(Company No.740412-X)
Soaring Through The Highest Expectations
Annual Report
VISION Statement
To be a company that contributes to the overall
reduction of global energy consumption through the
manufacturing of quality products, particularly in the
area of thermal insulators.
MISSION Statement
To be recognized globally as a manufacturer
of quality thermal insulators and steel-based
industries.
To build a global brand name within the
thermal insulation and steel-based products industries.
To continuously be innovative in the application of elastomeric
acrylonitrile butadiene rubber across other industries.
Insulation Tubes
SUPERLON is Malaysia’s leading
manufacturer of high quality thermal
insulation materials used mainly in the
Heating, Ventilation, Air Conditioning
and Refrigeration (HVAC&R) system of
residential, commercial and industrial
buildings.
The company’s thermal insulation
products are used as vapor barrier
for the prevention of condensation
or frost formation on cooling
systems, chilled water and
refrigeration lines and heat loss
reduction for hot water plumbing,
heating and dual temperature piping.
contents
02
03
04
05 – 06 07 – 09
10 – 12 13 – 20 21 – 22
23 – 65
66
67 – 68 69 – 72 73 74 Corporate Information
Financial Highlights
Group Structure
Chairman’s Statement
Profile Of Directors
Audit Committee Report
Statement On Corporate Governance
Statement On Internal Control
Financial Statements
List Of Properties
Analysis Of Shareholdings
Notice Of Annual General Meeting
Appendix I
Appendix II
Proxy Form
Annual Report 2010
Soaring Through The Highest Expectations
Corporate Information
Board of Directors
Tan Sri Datuk Amar (Dr.)
Haji Tommy bin Bugo @ Hamid bin Bugo
Non-Independent Non-Executive Chairman
Liu Lee, Hsiu-Lin @ Jessica H. Liu
Managing Director and Chief Executive Officer
Liu Han-Chao
Executive Director
Chun Kwong Pong
Non-Independent Non-Executive Director
Lim E @ Lim Hoon Nam
Independent Non-Executive Director
Lim Wee Keong
Independent Non-Executive Director
Ongi Cheng San
Executive Director
Audit Committee
Lim E @ Lim Hoon Nam – Chairman
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Lim Wee Keong
Nomination Committee
Chun Kwong Pong – Chairman
Lim E @ Lim Hoon Nam
Lim Wee Keong
Remuneration Committee
Chun Kwong Pong – Chairman
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Lim Wee Keong
Company Secretary
Pang Kah Man (MIA 18831)
Registered Office
3-2, 3rd Mile Square
No. 151, Jalan Kelang Lama, Batu 3½
58100 Kuala Lumpur
Tel : 603-7987 5300
Fax : 603-7987 5200
Principal Place
of Business
Lot 2736, Jalan Raja Nong
41200 Klang
Selangor Darul Ehsan
Tel : 603-5161 7778
Fax : 603-5162 7778
Share Registrars
MIDF Consultancy &
Corporate Services Sdn Bhd
Level 8, Menara MIDF
82 Jalan Raja Chulan
50200 Kuala Lumpur
Tel : 603-2173 8888
Fax : 603-2173 8677
Website
www.superlon.com.my
Principal Bankers
Auditors
SC Lim, Ng & Co (AF 0681)
3A-2, 3rd Mile Square
No. 151 Jalan Kelang Lama
Batu 3½
58100 Kuala Lumpur
Tel : 603-7987 5188
Fax : 603-7987 0588
Solicitors
Christina Chia,
Ng & Partners
CIMB Bank Berhad
United Overseas Bank
(Malaysia) Bhd
AmBank Malaysia Berhad
Public Bank Berhad
Stock Exchange Listing
Main Market of Bursa Malaysia
Securities Berhad
Stock Name : Superln
Stock Code : 7235
Investor Relations
Shareholders, investors and members of the public are invited to
access the Company’s website at www.superlon.com.my or Bursa’s
website for announcements made at www.bursamalaysia.com for
information on the Group’s operations and latest developments. For
further details, please contact the following at our principal place of
business :Mr Ongi Cheng San
Executive Director
2
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Mr Lim E @ Lim Hoon Nam
Senior Independent Director
Soaring Through The Highest Expectations
Annual Report 2010
Financial Highlights
for the financial years ended 30 April 2006 to 2010
Notes :
(i)
The revenue, profit before taxation, profit after taxation for the financial years up to 2007 are based on the proforma
audited consolidated income statement of the Superlon Group prepared on the assumption that the current structure of
the Superlon Group has been in existence throughout the years. The proforma financial information are extracted from
the prospectus of the Company dated 9 April 2007 and the audited accounts for the financial period ended 30 April 2007
and are presented for illustrative purposes only.
(ii) The net assets as at 30 April 2006 are based on the net assets of Superlon Worldwide Sdn Bhd, being the only subsidiary
of the Superlon Group existing prior to its restructuring and listing on Bursa Malaysia Securities Berhad and are presented
for illustrative purposes only.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
3
Annual Report 2010
Soaring Through The Highest Expectations
Group Structure
Superlon holdings berhad
Investment holding and
provision of
management services
100%
Superlon Worldwide
Sdn Bhd
Design, test and manufacture
of thermal insulation materials
mainly for the heating,
ventilation, air-conditioning
and refrigeration (“HVAC&R”)
industry and trading of
HVAC&R parts and equipments
4
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
55%
Superlon Steel Pipes
Sdn Bhd
Manufacturing of steel pipes
Soaring Through The Highest Expectations
Annual Report 2010
Chairman’s Statement
On behalf of the Board of Directors of Superlon Holdings Berhad, I am
pleased to present to you the Annual Report of the Group and of the
Company for the financial year ended 30 April 2010.
INDUSTRY TRENDS & PERFORMANCE REVIEW
Superlon Group experienced a recovery in demand for our products in tandem with the improved international
and local economic conditions compared to the previous financial year. However, the strength and consistency
of the demand have yet to achieve pre-crisis levels.
Despite a challenging operating environment, Superlon Group managed to turn-around its operations and
registered a net profit of RM4.6 million for 2010 compared to a net loss after tax of RM1.4 million in 2009.
This was achieved on the back of a turnover of RM62 million for 2010 which was slightly lower than the previous
year’s turnover of RM66 million.
Superlon Worldwide Sdn Bhd (“Superlon Worldwide”), a wholly-owned subsidiary which produces thermal
insulation materials used mainly in the heating, ventilation, air-conditioning and refrigeration system, continues
to be the main contributor to the Group. The gross profit margin of Superlon Worldwide improved as a result
of improved production and operational efficiencies coupled with lower raw material prices.
Superlon Steel Pipes Sdn Bhd (“Superlon Steelpipes”) a 55% subsidiary, manufactures precise fine tubes that are
used in a variety of industries from manufacturing of bicycles to furniture. During the financial year under review,
erratic steel prices as well as weak demand weight-down its efforts to meet its optimal production level. Hence,
Superlon Steelpipes registered a gross loss of RM451,904 for the financial year.
DIVIDENDS
The Company had on 2 February 2010 paid an interim single-tier dividend of
1.75 sen per share for the financial year ended 30 April 2010.
The Board of Directors is pleased to propose a final single-tier dividend of 1.75
sen for the financial year ended 30 April 2010 for shareholders’ approval.
PROSPECTS & OUTLOOK
Moving forward, international communities are watching cautiously
whether a sustained global recovery can be achieved as Western
policymakers are trying to deal with high unemployment rates
whilst Asia-Pacific policymakers have begun to normalize policies to
head-off rising inflation and the emergence of asset bubbles. Until
a sustained recovery of the global economy is achieved, the Group
is expecting a high degree of uncertainty and challenges ahead.
In anticipation of a challenging environment, the Group will place greater emphasis on research and development
of its HVAC&R products to improve quality and product range. In addition, the Group will continue with its
efforts to improve production and operational efficiencies.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
5
Annual Report 2010
Soaring Through The Highest Expectations
Chairman’s Statement (cont’d)
PROSPECTS & OUTLOOK (cont’d)
Efforts are also continuously made to acquire new clientele both in existing markets and prospective markets. The
Company believes that through increasing brand awareness and its strong focus on research and development,
new and creative products for broader industries will be developed and the overall market share held by Superlon
will increase.
It is hoped that through its efforts to achieve internal improvements coupled with a sustained recovery of the
global economy, the Group will at least sustain its profitability in the next financial year.
AUDITORS
In line with the requirements of Bursa Malaysia Securities Berhad, Superlon has received a Notice of Nomination
to engage Messrs. Crowe Horwath which is registered with the Audit Oversight Board under Section 31O of the
Securities Commission Act, 1993 to act as the auditors for the Superlon group of companies. Meanwhile, the
Board of Directors wishes to express its appreciation to Messrs. S C Lim Ng & Co for their years of service.
APPRECIATION
The Board of Directors of Superlon wishes to express its appreciation for all the industrious and unwavering
efforts of the management and staff towards the success of the Group.
On behalf of the Board, I would like to thank our former Director, Mr Andrew Tan Lyn San for his contribution
and invaluable services to the Group during the tenure of his office.
I would like to extend a warm welcome to Mr Ongi Cheng San who has just joined the Board. His diverse experience
will undoubtedly benefit the Group in many ways.
Our sincere gratitude is also due to our valued customers, business associates, government authorities, bankers,
suppliers and shareholders.
I thank my fellow Board members for their co-operation and contributions to the Group.
Whilst the road ahead of us is expected to be uncertain, the Board shall endeavour
to meet the challenges ahead with our committed and loyal team to
fulfill our commitment to our shareholders.
Tan Sri datuk Amar (Dr.) Haji Tommy
Bin Bugo @ Hamid Bin Bugo
Chairman
6
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Profile of Directors
Tan Sri Datuk Amar
(Dr.) Haji Tommy Bin
Bugo @ Hamid Bin Bugo
Non-Independent
Non-Executive Chairman
Tan Sri Datuk Amar, a Malaysian aged 65, was appointed to the Board on 31
January 2007. He graduated from the University of Canterbury, New Zealand
in 1969 with M. A. in Economics. He also obtained a Postgraduate Diploma in
Teaching from Christchurch Teachers’ College, New Zealand and a Postgraduate
Certificate in Business Studies from Harvard Institute of Development Studies,
USA. He was honoured with Ph. D. in Commerce by Lincoln University, New
Zealand. He is a recipient of an Excellent Award from the American Association
of Conservation Biology.
His career started as a Teacher at Tanjong Lobang College, Miri in 1971. A year
later he was posted to the State Planning Unit, Sarawak. He was seconded to
Malaysia LNG Sdn Bhd as Administration Manager for three years. In 1981 he
was appointed the first General Manager of Land Custody and Development
Authority, Sarawak. He moved on to become Permanent Secretary of the Ministry
of Resource Planning, and State Secretary of Sarawak till his retirement from the
Civil Service in August 2000.
Tan Sri Hamid has served on the board of several companies and statutory bodies.
Currently, he is on the Board of several listed and non-listed companies including
SapuraCrest Petroleum Berhad, Sarawak Consolidated Industries Berhad and
Zecon Berhad. He is also a board member of Institute Integrity Malaysia and a
member of the Advisory Committee of the Malaysian Anti-Corruption Commission.
Tan Sri Hamid is also active in charitable activities as a member of Lembaga
Amanah Masjid Sarawak, Chairman of Yayasan Kemajuan Insan and Sarawak
State Library Management Board.
He does not have any family relationship with any of the other Directors of the
Company. He is a major shareholder of the Company. He has no material conflict
of interest with the Group other than that which has been disclosed to the Board of
Directors. He has not been convicted of any offences within the past 10 years.
Liu Lee, Hsiu-Lin
@ Jessica H. Liu
Managing Director and
Chief Executive Officer
Jessica Liu, a Taiwanese & Australian aged 53, was appointed to the Board on 31
January 2007. She graduated from Ming Chuan Commercial and Management
College, a local college in Taiwan with a Secretarial Science and Management
degree qualification in 1978.
In 1983, she co-founded TransAsia Rubber Industrial Co Ltd, a Taiwanese company
principally involved in the manufacturing of rubber thermal insulation products
and she was a Director and shareholder of the company from 1983 to 1997. In
1992, she founded Villa Mutiara Sdn Bhd manufacturing rubber insulation and
the company name has since been changed to Superlon Worldwide Sdn Bhd.
Jessica Liu has more than 27 years’ working experience in the rubber thermal
insulation industry and has todate accumulated in-depth knowledge in
management skills, and the business and market environment of the thermal
insulation industry.
She does not hold any directorships in any other public companies. Apart from her
son, Liu Han-Chao, who is also an Executive Director of the Company, she does
not have any family relationship with any of the Directors of the Company. She is
a major shareholder of the Company. She has no material conflict of interest with
the Group other than that which has been disclosed to the Board of Directors.
She has not been convicted of any offences within the past 10 years.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
7
Annual Report 2010
Soaring Through The Highest Expectations
Profile of Directors (cont’d)
Liu Han-Chao
Executive Director
Liu Han-Chao, an Australian aged 28, was appointed to the Board on 6 November
2007. He graduated with a Diploma in Business major in marketing and a Bachelor
of Business degree with double major in Management and Marketing from
Queensland University of Technology, Australia in 2005. He joined the Superlon
group in November 2005 as Sales and Marketing Manager of Superlon Worldwide
Sdn Bhd. He was subsequently appointed to the position of Senior Manager in
January 2007.
Currently, Liu Han-Chao is the head of the Marketing Department where he is
responsible for formulating marketing and business strategies for new markets,
implementing marketing and business strategies and developing marketing
programmes to measure and forecast market demand within the Superlon group.
Liu Han-Chao does not hold any directorship in any other public companies.
Apart from his mother, Liu Lee, Hsiu-Lin @ Jessica Liu who is also the Managing
Director and a major shareholder of the Company, he does not have any family
relationship with any of the Directors of the Company. He has no material conflict
of interest with the Group other than that which has been disclosed to the Board
of Directors. He has not been convicted of any offences within the past 10 years.
Ongi Cheng San
Executive Director
Ongi Cheng San, a Malaysia aged 39, was appointed to the Board on 25 March 2010.
He is a member of the Association of Chartered Certified Accountants, UK and a
Chartered Accountant registered with the Malaysian Institute of Accountants.
Ongi Cheng San has over 17 years of working experience in finance and accounting.
He was appointed as Accountant in Superlon Worldwide Sdn Bhd, a wholly owned
subsidiary of Superlon Holdings Berhad in June 2003 and prior to his appointment
as Executive Director, he was the Chief Accountant who is responsible for corporate,
finance, accounting, secretarial, taxation and audit matters of the Group. Prior to
joining the Group, he has been working for listed and unlisted companies involved
in automotive parts, securities trading and construction.
Ongi Cheng San does not hold any other directorship in any public companies.
He does not have any family relationship with any of the other Directors and/or
major shareholders of the Company. He has no material conflict of interest with
the Group other than that which has been disclosed to the Board of Directors. He
has not been convicted of any offences within the past 10 years.
Chun Kwong Pong
Non-Independent
Non-Executive Director
Chun Kwong Pong, a Malaysian aged 38, was appointed to the Board on 24 October
2007.
He graduated from Monash University, Australia in 1993 with a Bachelor of Business
(Accounting) and is a Chartered Accountant registered with the Malaysian Institute
of Accountants and a Certified Practising Accountant under CPA Australia. He is
currently a Director of cfSolutions Sdn Bhd, a corporate finance advisory company
licensed under the Capital Market and Services Act, 2007.
He was formerly with a property development company listed on the Main Market
of Bursa Malaysia Securities Berhad from 2000 to 2005 and last held the position
of General Manager, Corporate Planning. From 1997 to 2000, he worked with
AmInvestment Bank Berhad’s Corporate Finance Department where he handled
8
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Profile of Directors (cont’d)
flotations, restructurings, fund raising as well as mergers and acquisitions. Prior to
that, he was with Ernst & Young where he has audited companies from a spectrum
of industries.
Chun Kwong Pong does not hold any directorship in any other public companies.
He does not have any family relationship with any of the other Directors and/or
major shareholders of the Company. He has no material conflict of interest with
the Group other than that which has been disclosed to the Board of Directors.
He has not been convicted of any offences within the past 10 years.
Lim E @ Lim Hoon Nam
Independent Non-Executive
Director
Lim Hoon Nam, a Malaysian aged 66, was appointed to the Board on 31 January
2007. He holds a Bachelor degree in Accountancy from National Chengchi
University, Taiwan and Bachelor degree in Commerce from Otago University, New
Zealand. He is a member of the Malaysian Institute of Accountants, Malaysian
Institute of Certified Public Accountants and New Zealand Institute of Chartered
Accountants.
Lim Hoon Nam has been practising as an accountant since 1977 under his own
audit firm, Lim Hoon Nam & Co. He is also a director of Metech Group Berhad.
He does not have any family relationship with any of the other Directors and/or
major shareholders of the Company. He has no material conflict of interest with
the Group other than that which has been disclosed to the Board of Directors.
He has not been convicted of any offences within the past 10 years.
Lim Wee Keong
Independent Non-Executive
Director
Lim Wee Keong, a Malaysian aged 37, was appointed to the Board on 27 March
2008. He graduated from University of Sheffield, UK in 1996 with B. A. (Hons)
in Accounting and Financial Management.
He has more than 12 years’ experience in business development, accounting and
management. He started work with the banking industry for 3 years where he held
a position as Credit and Marketing Executive. His main job scope included credit
management, business analysis, evaluation and presentation of credit proposal.
Subsequently, he worked with Villa Mutiara Sdn Bhd as Finance Manager from
1999 to 2002 where his main scope of responsibility was overseeing the financial
planning and accounting operations of its group of companies. Currently,
Lim Wee Keong is the Operations Director for Bacfree group of companies, a
medium-sized water treatment equipment provider with business operations in
Malaysia, Singapore and the United Kingdom. His main functions include the
management of production and engineering operations, management system
design, process engineering, strategic planning and implementation and research
and development.
Lim Wee Keong does not hold any directorship in any other public companies.
He does not have any family relationship with any of the other Directors and/or
major shareholders of the Company. He has no material conflict of interest with
the Group other than that which has been disclosed to the Board of Directors.
He has not been convicted of any offences within the past 10 years.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
9
Annual Report 2010
Soaring Through The Highest Expectations
Audit Committee Report
OBJECTIVE
The objective of the Audit Committee is to assist the Board of Directors (“the Board”) in fulfilling its fiduciary
responsibilities relating to the internal control, corporate accounting and reporting practices of Superlon Holdings
Berhad (“the Company”) and its subsidiaries (“the Group”). The Audit Committee will endeavour to adopt
various practices aimed at maintaining appropriate standards of responsibility, integrity and accountability to
the shareholders of the Company.
COMPOSITION
The Audit Committee members consist of the following directors:
Name
Directorship
Lim E @ Lim Hoon Nam
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Lim Wee Keong
Designation in
Audit Committee
Independent
Chairman
Non-Independent
Non-Executive
Member
Independent
Member
TERMS OF REFERENCE
The Audit Committee is appointed by the Board from amongst its Directors and consists of not fewer than three
(3) Directors, all of whom are Non-Executive Directors and the majority of whom are Independent Directors.
At least one (1) member of the Audit Committee, i.e. Mr Lim E @ Lim Hoon Nam, is a member of the Malaysian
Institute of Accountants or otherwise a person approved under Paragraph 15.09 (1)(c)(ii) or (iii) of the Main
Market Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad and Practice Note No 13 of the LR. (An
alternate director does not qualify as a member of the Audit Committee.)
The Chairman of the Audit Committee, Mr Lim E @ Lim Hoon Nam, is an Independent Non-Executive Director
and is appointed by its members.
If a member of the committee resigns, dies or for any other reason ceases to be a member with the result that the
number of members is reduced to below 3, the Board shall within three (3) months appoint such number of new
members as may be required to make up the shortfall.
Each and every member of the Audit Committee including the Chairman shall hold office until otherwise determined
by the board or unless they cease to be a director of the Company.
The term of office of the committee members shall continue to run and be reviewed by the Board at least once in
every three years.
The Company Secretary acts as secretary to the Audit Committee. Minutes of each meeting is distributed to each
member of the board. The Chairman of the Committee reports on each meeting to the Board.
Authority
The Audit Committee is authorised to investigate ay activity of the Company within its terms and references and all
employees shall be directed to co-operate with any request made by the Audit Committee. The Audit Committee
shall have unrestricted access to any information pertaining to the Company and have direct communication
channels with the external and internal auditors, when applicable and to the senior management of the Group.
The Audit Committee shall be empowered to retain persons or experts having special competence as necessary to
assist the Audit Committee in fulfilling its responsibilities.
10
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Audit Committee Report (cont’d)
Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:-
•To consider and recommend the nomination and appointment of the external auditors, the audit fees, the
questions of resignation or dismissal and any other related matters;
•To oversee all matters pertaining to audit including the review of the audit plan and audit report with the
external auditors;
•To review the financial statements of the Company/ Group, and to discuss problems and reservations arising
from the interim and final results, and any matters that the external auditors may wish to discuss (in the absence
of the management, where necessary);
The Chairman of the Audit Committee, to engage on a continuous basis with senior management, such as
the Chairman, the Chief Executive Officer, the Finance Director, the external auditors as well as the internal
auditors in order to be kept informed of matters affecting the Company.
In relation to the internal audit function:
– Review the adequacy of the scope, function, competency and resources of the internal audit function,
and that it has the necessary authority to carry out its works;
– Review the internal audit programme and results of the internal audit process, and where necessary,
ensure that appropriate actions are taken on the recommendations of the internal audit function;
To review any related parties transactions that may arise within the Company or the Group;
To review the application of corporate governance principles and the extent of the Group’s compliance with
the best practices set out under the Malaysian Code on Corporate Governance;
To consider all areas of significant financial risk and arrangements in place to contain those risks to acceptable
levels;
To ensure that the Group is in compliance with the regulations of the Companies Act, 1965, the LR and other
legislative and reporting requirements;
To identify and direct any special project or investigate and to report on any issues or concerns in regards to
the management of the Group; and
Such other functions as may be agreed by the Audit Committee and the Board.
•
•
•
•
•
•
•
•
MEETING AND MINUTES
Meetings of the Audit Committee are held not less than four (4) times a year. Further meetings may be called
at any time at the request of any committee member, the company’s Managing Director, the external auditors
or the internal auditors.
The Finance Director, a representative of the external auditors and internal auditors attends Audit Committee
meetings. Other board members may attend the meetings upon the invitation of the Audit Committee. However,
the Audit Committee meets with the external auditors, the internal auditors or both without the presence of
executive directors at least twice a year.
Minutes of each meeting are prepared and kept by the company secretary and are signed by the Chairman as
correct record and distributed to all members of the Board.
During the financial year ended 30 April 2010, 4 Audit Committee meetings were held. The record of attendance
of its members during their membership is as follows: NameTotal
Lim E @ Lim Hoon Nam
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Lim Wee Keong
4/4
4/4
4/4
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
11
Annual Report 2010
Soaring Through The Highest Expectations
Audit Committee Report (cont’d)
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR
During the financial year ended 30 April 2010, the main activities undertaken by the Audit Committee were as
follows:-
•
•
•
•
•
•
•
•
Reviewed the unaudited quarterly financial results of the Group with the management team prior to the
Board’s approval and subsequent announcements;
Reviewed with the external auditors the audited financial statements for the financial year ended 30 April
2010, the audit planning memorandum, the results of the audit, audit report and recommendation prior
to the approval of the Board and subsequent announcements;
Reviewed and discussed the new developments on accounting standards issued by the Malaysian Accounting
Standards Board and its adoption and impact to the Group’s and Company’s financial statements;
Reviewed the internal audit plan and programme for the next financial year;
Reviewed the reports prepared by the outsourced internal auditors on the state of internal controls of the
Group;
Reviewed the capital budget for the Group;
Reviewed the documents prior to its release to the shareholders; and
Reviewed the related party transactions entered into by the Group and the Company for compliance with
the LR.
INTERNAL AUDIT FUNCTION
The internal audit function is outsourced to an external consultant firm which reports to the Audit Committee
and assists the Board of Directors in monitoring and managing risks and internal controls. The principal role of
the internal audit includes:-
•
•
•
•
12
Assisting the Board in the review of the adequacy, integrity and effectiveness of the system of internal controls
of the Group to enable the Board to prepare the Statement on Internal Control in the Annual Report.
Performing a risk assessment of the Group to identify and evaluate the principal risk factors and ensuring
the implementation of appropriate internal control processes and procedures to mitigate these risks.
Allocating adequate audit resources, in accordance with the internal audit plan approved by the Audit
Committee, to carry out internal audits on key operations of the Group so as to provide the Board with an
effective and efficient audit coverage.
Providing independent and objective reports on the state of internal controls of the various operating units
within the Group to the Audit Committee so that remedial actions can be taken in relation to any weaknesses
noted in the systems and controls of the respective operating units.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Statement On Corporate Governance
THE CODE OF CORPORATE GOVERNANCE
The Board of Directors (“the Board”) of Superlon Holdings Berhad (“the Company”) acknowledges the importance
of practising good corporate governance to focus the Company and its subsidiaries (“the Group”) towards
enhancing business value and long term value for its stakeholders. The Board is fully committed to ensuring that
high standards of corporate governance are practised within the Group as the underlying principle in discharging
its responsibilities.
BOARD OF DIRECTORS
The Board’s responsibilities are in setting the strategic direction of the Group, establishing visions and goals for
the management and continuously improving its performance so as to protect and enhance shareholders’ value.
They are hence responsible for the overall standards of strategic planning, conduct, risk management, succession
planning, investor relations programme as well as the system of internal controls within the Group.
BOARD COMPOSITION
The Board currently consists of seven (7) members comprising three (3) executive directors, two (2) nonindependent non-executive directors and two (2) independent non-executive directors. The Board has a good
balance of members who are executive, non-executive and independent directors such that no one individual or
a small group of individuals can dominate the Board’s decision-making process.
With their different backgrounds and specialisation, the directors bring along a wide range of experience, expertise
and perspective in discharging their responsibilities and duties in managing the business affairs of the Group.
There is a clear and distinct division of roles and responsibilities between the Chairman and the Managing Director.
The Chairman is primarily responsible for Board effectiveness and conduct whilst the Managing Director is
responsible for the day-to-day running of the business overseeing the operating units, organisational effectiveness
and implementation of Board policies and decisions.
With one-third of the Board independent, the minority shareholders in the Company are fairly represented by the
independent non-executive directors. The independent directors fulfill a pivotal role in corporate accountability and
provide unbiased, objective and independent views, advice and judgment by taking into account the interests of all
stakeholders. A senior independent director is available to whom concerns of stakeholders may be conveyed.
BOARD COMMITTEES
To assist the Board in fulfilling its roles, the board has three (3) committees, namely Audit Committee,
Nomination Committee and Remuneration Committee, to support and assist in discharging its fiduciary duties
and responsibilities. The respective functions and terms of reference of the board committees as well as authority
delegated to these board committees have been defined by the Board. The committees report and make
recommendations to the Board on matters delegated to them for deliberation. The ultimate responsibility for
the final decisions on all matters lies with the Board.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
13
Annual Report 2010
Soaring Through The Highest Expectations
Statement On Corporate Governance (cont’d)
BOARD MEETINGS
Board meetings are scheduled for every quarter with additional meetings to be convened as and when required.
During the financial year under review, the Board met a total of 5 times. The attendance of the Directors who
held office during the financial year is set out below: Name of Director
Attendance at meetings
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Liu-Lee, Hsiu Lin @ Jessica Liu
Lim E @ Lim Hoon Nam
Liu Han Chao
Ongi Cheng San
Andrew Tan Lyn San Chun Kwong Pong Lim Wee Keong ^appointed with effect from 25 March 2010
*resigned with effect from 6 November 2009
5/5
5/5
5/5
5/5
-/- ^
2/2 *
5/5
5/5
SUPPLY OF INFORMATION
Prior to any Board meeting, every Director is given an agenda with the relevant documents and information on
each agenda item to be deliberated on. The Chairman will lead the presentation of Board papers and discussion.
All Directors are entitled to call for additional clarification and information to assist them in matters that require
their decision-making.
All Directors have unrestricted access to the advice as well as services of the company secretary and external
auditors whether as a full board or in their individual capacity, in the furtherance of their duties. They may obtain
independent professional advice at their discretion at the Company’s expense.
APPOINTMENT AND RE-ELECTION OF DIRECTORS
The Company has a transparent and formal procedure for the appointment of new directors to the Board.
Assessment and recommendation to the Board of new candidates for the appointment as directors is to be made
by the Nomination Committee. The newly appointed directors will retire at the first Annual General Meeting
(“AGM”) and are eligible for re-appointment.
Every director will be required by the Company’s Articles of Association to retire by rotation at intervals of not
less than three years at each AGM. The directors to retire in each year are the directors who have been longest in
office since their appointment or re-appointment. A retiring director is eligible for re-appointment.
The Nomination Committee comprises exclusively of non-executive directors, a majority of whom is independent.
The members of the Nomination Committee are as follows:Chun Kwong Pong
Lim E @ Lim Hoon Nam
Lim Wee Keong
as Chairman
as Member
as Member
The objectives and responsibilities of the Nomination Committee are to identify and recommend to the Board
suitable nominees for appointment to the Board and Board Committees. In line with the best practices in
corporate governance, the Board has adopted a methodology for the assessment of the effectiveness of the Board
as a whole and assesses the performance of the Board as a whole annually.
14
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Statement On Corporate Governance (cont’d)
Directors’ Training
Lim Wee Keong
Lim E @ Lim Hoon Nam
Chun Kwong Pong
Ongi Cheng San
Liu Han Chao
Tan Sri Datuk Amar (Dr.) Haji Tommy
bin Bugo @ Hamid bin Bugo
TRAINING PROGRAMME / SEMINAR/TRADE SHOWS
Liu Lee, Hsiu-Lin @ Jessica Liu
All the Directors have completed the Mandatory Accreditation Programme as required by Bursa Malaysia Securities
Berhad. The Directors have from time to time attended various relevant training programmes, seminars and
trades shows organised by the relevant regulatory authorities and professional bodies to broaden their knowledge
and to keep abreast with the relevant changes in law, regulations and the business environment, including the
following:-
Vietnam: Setting up a Company, M&A, Tax Planning and
Financial Management for Foreign Investors
3
3
Taipei International Plastics & Rubber Industry Show
3
Asia Trader and Investor Convention 2010
3
3
Chinaplas 2010
3
The 21st International Exhibition for Refrigeration,
Air-Conditioning, Heating and Ventilation, Frozen
FoodProcessing, Packaging And Storage
3
3
Taipei International Sporting Goods Show
3
3
Modern Internal Auditing for Directors, Audit Committee,
Senior Management and Auditors
3
Sapura Group Directors Training Programme
3
Air Conditioning, Refrigeration & Building Services Trade
Exhibition 2010
3
Reach For Success in Turbulent Times
3
Financial Instruments: Recognition, Measurement,
Disclosure & Presentation
3
The All New 2010 Edition of the Quarterly Interim
3
Financial Reporting
Impairment of Assets
3
Bursa Securities’ Clarification on the Announcement of
Profit Forecast / Projection
3
Corporate Governance Guide – Toward Boardroom
Excellence
3
Quantitative Retirement Planning
3
Financial Reporting Standard 139: Recognition &
Measurement – Preparing to Implement
3
Negotiation & Influencing Skills
3
Update on Recent Public Rulings and Income Tax Rules
3
Malaysia Tax Conference 2009
3
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
15
Annual Report 2010
Soaring Through The Highest Expectations
Enhancing Audit Quality Control & Practice Review
Finding and Tax Compliance Conference
3
2010 Budget Talk
3
Withholding tax on Section 4(f) Income – Practical and
Legal Perspectives
3
Metal Tech 2009
AquaTech Shanghai 2009
Forum on FRS 139: Financial Instrument Standards
Asia Water 2010
Lim Wee Keong
Lim E @ Lim Hoon Nam
Chun Kwong Pong
Ongi Cheng San
Liu Han Chao
Tan Sri Datuk Amar (Dr.) Haji Tommy
bin Bugo @ Hamid bin Bugo
TRAINING PROGRAMME / SEMINAR/TRADE SHOWS
Liu Lee, Hsiu-Lin @ Jessica Liu
Directors’ Training (cont’d)
3
3
3
3
Directors’ Remuneration
The remuneration of the Executive Directors are recommended to the Board by the Remuneration Committee.
The Remuneration Committee comprises 3 non-executive directors, namely the following: Chun Kwong Pong
Tan Sri Datuk Amar (Dr.) Haji Tommy bin Bugo @ Hamid bin Bugo
Lim Wee Keong
as Chairman
as Member
as Member
The objective of the remuneration policies is to attract and retain suitable directors to lead and control the Group
effectively. Generally, the remuneration of directors reflects the level of responsibility and commitment that goes
with the Board’s membership. In the case of executive directors, the component parts of the remuneration are
structured so as to incentivise the individual according to the performance of the Group. The Committee is to
recommend to the Board the framework and remuneration package for each executive director. The Committee
meets at least once a year to consider all aspects of the executive directors’ performance for recommendation of
remuneration, drawing external advice when necessary.
For non-executive directors, the level of remuneration is based on their individual experience and level of
responsibilities. The determination of remuneration packages of non-executive directors, including the nonexecutive chairman, is decided by the Board as a whole. The individuals concerned abstain from discussing and
deliberating on their own remuneration.
16
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Statement On Corporate Governance (cont’d)
Directors’ Remuneration (cont’d)
The aggregate directors’ remuneration for the financial year under review is as follows:
Executive Directors
RM
Non-Executive DirectorsTotal
RM
RM
Directors’ salaries
Employee Provident Fund
Directors’ fees
Meeting allowance
Bonus
Benefits in kind
614,313
120,137
–
–
16,255
33,250
–
–
114,000
7,000
–
–
614,313
120,137
114,000
7,000
16,255
33,250
TOTAL
783,955
121,000
904,955
The directors’ remuneration for the financial year under review analysed in bands is as follows:
RM50,000 and below
RM50,001 to RM100,000
RM100,001 to RM150,000
RM150,001 to RM200,000
RM200,001 to RM400,000
RM400,001 to RM450,000
TOTAL
Executive Directors
RM
Non-Executive DirectorsTotal
RM
RM
1
–
1
1
–
1
4
–
–
–
–
–
5
–
1
1
–
1
4
4
8
SHAREHOLDER COMMUNICATION AND INVESTORS RELATIONS POLICY
The Board believes in clear communication and acknowledges the importance of timely dissemination of relevant
information to its shareholders. Announcements on the major events of the Company as well as the quarterly
results and annual reports provide the shareholders and investors with a continuous overview of the Group’s
businesses, activities and financial performances.
The AGM is the principal forum of dialogue with shareholders. Shareholders are notified of the meeting and
provided with a copy of the Company’s Annual Report prior to the meeting. At each AGM, the Board presents
the Group’s results and shareholders are given the opportunities to raise questions pertaining to the Group.
Members of the Board and the auditors of the Company are available at the meeting to respond to all queries
and to provide clarification on issues and concerns raised by the shareholders.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
17
Annual Report 2010
Soaring Through The Highest Expectations
Statement On Corporate Governance (cont’d)
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each
financial year which have been made out in accordance with the applicable approved accounting standards and
the provision of the Act. The Board of Directors is responsible for taking reasonable steps to ensure that the
financial statements give a true and fair view of the state of affairs of the Group and the Company, and of their
results and cash flows for the financial year under review.
In preparing the financial statements of the Group and the Company for the year ended 30 April 2010, the Board
of Directors has adopted and applied appropriate accounting policies on a consistent basis, made judgements and
estimates where applicable that are reasonable and prudent and ensured that applicable accounting standards
have been followed.
The Directors have ensured that the Group and Company keep proper accounting and other records that will
disclose with reasonable accuracy at any time the financial position of the Group and the Company, and which
enable them to ensure that the financial statements comply with the Act and the applicable approved accounting
standards.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board is responsible for ensuring that the Company’s and Group’s financial statements are in accordance with
the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia. The
Board aims to present a true and fair assessment of the Group’s financial performance, position and prospects
to the shareholders of the Company. The Board is also responsible for providing a high level of disclosure to
ensure integrity and consistency of the financial reports.
The Audit Committee assists the Board in its responsibility to oversee and scrutinise the financial reporting and
the effectiveness of the internal controls of the Group. The Audit Committee comprises three (3) directors, all
of whom are non-executive and the majority of whom are independent. The terms of references and activities of
the Audit Committee are detailed in the Audit Committee Report of this Annual Report.
Internal Control
The Directors acknowledge their responsibility to maintain a sound system of internal controls to safeguard
the shareholders’ investment and the Company’s assets. The Board also recognises its overall responsibility for
continuous reviewing and maintenance of the system of internal controls of the Group.
The Statement of Internal Control in this Annual Report herein details the state of internal controls within the
Company.
Relationship with Auditors
The Board has established a formal and transparent arrangement with the external auditors of the Company
through the Audit Committee. The Audit Committee communicated directly and independently with the auditors
once (1) a quarter where necessary and without the presence of the executive directors at least twice a year.
18
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Statement On Corporate Governance (cont’d)
CORPORATE SOCIAL RESPONSIBILITY (“CSR”)
The Group is mindful of the need to an organisation which is responsible social. Various steps are being undertaken
by the Group to play its part in contributing to the welfare of the society and communities in the environment
it operates.
The Group has thus far undertaken various CSR activities during the financial year under review, which efforts
include:Environment
The Group currently uses natural gas in its various heating production processes which is safer and causes less
pollution. In addition, the Group has engaged an accredited laboratory consultant to assist in the monitoring
of the quality of its treated water, chimney emissions and factory air to ensure compliance with the regulatory
requirements at all times.
Welfare of employees
The Group believes in providing a safe, conducive and comfortable working environment for its employees. In
pursuing continual improvements to safety and health management, the Group works together with its employees,
government agencies and suppliers to promote the awareness of safety and health. A truly safe working environment
will benefit everyone and a high level of safety can only be achieved through the co-operation from all parties.
Recreational activities are also organised to assist the employees in achieving a balanced work life and in enhancing
the rapport between the management and the staff. Group trips are also organised to build staff rapport and to
incentivise staff for their industrious efforts.
The management are also provided with opportunities to attend internal and external training programmes to
enhance one’s knowledge and skills. The Group also conducted visits to and participate in international trade
fairs / exhibitions locally and overseas, to broaden the knowledge base of the employees.
Community
Recognising the importance of contributing to a healthy and balanced community, various donations have been
made by the Group during the year to various charitable organisations, schools and others.
Every year, the Group provides opportunities for practical training for undergraduates from local universities to
expose them to hands-on experience in the industry.
The Group, together with its employees, participates in fundraising for the education institutions and charitable
organisations for the unfortunate.
ADDITIONAL COMPLIANCE INFORMATION
Disclosure of Related Party Transactions
The Group has taken all necessary steps to ensure that transactions which were deemed to be related party
transactions were appropriately disclosed in accordance with the Listing Requirements and good corporate
governance.
Utilisation of proceeds
No fundraising was made from the equity market in the financial year under review.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
19
Annual Report 2010
Soaring Through The Highest Expectations
Statement On Corporate Governance (cont’d)
ADDITIONAL COMPLIANCE INFORMATION (cont’d)
Share Buy-back
The renewal of the approval of the shareholders for a share buy-back of up to 10% of the issued and paid-up
share capital of the Company was obtained on 29 September 2009. During the financial year under review, the
Company bought back the following shares:Month
No. of
shares
Lowest
price
(RM)
Highest price
(RM)
AverageTotal
price
consideration *
(RM)
(RM)
–
0.41
–
0.415
0.415
–
0.45
0.415
–
0.415
–
0.45
0.48
–
0.48
0.485
–
0.411
–
0.442
0.449
–
0.473
0.48
May 09
June 09
July – Nov 09
Dec 09
Jan 10
Feb 10
Mar 10
Apr 10
–
19,000
–
20,000
96,000
–
110,600
67,500
–
7,872
–
8,923
43,122
–
52,325
32,426
Note:*Including transaction costs
The total number of treasury shares held as at 30 April 2010 was 354,100. The Company did not dispose or
cancel any treasury shares during the financial year under review.
Options, warrants or convertible securities
During the financial year under review, there were no options, warrants or convertible securities exercised.
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) programmes
The Company did not sponsor any ADR or GDR programmes during the financial year.
Sanctions / Penalties
There were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management
by any relevant regulatory bodies during the financial year.
Non-audit fees
No non-audit fees were paid to the external auditors by the Group in respect of the financial year ended 30 April
2010 save for the fees of RM2,500 for the review of the Statement of Internal Control contained in the Annual
Report 2009.
Variation in results
No profit forecast was made for the financial year under review.
Profit guarantee
No profit guarantee was given for the financial year.
Material Contracts
There were no contracts involving the interest of the Directors and/or major shareholders of the Company other
than those disclosed in Note 31 of the audited accounts in this Annual Report.
Revaluation of Landed Properties
The Group did not adopt any revaluation policy on landed properties during the financial year under review.
20
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Statement On Internal Control
Introduction
The Board of Directors (“the Board”) acknowledges the importance of maintaining a sound system of internal
controls to safeguard shareholders’ investment and the assets of the Company and its subsidiaries (“the Group”)
as stipulated by the Malaysian Code of Corporate Governance.
Board’s responsibility
The Board affirms its overall responsibility for the system of internal control of the Group and for reviewing its
effectiveness, adequacy and integrity. This includes:
•
•
•
identifying principal risks;
ensuring implementation of appropriate risk management system to identify and manage these risks that
threaten the business;
reviewing the adequacy and integrity of the company’s internal control and management information systems
including the systems for compliance with applicable laws, regulations, rules, directives and guidelines.
The Board strives to ensure that appropriate controls, encompassing those that are financial, operational and
compliance in nature, are in place and working as intended. Nonetheless, due to the limitations that are inherent
in any system of internal control, the Board is aware that such system is designed to manage rather than eliminate
the risk of failure to achieve the business objectives of the Group, and can provide only reasonable and not absolute
assurance against material misstatement or loss.
Risk management framework
The Board regards risk management as an integral part of the business operations. The Group implements an
on-going process of identifying, evaluating, monitoring and managing significant risks that may affect the Group
in achieving its business objectives throughout the financial year under review. This process is regularly reviewed
by the Board and the Audit Committee and improved where necessary.
The respective Head of each business unit participates in the identification of risks as part of the management’s
risk management initiatives. Significant risks identified and the corresponding internal controls implemented
are discussed during periodic management meetings. In addition, significant risks identified are also brought
to the attention of the Board at their scheduled meetings. The Group’s key risk profile is updated regularly by
management. Risks identified are prioritised in terms of possibility of occurrence and the potential impact to the
Group’s operation should the risks materialise.
Internal Audit
The outsourced Internal Auditors periodically reviews the Group’s system of internal controls to address the
related internal control weaknesses, if any. The Internal Audit team independently reviews the risk identification
procedures and control processes implemented by the management. Any significant weaknesses identified during
the reviews together with the improvement measures to strengthen the internal controls were directly reported to
the Audit Committee. The Management is then responsible to ensure the rectification measures with due followup by the Internal Auditors and updates to the Audit Committee.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
21
Annual Report 2010
Soaring Through The Highest Expectations
Statement On Internal Control (cont’d)
Other key elements of internal control
Other key elements of the system of internal control of the Group are as follows:•
•
•
•
•
•
•
The Group has an appropriate organisational structure, which enables adequate monitoring of the activities
and ensures effective flow of information across the Group. In addition, lines of responsibility and delegations
of authority are clearly defined.
The manufacturing activities of the Group’s main subsidiary, Superlon Worldwide Sdn Bhd are accredited
with ISO 9001 : 2000 international quality system standard and such quality management system provides
the Group with improved control of key processes and a foundation for improving quality and customer
satisfaction.
Key processes of the Group are governed by written policies and procedures.
The Managing Director and Executive Directors actively participate in the day-to-day running of the operations
of the Group. This enables material issues to be effectively resolved on a timely basis.
The Management monitors the performance of the Group through key performance indicators and prepares
quarterly management reports. Risk management is embedded in the Group’s management system and is
every employee’s responsibility.
The Board receives and reviews information of the Company’s financial status and performance.
The Audit Committee meets at least once every quarter and reviews the adequacy, integrity and effectiveness of
the system of internal control of the Group. The Audit Committee receives and reviews quarterly management
reports.
Summary
Overall, the Board of Directors is satisfied that the process of identifying, evaluating and managing significant
risks that may affect achievement of the Group’s business objectives is in place to provide reasonable assurance.
The Group will strive to ensure that the system of internal control will be continuously enhanced and will seek
regular assurance on the effectiveness and soundness of the internal control systems through appraisals by the
internal as well as external auditors.
In consideration of the Internal Auditors’ reports and management representations, the Board is pleased to report
that there were no significant internal control deficiencies for areas that have been reviewed.
In addition, in accordance with the paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad, the external auditors have reviewed this Statement on Internal Control and reported that nothing
has come to their attention that causes them to believe that the contents of this Statement is inconsistent with
their understanding of the actual processes carried out in the Group.
22
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
SUPERLON HOLDINGS BERHAD (740412-X)
Soaring Through The Highest Expectations
Annual Report 2010
Financial Statements
24 – 27 28 28
29 – 30 31 32 33 – 34 35 – 36 37 – 65 Directors’ Report
Statement By Directors
Statutory Declaration
Independent Auditors’ Report
Balance Sheets
Income Statements
Statements Of Changes In Equity
Cash Flow Statements
Notes To The Financial Statements
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
23
Annual Report 2010
Soaring Through The Highest Expectations
Directors’ Report
The Directors have pleasure in submitting this report together with the audited financial statements of the Group
and of the Company for the financial year ended 30 April 2010.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding and provision of management services. The principal
activities of its subsidiary companies are as described in Note 8 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year.
RESULTS
GROUP RM COMPANY
RM
Net profit for the financial year Attributable to:
Equity holders of the Parent Minority interest
4,594,597 3,553,002
5,249,527 (654,930) 3,553,002
–
4,594,597 3,553,002
In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial
year have not been substantially affected by any item, transaction or event of a material and unusual nature save
as disclosed in the notes to the financial statements.
DIVIDENDS
Since the end of the previous financial year, the Company declared on 21 December 2009 an interim single-tier
dividend of 3.5% on 79,900,000 ordinary shares of RM 0.50 each amounting to RM 1,398,250 in respect of the
financial year ended 30 April 2010 and paid on 2 February 2010.
On 24 August 2010, the Board of Directors proposed a final single-tier dividend of 3.5% per ordinary share of
RM 0.50 each in respect of the financial year ended 30 April 2010. This dividend is subject to the approval by the
shareholders at the forthcoming Annual General Meeting.
RESERVES AND PROVISIONS
There was no material transfer to or from reserves and provisions during the financial year save as disclosed in
the notes to the financial statements.
ISSUE OF SHARES AND DEBENTURES
There was no issue of shares or debentures during the financial year.
24
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Directors’ Report (cont’d)
TREASURY SHARES
During the financial year, the Company repurchased 313,100 of its ordinary shares from the open market at
an average price of RM 0.46 per share. The total consideration paid for the repurchase was RM 144,668. The
shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.
Treasury shares have no rights to voting, dividends and participation in other distribution.
Out of the total 80,000,000 issued and fully paid ordinary shares of RM 0.50 each as at 30 April 2010, 354,100
are held as treasury shares by the Company. As at 30 April 2010, the number of outstanding ordinary shares in
issue and fully paid are therefore 79,645,900 ordinary shares of RM 0.50 each.
Further relevant details are disclosed in Note 15 to the financial statements.
OPTIONS GRANTED OVER UNISSUED SHARES
No options have been granted by the Company to any person to take up any unissued shares of the Company
during the financial year.
DIRECTORS OF THE COMPANY
The Directors who served since the date of last report are:
(a) Tan Sri Datuk Amar (Dr.) Haji Tommy Bin Bugo @ Hamid Bin Hugo
(b) Liu Lee, Hsiu-Lin @ Jessica H. Liu (f)
(c) Lim E @ Lim Hoon Nam
(d) Andrew Tan Lyn San (Resigned on 6 November 2009) (e) Chun Kwong Pong (f) Liu Han-Chao
(g) Lim Wee Keong
(h) Ongi Cheng San(Appointed on 25 March 2010)
DIRECTORS’ INTEREST IN SHARES
According to the register of directors’ shareholdings, none of the Directors holding office at the end of the financial
year had any interest in the shares of the Company and its subsidiary companies other than as follows:
Ordinary shares of RM 0.50 each
Balance Balance
as at
as at
01.05.09 Bought
Sold 30.04.10
Tan Sri Datuk Amar (Dr.) Haji Tommy Bin Bugo
@ Hamid Bin Hugo
- Direct
8,816,500
–
(1,316,263)
7,500,237
Liu Lee, Hsiu-Lin @ Jessica H. Liu (f)
- Direct
21,078,700
–
– 21,078,700
- Indirect
–
3,500,000
– *3,500,000
Liu Han-Chao
- Direct
–
3,500,000
–
3,500,000
- Indirect
21,078,700
–
– ** 21,078,700
Ongi Cheng San
- Direct 100
–
–
100
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
25
Annual Report 2010
Soaring Through The Highest Expectations
Directors’ Report (cont’d)
DIRECTORS’ INTEREST IN SHARES (cont’d)
* Deemed interest by virtue of her son, Liu Han-Chao’s direct interest in the Company.
** Deemed interest by virtue of his mother, Liu Lee, Hsiu-Lin @ Jessica H.Liu’s direct interest in the Company.
By virtue of her interest in the shares of the Company, Ms. Liu Lee, Hsiu-Lin @ Jessica H. Liu is also deemed to
have an interest in the shares of the subsidiary companies to the extent that the Company has an interest.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the Directors has received or become entitled to receive any
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by
Directors shown as disclosed Note 26 to the financial statements, or the fixed salary of a full-time employee of
the Group and of the Company, if any) by reason of a contract made by the Company or a related corporation
with the Director or with a firm of which the Director is a member, or with a company in which the Director has
a substantial financial interest other than those disclosed in Note 31(b) to the financial statements.
During and at the end of the financial year, no arrangements subsisted to which the Company or any other body
corporate was a party, whereby Directors of the Company might acquire benefits by means of the acquisition of
shares in, or debentures of, the Company or any other body corporate.
OTHER STATUTORY INFORMATION
(a) Before the financial statements of the Group and of the Company were made out, the Directors took
reasonable steps:
(i) To ascertain that proper action had been taken in relation to the writing off of bad debts and the
making of allowance for doubtful debts and satisfied themselves that all known bad debts had been
written off and adequate allowance had been made for doubtful debts; and
(ii) To ensure that any current assets which were unlikely to realise their value as shown in the accounting
records in the ordinary course of business had been written down to an amount which they might be
expected so to realise.
(b) At the date of this report, the Directors are not aware of any circumstances:
(i) That would render the amount written off for bad debts or the amount of the allowance for doubtful
debts of the Group and of the Company inadequate to any substantial extent; or
(ii) That would render the values attributed to current assets in the financial statements of the Group and
of the Company misleading; or
(iii) Which have arisen which render adherence to the existing method of valuation of assets or liabilities
of the Group and of the Company misleading or inappropriate; or
(iv) Not otherwise dealt with in this report or financial statements of the Group and of the Company which
would render any amount stated in the financial statements misleading.
26
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Directors’ Report (cont’d)
OTHER STATUTORY INFORMATION (cont’d)
(c) At the date of this report, there does not exist:
(i)
Any charge on the assets of the Group and of the Company which has arisen since the end of the
financial year which secures the liabilities of any other person; or
(ii) Any contingent liability in respect of the Group and of the Company which has arisen since the end
of the financial year.
(d) In the opinion of the Directors:
(i) No contingent or other liability has become enforceable or is likely to become enforceable within the
period of twelve months after the end of the financial year which will or may affect the ability of the
Group and of the Company to meet their obligations as and when they fall due; and
(ii) No item, transaction or event of a material and unusual nature has arisen in the interval between the
end of the financial year and the date of this report which is likely to affect substantially the results of
the operations of the Group and of the Company for the financial year in which this report is made.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Significant events during the financial year are disclosed in Note 35 to the financial statements.
AUDITORS
The auditors, Messrs. SC Lim, Ng & Co., retire at the forthcoming annual general meeting and do not wish to
seek re-appointment.
Signed on behalf of the Board in accordance with a resolution of the Directors:
LIU LEE, HSIU-LIN @ JESSICA H. LIU (f)
DIRECTOR
LIU HAN-CHAO
DIRECTOR
Kuala Lumpur
24 August 2010
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
27
Annual Report 2010
Soaring Through The Highest Expectations
Statement By Directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, the undersigned, being two of the Directors of Superlon Holdings Berhad, do hereby state that, in the
opinion of the Directors, the financial statements set out on pages 31 to 65 are drawn up in accordance with the
provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to exhibit
a true and fair view of the state of affairs of the Group and of the Company as at 30 April 2010 and of the results
and the cash flows of the Group and of the Company for the financial year ended on that date.
Signed on behalf of the Board in accordance with a resolution of the Directors:
LIU LEE, HSIU-LIN @ JESSICA H. LIU (f)
DIRECTOR
LIU HAN-CHAO
DIRECTOR
Kuala Lumpur
Date: 24 August 2010
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, ONGI CHENG SAN, being the Director primarily responsible for the financial management of Superlon Holdings
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 31 to 65 are to the best
of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be
true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
}
the abovenamed ONGI CHENG SAN
}
at Kuala Lumpur
}
in the state of Wilayah Persekutuan
}
on the 24 August 2010
}
ONGI CHENG SAN
MIA 30665
Chartered Accountant
Before me:
YAP LEE CHIN
No. W 591
Commissioner for Oaths
28
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Independent Auditors’ Report
To The Members Of Superlon Holdings Berhad
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Superlon Holdings Berhad, which comprise the balance sheets of the
Group and of the Company as at 30 April 2010, and the income statements, statements of changes in equity and
cash flow statements of the Group and of the Company for the year then ended, and a summary of significant
accounting policies and other explanatory notes, as set out on pages 31 to 65.
Directors’ responsibility for the financial statements
The Directors of the Company are responsible for the preparation and fair presentation of these financial statements
in accordance with applicable Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgement, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the Company’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with applicable Financial
Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as at 30 April 2010 and of their financial performance and the cash
flows of the Group and of the Company for the financial year then ended.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
29
Annual Report 2010
Soaring Through The Highest Expectations
Independent Auditors’ Report (cont’d)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and by its subsidiary companies have been properly kept in accordance with the provisions of the
Act.
(b) We are satisfied that the financial statements of the subsidiary companies that have been consolidated with
the Company’s financial statements are in form and content appropriate and proper for the purposes of
the preparation of the consolidated financial statements and we have received satisfactory information and
explanations required by us for those purposes.
(c) Our auditors’ reports on the financial statements of the subsidiary companies did not contain any qualification
or any adverse comment made under Section 174(3) of the Act.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person
for the content of this report.
SC LIM, NG & CO.
NG KIM KIAT
No. AF 0681
No. 2074/10/10 (J)
Chartered Accountants Kuala Lumpur
24 August 2010
30
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Balance Sheets
as at 30 April 2010
GROUP
Note
2010 2009 RM RM ASSETS
Non-current assets
Property, plant and equipment 6
45,355,877 43,861,942
Intangible assets
7
1,886,197 1,808,940
Investment in subsidiary companies 8
–
–
Other investments 9
46,667
68,667 Scheduled receivable 10
697,768 –
COMPANY
2010 2009
RM RM
–
–
37,588,990 –
–
–
–
37,588,990
–
–
Current assets
Inventories 11 Trade and other receivables 12 Deposits, cash and bank balances 13 47,986,509 45,739,549
37,588,990 37,588,990
10,793,012
7,112,475
11,120,610 15,466,435 6,879,493
3,765,210
–
6,494,875
185,488 –
4,665,532
72,680
28,793,115 26,344,120
6,680,363 4,738,212
TOTAL ASSETS 76,779,624 72,083,669
44,269,353 42,327,202
EQUITY AND LIABILITIES
Share capital Treasury shares Reserves 40,000,000 40,000,000 40,000,000 (162,653) (17,985) (162,653)
14,887,233 11,035,956 4,298,247 40,000,000
(17,985)
2,143,495
Equity attributable to equity
holders of the Parent
Minority interest 54,724,580 51,017,971 44,135,594 42,125,510
1,938,048
–
–
Total equity 56,007,698 52,956,019 44,135,594
42,125,510
Non-current liabilities
Bank borrowings Finance leases Scheduled payable Deferred tax liability 14 15 16 1,283,118 17 18
19 20 2,857,045
2,264,609
906,896 2,513,338
3,180,909 536,419
1,317,600 2,470,498 –
–
–
–
–
–
–
–
Current liabilities
Bank borrowings 17 Trade and other payables 21 Finance leases 18 Tax liability 8,541,888
7,505,426
–
–
2,670,512 8,762,658
443,589 353,279
4,387,176
6,932,453
280,359 22,236 –
133,759
–
–
–
179,456
–
22,236
12,230,038 11,622,224
133,759 201,692
Total liabilities 20,771,926 19,127,650 133,759 201,692
TOTAL EQUITY AND LIABILITIES 76,779,624 72,083,669 44,269,353 42,327,202
The accompanying notes form an integral part of the financial statements
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
31
Annual Report 2010
Soaring Through The Highest Expectations
Income Statements
for the financial year ended 30 April 2010
GROUP
Note
2010 2009 RM RM REVENUE 22
COST OF SALES
COMPANY
2010 2009
RM RM
61,719,697 65,836,458 3,914,000 2,640,000
(48,315,393) (56,846,249)
–
–
GROSS PROFIT
13,404,304
8,990,209
3,914,000 2,640,000
OTHER OPERATING INCOME 1,733,654 1,160,959 –
–
–
–
SELLING AND DISTRIBUTION EXPENSES (3,956,570) (4,363,734) ADMINISTRATIVE EXPENSES
(4,052,479) (3,660,355)
OTHER OPERATING EXPENSES (710,293) (2,857,583)
FINANCE COSTS 23 (651,224) PROFIT / (LOSS) BEFORE TAX 24 5,767,392
TAX EXPENSE
27 (1,172,795) (488,713)
(1,219,217)
3,568,947
(1,404,609)
3,553,002 Attributable to:
Equity holders of the Parent Minority interest 5,249,527 (1,092,657)
(654,930)
(311,952)
4,594,597 6.59
(1,842)
(15,945)
4,594,597 28 –
(185,392) NET PROFIT / (LOSS) FOR THE
FINANCIAL YEAR
Earnings / (Loss) Per Ordinary Share
(343,211)
(1,404,609)
(1.37)
The accompanying notes form an integral part of the financial statements
32
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
(373,989)
–
(1,902)
2,264,109
(96,851)
2,167,258
–
–
Arising from acquisition
of a subsidiary company 15 29 Shares buy back Dividend SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
(162,653) –
–
(144,668) (17,985) –
–
(17,985) –
–
12,838,088
5,249,527 (1,398,250) –
8,986,811 (1,092,657) (2,400,000)
–
–
12,479,468 54,724,580
5,249,527 (1,398,250) (144,668) 51,017,971
(1,092,657) (2,400,000) (17,985) –
54,528,613
The accompanying notes form an integral part of the financial statements
2,049,145
40,000,000 As at 30 April 2010
–
–
–
–
–
29 Dividend
–
2,049,145
–
–
–
–
2,049,145
1,283,118 (654,930) –
–
1,938,048
(311,952)
–
–
2,250,000 –
56,007,698
4,594,597
(1,398,250)
(144,668)
52,956,019
(1,404,609)
(2,400,000)
(17,985)
2,250,000
54,528,613
Attributable to Equity Holders of the Parent
NonDistributable Distributable
ShareTreasury
RetainedMinorityTotal
Premium
Shares
Profits Total
Interest
Equity
RM RM RM RM RM RM
Net profit for the financial year 15 40,000,000 As at 30 April 2009 Shares buy back –
Net (loss) for the financial year –
40,000,000 As at 1 May 2008 Note
Share
Capital
RM GROUP
Soaring Through The Highest Expectations
Annual Report 2010
Statements Of Changes In Equity
for the financial year ended 30 April 2010
33
34
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
–
(162,653) –
–
(144,668) (17,985) –
–
(17,985)
The accompanying notes form an integral part of the financial statements
2,049,145
40,000,000
As at 30 April 2010 –
–
–
–
–
29 Dividend –
2,049,145
–
–
–
2,049,145
Net profit for the financial year
15 40,000,000 As at 30 April 2009 Shares buy back –
–
Dividend Net profit for the financial year –
Shares buy back
29
40,000,000
As at 1 May 2008 Non
Distributable
Share ShareTreasury
Note
Capital
Premium
Shares
RM RM RM
COMPANY
2,249,102 3,553,002 (1,398,250) –
94,350 2,167,258 (2,400,000)
–
327,092 44,135,594
3,553,002
(1,398,250)
(144,668)
42,125,510
2,167,258
(2,400,000)
(17,985)
42,376,237
Distributable
RetainedTotal
Profits equity
RM RM
Annual Report 2010
Soaring Through The Highest Expectations
Statements Of Changes In Equity (cont’d)
for the financial year ended 30 April 2010
Soaring Through The Highest Expectations
Annual Report 2010
Cash Flow Statements
for the financial year ended 30 April 2010
GROUP
Note
2010 2009 RM RM CASH FLOWS FROM OPERATING
ACTIVITIES
Profit / (Loss) before tax Adjustments for :
Allowance for doubtful debts, specific Allowance for obsolete inventories Amortisation of development cost
Bad debts written off Bad debts provision written back
Depreciation of property, plant
and equipment
Dividend income Gain on disposal of property, plant
and equipment
Interest expense Interest income
Loss on disposal of other investment Property, plant and equipment written off Unrealised loss / (gain) on
foreign exchange 5,767,392
213,114 15,766 46,500 –
(32,745) 3,782,501 –
(1,219,217) 126,973
250,151 –
29,790 –
3,522,178 –
COMPANY
2010 2009
RM RM
3,568,947
2,264,109
–
–
–
–
–
–
–
–
–
–
–
–
(3,650,000) (2,400,000)
–
443,652
(30,336) 359 150,581
(36,916)
334,090 (118,071) –
–
–
–
–
–
–
–
–
–
–
–
317,358
(348,957)
–
–
OPERATING PROFIT / (LOSS) BEFORE
WORKING CAPITAL CHANGES
10,674,142
2,540,021 (81,053)
Changes in working capital
Inventories Trade and other receivables Trade and other payables (3,696,303) 3,058,047
1,521,659 308,013 (784,125)
4,301,829 –
(1,819,468) (45,697)
CASH GENERATED FROM / (ABSORBED
INTO) OPERATING ACTIVITIES
Interest paid Tax paid 11,557,545 (443,652)
(808,788)
6,365,738 (1,946,218) (334,090) –
(327,824) (48,056) NET CASH FROM / (USED IN) OPERATING
ACTIVITIES
10,305,105
5,703,824
CASH FLOWS FROM INVESTING ACTIVITIES
Dividend received
–
–
Interest received 30,336 118,071 Net cash flow from acquisition of
subsidiary company –
–
Proceeds from disposal of quoted shares 21,641 –
Purchase of quoted shares –
(22,000)
Product development expenditure (123,757)
(317,690) Proceeds from disposal of property, plant
and equipment –
257,550 Purchase of property, plant and
equipment
30 (b) (2,847,153) (12,904,402) NET CASH (USED IN) / FROM
INVESTING ACTIVITIES
(2,918,933) (12,868,471) (135,891)
–
2,926,985
53,459
2,844,553
–
(85,249)
(1,994,274)
2,759,304
3,650,000 –
2,400,000
–
–
–
–
–
(2,750,000)
–
–
–
–
–
–
–
3,650,000
(350,000)
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
35
Annual Report 2010
Soaring Through The Highest Expectations
Cash Flow Statements (cont’d)
for the financial year ended 30 April 2010
GROUP
Note
2010 2009 RM RM CASH FLOWS FROM FINANCING
ACTIVITIES
Dividend paid
29 Purchase of treasury shares Net movement in trade bills Proceeds from term loan Proceeds from issuance of new shares to
to minority shareholders in subsidiary
company Repayment of hire purchase payables Repayment of term loan
(1,398,250) (2,400,000) (1,398,250) (2,400,000)
(144,668)
(17,985)
(144,668) (17,985)
1,550,443
319,000
–
–
–
3,560,000
–
–
–
2,250,000
(688,443) (1,660,948)
(590,284)
(873,246) NET CASH (USED IN) / FROM
FINANCING ACTIVITIES
(1,271,202) 1,176,821 NET INCREASE / (DECREASE) IN CASH
AND CASH EQUIVALENTS
6,114,970 CASH AND CASH EQUIVALENTS AT
BEGINNING OF FINANCIAL YEAR
CASH AND CASH EQUIVALENTS
AT END OF FINANCIAL YEAR
30 (a)
COMPANY
2010 2009
RM RM
–
–
–
(1,542,918)
(2,417,985)
(5,987,826) 112,808 (8,681)
282,379 6,270,205 72,680
81,361
6,397,349 282,379 185,488
72,680
The accompanying notes form an integral part of the financial statements
36
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
–
–
–
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements
for the financial year ended 30 April 2010
1. CORPORATE INFORMATION
The Company is principally engaged in investment holding and provision of management services. The
principal activities of its subsidiary companies are as described in Note 8 to the financial statements. There
have been no significant changes in the nature of these principal activities during the financial year.
The Company is a public company limited by shares incorporated and domiciled in Malaysia, and listed on
the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business
of the Company are as follows:
(a) Registered office: 3-2, 3rd Mile Square, No. 151, Jalan Klang Lama, Batu 3 ½, 58100 Kuala Lumpur
(b) Principal place of business: Lot 2736, Jalan Raja Nong, 41200 Klang, Selangor Darul Ehsan.
These financial statements were authorised for issue by the Board of Directors in accordance with a resolution
of the Directors on 24 August 2010.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(a) The financial statements of the Group and of the Company have been prepared in accordance with
applicable Financial Reporting Standards issued by the Malaysian Accounting Standards Board
(“MASB”) for entities other than private entities, accounting principles generally accepted in Malaysia
and the provisions of the Companies Act, 1965.
(b) The financial statements of the Group and of the Company have been prepared under the historical
cost convention, unless otherwise disclosed in significant accounting policies.
(c) The financial statements of the Group are measured using the currency of the primary economic
environment in which the entities operate (“the functional currency”). All the financial statements are
presented in Ringgit Malaysia (“RM”) and the figures have been rounded up to nearest RM, unless
otherwise stated.
(d) The preparation of financial statements required the Directors to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent
assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement
in the process of applying the accounting policies. The areas involving such judgements, estimates
and assumptions are disclosed in Note 5 to the financial statements. Although these estimates and
assumptions are based on the Directors’ best knowledge of events and actions, actual results could
differ from those estimates.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Company and all its
subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for
the same reporting year as the parent company using consistent accounting policies.
All intra-group balances, transactions, income and expenses and profits and losses resulting from
intra-group transactions that are recognised in assets, are eliminated in full. Unrealised losses are
also eliminated unless cost cannot be recovered. Thus the consolidated financial statements reflect
external transactions only. Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Company obtains control, continue to be consolidated until the date that such
control ceases.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
37
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(a) Basis of Consolidation (cont’d)
Acquisition of subsidiaries is accounted for using the purchase method. The cost of an acquisition
is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.
Any excess of the cost of the business combination over the Group’s interest in the net fair value of
the identifiable assets, liabilities and contingent liabilities represent goodwill.
Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of business combination is recognised in the income statement on the date of
acquisition.
Minority interest represents the portion of profit or loss and net assets in subsidiary companies not
held by the Group. It is measured at the minorities’ share of the fair value of the subsidiary companies
identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in subsidiary
companies equity since then.
(b) Property, plant and equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. Subsequent to initial
recognition, property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses, Note 3(i).
Freehold land has an unlimited useful life and therefore is not depreciated, whilst other property, plant
and equipment are depreciated on a straight-line basis over the estimated useful life of the asset as
follows:
Factory buildings and staff quarters
Plant, machinery, tools and equipment
Motor vehicles
Office equipment, renovation, furniture and fittings
5 - 33 years
10 years
7 years
5 - 10 years
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year end to
ensure that the amount, method and period of depreciation are consistent with previous estimates
and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is
included in the income statement in the year the asset is derecognised.
Fully depreciated property, plant and equipment are retained in the books of accounts at nominal
value of RM1 until they are no longer in use, and no further charge for depreciation is made in respect
of these assets.
38
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(c) Inventories
Inventories comprising raw materials, work-in-progress and finished goods are stated at the lower of
cost and net realisable value. Cost is determined on the weighted average and first-in-first-out basis, as
applicable. Cost of finished goods and work-in-progress includes direct materials, direct labour, other
direct costs and appropriate production overheads. In arriving at net realisable value, due allowance
is made for all obsolete and slow moving items. Net realisable value is the estimate of the selling price
in the ordinary course of business, less the costs of completion and selling expenses.
(d) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, the provision is reversed.
(e) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortisation and any accumulated
impairment losses, Note 3(i). The useful lives of intangible assets are assessed to be either finite or
indefinite.
Intangible assets with finite lives are amortised on straight-line basis over the estimated economic
useful lives and assessed for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method for an intangible asset with a
finite useful life are reviewed at least at each financial year end.
The amortisation expense on intangible assets with finite useful lives is recognised in the income
statement in the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if the
events or changes in circumstances indicate that the carrying value may be impaired either individually
or at cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset
with an indefinite life is reviewed annually to determine whether the useful life assessment continues
to be supportable.
(i) Trademark
Acquired trademark is stated at cost less any impairment losses, Note 3(i). Trademark with
indefinite useful lives are tested for impairment annually or more frequently if the events or
changes in circumstances indicate that the carrying value may be impaired either individually or
at cash generating unit level.
(ii) Research and development expenditure
Expenditure on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, is expensed to the income statement as incurred.
Development expenditure is stated at cost less accumulated amortisation and impairment
losses, Note 3(i), if any. It is assessed annually for any indication that the intangible assets may
be impaired.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
39
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(e) Intangible assets (cont’d)
(ii) Research and development expenditure (cont’d)
Expenditure on development activities, for the production of new or substantially improved
products and processes, is capitalised if the product or process is technically and commercially
feasible and the Group has sufficient resources to complete development. The expenditure
capitalised includes the cost of materials, direct labour and an appropriate proportion of
overheads. Other development expenditure is expensed to the income statement as incurred.
Development expenditure is amortised on an individual product and straight-line basis, and
over the period of probable estimated future economic benefits being recovered. Amortisation
commences from the date when the individual product is available for sale. The amortisation
period is no more than five years.
(f) Investments
(i)
Subsidiaries
Subsidiary companies are entities over which the Group has the ability to control the financial
and operating policies so as to obtain benefits from their activities. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group has such power over another entity.
The Company’s investment in subsidiaries is stated at cost less impairment losses. The policy for
the recognition and measurement of impairment losses is in accordance with Note 3(i).
On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is recognised in the income statements.
(ii) Other investments
Investment in golf club membership held on a long-term basis is stated at cost less impairment
losses. The policy for the recognition and measurement of impairment losses is in accordance
with Note 3(i). On disposal of an investment, the difference between net disposal proceeds and
its carrying amount is recognised in the income statement.
Marketable securities are carried at the lower of cost and market value, determined on a aggregate
portfolio basis by category of investment. Market value is calculated by reference to quoted
market selling price at the close of business on the balance sheet date.
Upon disposal of such investment, the difference between net disposal proceeds and its carrying
amount is recognised in income statement.
(g) Income tax
40
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the
expected amount of income taxes payable in respect of the taxable profit for the year and is measured
using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for,
using the liability method, on temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts in the financial statements.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Income tax (cont’d)
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred
tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax
credits to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not
recognised if the temporary difference arises from goodwill or reserve on consolidation or from the
initial recognition of an asset or liability in a transaction which is not a business combination and at
that time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is
realised or the liability is settled, based on tax rates that have been enacted or substantively enacted
at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises
from a transaction which is recognised directly in equity, in which case the deferred tax is also charged
or credited directly in equity, or when it arises from a business combination that is an acquisition, in
which case the deferred tax is included in the resulting goodwill.
(h) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards
incident to ownership. All other leases are classified as operating leases.
(i) Finance leases
Asset acquired by way of finance lease are stated at an amount equal to the lower of their fair
values and the present value of the minimum lease payments at the inception of the leases, less
accumulated depreciation and impairment losses, Note 3(i).
Finance lease payments are apportioned between finance costs and the reduction of the
outstanding liability. Finance costs, which represent the difference between the total leasing
commitments and the fair value of the assets acquired, are recognised as an expense in the
income statement over the term of the relevant lease so as to produce a constant periodic rate
of change on the remaining balance of the obligations for each accounting period.
The depreciation policy for finance lease assets is consistent with that for depreciable property,
plant and equipment as described in Note 3(b).
(ii) Operating leases
Operating lease payments are recognised as an expense in the income statement on a straightline basis over the term of the relevant lease.
(i) Impairment of assets
The carrying amounts of the Group’s assets except for inventories subject to impairment are reviewed
at each balance sheet date to determine whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is estimated.
If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable
amount of the cash-generating unit to which the assets belongs will be identified. The recoverable
amount is the higher of fair value, reflecting market conditions less costs to sell and value in use, based
on an internal discounted cash flow evaluation.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
41
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(i) Impairment of assets (cont’d)
An impairment loss is charged to the income statement immediately, unless the asset is carried at
revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the
extent of previously recognised revaluation surplus for the same asset.
Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous
impairment loss and is recognised to the extent of the carrying amount of the asset that would have
determined (net of amortisation and depreciation) had no impairment loss been recognised.
The reversal is recognised in the income statement immediately, unless the asset is carried at revalued
amount. A reversal of an impairment loss on a revalued asset is credited directly to revaluation surplus.
However, to the extent that an impairment loss on the same revalued asset was previously recognised
as an expense in the income statement, a reversal of that impairment loss is recognised as income in
the income statement.
(j) Financial instruments
.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified
as liability are reported as expense or income. Distributions to holders of financial instruments classified
as equity are charged directly to equity. Financial instruments are offset when the Group has a legally
enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Financial instruments are recognised in the balance sheet when the Group has become a party to the
contractual provisions of the instruments. Financial instruments carried on the balance sheet include
receivables, cash and cash equivalents, payables, interest-bearing bank borrowings, equity instruments,
derivatives and other non-current investments. The particular recognition methods and accounting
policy adopted associated with each item are set forth below:
(i)
Payables are stated at cost which is the fair value of the consideration to be paid in the future
for goods and services received.
(iv) Interest-bearing bank borrowings
42
Cash and cash equivalents comprise cash and bank balances, short-term deposits and other
short-term, highly liquid investments that are readily convertible to a known amount of cash
with an insignificant risk of changes in value. These also include bank overdrafts that form an
integral part of the Group’s cash management. For the purpose of the cash flow statement, cash
and cash equivalents are presented net of bank overdrafts.
(iii) Payables
Receivables are carried at anticipated realisable values. A provision for impairment of receivables
is established when there is objective evidence that the Group will not be able to collect all
amounts due to the original terms of receivables. The amount of the provision is recognised in
the income statement.
(ii) Cash and cash equivalents
Receivables
Interest-bearing bank borrowings are recorded at the fair value of the consideration received, net
of transaction costs. After initial recognition, interest-bearing bank borrowings are subsequently
measured at amortised cost using the effective interest method.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(j) Financial instruments (cont’d)
(v) Equity instrument
Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue
costs. Equity transaction costs comprise only those incremental external costs directly attributable
to the equity transaction which would otherwise have been avoided. Cost of issuing equity
securities in connection with a business combination is included in the cost of acquisition.
When the share capital of the Company is repurchased, the consideration paid, including any
attributable transaction costs, is presented as a change in equity. Repurchased shares are classified
as treasury shares and presented as deduction from equity. No gain or loss is recognised in the
income statements on the sales, re-issuance or cancellation of treasury shares. Consideration
received is presented in the financial statements as a change in equity.
When the treasury shares are distributed as share dividends, the cost of the treasury shares will
be reduced against the share premium account or the distributable reserves, or both.
(vi) Derivatives
Derivative financial instruments are used by the Group to manage its exposure to foreign currency
risk arising from operating, investing and financing activities. The Group does not use derivative
financial instruments for speculative and trading purposes.
Derivative financial instruments are initially recognised at cost, and are subsequently re-measured
at fair value. Changes in the fair value that do not qualify for hedge accounting are recognised
in the profit or loss. The fair value of forward exchange contracts is determined based on the
quoted market rate at the balance sheet date.
(k) Revenue recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction
will flow to the Group and the amount of the revenue can be measured reliably.
(i) Sales of goods
(ii) Interest income
Dividend income from investments is recognised when the shareholder’s right to receive payment
is established.
(iv) Management fee income
Interest income is recognised on a time proportion basis that reflects the effective yield on the
asset.
(iii) Dividend income
Revenue from sales of goods is recognised upon transfer of significant risk and rewards of
ownership of the goods to the customer, which generally coincides with delivery and acceptances
of goods sold.
Management fee income from subsidiary companies is recognised on accrual basis.
(l) Employee benefits
(i) Short term employee benefits
Wages, salaries, social security contributions, paid annual leave, sick leave, bonuses and nonmonetary benefits are recognised in the income statement in the period in which the associated
services are rendered by the employees of the Group.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
43
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(l) Employee benefits (cont’d)
(ii) Defined contribution plan
As required by law, companies in Malaysia make contributions to the state pension scheme,
the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in the
income statement as incurred.
(m) Functional and foreign currency
(i) Functional and presentation currency
The management has determined the currency of the primary economic environment in which
the Group operates i.e. functional currency, to be presented in Ringgit Malaysia (“RM”), which
is also the Group’s functional and presentation currency.
(ii) Foreign currency transactions
Transactions in foreign currencies are translated into RM using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the retranslation of monetary assets and liabilities denominated
in foreign currencies are recognised in the income statement.
The principal closing rates used in translation of foreign currency are as follows:
1United States Dollar
1
Singapore Dollar
100
Japanese Yen
100Taiwanese New Dollar
100
Vietnam Dong
1
Chinese Renminbi (Yuan)
2010
RM
3.19
2.33
3.38
10.17
0.0168
0.4674
2009
RM
3.53
2.40
3.66
–
–
–
(n) Contingent liabilities and assets
Contingent liabilities are disclosed in the financial statements. A contingent liability is a possible
obligation that arises from past events whose existence will be confirmed by uncertain future events
beyond the control of the Group or a present obligation that is not recognised because it is not probable
that an outflow of resources will be required to settle the obligation. A contingent liability also arises in
the extremely rare circumstances where there is a liability that cannot be recognised because it cannot
be measured reliably.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed
by uncertain future events beyond the control of the Group. The Group discloses the existence of
contingent assets where inflows of economic benefits are probable, but not virtually certain.
(o) Segment reporting
44
A segment is a distinguishable component of the Group that is engaged either in providing products
or services (business segment), or in providing products or services within a particular economic
environment (geographical segment), which is subject to risks and rewards that are different from
those of other segments.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
4. ADOPTION OF NEW FINANCIAL REPORTING STANDARDS (“FRSs”)
At the date of authorisation of these financial statements, the following FRSs, amendments to FRSs, IC
Interpretations and amendments to IC Interpretations have been issued but not yet effective, and therefore
have not been applied by the Group and the Company:
Effective for
financial period
beginning
on or after
FRS 1
First-time Adoption of Financial Reporting Standards 1 July 2010
Revised FRS 1 (2010) First-time Adoption of Financial Reporting Standards 1 July 2010
FRS 3 Business Combinations 1 July 2010
Revised FRS 3 (2010) Business Combinations
1 July 2010
FRS 4 Insurance Contracts 1 January 2010
FRS 7 Financial Instruments: Disclosures 1 January 2010
FRS 101 Presentation of Financial Statements 1 January 2010
Revised FRS 101 (2009) Presentation of Financial Statements 1 January 2010
FRS 123 Borrowing Costs 1 January 2010
Revised FRS 123 (2009) Borrowing Costs 1 January 2010
FRS 127 Consolidated and Separate Financial Statements 1 July 2010
Revised FRS 127 (2010) Consolidated and Separate Financial Statements 1 July 2010
FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010
Revised FRS 139 (2010) Financial Instruments: Recognition and Measurement 1 January 2010
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2010
and FRS 127 and Consolidated and Separate Financial Statements:
Cost of an Investment in a Subsidiary, Jointly Controlled
Entity or Associate
Amendments to FRS 1 Limited exemption from Comparative FRS 7 Disclosures 1 January 2011
for First-Time Adopters
Amendments to FRS 1 Additional Exemptions For First-time Adopters 1 January 2011
Amendments to FRS 2 Share-based Payment: Vesting Conditions and 1 January 2010
Cancellations
Amendments to FRS 2 Share-based Payment 1 July 2010
Amendments to FRS 2 Scope of FRS 2 and Revised FRS 3 (2010) 1 July 2010
Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions 1 January 2011
Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued 1 July 2010
Operations
Amendments to FRS 5
Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010
Amendments to FRS 7
Improving Disclosures about Financial Instruments 1 January 2011
Amendments to FRS 101 Puttable Financial Instruments and Obligations Arising 1 January 2010
and FRS 132 on Liquidation
Amendments to FRS 132 Financial Instruments: Presentation 1 January 2010
Amendments to FRS 132 Financial Instruments: Presentation
- Paragraphs 95A, 97AA and 97AB of the standard 1 January 2010
- Amendments in paragraphs 11, 16 and 97E of the 1 March 2010
standard, relating to Classification of Rights Issues
Amendments to FRS 138 Intangible Assets 1 July 2010
Amendments to FRS 138 Consequential Amendments Arising from Revised FRS 3 (2010)
1 July 2010
Amendments to FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010
Amendments to FRS 139, Financial Instruments: Recognition and Measurement, 1 January 2010
FRS 7 and IC Disclosures and Reassessment of Embedded Derivatives
Interpretation 9
Improvement to Amendment to FRSs 5, 8, 107, 108, 110, 116, 117, 118, 1 January 2010
FRSs (2009) 119, 120, 123, 127, 128, 129, 131, 134, 136, 138 and 140
IC Interpretation 4 Determining Whether An Arrangement Contains a Lease 1 January 2011
IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010
IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
45
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
4. ADOPTION OF NEW FINANCIAL REPORTING STANDARDS (“FRSs”) (cont’d)
IC Interpretation 11 FRS 2 - Group and Treasury Share Transactions IC Interpretation 12 Service Concession Arrangements IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14 FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
IC Interpretation 15 Agreements for the Construction of Real Estate IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners IC Interpretation 18 Transfers of Assets from Customers Amendments to IC Reassessment of Embedded Derivatives Interpretation 9
Effective for
financial period
beginning
on or after
1 January 2010
1 July 2010
1 January 2010
1 January 2010
1 July 2010
1 July 2010
1 July 2010
1 January 2011
1 July 2010
The Company plans to apply the above applicable FRSs, Amendments to FRSs, IC Interpretations and
Amendments to IC Interpretation when effective.
All the above standards and interpretations are not relevant to the Group’s and the Company’s operation
except for FRS 4, FRS 7, FRS 101, Revised FRS 101 (2009), FRS 123, Revised FRS 123 (2009), FRS 139,
Revised FRS 139 (2010), Amendments to FRS 7, Amendments to FRS 101 and FRS 132, Amendments to FRS
138, Amendments to FRS 139, Amendments to FRS 139, FRS 7 and IC Interpretation 9 and Improvements
to FRSs (2009).
The possible impact of applying FRS 7 and FRS 139 on the financial statements upon their initial application
is not disclosed by virtue of the exemptions given in the respective standards.
The adoption of FRS 101 will only impact the form and content of the presentation of the Company’s
financial statements in the next financial year. There will be no financial impact on the financial statements
upon the adoption of this standard.
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Estimates and assumptions concerning the future are made in the preparation of the financial statements.
They affect the application of the Group’s and of the Company’s accounting policies, reported amounts of
assets, liabilities, income and expenses, and disclosure made. They are assessed on an ongoing basis and
are based on experience and relevant factors, including expectations of future events that are believed to be
reasonable under the circumstances.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance
sheet date, that have significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within next financial year, are discussed below:
(a) Intangible assets
The assessment of the useful lives of intangible assets requires judgement.
(i) Trademark
The management assessed that trademark of the Group to have indefinite useful life when, based
on the analysis of all the relevant factors, there is no foreseeable limit to the period over which
the asset is expected to generate net cash inflows for the Group.
46
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont’d)
(a) Intangible assets (cont’d)
(ii) Product development expenditure
The management assessed that the useful lives of product development expenditure incurred
for the production of new or substantially improved products and processes, to be finite. It is
amortised on a straight line basis over the time period of probable estimated future economic
benefits being recovered and assessed for impairment whenever there is an indication that the
intangible assets may be impaired. Amortisation only commences when the product is available
for sale.
The management determines whether intangible assets are impaired at least on an annual basis. This
requires an estimation of the value in use of the cash-generating units to which the intangible assets is
allocated. Estimating the value in use requires the management to make an estimate of the expected
future cash flows from the cash-generating unit and also choose a suitable discount rate in order to
calculate the present value of those cash flows.
Based on the estimated value in use calculated using the discounted cash flow methodology, the
recoverable amount of the intangible assets is higher than the carrying value. Therefore, no impairment
loss was recognised for the financial year ended 30 April 2010.
(b) Depreciation of property, plant and equipment
Property, plant and equipment are depreciated in a straight-line method over their useful lives. The
management estimated the useful lives of these assets to be within 5 to 10 years except for those of
buildings which is 33 years.
Changes in the expected level of usage and technological developments could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could be
revised.
(c) Income taxes
Significant judgement is involved in determining the provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during the ordinary
course of business. The Company recognises liabilities for expected tax issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recognised, such differences will impact the income tax and deferred
tax provisions in the period in which such determination is made.
(d) Allowance for doubtful debts
The allowance is established when there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of receivables. This is determined based on the ageing
profile, expected collection patterns of individual receivable balances, credit quality and credit losses
incurred. Management carefully monitors the credit quality of receivable balances and makes estimates
about the amount of credit losses that have been incurred at each financial statement reporting date.
Any changes to the ageing profile, collection patterns, credit quality and credit losses can have an
impact on the allowance recorded.
(e) Allowance for obsolete inventories
Allowance for obsolete inventories are made based on an analysis of the ageing profile and expected
sales patterns of individual items held in inventory. This requires an analysis of inventory usage based
on expected future sales transactions taking into account current market prices, useful lives of products
and expected cost to sell. Changes in the inventory ageing and expected usage profiles can have an
impact on the allowance recorded.
Critical judgments made in applying accounting policies
Management is of the opinion that the instances of application of judgment are not expected to have
a significant effect on the amounts recognised in the financial statements, apart from those involving
estimates.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
47
48
–
12,614,180
As at 30 April 2010 Net Book Value
As at 30 April 2010 SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
As at 30 April 2009 Net Book Value
As at 30 April 2009 12,614,180 –
9,650,125 19,495,835 2,469,705 18,692,086
2,088,542 15,975,491 381,163
2,716,595 –
–
1,667,957 667,461
604,088 333,499
(270,126) 433,845 1,096,573
1,005,652
90,921
–
–
–
–
2,335,418
43,861,942
22,925,825
19,673,773
3,522,178
(270,126)
66,787,767
54,127,825
13,150,702
(490,760)
Office
equipment,
renovation,
furniture
and fittings Total
RM RM
Less : Accumulated Depreciation
As at 1 May 2008 Charge for the financial year Disposals
12,119,830 38,187,921
26,269,671
362,848 45,355,877
766,997 12,614,180 71,625,548
1,096,573 22,925,825
88,770
3,782,499
(418,346)
(438,653)
1,129,845 1,530,418 1,393,681 975,650
667,461
328,496 (20,307)
2,369,331 As at 30 April 2009 4,822,268 –
–
–
–
4,822,268
16,900,937
21,669,157 18,692,086 2,977,071
–
38,570,094 1,453,851 76,567 –
9,261,963
2,857,867 2,469,705 388,162 –
12,119,830 Factory
Plant,
buildings
machinery,
Freehold
and staff
tools andMotor
land
quarters
equipment
vehicles
RM RM RM RM At Cost
As at 1 May 2008
6,612,720
11,741,170 32,168,813
2,151,271
Additions
6,001,460 378,660 6,019,108 674,907
Disposals
–
–
–
(490,760) –
–
–
Less : Accumulated Depreciation
As at 1 May 2009
Charge for the financial year Write off 12,614,180
As at 30 April 2010 GROUP
Office
Plant and
equipment,
Factory
Plant,
machinery
renovation,
Freehold
buildings and machinery, tools
work-inMotor
furniture and
land
staff quarters
and equipment
progress
vehicles
fittings Total
RM RM RM RM RM RM RM
At Cost
As at 1 May 2009 12,614,180
12,119,830 38,187,921
–
2,335,418
1,530,418 66,787,767
Additions
–
–
382,173 4,822,268 203,142 19,432
5,427,015
Write off –
–
–
–
(169,229) (420,005)
(589,234)
6. PROPERTY, PLANT AND EQUIPMENT
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
6. PROPERTY, PLANT AND EQUIPMENT (cont’d)
(a) The following property, plant and equipment are charged against bank borrowings (Note 17):
GROUP
2010 2009
RM RM
At Net Book Value
Freehold land 12,614,180 12,614,180
Factory buildings 8,996,838 9,349,333
21,611,018 21,963,513
(b) The following property, plant and equipment are acquired under finance lease instalments plan (Note
18):
GROUP
2010 2009
RM RM
At Net Book Value
Motor vehicles 770,446
948,334
Plant and machinery 4,822,268 3,337,588
5,592,714 4,285,922
(c) There were no property, plant and equipment in the Company throughout the current and previous
financial year.
7. INTANGIBLE ASSETS
GROUP
2010 2009
RM RM
At Cost
Trademark 1,000,000 1,000,000
Product development expenditure 886,197
808,940
1,886,197 1,808,940
(a) Trademark
The trademark “Superlon” is registered in Malaysia and acquired for a cash consideration of RM 1.0
million in August 2000.
Trademark is tested for impairment on an annual basis by comparing the carrying amount with
the recoverable amount of the cash generating unit (“CGU”) based on value-in-use. Value-in-use is
determined by discounting the future cash flows to be generated from the continuing use of the CGU
based on the following assumptions:
(i) Cash flows are projected based on the management’s five-year business plan.
(ii) Discount rates used for cash flows discounting purpose are the management’s estimate of cost
of capital plus a reasonable risk premium at the date of assessment of the CGU. The discount
rate applied for cash flow projections is 6.05%.
(iii) Growth rate for the CGU is determined based on the management’s estimate of the industry
trends and past performances of the CGU.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
49
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
7. INTANGIBLE ASSETS (cont’d)
(a) Trademark (cont’d)
(iv) Profit margins are projected based on the industry trends and historical profit margin
achieved.
The management is not aware of any reasonably possible change in the above key assumptions that
would cause the carrying amounts of the CGU to materially exceed their recoverable amounts.
(b) Product development expenditure
The Company has a continuous program of product development initiatives to obtain various code
listings for its insulation materials, and to develop special new products for overseas market according
to specific requirements of each respective country or region. The code listings, once obtained, will
increase selling opportunities for its insulation materials by making it easier for designers, architects
and specifies of heating, ventilation, air-conditioning and refrigeration systems to incorporate these
products in their plans. Deferred product development expenditure are amortised over a five (5) years
period commensurate with the availability of the sales of the developed products.
The carrying amount of product development costs is as follows:
GROUP
2010 2009
RM RM
At Cost
Balance as at 1 May
808,940
491,250
Additions 123,757
317,690
Less: Accumulated amortisation
(46,500) –
886,197
Balance as at 30 April 808,940
The Company’s policy for product development costs requires the periodic review of the carrying
values to determine if there has been impairment in value-based expected future cash flows. If it is
determined that the carrying value exceeds the recoverable amount, the net asset is written down to
the net recoverable amount.
8.
INVESTMENT IN SUBSIDIARY COMPANIES
COMPANY
2010 2009
RM RM
Unquoted shares - at cost
As at 1 May 37,588,990 34,838,990
Add: Addition
–
2,750,000
As at 30 April 37,588,990 37,588,990
The principal activities of the subsidiary companies, which are incorporated in Malaysia, and the equity
interest held by the Company are shown below:
Name of subsidiaries Principal Activities
Superlon Worldwide Design, test and manufacture of insulation Sdn. Bhd. materials for the heating, ventilation, air conditioning and refrigeration (“HVAC&R”)
industry; and trading of HVAC&R parts and
equipments
Superlon Steel Pipes Manufacture, import and export of various Sdn. Bhd. kinds of steel pipes and tubes
50
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Effective Equity Interest
2010
2009
100% 100%
55%
55%
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
9. OTHER INVESTMENTS
GROUP
2010 2009
RM RM
At Cost
Golf club membership 140,000 140,000
Less: Portion borne by co-owners (93,333)
(93,333)
Quoted shares in Malaysia Less : Disposal 46,667 46,667
22,000 (22,000) 22,000
–
–
22,000
46,667 68,667
Market value
Golf club membership Quoted shares in Malaysia 46,667 –
46,667
14,960
46,667
61,627
Golf club membership
Investment in golf club membership which is assessed to have indefinite useful life because there are no
foreseeable limit to the period over which the asset are expected to generate net cash inflows for the Company
and the contractual or legal right of these assets can be renewed without incurring significant costs.
The recoverable amount for such golf club membership is determined by reference to current market price
of such similar membership. As at 30 April 2010, the price applying for a new corporate membership is RM
140,000. Therefore, no impairment loss is recognised during the financial year.
10. SCHEDULED RECEIVABLE
Scheduled receivable represents the remaining amount of JPY 27,273,211 (equivalent to RM 924,071)
owing by a foreign supplier arising from one-off rectification works claim (Note 35). The amount shall be
receivable in 49 equal monthly instalments. As at year end, the receipt schedule is analysed as follows:
GROUP
2010 2009
RM RM
Current
Not later than one year (Note 12) 226,303 –
Non-current
Later than one year and not later than two years Later than two years and not later than five years 226,303 471,465 –
–
697,768 –
924,071
–
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
51
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
11. INVENTORIES
GROUP
2010 2009
RM
RM
At Cost
Raw materials 7,518,196
3,979,701
Work-in-progress 45,243 167,673
Finished goods 2,095,956 1,868,292
Trading stocks 1,399,534
1,346,960
11,058,929 7,362,626
Less: Allowance for obsolete inventories (265,917)
(250,151)
10,793,012 7,112,475
12. TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Trade receivables 10,557,023 12,290,146
–
–
Less : Allowance for doubtful debts,
specific
(378,101)
(197,732)
–
–
Other receivables
Amount due from a subsidiary company
Deposits Prepayments Scheduled receivable (Note 10)
Sundry receivables
10,178,922
12,092,414
–
–
–
166,707 298,862
226,303
249,816
–
2,377,607 328,956
–
667,458
6,484,000 1,000
–
–
9,875
4,664,532
1,000
–
–
–
941,688 3,374,021 6,494,875 4,665,532
11,120,610 15,466,435 6,494,875 4,665,532
(a) The Group’s trade receivables are non-interest bearing and are generally on credit terms ranging from 30
to 90 days (2009: 30 to 90 days) from date of invoices. Other credit terms are assessed and approved
on a case-by-case basis.
(b) The amount due from a subsidiary company is unsecured, interest free and repayable on demand.
13. DEPOSITS, CASH AND BANK BALANCES
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Cash and bank balances Fixed deposits with a licensed bank
4,346,137
2,533,356
3,235,483 529,727
185,488
–
72,680
–
6,879,493 3,765,210 185,488
72,680
(a) The effective interest rates of deposit placed with a licensed bank of the Group as at the end of financial
year are ranging from 2.2% to 2.6% (2009: 1.8% to 3.6%) per annum.
(b) The maturity periods for deposit placed with a licensed bank of the Group as at the end of financial
year are between 30 to 365 days (2009: 7 and 365 days).
52
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
14. SHARE CAPITAL
Authorised :
200,000,000 ordinary shares of RM 0.50 each GROUP AND COMPANY
2010
2009
RM
RM
100,000,000 100,000,000
Issued and fully paid :
80,000,000 ordinary shares of RM 0.50 each 40,000,000 40,000,000
15. TREASURY SHARES
On 29 September 2009, the shareholders renewed the Company’s authority to repurchase its own shares
up to 10% of its issued and paid up share capital (“Share Buy Back”).
The Directors of the Company are committed to enhancing the value of the Company to its shareholders and
believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.
During the financial year, the Company repurchased its ordinary shares of RM 0.50 each from the open
market as follows:
Cost Highest Lowest No. of Shares RM RM RM Purchases during the financial year
June 2009 19,000 7,872
0.42
0.41 December 2009 20,000 8,923 0.45 0.41
January 2010 96,000 43,122
0.48
0.42 March 2010 110,600
52,325 0.48 0.45
April 2010 67,500 32,426 0.48 0.41
Total
313,100 144,668 0.48
0.41 Average
purchase price
per share
RM
0.41
0.45
0.45
0.47
0.48
0.46
The transactions of Share Buy Back were financed by internally generated funds. During the financial year,
all the shares purchased by the Company were retained as treasury shares in accordance with Section 67A
Subsection 3 (A) (b) of the Companies Act, 1965. As at 30 April 2010, a total of 354,100 ordinary shares
were held as treasury shares. None of the treasury shares held were resold or cancelled during the financial
year ended 30 April 2010.
16. RESERVES
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Non-distributable
Share premium 2,049,145 2,049,145 2,049,145
2,049,145
Distributable
Retained profits 12,838,088 8,986,811
2,249,102
94,350
14,887,233 11,035,956 4,298,247
2,143,495
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
53
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
16. RESERVES (cont’d)
(a) Share premium
Share premium arose from issue of ordinary shares in excess of its par value. The share premium is not
distributable by way of cash dividends and may be utilised in the manner set out in Section 60(3) of
the Companies Act, 1965.
(b) Retained profits
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In
accordance with the Finance Act, 2007 which was gazetted on 28 December 2007, companies shall
not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such
dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However,
there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay
franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable
option to disregard the balance under Section 108 of the Income Tax Act, 1967 (“108 balance”) and
opt to pay dividends under the single tier system. The change in the tax legislation also provides for
the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance
Act, 2007.
The Company has opted to elect for the irrevocable option to disregard the 108 balance and to move
to single tier system on 1 November 2009. Accordingly, the Company can distribute the tax exempt
single tier dividend out of it entire retained earnings.
17. BANK BORROWINGS
GROUP
2010 2009
RM RM
Current
Secured - Bank overdrafts 482,144 3,482,831
Secured - Trade bills 1,869,443
319,000
Secured - Term loans 318,925 585,345
Non-current
Secured - Term loans
2,670,512 4,387,176
2,857,045 3,180,909
5,527,557 7,568,085
(a) The bank borrowings are secured against:
(i) A registered first party charge over the Group’s freehold land and factory buildings (Note 6);
and
(ii) Corporate guarantee provided by the Company.
54
(b) The bank overdrafts are interest bearing at 7.3% to 7.6% (2009: 7.8%) per annum on a monthly rest
basis whilst the trade bills are interest bearing at 2.1% to 3.4% (2009: 3.7% to 5.5%) per annum.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
17. BANK BORROWINGS (cont’d)
(c) The term loans are interest bearing at 4.6% (2009: 5.5%) per annum on a monthly rest basis and
repayable by 120 equal monthly instalments. As at the end of financial year, they are repayable are as
follows:
GROUP
2010 2009
RM RM
Current
Not later than one year 318,925 585,345
Non-current
Later than one year and not later than two years 333,909 329,533
Later than two years and not later than five years 1,098,838 1,076,790
Later than five years 1,424,298
1,774,586
2,857,045
3,180,909
3,175,970 3,766,254
18. FINANCE LEASES
As at the end of the financial year, the outstanding finance lease obligations are repayable as follows:
GROUP
2010 2009
RM RM
Minimum finance lease payments:
Not later than one year 573,359 307,919
Later than one year and not later than five years
2,610,396 584,290
Less: Unexpired term charges 3,183,755 (475,557)
892,209
(75,431)
2,708,198
816,778
Principal amounts outstanding:
Current portion Non-current portion 443,589
2,264,609
280,359
536,419
2,708,198 816,778
The effective interest rates of the finance lease obligations are ranging from 4.2% to 6.3% (2009: 4.2% to
6.1%) per annum.
19. SCHEDULED PAYABLE
Scheduled payable represents the remaining amount of JPY 36 million (approximately RM 1,209,197) due
to a foreign buyer arising from one-off rectification works claim. The amount shall be payable in 48 equal
monthly instalments. As at year end, the payment schedule is analysed as follows:
GROUP
2010 2009
RM RM
Current
Not later than one year (Note 21) 302,301
329,400
Non-current
Later than one year and not later than two years 302,301
329,400
Later than two years and not later than five years 604,595
658,800
Later than five years
–
329,400
906,896 1,317,600
1,209,197 1,647,000
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
55
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
20. DEFERRED TAX LIABILITY
GROUP
2010 2009
RM RM
(a) Movement of deferred tax liability
Balance as at 1 May 2,470,498 2,256,291
Deferred tax expense relating to origination of temporary 40,354 200,306
differences
Under provision in prior year 2,486
13,901
Balance as at 30 April
(b) Component of the deferred tax liability
Excess of capital allowances over corresponding book depreciation 2,513,338
2,470,498
2,513,338
2,470,498
21. TRADE AND OTHER PAYABLES
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Trade payables 6,089,995 4,387,475 –
–
Other payables
- Accruals
- Scheduled payable (Note 19) - Sundry payables
1,632,510 302,301 737,852 1,432,510 329,400 783,068 114,000 –
19,759
153,000
–
26,456
2,672,663 2,544,978
133,759 179,456
8,762,658 6,932,453 133,759 179,456
The normal trade credit terms granted to the Group ranging from 30 days to 120 days (2009: 30 days to
120 days) from date of invoices.
22. REVENUE
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Dividend income –
–
3,650,000
2,400,000
Management fee income –
–
264,000
240,000
Invoiced value of goods sold net of
discount and return 61,719,697 65,836,458
–
–
61,719,697
65,836,458
3,914,000 2,640,000
23. FINANCE COSTS
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Interest on:
Bank overdrafts 54,065
75,110 –
Finance charges under finance leases 165,450 84,028
–
Trade bills 77,433
90,818
–
Term loans 146,704 84,134
–
–
–
–
–
Bank charges 443,652 207,572 334,090
154,623
–
1,842 –
1,902
651,224 488,713 1,842
1,902
56
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
24. PROFIT / (LOSS) BEFORE TAX
Profit / (Loss) before tax is arrived at:
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
After charging:
Allowance for doubtful debts, specific 213,114 126,973 –
–
Allowance for obsolete inventories 15,766 250,151 –
–
Amortisation of development cost 46,500
–
–
–
Auditors’ remuneration
- Statutory audit
- Current 45,000 47,500 12,500 12,500
- (Over) provision in prior year –
(2,500) –
(2,500)
- Other services 2,500 –
2,500
–
Bad debts written off –
29,790
–
–
Claim for rectification works
2,000 2,835,750 –
–
Depreciation of property, plant and
equipment
3,782,499
3,522,178 –
–
Loss on disposal of other investment 359 –
–
–
Loss on foreign exchange
- realised 217,869 –
–
–
- unrealised 317,358
–
–
–
Preliminery expenses –
9,500
–
–
Property, plant and equipment
written off 150,581
–
–
–
Rental of
- factory 345,600 259,200 –
–
- hostel 44,000 2,000 –
–
- office equipment
6,145 8,153
–
–
- factory equipment
3,366 –
–
–
- premises 61,166 29,500
–
–
And crediting:
Bad debts provision written back Claim from rectification works Dividend income
Fixed deposits interest income Gain on disposal of property, plant
and equipment Gain on foreign exchange
- realised
- unrealised Insurance claims
Sundry income (32,745) (1,288,201) (1,400)
(30,336) –
(116,788) –
(170,800) (93,384)
–
–
–
(118,071) –
–
–
–
–
–
–
–
(36,916)
–
–
(720,997) (348,957)
–
–
–
–
–
–
–
–
–
–
25. EMPLOYEES’ BENEFITS
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
(a) Executive directors’
remuneration (Note 26) 750,705 721,494
–
–
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
57
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
25. EMPLOYEES’ BENEFITS (cont’d)
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
(b) Other staff costs
- Wages, salaries and bonuses 3,584,746 3,277,547
–
–
- Defined contribution plan (EPF) 351,812 295,829
–
–
- Other benefits 923,561 729,876
–
–
4,860,119
4,303,252 –
–
5,610,824 5,024,746 –
–
26. DIRECTORS’ REMUNERATION
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Executive directors
- Salaries, allowance and bonuses 630,568 607,228 –
–
- Defined contribution plan (EPF) 120,137
114,266 –
–
- Benefit-in-kind 750,705 33,250
721,494
33,250
–
–
–
–
783,955
754,744
–
–
Non-executive directors
- Fees - Allowances 114,000 7,000
114,000 7,000
114,000 7,000 114,000
7,000
121,000 121,000 121,000 121,000
904,955 875,744 121,000
121,000
27. TAX EXPENSE
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
(a) Component of the tax expenses:
Current tax expense 1,144,891 74,594 23,632 58,121
Deferred tax expenses relating to
origination of temporary differences 40,354
200,306
–
–
(Over) / Under provision of current
tax in prior year
(14,936)
(103,409)
(7,687)
38,730
Under provision of deferred tax in
prior year
2,486 13,901
–
–
Tax expense for the financial year 58
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
1,172,795
185,392
15,945 96,851
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
27. TAX EXPENSE (cont’d)
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
(b) Reconciliation of tax expense with
statutory tax rate
Profit / (Loss) before tax 5,767,392 (1,219,217) 3,568,947
2,264,109
Tax at statutory income tax
rate at 25% 1,441,847
(304,804) 892,238
566,027
Tax effects of:
- non-deductible expenses 339,239 493,103 43,894 116,094
- non-taxable income (39,478)
(14,350)
(912,500) (624,000)
Tax savings arising from:
- double deduction expenses
(69,263) (67,423) –
–
- utilisation of deferred tax assets
not recognised previously
(163,417)
–
–
–
- utilisation of reinvestment allowance (323,683) –
–
–
Deferred tax assets not recognised
during the financial year
–
168,374
–
–
(Over) / Underprovision of current
tax in prior year
(14,936) (103,409) (7,687)
38,730
Under provision of deferred tax in
prior year 2,486 13,901 –
–
Tax expense for the financial year 1,172,795 185,392 15,945
96,851
As at the end of financial year, the Group has estimated unabsorbed losses, unutilised reinvestment allowances
and capital allowances amounting to approximately RM 3,537,047 (2009: RM 4,866,000) available for
setting off against future taxable profits, subject to agreement by the Inland Revenue Board.
28. EARNINGS / (LOSS) PER ORDINARY SHARE
(a) The earnings/(loss) per share is calculated by dividing the net profit/(loss) for the financial year
attributable to ordinary equity holders by the weighted average number of ordinary shares in issue
during the financial year:
GROUP
2010 2009
RM RM
Profit / (loss) attributable to ordinary equity holders
of the Parent (RM) 5,249,527 (1,092,657)
79,645,900
Weighted average number of ordinary shares in issue 6.59 Earnings / (Loss) per share (sen)
79,959,000
(1.37)
(b) The diluted earnings per share of the Group were not presented as there were no dilutive potential
ordinary shares during the financial year.
29. DIVIDEND
In respect of financial year ended 30 April 2010:
An interim dividend of single-tier dividend of 3.5%
on 79,900,000 ordinary shares of RM 0.50 each
In respect of financial year ended 30 April 2008:
A final dividend of tax exempt dividend of 6%
on 80,000,000 ordinary shares of RM 0.50 each
GROUP AND COMPANY
2010
2009
RM
RM
1,398,250
–
–
2,400,000
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
59
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
30. CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents included in the cash flow statements comprise the following amounts:
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Deposits, cash and bank
balances (Note 13) 6,879,493 3,765,210 185,488 72,680
Less: Bank overdrafts (Note 17) (482,144) (3,482,831) –
–
6,397,349 282,379 185,488 72,680
(b) During the financial year, the Group acquired property, plant and equipment with an aggregate cost
of RM 5,427,015 (2009: RM 13,150,702) of which RM 2,579,862 (2009: RM 246,300) was acquired
by means of finance leases. Cash payments of RM 2,847,153 (2009: RM 12,904,402) were made to
purchase property, plant and equipment.
31. RELATED PARTY DISCLOSURES
(a) Related party relationship
An entity or individual is considered a related party of the Group for the purposes of the financial
statements if the Group has the ability, directly or indirectly, to control or exercise significant influence
over the party in making financial and operating decisions, or vice versa, or where the Group and the
party are subject to common control or common significant influence.
The Group has related party relationship with its subsidiary companies and company in which certain
directors and their close family members have substantial financial interest.
(b) Related party transactions
The following are aggregate value of transactions between the Group and related parties that took
place during the financial year at terms that are not more favourable to the related party than those
arranged with independent third parties:
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
(i) Transactions with companies
in which certain directors and
their close family members have
substantial financial interest
- Professional fees paid to
cfSolutions Sdn. Bhd. 105,700
100,200 105,700 100,200
(ii) Transactions with a
subsidiary company
- Dividend income - Management fee
income 60
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
–
–
3,650,000 2,400,000
–
–
264,000 240,000
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
31. RELATED PARTY DISCLOSURES (cont’d)
(c) Remunerations of key management personnel
GROUP AND COMPANY
2010
2009
RM
RM
1,233,657 174,581 1,174,198
177,945
Comprise amounts paid to:
- Executive directors of the Group - Other key management personnel 1,408,238 1,352,143
750,705 657,533 721,494
630,649
1,408,238
1,352,143
Salary, allowance and bonuses Defined contribution plans (EPF) The remunerations of key management personnel are determined by the Remuneration Committee
having regard to the performance of individuals and market trends.
32. CONTINGENT LIABILITY
GROUP COMPANY
2010
2009
2010 2009
RM RM RM RM
Secured:
Bank guarantees issued to third parties 282,000 670,047
–
–
Unsecured:
Corporate guarantee to:
- financial institution for banking facilities
granted to a subsidiary company - a foreign buyer for claim for rectification
works against a subsidiary company –
–
34,272,000 18,822,000
–
–
1,209,197
1,647,000
282,000 670,047
35,481,197 20,469,000
The bank guarantees are secured against the Group’s freehold land and factory buildings (Note 6). As at the
end of the financial year, a subsidiary company has bank overdraft and trade facilities (“banking facilities”)
from a licensed bank amounting to RM 34,272,000 (2009: RM 18,822,000) which are guaranteed by the
Company. Accordingly, the Company is contingently liable to the extent of the outstanding banking facilities
of the said subsidiary company.
33. SEGMENTAL REPORTING
The primary segment reporting format is determined to be business segments as the Group’s risks and rate of
return are affected by differences in the products and services produced. Secondary information is reported
geographically by location of customers.
The Directors are of the opinion that all inter-segment transactions have been entered into in the normal
course of business and have been established on terms and conditions that are not materially different from
those obtainable in transactions with unrelated parties.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
61
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
33. SEGMENTAL REPORTING (cont’d)
The Group comprises the following main business segments as follow:
Business segments Business activities
Insulation materials
Manufacturing of insultion materials for the heating, ventilation, airconditioning and refrigeration (“HVAC&R”) industry
HVAC&R parts and equipment Trading of HVAC&R parts and equipments
Steel pipes (a) Business segments
Manufacture, import and export of various kinds of steel pipes and tubes
Insulation
materials
RM Financial year ended 30 April 2010
REVENUE
- External sales 50,504,982 - Inter-segment sales –
HVAC&R
parts and
equipment Steel pipes
RM RM
2,769,827
–
8,444,888
22,915
Total revenue 50,504,982 2,769,827 8,467,803 Cost of goods sold (37,149,516) (2,269,085) (8,919,707)
Gross profit / (loss) 13,355,466 500,742 (451,904)
Eliminations Consolidated
RM RM
– 61,719,697
(22,915) –
(22,915) 61,719,697
22,915 (48,315,393)
–
13,404,304
Other income Unallocated corporate expenses 1 ,733,654
(8,719,341)
Profit from operations
Finance costs 6 ,418,617
(651,225)
Profit before tax Tax expense 5,767,392
(1,172,795)
4,594,597
Net profit for the financial year
Financial year ended 30 April 2009
REVENUE
- External sales 55,765,525
- Inter-segment sales –
6,340,026 38,600 3,730,907 –
– 65,836,458
(38,600) –
Total revenue 55,765,525
6,378,626 3,730,907 Cost of goods sold (46,580,298) (6,154,970) (4,110,981) (38,600) 65,836,458
– (56,846,249)
(38,600) Gross profit 9,185,227 223,656 (380,074) 8,990,209
Other income 1,160,959
Unallocated corporate expenses (10,881,672)
(Loss) from operations
Finance costs (730,504)
(488,713)
(Loss) before tax Tax expense (1,219,217)
(185,392)
(1,404,609)
62
Net (loss) for the financial year
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
33. SEGMENTAL REPORTING (cont’d)
(b) Geographical segments
The Group operates principally in Malaysia, therefore geographical segment is analysed based on
geographical location of its customers. The analysis of segment results is not presented because it is
not practicable to allocate operating expenses as the basis for making these allocations is arbitrary.
The Group’s segment revenue from external customers by geographical area based on the geographical
location of its customers is shown as follows:
GROUP
2010 2009
RM RM
Africa Americas Asia (excluding Malaysia) Europe Malaysia Oceania 2,330,793
6,321,984 33,724,368 559,731 12,901,073 5,881,748
1,443,290
6,403,797
38,781,553
2,395,309
15,596,735
1,215,774
61,719,697
65,836,458
34. FINANCIAL INSTRUMENTS
(a) Financial risk management
The operations of the Group are subject to various financial risks, including foreign currency risk,
interest rate risk, credit risk, liquidity and cash flow risk, in connection with its use or holding of
financial instruments. The Group has adopted a financial risk management framework with the principal
objective of effectively managing these risks and minimising any potential adverse effects on its financial
performance.
(i) Foreign currency risk
The Group operates principally in Malaysia but is exposed to various currencies, mainly United
States Dollar, Singapore Dollar, Japanese Yen, Chinese Renminbi (Yuan), Taiwanese New Dollar
and Vietnam Dong arising from its imports and exports. Foreign currency denominated assets and
liabilities together with expected cash flows from highly probably purchases and sales give rise to
foreign exchange exposures. The Group has a natural hedge to the extent that payments for foreign
currency payables will be matched against receivables denominated in the same foreign currency
or whenever possible, by intra group arrangements and settlements. As at the financial year end,
the Group does not have any derivative financial instruments used to hedge foreign currency risk.
The foreign currency exposure of cash and cash equivalents is as follows:
Cash and cash equivalents :
Chinese Renminbi (Yuan) Taiwanese New Dollar United States Dollar
Vietnam Dong 2010 RM 2009
RM
1,168 480 2,998,340
310 –
–
2,218,926
–
3,000,298
2,218,926
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
63
Annual Report 2010
Soaring Through The Highest Expectations
Notes To The Financial Statements (cont’d)
34. FINANCIAL INSTRUMENTS (cont’d)
The foreign currency exposure of trade and other receivables is as follows:
Trade receivables :
Singapore Dollar United States Dollar 2010 RM Scheduled receivables :
Japanese Yen 2009
RM
155,231
8,078,177
120,742
8,581,135
8,233,408 8,701,877
924,701
–
The foreign currency exposure of trade and other payables is as follows:
Trade payables :
United States Dollar
2010 RM 2009
RM
(1,729,845)
Scheduled payables :
Japanese Yen (1,209,197) (1,647,000)
(ii) Interest rate risk
(856,993)
The Group’s primary interest rate risk relates to the interest-bearing debts obtained from financial
institutions in Malaysia. It has no substantial long term interest-bearing assets as at 30 April 2010.
The investments in financial assets, i.e. deposits placed with a licensed bank, are short term in
nature and are not held for speculative purposes. The Group does not hedge interest rate risk
but ensures that it obtains borrowings at competitive interest rates under the most favourable
terms and conditions.
(iii) Credit risk
The credit risk with respect to trade and other receivables are managed through the application
of credit approvals, credit limits and monitoring procedures. Credit is extended to the customers
based upon careful evaluation of the customer’s financial condition and credit history.
The Group’s normal credit term is ranging from 30 to 90 days from date of invoices. Any other
credit terms are assessed and approved on a case-by-case basis depending on the length of trading
relationship, the volume of trade and other management considerations. Notwithstanding the
credit terms granted to customers, it is the industry norm to begin counting the credit period
from the first day of the immediate following month after sales transactions occurred.
As at balance sheet date, the two (2) (2009: two) largest customers account for 43% (2009: 27%)
of total trade receivables. Except for the above, there was no significant concentration of credit
risk. The maximum exposure to credit risk for the Group is represented by the carrying amount
of the receivables presented in balance sheet.
(iv) Liquidity and cash flow risk
The Group actively manages its debt maturity profile, operating cash flows and the availability
of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of
its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash
convertible investments to meet its working capital requirements. In addition, the Group strives
to maintain available banking facilities of a reasonable level to its overall debt position.
64
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
Notes To The Financial Statements (cont’d)
34. FINANCIAL INSTRUMENTS (cont’d)
(b) Fair values
The methodologies used in arriving at the fair values of the principal financial assets and financial
liabilities of the Group are as follows:
(i) The carrying amounts of cash and cash equivalents, receivables, payables and trade bills are
considered to approximate their carrying amounts as they are either payable on demand or within
the normal credit term or they have short maturity.
(ii) The fair values of investment in golf club membership approximate its carrying amounts by
reference to golf club membership market price.
(iii) The fair value of term loans approximates its carrying amount as the interest rate is on floating
rate basis.
(iv)The fair value of scheduled receivable, finance lease and scheduled payable has been determined
using discounted cash flow technique. The discount rates used are based on the current finance
lease interest rate with similar nature of borrowing of the group.
The fair values of financial assets and liabilities of the Group and of the Company approximate their
carrying amounts as at 30 April 2010 except as set out below:
30 April 2010
Note Financial Asset
Schedule receivable
10 Financial Liabilities
Finance lease Schedule payable 924,071
837,831
18
19 2,708,198 1,209,197 2,671,458
1,097,655
18
19 816,778 1,647,000
766,906
1,488,888
30 April 2009
Financial Liabilities
Finance lease Schedule payable CarryingFair
amount Value
RM RM
It is not practicable to estimate reliably the fair value of contingent liabilities due to uncertainty of
timing, costs and eventual outcome.
35. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
On 20 May 2009, Superlon Worldwide Sdn. Bhd. entered into a deed of settlement agreement with a supplier,
Namique Co. Ltd (“Namique”), a company incorporated in Korea, for the rectification works claim by a
foreign buyer amounting to JPY 74,212,820 or RM 2,763,610 incurred during the financial year ended 30
April 2009. Pursuant to the aforesaid agreement, Namique agreed to bear half of the claim sum amounting to
JPY 37,106,410 or RM 1,288,201. Namique has paid the claim of JPY 9,833,199 or RM 364,130 during the
current financial year. The remaining of JPY 27,273,211 (equivalent to RM 924,071 based on the exchange
rate of JPY 1 = RM 0.03388) as at 30 April 2010 shall be receivable by 49 equal monthly instalments (Note
10).
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
65
Annual Report 2010
Soaring Through The Highest Expectations
List Of Properties
as at 30 April 2010
Approximate
Age of Net Book
Type
Date of
Building /Value
Property / Title Details
(Existing Use)
AcquisitionTenure
(RM’000) Factory 1
30/03/1996
Land and
Lot 2567,
Jalan Sungai
Building
Jati,
Kampung Jawa,
(Factory)
41200 Klang, Selangor
/ Geran 397, Lot 2567,
Tempat Sungei Jaty,
Mukim Klang
Daerah Klang, Selangor
Land
area/
Built up
Area
(square
feet)
13 years /
6,609
Freehold
126,128/
60,000
08/01/2009
Freehold
6,001
Land
Lot 2568, Jalan Sungai
Jati, Taman Klang Jaya,
41200 Klang, Selangor /
GM 1393, Mukim Klang,
Daerah Klang, Selangor
126,077/
–
Factory 2
13/10/2004
Land and
Lot 2736, Jalan Raja
Building
Nong,
Kampung Jawa,
(Factory and
41200 Klang, Selangor
/ H.S.M. 42634
Office)
PT118211
(formerly under Geran
Mukim 1058 Lot 2736)
Tempat Sungei Jaty
Mukim Klang
Daerah Klang, Selangor
66
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
5 years /
9,001
Freehold
129,242/
66,000
Soaring Through The Highest Expectations
Annual Report 2010
Analysis Of Shareholdings
as at 9 august 2010
Authorised Share Capital
Issued and Fully Paid-up Share Capital
Class of Shares
: RM100,000,000.00
: RM40,000,000.00
: Ordinary shares of RM0.50 each
ANALYSIS OF SHAREHOLDINGS
Size of Shareholdings Less than 100
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - less than 5% 5% and above Total
No. of
Shareholders
%
No. of Shares
%
4
678
225
88
15
7
0.39
66.67
22.12
8.65
1.48
0.69
150
122,139
1,297,350
3,072,800
20,261,600
54,886,861
0.00
0.15
1.63
3.86
25.44
68.92
1,017
100.00
79,640,900 *
100.00
*Excluding the 359,100 shares held in treasury
SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS
No Names
Liu Lee, Hsiu Lin @ Jessica H. Liu
Tommy bin Bugo @ Hamid bin Bugo
Liu, Man-Tien
Huang Hsin-Yueh
Ting Ming Hoi Enterprise Sdn Bhd
Tina Yu-Chen Lee
Koperasi Permodalan Felda Berhad
Direct Interest
No. of shares
%
21,078,700
7,500,237
6,047,361
5,900,000
5,000,063
4,843,700
4,787,500
26.47
9.42
7.59
7.41
6.28
6.08
6.01
Indirect Interest
No. of shares
%
3,500,000*
–
–
–
–
–
–
4.39
–
–
–
–
–
–
* Deemed interested via her son, Mr Liu Han-Chao’s direct interest in the Company
DirectorS’ SHAREHOLDINGS
Direct Interest
Indirect Interest
No Names
No. of shares
%
No. of shares
%
Liu Lee, Hsiu Lin @ Jessica H. Liu
21,078,700
26.47
3,500,000*
4.39
Tommy bin Bugo @ Hamid bin Bugo
7,500,237
9.42
–
–
Liu Han-Chao
3,500,000
4.39
21,078,700~
26.47
Ongi Cheng San
100
0.00
Chun Kwong Pong
–
–
–
–
Lim E @ Lim Hoon Nam
–
–
–
–
Lim Wee Keong
–
–
–
–
* Deemed interested via her son, Mr Liu Han-Chao’s direct interest in the Company
~ Deemed interested via his mother, Madam Liu Lee Hsiu-Lin’s direct interest in the Company
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
67
Annual Report 2010
Soaring Through The Highest Expectations
Analysis Of Shareholdings (cont’d)
LIST OF THIRTY (30) LARGEST SHAREHOLDERS
No. Names
No. of Shares
1 LIU LEE, HSIU LIN
20,808,000
2TOMMY BIN BUGO @ HAMID BIN BUGO
7,500,237
3 F.I.T NOMINEES (ASING) SDN BHD
6,047,361
PLEDGED SECURITIES ACCOUNT FOR LIU, MAN-TIEN
4 F.I.T NOMINEES (ASING) SDN BHD
5,900,000
PLEDGED SECURITIES ACCOUNT FOR HUANG, HSIN-YUEH
5TING MING HOI ENTERPRISE SDN BHD
5,000,063
6 F.I.T NOMINEES (ASING) SDN BHD
4,843,700
PLEDGED SECURITIES ACCOUNT FOR TINA YU-CHEN LEE
7 KOPERASI PERMODALAN FELDA BERHAD
4,787,500
8 COVINGTON PACIFIC LTD
3,910,000
9 LIU HAN-CHAO
3,500,000
10 HO SEE CHAI
3,037,500
11 HSBC NOMINEES (ASING) SDN BHD
2,730,000
KIRBY INTERNATIONAL PRIVATE LTD
12 CIMSEC NOMINEES (ASING) SDN BHD
2,071,000
PLEDGED SECURITIES ACCOUNT FOR KENWIN INVESTMENT LIMITED
13 AIBB NOMINEES (TEMPATAN) SDN BHD
1,068,600
PLEDGED SECURITIES ACCOUNT FOR LOK HUEY MING
14 LIM CHAI BENG
829,500
15 CITIGROUP NOMINEES (ASING) SDN BHD
768,000
UBS AG SINGAPORE FOR EPIRUS LTD
16 LIN,RONG-MAO
471,400
17 CHENG LING MU
400,000
18 HSBC NOMINEES (ASING) SDN BHD
369,900
EXEMPT AN FOR CREDIT SUISSE
19 RAHIMI BIN AB WAHAB
361,427
20 LIU LEE, HSIU LIN
270,700
21THAM CHOY CHIN
250,000
22 CHAN WAI KHEONG
113,573
23ER KOK LEONG @ ER CHAI TUAN
110,000
24 WANG, CHUN-CHENG
100,000
25 M.I.T NOMINEES (TEMPATAN) SDN BHD
100,000
PLEDGED SECURITIES ACCOUNT FOR SALBIAH BINTI SHUIB
26 CUSTODEV SDN BHD
95,000
27 CIMSEC NOMINEES (TEMPATAN) SDN BHD
92,000
PLEDGED SECURITIES ACCOUNT FOR KHOO YAP HOCK CHENG (PENANG)
28 CHIA LI ENG
90,500
29 MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD
90,000
PLEDGED SECURITIES ACCOUNT FOR CHAU POH YEE
30 NG KOON SAN @ AK AH TIN
90,000
68
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
%
26.13
9.42
7.59
7.41
6.28
6.08
6.01
4.91
4.40
3.81
3.43
2.60
1.34
1.04
0.97
0.59
0.50
0.46
0.45
0.34
0.31
0.14
0.14
0.13
0.13
0.12
0.12
0.11
0.11
0.11
Soaring Through The Highest Expectations
Annual Report 2010
Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of SUPERLON HOLDINGS BERHAD
(“Superlon” or “the Company”) will be held at Putra Room, Kelab Golf Sultan Abdul Aziz Shah (KGSAAS), No.
1, Rumah Kelab, Jalan Kelab Golf 13/6, 40100 Shah Alam, Selangor Darul Ehsan on Wednesday, 29 September
2010 at 10.00 a.m. for the following purposes:
AGENDA
As Ordinary Business
1.To receive the Audited Financial Statements for the financial year ended 30 April 2010 together with the
Reports of Directors and Auditors thereon (Please refer to Note A).
2.To approve a final single-tier dividend of 1.75 sen per ordinary share in respect of the financial year ended 30 April 2010.
(Resolution 1)
3.To approve the payment of Directors’ fees for the financial year ended 30 April 2010. (Resolution 2)
4.To re-elect the following Directors who retire in accordance with Article 96 of the
Company’s Articles of Association:
(1) Mr Chun Kwong Pong
(2) Mr Liu Han-Chao
5.To re-elect Mr Ongi Cheng San as Director who retires in accordance with the Article 103
of the Company’s Articles of Association.
6.To appoint Auditors of the Company and to authorise the Directors to determine their
remuneration.
A Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965 (a copy
of which is set out in Appendix I in the 2010 Annual Report) had been received by the
Company for the nomination of Messrs Crowe Horwath, who have given their consent to
act, for appointment as Auditors of the Company in place of the current Auditors, Messrs
SC Lim, Ng & Co. who had indicated their intention not to seek for re-appointment.
As Special Business
To consider and if thought fit, to pass the following resolutions:-
7. Ordinary Resolution
Authority to Directors to allot and issue shares pursuant to Section 132D of the
Companies Act, 1965
“THAT, subject always to the Companies Act, 1965 (“the Act”), the Articles of Association
of the Company and approval and requirements of the relevant governmental and/or
regulatory authorities (where applicable), the Directors be and are hereby empowered
pursuant to Section 132D of the Act to allot and issue new ordinary shares of RM0.50
each in the Company, from time to time and upon such terms and conditions and for
such purposes and to such persons whomsoever the Directors may, in their absolute
discretion deem fit and expedient in the interest of the Company, provided that the
aggregate number of shares to be issued pursuant to this Resolution does not exceed ten
(10) percent of the issued and paid-up share capital for the time being of the Company
AND THAT such authority shall continue to be in force until the conclusion of the next
Annual General Meeting of the Company.”
(Resolution 3)
(Resolution 4)
(Resolution 5)
(Resolution 6)
(Resolution 7)
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
69
Annual Report 2010
Soaring Through The Highest Expectations
Notice Of Annual General Meeting (cont’d)
8.
Ordinary Resolution
Proposed renewal of authority to the Company to purchase its own ordinary shares
up to ten percent (10%) of its issued and paid-up capital
“THAT, subject to compliance with the Companies Act, 1965 (“the Act”), the
Memorandum and Articles of Association of the Company, the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other
applicable laws, regulations and guidelines and the approvals of all relevant governmental
and/or regulatory authorities, the Company be and is hereby authorised to allocate an
amount not exceeding the total of audited share premium reserve and retained profit of the
Company for the purpose of and to purchase such amount of ordinary shares of RM0.50
each (“Superlon Shares”) in the Company (“Proposed Share Buy-Back Renewal”) as may
be determined by the Directors of the Company provided that the aggregate number of
Superlon Shares purchased and/or held as treasury shares pursuant to this resolution
does not exceed RM4,000,000 comprising 8,000,000 Shares in Superlon, representing
ten percent (10%) of the total issued and paid-up capital of the Company.
THAT upon completion of the purchase by the Company of its own shares, the Directors
are authorized to deal with the Superlon Shares in the following manner:
(i) cancel the Superlon Shares so purchased; or
(ii) retain the Superlon Shares so purchased as treasury shares; or
(iii) retain part of Superlon Shares so purchased as treasury shares and cancel the
remainder; or
(iv) if held as treasury shares, to resell the treasury shares on the Bursa Securities and/
or distribute the treasury shares as dividends to the Company’s shareholders and/
or subsequently cancel the treasury shares or any combination thereof;
and in any other manner as prescribed by the Act, rules, regulations and orders made
pursuant to the Act and the requirements of the Bursa Securities and any other relevant
authority for the time being in force.
AND THAT the Directors be and are hereby empowered to carry out the above immediately
upon the passing of this resolution and from the date of the passing of this resolution
until:
(i)
the conclusion of the next annual general meeting of the Company following the
general meeting at which this resolution was passed at which time it shall lapse
unless by an ordinary resolution passed at that meeting, the authority is renewed,
either unconditionally or subject to conditions; or
(ii) the expiration of the period within which the next annual general meeting after that
date is required by law to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders in general
meeting;
whichever is the earliest and the Directors and/or any of them be and are hereby authorized
to complete and do all such acts and things deem fit and expedient in the interest of the
Company to give full effect to the Proposed Share Buy-Back Renewal contemplated and/
or authorized by this resolution.”
9.
Special Resolution
Proposed Amendments to the Articles of Association of the Company
“THAT the proposed amendments to the existing Article 163 of the Articles of Association
of the Company as set out in Appendix II in the Annual Report 2010 be and is hereby
approved and adopted.”
70
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
(Resolution 8)
(Resolution 9)
Soaring Through The Highest Expectations
Annual Report 2010
Notice Of Annual General Meeting (cont’d)
10.To transact any other ordinary business of which due notice shall have been given.
NOTICE OF DIVIDEND ENTITLEMENT
NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Fourth Annual General
Meeting, a final single-tier dividend of 1.75 sen per ordinary share for the financial year ended 30 April 2010 will
be paid on 11 November 2010 to holders of ordinary shares registered in the Record of Depositors at the close
of business on 15 October 2010.
(a) Shares transferred into the Depositor’s Securities Account on or before 4.00 p.m. on 15 October 2010 in
respect of ordinary transfers; and
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of
Bursa Malaysia Securities Berhad.
By order of the Board
PANG KAH MAN (MIA 18831)
Company Secretary
Kuala Lumpur
6 September 2010
NOTES:(A)This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965, does not
require a formal approval of the shareholders and hence, is not put forward for voting.
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his
stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies
Act, 1965 shall not apply to the Company.
2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that
the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with.
3.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion
of his shareholdings to be represented by each proxy.
4.The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in
writing. If the appointer is a corporation, the instrument must be executed under its Common Seal or under the hand
of an attorney so authorised.
5.The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a
notarially certified copy of that power of attorney, must be deposited at the Registered Office of the Company at 3-2,
3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, 58100 Kuala Lumpur not less than forty eight (48) hours before
the time appointed for holding this meeting or any adjournment thereof.
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
71
Annual Report 2010
Soaring Through The Highest Expectations
Notice Of Annual General Meeting (cont’d)
EXPLANATORY NOTES ON SPECIAL BUSINESS
1.
Ordinary Resolution no. 7
Authority to Allot and Issue Shares pursuant to Section 132D of the Companies Act, 1965
The proposed Ordinary Resolution no. 7 under Item 6, if passed, will grant general mandate (“General Mandate”) and
empower the Directors of the Company, from the date of the above Annual General Meeting to allot and issue shares
in the Company up to an amount not exceeding in total 10% of the issued and paid-up capital of the Company for the
time being for such purposes as they may think fit and in the interest of the Company. This authority, unless revoked or
varied at a general meeting, shall continue to be in full force until the conclusion of the next Annual General Meeting
of the Company.
As at the date of this Notice, no new shares were issued by the Company pursuant to the previous mandate granted to
the Directors since the last Annual General Meeting held on 29 September 2009.
The General Mandate, if granted will provide flexibility to the Company for any possible fund raising activities, including
but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/
or acquisition.
2. Ordinary Resolution no. 8
Proposed Renewal of Authority for Purchase of Own Shares by the Company
The proposed Ordinary Resolution no. 8 under Item 7, if passed, will allow the Board of Directors to exercise the power
of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company at any time
within the time period stipulated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. This
authority, unless revoked or varied by the Company at a general meeting, shall continue to be in full force until the
conclusion of the next Annual General Meeting of the Company.
Further details are set out in the Circular to Shareholders dated 6 September 2010.
3.
Special Resolution
Proposed Amendments to the Articles of Association of the Company
The proposed Special Resolution is to amend the existing Article 163 of the Articles of Association of the Company in
relation to the implementation of the electronic dividend payment (“eDividend”).
The main objective of implementing the eDividend is, amongst others, to promote greater efficiency of the dividend
payment system to reflect the new initiatives with regard to the capital market, specifically to provide shareholders
with an e-dividend payment system which is an alternative method of receiving cash dividends that is convenient to
the shareholders. The eDividend will allow the Company to credit dividend entitlements in respect of the shares of the
Company directly into the shareholders’ bank accounts and improve the efficiency of the payment.
Please refer to the document marked Appendix II attached to the Annual Report for details of the Proposed
Amendments.
72
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Soaring Through The Highest Expectations
Annual Report 2010
APPENDIX I
Notice of Nomination Pursuant to Section 172(11) of the Companies Act, 1965
LIU LEE, HSIU-LIN
(also known as JESSICA H. LIU)
No. B3-13, Jalan Kelab Golf 13/1
Sri Alam Condo
Kelab SAAS
Seksyen 13, Shah Alam
40100 Selangor Darul Ehsan
Date: 18 August 2010
The Board of Directors
SUPERLON HOLDINGS BERHAD
Lot 2736 Jalan Raja Nong
41200 Klang
Selangor Darul Ehsan
Dear Sirs,
NOTICE OF NOMINATION OF MESSRS CROWE HORWATH
I, Liu Lee, Hsiu-Lin (also known as Jessica H. Liu) (Passport No.: 300743268), being a shareholder of the Company,
hereby give notice, pursuant to Section 172(11) of the Companies Act, 1965 of my nomination of Messrs Crowe
Horwath as Auditors of the Company in place of the retiring Auditors, Messrs SC Lim, Ng & Co.
Yours faithfully
..................……...……................
LIU LEE, HSIU-LIN
(also known as JESSICA H. LIU)
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
73
Annual Report 2010
Soaring Through The Highest Expectations
APPENDIX II
DETAILS OF THE PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF SUPERLON
HOLDINGS BERHAD
(PLEASE REFER TO SPECIAL RESOLUTION 9 OF THE NOTICE OF ANNUAL GENERAL MEETING OF SUPERLON
HOLDINGS BERHAD)
The proposed deletions, alterations, modifications, variations and additions to the Articles of Association of the
Company (“Proposed Amendments”) are as follows:
EXISTING ARTICLE
PROPOSED AMENDMENTS TO THE EXISTING
ARTICLE
Article 163
To amend Article 163
Any dividend, interest or other money payable in
cash in respect of shares may be paid by cheque
or warrant, sent through the post directed to the
registered address of the holder as per the Record of
Depositors. Every such cheque or warrant shall be
made payable to the order of the person to whom
it is sent, and the payment of any such cheque or
warrant shall operate as a good discharge to the
Company in respect of the money represented
thereby, notwithstanding that it may subsequently
appear that the same has been stolen or that the
endorsement thereon has been forged. Every such
cheque or warrant shall be sent at the risk of the
person entitled to the money thereby represented.
Any dividend, interest or other money payable in cash
in respect of shares may be paid by cheque or warrant,
sent through the post directed to the last registered
address of the Member or by direct transfer or
such other mode of electronic means (subject to
the provision of the Act, the Depositories Act and
the Rules, the Listing Requirements and/or other
regulatory authorities) to the bank account of
the Member whose name appears in the Record
of Depositors. Every such cheque or warrant or
payment by direct transfer shall be made payable
to the order of the person to whom it is sent, and the
payment of any such cheque or warrant or payment
by such electronic means shall operate as a good
discharge to the Company in respect of the money
represented thereby, notwithstanding that it may
subsequently appear that the same has been stolen
or that the endorsement thereon has been forged
or of any discrepancy given by the Member in the
details of the bank account. Every such cheque or
warrant or electronic transfer or remittance shall be
sent at the risk of the person entitled to the money
thereby represented.
74
SUPERLON HOLDINGS BERHAD (740412-X)
(Incorporated in Malaysia)
Proxy Form
No. of ordinary shares held
(Company No.740412-X)
(Incorporated in Malaysia)
I/We____________________________________________________________________(Please use Block Letters)
of __________________________________________________________________________________________
being a member/members of SUPERLON HOLDINGS BERHAD, hereby appoint ________________________
of __________________________________________________________________________________________
or failing him,_________________________________________________________________________________
of __________________________________________________________________________________________
as my/our proxy to vote for me/ us and on my/ our behalf at the FOURTH ANNUAL GENERAL MEETING of
the Company to be held on at Putra Room, Kelab Golf Sultan Abdul Aziz Shah (KGSAAS), No 1, Rumah Kelab,
Jalan Kelab Golf 13/6, 40100 Shah Alam, Selangor D.E. on Wednesday, 29 September 2010 at 10.00 a.m. and
at any adjournment thereof in respect of my/our shareholding in the manner indicated below:No.
RESOLUTIONS
1. Approval of the final single-tier dividend of 1.75 sen per ordinary share in
respect of the financial year ended 30 April 2010
2.Approval of payment of Directors’ fees for the financial year ended 30 April
2010
3.Re-election of Chun Kwong Pong as Director
4.Re-election of Liu Han-Chao as Director
5.Election of Ongi Cheng San as Director
6. Appointment of Auditors of the Company and Authorization for the Directors
to determine their remuneration
7. Authority to Directors to allot and issue shares pursuant to Section 132D of
the Companies Act, 1965
8. Renewal of authority to the Company to purchase up to ten per cent (10%)
of its own shares in its issued and paid-up share capital
9. Amendments to the Articles of Association of the Company
FOR
AGAINST
Please indicate with an “X” in the appropriate box against each resolution how you wish your vote to be cast. In
the absence of specific direction as to voting is indicated, your proxy will vote or abstain as he/ she thinks fit.
Dated this ____________ day of ________________________ 2010.
...........................................................
Signature of Shareholder/Common Seal
Notes :
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be
a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
2.
A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c)
of the Companies Act, 1965 are complied with.
3.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented
by each proxy.
4.The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing. If the appointer is a
corporation, the instrument must be executed under its Common Seal or under the hand of an attorney so authorised.
5.The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power
of attorney, must be deposited at the Registered Office of the Company at 3-2, 3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, 58100 Kuala Lumpur
not less than forty eight (48) hours before the time appointed for holding this meeting or any adjournment thereof.
FOLD HERE
AFFIX
STAMP
HERE
To: Company Secretary
SUPERLON HOLDINGS BERHAD (740412-X)
3-2, 3rd Mile Square
FOLD HERE
No. 151 Jalan Kelang Lama
Batu 3½
58100 Kuala Lumpur
Insulation Sheets & Rolls
SUPERLON sheets are available
in pre-cut size, or in rolls.
Several items of ancillary products
are also available like foam tape,
gasket tape, and adhesive glue.
Steel Tubes & Pipes
SUPERLON also manufactures various kinds of
galvanised and ungalvanised steel tubes/pipes
including welded tubes, round tubes, square tubes,
rectangle tubes, special out-look tubes and finger
cut tubes ranging from 12.7mm
to 100mm.
The strong and durable products are used
for furniture, automobile, bicycle and
fitness apparatus industries.
HVAC&R Parts
In addition to the manufacturing of thermal insulation
materials, SUPERLON is also involved in trading of
HVAC&R parts and equipments. The existing product
ranges for our trading business include the following:1) Copper Tubes, Fittings and Driers
2) Refrigerant Gas
3) Refrigerator Compressor, Vacuum
Pump and Motor Fan
4) Temperature Controller, Digital
Thermometer and Refrigerator Gauge.
(Company No.740412-X)
Annual Report
www.superlon.com.my