim of Kapar, District of Klang, State of Selangor.
29/10/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
121 square meter
154
68) 15, Jalan Abadi 10B/KU8, Taman Daya Maju, 41050 Klang, Selangor.
GM 8996, Lot 48112, Mukim of Kapar, District of Klang, State of Selangor.
30/10/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
109 square meter
140
Top Glove Corporation Berhad • Annual Report 2014
157
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
69) 22, Jalan Mempari 3, Taman Bayu, 41050 Klang, Selangor.
GM 13069, Lot 342, Sek 1, Mukim of Kapar, District of Klang, State of Selangor.
19/11/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
100 square meter
136
70) 16, Jalan Sesenduk 4, Taman Meru Utama, 41050 Klang, Selangor.
GM 12550, Lot 33929, Mukim of Kapar, District of Klang, State of Selangor.
19/11/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
190 square meter
147
71) 24, Jalan Mempari 3, Taman Bayu, 41050 Klang, Selangor.
GM 13394, Lot 343, Sek 1, Mukim of Kapar, District of Klang, State of Selangor.
19/11/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
100 square meter
136
72) 25, Jalan Mempari 9, Taman Bayu, 41050 Klang, Selangor.
GM 13014, Lot 307, Sek 1, Mukim of Kapar, District of Klang, State of Selangor.
15/12/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
109 square meter
136
73) 22, Jalan Sesenduk 4, Taman Meru Utama, 41050 Klang, Selangor.
GM 13456, Lot 33926, Mukim of Kapar, District of Klang, State of Selangor.
30/12/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
190 square meter
137
74) 26, Jalan Mempari 1, Taman Bayu, 41050 Klang, Selangor.
GM 8479, Lot 38225, Sek 1, Mukim of Kapar, District of Klang, State of Selangor.
31/12/2010 (A)
4
Freehold
Terrace house/ Accommodation for staff
121 square meter
103
75) 14, Jalan Sesenduk 4, Taman Meru Utama, 41050 Klang, Selangor.
GM 12551, Lot 33930, Mukim of Kapar, District of Klang, State of Selangor.
06/01/2011 (A)
4
Freehold
Terrace house/ Accommodation for staff
190 square meter
148
76) 30, Jalan Abadi 5, Taman Daya Maju, 41050 Klang, Selangor.
Lot 31191, Mukim of Kapar, District of Klang, State of Selangor.
12/05/2011 (A)
4
Freehold
Terrace house/ Accommodation for staff
82 square meter
114
77) 20, Jalan Sesenduk 4, Taman Meru Utama, 41050 Klang, Selangor.
HSM 17925, PT 24051, Mukim of Kapar, District of Klang, State of Selangor.
21/07/2011 (A)
4
Freehold
Terrace house/ Accommodation for staff
190 square meter
132
78) No.42, Jalan Mempari 10, GM 14219, Lot 38256, Batu 5½, Jalan Meru, Sek 1, Pekan Meru, 41050 Klang, Selangor. District of Klang, State of Selangor.
07/09/2011 (A)
3
Freehold
Terrace house/ Accommodation for staff
121 square meter
117
79) No. 60, Jln Mempari 10, Taman Bayu, Batu 5½, Jalan Meru, 41050 Klang, Selangor.
GM 14210, Lot 38247, Sek 1, Pekan Meru, District of Klang, State of Selangor.
01/11/2011 (A)
3
Freehold
Terrace house/ Accommodation for staff
121 square meter
119
80) No. 58, Jln Mempari 1, Taman Bayu, Batu 5½, Jalan Meru, 41050 Klang, Selangor.
GM 8463, Lot 38208, Sek 1, Pekan Meru, District of Klang, State of Selangor.
15/11/2011 (A)
3
Freehold
Terrace house/ Accommodation for staff
121 square meter
110
81) No. 31, Jln Abadi 1, Pekan Meru, 41050 Klang, Selangor.
GM 13956, Lot 31152, 6 Miles Sg. Binjai Road, Mukim Kapar, District of Klang, State of Selangor.
15/02/2012 (A)
3
Freehold
Terrace house/ Accommodation for staff
139 square meter
175
82) No. 64, Jln Sesenduk 7, Off Jln Meru, 41050 Klang, Selangor.
GM 7303, Lot 43345, Mukim of Kapar, District of Klang, State of Selangor.
25/02/2012 (A)
3
Freehold
Terrace house/ Accommodation for staff
121 square meter
164
83) No. 21, Jln Abadi 5, Taman Saujana Meru, 41050 Klang, Selangor.
GM 16595, Lot 31142, Mukim of Kapar, District of Klang, State of Selangor.
21/03/2012 (A)
3
Freehold
Terrace house/ Accommodation for staff
121 square meter
92
22/06/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
145 square meter
177
84) No. 25, Jln Abadi 10D/KU8, GM 9497, Lot 48131, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
158
Top Glove Corporation Berhad • Annual Report 2014
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
85) No. 47, Jln Abadi 1A/KU8, GM 17487, Lot 59975, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
86) No. 43, Jln Abadi 1A/KU8, Taman Daya Maju, Batu 6 ½, Off Jln Meru, 41050 Klang, Selangor.
GM 17485, Lot 59973, Mukim of Kapar, District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
87) No. 45, Jln Abadi 1A/KU8, GM 17486, Lot 59974, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
88) No. 49, Jln Abadi 1A/KU8, GM 17488, Lot 59976, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
89) No. 51, Jln Abadi 1A/KU8, GM 17489, Lot 59977, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
90) No. 53, Jln Abadi 1A/KU8, GM 17490, Lot 59978, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
91) No. 55, Jln Abadi 1A/KU8, GM 17491, Lot 59979, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
92) No. 57, Jln Abadi 1A/KU8, GM 17492, Lot 59980, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
93) No. 59, Jln Abadi 1A/KU8, GM 17493, Lot 59981, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
94) No. 61, Jln Abadi 1A/KU8, GM 17494, Lot 59982, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
95) No. 63, Jln Abadi 1A/KU8, GM 17495, Lot 59983, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
96) No. 65, Jln Abadi 1A/KU8, GM 17496, Lot 59984, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
97) No. 67, Jln Abadi 1A/KU8, GM 17497, Lot 59985, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
98) No. 69, Jln Abadi 1A/KU8, GM 17498, Lot 59986, Taman Daya Maju, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
99) No. 71, Jln Abadi 1A/KU8, Taman Daya Maju, Batu 6 1/2, 41050 Klang, Selangor.
GM 17499, Lot 59987, Mukim of Kapar, District of Klang, State of Selangor.
19/07/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
130 square meter
160
100)8-2,8-3,8-4,8-5, Setia Avenue Jalan Setia Prima (S) U13/5, Setia Alam, Seksyen U13, 40170, Shah Alam, Selangor.
GM 290749, Lot No. 59640, Mukim Bukit Raja, District of Petaling, State of Selangor.
01/02/2012 (A)
2
Freehold
Building
920.77 square meter
3,404
Top Glove Corporation Berhad • Annual Report 2014
159
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
101)No. 6, Lorong Abadi 3 Pekan Meru, Taman Saujana Meru, 41050 Klang, Selangor.
HS (M) 20392, PT 25898, Mukim Kapar.
30/10/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
111.483 square meter
122
102)No. 24, Lorong Hamzah Alang 77B, Off Jalan Kapar, Batu 9 1/2, Taman Jaya, 42200 Kapar, Selangor
HS (D) 35605, PT 19713
28/09/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
120.75 square meter
113
103)No. 40, Jln Mempari 10 Taman Bayu, Batu 5 ½, Jalan Meru, 41050 Klang, Selangor.
HS (M) 15228, PT 8339, Mukim Kapar.
12/10/2012 (A)
2
Freehold
Terrace house/ Accommodation for staff
121 square meter
122
104)No. 28, Jln Mempari 12, 5th Miles, Jln Meru, 41050 Klang, Selangor.
HS (M) 15355, PT 8473.
04/02/2013 (A)
2
Freehold
Terrace house/ Accommodation for staff
105 square meter
103
105)Lot 4981, 5 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5117, Lot 4981, Mukim of Kapar, District of Klang, State of Selangor.
06/06/2013 (A)
N/A
Freehold
Vacant
1.2141 hectares
4,526
106)Lot 4982, 5 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 4325, Lot 4982, Mukim of Kapar, District of Klang, State of Selangor.
01/01/2013 (A)
N/A
Freehold
Vacant
1.2141 hectares
718
107)Lot 4983, 5 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 593, Lot 4983, Mukim of Kapar, District of Klang, State of Selangor.
01/01/2013 (A)
N/A
Freehold
Vacant
1.2141 hectares
609
108)Lot 4984, 5 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 2445, Lot 4984, Mukim of Kapar, District of Klang, State of Selangor.
01/01/2013 (A)
N/A
Freehold
Vacant
1.2141 hectares
835
109)Lot 4991, Jalan Bunga Raya, Batu 5 ½ , Off Jalan Meru, 41050 Klang, Selangor.
HSM 39325 PT64593, Mukim of Kapar, District of Klang, State of Selangor.
19/10/2004 (A)
1
Freehold
Factory/Glove/ Manufacturing
4.3 acres PT64593
3,242
110)Lot 5105, 4 1/2 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 5076, Lot 5105, Mukim of Kapar, District of Klang, State of Selangor.
19/11/2013 (A)
N/A
Freehold
Vacant
4.344 Acres/ 1.7579 hectares
13,642
111)Lot 4953, 5 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 2645, Lot 4953, Mukim of Kapar, District of Klang, State of Selangor.
27/02/2014 (A)
N/A
Freehold
Vacant
1.2141 hectares
9,286
112)Lot 5136, 6 Miles, Jalan Sungai Binjai, 41050 Klang, Selangor.
GM 3057, Lot 5136, Mukim of Kapar, District of Klang, State of Selangor.
15/08/2014 (A)
N/A
Freehold
Vacant
1.8843 hectares
12,529
113)No. 29, Jln Abadi 1, Taman Daya Meru, Batu 5 ½, Jalan Meru, 41050 Klang Selangor.
GM 13955, LOT 31151, Mukim Kapar.
05/12/2013 (A)
1
Freehold
Terrace house/ Accommodation for staff
139 square meter
141
EMR 6510, Lot No 5091, Mukim of Kapar, District of Klang, State of Selangor.
25/10/1995 (A)
19
Freehold
Factory/Glove manufacturing
3 acres/68,490 square feet
6,432
16
Freehold
Terrace house/ Accommodation for staff
1,300 square feet
92
15
Freehold
Factory/Glove manufacturing
Approx 1.7935 acres/ 47,200 square feet
3,362
B) TG Medical Sdn Bhd 1) Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor. 2)
19, Jalan Mempari 11, Batu 5½, Jalan Meru, Klang, Selangor.
HS(M) 15241, PT No 8352, HS(M) 15325, PT No 8442, Mukim of Kapar, District of Klang, State of Selangor.
3)
Lot 5972 & 5974, Jalan Teratai, Batu 5, Jalan Meru, 41050 Klang, Selangor.
EMR 8769, Lot 5972 & 5974, Mukim of Kapar, District of Klang, State of Selangor
160
08/05/1998 (A)
01/07/1999 (A)
Top Glove Corporation Berhad • Annual Report 2014
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
4)
Lot 5104, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor.
GM 5064, Lot No. 5104, Mukim of Kapar, District of Klang, State of Selangor.
29/03/2004 (A)
10
Freehold
Factory/Glove manufacturing
3 acres/ 54,600 square feet
6,730
5)
No.1,3,5,7,9 & 11, Jalan Abadi 10D/KU8, Taman Daya Maju, Meru, 41050 Klang, Selangor.
HS (M) 33205 – HS (M) 33252, PT NO. 50423 – PT NO. 50470 Mukim of Kapar, Daerah Klang, State of Selangor.
12/07/2007 (A)
7
Freehold
Terrace house/ Accommodation for staff and and workers
Approx 108.85 square meter per house
6,501
No.1,2,3,4,5,6,7,8,9, 10,11 & 12, Jalan Abadi 10C/KU8, Taman Daya Maju, Meru, 41050 Klang, Selangor. No.1,2,3,4,5,6,7,8,9,10, 11 & 12, Jalan Abadi 10A/KU8, Taman Daya Maju, Meru, 41050 Klang, Selangor. No.1,2,3,4,5,6,7,8,9,10, 11 & 12, Jalan Abadi 10B/KU8, Taman Dayu Maju, Meru, 41050 Klang, Selangor. No.85,87,89,91,93 &95, Jalan Abadi 1/KU8, Taman Daya Maju, Meru, 41050 Klang, Selangor. C) Top Glove Engineering Sdn Bhd
1)
Lot 213, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 213, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
18/04/1996 (A)
N/A
Freehold
Land
3.39 acres/ 13,716 square meter
862
2)
Lot 214, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 214, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
18/04/1996 (A)
N/A
Freehold
Land
3.39 acres/ 13,711 square meter
862
3)
Lot 215, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 215, GRN 285705, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
18/04/1996 (A)
N/A
Freehold
Land
3.39 acres/ 13,708 square meter
863
4)
Lot 216, GRN 285708, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 216, GRN 285708, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
12/06/2012 (A)
N/A
Freehold
Land
19.83 acres
8,292
5)
Lot 217, GRN 285709, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 217, GRN 285709, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
12/06/2012 (A)
N/A
Freehold
Land
7.91 acres
3,305
6)
Lot 218, GRN 285710, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
Lot 218, GRN 285710, Pekan Bukit Changgang, Daerah Kuala Langat, State of Selangor.
12/06/2012 (A)
N/A
Freehold
Land
6.77 acres
2,828
60199, 60200, 60201 & 60202, Tambon Sumnukkaam Ampur Sadao, 90320, Songkhla, Thailand
28/02/2003 (A)
10
Freehold
Factory/ Office Building
9,504 square meter
RM 5,055 (Thai Baht 50,858)
02/02/2004 (A)
9
Freehold
Hostel
1,200 square meter
RM 1,218 (Thai Baht 12,257)
01/12/2011 (A)
2
Freehold
Factory Building
5,134.5 square meter
RM 2,778 (Thai Baht 27,945)
01/12/2011 (A)
2
Freehold
Hostel
882 square meter
RM 1,120 (Thai Baht 11,269)
D) Top Glove Medical (Thailand) Co. Ltd. 1) 188, Moo 5, Karnchanawanich Road, Tambon Sumnukgarm, Sadao, Songkhla 90320, Thailand.
Top Glove Corporation Berhad • Annual Report 2014
161
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
2)
Title Deed no.39553 Moo.5 Pruteaw Karnchanawanich Road, Tambon Samnakkaa, Ampur Sadao, Songkhla 90320 Thailand.
Title Deed no.39553 Moo.5 Pruteaw Karnchanawanich Road, Tambon Samnakkaa, Ampur Sadao, Songkhla 90320 Thailand.
03/03/2005 (A)
N/A
Freehold
Pond
Approx 2.8 acres
RM 567 (Thai Baht 5,702)
3)
Nor. Sor. 3 Kor No 637 & 638 Tambon Sammakkaam , Ampur Sadao, Songkhla 90320, Thailand.
Nor. Sor. 3 Kor No 637 & 638 Tambon Sammakkaam , Ampur Sadao, Songkhla 90320, Thailand.
16/11/2010 (A)
N/A
Freehold
Land
Approx 32 acres
RM 4,888 (Thai Baht 49,177)
E) TG Medical (U.S.A) INC. 1) 165-167 North Aspan, Avenue, Azusa, CA 91702, USA.
Ssessorʼs ID #8615 018 010 05 000
31/03/2005 (A)
9
Freehold
Warehouse/ Office building
Approx 47,896 square feet/ 25,878 square feet
RM 7,091 (USD 2,245)
2)
Ssessorʼs ID #8615 018 011
31/07/2005 (A)
N/A
Freehold
Warehouse/ Office building
Approx 53,143 square feet/ 25,950 square feet
RM 9,810 (USD 3,106)
Channod No. 52538, 52539 & 52540, Tambon Pangla, Ampur Sadao, Songkhla, Thailand.
23/02/2006 (A)
7
Freehold
Factory/ Office building
Approx 40.4 acres/ 47,816.68 square meter
RM 14,010 (Thai Baht 140,946)
13/10/2005 (A)
9
Leasehold (Expiring on Sept 2056)
Factory/ Office building, Industrial usage
112,234.48 square meter/ 30,646.96 square meter
RM 15,807 (RMB 30,801)
31/07/2007 (A)
7
Leasehold Accommodation (Expiring on for Staff 15th Jan 2074)
153.1 square meter/342.23 square meter
RM508 (RMB 989)
01/08/2006(A)
11
Freehold
Factory/ Office building
Approx 44,718 square meter/ 8,754 square meter
RM 5,050 (Thai Baht 50,805)
4.Nor Sor 4 Jor No. 5947 5.Nor Sor 4 Jor No. 5948 6.Nor Sor 4 Jor No .5949 7.Nor Sor 4 Jor No. 5950 8.Nor Sor 4 Jor No. 5951
21/08/2009 (A)
5
Freehold
Waste water pond
Approx 18.64 acres
HS (M) 5735, PT4065, Komplek Perabot Olak Lempit, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Selangor.
15/09/2005 (A)
9
Leasehold Workers Hostel (Expiring on 26th Sep 2087)
Approx 11,735.87 square meter/6,826 square meter
4,097
153-155 North Aspan, Avenue, Azusa, CA 91702, USA.
F) Top Glove Technology (Thailand) Co. Ltd. 188, Moo 5, Tambon Pangla, Ampur Sadao, Songkhla 90170, Thailand.
1)
G) Great Glove (Xing Hua) Co. Ltd. 1) South Wei Wu Lu, South Wei Wu Lu, Xinghua Economic Zhao Yang Zheng, Development Region, Xinghua City, China. Xinghua City, Jiangsu Province, China. 2)
No. 20, Tian Shui Yuan South Wei Wu Lu, Tian Shui Hua Ting, Zhao Yang Zheng, Xinghua Economic Xinghua City, China. Development Region, Xinghua City, Jiangsu Province, China.
H) B Tech Industry Co. Ltd. 1) 268 M.5 T.Kampangphet 1.Nor Sor 3 Kor No. 2361 A.Rattaphum, 2.Nor Sor 4 Jor No. 5943 Songkhla 90180, 3.Nor Sor 4 Jor No. 5944 Thailand.
I) 1)
Flexitech Sdn Bhd Lot 127, Jalan 6, Komplek Olak Lempit, Mukim Tanjung 12, 42700 Banting, Selangor.
2)
Lot 128, Jalan 8, Komplek Olak Lempit, Mukim Tanjung 12, 42700 Banting, Selangor.
HS (M) 5719, PT4049, Komplek Perabot Olak Lempit, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Selangor.
02/08/2005 (A)
2
Leasehold (Expiring on 26th Sep 2087)
Production/ Warehouse
Approx 11,735.87 square meter/6,183 square meter
10,633
3)
Lot 124, Jalan 8, Komplek Olak Lempit, Mukim Tanjung 12, 42700 Banting, Selangor.
HS (M) 5721, PT4051, Komplek Perabot Olak Lempit, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Selangor.
08/01/2009 (A)
9
Leasehold (Expiring on 26th Sep 2087)
Production/ Office Lot
Approx 12,140.56 square meter/10,172 square meter
5,433
4)
Lot 126, Jalan 8, Komplek Olak Lempit, Mukim Tanjung 12, 42700 Banting, Selangor.
HS (M) 5720, PT4050, Komplek Perabot Olak Lempit, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Selangor.
08/01/2009 (A)
9
Leasehold (Expiring on 26th Sep 2087)
Production/ Office Lot
Approx 12,140.56 square meter/6,813 square meter
5,433
162
Top Glove Corporation Berhad • Annual Report 2014
LIST OF PROPERTIES For the financial year ended 31 August 2014 (cont’d) PARTICULARS OF PROPERTY
DATE OF AGE OF ACQUISITION(A)/ BUILDING REVALUATION(R) (YEARS)
TENURE
AUDITED NET BOOK VALUE DESCRIPTION/ LAND AREA/ AS AT 31.8.2014 EXISTING USE BUILD-UP AREA (RMʼ000)
5)
No. 11, Jalan Emas 28, Bandar Sungai Emas, 42700 Banting, Selangor.
GRN 108819, Lot 630 Seksyen 5, Pekan Sungai Manggis, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
29/04/2013(A)
9
Freehold
Accommodation for Staff
Approx 130 square meter
225
6)
No. 7, Jalan Emas 28, Bandar Sungai Emas, 42700 Banting, Selangor.
GRN 108817, Lot 628 Seksyen 5, Pekan Sungai Manggis, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
19/06/2013(A)
9
Freehold
Accommodation for Staff
Approx 130 square meter
236
J)
Top Quality Glove Sdn Bhd Lot 2604, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
GRN 47717 Lot 2604, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
25/01/2013 (A)
N/A
Freehold
Land
Approx. 1.9526 hectares/ 4 acres 3 rood 12.0 pole.
2,040
2)
Lot 2605, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
GRN 47718 Lot 2605, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
25/01/2013 (A)
N/A
Freehold
Land
Approx. 2.031 hectares/ 5 acres 0 rood 03.0 pole.
2,122
3)
Lot 2615, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
GRN 47724 Lot 2615, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
25/01/2013 (A)
N/A
Freehold
Land
Approx. 1.7376 hectares/ 4 acres 1 rood 07.0 pole.
1,815
4)
Lot 2616, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
GRN 47725 Lot 2616, Mukim Tanjong Dua Belas, Daerah Kuala Langat, Selangor.
25/01/2013 (A)
N/A
Freehold
Land
Approx. 2.0942 hectares/ 5 acres 0 rood 28.0 pole.
2,188
5)
Lot 4961, Tempat Batu 5, GM 525, Lot No 4961, Jalan Binjai, Mukim of Kapar, 41050 Klang, Selangor. District of Klang, State of Selangor.
17/09/2008 (A)
1
Freehold
Factory/Glove Manufacturing
3 acres
12,235
HSM 39325 PT64593, Mukim of Kapar, District of Klang, State of Selangor.
01/08/2013 (A)
1
Freehold
Factory/Glove Manufacturing
4.3 acres PT64593
13,645
Lot 11558 (Baki Lot 2431, PA50813) Mukim Port Dickson, Daerah Port Dickson, Negeri Sembilan.
06/12/2012 (A)
Phase 1 – 19yrs Phase 2 – 13yrs
Freehold
Factory/Glove Manufacturing
16.7 acres 22000 meter square
12,620
HSD 277347 PT29363, Mukim Bukit Raja, District of Petaling, State of Selangor.
21/09/2011 (A)
1
Freehold
TG Tower Project
2 acres
14,002
Bangka Belitung Province
01/10/2012 (A)
1
Land Concession for 60 Years
Industrial Forest Plantation Including Planting and Tapping of Rubber Trees
30,773 hectares
22,870
1)
K) GMP Medicare Sdn Bhd 1) Lot 4991, Jalan Bunga Raya, Batu 5 ½ , Off Jalan Meru 41050 Klang, Selangor. 2)
Lot 2431, Mukim Port Dickson, Sendayan, 71100 Siliau, Port Dickson, Negeri Sembilan.
L) Top Glove Properties Sdn Bhd 1) 16, Persiaran Setia Dagang, Bandar Setia Alam Seksyen U13, 40170 Shah Alam, Selangor. M) PT. Agro Pratama Sejahtera 1) The City Tower, 12th Floor 1 N, JL MH Thamrin No. 81, Jakarta Pusat 10310, Indonesia.
Top Glove Corporation Berhad • Annual Report 2014
163
ANALYSIS OF SHAREHOLDINGS AS AT 21 OCTOBER 2014 Authorised Share Capital Issued and Fully Paid-Up Capital Class of Shares Voting Rights
: : : :
RM400,000,000.00 RM310,337,931.00 Ordinary Shares of RM0.50 each One vote per ordinary share
1. DISTRIBUTION OF SHAREHOLDERS
Size of Holdings
No. of Holders
1 - 99 100 - 1,000 1,001 - 10,000 10,001 - 100,000 100,001 - 31,033,792 (less than 5% of Issued Shares) 31,033,793 (5% of Issued Shares) and above
%
No. of Shares
%
115 2,495 4,094 736 221 2
1.50 32.56 53.43 9.60 2.88 0.03
2,837 1,968,436 15,743,169 19,874,341 412,520,185 170,566,894
0.00 0.32 2.54 3.20 66.46 27.48
7,663
100.00
620,675,862
100.00
2. LIST OF SUBSTANTIAL SHAREHOLDERS The Substantial Shareholders of Top Glove Corporation Berhad ("Top Glove") based on the Register of Substantial Shareholders of the Company and their respective shareholdings are as follows:
No. of Ordinary Shares Held No. 1. 2. 3. 4. 5. 6.
Name Tan Sri Lim Wee Chai Puan Sri Tong Siew Bee Lim Hooi Sin Top Glove Holding Sdn. Bhd. Kumpulan Wang Persaraan (Diperbadankan) Employees Provident Fund Board
Direct
%
Indirect
%
179,061,138 13,845,748 9,935,362 32,153,794
28.85 2.23 1.60 5.18
55,934,904* 221,150,294** 225,060,680*** -
9.01 35.63 36.26 -
48,582,000 39,593,773
7.83 6.38
7,505,400 -
1.21 -
Note : * Deemed interested through Puan Sri Tong Siew Bee, Mr. Lim Hooi Sin and Top Glove Holding Sdn Bhd's direct interest in Top Glove. ** Deemed interested through Tan Sri Lim Wee Chai, Mr. Lim Hooi Sin and Top Glove Holding Sdn Bhd's direct interest in Top Glove. *** Deemed interested through Tan Sri Lim Wee Chai, Puan Sri Tong Siew Bee and Top Glove Holding Sdn Bhd's direct interest in Top Glove.
164
Top Glove Corporation Berhad • Annual Report 2014
ANALYSIS OF SHAREHOLDINGS AS AT 21 OCTOBER 2014 (cont’d) 3. DIRECTORS' SHAREHOLDINGS The Directors' Shareholdings of Top Glove based on the Register of Directors' Shareholdings are as follows: No. of Ordinary Shares Held No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
Name Tan Sri Lim Wee Chai Tan Sri Dato' Seri Utama Arshad Bin Ayub Tan Sri Mohd Sidek Bin Haji Hassan Tan Sri Dato' Dr. Lin See Yan Tan Sri Rainer Althoff Lee Kim Meow Puan Sri Tong Siew Bee Lim Hooi Sin Lim Cheong Guan Sekarajasekaran a/l Arasaratnam Lim Han Boon
Direct
%
179,061,138 1,200,000 441,600 13,845,748 9,935,362 11,830,118 -
28.85 0.19 0.07 2.23 1.60 1.91 -
Indirect 55,934,904* 10,000**** 221,150,294** 225,060,680*** -
% 9.01 0.00 35.63 36.26 -
Note : * Deemed interested through Puan Sri Tong Siew Bee, Mr. Lim Hooi Sin and Top Glove Holding Sdn Bhd's direct interest in Top Glove. ** Deemed interested through Tan Sri Lim Wee Chai, Mr. Lim Hooi Sin and Top Glove Holding Sdn Bhd's direct interest in Top Glove. *** Deemed interested through Tan Sri Lim Wee Chai, Puan Sri Tong Siew Bee and Top Glove Holding Sdn Bhd's direct interest in Top Glove. **** Deemed interested through Madam Chung Lee Moy. The Directors' Share Options held under the Employeesʼ Share Option Scheme of the Company are as follows: No. of Options Held No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
Name
Direct
Tan Sri Lim Wee Chai Tan Sri Dato' Seri Utama Arshad Bin Ayub Tan Sri Mohd Sidek Bin Haji Hassan Tan Sri Dato' Dr. Lin See Yan Tan Sri Rainer Althoff Lee Kim Meow Puan Sri Tong Siew Bee Lim Hooi Sin Lim Cheong Guan Sekarajasekaran a/l Arasaratnam Lim Han Boon
672,000 403,200 259,200 161,600 326,700 -
Indirect 420,800* 833,600** 931,200*** -
Note: * Deemed interested through Puan Sri Tong Siew Bee and Mr. Lim Hooi Sinʼs options in Top Glove. ** Deemed interested through Tan Sri Lim Wee Chai and Mr. Lim Hooi Sin's options in Top Glove. *** Deemed interested through Tan Sri Lim Wee Chai and Puan Sri Tong Siew Bee's options in Top Glove.
Top Glove Corporation Berhad • Annual Report 2014
165
ANALYSIS OF SHAREHOLDINGS AS AT 21 OCTOBER 2014 (cont’d) 4. LIST OF THIRTY LARGEST SECURITIES ACCOUNTS HOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
166
Name
Shareholdings
%
Tan Sri Lim Wee Chai Kumpulan Wang Persaraan (Diperbadankan) Cimsec Nominees (Tempatan) Sdn. Bhd. - CIMB Bank for Tan Sri Lim Wee Chai Citigroup Nominees (Tempatan) Sdn. Bhd. - Employees Provident Fund Board MFP Capital Corporation Citigroup Nominees (Tempatan) Sdn. Bhd. - UBS AG Singapore for Tan Sri Lim Wee Chai Top Glove Holding Sdn. Bhd. HSBC Nominees (Asing) Sdn. Bhd. - Exempt An for JPMorgan Chase Bank, National Association (U.S.A.) Puan Sri Tong Siew Bee Citigroup Nominees (Asing) Sdn. Bhd. - CBHK for Hostplus Superannuation Fund (Northcape) Cartaban Nominees (Asing) Sdn. Bhd. - Exempt An for RBC Investor Services Trust (Clients Account) Top Glove Holding Sdn. Bhd. Sekarajasekaran a/l Arasaratnam HSBC Nominees (Asing) Sdn. Bhd. - Exempt An for BNP Paribas Securities Services (Client Assets) Citigroup Nominees (Tempatan) Sdn. Bhd. - Employees Provident Fund Board (CIMB PRIN) HSBC Nominees (Asing) Sdn. Bhd. - TNTC for Somerset Small Mid Cap Em All Country Fund LLC HSBC Nominees (Asing) Sdn. Bhd. - Exempt An for The Bank of New York Mellon (Mellon ACCT) Top Glove Holding Sdn. Bhd. HSBC Nominees (Asing) Sdn. Bhd. - Exempt An for JPMorgan Chase Bank, National Association (JPMEM IT) DB (Malaysia) Nominee (Asing) Sdn. Bhd. - State Street Australia Fund Remi for Retail Employees Superannuation Trust DB (Malaysia) Nominee (Asing) Sdn. Bhd. - SSBT Fund C7KQ for MFS Emerging Markets Portfolio (MET INV STST) Cartaban Nominees (Tempatan) Sdn. Bhd. - Exempt An for Eastspring Investments Berhad Lim Hooi Sin Citigroup Nominees (Tempatan) Sdn. Bhd. - Exempt An for AIA Bhd. HSBC Nominees (Asing) Sdn. Bhd. - TNTC for Overstone Fund Public Limited Company HSBC Nominees (Asing) Sdn. Bhd. - TNTC for Somerset Emerging Markets Small Cap Fund LLC Lim Hooi Sin Amanahraya Trustees Berhad - Public Islamic Select Treasures Fund HSBC Nominees (Asing) Sdn. Bhd. - HSBC-FS I for Best Investment Corporation (Deutsche Asia) EB Nominees (Tempatan) Sendirian Berhad - Pledged Securities Account for Sekarajasekaran a/l Arasaratnam (SFC)
121,984,894 48,582,000
19.65 7.83
30,900,000
4.98
29,201,673 22,223,916
4.70 3.58
20,000,000 15,400,000
3.22 2.48
14,859,736 10,497,010
2.39 1.69
10,154,972
1.64
10,132,704 7,883,232 7,860,118
1.63 1.27 1.27
7,830,703
1.26
7,329,400
1.18
6,361,300
1.02
6,241,323 5,812,962
1.01 0.94
5,634,300
0.91
5,582,200
0.90
5,183,500
0.84
5,165,800 5,144,730
0.83 0.83
5,081,900
0.82
5,052,334
0.81
4,700,043 4,635,732
0.76 0.75
4,630,800
0.75
4,035,500
0.65
3,960,000
0.64
Total
442,062,782
71.22
Top Glove Corporation Berhad • Annual Report 2014
NOTICE OF The SIXTEENTH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Sixteenth Annual General Meeting of the Company will be held at Ballroom 1 (Ground Floor), Setia City Convention Centre of No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 8 January 2015 at 11:30 a.m. for the following purposes: AGENDA 1. To receive the Audited Financial Statements for the financial year ended 31 August 2014 together with the Reports of the Directors and the Auditors thereon. 2. To approve the declaration of a Single Tier Final Dividend of 9 sen per share (18%) for the financial year ended 31 August 2014.
(Resolution 1)
3. To approve the payment of Directorsʼ Fees for the financial year ended 31 August 2014.
(Resolution 2)
4. To re-elect the following Directors who retire pursuant to Article 94 of the Companyʼs Articles of Association and being eligible, have offered themselves for re-election: (a) Tan Sri Lim Wee Chai; (b) Lim Cheong Guan; and (c) Lim Han Boon.
(Resolution 3) (Resolution 4) (Resolution 5)
5. To pass the following resolutions pursuant to Section 129 (6) of the Companies Act, 1965: “That the following Directors who have attained the age of over seventy (70) years, be and are hereby re-appointed as Directors of the Company and to hold office until the conclusion of the next Annual General Meeting:
6. 7.
(a) Tan Sri Datoʼ Seri Utama Arshad Bin Ayub; (b) Mr. Sekarajasekaran a/l Arasaratnam; and (c) Tan Sri Datoʼ Dr. Lin See Yan.”
(Resolution 6) (Resolution 7) (Resolution 8)
To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.
(Resolution 9)
As Special Business To consider and, if thought fit, with or without any modification, to pass the following resolutions which will be proposed as Ordinary Resolutions: (a) Ordinary Resolution No. 1 Authority To Issue Shares Pursuant To Section 132D Of The Companies Act, 1965 “THAT subject to Section 132D of the Companies Act, 1965 and approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”
(Resolution 10)
Top Glove Corporation Berhad • Annual Report 2014
167
NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING (cont’d) (b) Ordinary Resolution Nos. 2 and 3 Retention of Independent Directors “THAT subject to the passing of Resolutions Nos. 6 and 7 respectively, approval be and is hereby given to retain the following Directors who have served as Independent NonExecutive Directors of the Company for more than nine (9) years in accordance with Malaysian Code on Corporate Governance 2012: (a) Tan Sri Datoʼ Seri Utama Arshad Bin Ayub; and (b) Mr. Sekarajasekaran a/l Arasaratnam.
(Resolution 11) (Resolution 12)
(c) Ordinary Resolution No. 4 Proposed Renewal of Authority For Share Buy-Back “THAT subject to the Companies Act, 1965, the Companyʼs Memorandum and Articles of Association, Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements and the approvals of all relevant governmental and/or regulatory authority (if any), the Company be and is hereby authorised to purchase such amount of ordinary shares of RM0.50 each in the Company (“Proposed Share Buy-Back”) as may be determined by the Board from time to time through Bursa Securities upon such terms and conditions as the Board may deem fit and expedient in the interest of the Company provided that the aggregate number of shares purchased pursuant to this resolution shall not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company; AND THAT the maximum amount of funds to be utilised for the purpose of the Proposed Share Buy-Back shall not exceed the aggregate retained profits or share premium account of the Company based on its audited financial statements for the financial year ended 31 August 2014 of RM880,864,000.00 and RM180,673,000.00 respectively; AND THAT at the discretion of the Board, the shares of the Company to be purchased are proposed to be cancelled and/or retained as treasury shares and/or distributed as dividends and/or resold on Bursa Securities; AND THAT such authority shall commence immediately upon passing of this resolution until: (i)
the conclusion of the next Annual General Meeting of the Company following the General Meeting at which such resolution was passed at which time it will lapse unless by ordinary resolution passed at that Meeting, the authority is renewed, either unconditionally or subject to conditions;
(ii)
the expiration of the period within which the next Annual General Meeting after that date is required by law to be held; or
(iii) the authority is revoked or varied by ordinary resolution passed by the shareholders of the Company in General Meeting, whichever is the earlier; AND THAT the Board be and is hereby authorised to take such steps to give full effect to the Proposed Share Buy-Back with full power to assent to any conditions, modifications, variations and/or amendments as may be imposed by the relevant authorities and/or to do all such acts and things as the Board may deem fit and expedient in the best interest of the Company.” 8. To transact any other ordinary business for which due notice shall have been given.
168
Top Glove Corporation Berhad • Annual Report 2014
(Resolution 13)
NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING (cont’d) NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN THAT a Single Tier Final Dividend of 9 sen per share in respect of the financial year ended 31 August 2014 will be payable on 29 January 2015 to depositors who are registered in the Record of Depositors at the close of business on 14 January 2015, if approved by members at the forthcoming Sixteenth Annual General Meeting on 8 January 2015. A Depositor shall qualify for entitlement only in respect of: (a) Shares transferred into the Depositorʼs Securities Account before 4:00 p.m. on 14 January 2015 in respect of ordinary transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad (“Bursa Securities”) on a cum entitlement basis according to the Rules of Bursa Securities. By Order of the Board CHUA SIEW CHUAN (MAICSA 0777689) Chartered Secretary
CHIN MUN YEE (MAICSA 7019243) Chartered Secretary
NGIAN YOKE FUNG (MAICSA 7049093) Chartered Secretary
Subang Jaya 12 November 2014
NOTES TO THE NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING: Proxy 1.
In respect of deposited securities, only members whose names appear in the Record of Depositors on 30 December 2014 (General Meeting Record of Depositors) shall be eligible to attend the Meeting.
2.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Sections 149(1) (a), (b), (c) and (d) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.
3.
Where a holder appoints two or more proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.
5.
Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
6.
The instrument appointing a proxy must be deposited at the office of the Share Registrar, Securities Services (Holdings) Sdn Bhd at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time appointed for holding the Meeting or at any adjournment thereof.
Top Glove Corporation Berhad • Annual Report 2014
169
NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING (cont’d) Audited Financial Statements for financial year ended 31 August 2014 7.
The Audited Financial Statements under Agenda 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act 1965 does not require the Audited Financial Statements to be formally approved by the shareholders. As such, this item is not put forward for voting.
Declaration of Single Tier Final Dividend of 9 sen per share (18%) for financial year ended 31 August 2014 8.
In accordance with Article 153 of the Companyʼs Articles of Association, the Company in General Meeting may declare dividends, but no dividend shall exceed the amount recommended by the Directors. A Single Tier Final Dividend of 9 sen per share (18%) based on 620,683,862 ordinary shares as at the date of the Notice amounting to RM55,861,547.58 in respect of the financial year ended 31 August 2014 is proposed for shareholders' approval. The actual amount of final dividend per ordinary share would be dependent on the actual number of ordinary shares as at the Book Closure Date. Pursuant to Paragraph 8.26 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, the Single Tier Final Dividend, if approved, shall be paid not later than three (3) months from the date of the shareholdersʼ approval.
Determination and Payment of Directorsʼ fees 9.
Article 105 of the Companyʼs Articles of Association provides that fees payable to Directors shall not be increased except pursuant to a resolution passed at a General Meeting. Therefore, shareholdersʼ approvals are required for the determination and payment of Directorsʼ fees amounting to RM1,140,000.00 for the financial year ended 31 August 2014.
Re-election of Directors who retire by rotation pursuant to Article 94 10. Article 94 of the Companyʼs Articles of Association provides that one third (1/3) of the Directors of the Company for the time being shall retire by rotation at an Annual General Meeting (“AGM”) of the Company. All the Directors shall retire from office once at least in each three years but shall be eligible for re-election. The profiles of the Directors who are standing for re-election as per Agenda 4 of the Notice of Sixteenth AGM are stated on pages 8, 14 and 15 of this Annual Report. Re-appointment of Directors who have attained the age of over seventy (70) years pursuant to Section 129 (6) of the Companies Act, 1965 11. Tan Sri Datoʼ Seri Utama Arshad Bin Ayub, Mr. Sekarajasekaran a/l Arasaratnam and Tan Sri Datoʼ Dr. Lin See Yan, who have attained the age of over 70 years, have offered themselves for re-election as Directors of the Company and to hold office until the conclusion of the next AGM. The re-appointment, shall take effect if the proposed Ordinary Resolutions 6, 7 and 8 are passed by a majority of not less than three-fourths of such members as being entitled to vote in person or, where proxies are allowed, by proxy at this Sixteenth AGM of which not less than 21 daysʼ notice has been given. The profiles of the Directors who are standing for re-appointment are stated on pages 9, 11 and 15 of this Annual Report. Re-appointment of Auditors 12. The Audit Committee and the Board have considered the re-appointment of Messrs. Ernst & Young as Auditors of the Company and collectively agreed that Messrs. Ernst & Young has met the relevant criteria prescribed by Paragraph 15.21 of Bursa Malaysia Securities Berhad Main Market Listing Requirements.
170
Top Glove Corporation Berhad • Annual Report 2014
NOTICE OF THE SIXTEENTH ANNUAL GENERAL MEETING (cont’d) EXPLANATORY NOTE TO SPECIAL BUSINESS: 1.
Authority pursuant to Section 132D of the Companies Act, 1965. Ordinary Resolution No. 1 is proposed for the purpose of granting a renewed general mandate (“General Mandate”) and empowering the Directors of the Company, pursuant to Section 132D of the Companies Act, 1965, to issue and allot new shares in the Company from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued and paid-up share capital of the Company for the time being. The General Mandate, unless revoked or varied by the Company in General Meeting, will expire at the conclusion of the next AGM of the Company. The General Mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to placement of shares for the purpose of funding future investment project(s), working capital and/or acquisition(s). As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the Fifteenth AGM held on 7 January 2014 and which will lapse at the conclusion of the Sixteenth AGM.
2.
Retention as Independent Non-Executive Directors of the Company pursuant to the Malaysian Code on Corporate Governance 2012 (i)
Tan Sri Datoʼ Seri Utama Arshad Bin Ayub Tan Sri Datoʼ Seri Utama Arshad Bin Ayub was appointed as Independent Non-Executive Director of the Company on 4 September 2000, and has, therefore served for more than nine (9) years. As at the date of the Notice of the AGM, he has served the Company for fourteen (14) years. However, he has met the independence guidelines as set out in Chapter 1 of Bursa Malaysia Securities Berhad Main Market Listing Requirements. The Board, therefore, considers him to be independent and believes that he should be retained as Independent Non-Executive Director.
(ii) Mr. Sekarajasekaran a/l Arasaratnam Mr. Sekarajasekaran a/l Arasaratnam was appointed as Independent Non-Executive Director of the Company on 4 September 2000, and has, therefore served for more than nine (9) years. As at the date of the Notice of the AGM, he has served the Company for fourteen (14) years. However, he has met the independence guidelines as set out in Chapter 1 of Bursa Malaysia Securities Berhad Main Market Listing Requirements. The Board, therefore, considers him to be independent and believes that he should be retained as Independent Non-Executive Director. 3.
Proposed Renewal of Authority for Share Buy-Back Ordinary Resolution No. 4 is proposed for the purpose of renewing the authority granted by the shareholders of the Company at the Fifteenth AGM held on 7 January 2014. The proposed renewal will allow your Board of Directors to exercise the power of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company at any time within the time period stipulated in Bursa Malaysia Securities Berhad Main Market Listing Requirements.
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING There is no Director standing for election at the Sixteenth AGM of the Company.
Top Glove Corporation Berhad • Annual Report 2014
171
Administrative Details for the SIXTEENTH Annual General Meeting DAY & DATE TIME VENUE
: : :
Thursday, 8 January 2015 11.30 a.m. SETIA CITY CONVENTION CENTRE Ballroom 1 (Ground Floor), No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia. Tel: +603-3359 5252
REGISTRATION 1. Registration will start at 9.00 a.m. at the entrance of the meeting hall and will remain open until the conclusion of the Annual General Meeting or such time as may be determined by the Chairman of the meeting. 2. Kindly queue at the registration counter to register yourself for the meeting. 3. Please produce your original Identity Card (IC)/ Passport for verification and kindly ensure you collect your IC/ Passport thereafter. 4. Upon verification, you are required to sign on the Attendance List. 5. After the verification and registration, you will be given an identification wristband and a gift bag; kindly also inform the registration officer should you wish to stay for lunch after the meeting. 6. Usage of identification wristband: a) Only person with identification wristband will be allowed to enter the meeting hall. b) Only person with identification wristband will be allowed to enter the refreshment area and lunch venue. c) There will be no replacement in the event that you lose or misplace the identification wristband. 7. After verification and registration, please proceed for light refreshment immediately to avoid overcrowding at the registration area. 8. No person will be allowed to register on behalf of another person even with the original IC/ Passport of that other person. 9. The registration counter is solely for verification of identity and registration purposes. Please proceed to Help Desk if you have any other matters that you would like to clarify or enquire. PARKING You are advised to park your vehicle at Setia City Convention Centre (SCCC) car park and your parking fee will be reimbursed. Upon registering your attendance, please proceed to Help Desk for parking fee reimbursement. HELP DESK Please proceed to Help Desk for the following matters: 1. Reimbursement of parking fee. 2. Registration of Corporate Member. 3. Revocation of ProxyĘźs Appointment. 4. Any clarification or queries or feedbacks. RECORD OF DEPOSITORS FOR ATTENDANCE AT ANNUAL GENERAL MEETING For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue the Record of Depositors as at 30 December 2014. Only depositors whose names appear on the Record of Depositors as at 30 December 2014 shall be entitled to attend, speak and vote at the said meeting or appoint proxies to attend, speak and vote on his/her behalf in respect of the number of shares registered in his/her name at that mentioned date. PROXY 1. If you are a member of the Company at the time set out above, you are entitled to appoint one (1) or more proxies to attend and vote at the Annual General Meeting. If you are unable to attend the meeting and wish to appoint a proxy to vote on your behalf, please submit your Proxy Form in accordance with the notes and instructions printed therein. 2. If you wish to attend the meeting yourself, please do not submit any Proxy Form for the meeting that you wish to attend. You will not be allowed to attend the meeting together with a proxy appointed by you. Only one of you is allowed to attend and enter the meeting hall. 3. If you have submitted your Proxy Form prior to the meeting and subsequently decided to attend the meeting yourself, please proceed to the Help Desk to revoke the appointment of your proxy.
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Top Glove Corporation Berhad • Annual Report 2014
Administrative Details for the SIXTEENTH Annual General Meeting (cont’d) 4. If you wish to submit your Proxy Form, please deposited it at the office of the Share Registrar, Securities Services (Holdings) Sdn Bhd at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time appointed for holding the meeting or any adjournment therof. Any proxy form received after 48 hours would not be entertained and the said appointment of proxy shall be deemed invalid. CORPORATE MEMBER Any corporate member who wishes to appoint a representative instead of a proxy to attend the meeting should submit the original certificate of appointment under the seal of the corporation to the office of the Share Registrar at any time before the time appointed for holding the meeting or to the registration staff on the meeting day for the Companyʼs records. IF YOU NEED TO CONTACT US If you have general queries prior to the meeting, please contact the Share Registrar at Tel: +603-2084 9000 and/or Fax: +603-2094 9940, during office hours: 1) Mr Wong Piang Yoong (email: piang.yoong.wong@sshsb.com.my) 2) Encik Hisham (email: hishamh@sshsb.com.my) Alternatively, you may contact the Corporate Services of Top Glove at Tel: +603- 5022 2110 during office hours: Ms Sharon Tan (email: bstan@topglove.com.my). MAP TO SCCC
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FORM OF PROXY *I/We ________________________________________________________________________________________ (Name in full)
I/C No. or Company No. ______________________________ of __________________________________________ (New and Old I.C. Nos.)
(Address)
______________________________________________________________Tel:_____________________________ (Address)
being a *member/members of TOP GLOVE CORPORATION BERHAD hereby appoint: ________________________________________________________ I/C No. ____________________________ of (Name in full)
(New and Old I.C. Nos.)
______________________________________________________________Tel:_____________________________ (Address) or failing *him/her, ____________________________________________ I/C No. _________________________ of (Name in full)
(New and Old I.C. Nos.)
______________________________________________________________Tel:_____________________________ (Address)
or failing *him/her, *the CHAIRMAN OF THE MEETING, as *my/our proxy to attend and vote for *me/us, and on *my/our behalf at the Sixteenth Annual General Meeting of the Company to be held at Ballroom 1 (Ground Floor), Setia City Convention Centre of No. 1, Jalan Setia Dagang AG U13/AG, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 8 January 2015 at 11:30 a.m. and at any adjournment thereof. The proportion of *my/our holding to be represented by *my/our proxies are as follows: First Proxy:
%
Second Proxy:
%
* Strike out whichever not applicable.
Please indicate with an “X” in the spaces provided below how you wish your votes to be casted. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his/her discretion. No. Resolutions ORDINARY BUSINESS 1 To approve the declaration of the Single Tier Final Dividend of 9 sen per share (18%) for the financial year ended 31 August 2014. 2 To approve the payment of Directorsʼ Fees. 3 To re-elect the Director, Tan Sri Lim Wee Chai. 4 To re-elect the Director, Mr. Lim Cheong Guan. 5 To re-elect the Director, Mr. Lim Han Boon. 6 To re-appoint the Director, Tan Sri Datoʼ Seri Utama Arshad Bin Ayub. 7 To re-appoint the Director, Mr. Sekarajasekaran a/l Arasaratnam. 8 To re-appoint the Director, Tan Sri Datoʼ Dr. Lin See Yan. 9 To re-appoint Messrs. Ernst & Young as Auditors of the Company. SPECIAL BUSINESS 10 Authority to issue shares pursuant to Section 132D of the Companies Act, 1965. 11 To retain Tan Sri Datoʼ Seri Utama Arshad Bin Ayub as the Independent Non-Executive Director. 12 To retain Mr. Sekarajasekaran a/l Arasaratnam as the Independent Non-Executive Director. 13 Proposed Renewal of Authority for Share Buy-Back.
For
Against
Signed on this _____ day of __________ 2014/2015 Number of Shares held
CDS Account No.
Signature of Member/Common Seal Notes: 1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 30 December 2014 (General Meeting Record of Depositors) shall be eligible to attend the Meeting.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.
2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Sections 149(1) (a), (b), (c) and (d) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.
5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one 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.
3. Where a holder appoints two or more proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
6. The instrument appointing a proxy must be deposited at the office of the Share Registrar, Securities Services (Holdings) Sdn. Bhd. at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time appointed for holding the Meeting or at any adjournment thereof.
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Fold this flap for sealing
Then fold here
STAMP
The Share Registrar TOP GLOVE CORPORATION BERHAD (474423-X) c/o: Securities Services (Holdings) Sdn. Bhd. Level 7, Menara Milenium Jalan Damanlela, Pusat Bandar Damansara Damansara Heights 50490 Kuala Lumpur, Malaysia
1st fold here
CORPORATE OFFICES AND FACTORIES KLANG HEAD OFFICE (FACTORY 9) Address : Lot 4969, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia Tel : +603-3392 1992 / 1905 Fax : +603-3392 1291 / 8410 E-mails : (i) sales@topglove.com.my (ii) invest@topglove.com.my (iii)tgfoundation@topglove.com.my Website : www.topglove.com.my
SUBANG CORPORATE OFFICE A-11-01, Empire Subang OfďŹ ce Jalan SS 16/1, 47500 Subang Jaya, Selangor D.E., Malaysia Tel : +603-5022 2110 Fax : +603-5022 2113
FACTORY 10 Lot 4970, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 9288 / 9942/ 3320 Fax : +603-3392 8984
FACTORY 20 Lot 4988, Jalan Bunga Raya, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 4211 Fax : +603-3392 4200
FACTORY 11 Lot 4967, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 1899 / 5399 Fax : +603-3392 1299 / 1399
FACTORY 21 Lot 4989, Jalan Dahlia/KU8, Kawasan Perindustrian Meru Timur, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 4614/ 5166/ 4162 Fax : +603-3392 5066
FACTORY 12 Lot 4960, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 3375 Fax : +603-3392 5200
FACTORY 22 Lot 4990, Jalan Bunga Raya, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia Tel : +603-3392 1187 Fax : +603-3392 1186
FACTORY 13 Lot 4947, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3393 1288 Fax : +603-3393 1993
FACTORY 23 Lot 12, Persiaran Tasek, Kawasan Perindustrian Tasek, 31400 Ipoh, Perak D.R., Malaysia. Tel : +605-545 5032 Fax : +605-547 8975
FACTORY 14 Lot 5104, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 3378 / 3433 Fax : +603-3392 3372
FACTORY 24 Lot 4986, Jalan Dahlia/KU8, Kawasan Perindustrian Meru Timur, 41050 Klang, Selangor D.E., Malaysia Tel : +603-3392 6010/ 0975 Fax : +603-3392 0289
FACTORY 3 Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 7880 / 7350 Fax : +603-3392 7229 / 9160
FACTORY 15 South of Weiwu Road, West of Xihuan Road, Xinghua Economic Developing Zone. 225700 Jiang Su Province, China. Tel : +86-523-8326 8976 Fax : +86-523-8326 8676
FACTORY 25 Lot 64593, Jalan Dahlia/KU8, Kawasan Perindustrian Meru Timur, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 6317 Fax : +603-3392 6348
FACTORY 4 Lot 5987, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 8588 / 8996 Fax : +603-3392 6788
FACTORY 16L 188, Moo 5, Tambon Pangla, Amphur Sadao, Songkhla 90170 Thailand. Tel : +66-74-410 888 Fax : +66-74-410 886
U.S.A. MARKETING OFFICE TG Medical (U.S.A.) Inc., 165, North Aspan Avenue, Azusa CA 91702, U.S.A. Tel : 001-626-969-7838 Fax : 001-626-969-7823 E-mail : topglove@topgloveusa.com GERMANY SALES OFFICE Bliersheimer Str. 80 A 47229 Duisburg Northrhein-Westfalia, Germany Tel : +49 (0) 2065 76421 0 Fax : +49 (0) 2065 76421 19 E-mail : info@topglove.de TG2 (TG IT Office) Unit 8-3 & 8-4, Setia Avenue, 2 Jalan Setia Prima S U13/S, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor D.E. Malaysia. Tel : +603-3358 4200 FACTORY 2 Lot 4968, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 1992 / 1905 Fax : +603 3392 2134
FACTORY 5 & 5B Lot 18, 27, 38 & 57, Medan Tasek, Kawasan Perindustrian Tasek, 31400 Ipoh, Perak D.R., Malaysia. Tel : +605-546 6360 / 547 9271 Fax : +605-547 8975
FACTORY 17L 268, Moo 5, Tambon Kampangphet, Amphur Rattaphum, Songkhla 90180 Thailand. Tel : +66-74-302888 Fax : +66-74-302889 / 302890
FACTORY 6 180/3, Moo 7, Srisoontorn Road, Tambon Srisoontorn, Amphur Thalang, Phuket 83110, Thailand. Tel : +66-76-272 572-4 Fax : +66-76-273 447
FACTORY 18 & 28 Lot 124 & 126, Jalan Lapan, Kompleks Perabot Olak Lempit, 13 KM, Jalan Banting Dengkil, 42700 Banting, Selangor D.E., Malaysia. Tel : +603-3149 1998 Fax : +603-3149 3008
FACTORY 7 188, Moo 5, Kanchanawanich Road, Tambon Sumnakkham, Amphur Sadao, Songkhla, 90320 Thailand. Tel : +66-74-410-000 Fax : +66-74-410 007 / 008
FACTORY 19 Lot 4987, Jalan Bunga Raya, Batu 6, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia. Tel : +603-3392 5900 Fax : +603-3392 5910
FACTORY 26 Lot 4961, Jalan Teratai/KU8, Kawasan Perindustrian Meru Timur, 41050 Klang, Selangor.D.E.,Malaysia. Tel : +603-3392 3375 Fax : +603-3392 5200 FACTORY 27 Lot 2431 Mukim Port Dickson, Sendayan, 71100 Siliau, Negeri Sembilan Darul Khusus. Tel : +606-651 4966 / 2043 Fax : +606-651 6896 FACTORY 29 Lot 4985, D/A, Jalan Dahlia, Kawasan Perindustrian Meru Timur, 41050 Klang, Selangor D.E., Malaysia Tel : +603-3392 6010/ 0975 Fax : +603-3392 0289