annual report 2001 · annual report 2001 TOP GLOVE CORPORATION BERHAD incorporated in malaysia under the companies act, 1965 AWARDED MS ISO 9002 TOP GLOVE CORPORATION BERHAD

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TOP GLOVE CORPORATION BERHADincorporated in malaysia under the companies act, 1965

AWARDEDMS ISO 9002

TOP GLOVE CORPORATION BERHADlot 5091, jalan teratai, batu 5, off jalan meru,

41050 klang, selangor darul ehsan, malaysia

tel: 603-3392 7880/7350 fax: 603-3392 7229/9160

websites: www.topglove.com.my e-mail: [email protected]://topglove.asiaep.com [email protected]

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AD a n n u a l r e p o r t 2 0 0 1

Factory 1 (Klang)

Factory 4 (Klang) Factory 5 (Ipoh) Factory 6 (Thailand)

Factory 2 (Klang) Factory 3 (Klang)

Top Glove’s International Quality System Certifications

Top Glove’s Highly Efficient Manufacturing Plants

top glove malaysia

Exports to 108 Countries

(474423-x)

(474423-x)

FACTORY 1Bangunan United Industries

lot 5019, Batu 51/2, Jalan Meru41050 Klang, Selangor, Malaysia

tel : 603-3392 3726/3392 1101

fax : 603-3392 3726

e-mail : [email protected]

FACTORY 2lot 4968, Jalan Teratai, Batu 6

Off Jalan Meru, 41050 Klang, Selangor, Malaysia

tel : 603-3392 1992/1905

fax : 603-3392 1291/8410


FACTORY 4lot 5987, Jalan Teratai, Batu 5

Off Jalan Meru41050 Klang, Selangor, Malaysia

tel : 603-3392 8588/8996

fax : 603-3392 6788


FACTORY 5lot 18, 27, 38 & 57, Medan Tasek,

Kawasan Perindustrian Tasek, 31400 Ipoh, Perak, Malaysiatel : 605-546 6360/547 9271

fax : 605-547 8975

e-mail : (i) [email protected](ii) [email protected]

1906, n 16th StreetSuite 101 Phoenix AZ 85006

tel : 602-253 7533

fax : 602-253 7172


600, Camino VerdSouth Pasadena CA 91030

tel : 323-683 3197

fax : 323-257 5802


501 Mertoplex Drive, Suite 310

Nashville, TN 37211

tel : 615-837 3278

fax : 615-837 3478


CORPORATE OFFICE & FACTORY 3lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru

41050 Klang, Selangor, Malaysiatel : 603-3392 7880/7350 fax : 603-3392 7229/9160

e-mail : (i)[email protected] (ii) [email protected] : www.topglove.com.my; http://topglove.asiaep.com

corporate directory

MALAYSIA

THAILAND

FACTORY 6180/3 m.7 Srisonthon Road. T. Srisonthon, A. Thalang

Phuket 83110, Thailandtel : 6676-272 572/272 573 fax : 6676-325 354


USA

TG MEDICAL (U.S.A.) INC.

our vision

We strive to be the world’s leadingmanufacturer with excellentquality glove products andservices that enrich and protecthuman lives.

quality policy

Quality and productivity areour business.Continuous and improvementare our duties.Towards zero defect is ourtarget.

mission statement

To be a world class glovemanufacturer providing TOPquality products with excellentservices through continuousimprovement and innovation.

corporate values

Global customer satisfaction.Do it right first time and every time.Integrity and total commitment.Excellence in quality andcompetitiveness.Environmental friendly and socialresponsibilities.


AWARDEDMS ISO 9002


AWARDEDMS ISO 9002

(474423-x) (474423-x)

TOP GLOVE CORPORATION BERHAD2001 ANNUAL REPORT

CONTENTS

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25

29

55

56

Notice of Annual General Meeting

Corporate Information

Corporate Structure

Five-Year Group Financial Review

Export Markets

Chairman’s Statement

Profile of Directors

Management

Corporate Governance Statement

Audit Committee Report

Financial Statements

List of Properties

Analysis of Shareholding

Proxy Form

Top Glove Corporation Bhd is one

of the few and leading local

manufacturers of surgical gloves

which requires sophisticated

process and is subjected to

stringent quality standards.

The Group acts as a comprehensive

one-stop glove sourcing centre in

the market, with an extensive range

of latex examination, nitrile, surgical,

household and industrial gloves.

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Third Annual General Meeting of the Company will be held atEast VIP Lounge, Kuala Lumpur Golf & Country Club, No.10, Jalan 1/70D, Off Bukit Kiara, 60000Kuala Lumpur on Friday, 18 January, 2002 at 9.30 a.m. for the following purposes:

AGENDA

1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the financial year ended 31 August, 2001 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a final tax exempt dividend of 3% for the financial year ended 31 August, 2001. (Resolution 2)

3. To approve the payment of Directors’ Fees for the financial year ended 31 August, 2001. (Resolution 3)

4. To re-elect the retiring Director, Madam Tong Siew Bee who retires pursuant to Article 71 of the Company’s Articles of Association. (Resolution 4)

5. To re-elect the retiring Director, Dr. Lim Wee Chai who retires pursuant to Paragraph 7.28(2) of Part K of Chapter 7 of the Revamped Listing Requirements of Kuala Lumpur Stock Exchange. (Resolution 5)

6. To pass the following resolution pursuant to Section 129(6) of the Companies Act, 1965 :

“That pursuant to Section 129(6) of the Companies Act, 1965, the following Directors who have attained the age of seventy (70) years, be and are hereby re-appointed as Directors of the Company and to hold office until the conclusion of the next Annual General Meeting:

(a) Tan Sri Datuk Arshad Bin Ayub (Resolution 6)(b) Mr. Sekarajasekaran a/l Arasaratnam” (Resolution 7)

7. To re-appoint Messrs. Arthur Andersen & Co as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration. (Resolution 8)

8. As Special Business

To consider and, if thought fit, to pass the following ordinary resolution:

Ordinary Resolution – Authority To Issue Shares Pursuant To Section 132D of the Companies Act, 1965

“That pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue and allot 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 thisresolution does not exceed 10% of the issued 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 Kuala Lumpur Stock Exchange and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.” (Resolution 9)

9. To transact any other ordinary business for which due notice has been given.


NOTICE OF ANNUAL GENERAL MEETING (CONT’D)

3

NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that the Register of Members of the Company will be closed at5.00 p.m. on 5 February, 2002 for purpose of determining shareholders’ entitlement to the final taxexempt dividend of 3% in respect of the financial year ended 31 August, 2001.

The dividend, if approved, will be paid on 1 March, 2002 to shareholders whose names appear in theRecords of Depositors (ROD) on 5 February, 2002.

A Depositor shall qualify for entitlement only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 12.30 p.m. on 5 February, 2002in respect of ordinary transfers; and

(b) Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to theRules of the Kuala Lumpur Stock Exchange.

By Order of the Board

CHUA SIEW CHUANCompany Secretary

Kuala Lumpur27 December, 2001

Explanatory Notes to Special Business:

The proposed adoption of the Ordinary Resolution under Special Business is primarily to give flexibility to the Boardof Directors to issue and allot shares at any time in their absolute discretion without convening a general meeting.

Notes:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend andvote in his stead. A proxy may but need not be a member of the Company and a member may appoint anyperson to be his proxy without limitation and the provisions of Section 149(1) (a), (b) and (c) of the Companies Act,1965 shall not apply to the Company.

2. In the case of a corporate member, the instrument appointing a proxy shall be either under its Common Seal orunder the hand of its officer or attorney duly authorised.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 22,Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not lessthan 48 hours before the time for holding the Meeting or at any adjournment thereof.

Directors Standing For Re-election:

The Directors standing for re-election are as follows:

1. Madam Tong Siew Bee2. Dr. Lim Wee Chai3. Tan Sri Datuk Arshad Bin Ayub4. Mr. Sekarajasekaran a/l Arasaratnam

Their particulars can be found on pages 14,15 and 17 of the Annual Report. Their shareholdings in the Company arestated on page 57 of the Annual Report.

Information On Board Meetings:

The information on Board meetings and attendance of the Directors can be found on page 19 of the Annual Report.

4


CORPORATE INFORMATION

BOARD OF DIRECTORS

• Dr. Lim Wee ChaiChairman/Managing Director

• Tan Sri Datuk Arshad bin AyubIndependent Non-Executive Director

• Tong Siew BeeExecutive Director

• Haji Shahadan bin Haji Abd ManasExecutive Director

• Lim Hooi SinNon-Executive Director

• Sekarajasekaran a/l ArasaratnamIndependent Non-Executive Director

• Lau Boon AnnNon-Executive Director

AUDIT COMMITTEE

• Tan Sri Datuk Arshad bin AyubChairman

• Dr. Lim Wee Chai

• Sekarajasekaran a/l Arasaratnam

COMPANY SECRETARY

Chua Siew Chuan (MAICSA No: 0777689)

REGISTERED OFFICE

Level 22, Menara Milenium, Jalan DamanlelaPusat Bandar Damansara, Damansara Heights50490 Kuala LumpurTel: 03–255 7077Fax: 03–254 9940

CORPORATE OFFICE

Lot 5091, Jalan TerataiBatu 5, Off Jalan Meru41050 Klang, Selangor Darul EhsanTel: 03–3392 7880/7350Fax: 03–3392 7229/9160E-Mail: [email protected]

[email protected]: www.topglove.com.my

http://topglove.asiaep.com

REGISTRARS

Securities Services (Holdings) Sdn BhdLevel 22, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel: 03–255 7077Fax: 03–254 9940

AUDITORS

Arthur Andersen & Co Public AccountantsGraha Maju (Bangunan PKNM)Tingkat 10–Lot 1Jalan Graha Maju75300 Melaka

PRINCIPAL BANKERS

• Public Bank Berhad

• EON Bank Berhad

• HSBC Bank Malaysia Berhad

• Standard Chartered Bank Malaysia Berhad

• Malayan Banking Berhad

SOLICITORS

• Soo Thien Ming & NashrahNo. 45–47, 1st FloorJalan Kapar, 41400 KlangSelangor Darul Ehsan

• Michael Chen, Gan, Muzafar & Azwar5th Floor, Bangkok Bank Building105, Jalan Tun H.S. Lee50000 Kuala Lumpur

• Ranjit Ooi & Robert LowNo. 53, Jalan MaarofBangsar, 59000 Kuala Lumpur

STOCK EXCHANGE LISTING

Kuala Lumpur Stock Exchange Second Board

5


CORPORATE STRUCTURE

Top Glove Corporation Berhad

100%Top Glove Sdn Bhd(Factory1,2,4 and 5)

74%Great Glove (Thai) Co Ltd(Factory 6)

100%TG Medical Sdn Bhd(Factory 3)

100%Top Glove Engineering Sdn Bhd

100%TG Medical (U.S.A.) Inc.

100%Great Glove Sdn Bhd

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FIVE-YEAR GROUP FINANCIAL REVIEW

7

Financial Year Ended31.8.1997 31.8.1998 31.8.1999 31.8.2000 31.8.2001

RM’000 RM’000 RM’000 RM’000 RM’000

Turnover 35,453 48,493 70,198 103,161 138,862_____________________________________________________________

Earnings Before Interest, Depreciation And Taxation 6,628 10,757 12,790 17,198 23,865

Interest Expense (385) (860) (970) (1,405) (1,783)

Depreciation (1,070) (1,766) (1,683) (3,157) (4,865)_____________________________________________________________

Profit Before Taxation 5,173 8,131 10,137 12,636 17,217

Taxation (882) (1,059) (313) (1,012) (1,312)_____________________________________________________________

Profit After Taxation 4,291 7,072 9,824 11,624 15,905_____________________________________________________________

Gross Earnings Per Share (RM) 0.19 0.31 0.38 0.48 0.43

Net Earnings Per Share (RM) 0.16 0.27 0.37 0.44 0.40

Gross dividend rate (%) 0.68 1.51 1.58 — 5.00

Net dividend rate (%) 0.49 1.08 1.58 — 5.00

Note: The figures for financial years ended 31 August 1997, 1998, 1999 and 2000 are prepared based on aproforma consolidated basis on the assumption that the current structure of the Group has been in existencesince financial year ended 31 August 1997.


FIVE-YEAR GROUP FINANCIAL REVIEW (CONT’D)

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EXPORT

NorthAmericaCanadaPuerto RicoUSA

LatinAmericaArgentinaBoliviaBrazilChileColombiaCosta RicaDominican RepublicEcuadorEl SalvadorFrench GuyanaGuatemalaHaitiHondurasJamaicaMexicoNicaraguaPanamaParaguayPeruUruguayVenezuela 108 Countries

EuropeAlbaniaArmeniaBelgiumBosnia HerzegovinaBulgariaCanary IslandsCroatiaCyprusCzech RepublicDenmarkEstoniaFranceGeorgiaGermanyGreeceHungaryItalyKazakhstanKosovoLatviaLithuaniaMacedonia, FYRNetherlandsNorthern IrelandPolandRepublic of UzbekistanRomaniaRussiaSloveniaSpainSwedenTurkeyUkraineUnited Kingdom

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MARKETS

MiddleEastBahrainEgyptIraqIsraelJordanKuwaitLebanonOmanQatarSaudi ArabiaSyriaUAEYemen

Worldwide

Africa AlgeriaBurundiCongoEthiopiaGhanaIvory CoastKenyaMadagascarMoroccoMozambiqueNigeriaSierra LeoneSouth AfricaSudanSwazilandTanzaniaTunisiaUgandaZimbabwe

Asia PacificAustraliaBangladeshBruneiCambodiaChinaHong KongIndonesiaJapanKoreaMauritiusNepalNew ZealandPakistanPapua New GuineaSingaporeTaiwanUnion of MyanmarVietnam

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CHAIRMAN’S STATEMENT

“The Group has managed to weather the global economy slowdownextremely well through our recipe of prudence, excellence inCustomer Relationship Management, cost effectiveness in everythingthat we do, innovative in continuously improving our product rangeand standards and always on the move by embarking on expansionprogrammes to achieve economies of scale which made the Group amajor leading glove manufacturer and exporter in the world.”

Dr. Lim Wee Chai Chairman/Managing Director

Dear Valued Shareholders,

On behalf of the Board of Directors, it gives me great pleasure to present the AnnualReport and the Audited Statements of Top Glove Corporation Bhd and its Group ofCompanies for the financial year ended 31 August 2001.

FINANCIAL PERFORMANCE

Despite the global economic meltdown, coupled with an oversupply of latex examination gloves in themarket, I am pleased to report that the Group is able to continue its trend in retaining the support of itsworldwide customers based on our philosophy in providing an extensive range of high quality productsat competitive prices reinforced with excellent customer services.

The Group recorded an impressive after-tax profit of RM15.905 million for the year, on the back of anotable turnover of RM138.862 million. This represents a growth of 36.83% and 34.61% from last year’sproforma Group after-tax profit of RM11.624 million and turnover of RM103.161 million respectively.Despite lower prices, higher operational costs and tighter production quality standards, the Group’sfinancial performance has fared well resulting in a positive financial bottomline which is commendable inthe glove industry.

The robust growth of the Group was mainly attributed to our expansion into prestigious markets such asthe USA, Europe and Japan resulting in the clinching of a bigger market share in the said continents. The

resilient earnings are also due to the rapid expansion planundertaken by the Group to increase its presence in the

global market by adopting aggressive and intensivemarketing strategies supported by economies of

scale from the Group’s six manufacturing plants.

The Group has attained a high level ofrecognition among its established globalglove buyers since the inception of itssubsidiary, Top Glove Sdn Bhd in 1991. Ithas always been the Group’s main goal tocontinuously deliver quality and unrivalled

customer services to meet our buyers’aspirations as a means to maintain loyalty. We

aim to exceed our customers’ and shareholders’expectations in all our undertakings.

11


CHAIRMAN’S STATEMENT (CONT’D)

DIVIDEND

The Company has declared and paid an interim tax exemptdividend of 5 sen per share on 31 May 2001. The Board ispleased to propose a second and final tax exempt dividend of3 sen per share for the financial year ended 31 August 2001.The proposed final dividend is subject to the approval of theshareholders in the forthcoming Annual General Meeting.

UTILISATION OF PROCEEDS FROM INITIAL

PUBLIC OFFER

Following its Initial Public Offer in March 2001, theCompany has raised gross proceeds amounting toRM38.738 million. As at 31 August 2001, RM22.878 millionwere used to repay bank borrowings, RM4.800 million forpurchase of plant and machinery, RM0.515 million for ITand office equipment, RM1.472 million for listing expensesand RM6.537 million for working capital. The unutilisedamount of RM2.536 million was being kept in short termfixed deposits for the time being and will be used as plannedin the listing proposal.

INDUSTRY TREND AND DEVELOPMENT

The Malaysian rubber glove industry has been through various ups and downsin the past decade. Being the leading manufacturer and exporter of rubber gloves worldwide, Malaysianmanufacturers have been hard pressed to maintain their strong hold in this industry with the emergenceof manufacturers from neighbouring countries like Thailand and Indonesia.

The year in review pose many challenges and many companies in the rubber glove industry were notspared the resultant depressing market sentiments. Nevertheless, the Group was able to ride out yetanother storm.

Latex gloves are essentials items which provide biological barriers against virus, diseases, germs andharmful substances. They are mainly used in the medical and health industry as examination and surgicalgloves, followed by the dentistry sector, high technology manufacturing scientific research areas, foodbased industries, sanitary and general household purposes.

In the 90s, the demand for disposable latexexamination and surgical gloves continued toincrease due to the AIDS menace and a greaterawareness in both developed and developingcountries such as Africa and Eastern Blockcountries to protect healthcare workers andothers against the transmission of diseasesthrough human contacts.

The latest and most current menace i.e., the Anthrax scare, is also expected to boostthe demand for rubber gloves but is still at an

early stage and has not created any significantimpact on the glove industry so far.


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PROSPECTS

The growth of the industry is assured as long asthe need to wear gloves as a protective barrierremains. With an increasing world population,the increasing wealth of world nations and theincreasing level of health consciousness, thedemand of gloves will continue to grow.

As a glove manufacturer and exporter, I amoptimistic that the future of the glove industry isbright provided both the manufacturers and thegovernment bodies address some key issues in apositive manner.

The present economic uncertainty on top of suchconcerns as low selling prices, rising operationalcosts, price undercutting, and tighter production qualitystandards did not dampen the Group’s performance. On thecontrary, the Group has responded positively in combating these issues by continuously increasing andupgrading its production lines.

In line with the expansion programme, the Group has increased the number of its production lines from 41lines in year 2000 to 54 lines in year 2001 with six manufacturing plants supported by a total workforce of1,700 churning out a combined production capacity of more than 270 million pieces of gloves per month or3.24 billion pieces of gloves per year (compared to 2.82 billion pieces of gloves produced in year 2000).

The Group’s market for gloves is concentrated in the US and some countries such as Germany, Franceand UK in Europe. The Far East such as Japan, Hong Kong and Taiwan have also joined the ranks ofother countries as important target markets to the Group. Market diversification into more developedcountries in Latin America and Southern Africa are also being explored. Currently, the Group exports tomore than 108 countries worldwide.

As an innovative and efficient producer who strives continuously to meet the high expectation of thecustomers, the Group is moving aggressively into more valued-added glove products such as surgical,nitrile, household and industrial gloves. The Group also has facilities to carry out extensive post-leachingprocesses, chlorination and enzyme treatment which have reduced the protein level in its glovessignificantly. The Group is also on the continuous lookout for profitable overseas ventures to broaden its

base of operations and build productive relationshipand synergies with its partners.

Albeit all the obstacles faced by the gloveindustry, the Group is still upbeat on thefuture outlook in view of its innovativetechnology, prudent management,automation technology and forcefulmarketing efforts. Adding to this, the Groupis able to retain its customers by itsadherence to quality, reliability and goodbusiness ethics. To stay as a costcompetitive producer, the Group is alsoswitching to sourcing material at lower costwithout any compromise on product quality.

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PROSPECTS (CONT’D)

The Group’s strength is seen in its reputation as a high quality one stop glove sourcing centre for itscustomers locally as well as other parts of the globe where we have been providing quality gloves andexpeditious services through our subsidiaries Top Glove Sdn Bhd, TG Medical Sdn Bhd, TG Medical(USA) Inc., Great Glove Sdn Bhd and Great Glove (Thai) Co. Ltd. This reputation has earned us theloyalty of customers worldwide.

APPRECIATION

My heartiest thanks and gratitude go to our shareholders and customers for their loyalty and continuoustrust in our products and services, our partners and business associates, especially consultants andsuppliers for providing much-needed support and the various government authorities for theirwholehearted co-operation and assistance.

I am also extremely grateful to all our dedicated and fully committed staff as I strongly believe theGroup’s success is largely attributed to their continuous contributions and professionalism on the job asa united team and willingness to walk the extra mile for the customer and also for the Company.

Finally, on behalf of the management team and all employees, I wish to express my deep appreciation tomembers of the Board for standing by us to face the challenges ahead.

Thank you.

Dr. Lim Wee Chai,Chairman/ Managing Director


2001200019991998

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PROFILE OF DIRECTORS

DR. LIM WEE CHAIChairman/Managing Director

Dr. Lim Wee Chai, aged 44, is the Chairman andManaging Director as well as founder of the Top GloveGroup of Companies. He was appointed to the Boardon 4 September 2000. He graduated with a Bachelorof Science Degree with Honours in Physics in 1982from University Malaya and a Master of BusinessAdministration in 1985 from the Sul Ross StateUniversity in Texas, USA. He was conferred hisDoctorate in Business Administration from IrishInternational University, London and awarded FellowMembership of the Business Management Association,UK in September 2001. Dr. Lim brings a wealth ofexperience in the marketing of consumer productswhilst he was the Sales Manager of a subsidiarycompany of OYL Industries Bhd, a company listed onthe Kuala Lumpur Stock Exchange. In 1991, he set upTop Glove Sdn Bhd, his own glove manufacturing andtrading business with only one factory and hasexpanded his business to six glove factories in 2001.He has more than 20 years of experience in the rubberand latex manufacturing business.

He was the President (1997/99) of the Malaysian RubberGlove Manufacturers’ Association (MARGMA), afterhaving been actively involved in the association holdingvarious portfolios as the ex-Vice President, ex-HonoraryTreasurer and ex-Honorary Secretary for the past sevenyears. He was a Board Member of the Malaysia RubberBoard (MRB) in 1998 and 1999, and is a Director of theAssociation of Malaysian Medical Industries (AMMI).

His business philosophies are:• Quality and Productivity are Our Business.• Continuous Improvement and Innovation

are Our Duties.• Towards Zero Defects is Our Target.

Dr. Lim Wee Chai does not have any majorshareholdings and directorships in other publiccorporations for the past two years.

Dr. Lim Wee Chai is the husband of Tong Siew Beeand brother of Lim Hooi Sin.

TONG SIEW BEEExecutive Director

Tong Siew Bee, aged 44, has been a Director of theGroup since 1991 and is a co-founder of the Top Glove Group of Companies. She was appointedto the Board of Top Glove on 4 September 2000.Madam Tong graduated from University SainsMalaysia in Penang with a Bachelor of ScienceDegree with Honours in Computer Science in 1983and obtained her Master of Business Administrationfrom Sul Ross State University, Texas, USA in 1985.She is responsible for the computer and informationsystems, human resource and general administrationfor the Top Glove Group of Companies. She has morethan ten years of experience in informationtechnology in the banking industry. She was formerlyattached to United Overseas Bank Berhad andUtama Bank Berhad.

Tong Siew Bee does not have any majorshareholdings and directorships in other publiccorporations for the past two years.

Tong Siew Bee is the wife of Dr. Lim Wee Chai andsister-in-law of Lim Hooi Sin.


PROFILE OF DIRECTORS (CONT’D)

15

TAN SRI DATUK (DR) ARSHAD BIN AYUBIndependent Non-Executive Director

Tan Sri Datuk (Dr) Arshad Bin Ayub, aged 73, is anIndependent Non-Executive Director of the Top Glove Group. He was appointed to the Board on 4 September 2000. He obtained a Diploma inAgriculture from College of Agriculture, Serdang,Selangor in 1954 and a Bachelor of Science (Hons)Economics and Statistics from University College of Wales, Aberystwyth, United Kingdom in 1958. In 1964, he obtained a postgraduate Diploma inBusiness Administration (IMEDE), Switzerland.

Tan Sri Datuk (Dr) Arshad joined the Malaysian CivilService upon his graduation and had a successfulcareer. Among the top posts he held were FirstDirector of Mara Institute of Technology for 10 yearsfrom 1965 to 1975, Deputy Governor of Bank NegaraMalaysia from 1975 to 1977, Deputy Director GeneralEconomic Planning Unit of the Prime Minister’sDepartment from 1977 to 1978 and Secretary GeneralMinistry of Primary Industries in 1978, Ministry ofAgriculture from 1979 to 1981 and Ministry of LandRegional Development from 1981 to 1983. In thatcapacity he was Joint Chairman of the InternationalBoundary Survey Malaysia-Thailand and Malaysia-Indonesia. He was Deputy Chairman of KedahRegional Development Authority (KEDA) from 1981 to1983, Chairman of Penang Regional DevelopmentAuthority (PERDA) from 1983 to 1985 and Chairmanof South East Johor Development Authority (KEJORA)from 1983 to 1987. He sat on a number ofcommittees at national level and was a member ofHarun Salary Commission for Statutory bodies.

He is the Chairman of PFM Capital Holdings SdnBhd, a wholly owned subsidiary of PermodalanNasional Berhad, a company principally involved inthe trading and underwriting of shares and equityparticipation since 1977. He sits on the Board ofDirectors of several public listed and privatecompanies, which among others include Kulim (M)Berhad, KPJ Healthcare Bhd, Sindora Bhd, RumpunHikau Capital Berhad, Nationwide Express CourierServices Bhd, Tomypal Holdings Berhad, MITHoldings Bhd, Pelaburan Johor Berhad, AudreyInternational Berhad and Perwira Affin Merchant BankBerhad. He is presently the President of MalaysiaRubber Products Manufacturers Association, memberof Lembaga Getah Malaysia and was recentlyappointed as Chairman of Malaysia Rubber ExportPromotion Council (MREPC). He is a member of theCouncil of University Malaya and Kolej Ugama SultanZainal Abidin (KUSZA). He is also the Chairman ofMalaysian Business Council IMS-GT and also a ViceChairman of Koperasi MOCCIS Berhad.


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HAJI SHAHADAN BIN HAJI ABD MANASExecutive Director

Haji Shahadan Bin Haji Abd Manas, PPT, PMC, PJK,aged 67, is the Human Resource Director who joinedTop Glove Sdn Bhd on 10 June 1996, and wasappointed to the Board of Top Glove on 4 September2000. He graduated with a Bachelor of Arts fromUniversity Malaya in 1962 and obtained his Diplomain Public Administration (Australia) in 1968.

He commenced his career in the Government Sector,as Assistant Secretary (Admin) in the Ministry ofWorks, Posts & Telekom from 1963 to 1966, AssistantSecretary (Finance) in the Ministry of National & RuralDevelopment from 1967 to 1969. He served asDistrict Officer and President of the District Councilsof Rembau, Tampin and Port Dickson consecutivelyfrom 1970 to 1979. From 1980 to 1985, he was theDirector General of the Department of CommunityDevelopment in the Ministry of National & RuralDevelopment. He was the Director of LandAdministration and Management from 1986 to 1990.In 1991, he left to join a Dutch construction company,namely Ballast Nedam (M) Sdn Bhd, as the PublicAffairs Advisor until 1995. In 1996, he joined TopGlove Sdn Bhd as its Group Human Resource Director.

Haji Shahadan bin Haji Abd Manas does not have anymajor shareholdings and directorships in other publiccorporations for the past two years.

LIM HOOI SINNon-Executive Director

Lim Hooi Sin, aged 40, has been appointed to theBoard of Top Glove since 4 September 2000. With TGMedical USA Inc., he serves as Vice President sinceApril 2001 and as a Director since it founded in 1994.He obtained a Bachelor of Science Degree inManagement Science from Oklahoma StateUniversity, USA in 1985, a Master of BusinessAdministration Degree from Arizona State University, USA in 1986 and a Charter Financial ConsultantDiploma from American College, PA, USA in 1990. He is a resident of United States and has spent 14years of his career with MetLife Financial Services(one of the largest insurance & financial servicescompany in the US). He was a Management Trainee,Associate Branch Manager, Regional MarketingSpecialist, Agency Director and Director of AsianMarket. His experience includes productdevelopment, marketing, recruiting, training andsupervision of a large highly productive sales force.

Lim Hooi Sin does not have any major shareholdingsand directorships in other public corporation for thepast two years.

Lim Hooi Sin is the brother of Dr. Lim Wee Chai andbrother-in-law of Tong Siew Bee.


17


SEKARAJASEKARAN A/L ARASARATNAMIndependent Non-Executive Director

Sekarajasekaran a/l Arasaratnam, K.M.N., aged 74, isan Independent Non-Executive Director of Top Gloveand was appointed on 4 September 2000. Hegraduated from the Technical College of KualaLumpur with a Diploma in Civil Engineering in 1951and passed the Membership Examination of theInstitute of Civil Engineers, U.K. in 1960.Subsequently, he obtained his Diploma in PublicHealth Engineering from the Imperial College ofScience & Technology, U.K. in 1968. Since 1951, he was with the Public Works Department as theTechnical Assistant of Waterworks until 1959,thereafter as Assistant Resident Engineer, Executive Engineer and Waterworks Engineer from 1960 to 1966.

In 1968, he joined the Ministry of Health as a SeniorPublic Health Engineer. He was promoted to ChiefPublic Health Engineer in 1972 and Director ofEngineering Services in 1980, a position he held until1983. He is currently the President of Enrico SdnBhd, a company active in various environmentalengineering projects. He has more than 45 years of work experience in environmental engineering,environmental related studies, design andimplementation of environmental engineering projectsand environmental and sanitation studies.

He is a Fellow in the Institution of Engineers Malaysia,Member of the Institution of Civil Engineers, U.K.,Member of the Institution of water Engineers &Scientists U.K., Member of the American Society ofCivil Engineers and Member of the Association ofConsulting Engineers Malaysia.

Sekarajasekaran A/L Arasaratnam does not have anymajor shareholdings and directorships in other publiccorporations for the past two years.

LAU BOON ANNNon-Executive Director

Lau Boon Ann, aged 47, is a Non-Executive Directorof the Top Glove Group and was appointed on 4September 2000. He obtained Diplomas inAdministrative Management, Organisation andMethods and Marketing from United Kingdom in1979 before proceeding with his post GraduateDiploma in Management studies. In 1981, heobtained a Master in Business Analysis fromLancaster University. He commenced his career as a Corporate Planner with Kesang Holding Bhd, a private investment holding company, in 1981 whenhe returned from U.K. and subsequently joined SGVKassim Chan Sdn Bhd (Management Consultants) asa Management Consultant in 1982. In 1983, he joinedSungei Wang Sdn Bhd as Operations Manager. He left and joined Plaza Damansara Sdn Bhd in 1985as Marketing Manager. In August 1988, he was incharge of setting up Top Glove’s Factory 1 for theproduction of latex examination gloves which wassubsequently leased to Top Glove Sdn Bhd. Hereturned to property development with ArabMalaysian Development Bhd in 1990 and served asan Assistant General Manager. He left in December1996. He is presently involved in the real estate andproperty development sector.

Lau Boon Ann does not have any majorshareholdings and directorships in other publiccorporations for the past two years.


18

MANAGEMENT

DIRECTORS

Dr. Lim Wee Chai(Group Managing Director)

Madam Tong Siew Bee Hj Shahadan bin Hj Abd. Manas Lim Hooi Sin(Executive Director) (Executive Director) (Director)

GENERAL MANAGERS

KM Lee HH Lee YT Chong (Marketing) (Operations) (Manufacturing)

MANAGERS

Lim Mong Seng Lim Quee Choo Chew Yoke Moi(Financial Controller) (Vice President – USA Office) (Operations Manager)

Puon Tuck Seng Danny Ong Audie Seow(Factory Manager) (International Sales Manager) (Production & Packaging Manager)

Philip Thomas KK Lim Nagappen a/l Kumarasamy(Plant Manager) (Maintenance Manager) (Human Resource Manager – Ipoh)

Tony Yee Sin Kin Razali bin Arshad Noor Akilah Saidin(Technical Manager) (Human Resource Manager – Klang) (Quality Assurance Manager)

Dorothy Ressel Noraziah bte Mahmud Terrence Lee (Marketing Manager – USA Office) (Marketing & Production (Business Development Manager)

Schedule Planner)

Desmond Tang Jeff Lee Lew Sin Chiang (Marketing Manager) (Assistant Marketing Manager) (Assistant Manager – Manufacturing)

SENIOR EXECUTIVES

Ong Kee Yong Gan Ah Suan James Liew (Accountant – Ipoh) (Accountant – Klang) (Maintenance Engineer – Ipoh)

Koo Sing Huat Ngiam Geok Lian Eddy Yap She Koon(Accounts – Klang) (Executive Secretary) (Administrative & Personnel)

Eddie Rosyadie Khu Hun Lan Shanti(QA Validation) (Accounts – Klang) (Administrative & Personnel – Ipoh)

Wong Chong Ban Annie Teh Bong Nee Loh Yew Choong(Senior Chemist) (IT Executive) (Production & Technical Executive)

Mansor bin Daud(Maintenance Engineer)

19


CORPORATE GOVERNANCE STATEMENT

Top Glove Corporation Bhd (‘Top Glove’ or the ‘Company’) recognises that its existence in the businesscommunity relies on the support, trust and confidence of our shareholders, business associates,customers, suppliers, financiers and various other group of people with whom it interacts and conducts business with.

Its Board of Directors is therefore committed to formulate policies and direct the Company to achieve its objectives by enhancing shareholders’ value with corporate accountability and openness, taking intoaccount the interests of other stakeholders.

The Company will take every step to ensure that the principles of good corporate governance iscomplied with by adhering to the Malaysian Code on Corporate Governance’s (the ‘Code’) best practicesfor companies and to fulfil the provisions of the recently revamped listing requirements of the KLSE (‘the KLSE Listing Requirements’).

THE BOARD OF DIRECTORS

Top Glove is led by an experienced Board comprising members who are specialised in the glovemanufacturing and various business sectors supported by a wide range of other professionals in the legal and accounting sectors. This wide spectrum of skills and experience provide the strengththat is needed to lead the Company to meet its objectives and enable the Company to rest in the firmcontrol of an accountable and competent Board of Directors.

The Board currently comprises seven (7) members: three (3) executive directors including the Chairman/Managing Director, two (2) independent non-executive directors and two (2) non-executives directors.The composition reflects a balance of executive directors and non-executive directors (includingindependent non-executive directors) such that no individual or small group of individuals can dominatethe board’s decision making. A brief description of the background of each Director is presented onpages 14 to 17.

The Board meets quarterly to review its quarterly performances and discuss new policies and strategiessince the Company was listed on 27 March 2001 and had its first post listing results announced for the quarter ended 31 May 2001. Additional meetings will be called as and when necessary. During the year ended 31 August 2001, one Board Meeting was held and the attendance of Boardmembers are as follows:

Date & Time of Board Meeting 9 July 2001 (11.00 a.m.)

Dr. Lim Wee Chai PresentTan Sri Datuk Arshad bin Ayub AbsentTong Siew Bee PresentHaji Shahadan bin Hj Abd Manas PresentLim Hooi Sin AbsentSekarajasekaran a/l Arasaratnam PresentLau Boon Ann Present

The above meeting was held in the Company’s Board Room at Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor, Malaysia.

It is the Company’s intention that each new director is given a comprehensive briefing on the Company’shistory, operations, financial control system and plant visit to enable them to have first handunderstanding of the Company’s operation. This orientation programme will be implemented by 31 December 2001.

20


CORPORATE GOVERNANCE STATEMENT (CONT’D)

THE BOARD OF DIRECTORS (CONT’D)

Clear demarcation of duties, responsibilities and authority are being practised by the Board. The position of Chairman and Managing Director is held by Dr. Lim Wee Chai. The Chairman/ManagingDirector is primarily responsible for the orderly conduct of the board meeting and working of the Board.The Chairman/Managing Director, assisted by the Executive Director is subject to the control of theBoard and is responsible for the implementation of Board policies, making operational decisions andmonitoring the day to day running of the business. He also defines the limits of the management’sresponsibilities. The Executive Director is responsible for the day to day operations of the Groupwhereby operational issues and problems are discussed, major transactions and matters relating to the Group are reviewed and also to formulate operational strategies.

The non-executive Directors are to deliberate and discuss policies and strategies formulated andproposed by the management with the view of the long term interests of all stakeholders. They contribute to the formulation of policies, and decision making using their expertise and experience.They also provide guidance and promote professionalism to the management.

The presence of the independent non-executive Directors is essential as they provide the unbiased and independent view, advice and judgement as well as to safeguard the interest of other parties likeminority shareholders and the community.

Directors standing for re-election at the Annual General Meeting of the Company to be held are Dr. Lim Wee Chai, Tong Siew Bee, Tan Sri Datuk Arshad bin Ayub and Sekarajasekaran a/l Arasaratnam.

The Board has delegated certain responsibilities to several Board Committees which operate withinclearly defined terms of reference. The Chairman of the various committees will report to the Board theoutcome of the committee meetings and such reports are incorporated in the minutes of the Boardmeeting. The various committees are:

Audit Committee

This committee was established on 5 September 2000. Its role and function is to assist the Board inoverseeing the Group’s activities within its clear defined terms of reference. Best Practices BB Part 2 and Part 4 of the Code and Paragraph 15.13 of the KLSE Listing Requirements spell out the duties of an Audit Committee. The scope of duties of Top Glove’s Audit Committee includes primarily the dutiesdetailed therein. Pursuant to Paragraph 15.26 of the KLSE Listing Requirements, the Audit CommitteeReport for the current financial year can be found in pages 25 to 28 of this Annual Report which alsocontain other information as required under the Code.

The Board shall review the term of office and performance of the audit committee and each of itsmembers once at least every three (3) years to determine whether such audit committee and membershave carried out their duties in accordance with their terms of reference.

The Board has full access to both internal and external auditors and receive reports on all auditsperformed via this committee.

21



Nomination Committee

The committee was established on 7 November 2001. Its role is to assist the Board of Directors in theirresponsibilities in nominating new nominees to the Board of Directors. The Nomination Committee shallalso assess the performance of the Directors of the Company on an on-going basis.

The members of the Nomination Committee, are as follows:

(a) Tan Sri Datuk Arshad Bin Ayub (Independent Non-Executive Director) – Chairman

(b) Lau Boon Ann (Non-Executive Director)

(c) Sekarajasekaran a/l Arasaratnam (Independent Non-Executive Director)

The duties and responsibilities of the Nomination Committee are as follows:

• To recommend to the Board of Directors, candidates for all directorships to be filled by theShareholders or the Board of Directors.

• To consider, in making its recommendations, candidates for directorships proposed by the ChiefExecutive Officer and, within the bounds of practicability, by any other senior executive or anyDirector or Shareholder

• To recommend to the Board of Directors the nominees to fill the seats on Board Committees.

• To assess the effectiveness of the Board of Directors as a whole and each individualDirectors/committees of the Board.

• To act in line with the directions of the Board of Directors.

• To consider and examine such other matters as the Nomination Committee considers appropriate.

Remuneration Committee

The Committee was established on 7 November 2001. Its role is to assist the Board of Directors in theirresponsibilities in assessing the remuneration packages of the executive directors.

The members of the Remuneration Committee are as follow:

(a) Dr. Lim Wee Chai (Chairman and Managing Director) – Chairman

(b) Sekarajasekaran a/l Arasaratnam (Independent Non-Executive Director)

(c) Lau Boon Ann (Non-Executive Director)

The duties and responsibilities of the Remuneration Committee are as follow:

• To review and assess the remuneration packages of the executive directors in all forms, with orwithout other independent professional advice or other outside advice.

• To ensure the levels of remuneration be sufficiently attractive and be able to retain directors neededto run the Company successfully.

• To structure the component parts of remuneration so as to link rewards to corporate and individualperformance and to assess the needs of the Company for talent at Board level at a particular time.

• To recommend to the Board of Directors the remuneration packages of the executive directors.

• To act in line with the directions of the Board of Directors; and

• To consider and examine such other matters as the Remuneration Committee considers appropriate.

22



THE BOARD OF DIRECTORS (CONT’D)

Directors’ Remuneration

1) Aggregate remuneration of Directors categorised into appropriate components are as follows:

Benefits-Salaries Fees Bonus in-kind TotalRM’000 RM’000 RM’000 RM’000 RM’000

Executive Directors 624 80 0 35 739Non-Executive Directors 0 90 0 0 90

2) Directors’ remuneration are broadly categorised into the following bands:

Number of DirectorsExecutive Non-

Range of Remuneration executive

Below RM50,000 0 4RM50,001 to RM100,000 2 0RM450,000 to RM500,000 1 0

SUPPLY OF INFORMATION TO THE BOARD

All Directors are provided with an agenda of the meeting and board papers which contain Company’sfinancial performance, business outlook, various committees’ reports and disclosures by Directors oftheir interest in shares and their interest in contracts, properties and offices pursuant to S135 and S131of the Companies Act, 1965 respectively prior to the Board meeting. The board papers are issued inadvance to facilitate informed decision-making. The Managing Director will lead the presentation ofboard papers and provide comprehensive explanations of pertinent issues. Any proposals andrecommendations by the management will be deliberated and discussed by the Board before a decisionis made. Minutes are prepared on all board proceedings and will be signed by the Chairman of themeeting in accordance with the provision of S156 of the Companies Act, 1965. The Board is keptupdated on the Company’s financial activities and operations on a regular basis.

The Directors are also notified of any corporate announcement released to the KLSE and the impendingrestriction in dealing with the securities of the Company prior to the announcement of the quarterlyfinancial results.

All Directors have access to the advice and services of the Company Secretary and they have beenissued with the Code of Ethics for Directors and Secretaries. The Company Secretary also acts as theSecretary for all the Board Committees.

23



RELATIONSHIP WITH THE SHAREHOLDERS

The Company views the timely and equal dissemination of information to shareholders andstakeholders as important. It strictly adheres to the disclosure requirements of the KLSE. The Companyis cautious not to provide undisclosed material information about the Company to any shareholder orshareholder group.

The AGM is an important forum where communications with shareholders can be effectively conducted.Shareholders are notified of the meeting together with a copy of the Company’s Annual Report 21 daysbefore the meeting. At each AGM, shareholders are given ample time and opportunity to ask for moreinformation, without limiting the type of questions asked, prior to seeking approval by show of handsfrom the members and proxies on the audited financial statements. During the meeting, the Chairmanand the Board members are prepared to respond to all queries and undertake to provide sufficientclarification on issues and concerns raised by the shareholders. The external auditors are also present toprovide their professional and independent clarification on issues and concerns raised by theshareholders. Status of all resolutions proposed at the AGM are submitted to KLSE at the end of themeeting day. The Board has ensured that each item of special business included in the notice of theannual or extraordinary general meeting are accompanied by a full explanation of the effects of aproposed resolution.

Institutional investors and analysts are welcomed and have equal opportunity to meet our managementabout performance, corporate governance and other matters related to shareholders’ interest.

The Company also maintain two web sites at www.topglove.com.my and http://topglove.asiaep.comfrom which shareholders and stakeholders can access for information.

ACCOUNTABILITY AND AUDIT

Financial Report

Statement of Directors’ Responsibility in respect of Audited Financial Statements pursuant toParagraph 15.27 (a) of the Listing Requirements.

The Directors are responsible to ensure that financial statements are drawn up in accordance with theprovisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. Inpresenting the financial statements, the Company has used appropriate accounting policies, consistentlyapplied and supported by reasonable and prudent judgements and estimates and prepared on a goingconcern basis. The directors also strive to ensure that financial reporting present a balanced andunderstandable assessment of the Company’s position and prospects.

Quarterly financial statements are reviewed by the Audit Committee and approved by the Board ofDirectors prior to release to KLSE within stipulated time frame.

Internal Control

Internal control mechanism is embedded in the various work processes and procedures at appropriatelevels in the Company. The Managing Director is responsible in ensuring the existence and effectivenessof internal control through the works of routine checking, reporting, proper delegation of authorisationand approval system in the Company. In developing the internal control system, consideration is given tooverall control environment of the Company, assessment of both operational and financial risks andeffective monitoring mechanism. In monitoring the internal control system by the internal auditdepartment, emphasis is placed not only on financial controls but operational and compliance controlsas well.

24



ACCOUNTABILITY AND AUDIT (CONT’D)

While the management has full responsibility in ensuring the effectiveness of internal control which itestablishes, the Board has the authority to assess the state of internal control as it deems necessary. In doing so, the Board has the right to information and clarification from management as well as seekinputs from the Audit Committee, external and internal auditors.

The Company has a documented delegation of authority with a clear line of responsibility andaccountability. It sets out the decisions that need to be taken and the appropriate approving authority at various levels of management including matters that require board approval.

To assist the Board in fulfilling this role, the Audit Committee in its advisory capacity is established withspecific terms of reference which include the overseeing and monitoring of the Company’s financialreporting system and the internal and external audit processes.

Whilst the Board also reviews the key business and financial risks facing the Company, there is also adedicated committee in the Company to review and monitor risks in relation to credit and to makeappropriate recommendations thereto. A Risk Management Committee will be set-up by December 2001under the Internal Audit Department to look into the identification, assessment, controlling and reviewingof potential principal risks to the Group.

Relationship with the Auditors

The external auditors, Messrs. Arthur Andersen & Co and Messrs. William C.H. Tan & Associates havecontinued to report to members of the Company on their findings which are included as part of theCompany’s statutory financial statements. The Company has thus established a transparent arrangementwith the auditors to meet auditors’ professional requirements. From time to time, the auditors highlight tothe Audit Committee and Board of Directors on matters that require Board’s attention through theissuance of management letters.

RECURRENT RELATED PARTY TRANSACTIONS

Save as follows, there are no transactions of the Company which involve the Directors or substantialshareholders of the Company during the financial year ended 31 August 2001:

Related party: Titi Latex Sdn Bhd

Nature of transactions: Supply of latex to the Company for production of gloves

Interested party: Dr Lim Wee Chai

Nature of relationship: Dr Lim Wee Chai owns 4.85% shares in Titi Latex Sdn Bhd

Value of transactions: RM6,474,286.00

The Directors confirmed that the recurrent transactions were conducted at arm’s length on commercialterms based on prevailing market prices which are not more favourable to the Related Parties than thoseextended to the general public and are not to the detriment of the minority shareholders.

25


AUDIT COMMITTEE REPORT

TERMS OF REFERENCE OF AUDIT COMMITTEE

1. Membership

Members Designation

(a) Tan Sri Datuk Arshad bin Ayub Chairman & Independent Non-Executive Director

(b) Dr. Lim Wee Chai Executive Director

(c) Sekarajasekaran a/l Arasaratnam Independent Non-Executive Director

2. Composition of members

The Board shall elect the Audit Committee members from amongst themselves, comprising no fewerthan three (3) directors, where the majority shall be independent directors. The term of office of theaudit committee is 2 years and may be re-nominated and appointed by the Board of Directors.

In this respect, the Board adopts the definition of “independent director” as defined underthe Kuala Lumpur Stock Exchange (“KLSE”) Listing Requirements.

At least one member of the Audit Committee must be:

(a) a member of the Malaysian Institute of Accountant (“MIA”); or

(b) if he is not a member of MIA, he must have at least 3 years of working experience and:

i. he must have passed the examinations specified in Part I of the 1st Schedule of theAccountants Act 1967; or

ii. he must be a member of one of the associations of the accountants specified in Part II of theFirst Schedule of the Accountants Act 1967.

No alternate director of the Board shall be appointed as a member of the Audit Committee.

Retirement and resignation

If a member of the Audit Committee resigns, dies, or for any reason ceases to be a member with theresult that the number of members is reduced below three (3), the Board shall within three (3) monthsof the event appoint such number of the new members as may be required to fill the vacancy.

3. Chairman

The Chairman of the Audit Committee, elected from amongst the Audit Committee members, shall bean independent director. The Chairman of the Committee shall be approved by the Board of Directors.

26


AUDIT COMMITTEE REPORT (CONT’D)

4. Secretary

The Secretary of the Audit Committee shall be the Company Secretary.

The Secretary shall be responsible for drawing up the agenda with concurrence of the Chairman andcirculating it, supported by explanatory documentation to members of the Audit Committee prior toeach meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee,circulating them to members of the Audit Committee and to the other members of the Board ofDirectors and for following up outstanding matters.

5. Meetings

The Audit Committee meetings shall be conducted at least four (4) times annually, or more frequentlyas circumstances dictate. In addition, the Chairman may call for additional meetings at any time at theChairman’s discretion.

In the absence of the Chairman, the other independent director shall be the Chairman for that meeting.

The members of the Audit Committee, Group Financial Controller and the head of internal audit willnormally be in attendance at the meetings. Representatives of the external auditors are to be inattendance at meeting where matters relating to the audit of the statutory accounts and/or externalauditors are to be discussed.

Other directors, officers and employees of the Company and/or Group may be invited to attend,except for those portions of the meetings where their presence is considered inappropriate, asdetermined by the Audit Committee. However, at least once a year the Audit Committee shall meetwith the external auditors without any executive board member present.

Minutes of each meeting shall be kept and distributed to each member of the Audit Committee andalso to the other members of the Board of Directors. The Audit Committee Chairman shall report oneach meeting to the Board of Directors.

6. Quorum

The quorum for the Audit Committee meeting shall be the majority of members present whom mustbe independent directors.

7. Reporting

The Audit Committee shall report to the Board of Directors, either formally in writing, or verbally, as itconsiders appropriate on the matters within its terms of reference at least once a year, but morefrequently if it so wishes.

The Audit Committee shall report to the Board of Directors on any specific matters referred to it by theBoard for investigation and report.

27



8. Objectives

The principal objectives of the Audit Committee is to assist the Board of Directors in discharging itsstatutory duties and responsibilities relating to accounting and reporting practices of the holdingcompany and each of its subsidiaries. In addition, the Audit Committee shall:

• evaluate the quality of the audits performed by the internal and external auditors;

• provide assurance that the financial information presented by management is relevant, reliable and timely;

• oversee compliance with laws and regulations and observance of a proper code of conduct; and

• determine the quality, adequacy and effectiveness of the Group’s control environment.

9. Authority

The Audit Committee shall, in accordance with a procedure to be determined by the Board ofDirectors and at the expense of the Company,

(a) authorise to investigate any activity within its terms of reference. All employees shall be directed toco-operate as requested by members of the Audit Committee.

(b) have full and unlimited/unrestricted access to all information and documents/resources which arerequired to perform its duties as well as to the internal and external auditors and seniormanagement of the Company and Group.

(c) obtain, at the expense of the Company, other independent professional advice or other advice andto secure the attendance of outsiders with relevant experience and expertise if it considersnecessary.

(d) be able to convene meetings with the external auditors, without the attendance of the executivemembers of the Audit Committee, whenever deemed necessary.

(e) be able to make relevant reports when necessary to the relevant authorities if a breach of the Listing Requirements occurred.

28



10. Duties and Responsibilities

The duties and responsibilities of the Audit Committee are as follow:

• To review the maintenance and control of an effective accounting system;

• To review the Group’s public accountability and compliance with the law;

• To ensure the adequacy of internal and external audit procedures;

• To evaluate the quality of external auditors and make recommendations concerning theirappointment and remuneration and to consider the nomination of a person or persons asexternal auditors;

• To provide liaison between the external auditors, the management and the Board of Directorsand also to review the assistance given by the management to the external auditors;

• To review the findings of the internal and external auditors;

• To review the quarterly results and financial statements and annual report prior to submission to the Board of Directors;

• To monitor any related party transactions that may arise within the Group and to report, if any,transactions between the Group and any related party outside the Group which are not basedon arms-length terms and on terms which are disadvantageous to the Group;

• To report its findings on the financial and management performance, and other material mattersto the Board of Directors;

• To act in line with the directions of the Board of Directors; and

• To consider and examine such other matters as the Audit Committee considers appropriate.

The Members of Audit Committee met two times during the financial year ended 31 August 2001.

Members No. of Meetings Attended

(a) Dr. Lim Wee Chai 2 of 2

(b) Tan Sri Datuk Arshad bin Ayub 1 of 2

(c) Sekarajasekaran a/l Arasaratnam 1 of 2

MEETINGS AND ATTENDANCE

29


FINANCIAL STATEMENTS

30

34

34

35

36

37

38

39

41

Directors’ Report

Statement by Directors

Statutory Declaration

Auditors’ Report

Balance Sheets

Income Statements

Statements of Changes in Equity

Cash Flow Statements

Notes to the Financial Statements


DIRECTORS’ REPORT

The directors hereby submit their report together with the audited financial statements of the Group and the Company for the financial year ended31 August 2001.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiaries are described in Note 4 to the financial statements.

There were no significant changes in the nature of these activities during the financial year.

RESULTS

GROUP COMPANYRM RM

Net profit for the year 15,901,527 20,125,478____________ ____________DIVIDENDS

The amount of dividend paid or declared by the Company since 31 August 2000 were as follows:

RM

In respect of the financial year ended 31 August 2001Interim tax exempt ordinary dividend of 5% on 50,000,000 ordinary shares paid on 31 May 2001 2,500,000____________At the forthcoming Annual General Meeting, dividend which will be proposed for shareholder’s

approval in respect of the current financial year ended 31 August 2001 were as follows:

RM

Final tax exempt dividend of 3% on 50,000,000 ordinary shares 1,500,000____________The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders willbe accounted for in shareholder’s equity as an appropriation of retained profits in the next financial year ending 31 August 2002.

RESERVES AND PROVISIONS

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

BAD AND DOUBTFUL DEBTS

Before the income statements and balance sheets were made out, the directors took reasonable steps to ascertain that action had been taken inrelation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known baddebts and that adequate provision had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would require any amount to be written off as bad debts orrender the amount of provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent.

30


DIRECTORS’ REPORT (CONT’D)

CURRENT ASSETS

Before the income statements and balance sheets were made out, the directors took reasonable steps to ensure that any current assets whichwere unlikely to be realised in the ordinary course of business their values as shown in the accounting records of the Group and the Companyhave been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in thefinancial statements of the Group and the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method ofvaluation of assets or liabilities of the Group and the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year which secures the liabilities ofany other person; or

(b) any contingent liability of the Group and the Company which has arisen since the end of the financial year.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and the Company to meet theirobligations when they fall due.

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 ofthe Group and the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and the Company during the financial year were not, in the opinion of the directors, substantially affectedby 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 materialand unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and the Company for the financial year in which this report is made.

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up share capital from RM600,000 to RM50,000,000 by way of the issuanceof 49,400,000 ordinary shares as follows:

CLASS NUMBER TERMS AND PURPOSE OF ISSUE

Ordinary share of RM1 each 25,975,213 Acquisition of subsidiariesOrdinary share of RM1 each 15,914,787 Rights Issue of 599 new ordinary shares of RM1 each

for every 1,000 ordinary shares held at RM1.16 each *Ordinary share of RM1 each 7,510,000 Public Issue at RM2.70 each *

* The proceeds from Rights Issue and Public Issue have been utilised to repay bank borrowings, purchase of plant, machinery, informationtechnology and office equipment, payment of listing expenses and for working capital.

31



ISSUE OF SHARES (CONT’D)

All the new ordinary shares that were issued rank pari passu in all respects with the existing shares.

On 8 November 2001, the Company announced the proposed bonus issue of 15,000,000 new ordinary shares of RM1.00 each in the Companyon the basis of 3 ordinary shares for every 10 existing ordinary shares held. Consequently, the Company’s issued and paid up share capitalincreased from RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each to RM65,000,000 comprising 65,000,000 ordinary sharesof RM1.00 each.

All the shares to be issued pursuant to the proposed Bonus Issue will rank pari passu in all respects with the existing shares of the Companyexcept that they shall not be entitled to any dividends, rights, allotments and/or any other distributions, the entitlement of which is prior to theallotment of Bonus Issue.

To accommodate the proposed Bonus Issue, the Company also proposed an increase in authorised share capital from 50,000,000 ordinary sharesto 100,000,000 ordinary shares by the creation of 50,000,000 new ordinary shares of RM1.00 each.

SIGNIFICANT EVENTS

The significant events during the financial year are disclosed in Note 25 to the financial statements.

DIRECTORS

The directors who served since the date of the last report are:

Dr. Lim Wee ChaiTan Sri Datuk Arshad bin AyubTong Siew BeeHaji Shahadan bin Haji Abd ManasLim Hooi SinSekarajasekaran a/l ArasaratnamLau Boon Ann

In accordance with the Company’s Articles of Association, Tong Siew Bee retires at the forthcoming Annual General Meeting and being eligible,offers herself for re-election.

In accordance with the Listing Requirements of Kuala Lumpur Stock Exchange, Dr. Lim Wee Chai retires at the forthcoming Annual General Meetingand being eligible, offers himself for re-election.

Tan Sri Datuk Arshad bin Ayub and Sekarajasekaran a/l Arasaratnam retire pursuant to Section 129(2) of the Companies Act, 1965 (“the Act”) anda resolution is being proposed for their reappointment as directors under the provision of Section 129(6) of the Act to hold office until the nextAnnual General Meeting of the Company.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party with the object of enabling directors ofthe Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a benefit included in theaggregate amount of emoluments received or due and receivable by the directors as shown in Note 16 or deemed benefits, if any, arising fromtransactions disclosed in Note 22 to the financial statements) by reason of a contract made by the Company or a related corporation with thedirector or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

32



DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors who held office at the end of the financial year in shares in theCompany during the financial year were as follows:

NUMBER OF ORDINARY SHARES OF RM1 EACHDATE OF RIGHTS 31 AUGUST

APPOINTMENT ISSUE BOUGHT SOLD 2001

Dr. Lim Wee Chai— direct 13,805,443 8,267,504 10,000 7,397,134 14,685,813— indirect 7,141,320 4,276,638 1,020,000 3,826,780 8,611,178Tan Sri Datuk Arshad bin Ayub — — 1,875,000 — 1,875,000Tong Siew Bee— direct 849,716 508,859 10,000 455,333 913,242— indirect 20,097,047 12,035,283 1,020,000 10,768,581 22,383,749Haji Shahadan bin Haji Abd Manas — — 2,510,000 2,100,000 410,000Lim Hooi Sin— direct 1,303,269 780,473 10,000 698,376 1,395,366— indirect 19,643,494 11,763,669 1,020,000 10,525,538 21,901,625Sekarajasekaran a/l Arasaratnam 1,941,433 1,162,643 10,000 1,040,345 2,073,731Lau Boon Ann — — 10,000 — 10,000

Dr. Lim Wee Chai, Tong Siew Bee and Lim Hooi Sin by virtue of their interest in shares of the Company are also deemed interested in shares ofall the subsidiaries to the extent the Company has an interest.

NUMBER OF EMPLOYEES AND PRINCIPAL PLACE OF BUSINESS

The number of employees in the Group at the end of the year was 1,356.

The Company is a public limited company, incorporated and domiciled in Malaysia, and is listed on Second Board of the Kuala Lumpur StockExchange. The principal place of business of the Company is located at Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor.

AUDITORS

Arthur Andersen & Co. retire and have indicated their willingness to accept re-appointment.

Signed on behalf of the board in accordance with a resolution of the directors

DR. LIM WEE CHAI

TONG SIEW BEE

6 December 2001Klang

33


STATEMENT BY DIRECTORS

We, DR. LIM WEE CHAI and TONG SIEW BEE, being two of the directors of TOP GLOVE CORPORATION BHD, do hereby state that, in the opinion ofthe directors, the financial statements set out on pages 36 to 54 give a true and fair view of the state of affairs of the Group and the Company asat 31 August 2001 and of their results and their cash flows for the year then ended and have been properly drawn up in accordance with theprovisions of Companies Act 1965 and applicable approved accounting standards in Malaysia.

Signed on behalf of the board in accordance with a resolution of the directors

DR. LIM WEE CHAI

TONG SIEW BEE

6 December 2001Klang

STATUTORY DECLARATION

I, DR. LIM WEE CHAI, the director primarily responsible for the financial management of TOP GLOVE CORPORATION BHD, do solemnly and sincerelydeclare that the financial statements set out on pages 36 to 54 are, to the best of my knowledge and belief, correct, and I make this solemndeclaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared )by the abovenamed DR. LIM WEE CHAI )

DR. LIM WEE CHAIat Shah Alam in the State of Selangor )on 6 December 2001 )

Before me,

NORMAH HJ. OSMANCommissioner for OathsShah Alam

34


AUDITORS’ REPORT TO THE SHAREHOLDERS OF TOP GLOVE CORPORATION BHD

We have audited the financial statements set out on pages 36 to 54. These financial statements are the responsibility of the Company’s directors.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 plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approvedaccounting standards in Malaysia and give a true and fair view of:

(i) the state of affairs of the Group and the Company as at 31 August 2001 and of their results and their cash flows for the year then ended; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements;

(b) the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have actedas auditors have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and the auditors’ report of all the subsidiaries of which we have not acted as auditors, as indicatedin Note 4 to the financial statements, being financial statements that have been included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company arein form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have receivedsatisfactory information and explanations required by us for these purposes.

The auditor’s reports on the financial statements of the subsidiaries were not subject to any qualification or any comment made under subsection(3) of Section 174 of the Act.

ARTHUR ANDERSEN & CO.No. AF 0103Public Accountants

LEE AH TOONo. 2187/09/03(J)Partner of the Firm

6 December 2001Melaka

35


BALANCE SHEETS 31 AUGUST 2001

GROUP COMPANY2001 2001 2000

NOTE RM RM RM

NON-CURRENT ASSETSProperty, plant and equipment 3 71,443,524 — —Subsidiaries 4 — 25,975,213 —Other investment 5 15,300 — —Intangible assets 6 — — 11,089____________ ____________ ____________

71,458,824 25,975,213 11,089____________ ____________ ____________

CURRENT ASSETSInventories 7 23,025,816 — —Other receivables 1,297,067 — 598,998Due from subsidiaries 8 — 55,673,566 —Trade receivables 23,327,756 — —Cash and bank balances 9 9,824,335 8,594 994____________ ____________ ____________

57,474,974 55,682,160 599,992____________ ____________ ____________

CURRENT LIABILITIESShort term borrowings 10 8,398,308 — —Trade payables 11,267,168 — —Other payables 7,757,716 191,187 11,081Taxation 726,245 — —____________ ____________ ____________

28,149,437 191,187 11,081____________ ____________ ____________NET CURRENT ASSETS 29,325,537 55,490,973 588,911____________ ____________ ____________

100,784,361 81,466,186 600,000____________ ____________ ____________FINANCED BY:Share capital 11 50,000,000 50,000,000 600,000Reserves 43,170,391 31,466,186 —____________ ____________ ____________Shareholders’ equity 93,170,391 81,466,186 600,000Minority interests 320,824 — —____________ ____________ ____________

93,491,215 81,466,186 600,000____________ ____________ ____________

Hire purchase payables 12 305,706 — —Term loans 13 5,254,440 — —Deferred taxation 14 1,733,000 — —____________ ____________ ____________Non-current liabilities 7,293,146 — —____________ ____________ ____________

100,784,361 81,466,186 600,000____________ ____________ ____________

36

The accompanying notes are an integral part of these balance sheets.


INCOME STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2001


NOTE RM RM RM

Revenue 15 138,862,134 20,600,000 —

Cost of sales (103,932,195) — —____________ ____________ ____________Gross profit 34,929,939 20,600,000 —

Other operating income 424,903 21,247 —

Distribution and selling costs (9,355,525) — —

Administrative and general expenses (6,362,471) (215,769) —

Other operating expenses (65,930) — —____________ ____________ ____________Profit from operations 16 19,570,916 20,405,478 —

Finance costs 17 (2,353,431) — —____________ ____________ ____________Profit before taxation 17,217,485 20,405,478 —

Taxation 18 (1,312,313) (280,000) —____________ ____________ ____________Profit after taxation 15,905,172 20,125,478 —

Minority interests (3,645) — —____________ ____________ ____________Net profit for the year 15,901,527 20,125,478 —____________ ____________ ____________Basic earnings per share (sen) 19 39.6____________

37

The accompanying notes are an integral part of these statements.


STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 AUGUST 2001

NON-DISTRIBUTABLE DISTRIBUTABLEFOREIGN

SHARE SHARE EXCHANGE RETAINEDCAPITAL PREMIUM RESERVE PROFITS TOTAL

GROUP RM RM RM RM RM

At 1.9.2000 600,000 — — 27,950,841 28,550,841Issuance of shares— Acquisition of subsidiaries 25,975,213 — — — 25,975,213— Rights Issue 15,914,787 2,546,366 — — 18,461,153— Public Issue 7,510,000 12,767,000 — — 20,277,000Listing expenses — (1,472,658) — — (1,472,658)Merger deficit set off — — — (12,053,213) (12,053,213)Currency translation differences* — — 30,528 — 30,528Net profit for the year — — — 15,901,527 15,901,527Dividends (Note 20) — — — (2,500,000) (2,500,000)____________ ____________ ____________ ____________ ____________At 31.8.2001 50,000,000 13,840,708 30,528 29,299,155 93,170,391____________ ____________ ____________ ____________ ____________

NON-DISTRIBUTABLE DISTRIBUTABLEFOREIGN

SHARE SHARE EXCHANGE RETAINEDCAPITAL PREMIUM RESERVE PROFITS TOTAL

COMPANY RM RM RM RM RM

At 1.9.1999 2 — — — 2Issuance of shares 599,998 — — — 599,998____________ ____________ ____________ ____________ ____________At 31.8.2000 600,000 — — — 600,000Issuance of shares— Acquisition of subsidiaries 25,975,213 — — — 25,975,213— Rights Issue 15,914,787 2,546,366 — — 18,461,153— Public Issue 7,510,000 12,767,000 — — 20,277,000Listing expenses — (1,472,658) — — (1,472,658)Net profit for the year — — — 20,125,478 20,125,478Dividends (Note 20) — — — (2,500,000) (2,500,000)____________ ____________ ____________ ____________ ____________At 31.8.2001 50,000,000 13,840,708 — 17,625,478 81,466,186____________ ____________ ____________ ____________ ____________* Representing net gain not recognised in the income statement.

38



CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2001


RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 17,217,485 20,405,478 —

Adjustments for:Depreciation 4,864,645 — —Gain on disposals of fixed assets (14,174) — —Intangible assets written off 33,792 11,089 —Interest expense 1,782,740 — —Interest income (101,984) (21,247) —____________ ____________ ____________Operating profit before working capital changes 23,782,504 20,395,320 —

Increase in receivables (23,986,169) (55,074,568) (598,998)Increase in inventories (8,468,575) — —Increase in payables 12,989,463 180,106 3,300Increase in intangible assets — — (3,308)____________ ____________ ____________Cash generated from/(used in) operations 4,317,223 (34,499,142) (599,006)

Interest paid (1,782,740) — —Tax paid (944,257) (280,000) —____________ ____________ ____________Net cash generated from/(used in) operating activities 1,590,226 (34,779,142) (599,006)____________ ____________ ____________

CASH FLOWS FROM INVESTING ACTIVITIESIssuance of shares 39,080,060 38,738,153 599,998Purchase of fixed assets (14,221,527) — —Placement of fixed deposits (1,269,957) — —Interest received 101,984 21,247 —Proceeds from disposals of fixed assets 304,808 — —____________ ____________ ____________Net cash generated from investing activities 23,995,368 38,759,400 599,998____________ ____________ ____________

39


CASH FLOW STATEMENTS (CONT’D)


RM RM RM

CASH FLOWS FROM FINANCING ACTIVITIESListing expenses (1,472,658) (1,472,658) —Payment of dividends (2,500,000) (2,500,000) —Repayments of hire purchase payables (1,172,421) — —Drawdown of term loan 90,392 — —Repayment of term loans (14,641,441) — —Short term borrowings 1,027,000 — —____________ ____________ ____________Net cash used in financing activities (18,669,128) (3,972,658) —____________ ____________ ____________

CASH AND CASH EQUIVALENTSNet increase during the year 6,916,466 7,600 992At beginning of the year (1,653,498) 994 2____________ ____________ ____________At end of the year 5,262,968 8,594 994____________ ____________ ____________Cash and cash equivalents comprise:Cash and bank balances 4,780,158 8,594 994Bank overdrafts (1,781,433) — —Fixed deposits 2,264,243 — —____________ ____________ ____________

5,262,968 8,594 994____________ ____________ ____________40



NOTES TO THE FINANCIAL STATEMENTS 31 AUGUST 2001

1. PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services. The principal activities of thesubsidiaries are described in Note 4. There were no significant changes in the nature of these activities during the financial year.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting

The financial statements of the Group and the Company have been prepared under the historical cost convention and comply with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.

(b) Revenue Recognition

(i) Sales of goods

Revenue relating to sale of goods is recognised net of discounts when transfer of risks and rewards have been completed.

(ii) Dividend income

Dividend income is recognised when shareholder’s right to receive payment is established.

(iii) Revenue from services

Revenue from services rendered is recognised net of discounts as and when the services are performed.

(iv) Interest income

Interest income is recognised on accrual basis.

(c) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are thosecompanies in which the Group has power to exercise control over the financial and operating policies so as to obtain benefitstherefrom. Companies acquired or disposed are included in the consolidated financial statement from the date of acquisition or to the date of disposal.

Acquisition of subsidiaries which meet the criteria for merger are accounted for using merger accounting principles. When the mergermethod is used, the cost of investment in the Company’s book is recorded at the nominal value of shares issued and the differencebetween the carrying value of the investment and the nominal value of shares acquired is treated as merger reserve or merger deficit.The results of the companies being merged are included as if the merger had been effected throughout the current and previousfinancial years. All the subsidiaries are consolidated using the merger method of accounting except for the acquisition of Great Glove(Thailand) Co Ltd, which is accounted for under the acquisition method.

The difference between the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiaryat the date of acquisition is included in the consolidated balance sheet as goodwill or reserve arising on consolidation and is amortisedor credited to income statement.

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financialstatements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered.

41


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(d) Currency Conversion and Translation

Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetaryassets and liabilities in foreign currencies at the balance sheet date are translated into Ringgit Malaysia at rates of exchange ruling at that date. All exchange differences are taken to the income statement.

Financial statements of foreign consolidated subsidiaries are translated at year-end exchange rates with respect to the assets andliabilities, and at exchange rates at the dates of the transactions with respect to the income statement. All resulting translationdifferences are taken to reserves.

The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are as follows:

2001

United States Dollar 3.795Singapore Dollar 2.167Thailand Baht 0.088

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation. Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated over the period of the respective lease which ranges from 63 years to 72 years.Depreciation of other property, plant and equipment is provided on a straight line basis to write off the cost of each asset over theirestimated useful life at the following annual rates:

Buildings 2%Plant and equipment 10%Other assets 10% to 20%

(f) Inventories

Inventories are stated at the lower of cost (determined on the first-in, first-out basis) and net realisable values. Cost of finished goodsand work-in-progress include direct materials, direct labour, other costs and appropriate production overheads.

42



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(g) Deferred Taxation

Deferred taxation is provided under the liability method for all material timing differences except where there is reasonable evidencethat these timing differences will not reverse in the foreseeable future.

(h) Trade and Other Receivables

Trade and other receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is madefor doubtful debts based on review of all outstanding amounts as at the balance sheet date.

(i) Investments

Investment in subsidiaries and other long term investments are stated at cost less provision for any permanent diminution in value.

(j) Interest Capitalisation

Interest incurred on borrowings relating to the purchase of property, plant and equipment is capitalised until the assets are ready for their intended use.

(k) Hire Purchase

Property, plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated inaccordance with the policy set out in (e) above. The corresponding outstanding obligations due under the hire purchase after deductingfinance expenses are included as liabilities in the financial statements. Finance expenses are charged to the income statement overthe period of the respective agreements.

(l) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and at banks and deposits at call, net of outstanding bank overdrafts.

43



3. PROPERTY, PLANT AND EQUIPMENT

CAPITAL*LAND AND PLANT AND **OTHER WORK-IN-BUILDINGS EQUIPMENT ASSETS PROGRESS TOTAL

GROUP RM RM RM RM RM

CostAt 1.9.2000 32,767,237 32,639,598 4,397,749 960,381 70,764,965Additions 4,287,391 8,508,186 807,175 618,775 14,221,527Reclassification — 253,141 — (253,141) —Disposals — (299,875) (100,650) — (400,525)____________ ____________ ____________ ____________ ____________At 31.8.2001 37,054,628 41,101,050 5,104,274 1,326,015 84,585,967____________ ____________ ____________ ____________ ____________

Accumulated DepreciationAt 1.9.2000 946,594 6,517,350 923,745 — 8,387,689Charge for the year 560,928 3,589,636 714,081 — 4,864,645Disposals — (41,268) (68,623) — (109,891)____________ ____________ ____________ ____________ ____________At 31.8.2001 1,507,522 10,065,718 1,569,203 — 13,142,443____________ ____________ ____________ ____________ ____________

Net Book ValueAt 31.8.2001 35,547,106 31,035,332 3,535,071 1,326,015 71,443,524____________ ____________ ____________ ____________ ____________* Land and buildings

LONG TERM LONG TERMFREEHOLD FREEHOLD LEASEHOLD LEASEHOLD

LAND BUILDINGS LAND BUILDING TOTALRM RM RM RM RM

CostAt 1.9.2000 7,606,192 14,609,558 2,900,000 7,651,487 32,767,237Additions 1,855,950 2,367,127 — 64,314 4,287,391____________ ____________ ____________ ____________ ____________At 31.8.2001 9,462,142 16,976,685 2,900,000 7,715,801 37,054,628____________ ____________ ____________ ____________ ____________

Accumulated DepreciationAt 1.9.2000 — 845,026 14,244 87,324 946,594Charge for the year — 254,883 42,732 263,313 560,928____________ ____________ ____________ ____________ ____________At 31.8.2001 — 1,099,909 56,976 350,637 1,507,522____________ ____________ ____________ ____________ ____________

Net Book ValueAt 31.8.2001 9,462,142 15,876,776 2,843,024 7,365,164 35,547,106____________ ____________ ____________ ____________ ____________**Other assets comprise motor vehicles, office furniture and equipment.

44



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

(a) Property, plant and equipment of the Group with the following carrying values are pledged to banks for banking facilities granted to the Group as referred to in Notes 10 and 13.

2001RM

Land and buildings 30,703,678Plant and equipment 20,488,277Other assets 2,569,199Capital work-in-progress 1,326,015____________

(b) Assets Held Under Hire Purchase Agreements

Included in the above property, plant and equipment are assets held under hire purchase agreements as follows:

Net Book Value2001

RM

Motor vehicles 1,328,529Plant and equipment 3,522,271____________

4,850,800____________45



4. SUBSIDIARIES

COMPANY2001 2000

RM RM

Unquoted shares, at cost:— in Malaysia 25,170,022 —— outside Malaysia 805,191 —____________ ____________

25,975,213 —____________ ____________(a) Details of the subsidiaries are as follows:

COUNTRY OFNAME OF COMPANY INCORPORATION EQUITY INTERESTS PRINCIPAL ACTIVITIES

2001 2000% %

Top Glove Sdn Bhd (“TGSB”) Malaysia 100 — Manufacture and trading of gloves

TG Medical Sdn Bhd (“TG Medical”) * Malaysia 100 — Manufacture and trading of gloves

Great Gloves Sdn Bhd (“GG”) * Malaysia 100 — Trading of gloves

Top Glove Engineering Malaysia 100 — Property investmentSdn Bhd (“TG Engineering”) *

TG Medical (U.S.A.) Inc (“TG USA”) * United States 100 — Trading of glovesof America

Subsidiary of TGSB:

Great Glove (Thailand) Thailand 74 — Manufacture of glovesCo Ltd (“GG Thailand”) *

*Subsidiaries not audited by Arthur Andersen & Co.

(b) Acquisition of subsidiaries:

On 1 September 2000, the Company acquired 100% equity interest in TGSB, TG Medical, GG, TG Engineering and TG USA for aconsideration of RM30,131,246 by an issue of 25,975,213 new ordinary shares of RM1 each in the Company at an issue price ofapproximately RM1.16 per share.

On 1 August 2001, the Company through its wholly owned subsidiary, TGSB acquired 2,220,000 shares of 10 Thailand Baht eachrepresenting 74% equity interest in Great Glove (Thailand) Co Ltd for a consideration of 22,200,000 Thailand Baht.

(c) The effect of the acquisition on the financial results of the Group from the date of acquisition to 31 August 2001 was as follows:

RM

Revenue 138,862,134Operating costs (119,196,696)____________Profits from operations 19,665,438Finance costs (2,353,431)____________Profit before taxation 17,312,007Taxation (1,032,313)____________Profit after taxation and attributable to shareholders 16,279,694____________

46



4. SUBSIDIARIES (CONT’D)

(d) The effect of the acquisition on the financial position of the Group as at 31 August 2001 was as follows:

RM

Property, plant and equipment 71,443,524Other investment 15,300Inventories 23,025,816Trade and other receivables 9,113,082Cash and bank balances 9,815,741Trade and other payables (77,356,765)Short term borrowings (8,398,308)Term loans (5,254,440)Hire purchase payables (305,706)Deferred taxation (1,733,000)Taxation payable (726,245)____________

19,638,999____________5. OTHER INVESTMENT

GROUP2001

RM

Golf resort membership at cost 15,300____________6. INTANGIBLE ASSETS


RM RM RM

At cost —Preliminary expenses 5,350 2,950 2,950Pre-operating expenses 28,442 8,139 8,139____________ ____________ ____________

33,792 11,089 11,089Less: Amount written off (33,792) (11,089) —____________ ____________ ____________

— — 11,089____________ ____________ ____________Included in intangible assets of the Company in prior year was audit fee of RM1,200.

47



7. INVENTORIES

GROUP2001

RM

At cost —Raw materials 2,048,264Consumables and hardware 1,343,271Work-in-progress 4,641,872Finished goods 14,992,409____________

23,025,816____________8. DUE FROM SUBSIDIARIES

The amounts due from subsidiaries are unsecured, interest free and with no fixed term of repayment.

9. CASH AND BANK BALANCES


RM RM RM

Cash on hand and in banks 4,780,158 8,594 994Fixed deposits with a licensed bank 5,044,177 — —____________ ____________ ____________

9,824,335 8,594 994Less: Fixed deposits pledged as securities (2,779,934) — —____________ ____________ ____________

7,044,401 8,594 994____________ ____________ ____________Fixed deposits amounting to RM3,049,377 are registered in the name of directors and are held in trust for the Group.

10. SHORT TERM BORROWINGS

GROUP2001

RM

Bank overdrafts 1,781,433Bankers’ acceptances 134,000Export credit refinancing 4,024,000____________

5,939,433Hire purchase payables (Note 12) 607,045Term loans (Note 13) 1,851,830____________

8,398,308____________The short term borrowings bear interest of between 3.15% to 9.30% per annum.

The short term borrowings of the Group are secured by way of fixed and floating charges over all the assets of certain subsidiaries.

48



11. SHARE CAPITAL

GROUP AND COMPANY2001 2000

RM RM

(a) Authorised:Shares of RM1 eachAt 1 September 50,000,000 100,000Created during the year — 49,900,000____________ ____________At 31 August 50,000,000 50,000,000____________ ____________

(b) Issued and fully paid:Ordinary shares of RM1 eachAt 1 September 600,000 2Issued and paid up during the year— New issue — 599,998— Acquisition of subsidiaries 25,975,213 —— Rights issue 15,914,787 —— Public issue 7,510,000 —____________ ____________At 31 August 50,000,000 600,000____________ ____________

The newly issued shares during the financial year rank pari passu in all respects with the existing issued shares of the Company.

On 8 November 2001, the Company announced the proposed bonus issue of 15,000,000 new ordinary shares of RM1 each in the Companyon the basis of 3 ordinary shares for every 10 existing ordinary shares held. Consequently, the Company’s issued and paid up share capitalincreased from RM50,000,000 comprising 50,000,000 ordinary shares of RM1 each to RM65,000,000 comprising 65,000,000 ordinaryshares of RM1 each.

All the shares to be issued pursuant to the proposed Bonus Issue will rank pari passu in all respects with the existing shares of the Companyexcept that they shall not entitled to any dividends, rights, allotments and/or any other distributions, the entitlement of which is prior to theallotment of Bonus Issue.

To accommodate the proposed bonus issue, the Company also proposed an increase in authorised share capital from 50,000,000 ordinaryshares to 100,000,000 ordinary shares by the creation of 50,000,000 new ordinary shares of RM1 each.

49



12. HIRE PURCHASE PAYABLES

GROUP2001

RM

Future minimum payments:Payable within one year 736,242Payable between one to five years 354,367____________

1,090,609Less: finance charges (177,858)____________

912,751____________Representing hire purchase liabilities:Due within 12 months (Note 10) 607,045Due after 12 months 305,706____________

912,751____________13. TERM LOANS

GROUP2001

RM

Total payables 7,106,270Repayments due within 12 months included in current liabilities (Note 10) (1,851,830)____________Due after 12 months 5,254,440____________The term loans are repayable over a period of up to 7.5 years and bear interest of between 4.0% to 9.6% per annum.

The term loans are secured by way of fixed and floating charges over all the assets of certain subsidiaries.

14. DEFERRED TAXATION

GROUP2001

RM

(a) At 1 September 1,233,000Transfer from income statement 500,000____________At 31 August 1,733,000____________

(b) Deferred taxation is in respect of the following:Timing differences between depreciation and corresponding capital allowances 6,189,000____________

50



15. REVENUE

Revenue of the Group and the Company consist of the following:


RM RM RM

Sales of goods net of discounts 138,862,134 — —Management fees receivable from subsidiaries — 100,000 —Dividends received from subsidiaries — 20,500,000 —____________ ____________ ____________

138,862,134 20,600,000 —____________ ____________ ____________16. PROFIT FROM OPERATIONS

Profit from operations is stated after charging/(crediting):


RM RM RM

Auditors’ remuneration 50,500 12,000 —Depreciation 4,864,645 — —Directors’ remuneration *— salaries and other emoluments 623,889 — —— fees 170,000 170,000 —Intangible assets written off 33,792 11,089 —Staff costs 18,903,888 — —Rental expenses 315,614 — —Interest income (101,984) (21,247) —____________ ____________ ____________* Directors’ remunerationDirectors of the Company

Executive:Salaries and other emoluments 623,889 — —Fees 80,000 80,000 —Benefit-in-kind 35,400 — —

Non-executive:Fees 90,000 90,000 —____________ ____________ ____________

Total 829,289 170,000 —____________ ____________ ____________Total excluding benefit-in-kind 793,889 170,000 —____________ ____________ ____________The number of the directors of the Company whose total remuneration during the year fall within the following bands are:

Executive Directors:RM50,001 to RM100,000 2RM450,001 to RM500,000 1

Non-executive Directors:RM1 to RM50,000 4

51



17. FINANCE COSTS

Included in finance costs of the Group is interest expense of RM1,782,740.

18. TAXATION


RM RM RM

Current year’s provision 812,313 280,000 —Transfer to deferred taxation 500,000 — —____________ ____________ ____________

1,312,313 280,000 —____________ ____________ ____________The effective rate of taxation of the Group is lower than the statutory rate of taxation principally due to the claim of reinvestment allowanceby certain subsidiaries.

The effective rate of taxation of the Company is lower than the statutory rate of taxation principally due to majority of the dividend receivedby the Company are exempted from tax.

19. EARNINGS PER SHARE

The earnings per share is calculated by dividing the Group’s profit after taxation and minority interests of RM15,901,527 by the weightedaverage number of shares during the year of 40,116,226.

20. DIVIDENDS


RM RM RM

Ordinary first interim tax exempt dividend of 5% 2,500,000 2,500,000 —____________ ____________ ____________Dividend per share (sen) 5 5 —____________ ____________ ____________At the forthcoming Annual General Meeting, dividend which will be proposed for shareholders’ approval in respect of the current financialyear ended 31 August 2001 was as follows:

RM

Final tax exempt dividend of 3% on 50,000,000 ordinary shares 1,500,000____________The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholderswill be accounted for in the shareholders’ equity as an appropriation of retained profits in the next financial year ending 31 August 2002.

52



21. CAPITAL COMMITMENTS

GROUP2001

RM

Commitments in respect of capital expenditure approved but not contracted for 592,000____________22. SIGNIFICANT RELATED PARTY TRANSACTIONS

GROUP2001

RM

Purchases of raw materials from Titi Latex Sdn Bhd, a company in which a director, Dr. Lim Wee Chai has interest 6,474,286____________The directors are of the opinion that the above transaction has been entered into in the normal course of business and have beenestablished on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.

23. CONTINGENT LIABILITIES

GROUP2001

RM

Corporate guarantee issued to financial institutions for credit facilities granted to subsidiaries (unsecured) 2,991,663____________In addition, a wholly owned subsidiary of the Company, Top Glove Sdn Bhd (“TGSB”) is subject to a litigation suit, which details are set outbelow:

Pursuant to Shah Alam High Court Civil Suit No MT3-22-431-2000, a writ of summons was served by Supermax Glove Manufacturing SdnBhd (“SGM”) against TGSB on 8 November, 2000 claiming damages in the region of USD 2 million. The claim alleges passing off by TGSBof certain coloured boxes bearing the device of a glove containing gloves manufactured by TGSB under the brand name “SAFEMAX” asboxes containing gloves manufactured by SGM under the brand name “SUPERMAX”. The alleged infringing boxes are also alleged to carrynotations of the various certifications of quality/accreditation belonging to SGM. Apart from damages, SGM have, inter alia, sought by wayof relief injunctions preventing TGSB from carrying on certain acts relating to the alleged infringement and an order for the delivery up ordestruction of the infringing goods.

TGSB’s appointed solicitors have opined that SGM’s case against TGSB is weak and unlikely to succeed. As such, the directors are of theopinion that no provision for any liabilities are required in the financial statements. The hearing of the Plaintiff’s application for interim reliefwas fixed on 20 March 2002.

24. FINANCIAL INFORMATION BY SEGMENT

No financial information by segment has been prepared as the Group’s activities are primarily in the manufacturing of gloves and areprincipally conducted in Malaysia.

53



25. SIGNIFICANT EVENTS

(a) As part of the restructuring and flotation exercise of the Company on the Second Board of the Kuala Lumpur Stock Exchange, whichwas approved by the Securities Commission on 3 July 2000, the Company completed the following transactions:

(i) On 1 September 2000, the Company acquired the following subsidiaries based on the audited net tangible assets as at 31 August1999 and were satisfied by an issue of 25,975,213 new ordinary shares of RM1 each in the Company at an issue price ofapproximately RM1.16 per share:

SATISFIEDNo OF EQUITY PURCHASE BY NEW

SHARES INTEREST CONSIDE- SHARES INCOMPANY ACQUIRED ACQUIRED RATION THE COMPANY

Top Glove Sdn Bhd (“TGSB”) 10,000,000 100% 18,016,500 15,531,466TG Medical Sdn Bhd 2,000,000 100% 10,142,301 8,743,363Top Glove Engineering Sdn Bhd 1,000,000 100% 979,693 844,563Great Glove Sdn Bhd 50,000 100% 58,731 50,630TG Medical (USA) Inc. 231,000 100% 934,021 805,191____________ ____________

30,131,246 25,975,213____________ ____________(ii) On 8 January 2001, the Company implemented a rights issue of 15,914,787 new ordinary shares of RM1 each at RM1.16 per share

for cash on the basis of approximately 599 new ordinary shares of RM1 each for every one thousand ordinary shares held.

(iii) The public issue of 7,510,000 new ordinary shares of RM1 each by the Company at an issue price of RM2.70 each.

(b) On 27 March 2001, the Company was listed on the Second Board of the Kuala Lumpur Stock Exchange.

(c) On 1 August 2001, the Company through its wholly owned subsidiary, TGSB acquired 2,220,000 shares of 10 Thailand Baht eachrepresenting 74% equity interest in Great Glove (Thailand) Co Ltd for a consideration of 22,200,000 Thailand Baht.

26. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

The financial statements were authorised for issue by the Board of Directors pursuant to their meeting held on 6 December 2001.

27. COMPARATIVE FIGURES

No group comparative figures are available as this is the first year of preparation of group financial statements.

54


LIST OF PROPERTIES

The landed properties owned by the Top Glove Group are set out below:

AUDITED NETBOOK VALUE AS

AGE OF BUILDING DESCRIPTION/ LAND AREA/ AT 31.8.2001PARTICULARS OF PROPERTY (YEARS) TENURE EXISTING USE BUILD-UP AREA (RM)

Top Glove Sdn Bhd18, Jalan Mempari 10, HS (M) 15256, PT 8368, 4 Freehold Terrace house/ 1,300 125,082Taman Bayu, Batu 5 1/2, Mukim of Kapar, Accommodation square feet /Jalan Meru, Klang District of Selangor. for staff 1,100 square feet

36, Jalan Mempari 1, HS (M) 15297, PT 8411, 4 Freehold Terrace house/ 1,300 122,434Taman Bayu, Batu 5 1/2, Mukim of Kapar, Accommodation square feet /Jalan Meru, Klang District of Selangor. for staff 1,100 square feet

11, Jalan Mempari 11, HS (M) 15238, PT 8349 4 Freehold Terrace house/ 1,300 116,882Taman Bayu, Batu 5 1/2, HS (M) 15238, PT 8445, Accommodation square feet /Jalan Meru, Klang Mukim of Kapar, District of Selangor for staff 1,100 square feet

Lot 4968, Jalan Teratai, EMR 6629, Lot 4968, 10 Freehold Factory /Glove 3 acres/ 5,265,090Batu 6, Off Jalan Meru, Mukim of Kapar, District manufacturing 66,98041050 Klang of Klang and State of Selangor square feet

24, Jalan Raja Mokhtar Dua, PS (D) 13211, Lot 153, 11 Freehold Land and 1,600 square 127,60542200 Kapar, Selangor Sek. 4, Pekan Kapar building /Office feet /1,350

and store square feet

4, Jalan Seri Kenangan 8, HS (M) 10354, PT 15485, 8 Freehold Terrace house/ 1,640 square 91,490Taman Meru 3, Meru, Mukim of Kapar, Accommodation feet /1,40041050 Klang District of Selangor for staff square feet



22, Jalan Mempari 1, HS (M) 15304, PT 8419, 8 Freehold Terrace house/ 1,300 square 125,278Taman Bayu, Batu 5 1/2, Mukim of Kapar, Accommodation feet /1,100Jalan Meru, Klang District of Selangor for staff square feet

Lot 5987, Jalan Teratai EMR 8780, Lot No 5987 2 Freehold Factory /Glove 2.8 acres/ 3,632,449Batu 5, Off Jalan Meru, Mukim of Kapar, manufacturing 57,25041050 Klang District of Klang square feet

Lot 4969, Jalan Teratai, G.M. 2143, Lot No 4969 N/A Freehold Not in use 3 acres 1,681,950Batu 6, Off Jalan Meru, Mukim of Kapar, (Vacant land)41050 Klang District of Klang

Lot 18, 27, 38 & 57, Medan Lot 18, 27, 38 & 57, 14 Leasehold Factory /Glove 31,192 10,208,187Tasek, Kawasan Perindustrian Medan Tasek, Kawasan (expiring on: manufacturing square feet /Tasek, Ipoh, Perak Perindustrian Tasek, Ipoh, Lot 18–30.9.2072 197,675

Perak Lot 27–28.12.2063 square feetLot 38–23.12.2069Lot 57–1.10.2064)

Lot 5130, EMR 6158, EMR 6158, N/A Freehold Not in use 4 acres 1,143,651Mukim Kapar, 41050 Klang Survey No 5130, (Vacant land)Selangor Darul Ehsan Mukim Kapar

TG Medical Sdn BhdLot 5091, Jalan Teratai, EMR 6510, Lot No 5091, 4 Freehold Factory /Glove 3 acres/ 5,843,732Batu 5, Off Jalan Meru, Mukim of Kapar, District manufacturing 68,49041050 Klang. of Klang, State of Selangor square feet

19, Jalan Mempari 11, HS (M) 15241, PT No 8352, 4 Freehold Terrace house/ 1,300 square 113,619Batu 5 1/2, HS (M) 15325, PT No 8442, Accommodation feet /1,100Jalan Meru, Klang Mukim of Kapar, for staff square feet

District of Selangor

Lot 5972 & 5974, EMR 8769, Lot 5972 & 1 Feehold Factory /Glove 1.7935 acres/ 3,227,005Jalan Teratai, Batu 5, 5974, Mukim of Kapar, manufacturing 47,200Jalan Meru, District of Klang, square feet41050 Klang State of Selangor

Top Glove Engineering Sdn BhdLot 5987, Jalan Teratai, EMR 8780, Lot No 5987, 1 Freehold Factory / 2.8 acres/ 2,106,872 Batu 5, Off Jalan Meru, Mukim of Kapar, Warehousing 57,25041050 Klang, District of Klang, square feetSelangor Darul Ehsan State of Selangor

55


ANALYSIS OF SHAREHOLDINGS AS AT 10 DECEMBER 2001

Authorised Share Capital : RM50,000,000.00

Issued and Paid Up Capital : RM50,000,000.00

Class of Shares : Ordinary Shares of RM1.00 each

On show of hands : 1 vote

On a poll : 1 vote for each share held

DISTRIBUTION OF SHAREHOLDINGS

PERCENTAGENUMBER OF NUMBER OF ISSUED

RANGE OF SHAREHOLDINGS SHAREHOLDERS OF SHARES CAPITAL (%)

Less than 1,000 0 0 0.01,000 — 10,000 2,079 4,051,000 8.1010,001 — 100,000 55 1,637,038 3.27100,001 to less than 5% of issued shares 33 20,864,242 41.735% and above of issued shares 4 23,447,720 46.90____________ ____________ ____________

2,171 50,000,000 100.00____________ ____________ ____________SUBSTANTIAL SHAREHOLDERS

The substantial shareholders of Top Glove Corporation Bhd based on the Register of Substantial Shareholders of the Company and their respectiveshareholdings as at 10 December 2001 are as follows:

NO. OF SHARESDIRECT INDIRECT

SUBSTANTIAL SHAREHOLDERS INTEREST % INTEREST %

Lim Wee Chai 14,685,813 29.37 (a) 8,611,178 17.22Tong Siew Bee 913,242 1.83 (b) 22,383,749 44.77Lim Hooi Sin 1,395,366 2.79 (c) 21,901,625 43.80Lim Quee Choo 611,671 1.22 (d) 22,685,320 45.37Top Glove Holding Sdn Bhd 5,690,899 11.38 — —United Gloves Sdn Bhd 3,095,597 6.19 — —

NOTE:

(a) Deemed interested through Tong Siew Bee, Lim Hooi Sin, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

(b) Deemed interested through Lim Wee Chai, Lim Hooi Sin, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

(c) Deemed interested through Lim Wee Chai, Tong Siew Bee, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

(d) Deemed interested through Lim Wee Chai, Tong Siew Bee, Lim Hooi Sin and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

[Lim Wee Chai and Tong Siew Bee are husband and wife. Lim Hooi Sin and Lim Quee Choo are the brother and sister respectively to Lim WeeChai. No other Directors and Senior Management of the Top Glove Group are related to each other.]

56


ANALYSIS OF SHAREHOLDINGS (CONT’D)

DIRECTORS’ SHAREHOLDINGS

DIRECT INDIRECTNO. OF NO. OF

DIRECTOR SHARES % SHARES %

Lim Wee Chai 14,685,813 29.37 (a) 8,611,178 17.22Tong Siew Bee (F) 913,242 1.83 (b) 22,383,749 44.77Lim Hooi Sin 1,395,366 2.79 (c) 21,901,625 43.80Tan Sri Datuk Arshad bin Ayub 1,502,000 3.00 — —Sekarajasekaran a/l Arasaratnam 2,073,731 4.15 — —Lau Boon Ann 10,000 0.02 — —Haji Shahadan bin Hj Abd Manas 410,000 0.82 — —

NOTE:

(a) Deemed interested through Tong Siew Bee, Lim Hooi Sin, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

(b) Deemed interested through Lim Wee Chai, Lim Hooi Sin, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

(c) Deemed interested through Lim Wee Chai, Tong Siew Bee, Lim Quee Choo and Top Glove Holding Sdn Bhd’s direct interest in Top GloveCorporation Bhd.

[Lim Wee Chai and Tong Siew Bee are husband and wife. Lim Hooi Sin and Lim Quee Choo are the brother and sister respectively to Lim WeeChai. No other Directors and Senior Management of the Top Glove Group are related to each other.]

THIRTY LARGEST SHAREHOLDERS

PERCENTAGENUMBER OF ISSUED

NO. SHAREHOLDERS OF SHARES CAPITAL (%)

1. Lim Wee Chai 14,685,813 29.372. Top Glove Holding Sdn Bhd 5,690,899 11.383. Arab-Malaysian Nominees (Tempatan) Sdn Bhd

Lim Wee Chai 5,136,000 10.274. United Gloves Sdn Bhd 3,095,597 6.195. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Koperasi Polis Diraja Malaysia Berhad 2,249,000 4.506. Sekarajasekaran a/l Arasaratnam 2,073,731 4.157. High Momentum Sdn Bhd 2,058,000 4.128. Liew Chin Khew 1,658,899 3.329. Maju Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Tan Sri Datuk Arshad bin Ayub 1,400,000 2.8010. Lim Hooi Sin 1,395,366 2.7911. Tong Siew Bee 913,242 1.8312. Chew Teck Chiang 900,899 1.8013. Dexia JMF Asset Management Sdn Bhd 683,000 1 1.3714. Amanah Raya Nominees (Tempatan) Sdn Bhd

Amanah Saham Johor 654,000 1.3115. Lim Quee Choo 611,671 1.22

57


ANALYSIS OF SHAREHOLDINGS (CONT’D)

THIRTY LARGEST SHAREHOLDERS (CONT’D)

PERCENTAGENUMBER OF ISSUED

NO. SHAREHOLDERS OF SHARES CAPITAL

16. Mayfin Nominees (Tempatan) Sdn BhdPledged Securities Account for Shahadan bin Abd Manas 586,000 1.17

17. Bright Element Sdn Bhd 300,000 0.6018. Koperasi Polis Diraja Malaysia Berhad 241,000 0.4819. Lee Kim Meow 195,883 0.3920. Kenanga Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Soh Cheong Fatt 183,000 0.3721. Hwang-DBS Securities Berhad

CLR (MIH) for Amanah Saham Johor 154,000 0.3122. RHB Capital Nominees (Tempatan) Sdn Bhd 120,000 2 0.2423. Noraini binti Borhan 105,000 0.2124. Arshad bin Ayub 97,000 0.1925. Goh Keng Huat 62,000 0.1226. TA Nominees (Tempatan) Sdn Bhd 61,000 3 0.1227. Chye Kit Foo 50,000 0.1028. Choong Khoi Onn 50,000 0.1029. Hiew Woon Chow 41,000 0.0830. Cheong Chun Seong 40,000 0.08____________ ____________

Total 45,492,000 90.98____________ ____________BENEFICIAL OWNERS IN RESPECT OF THE THIRTY LARGEST SHAREHOLDERS’ INTERESTS WHO HOLD MORE THAN 10,000 ORDINARY SHARES

NO. SHAREHOLDERS NO. OF SHARES

1. Koperasi Permodalan Melayu Negeri Johor Berhad 340,000Muafakat Rakyat Johor Sdn Bhd 343,000____________

683,000____________2. Ng Foong Meng 13,000

Cheong Kian Tung 15,000Ter Peng Teng 20,000Tae Sew Tin 35,000____________

83,000____________3. Soh Cheong Fatt 47,000

Koo Bee Lian 13,000____________60,000____________

58


PROXY FORM

I / We, (full name in capital letters) _______________________________________________________________________________

of (full address) ____________________________________________________________________________________________

being a member/members of TOP GLOVE CORPORATION BHD (“the Company”), hereby appoint (full name in capital letters) ____________

________________________________________________________________________________________________________

of (full address) ____________________________________________________________________________________________

or failing him/her, (full name in capital letters) _____________________________________________________________________

of (full address) ____________________________________________________________________________________________

or failing him/her , the CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us and on my/our behalf at the Third Annual GeneralMeeting of the Company to be held at East VIP Lounge, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Bukit Kiara, 60000 KualaLumpur on Friday, 18 January 2002 at 9.30 a.m. and at any adjournment thereof.

Please indicate with an “X” in the space provided below how you wish your votes to be casted. If no specific direction as to voting is given,the proxy will vote or abstain at his /her discretion.

NO. RESOLUTIONS FOR AGAINST

1. Adoption of the Directors’ Report and the Audited Financial Statements for the financial year ended 31 August 2001 together with the Auditors’ Report thereon.

2. Approval of the declaration of a final tax exempt dividend of 3% for the financial yearended 31 August 2001.

3. Approval of the payment of Directors’ Fees for the financial year ended 31 August 2001.

4. Re-election of Director, Madam Tong Siew Bee who retires pursuant to Article 71 of the Company’s Articles of Association.

5. Re-election of Director, Dr. Lim Wee Chai who retires pursuant to Paragraph 7.28(2) of Part K of Chapter 7 of the Revamped Listing Requirements of Kuala Lumpur Stock Exchange.

6. Re-election of Director, Tan Sri Datuk Arshad Bin Ayub who retires pursuant to Section 129(6) of the Companies Act, 1965.

7. Re-election of Director, Mr. Sekarajasekaran a/l Arasaratnam who retires pursuant to Section 129(6) of the Companies Act, 1965.

8. Re-appoint Messrs. Arthur Andersen & Co as Auditors of the Company until theconclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

9. As Special BusinessOrdinary ResolutionAuthority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965.

As witness my/our hand(s) this _______________ day of _______________ 2001

Signature of Member/Common Seal

Notes:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of theCompany and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1) (a), (b) and (c) of the Companies Act, 1965 shall not applyto the Company.

2. In the case of a corporate member, the instrument appointing a proxy shall be either under its Common Seal or under the hand of its officer or attorney duly authorised.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 22, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara,Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

Number of Shares Held CDS Accounts No.

StampTHE COMPANY SECRETARY

TOP GLOVE CORPORATION BERHAD (474423–X)

Level 22, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur, Malaysia

Documents

annual report 2001 · annual report 2001 TOP GLOVE CORPORATION BERHAD incorporated in malaysia under the companies act, 1965 AWARDED MS ISO 9002 TOP GLOVE CORPORATION BERHAD