HM Medical Clinic

Supermax.com.my

Cover Rationale
Supermax prides itself in always doing its utmost in its field of
expertise, which is the manufacturing and distribution of a now
world-renowned brand of high quality medical gloves. The theme
"Moving Beyond Boundaries" represents another chapter of keen
commitment and hard work aimed at taking Supermax to the
next level. An intense desire to reach for all of its lofty goals and
beyond continues burn brightly within the management team
and throughout the entire workforce.
At all times, the Group puts into practice its core competencies and expertise for all of its day to day business activities in order toachieve superior performance levels. Since our inception in the year 1987, we have taken a stepwise approach in our commitment to scale greater heights whilst charting a path towards sustainable growth and progress. We hold firm to the belief that the success that we have garnered today is built upon our commitment to going the extra mile. Hereon, we shall constantly move beyond our comfort zone to reap a fruitful harvest of sustained growth and success.

Corporate Profile Financial Highlights Five-Years Financial Summary Corporate Structure Corporate Information Board of Directors Profile of Directors Executive Chairman's Statement Corporate Social Responsibility Audit Committee Report Corporate Governance Statement Statement On Risk Management and Internal Control Financial Statements List of Properties Analysis Of Shareholdings Notice Of Seventeenth Annual General Meeting SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Supermax Corporation Berhad is a leading international
manufacturer, distributor and marketer of high quality medical gloves. Established in 1987, its founders started a trading business to distribute latex gloves and eventually ventured into manufacturing of latex gloves in 1989. Today, the Supermax Group has nine factories manufacturing various types of latex gloves, which are exported to over 155 countries around the world, such as the United States of America, European Union, Middle East, Asia and South Pacific countries.
The Group has received numerous accolades and awards over the years, including The Edge Billion Ringgit Club's inaugural Company of the Year Award in 2010, Export Excellence & Brand Excellence in the Industry Excellence Awards in 2009 and 2008, Special Award & 4th placing in the prestigious Deloitte's Top 50 Enterprise Award Malaysia in 2006, Export Excellence & Product Excellence in the Industry Excellence Awards in 2003, the National Productivity Council Award in 1999 and Andersen Consulting Top 50 Enterprise in Malaysia in 1998. One of the founders, Dato' Seri Stanley Thai himself, also won 2 very prestigious awards in 2010, i.e. Malaysia's Ernst & Young Entrepreneur of The Year Award 2010 and Malaysia's CEO of The Year Award 2010.
Supermax is well recognized for its commitment to deliver quality products and service to its customers. These accomplishments testify to the Group's relentless efforts in enhancing productivity in order to compete in the global market.
ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) 2013 2012
1,048,151 997,374 After-tax profit 1,369,735 1,254,079 Shareholders' equity Interim dividend Net assets per share (in RM) Earnings per ordinary share of RM0.50 each (in Sen) * Subject to shareholders' approval at upcoming Annual General Meeting SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Five-Years Financial Summary
NET ASSETS
BASIC EARNINGS PER SHARE
2013 2012 2011 2010 2009
rm'000 rm'000 rm'000 rm'000 rm'000
997,374 1,021,358 Shareholders' equity Basic earnings per share (sen) * Based on ordinary share of RM0.50 each. ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) 100% Supermax Glove manufacturing Sdn Bhd (218698-T)
100% maxter Glove manufacturing Sdn Bhd (229862-H)
100% Seal polymer Latex products Sdn Bhd (754360-X)
100% Supermax Latex products Sdn Bhd (34197-T)
100% Supermax healthcare incorporated
100% Supermax international Sdn Bhd (551579-X)
98% SuperVision optimax Sdn Bhd (1083853-U)
100% Supermax energy Sdn Bhd (318117-P)
100% maxwell Glove manufacturing Berhad (99472-X)
(Formerly known as Spenser Glove Manufacturing Berhad) 100% Supermax deutschland Gmbh
100% Supermax Global Limited
100% Supermax healthcare Limited
67% Supermax healthcare Canada incorporated
100% White oak Global property Limited
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Board of direCtorS
dato' Seri thai Kim Sim, Stanley
Gong Wooi teik, felix
(Executive Chairman and Group Managing Director) (Independent Non-Executive Director) datin Seri tan Bee Geok, Cheryl
Shamsudin @ Samad Bin Kassim
(Group Executive Director) (Independent Non-Executive Director) dato' ting heng peng
rashid Bin Bakar
(Independent Non-Executive Director) (Independent Non-Executive Director) dato' dr. tan Geok Swee @ tan Chin huat
Gong Wooi teik, felix
Tricor Investor Services Sdn. Bhd. (118401-V) Chairman, Independent Non-Executive Director Level 17, The Gardens North Tower rashid Bin Bakar
Lingkaran Syed Putra Member, Independent Non-Executive Director 59200 Kuala Lumpur Tel : 03-2264 3883 Shamsudin @ Samad Bin Kassim
Fax : 03-2282 1886 Member, Independent Non-Executive Director prinCipaL BanKerS
The Royal Bank of Scotland Berhad (301923-A)
Wong Wai foong (MAICSA 7001358)
HSBC Bank Malaysia Berhad (127776-V) Joanne toh Joo ann (LS 0008574)
Standard Chartered Bank Malaysia (115793-P) OCBC Bank (Malaysia) Berhad (295400-W) Malayan Banking Berhad (3813-K) Supermax Corporation Berhad Citibank Berhad (297089-M) Lot 38, Putra Industrial Park Bukit Rahman Putra 47000 Sungai Buloh Baker Tilly Monteiro Heng, AF0117 Selangor Darul Ehsan Baker Tilly MH Tower Tel : 03-6145 2328 Level 10, Tower 1, Avenue 5 Fax : 03-6156 2191 Bangsar South City 59200 Kuala Lumpur Tel : 03-2297 1000 Level 18, The Gardens North Tower Fax : 03-2282 9980 Lingkaran Syed Putra StoCK exChanGe LiStinG
59200 Kuala Lumpur Main Market of Bursa Malaysia Securities Berhad Tel : 03-2264 8888 Date of Listing : 2 August 2000 Fax : 03-2282 2733 StoCK information
Code No. 7106

ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Board Of Directors
1. dato' Seri thai Kim Sim, Stanley
(Executive Chairman and Group Managing Director)
2. datin Seri tan Bee Geok, Cheryl
(Group Executive Director)
3. Shamsudin @ Samad Bin Kassim
(Independent Non-Executive Director)
4. dato' ting heng peng
(Independent Non-Executive Director)
5. dato' dr. tan Geok Swee @ tan Chin huat
(Non-Executive Director)
6. Gong Wooi teik, felix
(Independent Non-Executive Director)
7. rashid Bin Bakar
(Independent Non-Executive Director)

SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Profile Of Directors
dato' Seri thai Kim Sim, StanLey
Executive Chairman and Group Managing Director Aged 53, Malaysian Appointed on 18 June 2000 Dato' Seri Stanley Thai graduated from the University of Windsor, Ontario, Canada with a Bachelor of Commerce degree (Hons) in 1982. Dato' Seri Stanley Thai started his early business training with Mulpha International Berhad before being appointed as the Chief Executive Officer cum Group Managing Director of Supermax Corporation Berhad on 18 June 2000. Dato' Seri Stanley Thai was re-designated as Executive Chairman and Group Managing Director on 27 September 2006. Dato' Seri Stanley Thai is an experienced businessman and has successfully secured business partnerships with distributions in North American, Western Europe, Australia, New Zealand, Middle East and Latin American countries. Dato' Seri Stanley Thai has also been actively involved in overseas trade promotions and programs organised by the Ministry of International Trade and Industry (MITI) and is a strong advocate of the "Made in Malaysia for the World" program of Malaysia External Trade Development Corporation (MATRADE) since 1983. Dato' Seri sits on the Board of the Malaysian Rubber Export & Promotion Council (MREPC) since April 2010 and was appointed Trustee of the Malaysian Rubber Glove Manufacturers Association (MARGMA) in April 2013.
datin Seri tan Bee GeoK, CheryL
Group Executive Director Aged 52, Malaysian Appointed on 18 June 2000 Datin Seri Cheryl Tan graduated with a Bachelor of Commerce degree (Hons) from University of Windsor, Ontario, Canada. Datin Seri Cheryl Tan was appointed as an Executive Director in Supermax Corporation Berhad on 18 June 2000 and she is a member of the Remuneration Committee. Datin Seri Cheryl Tan received her early business training in credit administration with a local financial institution. Datin Seri Cheryl Tan heads the finance, operations and administration of the Supermax Group.
ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Profile Of Directors (continued)
dato' tinG henG penG
Independent Non-Executive Director Aged 53, Malaysian Appointed on 18 June 2000 Dato' Ting graduated from University of Windsor, Ontario, Canada with a Bachelor of Commerce degree (Hons) in 1982. Upon graduation, he went to England where he read law at the University of Essex. Dato' Ting obtained his Bachelor of Law (Hons) in 1985. Following Dato' Ting's admission as a barrister by Lincoln's Inn, London in 1986, Dato' Ting came back to Malaysia and was called to the Malaysian Bar in 1987. Dato' Ting has been in legal practice as advocate and solicitor in the legal firm of Amin-Tan & Co from October 1987 until May 2007. Since 1 June 2007, Dato' Ting is a Partner of Joseph Ting & Co. Dato' Ting was appointed to the Board of Supermax Corporation Bhd in June 2000 and is currently Chairman of the Nomination Committee and a member of the Remuneration Committee. Dato' Ting is also an Independent Non-Executive Director of D.B.E. Gurney Resources Berhad as well as CSF Group PLC, a company listed on London Stock Exchange in Alternative Investment Market.
dato' dr. tan GeoK SWee @ tan Chin huat
Aged 63, Malaysian Appointed on 18 June 2000 Dato' Dr. Tan was appointed as a Non-Executive Director of Supermax Corporation Berhad on 18 June 2000 and he is a member of the Nomination Committee. He worked in a public-listed company as senior manager for more than 10 years before he started his own business in the 1980's. He is the founder of the renowned Malaysia International Furniture Fair (founded in 1995). He has good experience in international marketing and promotion. He holds a Hon. PhD in Business Administration. He is now the Managing Director of TGS Holdings SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Profile Of Directors (continued)
mr GonG Wooi teiK, feLix
Independent Non-Executive Director Aged 63, Malaysian Appointed on 28 December 2001 Mr Gong is a Fellow Member of The Institute of Chartered Accountants in England & Wales, member of the Malaysian Institute of Accountants and Fellow Member of the Chartered Tax Institute of Malaysia. After qualifying as a Chartered Accountant in England in 1976, he returned to Malaysia in early 1977 and worked for two of the big 4 International Accounting Firms before starting his own accounting firm in 1980. He is currently the Managing Partner of GEP Associates, a member firm of AGN International Ltd, which is a worldwide Association of Accounting and Consulting Firms. Mr Gong was appointed as an Independent Non-Executive Director of Supermax Corporation Berhad on 28 December 2001 and he is the Chairman of the Audit Committee. Presently, he is also Independent and Non-Executive Director of Box Pak (Malaysia) Berhad and Cheetah Holdings Berhad which are both listed on Bursa Malaysia.
enCiK ShamSudin @ Samad Bin KaSSim
Independent Non-Executive Director Aged 67, Malaysian Appointed on 18 July 2002 Encik Samad graduated with a Bachelor's degree in Economics from University of Malaya in 1970. Subsequently, he obtained Master in Public and International Affairs from University of Pittsburgh in 1979. He was appointed as an Independent Non-Executive Director of Supermax Corporation on 18 July 2002 and he is a member of the Audit Committee and Nomination Committee. He is currently also a Director of public listed Century Logistics Holdings Berhad, Kinsteel Berhad, Perwaja Steel Berhad and Multi-Code Electronic Industries (M) Berhad, and sits on the Boards of 2 non-listed companies, i.e. Ingress Corporation Berhad and Master Tec Holdings Berhad. He worked in the Ministry of International Trade and Industry (MITI) for fifteen years from 1985 and was Chief Executive Officer of SMIDEC since 1 January 2000 and left SMIDEC in retirement on September ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Profile Of Directors (continued)
enCiK raShid Bin BaKar
Independent Non-Executive Director 55, Malaysian Appointed on 18 July 2002 Encik Rashid holds a Master in Law from UKM and he is a graduate of UiTM with a Bachelor of Law (Hons). Encik Rashid also has a Diploma in Syariah Law and Practice from UIAM and Public Administration from UiTM. His business occupation is advocates and solicitors. He was appointed as an Independent Non-Executive Director of Supermax Corporation Berhad on 18 July 2002. He currently chairs the Remuneration Committee and is a member of the Audit Additional Information On The Board Of Directors
famiLy reLationShipS With any direCtor and / or maJor SharehoLder
None of the Directors of the Company has family relationships with any Director and/or major shareholder with the 1. Dato' Seri Stanley Thai and Datin Seri Cheryl Tan are husband and wife; and 2. Dato' Dr. Tan Geok Swee @ Tan Chin Huat is the brother of Datin Seri Cheryl Tan.
ConfLiCt of intereSt
None of the Directors of the Company has any conflict of interest with the Company.
LiSt of ConViCtionS for offenCeS Within paSt 10 yearS other than traffiC offenCeS
None of the Directors of the Company has been convicted for offences within the past ten (10) years other than traffic offences, if any.
SharehoLdinGS in the Company and itS SuBSidiarieS
Details are set out on page 98 of the Annual Report.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Executive Chairman's Statement
The glove industry has remained strong and vibrant in 2013 amid a switch in demand momentum towards nitrile gloves. While nitrile gloves formed merely 25% of Malaysia's rubber glove exports in 2009, the sharp rise in natural rubber latex prices which began in 2010 has proved to be a catalyst that has driven a shift in demand from natural rubber (NR) gloves to nitrile gloves. Today, nitrile glove exports from Malaysia form a hefty 47% of Malaysia's total rubber glove exports and this number continues to grow.
In line with Supermax's market driven philosophy, it intends to ride this momentum with the continued expansion of nitrile glove production capacity. It began with the quick response measure of converting suitable NR glove production lines to nitrile glove production lines but which has since extended to the construction of new nitrile designated plants.
We have the Plant # 10 & # 11 of Supermax Group which are now moving towards completion, testing and commissioning of the new production lines and we have another further mega projects in the pipeline aimed at keeping Supermax at the forefront of the glove industry.
Despite average selling for gloves falling in tandem with lower raw material prices, the Group had performed creditably to record an improved performance on a whole year basis, breaching over the RM1 billion mark for revenue. And with the new capacity coming on-stream this year following the commissioning of the new production lines at the 2 new plants, the Group is poised to make greater inroads into the nitrile segment and gaining more market share in particular in the Acure-Care and Hospitals segment going forward.
GLoVe induStry update
raw material prices
(i) Natural rubber latex
Natural rubber latex prices have generally trended lower this year. From an average of RM6.60 per kg wet in year 2012 to RM5.60 in year 2013, a 15% fall over the course of a year. As often the case, prices started the year on a stronger note, averaging above RM6.15 in the 1st quarter of 2013 in tandem with the wintering period for rubber trees. But thereafter, prices gradually retreated before closing the year at an average of RM5.26 in the final quarter of the year. Prices have since eased further to under RM5.00 per kg wet in Q1 2014.
Natural rubber latex supply has been on the rise as a result of the expansion of rubber planting acreage across the region. While Thailand and Indonesia have continued to grow their natural rubber production to remain as the undisputed No 1 and No. 2 rubber producers in the world, Vietnam has come up strongly to become the 3rd largest producer in the world, overtaking Malaysia in the process.
With increase in production of Natural Rubber Latex, we are anticipating an over- supply of NRL which would result in continuing depressed of material prices for the rest of year 2014 and beyond.
While the fall in raw material prices was welcome in terms of its impact in lowering the Group's manufacturing costs, it also had the less welcome impact of lowering average selling prices (ASPs) and ultimately sales revenue. This has had an impact on the top-line performance of most glove producers but profit margins remain healthy.
ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Executive Chairman's Statement (continued)
(ii) Nitrile latex
Nitrile latex material suppliers had aggressively expanded their capacity in 2010 and this has led to somewhat of an oversupply situation. While this has benefited the glove makers in the form of relatively stable and low cost of raw material, the proliferation of nitrile glove production capacity among manufacturers have seen more and more take-up for the nitrile latex material supply.
And with crude oil prices projected to increase going forward as the world economy continues to gradually pick up speed, nitrile latex material prices may see an uptick during the months and years ahead. We see nitrile latex material prices inching higher from the current prices of between USD1,000 to US$1,150 per metric ton.
Glove demand
The Malaysian Rubber Gloves Manufacturers Association (MARGMA) has forecast that global demand for rubber gloves would rise to 170 billion pieces per annum this year. Demand growth would be driven by factors such as rising affluence in developing countries the likes of China and India along with the African countries and Middle East countries that are coming up strongly economically, healthcare regulations being implemented in more and more countries and also new uses for disposable gloves in addition to the traditional use in the medical sector.
As mentioned earlier, there is a growing shift in demand from natural rubber latex gloves to nitrile gloves as the nitrile gloves have become relatively cheaper in the last few years. We see the market moving towards a 55:45 nitrile to NRL glove ratio in the near to medium term before settling at a 50:50 ratio over the longer term. There is every chance that NR latex prices will trend lower while nitrile latex prices may move the other way resulting in NR rubber gloves regaining its price competitiveness.
Regardless of whichever way market demand pans out going ahead, Supermax will be well poised with the demand, drive and flexibility to capture market share whichever way the market moves as the Company remains very much market driven and possesses technologically advanced and flexible production lines that can switch between NR and nitrile glove production with the minimum of production fuss.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
Executive Chairman's Statement (continued)
update on Supermax
(i) New National Distribution Headquarters in USA
Towards the end of year 2013, Supermax moved into its brand new premises in Chicago, Illinois. Phase 1, or the East Building, was completed and it features a 90,170 sq ft warehouse & distribution facility coupled with a 6,000 sq ft office which now houses Supermax's new National Distribution Headquarters for its US operations.
With Phase 1 completed, the Group is now well on its way to capturing a bigger US market share, with emphasis on the nitrile glove market. The US is not just the world's largest consumer of Medical gloves, it is also the biggest market for nitrile gloves. There is a lot of room for Supermax to grow in this segment as it will soon have the additional capacity which allows Supermax to gain greater market share in the US.
(ii) Completion of Lots 6058 and 6059 plants
The construction of the Group's 10th and 11th plants are scheduled for completion and the first batch of lines is expected to be commissioned in 3rd quarter, 2014. The remaining lines will be commissioned progressively in batches. We will see a full-year contribution from the additional annual capacity of 5.4 billion pieces from year 2015 (iii) Supermax Business Park
The Group completed the acquisition of a large 100-acre piece of land in Serendah, Selangor, early this year and the master plan to develop the Supermax Business Park on this piece of land is being fine-tuned at this moment.
This project will encompass the construction of the Group's Integrated Glove Manufacturing Complex (IGMC) comprising the construction of high capacity high efficiency production lines complete with the latest generation of auxiliary machinery featuring automated processes from stripping to stacking to packing; and also construction of factory lots catered to the supporting industries for rubber glove manufacturing such as the ceramic/porcelain former makers, chemical and packaging suppliers as well as the engineering and automation companies.
This project will keep us busy and keep us at the forefront of the rubber glove industry for the next 9 to 10 years.
ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Executive Chairman's Statement (continued)
The Group has performed creditably to record both top-line and bottom-line growth on the back of increased capacity gained from refurbishing efforts, process streamlining and also cost savings from declining rubber latex prices. The Group's automation efforts of the last few years, the new high-tech high efficiency capacity coming on-stream from the 2nd half of this year, robust demand and favourable forex and latex price trends are among the positive factors that are expected to drive top-line and bottom-line growth for this year.
On the dividend front, similarly to FYE2012, the Company has paid out an interim 4% tax exempt dividend for FYE2013 and the Board has proposed a final 6% tax exempt dividend which is subject to shareholders' approval at the upcoming Annual General Meeting. This is largely in line with our aim to pay out 30% of Profit after Tax (increased from 20% prior to FY2012) in order to further reward our loyal and supportive shareholders.
Our immediate focus is to expedite the completion of Plants #10 and #11 after which the increased nitrile glove capacity would enable the Group to make greater inroads into the US market and other countries where the demand is increasingly I would also like to thank all my staff from all levels for their commitment and efforts towards the achievement of all of the Group's objectives. My thanks also go out to all our business associates for their continuous support.
Last but certainly not least, I would like to thank all the Shareholders for their support and belief in Supermax. With the support and contributions from the Board and all my staff, it will be my commitment to take Supermax to ever greater dato' Seri Stanley thai
Founder, Executive Chairman and Group Managing Director April 30th, 2014 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013
BiomaSS aS an aLternatiVe enVironmentaLLy friendLy fueL SourCe
The Supermax Group has a "Protect your Health, Protect the Environment" philosophy the daily practice of which is encouraged and instilled among all levels of its organisation. Among its major ongoing initiatives which emphasises environmental preservation is the use of an alternative fuel source which is renewable and sustainable to fire its heating systems and for power generation.
With this in mind, the Group has implemented biomass systems at some of its factories. The fuel used is basically the waste from the oil palm industry such as palm kernel shells and empty fruit bunch and from the wood-based industry (such as wood waste from the furniture industry and even the tree trimmings from pruning work done by the local councils). The need for depleting and non-renewable energy sources is therefore greatly reduced. The Group has spent close to RM20 million over the years to build up and upgrade its biomass facilities.
The Group has spent close to RM20.0 million over the years to build up, upgrade and maintain its biomass facilities. A further RM5 million has been earmarked to build a new large scale biomass facility in Bukit Kapar for its ‘Glove City' Project which will entail the setting up of 6 large factories over the next 10 – 12 years commencing from the first half of WaSte Water manaGement
Another ongoing ‘green' project undertaken by the Supermax Group is the treatment of wastewater. Wastewater from the Supermax Group's manufacturing facilities is treated on site in effluent treatment plants utilising a chemical flocculation, anaerobic digestion and activated sludge process. The Group collaborates closely with the Department of Environment to conduct regular checks to ensure that the final discharge is clean and safe. The Supermax Group spares no expense or effort to ensure that all of its manufacturing facilities do not pollute the environment nor endanger the health of its employees or the communities residing within the vicinity. The Group has spent over RM7 million on this project.
BeSt praCtiCeS in the WorKpLaCe
Supermax places great emphasis on health and safety and making the Supermax workplace a conducive working environment for its entire workforce. It currently holds the ISO 9001:2008 certification and other quality management system certifications which showcase its commitment to providing stakeholders an assurance of quality in fulfilling requirements whilst optimizing environmental performance. Training and re-training of staff are conducted on a regular basis. Its policies are also non-bias in nature, be they in terms of gender, ethnicity, etc.
Ongoing initiatives include - strict "No child labour" policy - equal employment opportunity in terms of gender and ethnicity across all levels of employment from the boardroom to the factory floor - encouraging a healthy lifestyle and building camaraderie among staff by providing support for social and sporting ANNUAL REPORT 2013
SUPERMAX CORPORATION BERHAD (420405-P) Corporate Social Responsibility (continued)
We have also recently completed the setting up of our new distribution headquarters in Chicago, Illinois. This 90,200 sq ft. state-of-the-art warehouse and office facility in Aurora was designed and built with environment conservation in mind and has received the LEED (Leadership in Energy & Environmental Design) Gold Certification recognized by the U.S. Green Building Council. The facility has many environmentally-friendly features such as photovoltaic solar panels and other energy saving fixtures such as full LED lighting to increase efficiency.
BeSt praCtiCeS in the marKetpLaCe
Supermax also recognises the importance of practising the highest standards of corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance stakeholders' value and has taken all reasonable steps to ensure that the best practices are adopted and implemented wherever possible.
Supermax has ensured that all of Bursa Malaysia's listing requirements are duly complied with such as timely reporting of quarterly results and other announcements. Supermax also regularly engages with stakeholders including analysts, fund managers, investors and other shareholders wherever possible via various means and platforms from investor conferences and road shows to over the phone providing comprehensive updates.
BeSt praCtiCeS in the Community
Supermax believes in giving back to the community and have over the years donated generously in times of need. They include the donation of gloves during the devastating Katrina and Indian Ocean Tsunami natural disasters, also on a smaller scale albeit more regular basis to dialysis centre and St John Ambulance as well as donations in cash and kind to various places of worship and animal We also believe in helping our youths achieve their academic dreams and have, in collaboration with the Malaysian Rubber Export Promotion Council (MREPC) provided scholarships to needy students over the past 3 years.
The Supermax Foundation has also been set up to formalize and facilitate the Group's CSR efforts, especially in sponsoring students from lower income SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Audit Committee Report
MeMbers of Audit CoMMittee
Mr Gong Wooi teik, felix
Chairman of Committee, Independent Non-Executive Director encik rashid bin bakar
Member of Committee, Independent Non-Executive Director encik shamsudin @ samad bin Kassim
Member of Committee, Independent Non-Executive Director terMs of referenCe of Audit CoMMittee
The Board constitutes and establishes an audit committee with authority, responsibilities and specific duties as described (1) The Audit Committee must be composed of no fewer than 3 non-executive directors, with a majority of them being independent directors; (2) All the Audit Committee members must be financially literate, with at least one member:- (i) must be a member of the Malaysian Institute of Accountants; or (ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years' working experience (a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or (b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or (iii) fulfils such other requirements as prescribed or approved by the Exchange; (3) No alternate director shall be appointed as a member of the Audit Committee; and (4) The members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent Director. The Chairman of the Audit Committee should engage on a continuous basis with senior management, the head of internal audit and the external auditors in order to be kept informed of matters affecting the company.
(5) All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. The Board must review the term of office and performance of the Audit Committee and each of its members at least once every 3 years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference.
duties And responsibilities of the Audit CoMMittee
The Audit Committee shall review and report the same to the Board on the following key matters:- (i) To review the appointment, resignation, conduct and audit plans of the Internal and External Auditors; (ii) To review the assistance given by the employees of the Company to the external auditors and the internal auditors; (iii) To review the quarterly results and year end financial statements, prior to the approval by the Board; ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Audit Committee Report (continued)
(iv) To review any related party transaction and conflict of interest situations that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity; and (v) To oversee the Company's internal control structure to ensure operational effectiveness and efficiency, reduce risk of inaccurate financial reporting, protect the Company's assets from misappropriation and encourage legal and riGhts And Authority of the Audit CoMMittee
In carrying out its duties and responsibilities, the Audit Committee will:- (1) have the authority to investigate any matter within its terms of reference; (2) have the resources which are required to perform its duties; (3) have full and unrestricted access to any information pertaining to the Company; (4) have direct communication channels with the external auditors and person(s) carrying out the internal audit function (5) be able to obtain independent professional or other advice and to invite outsiders with relevant experience and expertise to attend the Audit Committee meetings (if required) and to brief the Audit Committee; and (6) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.
AttendAnCe of MeetinGs
Five (5) meetings were held during the financial year. The records of attendance are as follows: - no. of Meetings Attended
Gong Wooi Teik, Felix Shamsudin @ Samad Bin Kassim suMMAry of ACtivities
The Audit Committee has discharged its duties as set out in its Terms of Reference. During the financial year, the activities undertaken by the Audit Committee included the following : 1. Reviewed and recommended the quarterly financial results for Board approval; 2. Reviewed and recommended the audited financial statements for Board approval; 3. Considered the matters relating to corporate governance in compliance with the revamped Listing Requirement of Bursa Malaysia Securities Berhad and the Malaysian Code on Corporate Governance; 4. Review and deliberation of significant risk areas, internal control and financial matters coming to the attention of the external auditors in the course of their work.
internAl Audit funCtion
The Board considers the audit function to be an integral and important part of the governance process. The Internal Audit Department carried out the internal audit function for Supermax Group during the financial year under review. The internal auditors conduct reviews on systems of controls and the effectiveness of the processes which management has in place to identify, manage and control proper conduct of business within the Group.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Corporate Governance Statement
The Board of Directors recognises the importance of practicing the highest standards of Corporate Governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders' value and the financial performance of Supermax Corporation Berhad.
With this in mind, measures and efforts have and shall be taken to ensure as far as practicable the adoption and implementation of the Principles and Best Practices set out in the Malaysian Code on Corporate Governance ("the Code") and in the Main Market Listing Requirement ("MMLR") of the Bursa Malaysia Securities Berhad ("Bursa Securities").
Set out below is a description of how the Group has applied the Principles of the Code and how the Board of Directors has complied with the Best Practices set out in the Code throughout the financial year ended 31 December 2013.
seCtion A – the boArd of direCtors
size And CoMposition of the boArd
An experienced and effective Board consisting of members with a wide range of skills and experience from financial and business backgrounds leads and controls the Group. The Directors bring depth and diverse expertise to the leadership of the challenging and highly competitive glove business.
The Board continues to give close consideration to its size, composition and spread of experience and expertise. No individual or group of individuals dominates the Board's decision making and the number of Directors reflects fairly the investment of the shareholders. This is to ensure that issues of strategy, performance and resources are fully discussed and examined to take into account long-term interest of stakeholders of the Company.
The Company continues to be led by the same board members with professional and business experience.
The Board comprises the Executive Chairman and Group Managing Director, one Executive Director and five Non- Executive Directors, four of whom are Independent Directors.
The Board has also identified Dato' Ting Heng Peng as the senior independent non-executive director to whom concerns if any may be conveyed.
The appointment of Datin Seri Tan Bee Geok, Cheryl in the year 2000 reflects that the Board recognises the value of a woman member of the Board and was an initial step taken by the Board towards achieving a more gender diversified The profile of each of the Member of the Board is as presented on pages 7 to 11 of this annual report.
duties And responsibilities of the boArd
The responsibilities of the Board of Directors of the Company are as follows:- • Reviewing and adopting a strategic plan for the Company which will enhance the future growth of the Company; • Overseeing the conduct of the Company's business to evaluate whether the business is being properly managed; • Identifying principal risks of the business and ensure the implementation of appropriate systems to manage these • Reviewing the adequacy and the integrity of the Company's internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Corporate Governance Statement (continued)
boArd bAlAnCe And independenCe of direCtors
The Board members have a wealth of experience as well as skills and knowledge, which are relevant to the Group. Although the Chairman is jointly responsible for the Group's strategic business direction, the roles of the Chairman and Group Managing Director are separate with clearly defined responsibilities to ensure the balance of power and authority. The Chairman is primarily responsible for the orderly conduct and working of the Board whilst the Group Managing Director is responsible for the overall operation of the business and the implementation of Board strategy and policy.
All the Independent Non-Executive Directors are independent of Management and are free from any business or other relationship that could materially interfere with the exercise of their independent judgment. They have the calibre to ensure that the strategies proposed by the Management are fully deliberated and examined in the long-term interest of the Group, as well as shareholders, employees and customers.
The Nomination Committee and the Board have upon their annual assessment, concluded that each of the 4 Independent Non-Executive Directors continues to demonstrate conduct and behaviour that are essential indicators of independence, and that each of them continues to fulfill the definition of independence as set out in the Bursa Malaysia Main Market One of the recommendations of the Malaysian Code of Corporate Governance (MCCG) 2012 states that the tenure of an independent director should not exceed a cumulative term of 9 years. However the Nomination Committee and Board have determined at the annual assessment carried out that Dato' Ting Heng Peng, Gong Wooi Teik, Felix, Shamsudin @ Samad bin Kassim, and Rashid bin Bakar, remain objective and independent in expressing their views and in participating in deliberations and decision making of the Board and Board Committees. The length of their service on the Board does not in any way interfere with their exercise of independent judgement and ability to act in the best interest of Supermax Corporation Berhad.
The Committee also finds that each of the directors possess and continue to gain and develop the necessary experience and core competencies to discharge their duties as directors individually, as a Board and within the relevant sub- committees in which they serve. They have also exhibited the ability to devote sufficient time to carry out their duties and responsibilities and to further their knowledge and skills required.
direCtors' Code of ethiCs
The Directors observe a code of ethics in accordance with the code of conduct expected of Directors in the Company Directors' Code of Ethics established by the Companies Commission of Malaysia.
boArd MeetinGs And supply of inforMAtion to the boArd
During the financial year under review, five (5) board meetings were held. Details of the Directors' attendance at these meetings are as follows:- total no. of Meetings
Dato' Seri Thai Kim Sim Datin Seri Tan Bee Geok Dato' Dr. Tan Geok Swee @ Tan Chin Huat Dato' Ting Heng Peng Gong Wooi Teik, Felix Shamsudin @ Samad bin Kassim SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Corporate Governance Statement (continued)
The Group Managing Director of the Company undertakes the responsibility to ensure that the agenda and full set of Board papers (including qualitative information of the Company) for consideration are distributed well before each meeting of the Board to ensure that the Directors have sufficient time to study them and be properly prepared for discussion and decision making. Minutes of Board meetings are maintained.
All Directors of the Company whether in full Board or in their individual capacity, have access to all information within the Company and to seek independent professional advice where necessary and in appropriate circumstances, in furtherance of their duties.
The Directors also have access to the advice and services of the Company Secretary who is responsible for ensuring the Board meeting procedures are followed and that applicable rules and regulations are complied with.
neW AppointMent And re-eleCtion of direCtors
The Nomination Committee established by the Board is responsible for assessing the nominee(s) for directorship and Board Committee membership and thereupon submitting their recommendation to the Board for decisions.
The selection process involves the assessment of essential skill sets including relevant industry experience and experience in developing corporate growth strategies, knowledge on legal and regulatory requirements, ability to read, analyse and interpret financial statements and also working knowledge and experience in business development.
Each Director must retire from office at least once in every three years and can offer himself/herself for re-election. Directors who are appointed by the Board are subject to election by the shareholders at the next Annual General Meeting ("AGM") held following their appointment.
The Nomination Committee consists of the following:- : Dato' Ting Heng Peng (Independent Non-Executive : Dato' Dr. Tan Geok Swee @ Tan Chin Huat (Non-Executive Encik Shamsudin @ Samad Bin Kassim (Independent Non–Executive The duties and responsibilities of the Nomination Committee are as follows: - a) To recommend to the Board of Directors, candidates for directorships to be filled by the Shareholders or the Board of b) To consider, in making its recommendations, candidates for directorships proposed by the Group Managing Director and, within the bounds of practicability, by any other senior executive or any Director or Shareholder; c) To recommend to the Board, Directors to fill the seats on the Board committees; d) To assist the Board to annually review its required mix of skills and experience and other qualities, including core competencies, which Non-Executive Directors should bring to the Board; e) To assess the effectiveness of the Board of Directors as a whole and each individual Director/Committee of the Board; f) To consider and examine such other matters as the Nomination Committee considers as appropriate.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Corporate Governance Statement (continued)
All the Directors of the Company have attended the Mandatory Accredition Programme (MAP) prescribed by Bursa Securities for directors of public listed companies. The Directors will also attend trainings to keep abreast with developments in relation to the capital markets, relevant changes in laws and regulations and/or the business environment from time to In 2013, the Directors attended the following seminars and briefings conducted by the regulatory authorities and members of professional bodies, in order to stay abreast with the latest developments in the industry and to better enable them to fulfill their responsibilities:- Encik Shamsudin @ Samad Bin Kassim attended the following programs: 1) The Development in ASEAN Automotive Industry: Opportunities & Challenges – presented by Rt. Hon. Dr. Surin Pitsuwan at Ingress Corporation Bhd's Directors & Senior Management Seminar held in Bangkok, Thailand 2) Sustainability Training for Directors and Practitioners; by Bursa Malaysia 3) Nominating Committee Programme; by ICLIF and Bursa Malaysia 4) On-going Business Improvement; by Finet Associates Sdn Bhd 5) Audit Committee And Chief Audit Executive Forum: Enhancing Internal Audit's Value; by Institute of Internal Audit Mr Gong Wooi Teik, Felix attended the following programs: 1) Asean Audit Regulators Inspection Forum by Securities Commission 2) Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers; by Bursa Malaysia 3) National Tax Conference 2013; by Chartered Tax Institute of Malaysia 4) Budget Seminar 2013; by Inland Revenue Board Malaysia Dato' Ting Heng Peng attended the following programs: 1) Portfolio Management Strategies; by CHK Consultancy Sdn Bhd 2) Risk Management and Internal Control Workshop for Audit Committee Members; by Bursa Malaysia seCtion b – direCtors' reMunerAtion
The Remuneration Committee consists of the following:- : Encik Rashid Bin Bakar (Independent Non-Executive : Dato' Ting Heng Peng (Independent Non-Executive Datin Seri Tan Bee Geok, Cheryl (Executive SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Corporate Governance Statement (continued)
The duties and responsibilities of the Remuneration Committee are as follows:- a) To review and assess the remuneration packages of the Executive Directors in all forms, with or without other independent professional advice or other outside advice; b) To ensure the levels of remuneration be sufficiently attractive and be able to retain Directors needed to run the Company successfully; c) To structure the component parts of remuneration so as to link rewards to corporate and individual performance and to assess the needs of the Company for talent at Board level at a particular time; and d) To consider and examine such other matters as the Remuneration Committee considers appropriate.
The remuneration of the non-executive directors is determined in accordance with their experience and level of responsibilities assumed. Non-executive directors are remunerated in the form of directors' fees as approved by the The aggregate Directors' remuneration paid or payable or otherwise made available to all Directors of the company during the financial year are as follows: salaries & other emoluments
Benefit in kind
Executive Directors Non-executive Directors The number of Directors of the Company whose income from the Company falling within the following bands are: RM 1,000,000 and above RM 50,001 – RM100,000 seCtion C: shAreholders
diAloGue With investors And shAreholders
The Annual General Meeting (AGM) is the principal forum for dialogue with shareholders. At each AGM, the Board presents the progress and performance of the business and shareholders are encouraged to participate in the questions and answers session.
seCtion d – ACCountAbility And Audit
direCtors' responsibility stAteMents
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year.
The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting standards have been followed.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Corporate Governance Statement (continued)
The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.
The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the preparation of the annual audited financial statements and ensure that the accounts and other financial reports of the Company are prepared in accordance with Approved Accounting Standards and present a balanced and comprehensive assessment of the Company's position and prospects, to all the shareholders.
The Company's Annual Report and quarterly announcements of results give an updated financial performance of the The Audit Committee comprises three Independent Non-Executive Directors with Mr Gong Wooi Teik, Felix as the Chairman of the Committee. The composition and Terms of Reference of the Audit Committee are also provided in this The Audit Committee has explicit authority from the Board to investigate any matter and is given full responsibility within its Terms of Reference and necessary resources which it need to do so and full access to information. The Audit Committee also meets twice a year with the External Auditors without the presence of the Executive Board members.
The Statement of Risk Management and Internal Control furnished on page 27 to 28 of the annual report provides an overview of the internal controls within the Group.
The Company set up its Internal Audit Department on 8 December 2003. Internal auditors adopt a risk – based approach in the planning and conduct of its audits and focuses on the key areas of business risk.
The main responsibilities of the Internal Auditors are to:- a) Assist in reviewing the adequacy, integrity and effectiveness of the Company's internal control system for the Board to make an accurate Statement on Internal Control in the annual report; b) Support the Audit Committee in evaluating the effectives of the existing internal control system, identify future requirements and co-develop a prioritised action plan to further enhance the internal control system; and c) Perform a risk assessment of the Company to identify the business processes within the Company that internal audit should focus on.
relAtionship With externAl Auditors
The Board ensures that there is transparent arrangement for the achievement of objectives and maintenance of professional relationship with External Auditors.
other inforMAtion reQuired by the MMlr of bursA seCurities
During the financial year ended 31 December 2013, the Company carried out one (1) share buy-back transaction which amounted to 1,000 ordinary shares of RM0.50 each purchased from the open market. The 1,000 ordinary shares were acquired for a total consideration of RM2,363.70 on 29 August 2013 at a purchase price of RM2.32 per share.
As at 31 December 2013, the Company has 1,003,000 ordinary shares of RM0.50 each which are listed and quoted on the Main Market of Bursa Securities, retained as treasury shares.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Corporate Governance Statement (continued)
depository reCeipt ("dr") proGrAMMe
During the financial year, the Company was involved in a Sponsored Level-1 American Depositary Receipt ("ADR") Program, which is a program to facilitate the trading of Supermax's shares by investors in the United States of America ("the US"), has been declared effective by the Securities and Exchange Commission of the US on 20 December 2010.
The Bank of New York Mellon has been appointed as the depository bank for the ADR Program with Malayan Banking Berhad as the custodian of Supermax's shares in Malaysia for the ADR. The total number of shares that can be purchased under the ADR shall not exceed 5% of the total issued and paid-up capital of Supermax at any point in time. As at 15 March 2014, the total number of Supermax shares issued was 680,154,880.
As at 31 December 2013, there are no depository receipts issued against the Company's issued and paid-up capital.
The ADR program is anticipated to enhance the visibility of the Company in the US, as well as, to increase the awareness on the Company among US brokers, analysts and investors as the ADR program provides an avenue for US investors to access to Supermax's shares, thereby allowing the Company to broaden its' foreign shareholders base in addition to increasing its' shareholders diversity.
iMposition of sAnCtions / penAlties
There were no sanctions and/ or penalties imposed on the Company or its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year.
There is no non-audit fee paid by the Company to the External Auditors for the financial year.
vAriAtion in results for profit estiMAte, foreCAst or projeCtion
The Company did not make any release on the profit estimate, forecast or projections for the financial year. The variance between the audited results (net profit after taxation) and the unaudited results announced to Bursa Securities is less than During the year, there were no profit guarantees given by the Company.
During the year under review, the Company and its subsidiaries did not enter into any material contracts involving Directors' and major shareholders' interest.
ContrACt relAtinG to loAns
There were no contracts relating to loans entered into by the Company involving Directors' and major shareholders' interest.
relAted pArty trAnsACtions
A list of the significant related party transactions between the Company and its subsidiaries, and between the Group and other related parties including relevant Key Management personnel for the financial year ended 31 December 2013 is set out on pages 80 to 81 of the Annual Report.
revAluAtion of lAnded properties
The Company does not have a revaluation policy on landed properties.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Statement On Risk Management And Internal Control
The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and internal control to safeguard the shareholders' investments and the companies' assets. The Board of Directors of Supermax Corporaton Bhd is committed to maintain a sound system of risk management and internal control within the Group. Set out below is the Board of Directors' "Statement on Risk Management and Internal Control" which has been prepared in accordance with the Guidance for Directors of Public Listed Companies on the Statement on Risk Management and Internal Control.
responsibility of the boArd
The Board of Directors ("Board") is responsible for the adequacy and effectiveness of the Supermax Group's ("the Group") risk management and internal control system. The Board ensures that the system manages the Group's key areas of risk within an acceptable risk profile to increase the likelihood that the Group's policies and business objectives will be achieved. The Board continually reviews the system to ensure it provides a reasonable but not absolute assurance against material misstatement of management and financial information and records or against financial losses or fraud.
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group and this process includes enhancing the risk management and internal control system as and when there are changes to the business environment or regulatory guidelines. Management assists the Board in the implementation of the Board's policies and procedures on risk and control by identifying and assessing the risks faced, and in the design, operation and monitoring of suitable internal controls to mitigate and control these risks.
The Board has received assurance from the Chief Executive Officer and the Chief Financial Officer that the Group's risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group.
The Board is of the view that the risk management and internal control system in place for the year under review and up to the date of issuance of the financial statements is adequate and effective to safeguard the shareholders' investment, the interests of customers, regulators and employees, and the Group's assets.
risK MAnAGeMent frAMeWorK
The Board of Directors is aware that a sound system of internal control should be embedded in the operations of the Group and form part of its culture. This system should be capable of responding quickly to evolving risks to the business arising from factors within the Group and changes in the business environment. It should include procedures for reporting immediately to appropriate levels of management any significant control failings or weaknesses that are identified together with details of corrective action being taken.
The Group has in place an on–going process for identifying, monitoring and managing significant risks that may affect the achievement of business objectives. This is done through our Quality Assurance Department and Operational Internal Audit Management is continuously reviewing potential risk areas through discussions held at monthly staff meetings. Where a particular risk is identified, it will be monitored with counter measures taken to mitigate the risk wherever possible.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Statement On Risk Management And Internal Control (continued)
other Key eleMents of risK MAnAGeMent And internAl Control
Apart from the above, the other key elements of the Group's internal control systems are as follows: - a) Clearly documented internal policies and procedures including those that are ISO 9001:2008, ISO 13485:2003 and ISO 13485:CMDCAS compliant are in place and regularly updated to reflect changing risk or resolve operational deficiencies.
b) Regular and comprehensive information provided to Management for monitoring of performance against strategic plan, covering all key financial and operational indicators. c) On quarterly basis, Managing Director reviews with the Board on all issues covering strategy and performance of the The overall system of internal control was satisfactory and has not resulted in any material losses, contingencies or uncertainties that would require public disclosure.
internAl revieW And Audit
The in–house Internal Audit Department was established in 2003. The Internal Auditors review the internal controls on the key activities of the Group on the basis of a detailed annual internal audit plan. The internal audit functions are carried out to minimise the Company's exposure to risk and problems. The Internal Auditors will continue to come up with proactive measures or corrective actions to manage and mitigate potential business and operational risks noted in the course of carrying out their duties. In the event of any unavoidable cases, the Internal Auditors will do a thorough review and resolve the issues immediately.
revieW of the stAteMent by externAl Auditors
The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report of the Company for the year ended 31 December 2013 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system.
Director's Report Consolidated Statement of Financial Position Statements of Comprehensive Income Statements of Changes In Equity Statements of Cash Flow Notes to the Financial Statements Supplementary Information on the Disclosure of Realised and Unrealised Profits or Losses Statement by Directors Statutory Declaration Independent Auditors' Report ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31st December 2013.
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There have been no significant changes to the nature of these principal activities during the financial year.
Net profit for the financial year 118,990,407 14,308,150 Attributable to:- Owners of the parent 119,715,972 14,308,150 Non-controlling interest 118,990,407 14,308,150 Dividends paid by the Company since the end of the previous financial year were as follows:- In respect of the financial year ended 31st December 2012:-
Interim dividend of 4% per ordinary share of RM0.50, tax exempt, paid on 18th January 2013 Final dividend of 6% per ordinary share of RM0.50, tax exempt, paid on 18th June 2013 In respect of the financial year ended 31st December 2013:-
Interim dividend of 4% per ordinary share of RM0.50, tax exempt, paid on 21st January 2014 The directors proposed a single tier final dividend of 6% per ordinary share of RM0.50 amounting to RM20,374,556/- in respect of the current financial year. The proposed dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting and has not been included as a liability in the financial statements.
reserves And provisions
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.
bAd And doubtful debts
Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent.
Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Directors' Report (continued)
At the date of this report, the directors are not aware of any circumstances have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
ContinGent And other liAbilities
At the date of this report, there does not exist:- (i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person, or (ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financial year.
In the opinion of the directors, no contingent liabilities or other liabilities of the Group and of the Company have become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due, other than as disclosed in Note 30 to the financial statements.
ChAnGe of CirCuMstAnCes
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company that would render any amount stated in the financial statements iteMs of An unusuAl nAture
The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
issue of shAres And debentures
During the financial year, the Company did not issue any shares or debentures.
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists solely of the acquisition costs of treasury shares.
The Company acquired 1,000 shares in the Company through purchases on the Bursa Malaysia Securities Berhad during the financial year. The total amount paid to acquire the shares was RM2,364/- and this was presented as a component within shareholders' equity.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.
Details of the significant events are disclosed in Note 37 to the financial statements.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Directors' Report (continued)
The directors in office since the date of the last report are:- Dato' Seri Thai Kim Sim Datin Seri Tan Bee Geok Dato' Ting Heng Peng Dato' Dr. Tan Geok Swee @ Tan Chin Huat Shamsudin @ Samad Bin Kassim According to the Register of Directors' Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in Malaysia, the interests of those directors who held office at the end of the financial year in shares and options in the Company during the financial year ended 31st December 2013 are as follows:- Number of ordinary shares of RM0.50 each
Allotted/
1.1.2013
Dato' Seri Thai Kim Sim Datin Seri Tan Bee Geok Dato' Dr. Tan Geok Swee @ Tan Chin Huat Dato' Ting Heng Peng Shamsudin @ Samad Bin Kassim Rashid Bin Bakar Dato' Seri Thai Kim Sim* Datin Seri Tan Bee Geok* * These are their spouse's interest in the ordinary shares of the Company which shall be treated as their interest in the ordinary shares of the Company pursuant to Section 134(12)(c) of the Companies Act, 1965 in Malaysia.
By virtue of their interests in shares of the Company, Dato' Seri Thai Kim Sim and Datin Seri Tan Bee Geok are deemed to have an interest in shares of all the subsidiary companies to the extent the Company has an interest in the subsidiary ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Directors' Report (continued)
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.
Neither during nor at the end of the financial year was the Company a party to any arrangement whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
The auditors, Messrs Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
On behalf of the Board, dAto' seri thAi KiM siM
dAtin seri tAn bee GeoK
Date: 28th April 2014 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Consolidated Statement Of Financial Position
as at 31st December 2013 Property, plant and equipment 522,315,419 446,847,853 Investment property Prepaid land lease payments Investment in subsidiaries - 183,894,064 183,894,064 Investment in associates 214,904,230 209,874,119 18,994,696 19,829,489 Goodwill on consolidation 28,715,854 28,715,854 Deferred tax assets total non-current assets
773,092,146 690,462,782 202,888,760 203,723,553 10 192,660,713 233,786,632 Trade receivables 11 129,167,383 100,822,162 Other receivables Other current assets Amount owing by subsidiaries - 256,822,067 291,557,693 Amount owing by associates 92,975,862 101,078,141 Cash and bank balances 15 167,129,834 122,863,481 total current assets
596,642,376 563,616,568 258,021,413 292,752,333 totAl Assets
1,369,734,522 1,254,079,350 460,910,173 496,475,886 eQuity And liAbilities
Equity attributable to owners of the parent
16 340,077,440 340,077,440 340,077,440 340,077,440 18 558,572,207 493,954,115 14,556,569 47,791,465 898,649,647 834,031,555 354,634,009 387,868,905 Non-controlling interest totAl eQuity
897,648,487 833,780,118 354,634,009 387,868,905 Loans and borrowings 19 127,021,956 115,187,503 55,709,000 79,505,900 Deferred tax liabilities 24,200,749 19,993,037 Total non-current liabilities
151,222,705 135,180,540 55,709,000 79,505,900 59,372,922 76,930,128 41,626,755 40,993,394 Amount owing to a subsidiary Loans and borrowings 19 195,762,576 162,922,784 29,493,000 21,408,100 Dividend payable Total current liabilities
320,863,330 285,118,692 50,567,164 29,101,081 Total liabilities
472,086,035 420,299,232 106,276,164 108,606,981 totAl eQuity And liAbilities
1,369,734,522 1,254,079,350 460,910,173 496,475,886 The accompanying notes form an integral part of these financial statements.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Statements Of Comprehensive Income
for the financial year ended 31st December 2013 23 1,048,150,699 997,374,339 21,000,000 Other operating income Changes in inventories in finished goods and work in progress (48,949,937) (106,319,855) (681,104,009) (605,399,316) Directors' remuneration 24 (13,411,388) (7,132,082) 25 (71,104,764) (54,598,882) Depreciation and amortisation of property, plant and equipment (26,614,669) (24,279,234) Depreciation of investment property Amortisation of prepaid lease payments on Other operating expenses 25 (78,073,416) (85,390,292) (6,259,181) (1,133,146) (7,632,203) (8,746,244) Share in profits of associates 16,780,248 23,374,792 Profit before taxation
148,157,017 137,305,588 14,308,150 27 (29,166,610) (15,893,444) Net profit for the financial year 118,990,407 121,412,144 14,308,150 other comprehensive (loss)/ income,
net of tax:-
Foreign currency translation
(7,578,992) (42,848,080) (7,578,992) (42,848,080) total comprehensive income
for the financial year
111,411,415 78,564,064 14,308,150 Profit attributable to:-
Owners of the parent 119,715,972 121,717,800 14,308,150 Non-controlling interest 118,990,407 121,412,144 14,308,150 Total comprehensive income attributable to:-
Owners of the parent 112,161,138 78,867,096 14,308,150 Non-controlling interest 111,411,415 78,564,064 14,308,150 Earnings per ordinary share attributable to
owners of the parent
Basic (sen per share) Diluted (sen per share) The accompanying notes form an integral part of these financial statements.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Statements Of Changes In Equity
for the financial year ended 31st December 2013 Total Equity
833,780,118 111,411,415 Total Equity
- - (11,885,189) - - (47,540,682) - olling est
(251,437) (749,723) contr Inter
49,832,669 14,308,150 (93,780,955) (11,885,189) 834,031,555 112,161,138 Retained Pr
retained Pr
522,503,225 121,717,800 538,554,881 119,715,972 - - (93,780,955) - (11,885,189) - - (47,540,682) - translation Reserve
- - (42,850,704) Attributable to Owners of the Par Non-distributable
Non-distributable shar emium rM
Attributable to Owners of the Par
e Capital
Issued Shar
Balance at 1st January 2012 total compr Transactions with owners:- Incorporation of new subsidiaries Bonus shar Dividends Pur
Balance at 31st December 2012 total compr Transactions with owners:- Dividends 29 Pur
Balance at 31st December 2013
Balance at 1st January 2012 total compr Transaction with owners:- Bonus shar Dividends Pur
Balance at 31st December 2012 total compr Transactions with owners:- Dividends Pur
Balance at 31st December 2013
The accompanying notes form an integral part of these financial ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Statements Of Cash Flows
for the financial year ended 31st December 2013 CAsh floWs froM operAtinG ACtivities:-
Profit before taxation 148,157,017 137,305,588 14,308,150 Adjustments for:- Deposit written off Depreciation and amortisation expenses 26,691,869 24,356,434 Dividend income Impairment losses on:- - trade receivables - cost of investment in associates - amount owing by associates Net (gain)/loss on unrealised foreign exchange Share in profits of associates (16,780,248) (23,374,792) 164,691,598 154,850,085 (5,669,817) Changes in working capital:- 41,125,919 (10,646,981) Trade receivables (22,207,372) (3,549,039) Other receivables Amount owing by associates 7,535,917 (10,862,299) (17,843,869) 16,965,332 464,410 13,925,312 165,405,328 166,705,404 (5,664,599) (22,202,315) (3,395,784) Net Operating Cash Flows
143,204,759 163,587,311 (5,664,599) CAsh floWs froM investinG ACtivities:-
Advances to subsidiaries - 34,535,626 17,304,961 Dividend received Investment in subsidiaries Purchase of property, plant and equipment (101,632,018) (69,151,524) Net Investing Cash Flows
(101,632,018) (69,151,524) 55,535,626 17,081,525 CAsh floWs froM finAnCinG ACtivities:-
(33,957,644) (11,885,189) (33,957,644) (11,885,189) (7,632,203) (8,746,244) Drawdown/(repayment) of hire purchase payables, net Repayment of industrial hire purchase, net (7,246,507) (3,180,765) Drawdown/(repayment) of term loans, net 33,425,420 (27,451,585) (15,899,240) (20,089,600) Drawdown/(repayment) of short term borrowings, net 14,661,248 (22,098,302) Purchase of treasury shares (2,364) (2,041,204) (2,364) (2,041,204) Net Financing Cash Flows
(735,395) (75,897,454) (49,859,248) (34,015,993) net ChAnGe in CAsh And CAsh eQuivAlents
40,837,346 18,538,333 11,779 (13,107,973) effeCt of foreiGn exChAnGe rAte ChAnGes
CAsh And CAsh eQuivAlents At the
beGinninG of the finAnCiAl yeAr
122,863,481 104,483,446 629,368 13,737,278 CAsh And CAsh eQuivAlents At the
end of the finAnCiAl yeAr
167,129,834 122,863,481 AnAlysis of CAsh And CAsh eQuivAlents:-
Cash and bank balances 167,129,834 122,863,481 The accompanying notes form an integral part of these financial statements.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements
1. GENERAL INFORMATION
The Company is principally an investment holding company. The subsidiaries are principally involved in the manufacturing and sales of latex gloves. There have been no significant changes to the nature of these principal activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of the Bursa Malaysia Securities Berhad.
The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia.
The principal place of business of the Company is located at Lot 38, Putra Industrial Park, Bukit Rahman Putra, 47000 Sungai Buloh, Selangor Darul Ehsan, Malaysia.
The financial statements are expressed in Ringgit Malaysia.
The financial statements of the Group and of the Company have been authorised for issue by the Board of Directors in accordance with a resolution of the directors on 28th April 2014.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards ("MFRSs"), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost basis, except as disclosed in the significant accounting policies in Note 2.3 to the financial statements.
The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reporting period. It also requires directors to exercise their judgement in the process of applying the Group's and the Company's accounting policies. Although these estimates and judgement are based on the directors' best knowledge of current events and actions, actual results may differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.4 to the financial statements.
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int
(a) Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Int and
Amendments to iC int
The Group and the Company had adopted the following new and revised MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int that are mandatory for the current financial year:- Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Employee Benefits Separate Financial Statements Investments in Associates and Joint Ventures ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(a) Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Int and
Amendments to iC int (continued)
Amendments/Improvements to MFRSs First-time Adoption of Malaysian Financial Reporting Standards Financial Instruments: Disclosures Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Presentation of Financial Statements Property, Plant and Equipment Financial Instruments: Presentation Interim Financial Reporting Stripping Costs in the Production Phase of a Surface Mine Amendments to IC Int Members' Shares in Co-operative Entities & Similar Instruments The adoption of the above new and revised MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int do not have any effect on the financial statements of the Group and of the Company except for those as discussed below:- MFRS 10 Consolidated Financial Statements and MFRS 127 Separate Financial Statements (Revised)
MFRS 10 replaces the consolidation part of the former MFRS 127 Consolidated and Separate Financial Statements. The revised MFRS 127 will deal only with accounting for investment in subsidiaries, joint controlled entities and associates in the separate financial statements of an investor and require the entity to account for such investments either at cost, or in accordance with MFRS 139 Financial Instruments: Recognition and Measurement.
MFRS 10 brings about convergence between MFRS 127 and IC Int 12 Consolidation-Special Purpose Entities, which interprets the requirements of MFRS 10 in relation to special purpose entities. MFRS 10 introduces a new single control model to identify a parent-subsidiary relationship by specifying that "an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee". It provides guidance on situations when control is difficult to assess such as those involving potential voting rights, or in circumstances involving agency relationships, or where the investor has control over specific assets of the entity, or where the investee entity is designed in such a manner where voting rights are not the dominant factor in determining control.
The Group adopted MFRS 10 in the current financial year. This resulted in changes to the accounting policies as disclosed in Note 2.3(a) to the financial statements. The adoption of MFRS 10 has no significant impact to the financial statements of the Group.
MFRS 12 Disclosures of Interests in Other Entities
MFRS 12 is a single disclosure standard for interests in subsidiaries, jointly controlled entities, associates and unconsolidated structured entities. The disclosure requirements in this MFRS are aimed at providing standardised and comparable information that enable users of financial statements to evaluate the nature of, and risks associated with, the entity's interests in other entities, and the effects of those interests on its financial position, financial performance and cash flows. The requirements in MFRS 12 are more comprehensive than the previously existing disclosure requirements for subsidiaries. MFRS 12 disclosure are provided in Note 7.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(a) Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Int and
Amendments to iC int (continued)
MFRS 13 Fair Value Measurement
MFRS 13 defines fair value and sets out a framework for measuring fair value, and the disclosure requirements about fair value. This standard is intended to address the inconsistencies in the requirements for measuring fair value across different accounting standards. As defined in this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a result of the guidance in MFRS 13, the Group reassessed its policies for measuring fair values, in particular, its valuation inputs such as non-performance risk for fair values measurement of liabilities.
Application of MFRS 13 has not materially impacted the fair value measurements of the Group. MFRS 13 requires more extensive disclosures. Additional disclosures where required, are provided in the individual notes relating to the assets and liabilities whose fair values were determined.
As the financial assets and liabilities of the Group and of the Company are not carried at fair value by any valuation method, the fair value hierarchy analysis is not presented.
MFRS 119 Employee Benefits (Revised)
MFRS 119 (Revised) eliminates the corridor approach and recognise all actuarial gains and losses in other comprehensive income as they occur; to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset).
Amendments to MFRS 101 Presentation of Financial Statements
The amendments to MFRS 101 introduces a grouping of items presented in other comprehensive income. Items that will be reclassified to profit or loss at future point in time have to be presented separately from items that will not be reclassified.
These amendments also clarify the difference between voluntary additional comparative information and the minimum required comparative information. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The amendments clarify that the opening statement of financial position presented as a result of retrospective restatement or reclassification of items in financial statements does not have to be accompanied by comparative information in the related notes. As a result, the Group has not included comparative information in respect of the opening statement of financial position as at 1st January The amendments also introduce new terminology, whose use is not mandatory, for the statement of comprehensive income and income statement. Under the amendments, the ‘statement of comprehensive income' is renamed as the ‘statement of profit or loss and other comprehensive income'.
The above amendments affect presentation only and have no impact on the Group's financial position or MFRS 128 Investments in Associates and Joint Ventures (Revised)
MFRS 128 (Revised) incorporates the requirements for accounting for joint ventures into the same accounting standard as that for accounting for investments in associates, as the equity method was applicable for both investments in joint ventures and associates. However, the revised standard exempts the investor from applying equity accounting where the investment in the associate or joint venture is held indirectly via venture capital organisations or mutual funds, unit trusts and similar entities. In such cases, the entity shall measure the investment at fair value through profit or loss, in accordance with MFRS 139 Financial Instruments: Recognition and Measurement. ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(a) Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Int and
Amendments to iC int (continued)
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards
Amendments to MFRS 1 requires first-time adopters to apply the requirements MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 120 Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to MFRSs and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Entities may choose to apply the requirements of MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 120 to any government loans originated before the date of transition to MFRSs retrospectively provided that the information needed to do so had been obtained at the time of initially accounting for that loan. The exception would give the first-time adopters relief from retrospective measurement of government loans with a below-market rate of interest.
Amendments to MFRS 1 also clarifies that an entity that has applied MFRSs or IFRSs in a previous reporting period, but whose most recent previous annual financial statements did not contain an explicit and unreserved statement of compliance with MFRSs or IFRSs, has the option to apply this MFRS 1 or apply MFRSs retrospectively in accordance with MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors as if it had never stopped applying MFRSs or IFRSs.
Amendments to MFRS 7 Financial Instruments: Disclosures
Amendments to MFRS 7 addresses disclosures to include information that will enable users of an entity's financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set- off associated with the entity's recognised financial assets and recognised financial liabilities, on the entity's financial position.
Amendment to MFRS 116 Property, Plant and Equipment
Amendment to MFRS 116 clarifies that items such as spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.
Amendments to MFRS 10 Consolidated Financial Statements, MFRS 11 Joint Arrangements and
MFRS 12 Disclosure of Interests in Other Entities
Amendments to MFRS 10 clarifies that the date of initial application is the beginning of the annual reporting period for which this MFRS is applied for the first time. Consequently, an entity is not required to make adjustments to the previous accounting if the consolidation conclusion reached upon the application of MFRS 10 is the same as previous accounting or the entity had disposed of its interests in investees during a comparative period. When applying MFRS 10, these amendments also limit the requirement to present quantitative information required by Paragraph 28(f) of MFRS108 Accounting Policies, Changes in Accounting Estimates and Errors to the annual period immediately preceding the date of initial application. A similar relief is also provided in MFRS 11 and MFRS 12. Additionally, entities would no longer be required to provide disclosures for unconsolidated structure entities in periods prior to the first annual period that MFRS 12 is applied.
If, upon applying MFRS 10, an entity concludes that it shall consolidate an investee that was not previously consolidated and that control was obtained before the effective date of the revised versions of these standards issued by the Malaysian Accounting Standards Board in November 2011, these amendments also clarify that an entity can apply the earlier versions of MFRS 3 Business Combinations and MFRS 127.
These amendments are not expected to have any significant impact on the financial results and position of the Group and the Company.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(a) Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Int and
Amendments to iC int (continued)
Amendment to MFRS 132 Financial Instruments: Presentation
Amendment to MFRS 132 clarifies that income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction shall be accounted for in accordance with MFRS 112 Income Taxes.
Amendment to MFRS 134 Interim Financial Reporting
To be consistent with the requirements in MFRS 8 Operating Segments, the amendment to MFRS 134 clarifies that an entity shall disclose the total assets and liabilities for a particular reportable segment only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amount disclosed in the last annual financial statements for that reportable segment.
IC Int 20 Stripping Costs in the Production Phase of a Surface Mine
IC Int 20 applies to waste removal costs that are incurred in surface mining activity, during the production phase of the mine ("production stripping costs"). The interpretation sets out the criteria to be met for capitalising the production stripping costs as an asset and the initial and subsequent measurement requirements.
Amendment to IC Int 2 Members' Shares in Co-operative Entities and Similar Instruments
Amendment to IC Int 2 clarifies that distributions to holders of equity instruments are recognised directly in equity, gross of any income tax benefits.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(b) New MFRS, Amendments/Improvements to MFRSs and New IC Int that are issued, but not yet effective
and have not been early adopted
The Group and the Company have not adopted the following new MFRS, amendments/improvements to MFRSs and new IC Int that have been issued by the Malaysian Accounting Standards Board ("MASB") as at the date of authorisation of these financial statements but are not yet effective for the Group and the Effective for
financial periods
beginning on
Financial Instruments Amendments/Improvements to MFRSs First-time Adoption of Malaysian Financial Reporting Standards Share-based Payment Business Combinations Financial Instruments: Disclosures MFRS 9 is applied Operating Segments Financial Instruments Consolidated Financial Statements Disclosure of Interests in Other Entities Fair Value Measurement Property, Plant and Equipment Employee Benefits Related Party Disclosures Separate Financial Statements Financial Instruments: Presentation Impairment of Assets Intangible Assets Financial Instruments: Recognition and Measurement Financial Instruments: Recognition and Measurement MFRS 9 is applied Investment Property A brief discussion on the above significant new MFRS, amendments/improvements to MFRSs and new IC Int are summarised below. Due to the complexity of these new standards, the financial effects of their adoption are currently still being assessed by the Group and the Company.
MFRS 9 Financial Instruments
MFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.
This standard requires all financial assets to be classified based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial asset. Financial assets are to be initially measured at fair value. Subsequent to initial recognition, depending on the business model under which these assets are acquired, they will be measured at either fair value or at amortised cost.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(b) New MFRS, Amendments/Improvements to MFRSs and New IC Int that are issued, but not yet effective
and have not been early adopted (continued)
MFRS 9 Financial Instruments (continued)
In respect of the financial liabilities, the requirements are generally similar to the former MFRS 139. However, this standard requires that for financial liabilities designated as at fair value through profit or loss, changes in fair value attributable to the credit risk of that liability are to be presented in other comprehensive income, whereas the remaining amount of the change in fair value will be presented in the profit or loss.
MFRS 9 Financial Instruments (Hedge Accounting and amendments to MFRS 9, MFRS 7 and
The new hedge accounting model represents a substantial overhaul of hedge accounting that will enable entities to better reflect their risk management activities in their financial statements. The most significant improvements apply to those that hedge non-financial risk, and they are expected to be of particular interest to non-financial institutions. As a result of these changes, users of the financial statements will be provided with better information about risk management and about the effect of hedge accounting on the financial statements. The MFRS 9 hedge accounting model, if adopted, applies prospectively with limited exceptions.
As part of the Amendments, an entity is now allowed to change the accounting for liabilities that it has elected to measure at fair value, before applying any of the other requirements in MFRS 9. This change in accounting would mean that gains caused by a worsening in the entity's own credit risk on such liabilities are no longer recognised in profit or loss. The Amendments will facilitate earlier application of this long-awaited improvement to financial reporting.
The Amendments also remove the mandatory effective date from MFRS 9.
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards
Amendments to MFRS 1 relates to the IASB's Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clarifies that a first-time adopter is permitted but not required to apply a new or revised Standard that is not yet mandatory but is available for early application.
Amendments to MFRS 2 Share-based Payment
Amendments to MFRS 2 clarifies the definition of ‘vesting conditions' by separately defining ‘performance condition' and ‘service condition' to ensure consistent classification of conditions attached to a share-based Amendments to MFRS 3 Business Combinations
Amendments to MFRS 3 clarifies that when contingent consideration meets the definition of financial instrument, its classification as a liability or equity is determined by reference to MFRS 132 Financial Instruments: Presentation. It also clarifies that contingent consideration that is classified as an asset or a liability shall be subsequently measured at fair value at each reporting date and changes in fair value shall be recognised in profit or loss.
In addition, amendments to MFRS 3 clarifies that MFRS 3 excludes from its scope the accounting for the formation of all types of joint arrangements (as defined in MFRS 11 Joint Arrangements) in the financial statements of the joint arrangement itself.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(b) New MFRS, Amendments/Improvements to MFRSs and New IC Int that are issued, but not yet effective
and have not been early adopted (continued)
Amendments to MFRS 8 Operating Segments
Amendments to MFRS 8 requires an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments. This includes a brief description of the operating segments that have been aggregated and the economic indicators that have been assessed in determining that the aggregated operating segments share similar economic characteristics.
The Amendments also clarifies that an entity shall provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segment assets are reported regularly to the chief operating decision maker.
Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosure of Interests in
Other Entities and MFRS 127 Separate Financial Statements
Amendments to MFRS 10 introduces an exception to the principle that all subsidiaries shall be consolidated. The amendments define an investment entity and require a parent that is an investment entity to measure its investment in particular subsidiaries at fair value through profit or loss in accordance with MFRS 139 Financial Instruments: Recognition and Measurement instead of consolidating those subsidiaries in its consolidated financial statements. Consequently, new disclosure requirements related to investment entities are introduced in amendments to MFRS 12 and MFRS 127.
In addition, amendments to MFRS 127 also clarifies that if a parent is required, in accordance with paragraph 31 of MFRS 10, to measure its investment in a subsidiary at fair value through profit or loss in accordance with MFRS 139, it shall also account for its investment in that subsidiary in the same way in its separate Amendments to MFRS 13 Fair Value Measurement
Amendments to MFRS 13 relates to the IASB's Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clarifies that when IASB issued IFRS 13, it did not remove the practical ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, if the effect of discounting is immaterial.
The Amendments also clarifies that the scope of the portfolio exception of MFRS 13 includes all contracts accounted for within the scope of MFRS 139 Financial Instruments: Recognition and Measurement or MFRS 9 Financial Instruments, regardless of whether they meet the definition of financial assets or financial liabilities as defined in MFRS 132 Financial Instruments: Presentation.
Amendments to MFRS 116 Property, Plant and Equipment and MFRS 138 Intangible Assets
Amendments to MFRS 116 and MFRS 138 clarifies the accounting for the accumulated depreciation/ amortisation when an asset is revalued. It clarifies that: • the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset; and • the accumulated depreciation/amortisation is calculated as the difference between the gross carrying amount and the carrying amount of the asset after taking into account accumulated impairment losses.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(b) New MFRS, Amendments/Improvements to MFRSs and New IC Int that are issued, but not yet effective
and have not been early adopted (continued)
Amendments to MFRS 119 Employee Benefits
Amendments to MFRS 119 provides a practical expedient in accounting for contributions from employees or third parties to defined benefit plans.
If the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the related service is rendered, instead of attributing the contributions to the periods of service.
However, if the amount of the contributions is dependent on the number of years of service, an entity is required to attribute those contributions to periods of service using the same attribution method required by MFRS 119 for the gross benefit (i.e. either based on the plan's contribution formula or on a straight-line Amendments to MFRS 124 Related Party Disclosures
Amendments to MFRS 124 clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity.
Amendments to MFRS 132 Financial Instruments: Presentation
Amendments to MFRS 132 does not change the current offsetting model in MFRS 132. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off', that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counterparties in the normal course of business. The amendments clarify that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the MFRS 132 offsetting criteria.
Amendments to MFRS 136 Impairment of Assets
Amendments to MFRS 136 clarifies that disclosure of the recoverable amount (based on fair value less costs of disposal) of an asset or cash generating unit is required to be disclosed only when an impairment loss is recognised or reversed. In addition, there are new disclosure requirements about fair value measurement when impairment or reversal of impairment is recognised.
Amendments to MFRS 139 Financial Instruments: Recognition and Measurement
Amendments to MFRS 139 provides relief from discontinuing hedge accounting in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met. As a result of the amendments, continuation of hedge accounting is permitted if as a consequence of laws or regulations, the parties to hedging instrument agree to have one or more clearing counterparties replace their original counterparty and the changes to the terms arising from the novation are consistent with the terms that would have existed if the novated derivative were originally cleared with the central counterparty.
Amendments to MFRS 140 Investment Property
Amendments to MFRS 140 clarifies that the determination of whether an acquisition of investment property meets the definition of both a business combination as defined in MFRS 3 and investment property as defined in MFRS 140 requires the separate application of both Standards independently of each other.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 New and Revised MFRSs, Amendments/Improvements to MFRSs, New IC Interpretations ("IC Int") and
Amendments to iC int (continued)
(b) New MFRS, Amendments/Improvements to MFRSs and New IC Int that are issued, but not yet effective
and have not been early adopted (continued)
IC Int 21 Levies
IC Int 21 addresses the accounting for a liability to pay a government levy (other than income taxes and fine or other penalties that imposed for breaches of the legislation) if that liability is within the scope of MFRS 137 Provisions, Contingent Liabilities and Contingent Assets. This interpretation clarifies that an entity recognises a liability for a levy when the activity that triggers the payment of the levy, as identified by the relevant legislation, occurs. It also clarifies that a levy liability is recognised progressively only if the activity that triggers payment occurs over a period of time, in accordance with the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be recognised before the specific minimum threshold is reached.
2.3 Significant Accounting Policies
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements:- (a) basis of Consolidation
Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The Group adopted MFRS 10, Consolidated Financial Statements in the current financial year. This resulted in changes to the following policies: • Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In the previous financial years, control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
• Potential voting rights are considered when assessing control only when such rights are substantive. In the previous financial years, potential voting rights are considered when assessing control when such rights are presently exercisable.
• The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee's return. In the previous financial years, the Group did not consider de facto power in its assessment of control.
Investments in subsidiaries are measured in the Company's statement of financial position at cost less any impairment losses, unless the investment is held for sale or distribution. The cost of investments includes transactions costs.
The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.
(ii) Accounting for Business Combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.
From 1st January 2011, the Group has applied MFRS 3 Business Combination (Revised) in accounting for business combinations. The change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the standard and does not have impact on earnings per SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(a) basis of Consolidation (continued)
(ii) Accounting for Business Combinations (Continued)
For acquisition on or after 1st January 2011, the Group measures goodwill at the acquisition date as:- • The fair value of the consideration transferred; plus • The recognised amount of any non-controlling interest in the acquiree; plus • If the business combination is achieved in stages, the fair value of the existing equity interest in the • The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit For acquisition between 1st January 2006 and 1st January 2011, goodwill represents the excess of the cost of the acquisition over the Group's interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition.
For acquisition prior to 1st January 2006, goodwill represents the excess of the cost of the acquisition over the Group's interest in fair values of the net identifiable assets and liabilities.
(iii) Accounting for Acquisition of non-controlling interest
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group's share of net assets before and after the change, and any consideration received or paid, is adjusted to or against the Group's reserve.
(iv) loss of Control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interest and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
In the previous financial years, if the Group retained any interest in the previous subsidiary, such interest was measured at the carrying amount at the date that control was lost and this carrying amount would be regarded as cost in initial measurement of the investment.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(a) basis of Consolidation (continued)
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.
Investment in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investments included transaction costs. The consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of the equity accounted associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
When the Group's share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
Investment in associates are measured at the Company's statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.
(vi) non-controlling interest
Non-controlling interest at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interest in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interest and the owners of the Company.
Since the beginning of the reporting period, the Group has applied MFRS 127 Consolidated and Separate Financial Statements (Revised) where losses applicable to the non-controlling interest in a subsidiary are allocated to the non-controlling interest even if doing so causes the non-controlling interest to have a deficit balance. This change in accounting policy is applied prospectively in accordance with the transitional provisions of the standard and does not have impact on earnings per share.
In the previous years, where losses applicable to the non-controlling interest exceed their interests in the equity of a subsidiary, the excess, and any further losses applicable to the non-controlling interest, were charged against the Group's interest except to the extent that the non-controlling interest had a binding obligation to, and was able to make additional investment to cover the losses. If the subsidiary subsequently reported profits, the Group's interest was allocated with all such profits until the non- controlling interest's share of losses previously absorbed by the Group had been recovered.
(vii) transactions eliminated on Consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra- group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity accounted associates are eliminated against the investment to the extent of the Group's interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(b) Goodwill on Consolidation
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group's cash-generating units that are expected to benefit from the synergies of the combination.
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group's cash-generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.
Other investments are stated at cost less impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(n).
On disposal of an investment, the differences between net disposal proceeds and its carrying amount is recognised in the profit or loss.
(d) property, plant and equipment and depreciation
All property, plant and equipment are initially stated at cost. After recognition as an asset, items of property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses, except for freehold land, factory building under construction and plant, machinery and equipment under installation. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(n).
Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(d) property, plant and equipment and depreciation (continued)
Freehold land is not depreciated as it has an infinite life. Factory building under construction and plant, machinery and equipment under installation are not depreciated until the assets are ready for their intended use. Depreciation is provided on a straight-line basis so as to write off the depreciable amount of the following assets over their estimated useful lives, as follows:- Long leasehold land Over the remaining lease period of 63 years Factory buildings Plant, machinery and equipment Moulds and tools Electrical fittings and factory equipment Office equipment, furniture and fittings The residual values, useful lives and depreciation are reviewed and adjusted as appropriate at the end of the reporting period.
The carrying amounts of items of property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising from the derecognition of items of property, plant and equipment, determined as the difference between the net disposal proceeds, if any, and the carrying amounts of the item, is included in profit or loss.
(e) investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses. Building is depreciated on a straight line basis to write off the cost over its estimated useful life at an annual rate of 2%.
Investment properties are derecognised on disposal when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal arising from derecognition, determined as the difference between any net disposal proceeds and the carrying amount of the investment properties, are recognised in profit or loss.
(f) leases and hire purchase
(i) finance leases and hire purchase
Assets financed by finance leases and hire purchase arrangements which transfer substantially all the risks and rewards of ownership to the Group are capitalised as property, plant and equipment, and the corresponding obligations are treated as liabilities. The assets so capitalised are depreciated in accordance with the accounting policy on property, plant and equipment.
Assets acquired by way of finance leases and hire purchase arrangements are stated at an amount equal to the lower of their fair values and the present value of minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(n) to the financial statements. The corresponding liability is included in the statement of financial position as borrowings. In calculating the present value of minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group's incremental borrowing rate is used. Property, plant and equipment acquired under finance leases and hire purchase are depreciated over the shorter of the estimated useful life of the asset and the lease term.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(f) leases and hire purchase (continued)
(i) finance leases and hire purchase (continued)
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised as an expense in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.
(ii) operating leases
An operating lease is a lease other than a finance lease. Lease payments under operating lease are recognised as an expense in the profit or loss on a straight line basis over the lease period.
(iii) leases of land and buildings
In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payment and is amortised on a straight-line basis over the lease term.
Inventories are stated at the lower of cost and net realisable value. The cost of inventories is measured based on first-in first-out basis.
The cost of inventories comprises the costs of purchase, costs of conversion plus other costs incurred to bring the inventories to their present locations and conditions. The costs of manufactured finished goods and work-in-progress consist of raw materials, consumables, direct labour and a proportion of manufacturing Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and the estimated costs necessary to make the sale.
(h) financial instruments
Financial instruments are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contract provisions of the financial instrument.
A financial instrument is recognised initially, at its fair value, plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.
Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable to transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to- maturity investments and available-for-sale financial assets.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(h) financial instruments (continued)
(i) financial Assets
Financial assets at fair value through profit or loss
Financial assets are classified as fair value through profit or loss if they are held for trading, including derivatives, or are designated as such upon initial recognition.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with the gain or loss recognised in profit or loss. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised as other gains or losses in the profit or loss.
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market, trade and other receivables and cash and cash equivalents are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.
Financial assets with fixed or determinable payments and fixed maturity that are quoted in an active market and the Group have the positive intention and ability to hold the investment to maturity is classified as held-to-maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.
Available-for-sale financial assets
Available-for-sale are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.
(ii) Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definition of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(h) financial instruments (continued)
(ii) Financial Liabilities (continued)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at fair value through profit Other financial liabilities
The Group's 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. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.
(iii) financial Guarantee Contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit or loss over the contractual period or, upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.
(iv) regular Way purchase or sale of financial Assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention of the marketplace concerned.
A regular way purchase or sale of financial asset is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:- • the recognition of an asset to be received and the liability to pay for it on the trade date; and • derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(h) financial instruments (continued)
A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.
A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount and the consideration paid is recognised in profit or loss.
(i) Provision for Liabilities
Provision for liabilities are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(j) share Capital
Ordinary shares are recorded at the nominal value and the consideration in excess of nominal value of shares issued, if any, is accounted for as share premium. Both ordinary shares and share premium are classified as Dividends on ordinary shares are recognised as liabilities when proposed or declared before the end of the reporting period. A dividend proposed or declared after the end of the reporting period, but before the financial statements are authorised for issue, is not recognised as a liability at the end of the reporting period.
Costs incurred directly attributable to the issuance of the shares are accounted for as a deduction from share premium, if any, otherwise it is charged to the profit or loss. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been (k) treasury shares
When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue and cancellation of treasury shares. When treasury shares are reissued by resale, the differences between the sales consideration and the carrying amount is recognised in equity.
(l) foreign Currency translation
The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The financial statements are presented in Ringgit Malaysia ("RM"), which is the Company's functional currency and presentation currency.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(l) foreign Currency translation (continued)
(i) foreign Currency transaction
Transactions in foreign currencies are translated into RM at rates of exchange ruling at transaction dates. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated into Ringgit Malaysia at the foreign exchange rates ruling at that date. Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in the profit or loss.
Non-monetary items are measured in terms of historical cost in a foreign currency or translated using the exchange rates as at the date of the initial transaction. Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in the profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.
(ii) financial statements of foreign operation
For consolidation purposes, all assets and liabilities of foreign operations that have a functional currency other than RM are translated at the exchange rate ruling at the end of the reporting period. Income and expenses items are translated at exchange rate approximately those ruling on transactions dates.
All exchange differences arising from the translation of the financial statements of foreign operations are dealt with through the exchange translation reserve account within other comprehensive income. On the disposal of a foreign operation, the cumulative exchange translation reserves relating to that foreign operation are recognised in the profit or loss as part of the gain or loss on disposal.
(m) Cash and Cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise of cash in hand, bank balances, demand deposits and other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are stated at net of bank overdrafts and deposits pledged to the financial institution.
The Group and the Company assess at the end of each reporting period whether there is any objective evidence that a financial asset is impaired.
(i) impairment of financial Assets
Trade and other receivables
To determine whether there is objective evidence that an impairment loss on financial assets have been occurred, the Group and the Company consider factors such as the probability of insolvency or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group's and the Company's past experience of collecting payments, an increased in the number of delayed payments in the portfolio past the average credit period and the observable changes in national or local economic conditions that correlate with default on receivables.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(i) impairment of financial Assets (continued)
Trade and other receivables (continued)
If any such evidence exists, the amount of impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
unquoted equity securities carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost had been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.
(ii) Impairment of Non-financial Assets
The Group assesses at the end of each reporting period whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset's recoverable amount.
An asset's recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units ("CGU")).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.
An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(o) revenue
(i) sale of Goods
Revenue from sale of goods is recognised upon delivery of products and when the risks and rewards of ownership have passed. Sale represents gross invoiced value of goods sold net of trade discounts and (ii) dividend income
Dividend income represents gross dividends from investments and is recognised when the shareholders' right to receive payment is established.
(p) income tax
The tax expense in the profit or loss represents the aggregate amount of current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination or items recognised directly in equity or other comprehensive income.
Current tax expense is the expected tax payable or receivable in respect of the taxable profit or loss for the financial year and is measured using the tax rates that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as and when it is granted and claimed. Any unutilised portion of the tax incentive is recognised as a deferred tax asset to the extent that it is probable that future taxable profits will be available against which the unutilised tax incentive can be utilised.
(q) Borrowing Costs
Borrowing costs directly attributable to the acquisition and construction of development properties are capitalised as part of cost of those assets, until such time as the assets are ready for their intended use or All other borrowing costs are charged to the profit or loss as an expense in the period in which they are ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
(r) Employee Benefits
(i) Short Term Employee Benefits
Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees. Short term accumulating compensated absences such as paid annual leave are recognised when services rendered by the employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
(ii) Post-employment Benefits
The Group contributes to the Employees' Provident Fund, the national defined contribution plan. The contributions are charged to the profit or loss in the period to which the related service is performed. Once the contributions have been paid, the Group has no further payment obligations.
(iii) Share-based Compensation
The share option programme allows Group's employees to acquire shares of the Company. Prior to 1st January 2006, share options granted to employees are not recognised as an employee cost. Following the adoption of MFRS 2 Share-based Payment, the grant date fair value of share options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share- based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
The change in accounting policy is applied retrospectively only for those share options granted after 31st December 2004 and have not vested as of 1st January 2006 as provided in the transitional provision of MFRS 2. The amount recognised as an expense is adjusted to reflect the actual number of share options The fair value of employee share options is measured using the Black-Scholes model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.
(s) earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares ("EPS").
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares, which comprise convertible notes, bonus issue and share options granted to employees.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Significant Accounting Policies (continued)
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group.
(u) operating segment
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
2.4 Significant Accounting Estimation and Judgements
The preparation of the Group's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.
(a) judgements Made in Applying Accounting policies
In the process of applying the Group's accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:- (i) operating lease Commitment – as lessee
The Group evaluated the lease arrangement for the leasehold land based on terms and conditions of the arrangement, whether the leasehold land are in substance operating leases or finance leases.
Management judged that it does not retain all significant risks and rewards of the ownership of the leasehold land, thus accounted for the contract as operating lease.
(b) Key Sources of Estimation Uncertainty
The key assumption concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as stated below:- (i) useful lives of property, plant and equipment
The Group estimates the useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant In addition, the estimation of the useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Significant Accounting Estimation and Judgements (continued)
(b) Key Sources of Estimation Uncertainty (continued)
(ii) Impairment of Investment in Subsidiaries and Associates
The Group tests investment in subsidiaries, associates and other investment for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is Significant judgement is required in the estimation of the present value of future cash flows generated by the subsidiaries, associates and other investment which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Changes in assumptions could significantly affect the results of the Group's tests for impairment of investment in subsidiaries, associates and other investment.
The management determined the recoverable amount of the investment in subsidiaries, associates and other investment based on the individual assets' value in use and the probability of the realisation of the assets. The present value of the future cash flows to be generated by the asset is the asset's value in use, and it is assumed to be the same as the net worth of the asset as at the end of the reporting period. An impairment loss is recognised immediately in the profit or loss if the recoverable amount is less than the carrying amount.
In view of the above, the management are in the opinion that no impairment is required for the investment in subsidiaries as at the end of the reporting period. However, impairment on investment in associates has been made as at the end of the reporting period amounted to RM1,590,720/- (2012: RM Nil).
(iii) impairment of non-current Assets
The Group reviews the carrying amount of its non-current assets, which include property, plant and equipment and investment property, to determine whether there is an indication that those assets have suffered an impairment loss in accordance with relevant accounting policies on the respective category of non-current assets. Independent professional valuers to determine the carrying amount of these assets will be procured when the need arise.
(iv) Impairment of Loans and Receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group's loans and receivables at the end of the reporting period is disclosed in Note 11 to the financial statements.
(v) deferred tax Assets
Deferred tax assets are recognised for all unutilised tax losses, unabsorbed reinvestment allowances and deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management's judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of the Group was RM2,208,887/- (2012: RM Nil).
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Significant Accounting Estimation and Judgements (continued)
(b) Key Sources of Estimation Uncertainty (continued)
(vi) Net Realisable Values of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgements and estimates. Possible changes in these estimates could result in revisions to the valuations of inventories. The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is necessary.
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating unit to which goodwill has been allocated. The value-in-use calculation requires the management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value.
The carrying amount of goodwill at the end of the reporting period is RM28,715,854/- (2012: RM28,715,854/-). Details of the impairment assessment are disclosed in Note 8 to the financial ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
(841,279) (305,376) (841,279) (80,648) - 644,820,815 - - - nitur and
fittings and
Mould and tools
- - (15,029,733) equipment
1,025,000 17,134,900 , PLANT AND EQUIPMENT
Cost At 1st January 2012 Additions W Exchange differ Reclassification
At 31st December2012 Accumulated depr At 1st January 2012 Char financial year W Exchange differ
At 31st December2012 Net book value at 31st December2012
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(a) Included under property, plant and equipment are freehold land, buildings and certain plant and machinery which are charged as security for the long-term loans, overdraft and other credit facilities of the Group as disclosed in Note 19 to the financial statements.
(b) The net book value of plant and equipment held under hire purchase payables is RM Nil/- (2012: RM222,198/-).
(c) The net book value of motor vehicles held under hire purchase payables is RM86,522/- (2012: RM1,107,697/-).
(d) The net book value of plant, machinery and equipment under industrial hire purchase is RM36,769,116/- (2012: (e) The remaining purchase consideration for the acquisition of factory buildings under construction and plant, machinery and equipment under installation is disclosed as capital commitments in Note 31 to the financial 4. INVESTMENT PROPERTY
At 1st January/31st December Charge for the financial year At 31st December At 31st December Freehold office building Rental income from investment property during the financial year is RM23,417/- (2012: RM30,760/-).
As at 31st December 2013, the fair values of the investment properties are RM741,000/- (2012: RM741,000/-). The fair value of the Group's investment property has been arrived at on the basis of a valuation carried out through internal research and director's best estimate.
fair value information
Level 3 fair value
The investment property of the Group are categorised under the Level 3 fair value. Level 3 fair value is estimated using unobservable input for the investment property.
valuation method and key input
Significant unobservable input
Relationship of unobservable
input and fair value
Information available through Estimated sales price of The higher the estimated sales internal research and director's comparable properties in close price, the higher the fair value ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
5. PREPAID LAND LEASE PAYMENTS
5,283,684 5,283,684 Amortisation for the financial year At 31st December At 31st December 4,487,717 4,551,846 Leasehold land with period of:- Less than 50 years More than 50 years 4,019,869 4,066,142 4,487,717 4,551,846 All the prepaid land lease payments are charged to credit facilities granted to the Group as disclosed in Note 19 to 6. investMent in subsidiAries
unquoted shares, at cost
183,894,064 183,670,628 At 31st December 183,894,064 183,894,064 (a) On 1st January 2012, the Company incorporated a 100% owned subsidiary, Whiteoak Global Property Limited, a company incorporated in United States of America, comprising 5,000 issued and fully paid up capital of USD1/- each at par for a cash consideration of USD5,000/- (RM15,201/-); and (b) On 1st July 2012, the Company incorporated a 67% owned subsidiary, Supermax Healthcare Canada Incorporated, a company incorporated in Canada, comprising 100,000 issued and fully paid up capital of CDN1/- each at par for cash a consideration of CDN67,000/- (RM208,235/-).
(c) On 7th March 2014, a wholly-owned subsidiary of the Company, Supermax International Sdn. Bhd. incorporated a 98% owned subsidiary, SuperVision Optimax Sdn. Bhd., comprising 100 issued and fully paid up capital of RM1/- each at par for a cash consideration of RM100/-.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
6. investMent in subsidiAries (Continued)
Details of the subsidiaries are as follows:- Country of
Name of Companies
Incorporation 2013 2012 Principal Activities
Supermax Latex Products Sdn. Bhd. 100 100 Trading and exporting latex gloves Supermax Glove Manufacturing Sdn. Bhd. 100 100 Manufacturing and sale of latex gloves Maxter Glove Manufacturing Sdn. Bhd. 100 100 Manufacturing and sale of latex gloves Supermax Healthcare Incorporated** United States 100 100 Marketing, importing and distributing Supermax Incorporated** United States 100 100 Dormant Maxwell Glove Manufacturing Berhad* 100 100 Manufacturing and sale of latex gloves Supermax International Sdn. Bhd. 100 100 Pre-operating Supermax Energy Sdn. Bhd. 100 100 Generation of biomass energy Supermax Deutschland GmbH**# 90 90 Marketing, importing and distributing Supermax Global Limited** 100 100 Marketing, importing and distributing Supermax Healthcare Limited**# United Kingdom 100 100 Marketing, importing and distributing Supermax Healthcare Canada Incorporated* 67 67 Marketing, importing and distributing Whiteoak Global Property Limited** United States 100 100 Property holding Seal Polymer Latex Products Sdn. Bhd. 100 100 Trading and exporting latex gloves * Audited by audit firms other than Baker Tilly Monteiro Heng. ** The audited financial statements and auditor's report for the financial year were not available. However, the financial statements of the subsidiaries used for consolidation purposes were reviewed by Baker Tilly Monteiro # The non-controlling interest and financial information of Supermax Deutschland GmbH and Supermax Healthcare Limited have not been presented as it is immaterial. 7. investMent in AssoCiAtes
Unquoted shares, outside Malaysia 20,218,962 20,218,962 Share of post-acquisition result, net of dividend received 248,293,759 231,513,511 Exchange differences Less: Impairment 214,904,230 209,874,119 Unquoted shares, outside Malaysia 19,829,489 19,829,489 Less: Impairment At 31st December 18,994,696 19,829,489 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
7. investMent in AssoCiAtes
The summarised financial information of the material associates is as follows:- supermax brasil importadora s/A
512,284,007 469,219,815 Total liabilities 429,808,459 416,566,797 328,492,904 342,558,152 Profit for the financial year 33,560,495 46,749,584 The summarised financial information for the other two associates are not presented as it is insignificant to the Group.
Details of the associates are as follows:- Country of Effective Equity
Companies
interest
2013 2012
Supermax Brasil Importadora S/A# Marketing, importing and distributing Supermax Europe NC/SA** Marketing, importing and distributing Supermax Canada Inc.** Marketing, importing and distributing # Audited by audit firms other than Baker Tilly Monteiro Heng.
** The management financial statements of these associate companies were used in the preparation of the consolidated financial statements.
8. GoodWill on ConsolidAtion
At 1st January/31st December 28,715,854 28,715,854 Goodwill arising from business combination has been allocated to a cash-generating unit ("CGU") for impairment testing purpose. The carrying amount of goodwill has been allocated to the investment in Maxwell Glove Manufacturing The recoverable amount of the CGU is determined based on the value in use calculations using cash flow projections on financial budgets approved by directors covering a five-year period. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rates used to extrapolate cash flows beyond the five year period are 5.00% and 5.50% (2012: 4.26% and 5.00%) respectively.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
8. GoodWill on ConsolidAtion (Continued)
The calculation of value in use for this CGU is most sensitive to the following assumptions:- (a) Budgeted growth margin – Gross margin is based on average values achieved in the three years preceding the start of the budget period. The anticipated growth rate of 2% for gross margin is projected to be minimal.
(b) Growth rates – The forecasted growth rates of 5% to 9% are based on directors past experience in the glove manufacturing industry that the CGU operates in.
(c) Pre-tax discount rate – Discount rate of 5.50% reflects the current market assessment of the risks specific to the CGU. This is the benchmark used by directors to assess operating performance and to evaluate future investment proposals. In determining appropriate discount rate for the CGU, regard has been given to the yield on a five-year government bond at the beginning of the budgeted year.
(d) There is no significant fluctuation in the price of raw material.
The value assigned to the key assumptions represents directors' assessment of future trends in the glove manufacturing industry and are based on both external sources and internal sources (historical data).
sensitivity to changes in assumptions
Directors believe that no reasonable possible changes in any of the key assumptions above will cause the carrying values of the CGU to materially exceed its recoverable amount.
9. deferred tAx Assets/(liAbilities)
deferred tax assets
Transfer to profit or loss (Note 27) At 31st December Deferred tax liabilities
19,993,037 18,206,050 Transfer to profit or loss (Note 27) 4,207,712 1,786,987 At 31st December 24,200,749 19,993,037 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
9. deferred tAx Assets/(liAbilities) (Continued)
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are Recognised At 31st
January in the profit December
deferred tax assets
Unabsorbed capital allowances Unrealised foreign exchange - 1,500,905 1,500,905 Unrealised profit on inventories - 2,208,887 2,208,887 Unused reinvestment allowances 816,095 10,696,617 Unutilised tax losses 151,694 1,687,270 11,501,061 4,592,618 16,093,679 Deferred tax liabilities
Property, plant and equipment 31,431,636 4,319,793 35,751,429 Unrealised foreign exchange 62,462 2,271,650 2,334,112 31,494,098 6,591,443 38,085,541 (19,993,037) (1,998,825) (21,991,862) Presented after appropriate offsetting as follows:- Deferred tax assets Deferred tax liabilities (24,200,749) (19,993,037) 13,111,708 23,801,240 10,149,902 15,531,106 Work-in-progress 94,178,658 91,237,180 75,220,445 103,217,106 192,660,713 233,786,632 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
11. TRADE AND OTHER RECEIVABLES
Trade receivables
129,266,563 101,256,028 Less: Allowance for impairment Trade receivables, net 129,167,383 100,822,162 Other receivables 4,212,472 3,778,923 12,672,955 4,413,405 141,840,338 105,235,567 Total trade and other receivables 141,840,338 105,235,567 Amount owing by associates (Note 14) 92,975,862 101,078,141 Cash and bank balances (Note 15) 167,129,834 122,863,481 Total loans and receivables
401,946,034 329,177,189 Other receivables Total other receivables Amount owing by subsidiaries (Note 13) 256,822,067 291,557,693 Amount owing by associates (Note 14) Cash and bank balances (Note 15) Total loans and receivables
257,984,513 292,714,610 (a) Trade Receivables
The credit period granted on sales of goods ranges from 30 to 120 days (2012: 30 to 120 days).
Analysis of trade receivables by currency:- 2,909,845 1,661,807 1,124,179 1,377,788 Ringgit Malaysia United States Dollar 124,765,416 97,534,189 129,167,383 100,822,162 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
11. TRADE AND OTHER RECEIVABLES
(a) Trade Receivables
Ageing analysis of trade receivables:- Neither past due nor impaired 108,664,230 89,013,679 1 to 30 days past due not impaired More than 30 days past due not impaired 15,989,305 11,655,331 20,503,153 11,808,483 129,266,563 101,256,028 Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy receivables with good payment records with the Group. None of the 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 Based on historical default rates, the Group believes that no allowance for impairment in respect of trade receivables that are past due. These receivables are mainly arising from trade receivables that have a good credit record with the Group.
The trade receivables that are past due but not impaired are unsecured in nature.
Receivables that are impaired The Group's trade receivables that are impaired at the end of reporting period are as follows:- Trade receivables Less: Allowance for impairment Movements in the allowance for impairment account are as follows:- Allowance for the financial year Written off during the financial year At 31st December (b) Deposits
Included in deposits is an amount of RM7,840,800/- (2012: RM Nil) representing deposit paid for the acquisition of freehold industrial land. The balance of the purchase consideration is disclosed in Note 31 to the financial SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
12. OTHER CURRENT ASSETS
13. AMOUNT OWING BY/(TO) SUBSIDIARIES
Amount owing by/(to) subsidiaries are unsecured, interest free and are repayable on demand.
14. AMOUNT OWING BY ASSOCIATES
Amount owing by associates arose mainly from trade transactions with repayment term of 120 days (2012: 120 days).
Analysis of amount owing by associates by currency:- United States Dollar 92,975,862 101,078,141 United States Dollar 15. CASH AND BANK BALANCES
Analysis of cash and bank balances by currency:- 1,642,565 1,594,611 Ringgit Malaysia 14,224,881 16,416,746 United States Dollar 150,620,101 104,360,316 167,129,834 122,863,481 Ringgit Malaysia United States Dollar ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
16. SHARE CAPITAL
Group and Company
of shares
of shares
Ordinary shares of RM0.50 each At the beginning/end of the financial year 1,000,000,000 500,000,000 1,000,000,000 500,000,000 Issued and fully paid:- At the beginning of the financial year 680,154,880 340,077,440 340,077,440 170,038,720 Issued during the financial year - 340,077,440 170,038,720 At the end of the financial year 680,154,880 340,077,440 680,154,880 340,077,440 On 31st January 2012, the Company issued 340,077,440 ordinary shares of RM0.50 each pursuant to the bonus issue exercise on the basis of one bonus share for every one existing Company's share held.
17. SHARE PREMIUM
Group and Company
At 31st December 18. RESERVES
Non-distributable reserves:-Translation reserve (2,043,568) (2,041,204) Distributable reserve:- Retained earnings 610,730,171 538,554,881 558,572,207 493,954,115 Non-distributable reserves:-Treasury shares (2,043,568) (2,041,204) (2,043,568) (2,041,204) Distributable reserve:- Retained earnings 16,600,137 49,832,669 14,556,569 47,791,465 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
18. RESERVES (CONTINUED)
(a) translation reserve
Translation reserve arose from the exchange differences on the translation of foreign operations.
(b) Retained Earnings
The entire retained earnings of the Company as at 31st December 2013 may be distributed as dividend under the single tier system.
(c) treasury shares
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists solely of the acquisition costs of treasury shares.
The Company acquired 1,000 shares in the Company through purchases on the Bursa Malaysia Securities Berhad during the financial year. The total amount paid to acquire the shares was RM2,364/- and this was presented as a component within shareholders' equity.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.
19. LOANS AND BORROWINGS
Bankers' acceptance 145,647,318 129,449,275 Hire purchase payables (Note 20) Industrial hire purchase (Note 21) 7,670,203 7,246,506 42,396,976 26,082,899 195,762,576 162,922,784 Hire purchase payables (Note 20) Industrial hire purchase (Note 21) 13,070,922 20,741,126 113,806,277 94,414,300 127,021,956 115,187,503 Total loans and borrowings 322,784,532 278,110,287 29,493,000 21,408,100 55,709,000 79,505,900 Total loans and borrowings 85,202,000 100,914,000 Interest rates on bankers' acceptance and term loan for the financial year ranging from 1.15% to 3.75% (2012: 1.12% to 3.74%) per annum and 3.44% to 8.10% (2012: 3.40% to 8.10%) per annum respectively.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
19. LOANS AND BORROWINGS (CONTINUED)
The term loan and bankers' acceptance are secured by way of:- (i) legal charges over land and buildings of subsidiaries; (ii) negative pledge; and (iii) corporate guarantee by the Company.
Analysis of borrowings by currency:- Ringgit Malaysia 85,440,100 128,420,982 United States Dollar 237,181,828 149,689,305 322,784,532 278,110,287 United States Dollar 85,202,000 100,914,000 85,202,000 100,914,000 20. HIRE PURCHASE PAYABLES
Minimum hire purchase payments:- - not later than one year - later than one year but not later than five years Less: Future finance charges Analysis of present value of hire purchases payables:- - not later than one year - later than one year but not later than five years Interest rates on the hire purchase payables for the financial year ranging from 2.58% to 4.72% (2012: 2.78% to 6.25%) per annum.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
21. INDUSTRIAL HIRE PURCHASE
Minimum hire purchase payments:- - not later than one year 8,674,706 8,674,707 - later than one year but not later than five years 13,792,990 22,467,686 22,467,696 31,142,393 Less: Future finance charges (1,726,571) (3,154,761) 20,741,125 27,987,632 Analysis of present value of industrial hire purchases:- - not later than one year 7,670,203 7,246,506 - later than one year but not later than five years 13,070,922 20,741,126 20,741,125 27,987,632 Interest rate on the industrial hire purchase for the financial year ranging from 2.78% to 6.25% (2012: 6.25%) per 22. TRADE AND OTHER PAYABLES
Trade payables
59,372,922 76,930,128 21,669,560 18,651,447 Deposits received from customers 9,338,592 15,276,858 10,618,603 7,065,089 41,626,755 40,993,394 100,999,677 117,923,522 Total trade and other payables 100,999,677 117,923,522 Loans and borrowings (Note 19) 322,784,532 278,110,287 Total financial liabilities carried at amortised cost
423,784,209 396,033,809 Total other payables Amount owing to a subsidiary (Note 13) 7,439,986 7,639,986 Loans and borrowings (Note 19) 85,202,000 100,914,000 Total financial liabilities carried at amortised cost
92,693,126 108,606,981 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
22. TRADE AND OTHER PAYABLES (CONTINUED)
(a) Trade Payables
The credit period granted to the Group for trade purchases ranges from 30 to 60 days (2012: 30 to 60 days).
Analysis of trade payables by currency:- Ringgit Malaysia 34,980,341 42,969,148 United States Dollar 24,392,581 33,960,980 59,372,922 76,930,128 (b) Other Payables
Other payables which mainly arose from other operating expenses payable, are interest free and are repayable (c) deposits received from Customers
Deposits received from customers are denominated in United States Dollar.
23. REVENUE
1,048,150,699 997,374,339 Dividend income received from a subsidiary 1,048,150,699 997,374,339 21,000,000 24. DIRECTORS' REMUNERATION
Executive directors of the Company:- - other emoluments 12,960,888 6,653,722 13,090,888 6,757,722 Non-executive directors of the Company:- - other emoluments 13,411,388 7,132,082 Key management personnel of the Group and of the Company comprise of executive directors of the Company.
Included in other emoluments are contributions made by the Group to the Employees' Provident Fund of RM235,440/- SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
25. OTHER OPERATING EXPENSES
Other operating expenses had been arrived at:- Auditors' remuneration Deposit written off * Impairment losses on:- - trade receivables - cost of investment in associates - amount owing by associates Net loss on foreign exchange Rental of office equipment Rental of plant and machinery - salaries, wages and bonuses 65,881,715 52,006,592 - Employees' Provident Fund 2,218,396 1,658,605 - other related staff costs 2,234,668 1,053,745 Net gain on foreign exchange (1,769,518) (6,757,532) * Deposit written off amounting to RM Nil (2012:RM928,000/-) representing deposit paid by a subsidiary for the purchase of land.
26. FINANCE COSTS
Interest expenses on:- - bankers' acceptance 944,007 2,421,068 - hire purchases - industrial hire purchases 1,040,727 1,353,133 4,887,290 4,935,812 7,632,203 8,746,244 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
27. TAXATION (CONTINUED)
(26,481,326) (11,893,612) - under accrual in prior years (686,459) (2,212,845) (27,167,785) (14,106,457) Deferred tax (Note 9)- current year (7,558,206) (11,538,079) - over accrual in prior year 5,559,381 9,751,092 (1,998,825) (1,786,987) (29,166,610) (15,893,444) The income tax is calculated at Malaysian statutory rate of 25% of the estimated assessable profit for the fiscal year.
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of Company is as follows:- Profit before taxation 148,157,017 137,305,588 14,308,150 3,249,104 Taxation at applicable tax rate of 25% (37,039,254) (34,326,397) (3,577,038) Tax effects arising from:- - effects of tax rates in foreign jurisdications - income not subject to tax 1,632,636 4,641,468 5,250,000 1,188,688 - tax effects of share in profits of associates 4,195,062 5,843,698 - expenses not deductible for tax purposes (3,935,886) (1,048,098) (1,672,962) - double deduction - utilisation of reinvestment allowances 1,039,500 2,946,558 - deferred tax assets not recognised 5,013 (1,514,565) - (under)/over accrual in prior years:- (686,459) (2,212,845) 5,559,381 9,751,092 Tax expense for the financial year (29,166,610) (15,893,444) 28. EARNINGS PER ORDINARY SHARE
(a) basic earnings per share
Net profit attributable to owners of the parent 119,715,972 121,717,800 Number of shares in issue as of 1st January 680,154,880 340,077,440 - treasury shares held - bonus shares issued during the financial year Weighted average number of ordinary shares in issue 679,152,538 679,341,042 Basic earnings per ordinary share of RM0.50 (sen) The basic earnings per ordinary share is calculated by dividing the consolidated net profit attributable to equity owners of the Company by the weighted average number of ordinary shares in issue during the financial year.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
28. EARNINGS PER ORDINARY SHARE (CONTINUED)
(b) Diluted Earnings Per Share
The basic and diluted earnings per share are equal as the Group has no dilutive potential ordinary shares outstanding as at 31st December 2013.
Group and Company
Recognised during the financial year:- Final dividend of 3.5% per ordinary share of RM0.50, tax exempt, for year 2011 Interim dividend of 4% per ordinary share of RM0.50, tax exempt, for year 2012 Final dividend of 6% per ordinary share of RM0.50, tax exempt, for year 2012 Interim dividend of 4% per ordinary share of RM0.50, tax exempt, for year 2013 47,540,682 11,885,189 The directors proposed a single tier final dividend of 6% per ordinary share of RM0.50 amounting to RM20,374,556/- in respect of the current financial year. The proposed dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting and has not been included as a liability in the financial statements.
30. FINANCIAL GUARANTEES
(a) As of 31st December 2013, the Company is contingently liable in respect of guarantees given mainly for credit facilities totalling RM212,144,000/- (2012: RM221,259,000/-) granted by local licensed banks to the subsidiaries. Accordingly, the Company is contingently liable to the extent of the facilities utilised.
(b) As of 31st December 2013, the Company is contingently liable to the extent of RM18,219,979/- (2012: RM13,972,415/-) in respect of bank guarantees issued in favour of various third parties. The bank guarantees are secured over the corporate guarantee of the Company and subsidiary companies.
31. CAPITAL COMMITMENTS
Approved and contracted for but not provided in the financial statements - purchases of property, plant and equipment 57,636,871 72,000,000 - purchase of freehold industrial land 32. SIGNIFICANT RELATED PARTY TRANSACTIONS
(a) Identification of Related Parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operational decisions, or vice versa, or where the Group and the party are subject to common control.
Related parties may be individuals or other entities. Related parties of the Group include:- (i) Direct subsidiaries; (ii) Indirect subsidiary; (iii) Associates; and (iv) Key management personnel which comprise persons (including the directors of the Company) having the authority and responsibility for planning, directing and controlling the activities of the Company directly or ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
32. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
(b) Significant Related Party Transactions and Balances
During the financial year, the significant related party transactions are as follows:- Dividend received/ receivable from a subsidiary - Maxwell Glove Manufacturing Berhad Sales of gloves to an associate - Supermax Brasil 185,827,784 156,367,114 Donation to Supermax Foundation 33. SEGMENT REPORTING
During the previous financial year, the Group adopted MFRS 8 Operating Segments. MFRS 8 requires the identification of operating segments on the basis of internal reports that are regularly reviewed by the Group's chief operating decision maker in order to allocate resources to the segments and assess their performance.
The information reported to the Group's chief operating decision maker to make decisions about resources to be allocated and for assessing their performance is based on the nature of the products and services, and has three reportable operating segments as follows:- (a) Investment holding (b) Manufacturing of gloves (c) Trading of gloves Except as above, no other operating segment has been aggregated to form the above reportable operating segments.
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements.
Segment profit or loss is profit earned or loss incurred by each segment without allocation of depreciation and amortisation, finance cost, income from other investment, share of profit of associates and income tax expense. There are no significant changes from prior financial year in the measurement methods used to determine reported segment profit or loss.
All the Group's assets are allocated to reportable segments other than deferred tax assets.
All the Group's liabilities are allocated to reportable segments other than deferred tax liabilities.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
(26,691,869) (7,632,203) (29,166,610) (1,003,069,295) (1,003,069,295) (1,012,801,510) (471,377) (127,135) 1,059,713 5,307,471 893,512,322 72,607,956 153,578,664 904,153,868 (26,061,373) (7,496,279) (29,737,042)
olding RM
nvestment h
, plant and equipment ofits of associates nal sales
ofit for the financial year
eciation and amortisation SEGMENT REPOR
revenue exter Inter
results Segment r
Depr Finance costs Income tax expense Assets Segment assets Deferr Investment in associates Consolidated total assets
o Addition to pr
Liabilities Segment liabilities
Consolidated total liabilities
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
(24,356,434) (8,746,244) (334,686) (179,259) 806,283,642 99,730,062 191,090,697 842,950,339 (23,818,245) (8,746,244) eported in the consolidated financial statements:- olding RM
nvestment h
e eliminated on consolidation; e eliminated on consolidation e eliminated on consolidation; and , plant and equipment ofits of associates -segment transactions and r -segment assets ar -segment liabilities ar ofit for the financial year eciation and amortisation e of adjustments and eliminations to arrive at amounts r SEGMENT REPOR
revenue Exter Inter
results Segment r
Deposits written off Depr Finance costs Impairment loss on trade r Income tax expense Assets Segment assets Investment in associates Consolidated total assets
o Addition to pr
Liabilities Segment liabilities
Consolidated total liabilities
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
33. SEGMENT REPORTING (CONTINUED)
The Group operates predominantly in Malaysia and accordingly, the segment assets and capital additions are located in Malaysia.
The following is an analysis of the Group's sales by geographical market according to the continents:- 534,556,856 558,529,630 377,334,252 279,264,815 104,815,070 89,763,691 31,444,521 69,816,204 34. FAIR VALUE OF FINANCIAL INSTRUMENTS
(a) determination of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:- Trade and other receivables Amount owing by/(to) subsidiaries Amount owing by associates Cash and bank balances Trade and other payables Bankers' acceptances The carrying amounts of cash and bank equivalents, short term receivables and payables and short term borrowings reasonably approximate their fair values due to the relatively short term nature of these financial instruments.
(b) Fair Value Hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to 3 based on the degree to which the fair value is observable:- (i) Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities; (ii) Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and (iii) Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
34. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
(b) Fair Value Hierarchy (continued)
Fair value of financial instruments not carried at fair value
Hire purchase payables Industrial hire purchase - 20,741,125 20,741,125 - 156,203,253 156,203,253 - 177,137,214 177,137,214 * Comparative figures have not been analysed by level, by virtue of transitional provisio given in Appendix C2 Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.
35. FINANCIAL RISK MANAGEMENT AND OBJECTIVE
The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market The following sections provide details regarding the Group's and the Company's exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group's exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including other investment and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties. The management has a credit policy in place to monitor and minimise the exposure of default. Credit evaluations are performed on all customers requiring credit over certain amount.
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
The financial guarantees have not been recognised as it is not practicable to make a reliable estimate due to the uncertainties of timing, costs and eventual outcome.
At the end of the reporting period, it was not probable that the counterparty to the financial guarantee contract will claim under the contract. Consequently, the fair value for the corporate guarantees is RM Nil.
Information regarding credit enhancements for trade receivables is disclosed in Note 11 to the financial statements.
financial assets that are neither past due nor impaired
Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 11 to the financial statements. Deposits with banks and other financial institutions and investment securities are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of financial assets that are either past due or impaired
Information regarding trade and other receivables that are either past due or impaired is disclosed in Note 11 to the financial statements.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
35. FINANCIAL RISK MANAGEMENT AND OBJECTIVE (CONTINUED)
(b) Liquidity Risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group's and the Company's exposure to liquidity risks arises primarily from mismatched of the maturities of financial assets and liabilities. The Group's and the Company's objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all financing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group and the Company maintain sufficient levels of cash or cash convertible investments to meet its working capital requirements.
The table below summarises the maturity profile of the Group's and the Company's liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.
Contractual On Demand
Carrying
undiscounted or Within
cash flows
Trade and other payables 100,999,677 100,999,677 100,999,677 Loans and borrowings 322,784,532 324,511,986 196,767,962 127,744,024 423,784,209 425,511,663 297,767,639 127,744,024 Trade and other payables 117,923,522 117,923,522 117,923,522 Loans and borrowings 278,110,287 281,274,418 164,360,955 116,913,463 396,033,809 399,197,940 282,284,477 116,913,463 Amount owing to a subsidiary Loans and borrowings Amount owing to a subsidiary Loans and borrowings 100,914,000 100,914,000 108,606,981 108,606,981 ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
35. FINANCIAL RISK MANAGEMENT AND OBJECTIVE (CONTINUED)
(c) interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group's and the Company's 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 does not hedge its investment in fixed rate debt securities as they have active secondary or resale markets to ensure liquidity. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes.
The Group and the Company manage the net exposure to interest rate risks by maintaining sufficient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. Management does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweigh the potential risk of interest rate fluctuation.
Interest
Bankers' acceptances 0.89 - 3.75 145,647,318 Hire purchase payables Industrial hire purchase 6.25 7,670,203 13,070,922 Term loans (floating rate) 3.44 - 6.25 42,396,976 113,806,277 Bankers' acceptances 0.9 - 3.74 129,449,275 Hire purchase payables Industrial hire purchase 6.25 7,246,506 20,741,126 Term loans (floating rate) 3.4 - 8.1 26,082,899 94,414,300 Term loans (floating rate) 1.81 - 1.99 29,493,000 55,709,000 Term loans (floating rate) 1.81 - 1.99 21,408,100 79,505,900 sensitivity analysis for interest rate
At the end of the reporting period, if interest rates had been 1% lower/higher, with all other variables held constant, the Group's profit net of tax and the Company's profit net of tax would have been RM3,225,917/- (2012: RM2,779,341/-) and RM852,020/- (2012: RM1,009,140/-) higher/lower respectively, arising mainly as a result of a lower/higher of interest expenses from pre-determined rate of borrowings. The assumed movement in basis points for interest rate sensitivity is based on the currently observable market environment.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notes To The Financial Statements (continued)
35. FINANCIAL RISK MANAGEMENT AND OBJECTIVE (CONTINUED)
(d) foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily United States Dollars ("USD") and Euro Dollar ("Euro"). The foreign currencies in which these transactions are denominated are mainly USD.
The Group and the Company ensure that the net exposure to this risk is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address shortterm imbalances. Management does not enter into currency hedging transactions since it considers that the cost of such instruments outweigh the potential risk of exchange rate fluctuations.
The financial assets and financial liabilities of the Group that are not denominated in the functional currencies are disclosed in respective notes to the financial statements.
sensitivity analysis for foreign currency
The following table demonstrates the sensitivity of the Group's profit net of tax to a reasonably possible change in the exchange rates of Euro and USD against the functional currency of the Company, with all other variables held constant.
for the year for the year
CND/RM - strengthened 3% (2012: 3%) - weakened 3% (2012: 3%) EUR/RM - strengthened 3% (2012: 3%) - weakened 3% (2012: 3%) USD/RM - strengthened 3% (2012: 3%) 4,731,138 3,571,908 - weakened 3% (2012: 3%) (4,731,138) (3,571,908) (e) Market price risk
Market price risk is the risk that the fair value or future cash flows of the Group's financial instruments will fluctuate because of changes in market price (other than interest or exchange rates).
The Group has in place policies to manage the Group's exposure to fluctuations in the selling price of the Group's products and purchase prices of the key raw materials used in the operations. The management conducts constant survey of the global market price and trend in order to determine the selling price.
36. CAPITAL MANAGEMENT
The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratio in order to support its business and maximise shareholders' 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 financial years ended 31st December 2013 and 31st December 2012.
The Group monitors capital using a gearing ratio, which is total debts divided by total capital plus total debts. The Group's policy is to keep the gearing ratio between 20% to 40%. The Group includes within total debts, trade and other payables and loans and borrowings. Capital includes equity attributable to the owners of the parent.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notes To The Financial Statements (continued)
36. CAPITAL MANAGEMENT (CONTINUED)
The gearing ratio of the Group is as follows:- Trade and other payables 100,999,677 117,923,522 Loans and borrowings 322,784,532 278,110,287 423,784,209 396,033,809 Equity attributable to owners of the parent 898,649,647 834,031,555 Capital and total debts
Gearing ratio
Trade and other payables Loans and borrowings 85,202,000 100,914,000 85,253,140 100,966,995 Equity attributable to owners of the parent 354,634,009 387,868,905 Capital and total debts
439,887,149 488,835,900 Gearing ratio
The Group is required to maintain a minimum Consolidated Total Equity of RM480 million, a minimum Consolidated Earnings before Interest, Tax, Depreciation and Amortisation to Consolidated Interest Expense of 3.0 to 1.0 and a maximum Consolidated Debt to Consolidated Total Equity of 0.75 to 1.0 to comply with two bank covenants, failing which, the bank may call an event of default. The Group had complied with these covenants.
The Group is also required to comply with the disclosure and necessary capital requirements as prescribed in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
37. SIGNIFICANT EVENTS
(a) On 8th November 2013, a wholly-owned subsidiary of the Company, Maxwell Glove Manufacturing Berhad entered into a Sale and Purchase Agreement with Dragonline Resources Sdn. Bhd. for the acquisition of all the freehold industrial land held under Geran 28698, Lot 1858, Mukim Serendah, Daerah Ulu Selangor, Negeri Selangor for a total purchase consideration of RM78,408,000/- only upon such terms and conditions as stipulated in the Sale and Purchase Agreement.
(b) On 7th March 2014, a wholly-owned subsidiary of the Company, Supermax International Sdn. Bhd. incorporated a 98% owned subsidiary, SuperVision Optimax Sdn. Bhd., comprising 100 issued and fully paid up capital of RM1/- each at par for a cash consideration of RM100/-.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Supplementary Information On The Disclosure
of realised and unrealised profits or losses On 25th March 2010, Bursa Malaysia Securities Berhad ("Bursa Malaysia") issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.
On 20th December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.
Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the retained profits of the Group and the Company as at 31st December 2013 are as follows:- Total retained profits of the Company and its subsidiaries 440,952,029 371,817,056 16,412,897 49,232,132 (25,158,187) (13,439,112) 415,793,842 358,377,944 16,600,137 49,832,669 Share of retained profits of associates 255,980,722 239,200,473 671,774,564 597,578,417 16,600,137 49,832,669 Consolidation adjustments (61,044,393) (59,023,536) Total retained profits 610,730,171 538,554,881 16,600,137 49,832,669 Total retained profits as per statements of financial position 610,730,171 538,554,881 16,600,137 49,832,669 The determination of realised and unrealised profits is based on Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20th December 2010.
The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Statement By Directors
We, dAto' seri thAi KiM siM and dAtin seri tAn bee GeoK, being two of the directors of Supermax Corporation
Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements set out on pages 6 to 88 are properly drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirement of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31st December 2013 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.
The supplementary information set out on page 89 has been prepared in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.
On behalf of the Board, dAto' seri thAi KiM siM
dAtin seri tAn bee GeoK
Date: 28th April 2014 I, dAtin seri tAn bee GeoK, being the director primarily responsible for the financial management of Supermax
Corporation Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 6 to 88, and the supplementary information set out on page 89 are correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, l960.
dAtin seri tAn bee GeoK
Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 28th April 2014.
zulKiflA Mohd dAhliM
Commissioner for Oaths (W 541) SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Independent Auditor's Report
to the members of Supermax Corporation Berhad report on the financial statements
We have audited the financial statements of Supermax Corporation Berhad, which comprise the statements of financial position as at 31st December 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 6 to 88.
Directors' Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company'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 Company's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31st December 2013 and of their financial performance and cash flows for the financial year then ended in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:- (a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965, in Malaysia to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Companies Act, 1965 in Malaysia.
(b) Other than those subsidiaries without the auditors' reports as disclosed in Note 6 to the financial statements, we have considered the financial statements and the auditors' reports of the remaining subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.
(d) Other than those subsidiaries without the auditors' reports as disclosed in Note 6 to the financial statements, the audit reports on the financial statements of the remaining subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Companies Act, 1965 in Malaysia.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Independent Auditor's Report
to the members of Supermax Corporation Berhad (continued) Other Reporting Responsibilities
The supplementary information set out in page 89 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of this report.
Baker Tilly Monteiro Heng
Andrew Heng
No. 2935/08/14(J) Chartered Accountants Chartered Accountant Date: 28th April 2014 SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 List Of Properties
held by the group as at 31st December 2013 The leasehold land and building are valued at cost with subsequent improvement and additions valued at cost as appropriate. No revaluation exercise has been carried out and these properties continue to be stated at their existing carrying amounts less accumulated depreciation where applicable. The Directors have not adopted a policy of regular revaluation of these properties.
Lot 42, Jalan BRP9/2B Putra Industrial Park Bukit Rahman Putra Selangor Darul Ehsan Lot 6070, Mukim of Kapar District of Kelang Selangor Darul Ehsan Lot 38, Jalan BRP 9/2B Putra Industrial Park Bukit Rahman Putra Selangor Darul Ehsan Lot No. 5128, Mukim of Kapar District of Kelang, Selangor Darul Ehsan Lot 512 & Lot 1784 District of Kuala Selangor Selangor Darul Ehsan Suite No. 708,6th Floor (Level 7) Menara Atlas (Tower A) Off Jalan Pantai Baru Lot 6068, Mukim of Kapar District of Kelang Selangor Darul Ehsan Lot 55 Jalan Industri 13 Kaw. Perindustrian Kelemak, 78000, Alor Gajah, Melaka Lot 72706 Jalan Lahat Kawasan Perindustrian Bukit Merah, 31500 Lahat Perak Darul Ridzuan HS(D)KA 70399 Lot 72706 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 10. PN 123155, Lot 207171 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 11. PN 123156, Lot 207172 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 12. PN 123161, Lot 207177 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) List Of Properties
held by the group as at 31st December 2013 13. PN 123162, Lot 207178 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 14. HS(D) 11530, PT 11574 Mukim Asam Kumbang District Larut & Matang Perak Darul Ridzuan 15. HS(D) 11531, PT 11575 Mukim Asam Kumbang District Larut & Matang Perak Darul Ridzuan 16. PT 11574 & PT 11575 Kawasan Perindustrian 34600 Kamunting Raya Mukim Perak Darul Ridzuan 17. Lot 6069, Mukim Kapar Selangor Darul Ehsan 18. HS(D) 143519 PT 207093 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 19. PN 123157, Lot 207173 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 20. PN 123158, Lot 207174 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 21. PN 123159, Lot 207175 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 22. PN 123160, Lot 207176 Mukim Hulu Kinta, District Kinta Perak Darul Ridzuan 23. HS(D) 129442 PT 62957 Mukim Kapar,District of Kelang Selangor Darul Ehsan 24. Geran No. 45720 Lot No. 6059 Mukim Kapar, Daerah Klang Selangor Darul Ehsan 25. Geran No. 45719 Lot No. 6058, Mukim Kapar, Daerah Klang Selangor Darul Ehsan SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Analysis Of Shareholdings
as at 25 April 2014 Authorised Share Capital : RM 500,000,000.00 Issued and Fully Paid-up : RM 340,077,440.00 : Ordinary Shares of RM 0.50 each : 1 vote per Ordinary Share size of holdings
no. of holders
no. of shares
100,001-33,957,593 (*) 33,957,594 and above (**) * less than 5% of issued shares ** 5% and above of issued shares LIST OF TOP 30 HOLDERS AS AT 25 APRIL 2014
CITIGROUP NOMINEES (TEMPATAN) SDN BHD EMPLOYEES PROVIDENT FUND BOARD HSBC NOMINEES (ASING) SDN BHD NTGS LDN FOR SKAGEN KON-TIKI VERDIPAPIRFOND HSBC NOMINEES (ASING) SDN BHD HSBC-FS FOR THE NAVIS ASIA NAVIGATOR MASTER FUND AMSEC NOMINEES (TEMPATAN) SDN BHD AMTRUSTEE BERHAD FOR CIMB ISLAMIC DALI EQUITY GROWTH FUND TAN GEOK SWEE @ TAN CHIN HUAT CARTABAN NOMINEES (ASING) SDN BHD BBH AND CO BOSTON FOR FIDELITY LOW-PRICED STOCK FUND (PRIN CITIGROUP NOMINEES (TEMPATAN) SDN BHD EMPLOYEES PROVIDENT FUND BOARD (CIMB PRIN) CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND HSBC NOMINEES (ASING) SDN BHD ExEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION CARTABAN NOMINEES (ASING) SDN BHD ExEMPT AN FOR RBC INVESTOR SERVICES TRUST (CLIENTS ACCOUNT) AMANAHRAYA TRUSTEES BERHAD PUBLIC ISLAMIC SELECT TREASURES FUND ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Analysis Of Shareholdings
as at 25 April 2014 CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES HSBC NOMINEES (ASING) SDN BHD ExEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT DIMENSIONS GROUP INC CITIGROUP NOMINEES (TEMPATAN) SDN BHD KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (CIMB EQUITIES) RHB INVESTMENT BANK BERHAD IVT "SW BOOK 1" HSBC NOMINEES (ASING) SDN BHD ExEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION HSBC NOMINEES (ASING) SDN BHD BNY BRUSSELS FOR CI ASIAN TIGER FUND HSBC NOMINEES (ASING) SDN BHD HSBC-FS FOR NIIF PUBLIC EQUITIES HSBC NOMINEES (ASING) SDN BHD ExEMPT AN FOR THE BANK OF NEW YORK MELLON (MELLON ACCT) HSBC NOMINEES (ASING) SDN BHD ExEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION AMANAHRAYA TRUSTEES BERHAD AMANAH SAHAM DIDIK DB (MALAYSIA) NOMINEE (ASING) SDN BHD STATE STREET AUSTRALIA FUND REMG FOR RETAIL EMPLOYEES SUPERANNUATION TRUST MAYBANK NOMINEES (TEMPATAN) SDN BHD MAYBANK TRUSTEES BERHAD FOR RHB-OSK CAPITAL FUND (200189) MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TING HENG PENG (14570Mz0406) DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD DEUTSCHE TRUSTEES MALAYSIA BERHAD FOR HONG LEONG GROWTH SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Analysis Of Shareholdings
as at 25 April 2014 list of direCtors' shAreholdinGs As per the reGister of direCtors' shAreholdinGs
AS AT 25 APRIL 2014
Dato' Seri Thai Kim Sim, Stanley Datin Seri Tan Bee Geok, Cheryl Dato‘ Ting Heng Peng Dato' Dr. Tan Geok Swee @ Tan Chin Huat Shamsudin @ Samad Bin Kassim 1. (a) & (b) Deemed interest through the shares held by spouse in pursuance of Section 6A(4) of the Companies Act, 1965. 2. The issued and paid up capital as at 25 April 2014 was RM340,077,440.00 divided into 680,154,880 ordinary shares of RM0.50 each. 3. The ordinary shares of RM1.00 each was subdivided into ordinary shares of RM0.50 each on 20 March 2007. list of substAntiAl shAreholders' shAreholdinGs As per the reGister of substAntiAl
SHAREHOLDERS' SHAREHOLDINGS AS AT 25 APRIL 2014
(excluding bare trustees)
Dato' Seri Thai Kim Sim, Stanley Datin Seri Tan Bee Geok, Cheryl 1. (a) & (b) Deemed interest through the shares held by spouse in pursuance of Section 6A(4) of the Companies Act, 1965. 2. The issued and paid up capital as at 25 April 2014 was RM340,077,440.00 divided into 680,154,880 ordinary shares of RM0.50 each. ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notice Of Seventeenth Annual General Meeting
notiCe is hereby Given thAt the Seventeenth Annual General Meeting of the Company will be
held at the Ballroom, Lower Ground Floor, Eastin Hotel, 13, Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 3 June 2014 at 10.00 a.m., for the following 1. To receive the Audited Financial Statements for the financial year ended 31 December 2013 and [SEE NOTE 2]
the Reports of Directors and Auditors thereon.
2. To approve a final single-tier dividend of 6.0% per share in respect of the financial year ended 31 (Resolution 1)
December 2013.
3. To approve payment of the Directors' Fees of RM430,000 for the year ended 31 December 2013.
4. To re-elect Dato' Seri Thai Kim Sim who retires pursuant to Article 88 of the Company's Articles (Resolution 3)
of Association.:- [SEE NOTE 3]
5. To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company and to authorise (Resolution 4)
the Board of Directors to fix their remuneration.
To consider and, if thought fit, to pass the following Ordinary Resolutions:- 6. ordinAry resolution
AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE [SEE NOTE 4(a)]
COMPANIES ACT, 1965
"thAt, subject always to the Companies Act, 1965, Articles of Association of the Company and
approval of any other governmental and/or regulatory bodies, where such approval is required, the Directors be and are hereby authorised and empowered pursuant to Section 132D of the Companies Act, 1965 to allot and issue shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued and paid-up share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that authority shall continue in force until the conclusion of the next Annual General Meeting of 7. ordinAry resolution
proposed reneWAl of Authority for the CoMpAny to purChAse its oWn [SEE NOTE 4(b)]
"thAt, subject to the Companies Act, 1965, the Articles of Association of the Company, the
Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities") for the Main Market ("LR") and the approval of such relevant government and/or regulatory authorities where necessary, the Company be and is hereby authorised to purchase its own ordinary shares of RM0.50 each ("Shares") on the Main Market of Bursa Securities ("Proposed Share Buy-Back") at any time, upon such terms and conditions as the Directors shall in their discretion deem fit and expedient in the best interest of the Company provided that:- (a) The aggregate number of Shares in the Company which may be purchased and/or held by the Company shall not exceed ten percent (10%) of the prevailing issued and paid-up share capital of the Company at the time of purchase subject to any amount as may be determined by Bursa Securities from time to time and compliance with the public shareholding spread requirements as stipulated in Paragraph 8.02(1) of the LR; (b) The maximum funds to be allocated by the Company for the purpose of purchasing the Shares shall not exceed the Company's latest audited retained profits and/or share premium SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notice Of Seventeenth Annual General Meeting
(c) The authority conferred by this resolution will be effective immediately from the passing of this ordinary resolution until:- (i) the conclusion of the next Annual General Meeting ("AGM") at which time shall lapse unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; or (ii) the expiration of the period within which the next AGM after that date is required by law (iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a whichever occurs first; and (d) Upon the purchase by the Company of its own Shares, the Board of Directors of the Company ("Board") be and is hereby authorised to:- (i) cancel all or part of the Shares purchased pursuant to the Proposed Share Buy-Back ("Purchased Shares"); and/or (ii) retain all or part of the Purchased Shares as treasury shares; and/or (iii) distribute the treasury shares as share dividends to the Company's shareholders for the time being; and/or 100 (iv) resell the treasury shares on Bursa Securities.
And thAt authority be and is hereby given to the Board to take all such steps as are necessary
or expedient to implement, finalise and give full effect to and to implement the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be required or imposed by the relevant authorities from time to time and to do all such acts and things as the Board may deem fit and expedient in the best interest of the Company." 8. ordinAry resolution
[SEE NOTE 4(c)]
ContinuinG in offiCe As independent non-exeCutive direCtors
"thAt approval be and is hereby given to Dato' Ting Heng Peng who has served as (resolution 7)
an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to act as an Independent Non-Executive Director of the "thAt approval be and is hereby given to Mr. Gong Wooi Teik who has served as an (resolution 8)
Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to act as an Independent Non-Executive Director of the Company." 8.3 "thAt approval be and is hereby given to Encik Rashid Bin Bakar who has served as (resolution 9)
an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, to continue to act as an Independent Non-Executive Director of the 9. To transact any other business of which due notice has been given.
notiCe of dividend entitleMent And pAyMent
notiCe is Also hereby Given thAt subject to the approval of the members at the Seventeenth
Annual General Meeting to be held on 3 June 2014, a final single-tier dividend of 6% per share in respect of the financial year ended 31 December 2013, will be paid on 30 June 2014.
ANNUAL REPORT 2013 SUPERMAX CORPORATION BERHAD (420405-P) Notice Of Seventeenth Annual General Meeting
The entitlement date for the dividend is 12 June 2014.
A depositor shall qualify for entitlement to the dividend only in respect of:- (a) Shares transferred into the Depositor's Securities Account before 4.00 p.m. on 12 June 2014 in respect of transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.
by order of the boArd
WonG WAi foonG (MAICSA 7001358)
joAnne toh joo Ann (LS 0008574)
Date: 12 May 2014 1. APPOINTMENT OF PROXY
a) For the purpose of determining a member who shall entitle to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 46(f) of the Company's Articles of Association to issue a General Meeting Record of Depositors as at 28 May 2014. Only depositor whose name appears on the Record of Depositors as at 28 May 2014 shall be entitled to attend, speak and vote at the meeting or appoint proxies to attend, speak and vote on his/her behalf.
b) A member shall be entitled to be present and to vote on any question either personally or by proxy, or as proxy for another member at any general meeting, or upon a poll and to be reckoned in a quorum in respect of any fully paid-up shares and any share upon which call due and payable to the Company shall have been paid. The proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply. A member may appoint up to 2 proxies. Where a member appoints two or more proxies, the proxies shall not be valid unless the member specifies the proportion of his/her shareholdings to be represented by each proxy.
c) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to credit of the said securities account.
d) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ("omnibus account"), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
e) The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation under its common seal, or the hand of its attorney duly authorised. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.
SUPERMAX CORPORATION BERHAD (420405-P) ANNUAL REPORT 2013 Notice Of Seventeenth Annual General Meeting
f) The instrument appointing a proxy together with the power of the attorney (if any) shall be left at the Registered Office of the Company situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty-eight (48) hours before the time appointed for holding the meeting, i.e. on or before 10.00 a.m., Sunday, 1 June 2014, otherwise the person so named shall not be entitled to vote in respect thereof.
2. AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
The Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting by shareholders of the Company.
3. RETIREMENT OF DIRECTOR
Encik Shamsudin @ Samad Bin Kassim is retiring by rotation in accordance with Article 88 of the Company's Articles of Association as a Director of the Company at the Seventeenth Annual General Meeting and he had indicated to the Company that he would not be seeking for re-election at the Seventeenth Annual General Meeting. Therefore, Encik Shamsudin @ Samad Bin Kassim shall retire as Director of the Company at the conclusion of the Seventeenth Annual General Meeting.
4. EXPLANATORY NOTES TO SPECIAL BUSINESS
a) AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 The proposed Resolution 5 is the renewal of the mandate obtained from the members at the last Annual General Meeting ("the previous mandate"). The previous mandate was not utilised and accordingly no proceeds were raised.
The proposed Resolution 5, if passed, would provide flexibility to the Directors to undertake fund raising activities, including but not limited to further placement of shares for the purpose of funding the Company's current and/or future investment project(s), working capital, repayment of borrowings and/or acquisition(s), by the issuance of shares in the Company to such persons at any time as the Directors may deem fit provided that the aggregate number of shares issued pursuant to the mandate does not exceed 10% of the issued and paid-up share capital of the Company for the time being, without having to convene a general meeting. This authority, unless revoked or varied by the Company in a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.
b) PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES The proposed Resolution 6, if passed, will empower the Company to purchase up to ten percent (10%) of the issued and paid-up ordinary share capital of the Company through Bursa Malaysia Securities Berhad.
For further information, please refer to the Statement to Shareholders dated 12 May 2014.
c) CONTINUING IN OFFICE AS INDEPENDENT NON-ExECUTIVE DIRECTORS Pursuant to the Malaysian Code on Corporate Governance 2012, the Board of Directors has via the Nomination Committee assessed the independence of Dato' Ting Heng Peng, Mr. Gong Wooi Teik and Encik Rashid Bin Bakar who each has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and recommended them to continue to act as Independent Non-Executive Directors of the Company based on the following (i) each of them fulfills the criteria of an Independent Director pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; (ii) each of them is familiar with the Company's business operations as he has been with the Company for more than 9 (iii) each of them has devoted sufficient time and attention to his responsibilities as an Independent Non-Executive Director of the Company; and (iv) each of them has exercised due care during his tenure as an Independent Director of the Company and carried out his duty in the interest of the Company and shareholders.
The proposed Resolutions 7, 8 and 9, if passed, will enable Dato' Ting Heng Peng, Mr. Gong Wooi Teik and Encik Rashid Bin Bakar to continue in office as Independent Non-Executive Directors.
Proxy Form
I/We NRIC/ Company No. being a member(s) of SUPERMAx CORPORATION BERHAD (Company No.: 420405-P) or failing him/her, or failing him/her, the Chairman as *my/our proxy to vote for *me/us and on *my/our behalf at the Seventeenth Annual General Meeting of the Company to be held at the Ballroom, Lower Ground Floor, Eastin Hotel, 13, Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 3 June 2014 at 10.00 a.m. and at any The proxy is to vote in the manner indicated below, with an "x" in the appropriate spaces. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his/her discretion.
To approve a final single-tier dividend of 6.0% per share in respect of the financial year ended 31 December 2013.
To approve payment of the Directors' Fees of RM430,000 for the year ended 31 December 2013.
To re-elect Dato' Seri Thai Kim Sim who retires by rotation as a Director of the Company pursuant to Article 88 of the Company's Articles of Association.
To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Board of Directors to fix their remuneration.
To grant authority to allot and issue shares in general pursuant to Section 132D of the Companies Act, 1965.
To approve the Proposed Renewal of Authority for the Company to purchase its own ordinary shares on Bursa Malaysia Securities Berhad up to 10% of the Issued and Paid up Share Capital.
To approve Dato' Ting Heng Peng to continue to act as an Independent Non- Executive Director.
To approve Mr. Gong Wooi Teik to continue to act as an Independent Non-Executive To approve Encik Rashid Bin Bakar to continue to act as an Independent Non- Executive Director.
Signed this day of 2014
Number of shares held
Signature Shareholder or Common Seal Number of shares held:
If more than 1 proxy, please specify number of shares represented by each proxy
Name of Proxy 1:
Name of Proxy 2:
CDS Account No. Telephone no. (During office hours) * Delete if not applicable First fold here i. For the purpose of determining a member who shall entitle to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 46(f) of the Company's Articles of Association to issue a General Meeting Record of Depositors as at 28 May 2014. Only depositor whose name appears on the Record of Depositors as at 28 May 2014 shall be entitled to attend, speak and vote at the meeting or appoint proxies to attend, speak and vote on his/her behalf.
ii. A member shall be entitled to be present and to vote on any question either personally or by proxy, or as proxy for another member at any general meeting, or upon a poll and to be reckoned in a quorum in respect of any fully paid-up shares and any share upon which call due and payable to the Company shall have been paid. The proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply. A member may appoint up to 2 proxies. Where a member appoints two or more proxies, the proxies shall not be valid unless the member specifies the proportion of his/her shareholdings to be represented by each proxy.
iii. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to credit of the said securities account.
iv. 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 v. The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation under its common seal, or the hand of its attorney duly authorised. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.
vi. The instrument appointing a proxy together with the power of the attorney (if any) shall be left at the Registered Office of the Company situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty-eight (48) hours before the time appointed for holding the meeting, i.e. on or before 10.00 a.m., Sunday, 1 June 2014, otherwise the person so named shall not be entitled to vote in respect thereof.
First fold here superMAx CorporAtion berhAd
LEVEL 18, THE GARDENS NORTH TOWER LINGKARAN SYED PUTRA 59200 KUALA LUMPUR Then fold here SUPERMAX HEALTHCARE INC.
HAS SUCCESSFULLY ACHIEVED THE FOLLOWING LEVEL OF CERTIFICATION ESTABLISHED BY THE U.S. GREEN BUILDING COUNCIL IN THE LEED GREEN BUILDING RATING SYSTEMTM AND VERIFIED BY THE GREEN BUILDING CERTIFICATION INSTITUTE.
LEED FOR NEW CONSTRUCTION AND MAJOR RENOVATIONS

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