annual report 2002 - top glove · annual report 2002 awarded ms iso 9001 top glove corporation...

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AWARDEDMS ISO 9001

TOP GLOVE CORPORATION BERHADI N C O R P O R AT E D I N M A L AY S I A U N D E R T H E C O M PA N I E S A C T, 1 9 6 5

(474423-X)

AboveTopMoving Towards The

The RestRising

Annual Repor t

TOP GLOVE CORPORATION BERHAD (474423-X)

Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor D.E., Malaysia

tel: 603-3392 7880/7350 fax: 603-3392 7229/9160 websites: www.topglove.com.my http://topglove.asiaep.com

e-mails: [email protected] [email protected]

PRODUCTION FACILITIES

72 PRODUCTION LINES 2,000 EMPLOYEES8 FACTORIES 5.1 BILLION GLOVES P.A.

TOP GLOVE MALAYSIAExports to 118 Countrie

s

2002

corporate

values

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

our vision

We strive to be the world’sleading manufacturer withexcellent quality glove productsand services that enrich andprotect human lives.

quality policy

Quality and productivity are our business.Continuous improvement and innovation are our duties.Towards zero defect is our target.

mission

statement

To be a world class glovemanufacturer providing TOP qualityproducts with excellent servicesthrough continuous improvementand innovation.

corporate directory

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

(474423-x) TOP GLOVE CORPORATION BERHADincorporated in malaysia under the companies act, 1965

(474423-x)

All Over The WorldAll over the world we are knownFor our superior and quality glovesThrough the years we have grown we have shownOur gloves stand out superior in the world

Top Glove is the bestBetter than the restQuality, reliability and consistency remain our policyAt Top Glove Group of Companies

top glove corporate song

Factory 4Lot 5987, Jalan Teratai, Batu 5, Off Jalan Meru

41050 Klang, Selangor D.E., Malaysia

Tel: 603-3392 8588/8996

Fax: 603-3392 6788

E-mail: [email protected]

Factory 5Lot 18, 27, 38 & 57,

Medan Tasek, Kawasan Perindustrian Tasek

31400 Ipoh, Perak D.R., Malaysia

Tel: 605-546 6360/547 9271

Fax: 605-547 8975

E-mails: (i) [email protected]

(ii) [email protected]

1906, N 16th Street

Suite 101 Phoenix AZ 85006

Tel: 602-253 7533

Fax: 602-253 7172


TG Medical (U.S.A.) Inc.600, Camino Verde

South Pasadena CA 91030

Tel: 323-683 3197

Fax: 323-257 5802


501 Mertoplex Drive, Suite 310

Nashville, TN 37211

Tel: 615-837 3278

Fax: 615-837 3478


USA

Factory 6180/3 M.7 Srisonthon Road. T. Srisonthon,

A. Thalang

Phuket 83110, Thailand

Tel: 6676-272 572/272 573

Fax: 6676-325 354


Factory 7188, Moo 5, Karnchanawanich Rd.,

Tambon, Sumnukgarm Sadao, Songkhla

90320, Thailand

Mobile Phone: 661-370 6478/

669-871 3881

Fax: 667-441 2418


Factory 8No. 2, Xi Tang Road, Xi Zhang Town,

Shanghai, China

Tel: 86-512-5842 2860

Fax: 86-512-5842 2870

Factory 1Bangunan United Industries

Lot 5019, Batu 5 1/2, Off Jalan Meru


Tel: 603-3392 3726/3392 1101

Fax: 603-3392 3726


Factory 2Lot 4968, Jalan Teratai,

Batu 6, Off Jalan Meru,


Tel: 603-3392 1992/1905

Fax: 603-3392 1291/8410


Corporate Office & Factory 3Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru


Tel : 603-3392 7880/7350 Fax : 603-3392 7229/9160

E-mails: (i) [email protected]

(ii) [email protected]

Websites: www.topglove.com.my

http://topglove.asiaep.com

MALAYSIA

THAILAND CHINA

contents

TOP GLOVECORPORATION

BERHAD

2 – Corporate Information

3 – Corporate Structure

4 – Six-Year Group Financial Review

5 – Quality Awards & Certifications

6 – Export Markets

7 – Executive Chairman’s Statement

12 – Profile of Directors

16 – Management

17 – Corporate Governance Statement

23 – Audit Committee Report

27 – Financial Statements

53 – List of Properties

54 – Analysis of Shareholdings

57 – Notice ofNominationof Auditors

58 – Notice of Annual General Meeting

Proxy Form

Page

9

corporate information

2 0 0 2 A N N U A L R E P O R T 2

Audit Committee

q Tan Sri Datuk (Dr)Arshad bin AyubChairman

q Dr. Lim Wee Chai

q Sekarajasekaran a/l Arasaratnam

q Quah Chin Chye

Company Secretary

q Chua Siew Chuan(MAICSA No: 0777689)

Registered Office

Level 22, Menara Milenium Jalan DamanlelaPusat Bandar Damansara Damansara Heights50490 Kuala Lumpur, Malaysiatel: 03–2095 7077fax: 03–2094 9940

Corporate Office

Lot 5091, Jalan TerataiBatu 5, Off Jalan Meru41050 Klang Selangor D. E., Malaysiatel: 03–3392 7880/7350fax: 03–3392 7229/9160e-mails: [email protected]

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

http://topglove.asiaep.com

Registrars

Securities Services (Holdings) Sdn BhdLevel 22, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur, Malaysiatel: 03–2095 7077fax: 03–2094 9940

Auditors

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

Principal Bankers

q Public Bank Berhad

q EON Bank Berhad

q HSBC Bank Malaysia Berhad

q Malayan Banking Berhad

Solicitors

q Soo Thien Ming & NashrahNo. 45–47, 1st FloorJalan Kapar, 41400 KlangSelangor D. E., Malaysia

q Michael Chen, Gan, Muzafar & Azwar

5th Floor, Bangkok Bank Building105, Jalan Tun H.S. Lee50000 Kuala Lumpur, Malaysia

q Ranjit, Ooi & Robert LowNo. 53, Jalan Maarof, Bangsar59000 Kuala Lumpur, Malaysia

Stock Exchange Listing

Kuala Lumpur Stock Exchange Main Board

Board of Directors

q Dr. Lim Wee ChaiChairman/Managing Director

q Tan Sri Datuk (Dr) Arshad bin AyubIndependent Non-Executive Director

q Tong Siew BeeExecutive Director

q Haji Shahadan bin Haji Abd ManasExecutive Director

q Lim Hooi SinNon-Executive Director

q Sekarajasekaran a/l ArasaratnamIndependent Non-Executive Director

q Lau Boon AnnNon-Executive Director

q Quah Chin ChyeIndependent Non-Executive Director

q Lee Kim MeowAlternate Director to Lim Hooi Sin

T O P G L O V E C O R P O R AT I O N B E R H A D

corporate structure

93

top glove

corporation bhd

100%TG Medical

Sdn Bhd(Factory 3)

100%Top Glove

Engineering Sdn Bhd

100%Great GloveSdn Bhd

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

100%Top Glove Sdn Bhd(Factory 1,2,4 and 5)

55%Top Glove

(Zhangjiagang)Co Ltd

(Factory 8)

60%Top Glove Medical

(Thailand) Co Ltd

(Factory 7)

74%Great Glove (Thailand)

Co Ltd(Factory 6)

financial year ended

31.8.1997 31.8.1998 31.8.1999 31.8.2000 31.8.2001 31.8.2002Group rm’000 rm’000 rm’000 rm’000 rm’000 rm’000

Turnover 35,453 48,493 70,198 103,161 138,862 180,202

Earnings Before Interest, 6,628 10,757 12,790 17,198 23,865 27,058Depreciation And Taxation

Profit Before Taxation 5,173 8,131 10,137 12,636 17,217 20,186

Taxation 882 1,059 313 1,012 1,312 2,213

Profit After Taxation And 4,291 7,072 9,824 11,624 15,902 18,059Minority Interests

Net Tangible Assets 13,749 20,797 30,228 41,849 93,170 109,137

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

Net Earnings Per Share (RM) 0.16 0.27 0.37 0.44 0.29 0.28

Gross Dividend Rate (%) 0.68 1.51 1.58 — 5.00 6.00

Net Dividend Rate (%) 0.49 1.08 1.58 — 5.00 4.32

Net Tangible Assets Per Share(RM) 0.52 0.78 1.14 1.57 1.86 1.68

2 0 0 2 A N N U A L R E P O R T

six-year group financial review

94

* * * *

* The figures for financial years ended 31 August 1997, 1998, 1999 and 2000 are prepared based on a proforma consolidated basis forillustrative purposes only, based on the assumption that the current structure of the Group has been in existence throughout the financialyears under review.

The number of shares for financial years 1997, 1998, 1999 and 2000 was based on the issued and paid-up share capital of 26,575,213ordinary shares before the rights issue and public issue. The number of shares used in the computation of earnings per share for 2001 hasbeen adjusted for the bonus issue of 15,000,000 ordinary shares during the year retrospectively.

T O P G L O V E C O R P O R AT I O N B E R H A D95

Since 1991

Since 1997

Since 1998

Since 1998

Since 1998

Since 1999

Since 1999

Since 2002

Since 1994

Since 1997

Since 1998

Since 1998

Since 1999

Since 1999

Since 2001

quality awards & certifications

TSETurkey

ISO9002Quality System

0120

Europe

InstytutLekow

Poland

SATRA0321

U.K.

Chairman/Managing Director ofTop Glove, Dr. Lim Wee Chaireceiving Enterprise 50 Awardfrom Minister of InternationalTrade and Industry, Datuk SeriRafidah Aziz.

2 0 0 2 A N N U A L R E P O R T

export markets

96

North

America

CanadaPuerto RicoUSA

Latin America

ArgentinaBoliviaBrazilChileColombiaCosta RicaDominican RepublicEcuadorEl SalvadorFrench GuyanaGuatemalaHaitiHondurasJamaicaMexicoNicaraguaPanamaParaguayPeruUruguayVenezuela

Africa

AlgeriaBurundiCongoEritreaEthiopiaGhanaIvory CoastKenyaLibyaMadagascarMoroccoMozambiqueNigeriaSierra LeoneSouth AfricaSudanSwazilandTanzaniaTunisiaUgandaZambiaZimbabwe

Export to 118 Countries Worldwide

Middle

East

BahrainEgyptIraqIsraelJordanKuwaitLebanonOmanQatarSaudi ArabiaSyriaUAEYemen

Europe

AlbaniaArmeniaBelgiumBosnia HerzegovinaBulgariaCanary IslandsCroatiaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGeorgiaGermanyGreeceHungaryIcelandIrelandItalyKazakhstanKosovoLatviaLithuania

Macedonia,FYRNetherlandsNorthern IrelandPolandPortugal Republic of UzbekistanRomaniaRussiaSloveniaSpainSwedenTurkeyUkraineUnited Kingdom

Asia

Pacific

ArmeniaAustraliaBangladeshBruneiCambodiaChinaHong KongIndiaIndonesiaJapanKazashtanKoreaMauritiusNepalNew ZealandPakistanPapua New GuineaSingaporeTaiwanUnion of MyanmarVietnam

“This year, we emphasised onadopting various approaches andstrategies in strengthening theCompany. With our diversifiedmarketing strategies andinnovation from our R & Ddepartment, the Group registereda steady growth in terms of salesrevenue and profits.”

dr. lim wee chai

executive chairman

Dear Valued Shareholders,

a brief overview

Carrying on with our philosophy and commitment of continuingexcellence, we have once again, in the year 2002, achieved our financialforecast. Indeed, it was a very eventful year for the Top Glove Group ofCompanies. This year, we emphasised on adopting various approaches andstrategies in strengthening the Company. With our diversified marketing strategies andinnovation from our R & D department, the Groupregistered a steady growth in terms of sales revenueand profits. We are confident ofaccomplishing more in theyears ahead of us and weare very excited inachieving anddelivering long-termvalue to our valuedshareholders andcustomers.

executive chairman’s statement


A Letter to our Valued Shareholders and Customers from Dr. Lim Wee Chai, Executive Chairman

On behalf of the Board of Directors, Management and

staff, I now present to you our Annual Report and

Audited Financial Statements of Top Glove Corporation

Berhad and its Group of Companies for the financial year

ended 31 August 2002.

financial strength and performance

In aggregate, the Group delivered fine results in financial year 2002. The Group’s sales revenue for thefinancial year ended 31 August 2002 was rm180.202 million, compared to rm138.862 million recorded infinancial year 2001, representing a steady growth of 29.80%. One of the main contributor to the growthwas the commissioning of value added products such as online powder-free gloves. On 16 May 2002, TopGlove was promoted from the 2nd Board to the Main Board on the Kuala Lumpur Stock Exchange (KLSE),all within a short period of time (within 1 year and 2 months). This is made possible only through theenhanced quality control, higher cost effectiveness and productivity programmes being implemented inall the subsidiary companies.

We also continue to benefit as a result of the economies of scales from our existing five (5) factoriesin Malaysia and one (1) factory in Thailand respectively. We have posted positive and higher profit aftertax figures of rm18.059 million for the year as compared to rm15.902 million in the last fiscal year.

The growth in sales revenue and profitability achieved during the year was within the Company’sexpectation after taking into consideration the prevailing market conditions.

2 0 0 2 A N N U A L R E P O R T98

executive chairman’s statement (cont’d)

Nitrile Glove Surgical Glove PowderedExamination Glove


dividend

The Board is pleased to propose a first and final dividend of 6% (less 28% tax) per share for the financialyear ended 31 August 2002. The proposed final dividend is subject to the approval of the shareholders in theforthcoming Annual General Meeting.

During the current financial year, the second and final dividend of 3% (tax exempt) amounting torm1,500,000 in respect of the previous financial year ended 31 August 2001, which has been dealt with inthe previous directors’ report, was paid on 1 March 2002.

future and prospects

In March 2002, the Group entered into a joint venture (JV) agreement to set upa new high-tech glove-manufacturing complex in Hadyaai, Thailand. Thisfactory can accommodate more than 48 production lines in its 18-acrepremises. The other remarkable and bold step that the Group undertookin May 2002 was when the Group announced the signing of a JVagreement that was being witnessed by Datuk Seri Rafidah Aziz to setup a modern and state-of-the-art factory complex in Zhangjiagang,Shanghai, China to produce PVC gloves. The said complex can take inmore than 32 production lines too. With the full completion of these two(2) factories, the Group will be a step closer to be the largest disposablelatex gloves manufacturer in the world. This special achievement reflects theGroup’s strength and continuous growth over the years.

As I have mentioned earlier, we operate very well with the close co-operation of our staff to work hand-in-hand with our business partners to create value added partnerships and deliver high quality premiumgloves to enrich and to protect human lives. With our right recipe of success and the best combination thatinfuse all the elements of the strategies that we have set forth in order to deliver values to our shareholdersin the year to come, we are very confident of moving ahead rapidly from now onwards.


Powder-freeExamination Glove

Household GlovesVinyl Glove

2 0 0 2 A N N U A L R E P O R T910

The Group’s future looks bright and promising as ever.We are confident that we will continue to excel in ourindustry. The Group is upbeat and positive about itsfuture growth by focusing on providing good qualityproducts at competitive prices coupled with the bestcustomer services possible. We want to become acomprehensive one-stop glove-sourcing centre to caterfor the ever-changing needs of our valued customers fromthe 118 countries worldwide.

Also, with the economies of scales from our efficient andmodern factories in Malaysia, Thailand and China, we willpass the savings to our customers to enable them to competeeffectively in their markets. In order to achieve the objective tobe a cost effective and efficient glove manufacturer, the Group willcontinue to eye for synergistic business opportunities in neighbouringcountries in the near future.

caring corporate citizen

The Group believes strongly in being a progressive and proactive corporate citizen and isconscious of its social responsibilities that can be best showcased as follows:• Designing and installing modern waste processing plants and facilities in our factories to

ensure that hazardous wastes are being properly treated before discharging into the drains. Regular on-going research has been undertaken to improve the waste management system in line with theincreasing global awareness for environmental protection and preservation. Our organisation willcontinue to work closely with the authorities in meeting the standard requirements and regulations.

• The Group has introduced and implemented scholarship schemes for poor and needy students to assistthem in pursuing their further studies in colleges or universities. Upon completion of their studies, these

students will have the opportunity to be part of the happy Top Glove family.• Every year, the Group provides industrial and practical training to

university students to enable them to gain the necessary exposure thatis related to their fields of studies.

• The Group contributes and donates gloves to aid worthy andcharitable organisations like St. John Ambulance on a regularbasis.




911

words of thanks and appreciation

Last but not the least, we thank our employees fortheir dedication, commitment and loyalty to theCompany. Our special thanks also go to our shareholdersand customers for their confidence, trust and supportrendered to enable the Group to move ahead in its businessendeavors. We will not stop here but will continue with the highspirit in the quest for excellence to forge ahead to a higher level ofsuccess and growth. There is still much to be accomplished in this new millennium. We are mindful anddetermined that we will constantly challenge ourselves to improve our performance in the coming years byadopting our daily motto “Continuous Improvement and Innovation Are Our Duties.” We adopt a verypositive outlook of the future growth of the glove industry and we are forging ahead strongly to be theworld’s largest glove manufacturer and exporter to deliver high quality gloves to every corner of the worldto enrich and protect human lives.

Thank You.

dr. lim wee chai

Executive Chairman

Together We Stand United and Keep Reaching To The Top


dr. lim wee chai Chairman/Managing Director

Dr. Lim Wee Chai, a Malaysian aged 44, is the Chairman and Managing Director as well as founderof the Top Glove Group of Companies. He was appointed to the Board on 4 September 2000. Hegraduated with a Bachelor of Science Degree with Honours in Physics in 1982 from UniversityMalaya and a Master of Business Administration in 1985 from the Sul Ross State University in Texas,USA. He earned his Doctorate in Business Administration from Irish International University,London and awarded Fellow Membership of the Business Management Association, UK inSeptember 2001. Dr. Lim brings a wealth of experience in the marketing of consumer productswhilst he was the Sales Manager of a subsidiary company of OYL Industries Bhd, a company listed

on the Kuala Lumpur Stock Exchange. In 1991, he set up Top Glove Sdn Bhd, his own glove manufacturingand trading business with only one factory and has expanded his business to seven glove factories in 2002.He has more than 20 years of experience in the rubber and latex manufacturing business.

He was the President (1997/99) of the Malaysian Rubber Glove Manufacturers’ Association (MARGMA),after having been actively involved in the association holding various portfolios as the ex-Vice President, ex-Honorary Treasurer and ex-Honorary Secretary for the past seven years. He was a Board Member of theMalaysia Rubber Board (MRB) in 1998 and 1999, and is a Director of the Association of Malaysian MedicalIndustries (AMMI).His business philosophies are:• Quality and Productivity are Our Business.• Continuous Improvement and Innovation are Our Duties.• Towards Zero Defects is Our Target.

Dr. Lim Wee Chai does not have any major shareholdings and directorships in other public corporations for thepast two years.

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

tong siew bee Executive Director

Tong Siew Bee, a Malaysian aged 44, has been a Director of the Group since 1991 and is a co-founderof the Top Glove Group of Companies. She was appointed to the Board of Top Glove on 4 September2000. Madam Tong graduated from University Sains Malaysia in Penang with a Bachelor of ScienceDegree with Honours in Computer Science in 1983 and obtained her Master of Business Administrationfrom Sul Ross State University, Texas, USA in 1985. She is responsible for the computer and informationsystems, human resource and general administration for the Top Glove Group of Companies. She hasmore than ten years of experience in information technology in the banking industry. She was formerlyattached to United Overseas Bank Berhad and Utama Bank Berhad.

Tong Siew Bee does not have any major shareholdings and directorships in other public corporations for thepast two years.

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

profile of directors

2 0 0 2 A N N U A L R E P O R T913

ybhg tan sri datuk (dr) arshad bin ayub

Independent Non-Executive Director

Tan Sri Datuk (Dr) Arshad bin Ayub, a Malaysian aged 74, is an Independent Non-Executive Directorof the Top Glove Group. He was appointed to the Board on 4 September 2000. He obtained aDiploma in Agriculture from College of Agriculture, Serdang, Selangor in 1954 and a Bachelor ofScience (Hons) Economics and Statistics from University College of Wales, Aberystwyth, UnitedKingdom in 1958. In 1964, he obtained a postgraduate Diploma in Business Administration fromManagement Development Institute (IMEDE), Lausanne, Switzerland.

He had previously served as a member of numerous bodies in the fields of education,planning, finance, regional development, agriculture and science, and was the first Director of InstitutTeknologi Mara from 1965 to 1975. His extensive working experience which led to holding senior positionswith various Ministries in the Malaysian Government, from 1951 to 1983, including his appointment asDeputy Governor of Bank Negara Malaysia from 1975 to 1977, and Deputy Director General of EconomicPlanning Unit, Prime Minister’s Department. He served as Secretary-General Ministry of Land & RegionalDevelopment, Ministry of Agriculture and Primary Industries. Tan Sri Datuk (Dr) Arshad serves as Chairmanof Malaysia Rubber Export Promotion Council, President of Malaysia Rubber Products ManufacturersAssociation and a Board Member of Lembaga Getah Malaysia (LGM).

Tan Sri Datuk (Dr) Arshad is also a Director of Kulim Malaysia Bhd, Rumpun Hijau Capital Bhd, TomypakHoldings Bhd, Audrey International (M) Bhd, Sindora Bhd, KPJ Healthcare Bhd, Nationwide Courier ServicesBhd and Malayan Flour Mills Bhd. He is also a member of the University of Malaya, Cooperative College andKusza in Terengganu. He also sits on the board of Bata Sdn Bhd, PFM (Holdings) Sdn Bhd, Affin MerchantBank Bhd, CSR Building Materials Sdn Bhd and Nakagawa Rubber Industries Sdn Bhd.

haji shahadan bin haji abd manas Executive Director

Haji Shahadan bin Haji Abd Manas, PPT, PMC, PJK, a Malaysian aged 68, is the Human ResourceDirector who joined Top Glove Sdn Bhd on 10 June 1996, and was appointed to the Board of TopGlove on 4 September 2000. He graduated with a Bachelor of Arts from University Malaya in 1962and obtained his Diploma in Public Administration (Australia) in 1968.

He commenced his career in the Government Sector, as Assistant Secretary (Admin) in theMinistry of Works, Posts & Telekom from 1963 to 1966, Assistant Secretary (Finance) in theMinistry of National & Rural Development from 1967 to 1969. He served as District Officer andPresident of the District Councils of Rembau, Tampin and Port Dickson consecutively from 1970

to 1979. From 1980 to 1985, he was the Director General of the Department of CommunityDevelopment in the Ministry of National & Rural Development. He was the Director of LandAdministration and Management from 1986 to 1990. In 1991, he left to join a Dutch constructioncompany, namely Ballast Nedam (M) Sdn Bhd, as the Public Affairs Advisor until 1995. In 1996, he joinedTop Glove Sdn Bhd as its Group Human Resource Director.

Haji Shahadan bin Haji Abd Manas does not have any major shareholdings and directorships in otherpublic corporations for the past two years.

profile of directors (cont’d)


lim hooi sin Non-Executive Director

Lim Hooi Sin, a Malaysian aged 40, has been appointed to the Board of Top Glove since 4 September 2000.With TG Medical USA Inc., he serves as Vice President since April 2001 and as a Director since it founded in1994. He obtained a Bachelor of Science Degree in Management Science from Oklahoma State University, USAin 1985, a Master of Business Administration Degree from Arizona State University, USA in 1986 and aCharter Financial Consultant Diploma from American College, PA, USA in 1990. He is a resident of UnitedStates and has spent 14 years of his career with MetLife Financial Services (one of the largest insurance &financial services company in the US). He was a Management Trainee, Associate Branch Manager, Regional

Marketing Specialist, Agency Director and Director of Asian Market. His experience includes productdevelopment, marketing, recruiting, training and supervision of a large highly productive sales force.

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

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

sekarajasekaran a/l arasaratnam Independent Non-Executive Director

Sekarajasekaran a/l Arasaratnam, K.M.N., a Malaysian aged 74, is an Independent Non-ExecutiveDirector of Top Glove and was appointed on 4 September 2000. He graduated from the TechnicalCollege of Kuala Lumpur with a Diploma in Civil Engineering in 1951 and passed the MembershipExamination of the Institute of Civil Engineers, U.K. in 1960. Subsequently, he obtained hisDiploma in Public Health Engineering from the Imperial College of Science & Technology, U.K. in1968. From 1951, he was with the Public Works Department as the Technical Assistant ofWaterworks until 1959, thereafter as Assistant Resident Engineer, Executive Engineer andWaterworks Engineer from 1960 to 1966.

In 1968, he joined the Ministry of Health as a Senior Public Health Engineer. He was promoted to ChiefPublic Health Engineer in 1972 and Director of Engineering Services in 1980, a position he held until 1983.He is currently the President of Enrico Sdn Bhd, a company active in various environmental engineeringprojects. He has more than 45 years of work experience in environmental engineering, environmentalrelated studies, design and implementation of environmental engineering projects.

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

Sekarajasekaran a/l Arasaratnam does not have any major shareholdings and directorships in other publiccorporations for the past two years.


2 0 0 2 A N N U A L R E P O R T915

lau boon ann Non-Executive Director

Lau Boon Ann, a Malaysian aged 47, is a Non-Executive Director of Top Glove and was appointed on4 September 2000. He obtained Diplomas in Administrative Management, Organisation andMethods, and Marketing from United Kingdom in 1979 before proceeding with his post GraduateDiploma in Management studies. In 1981, he obtained a Master in Business Analysis from LancasterUniversity, United Kingdom. He commenced his career as a Corporate Planner with Kesang HoldingBhd, a private investment holding company, in 1981 when he returned from U.K. and subsequentlyjoined SGV Kassim Chan Sdn Bhd as a Management Consultant in 1982. In 1983, he joined Sungei

Wang Sdn Bhd as Operations Manager. He left and joined Plaza Damansara Sdn Bhd in 1985 asMarketing Manager. In August 1988, he was in charge of setting up Top Glove’s Factory 1 for the productionof latex examination gloves which was subsequently leased to Top Glove Sdn Bhd. He returned to propertydevelopment with Arab Malaysian Development Bhd in 1990 and served as an Assistant General Manager. Heleft in December 1996. He is presently involved in the real estate and property development sector.

Lau Boon Ann does not have any major shareholdings and directorships in other public corporations for thepast two years.

quah chin chye Independent Non-Executive Director

Quah Chin Chye, a Malaysian aged 48, is an Independent Non-Executive Director of Top Glove. He wasappointed to the Board on 28 December 2001. He is a fellow of the Chartered Institute of ManagementAccountants (CIMA), United Kingdom and a member of Malaysian Institute of Accountants. He is also amember of the Chartered Institute of Marketing, United Kingdom. He has wide experience, having workedwith both American and British multi-national corporations for more than ten years holding various seniormanagement positions. Currently, he is also a Director in Techventure Bhd, a listed company on the KLSE.Prior to this, he was with another diversified group listed on the KLSE Main Board for about six years.

Save as disclosed above, Quah Chin Chye does not have any major shareholdings and directorshipsin other public corporations for the past two years.

lee kim meow Alternate Director

Lee Kim Meow, a Malaysian aged 43, was appointed on 5 January 2002 as an Alternate Director toLim Hooi Sin. He obtained his Bachelor of Commerce Degree from the University of New SouthWales, Australia in 1982. In 1983, he joined OCBC Finance Bhd, the finance subsidiary of OCBC BankBhd as Trainee Bank Officer. In 1991, he obtained his Bachelor of Law Degree from the University ofLondon (External Degree). He has more than twelve years of experience in the marketing of financialservices and credit control operations in the finance industry during his employment with OCBCFinance Bhd and Asia Commercial Finance Bhd. He was Branch Manager at Asia Commercial Finance

(M) Bhd in early 1996 before he was promoted to Personal Assistant to the Group Executive Directorof the Lion Group. He left in 1997 to join Top Glove as the General Manager in charge of the marketing andpromotion of the company’s products to more than 118 countries world-wide.

Lee Kim Meow does not have any major shareholdings and directorships in other public corporations for thepast two years.

Note: None of the Directors has any conviction for offenses, other than traffic offenses, within the past ten years.None of the Directors has any conflict of interest with the Company.



management

91616

directors

Dr. Lim Wee Chai Madam Tong Siew Bee Hj Shahadan bin Hj Abd. Manas(Managing Director) (Executive Director) (Executive Director)

Lim Hooi Sin KM Lee(Director) (Alternate Director/GM, Marketing)

general managers

HH Lee YT Chong Lim Mong Seng(Operations) (Manufacturing) (Financial Controller)

managers

Ken Soo Lim Quee Choo Chew Yoke Moi(Corporate & Business (Vice President – USA Office) (Operations Manager)Development Consultant)

Puon Tuck Seng Audie Seow Philip Thomas(Factory Manager) (Production & Packaging Manager) (Plant Manager)

KK Lim Nagappen a/l Kumarasamy Tony Yee Sin Kin(Maintenance Manager) (Human Resource Manager) (Technical Manager)

Noor Akilah Saidin Dorothy Ressel Noraziah bte Mahmud(Quality Assurance Manager) (Marketing Manager – USA Office) (Manager, Marketing &

Production Schedule)

Jeff Lee Terence Lee Kenny Lim Song Tzer(Senior Marketing Manager) (Business Development Manager) (Marketing/Operations Manager)

Wong Chong Ban Lew Sin Chiang Wendy Yeoh(Assistant Manager – (Asst. Manager – Manufacturing) (Asst. Manager – Marketing)R&D & Chlorination)

Edwyn Poon Jimmy Ong Peng Jin(Asst. Manager – Marketing) (Asst. Manager – Marketing/Operations)


corporate governance statement

179

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

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

The Board of Directors recognises the importance of the role of good corporate governance in assisting the Company to achieveits corporate mission and in enhancing its shareholders’ value. Thus, the Board of Directors is committed to ensure that thecorporate governance adopted by the Company is in line with the principles set out in Part 1 of the Malaysian Code on CorporateGovernance (“the Code”) to the Company’s particular circumstances. The Board further acknowledges the recommended bestpractices as set out in Part 2 of the Code and continues to evaluate the status of the practices and the adopted alternatives.

the board of directors

Top Glove is led by an experienced Board comprising members who are specialised in the glove manufacturing and variousbusiness sectors supported by a wide range of other professionals in the legal and accounting sectors. This wide spectrum ofskills and experience provide the strength that is needed to lead the Company to meet its objectives and enable theCompany to rest in the firm control of an accountable and competent Board of Directors.

The Board currently comprises eight (8) members: three (3) executive directors including the Chairman/ ManagingDirector, three (3) independent non-executive directors and two (2) non-executives directors. The composition reflects abalance of executive directors and non-executive directors (including independent non-executive directors) such that noindividual or small group of individuals can dominate the board’s decision making. A brief description of the background ofeach Director is presented on pages 12 to 15.

The Board meets quarterly to review its quarterly performances and discuss new policies and strategies. Additionalmeetings will be called as and when necessary. During the year ended 31 August 2002, four Board Meetings were held andthe attendance of Board members are as follows:

Name of Director No. of Meetings Attended

Dr. Lim Wee Chai 4/4Tan Sri Datuk (Dr) Arshad bin Ayub 4/4Tong Siew Bee 4/4Haji Shahadan bin Hj Abd Manas 4/4Lim Hooi Sin 1/4Sekarajasekaran a/l Arasaratnam 4/4Lau Boon Ann 4/4Quah Chin Chye (appointed 28 Dec 2001) 3/4Lee Kim Meow (Alternate Director to 3/4

Lim Hooi Sin, appointed 5 Jan 2002)

All of the above meetings were held in the Company’s Board Room at Lot 5091, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang, Selangor, Malaysia.

All the Board members have attended the Mandatory Accreditation Programme conducted by the Research Institute ofInvestment Analysts Malaysia. It is the Company’s intention that each new director is given a comprehensive briefing on theCompany’s history, operations, financial control system and plant visit to enable them to have first hand understanding ofthe Company’s operation. This orientation programme has been implemented since 31 December 2001.

Clear demarcation of duties, responsibilities and authority are being practised by the Board. The position of Chairman andManaging Director is held by Dr. Lim Wee Chai. The Chairman/Managing Director is primarily responsible for the orderlyconduct of the board meeting and working of the Board. The Chairman/Managing Director, assisted by the Executive Directoris subject to the control of the Board and is responsible for the implementation of Board policies, making operational decisionsand monitoring the day to day running of the business. He also defines the limits of the management’s responsibilities. TheExecutive Director is responsible for the day to day operations of the Group whereby operational issues and problems arediscussed, major transactions and matters relating to the Group are reviewed and also to formulate operational strategies.

92 0 0 2 A N N U A L R E P O R T 18

corporate governance statement (cont’d)

the board of directors (cont’d)

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

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

Directors standing for re-election at the Annual General Meeting of the Company to be held are Lim Hooi Sin, Lau Boon Ann,Quah Chin Chye, Tan Sri Datuk (Dr) Arshad bin Ayub and Sekarajasekaran a/l Arasaratnam.

The Board has delegated certain responsibilities to several Board Committees which operate within clearly defined termsof reference. The Chairman of the various committees will report to the Board the outcome of the committee meetings andsuch reports are incorporated in the minutes of the Board meeting. The various committees are:

Audit Committee

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

The Board shall review the term of office and performance of the audit committee and each of its members once at leastevery three (3) years to determine whether such audit committee and members have carried out their duties in accordancewith their terms of reference.

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

Nomination Committee

The committee was established on 7 November 2001. Its role is to assist the Board of Directors in their responsibilities innominating new nominees to the Board of Directors. The Nomination Committee shall also assess the performance of theDirectors of the Company on an on-going basis. The members of the Nomination Committee are as follows:(a) Tan Sri Datuk (Dr) Arshad bin Ayub (Independent Non-Executive Director) – Chairman(b) Lau Boon Ann (Non-Executive Director)(c) Sekarajasekaran a/l Arasaratnam (Independent Non-Executive Director)(d) Qauh Chin Chye (Independent Non-Executive Director)

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

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

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

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

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

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

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



919

the board of directors (cont’d)

Remuneration Committee

The Committee was established on 7 November 2001. Its role is to assist the Board of Directors in their responsibilities inassessing the remuneration packages of the executive directors. The members of the Remuneration Committee are as follows:(a) Dr. Lim Wee Chai (Chairman and Managing Director) – Chairman(b) Sekarajasekaran a/l Arasaratnam (Independent Non-Executive Director)(c) Lau Boon Ann (Non-Executive Director)

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

• To review and assess the remuneration packages of the executive directors in all forms, with or without otherindependent professional advice or other outside advice.

• To ensure the levels of remuneration be sufficiently attractive and be able to retain directors needed to run the Companysuccessfully.

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

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

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

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

Directors’ Remuneration

1) Aggregate remuneration of Directors categorised into appropriate components are as follows:Salaries Fees Bonus Benefits in-kind Totalrm’000 rm’000 rm’000 rm’000 rm’000

Executive Directors 786 80 0 32 898Non-Executive Directors 86 130 0 0 216

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

Range of Remuneration Executive Non-ExecutiveBelow rm50,000 0 4rm100,001 to rm150,000 2 1rm600,001 to rm650,000 1 0

supply of information to the board

All Directors are provided with an agenda of the meeting and board papers which contain Company’s financial performance,business outlook, various committees’ reports and disclosures by Directors of their interest in shares and their interest incontracts, properties and offices pursuant to S135 and S131 of the Companies Act, 1965 respectively prior to the Board meeting.The board papers are issued in advance to facilitate informed decision-making. The Managing Director will lead the presentationof board papers and provide comprehensive explanations of pertinent issues. Any proposals and recommendations by themanagement will be deliberated and discussed by the Board before a decision is made. Minutes are prepared on all boardproceedings and will be signed by the Chairman of the meeting in accordance with the provision of S156 of the Companies Act,1965. The Board is kept updated on the Company’s financial activities and operations on a regular basis.

The Directors are also notified of any corporate announcement released to the KLSE and the impending restriction indealing with the securities of the Company prior to the announcement of the quarterly financial results.

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

92 0 0 2 A N N U A L R E P O R T 20


relationship with the shareholders

The Company views the timely and equal dissemination of information to shareholders and stakeholders as important. Itstrictly adheres to the disclosure requirements of the KLSE. The Company is cautious not to provide undisclosed materialinformation about the Company to any shareholder or shareholder group.

In addition to the various announcements made during the year, the timely release of financial results on a quarterly basisin line with the Kuala Lumpur Stock Exchange (KLSE) requirements, the Company provides shareholders with an overview ofthe Company’s performance and progress. During the year, the Executive Directors and senior management had regulardialogues and meetings with institutional investors, fund managers, analysts, research houses and members of the pressmedia to brief them and to keep them updated on the various announcements relating to the Company’s financialperformance, major corporate proposals and pertinent issues within the disclosure requirements of the KLSE.

The AGM is an important forum where communications with shareholders can be effectively conducted. Shareholders arenotified of the meeting together with a copy of the Company’s Annual Report at least 21 days before the meeting. At eachAGM, shareholders are given ample time and opportunity to ask for more information, without limiting the type of questionsasked, prior to seeking approval by show of hands from the members and proxies on the audited financial statements. Duringthe meeting, the Chairman and the Board members are prepared to respond to all queries and undertake to provide sufficientclarification on issues and concerns raised by the shareholders. The external auditors are also present to provide theirprofessional and independent clarification on issues and concerns raised by the shareholders. Status of all resolutionsproposed at the AGM are submitted to KLSE at the end of the meeting day. The Board has ensured that each item of specialbusiness included in the notice of the annual or extraordinary general meeting are accompanied by a full explanation of theeffects of a proposed resolution.

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

The Company also maintain two websites at www.topglove.com.my and http://topglove.asiaep.com from whichshareholders and stakeholders can access for information.

accountability and audit

Financial Reporting

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

The Directors are responsible to ensure that financial statements are drawn up in accordance with the provisions of theCompanies Act, 1965 and applicable approved accounting standards in Malaysia. In presenting the financial statements, theCompany has used appropriate accounting policies, consistently applied and supported by reasonable and prudentjudgements and estimates and prepared on a going concern basis. The directors also strive to ensure that financial reportingpresent a balanced and understandable assessment of the Company’s position and prospects.

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



921

accountability and audit (cont’d)

Internal Control

Internal control mechanism is embedded in the various work processes and procedures at appropriate levels in the Company.The Managing Director is responsible in ensuring the existence and effectiveness of internal control through the works ofroutine checking, reporting, proper delegation of authorisation and approval system in the Company. In developing theinternal control system, consideration is given to overall control environment of the Company, assessment of both operationaland financial risks and effective monitoring mechanism. In monitoring the internal control system by the management of theCompany, emphasis is placed not only on financial controls but operational and compliance controls as well.

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

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

The Company has not set up an Internal Audit Department. However, with the established framework of internal controlprocedures in the Company which are subject to regular reviews and improvements, the Company deems the internal controlto be sufficient. The Company will continue to take measures to strengthen the internal control environment.

To assist the Board in fulfilling this role, the Audit Committee in its advisory capacity is established with specific terms ofreference which include the overseeing and monitoring of the Company’s financial reporting system and the internal controlprocedures and external audit processes.

Whilst the Board also reviews the key business and financial risks facing the Company, there is also a dedicatedmanagement team in the Company to review and monitor risks in relation to credit and to make appropriaterecommendations thereto. The management of the Company holds regular weekly Management Meetings and alsoManagement Review Meetings on a half-yearly basis to look into the identification, assessment, controlling and reviewing ofpotential principal risks to the Group.

Relationship with the Auditors

The external auditors, Messrs. Arthur Andersen & Co and Messrs. William C.H. Tan & Associates have continued to report tomembers of the Company on their findings which are included as part of the Company’s statutory financial statements. TheCompany has thus established a transparent arrangement with the auditors to meet auditors’ professional requirements.From time to time, the auditors highlight to the Audit Committee and Board of Directors on matters that require Board’sattention through the issuance of management letters.

utilisation of proceeds from initial public offer

Following its Initial Public Offer in March 2001, the Company has raised gross proceeds amounting to rm38.738 million. As at31 August 2002, rm24.361 million were used to repay bank borrowings, rm4.800 million for purchase of plant and machinery,rm1.344 million for IT and office equipment, rm1.472 million for listing expenses and rm6.537 million for working capital. Theunutilised amount of rm0.224 million was being kept in short term fixed deposits for the time being and will be used asplanned in the listing proposal.

92 0 0 2 A N N U A L R E P O R T 22


recurrent related party transactions

Save as follows, there are no transactions of the Company which involve the Directors or substantial shareholders of theCompany during the financial year ended 31 August 2002:

Related party: Titi Latex Sdn Bhd

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

Interested party: Dr Lim Wee Chai

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

Value of transactions: rm4,801,880.00

The Directors confirmed that the recurrent transactions were conducted at arm’s length on commercial terms based onprevailing market prices which are not more favourable to the Related Parties than those extended to the general public andare not to the detriment of the minority shareholders.

other compliance information

1. Share BuybackDuring the financial year, there were no share buyback by the Company.

2. American Depository Receipt (ADR) Or Global Depository Receipt (GDR) ProgrammesDuring the financial year, the Company did not sponsor any ADR or GDR programmes.

3. Imposition Of Sanctions And/Or PenaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by therelevant regulatory bodies.

4. Non-Audit FeesNo non-audit fees was paid to the external auditors during the year.

5. Variation In ResultsThere was no material variance between the results of the financial year and the unaudited results previously announced.The Company did not make any release on the profit estimate, forecast or projections for the financial year.

6. Profit GuaranteesDuring the financial year, there were no profit guarantees given by the Company.

7. Material ContractsDuring the financial year, there were no material contracts of the Company and its subsidiaries involving Directors’ andmajor shareholders’ interests.

8. Contracts Relating To LoansThere were no material contracts relating to loans by the Company involving Directors and major shareholders.

9. Options, Warrants or Convertible SecuritiesDuring the financial year, no options, warrants or convertible securities were issued by Company.

10. Revaluation of Landed PropertiesThe Company does not have a revaluation policy on landed properties.


audit committee report

923

TERMS OF REFERENCE OF AUDIT COMMITTEE

1. membership

Members Designation

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

(b) Dr. Lim Wee Chai Executive Director

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

(d) Quah Chin Chye Independent Non-Executive Director(appointed on 28 Dec 2001)

2. composition of members

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

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

At least one member of the Audit Committee must be:

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

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

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

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

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

Retirement and resignation

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

3. chairman

The Chairman of the Audit Committee, elected from amongst the Audit Committee members, shall be an independentdirector. The Chairman of the Committee shall be approved by the Board of Directors.

92 0 0 2 A N N U A L R E P O R T 24

audit committee report (cont’d)

4. secretary

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

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

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

5. meetings

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

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

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

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

Minutes of each meeting shall be kept and distributed to each member of the Audit Committee and also to the othermembers of the Board of Directors. The Audit Committee Chairman shall report on each meeting to the Board of Directors.

6. quorum

The quorum for the Audit Committee meeting shall be the majority of members present whom must be independentdirectors.

7. reporting

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

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

8. objectives

The principal objectives of the Audit Committee is to assist the Board of Directors in discharging its statutory duties andresponsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries. Inaddition, the Audit Committee shall:

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

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

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

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



925

9. authority

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

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

(b) have full and unlimited/unrestricted access to all information and documents/resources which are required to performits duties as well as to the internal and external auditors and senior management of the Company and Group.

(c) obtain, at the expense of the Company, other independent professional advice or other advice and to secure theattendance of outsiders with relevant experience and expertise if it considers necessary.

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

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

10. duties and responsibilities

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

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

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

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

• To evaluate the quality of external auditors and make recommendations concerning their appointment and remunerationand to consider the nomination of a person or persons as external auditors;

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

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

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

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

• To report its findings on the financial and management performance, and other material matters to the Board ofDirectors;

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

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

92 0 0 2 A N N U A L R E P O R T 26


11. summary of activities

The Audit Committee has discharged its duties as set out in its Terms of Reference. The major areas reviewed by the Audit Committee are as follows:

a) Review of Quarterly Reports and the Annual Report to ensure adherence to legal and regulatory reportingrequirements and appropriate resolution of all accounting matters requiring significant judgement.

b) Review and deliberation of significant risk areas, internal control and financial matters coming to the attention ofthe external auditors in the course of their work.

c) Related party transactions which are required to be transacted at an arm’s length basis and are not detrimental tothe interests of minority shareholders.

d) Emerging financial reporting issues pursuant to the introduction of new accounting standards and additionalstatutory/regulatory disclosure requirements.

e) Best Board practices for meeting market expectations and protecting shareholders’ interests that were highlightedby the External Auditors.

f) Measures being taken to fortify the existing risk assessment and management processes.

MEETINGS AND ATTENDANCE OF AUDIT COMMITTEE

The Members of Audit Committee met five times during the financial year ended 31 August 2002.

Members No. of Meetings Attended

(a) Dr. Lim Wee Chai 5/5

(b) Tan Sri Datuk (Dr) Arshad bin Ayub 5/5

(c) Sekarajasekaran a/l Arasaratnam 5/5

(c) Quah Chin Chye 4/5(appointed on 28 Dec 2001)

26


28 – Directors’ Report

32 – Statement by Directors

32 – Statutory Declaration

33 – Auditors’ Report

34 – Balance Sheets

35 – Income Statements

36 – Statements of Changes in Equity

37 – Cash Flow Statements

39 – Notes to the Financial Statements

TOP GLOVECORPORATION

BERHAD

financial statements

Page

92 0 0 2 A N N U A L R E P O R T 28

directors’ report

The directors hereby submit their report together with the audited financial statements of the Group and the Company for the financial year ended31 August 2002.

PRINCIPAL ACTIVITIES

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

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

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

RESULTS

GROUP COMPANYRM RM

Net profit for the year 18,059,406 11,394,249____________ ____________DIVIDENDS

The amount of dividend paid by the Company since 31 August 2001 was as follows:

RM

In respect of the financial year ended 31 August 2001:Final tax exempt dividend of 3% paid on 1 March 2002 1,500,000____________

At the forthcoming Annual General Meeting, a first and final dividend in respect of the current financial year ended 31 August 2002 of 6% on65,000,000 ordinary shares less 28% taxation amounting to a total dividend of RM2,808,000 (4.32 sen per share) will be proposed for shareholdersapproval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders,will be accounted for in shareholders’ equity as an appropriation of retained profits in the next financial year ending 31 August 2003.

RESERVES AND PROVISIONS

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

BAD AND DOUBTFUL DEBTS

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

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

929 T O P G L O V E C O R P O R AT I O N B E R H A D

directors’ report (cont’d)

CURRENT ASSETS

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

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

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

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

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

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

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

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements ofthe Group or the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and the Company during the financial year were not, in the opinion of the directors, substantially affectedby any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a materialand unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group or the Company for thefinancial year in which this report is made.

SIGNIFICANT EVENTS

The significant events during the financial year are as disclosed in Note 4(b) to the financial statements.

92 0 0 2 A N N U A L R E P O R T 30


SHARE CAPITAL

During the financial year, the Company increased its:

(a) authorised share capital from RM50,000,000 to RM100,000,000 through the creation of 50,000,000 ordinary shares of RM1 each; and

(b) issued and paid-up share capital from RM50,000,000 to RM65,000,000 by way of the issuance of 15,000,000 ordinary shares of RM1 eachvia bonus issue on the basis of 3 new ordinary shares of RM1 each for every 10 existing ordinary shares of RM1 each held in the Company,by way of capitalisation of Retained Profits Account. These bonus shares were listed on 5 April 2002.

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

On 26 August 2002, the Company announced the proposed bonus issue of 26,000,000 new ordinary shares of RM1 each in the Company on thebasis of 2 new ordinary shares for every 5 existing ordinary shares held. In addition, the Company has also announced the proposed EmployeeShare Option Scheme (“ESOS”) of up to 10% of its issued and paid up share capital.

The above proposals are subject to the Shareholders’, Securities Commission’s and Kuala Lumpur Stock Exchange’s approval.

On 10 October 2002, the Company announced the proposed Share Buy Back of up to 10% of its issued and paid up share capital. The said proposalis conditional upon the shareholders’ approval.

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

To accommodate the proposed Bonus Issue and ESOS, the Company also proposed an increase in authorised share capital from 100,000,000ordinary shares to 200,000,000 ordinary shares by the creation of 100,000,000 new ordinary shares of RM1 each.

DIRECTORS

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

Dr. Lim Wee ChaiTan Sri Datuk (Dr) Arshad bin AyubTong Siew BeeHaji Shahadan bin Haji Abd ManasLim Hooi SinSekarajasekaran a/l ArasaratnamLau Boon AnnQuah Chin Chye (appointed on 28 December 2001)Lee Kim Meow (altenate to Lim Hooi Sin — appointed on 5 January 2002)

DIRECTORS’ BENEFITS

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

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



DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Companyand its related corporations during the financial year were as follows:

NUMBER OF ORDINARY SHARES OF RM1 EACH1 SEPTEMBER

2001/DATE BONUS 31 AUGUSTOF APPOINTMENT ISSUE BOUGHT SOLD 2002

Dr. Lim Wee Chai— direct 14,685,813 4,405,743 — — 19,091,556— indirect 8,611,178 2,583,359 — — 11,194,537Tan Sri Datuk (Dr) Arshad bin Ayub 1,875,000 444,600 — 393,000 1,926,600Tong Siew Bee— direct 913,242 273,971 — — 1,187,213— indirect 22,383,749 6,715,131 — — 29,098,880Haji Shahadan bin Haji Abd Manas 410,000 123,000 — 520,000 13,000Lim Hooi Sin— direct 1,395,366 418,609 — — 1,813,975— indirect 21,901,625 6,570,493 — — 28,472,118Sekarajasekaran a/l Arasaratnam 2,073,731 622,119 — — 2,695,850Lau Boon Ann 10,000 3,000 — — 13,000Quah Chin Chye — — — — —Lee Kim Meow 195,883 64,764 20,000 — 280,647

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

AUDITORS

Our auditors, Arthur Andersen & Co. retire and do not seek re-appointment. A resolution to appoint Ernst & Young will be proposed at theforthcoming Annual General Meeting.

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

DR. LIM WEE CHAI

QUAH CHIN CHYE

Klang6 November 2002

92 0 0 2 A N N U A L R E P O R T 32

statement by directors

statutory declaration

We, DR. LIM WEE CHAI and QUAH CHIN CHYE, being two of the directors of TOP GLOVE CORPORATION BHD, do hereby state that, in the opinionof the directors, the financial statements set out on pages 34 to 52 give a true and fair view of the state of affairs of the Group and the Companyas at 31 August 2002 and of their results and their cash flows for the year then ended and have been properly drawn up in accordance with theprovisions of Companies Act 1965 and applicable approved accounting standards in Malaysia.

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

DR. LIM WEE CHAI

QUAH CHIN CHYE

Klang6 November 2002

I, QUAH CHIN CHYE, the director primarily responsible for the financial management of TOP GLOVE CORPORATION BHD, do solemnly and sincerelydeclare that the financial statements set out on pages 34 to 52 are, to the best of my knowledge and belief, correct, and I make this solemndeclaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared )by the abovenamed QUAH CHIN CHYE )

QUAH CHIN CHYEat Klang in the State of Selangor )on 6 November 2002 )

Before me:

RAHMAH HJ. ISMAILCommissioner for OathsKlang


auditors’ reportTO THE SHAREHOLDERS OF TOP GLOVE CORPORATION BHD

We have audited the financial statements set out on pages 34 to 52. These financial statements are the responsibility of the Company’s directors.Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

In our opinion:

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

(i) the state of affairs of the Group and the Company as at 31 August 2002 and of their results and their cash flows for the year then ended;and

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

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

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

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

The auditor’s reports on the financial statements of the subsidiaries were not subject to any qualification and in respect of subsidiariesincorporated in Malaysia, did not include any comment made under subsection (3) of Section 174 of the Act.

ARTHUR ANDERSEN & CO.No. AF 0103Chartered Accountants

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

Melaka6 November 2002

92 0 0 2 A N N U A L R E P O R T 34

balance sheetsAS AT 31 AUGUST 2002

GROUP COMPANY2002 2001 2002 2001

NOTE RM RM RM RM

NON-CURRENT ASSETSProperty, plant and equipment 3 86,273,929 71,443,524 — —Subsidiaries 4 — — 25,975,213 25,975,213Other investment 5 15,300 15,300 — —Due from a subsidiary 6 — — 48,001,941 43,893,717____________ ____________ ____________ ____________

86,289,229 71,458,824 73,977,154 69,868,930____________ ____________ ____________ ____________

CURRENT ASSETSInventories 7 27,007,673 23,025,816 — —Other receivables 8 4,323,896 1,297,067 17,374,506 11,779,849Trade receivables 28,290,008 23,327,756 — —Cash and bank balances 9 16,906,977 9,824,335 7,935 8,594____________ ____________ ____________ ____________

76,528,554 57,474,974 17,382,441 11,788,443____________ ____________ ____________ ____________

CURRENT LIABILITIESShort term borrowings 10 7,735,339 8,398,308 — —Trade payables 22,962,757 11,267,168 — —Other payables 10,707,642 7,757,716 225,000 191,187Taxation 323,749 726,245 — —____________ ____________ ____________ ____________

41,729,487 28,149,437 225,000 191,187____________ ____________ ____________ ____________NET CURRENT ASSETS 34,799,067 29,325,537 17,157,441 11,597,256____________ ____________ ____________ ____________

121,088,296 100,784,361 91,134,595 81,466,186____________ ____________ ____________ ____________FINANCED BY:Share capital 11 65,000,000 50,000,000 65,000,000 50,000,000Reserves 44,136,602 43,170,391 26,134,595 31,466,186____________ ____________ ____________ ____________Shareholders’ equity 109,136,602 93,170,391 91,134,595 81,466,186Minority interests 3,548,163 320,824 — —____________ ____________ ____________ ____________

112,684,765 93,491,215 91,134,595 81,466,186____________ ____________ ____________ ____________

Hire purchase payables 12 138,490 305,706 — —Term loans 13 5,562,041 5,254,440 — —Deferred taxation 14 2,703,000 1,733,000 — —____________ ____________ ____________ ____________Non-current liabilities 8,403,531 7,293,146 — —____________ ____________ ____________ ____________

121,088,296 100,784,361 91,134,595 81,466,186____________ ____________ ____________ ____________

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


income statementsFOR THE YEAR ENDED 31 AUGUST 2002

GROUP COMPANY2002 2001 2002 2001

NOTE RM RM RM RM

Revenue 15 180,202,451 138,862,134 14,177,778 20,600,000

Cost of sales (136,164,582) (103,932,195) — —____________ ____________ ____________ ____________Gross profit 44,037,869 34,929,939 14,177,778 20,600,000

Other operating income 228,391 347,750 — 21,247

Distribution and selling costs (13,528,586) (9,355,525) — —

Administrative and general expenses (9,893,406) (6,899,080) (325,751) (215,769)____________ ____________ ____________ ____________Profit from operations 16 20,844,268 19,023,084 13,852,027 20,405,478

Finance costs 17 (658,008) (1,805,599) — —____________ ____________ ____________ ____________Profit before taxation 20,186,260 17,217,485 13,852,027 20,405,478

Taxation 18 (2,212,821) (1,312,313) (2,457,778) (280,000)____________ ____________ ____________ ____________Profit after taxation 17,973,439 15,905,172 11,394,249 20,125,478

Minority interests 85,967 (3,645) — —____________ ____________ ____________ ____________Net profit for the year 18,059,406 15,901,527 11,394,249 20,125,478____________ ____________ ____________ ____________Basic earnings per share (sen) 19 27.8 28.9____________ ____________

The accompanying notes are an integral part of these statements.

92 0 0 2 A N N U A L R E P O R T 36

statements of changes in equityFOR THE YEAR ENDED 31 AUGUST 2002

NON-DISTRIBUTABLE DISTRIBUTABLE

FOREIGNSHARE SHARE EXCHANGE RETAINED

CAPITAL PREMIUM RESERVE PROFITS TOTALGROUP RM RM RM RM RM

At 1 September 2000 600,000 — — 27,950,841 28,550,841Issuance of shares— Acquisition of subsidiaries 25,975,213 — — — 25,975,213— Rights Issue 15,914,787 2,546,366 — — 18,461,153— Public Issue 7,510,000 12,767,000 — — 20,277,000Listing expenses — (1,472,658) — — (1,472,658)Merger deficit set off — — — (12,053,213) (12,053,213)Currency translation differences* — — 30,528 — 30,528Net profit for the year — — — 15,901,527 15,901,527Dividends (Note 20) — — — (2,500,000) (2,500,000)____________ ____________ ____________ ____________ ____________At 31 August 2001 50,000,000 13,840,708 30,528 29,299,155 93,170,391Issuance of bonus shares 15,000,000 — — (15,000,000) —Share issue expenses — (225,840) — — (225,840)Currency translation differences* — — (367,355) — (367,355)Net profit for the year — — — 18,059,406 18,059,406Dividends (Note 20) — — — (1,500,000) (1,500,000)____________ ____________ ____________ ____________ ____________At 31 August 2002 65,000,000 13,614,868 (336,827) 30,858,561 109,136,602____________ ____________ ____________ ____________ ____________

NON-DISTRIBUTABLE DISTRIBUTABLE

SHARE SHARE RETAINEDCAPITAL PREMIUM PROFITS TOTAL

COMPANY RM RM RM RM

At 1 September 2000 600,000 — — 600,000Issuance of shares— Acquisition of subsidiaries 25,975,213 — — 25,975,213— Rights Issue 15,914,787 2,546,366 — 18,461,153— Public Issue 7,510,000 12,767,000 — 20,277,000Listing expenses — (1,472,658) — (1,472,658)Net profit for the year — — 20,125,478 20,125,478Dividends (Note 20) — — (2,500,000) (2,500,000)____________ ____________ ____________ ____________At 31 August 2001 50,000,000 13,840,708 17,625,478 81,466,186Issuance of bonus shares 15,000,000 — (15,000,000) —Share issue expenses — (225,840) — (225,840)Net profit for the year — — 11,394,249 11,394,249Dividends (Note 20) — — (1,500,000) (1,500,000)____________ ____________ ____________ ____________At 31 August 2002 65,000,000 13,614,868 12,519,727 91,134,595____________ ____________ ____________ ____________* Representing net gain/(loss) not recognised in the income statement.



cash flow statementsFOR THE YEAR ENDED 31 AUGUST 2002

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 20,186,260 17,217,485 13,852,249 20,405,478

Adjustments for:Depreciation 6,038,718 4,864,645 — —Gain on disposals of property, plant and equipment (62,912) (14,174) — —Intangible assets written off — 33,792 — 11,089Interest expense 833,092 1,782,740 — —Interest income (193,361) (101,984) — (21,247)____________ ____________ ____________ ____________

Operating profit before working capital changes 26,801,797 23,782,504 13,852,249 20,395,320

Increase in receivables (8,177,048) (23,986,169) (9,702,881) (55,074,568)Increase in inventories (3,981,857) (8,468,575) — —Increase in payables 14,832,151 12,989,463 33,813 180,106____________ ____________ ____________ ____________

Cash generated from/(used in) operations 29,475,043 4,317,223 4,183,181 (34,499,142)

Interest paid (833,092) (1,782,740) — —Tax paid (1,644,677) (944,257) (2,458,000) (280,000)____________ ____________ ____________ ____________

Net cash generated from/(used in) operating activities 26,997,274 1,590,226 1,725,181 (34,779,142)____________ ____________ ____________ ____________

CASH FLOWS FROM INVESTING ACTIVITIESIssuance of shares 2,946,642 39,080,060 — 38,738,153Purchase of property, plant and equipment (21,970,114) (14,221,527) — —Interest received 193,361 101,984 — 21,247Proceeds from disposals of fixed assets 1,323,903 304,808 — —____________ ____________ ____________ ____________Net cash (used in)/generated from investing activities (17,506,208) 25,265,325 — 38,759,400____________ ____________ ____________ ____________

92 0 0 2 A N N U A L R E P O R T 38

cash flow statements (cont’d)

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

CASH FLOWS FROM FINANCING ACTIVITIESShare issue/listing expenses (225,840) (1,472,658) (225,840) (1,472,658)Payment of dividends (1,500,000) (2,500,000) — —Repayments of hire purchase payables (556,526) (1,172,421) — —Drawdown of term loan 1,890,189 90,392 — —Repayment of term loans (783,277) (14,641,441) — —Short term borrowings 272,657 1,027,000 — —Dividends paid — — (1,500,000) (2,500,000)____________ ____________ ____________ ____________Net cash used in financing activities (902,797) (18,669,128) (1,725,840) (3,972,658)____________ ____________ ____________ ____________

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 8,588,269 8,186,423 (659) 7,600CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8,042,902 (143,521) 8,594 994____________ ____________ ____________ ____________CASH AND CASH EQUIVALENTS AT END OF YEAR 16,631,171 8,042,902 7,935 8,594____________ ____________ ____________ ____________Cash and cash equivalents comprise:Cash and bank balances 16,906,977 9,824,335 7,935 8,594Bank overdrafts (275,806) (1,781,433) — —____________ ____________ ____________ ____________

16,631,171 8,042,902 7,935 8,594____________ ____________ ____________ ____________



notes to the financial statements31 AUGUST 2002

1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

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

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of the KualaLumpur Stock Exchange. The principal place of business of the Company is located at Lot 5091, Jalan Teratai, Batu 5, off Jalan Meru, 41050Klang, Selangor.

The number of employees in the Group at the end of the financial year was 1,500 (2001: 1,356).

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 6 November 2002.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting

The financial statements of the Group and the Company have been prepared under the historical cost convention unless otherwiseindicated in the accounting policies below and comply with the provisions of the Companies Act 1965 and applicable approvedaccounting standards in Malaysia.

(b) Revenue Recognition

(i) Sales of goods

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

(ii) Dividend income

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

(iii) Revenue from services

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

(iv) Interest income

Interest income is recognised on accrual basis.

(c) Basis of Consolidation

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

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

92 0 0 2 A N N U A L R E P O R T 40

notes to the financial statements (cont’d)

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(c) Basis of Consolidation (Cont’d)

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

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

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets.

(d) Investments

Investment in subsidiaries and other non-current investments are stated at cost less provision for any permanent diminution in value.Such provision is made when there is a decline other than temporary in the value of investments and is recognized as an expense inthe period in which the decline occurred. On disposal of an investment, the difference between net disposal proceeds and its carryingamount is charged or credited to the income statement.

(e) Currency Conversion and Translation

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

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

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

2002 2001RM RM

United States Dollar 3.800 3.800Singapore Dollar 2.170 2.167Thailand Baht 0.089 0.088China, Yuan Renminbi 0.450 N/A



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(f) Property, Plant and Equipment and Depreciation

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

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

The carrying values of property, plant and equipment are reviewed for impairment when there is an indication that the assets mightbe impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts.

An impairment loss is charged to the income statement immediately.

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognisedto the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had noimpairment loss been recognised. The reversal is recognised in the income statement immediately.

(g) Inventories

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

(h) Deferred Taxation

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

(i) Hire Purchase

Property, plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated inaccordance with the policy set out in (f) above. The corresponding outstanding obligations due under the hire purchase after deductingfinance charges are included as liabilities in the financial statements. Finance charges are charged to the income statement over theperiod of the respective agreements so as to produce a constant periodic rate of interest on the remaining balance of the liability foreach period.

(j) Cash and Cash Equivalents

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

(k) Trade and Other Receivables

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

(l) Interest Capitalisation

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

92 0 0 2 A N N U A L R E P O R T 42


3. PROPERTY, PLANT AND EQUIPMENT

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

GROUP RM RM RM RM RM

CostAt 1 September 2001 37,054,628 41,101,050 5,104,274 1,326,015 84,585,967Additions 3,525,879 13,662,295 1,439,005 3,502,935 22,130,114Reclassification — 1,326,015 — (1,326,015) —Disposals (1,223,468) (26,000) (13,800) — (1,263,268)____________ ____________ ____________ ____________ ____________At 31 August 2002 39,357,039 56,063,360 6,529,479 3,502,935 105,452,813____________ ____________ ____________ ____________ ____________

Accumulated DepreciationAt 1 September 2001 1,507,522 10,065,718 1,569,203 — 13,142,443Charge for the year 654,318 4,599,782 784,618 — 6,038,718Disposals (1,817) — (460) — (2,277)____________ ____________ ____________ ____________ ____________At 31 August 2002 2,160,023 14,665,500 2,353,361 — 19,178,884____________ ____________ ____________ ____________ ____________

Net Book ValueAt 31 August 2002 37,197,016 41,397,860 4,176,118 3,502,935 86,273,929____________ ____________ ____________ ____________ ____________At 31 August 2001 35,547,106 31,035,332 3,535,071 1,326,015 71,443,524____________ ____________ ____________ ____________ ____________Depreciation charge for 2001 560,928 3,589,636 714,081 — 4,864,645____________ ____________ ____________ ____________ ____________



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

* Land and buildings

LONG TERMFREEHOLD LEASEHOLD

LAND LAND BUILDINGS TOTALRM RM RM RM

CostAt 1 September 2001 9,462,142 2,900,000 24,692,486 37,054,628Additions 2,445,873 — 1,080,006 3,525,879Disposals (1,093,651) — (129,817) (1,223,468)____________ ____________ ____________ ____________At 31 August 2002 10,814,364 2,900,000 25,642,675 39,357,039____________ ____________ ____________ ____________

Accumulated DepreciationAt 1 September 2001 — 56,976 1,450,546 1,507,522Charge for the year — 42,732 611,586 654,318Disposals — — (1,817) (1,187)____________ ____________ ____________ ____________At 31 August 2002 — 99,708 2,060,315 2,160,023____________ ____________ ____________ ____________

Net Book ValueAt 31 August 2002 10,814,364 2,800,292 23,582,360 37,197,016____________ ____________ ____________ ____________At 31 August 2001 9,462,142 2,843,024 23,241,940 35,547,106____________ ____________ ____________ ____________Depreciation charge for 2001 — 42,732 518,196 560,928____________ ____________ ____________ ____________** Other assets comprise motor vehicles, office furniture and equipment.

92 0 0 2 A N N U A L R E P O R T 44


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

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

2002 2001RM RM

Land and buildings 25,799,427 30,703,678Plant and equipment 11,606,944 20,488,277Other assets 407,913 2,569,199Capital work-in-progress — 1,326,015____________ ____________

37,814,284 55,087,169____________ ____________(b) Included in the above property, plant and equipment are assets held under hire purchase agreements as follows:

NET BOOK VALUE2002 2001

RM RM

Motor vehicles 1,339,331 1,328,529Plant and equipment — 3,522,271____________ ____________

1,339,331 4,850,800____________ ____________4. SUBSIDIARIES

COMPANY2002 2001

RM RM

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

25,975,213 25,975,213____________ ____________



4. SUBSIDIARIES (CONT’D)

(a) Details of the subsidiaries are as follows:

COUNTRY OF EQUITY INTERESTSNAME OF COMPANY INCORPORATION 2002 2001 PRINCIPAL ACTIVITIES

% %

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

TG Medical Sdn Bhd * Malaysia 100 100 Manufacture and trading of gloves

Great Gloves Sdn Bhd * Malaysia 100 100 Trading of gloves

Top Glove Engineering Sdn Bhd * Malaysia 100 100 Property investment

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

Subsidiaries of TGSB:

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

Top Glove Medical (Thailand) Thailand 60 — DormantCo Ltd (“TG Thailand”) *

Top Glove (Zhangjiagang) China 55 — DormantCo Ltd (“TG China”) *

* Subsidiaries not audited by Arthur Andersen & Co.

(b) Acquisition of subsidiaries:

On 28 January 2002, the Company through its wholly owned subsidiary, TGSB subscribed 3,600,000 ordinary shares of 10 Thailand Bahteach, representing 60% equity interest in TG Thailand, for a cash consideration of 36,000,000 Thailand Baht or RM3,669,720. TG Thailandis incorporated in Thailand and its intended principal activities are to engage in the manufacturing and trading of latex gloves.

On 8 May 2002, TGSB subscribed for 1,650,000 ordinary shares of USD1 each, representing 55% equity interest in TG China for a cashconsideration of USD1,650,000 or approximately RM6,270,000. As at the end of the financial year, TG China has called up 15% of sharecapital and TGSB has paid RM965,648 for its portion. TG China is incorporated in China and its intended principal activities are toengage in the manufacturing and trading of PVC gloves.

(c) The effect of the acquisition on the financial results of the Group from the date of acquisition to 31 August 2002 was as follows:

2002 2001RM RM

Revenue — 138,862,134Operating costs (170,163) (119,744,528)____________ ____________(Loss)/profits from operations (170,163) 19,117,606Finance costs, net (10,920) (1,805,599)____________ ____________Profit before taxation (181,083) 17,312,007Taxation — (1,032,313)____________ ____________(Loss)/profit after taxation and attributable to shareholders (181,083) 16,279,694____________ ____________

92 0 0 2 A N N U A L R E P O R T 46


4. SUBSIDIARIES (CONT’D)

(d) The effect of the acquisition on the financial position of the Group as at 31 August 2002 was as follows:

2002 2001RM RM

Property, plant and equipment 5,205,899 71,443,524Other investment — 15,300Inventories — 23,025,816Trade and other receivables 1,418,099 9,113,082Cash and bank balances 3,264,829 9,815,741Trade and other payables (1,007,522) (77,356,765)Short term borrowings (919,137) (8,398,308)Term loans (990,099) (5,254,440)Hire purchase payables (31,744) (305,706)Deferred taxation — (1,733,000)Taxation payable — (726,245)____________ ____________

6,940,325 19,638,999____________ ____________5. OTHER INVESTMENT

GROUP2002 2001

RM RM

Golf resort membership at cost 15,300 15,300____________ ____________6. DUE FROM A SUBSIDIARY

The amount due from a subsidiary is unsecured, interest free and with no fixed terms of repayment.

7. INVENTORIES

GROUP2002 2001

RM RM

At cost —Raw materials 3,748,018 2,048,264Consumables and hardware 1,762,178 1,343,271Work-in-progress 5,123,323 4,641,872Finished goods 16,374,154 14,992,409____________ ____________

27,007,673 23,025,816____________ ____________



8. OTHER RECEIVABLES

Included in the other receivables are the amounts due from subsidiaries of RM17,373,276 (2001: RM11,779,849) which are unsecured,interest free and with no fixed terms of repayment.

9. CASH AND BANK BALANCES

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

Cash on hand and in banks 10,876,050 4,780,158 7,935 8,594Fixed deposits with a licensed bank 6,030,927 5,044,177 — —____________ ____________ ____________ ____________

16,906,977 9,824,335 7,935 8,594Less: Fixed deposits pledged as securities (1,393,406) (2,779,934) — —____________ ____________ ____________ ____________

15,513,571 7,044,401 7,935 8,594____________ ____________ ____________ ____________Fixed deposits amounting to RM2,479,752 (2001: RM3,049,377) are registered in the name of directors and are held in trust for the Group.

10. SHORT TERM BORROWINGS

GROUP2002 2001

RM RM

Bank overdrafts 275,806 1,781,433Banker’s acceptances — 134,000Export credit refinancing 4,430,657 4,024,000____________ ____________

4,706,463 5,939,433Hire purchase payables (Note 12) 377,735 607,045Term loans (Note 13) 2,651,141 1,851,830____________ ____________

7,735,339 8,398,308____________ ____________The short term borrowings bear interest of between 3.50% to 8.05% (2001: 3.15% to 9.30%) per annum.

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

92 0 0 2 A N N U A L R E P O R T 48


11. SHARE CAPITAL

GROUP AND COMPANY2002 2001

RM RM

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

(b) Issued and fully paid:Ordinary shares of RM1 eachAt 1 September 50,000,000 600,000Issued and paid up during the year— Acquisition of subsidiaries — 25,975,213— Rights issue — 15,914,787— Public issue — 7,510,000— Bonus issue 15,000,000 —____________ ____________At 31 August 65,000,000 50,000,000____________ ____________

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

On 26 August 2002, the Company announced the proposed bonus issue of 26,000,000 new ordinary shares of RM1 each in the Companyon the basis of 2 new ordinary shares for every 5 existing ordinary shares held. In addition, the Company has also announced the proposedEmployee Share Option Scheme (“ESOS”) of up to 10% of its issued and paid up share capital.

The above proposals are subject to the Shareholders’, Securities Commission’s and Kuala Lumpur Stock Exchange’s approval.

On 10 October 2002, the Company announced the proposed Share Buy Back of up to 10% of its issued and paid up share capital. The saidproposal is conditional upon the shareholders’ approval.

All the shares to be issued pursuant to the proposed Bonus Issue and ESOS will rank pari passu in all respects with the existing shares ofthe Company except that they shall not entitle to any dividends, rights, allotments and/or any other distributions, the entitlement of whichis prior to the allotment of Bonus Issue and ESOS.

To accommodate the proposed Bonus Issue and ESOS, the Company also proposed an increase in authorised share capital from100,000,000 ordinary shares to 200,000,000 ordinary shares by the creation of 100,000,000 new ordinary shares of RM1 each.



12. HIRE PURCHASE PAYABLES

GROUP2002 2001

RM RM

Future minimum payments:Payable within one year 469,966 736,242Payable between one to five years 140,674 354,367____________ ____________

610,640 1,090,609Less: finance charges (94,415) (177,858)____________ ____________

516,225 912,751____________ ____________Representing hire purchase liabilities:Due within 12 months (Note 10) 377,735 607,045Due after 12 months 138,490 305,706____________ ____________

516,225 912,751____________ ____________13. TERM LOANS

GROUP2002 2001

RM RM

Total payables 8,213,182 7,106,270Repayments due within 12 months included in current liabilities (Note 10) (2,651,141) (1,851,830)____________ ____________Due after 12 months 5,562,041 5,254,440____________ ____________The term loans are repayable over a period of up to 7.5 years and bear interest of between 7.40% to 8.05% (2001: 4.0% to 9.6%) per annum.

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

14. DEFERRED TAXATION

GROUP2002 2001

RM RM

(a) At 1 September 1,733,000 1,233,000Transfer from income statement 970,000 500,000____________ ____________At 31 August 2,703,000 1,733,000____________ ____________

(b) Deferred taxation is in respect of the following:Timing differences between depreciation and corresponding capital allowances 9,654,000 6,189,000____________ ____________

92 0 0 2 A N N U A L R E P O R T 50


15. REVENUE

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

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

Sales of goods net of discounts 180,202,451 138,862,134 — —Management fees receivable from subsidiaries — — 120,000 100,000Dividends received from subsidiaries — — 14,057,778 20,500,000____________ ____________ ____________ ____________

180,202,451 138,862,134 14,177,778 20,600,000____________ ____________ ____________ ____________16. PROFIT FROM OPERATIONS

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

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

Auditors’ remuneration 60,841 50,500 15,000 12,000Depreciation 6,038,718 4,864,645 — —Directors’ remuneration * 1,072,590 793,889 210,000 170,000Gain on disposal of property, plant and equipment 62,912 — — —Intangible assets written off — 33,792 — 11,089Staff costs 19,274,820 18,903,888 — —Rental expenses 1,137,546 315,614 — —____________ ____________ ____________ ____________* Directors’ remunerationDirectors of the companyExecutive:Salaries and other emoluments 637,090 623,889 — —Fees 220,000 80,000 80,000 80,000Benefit-in-kind 42,700 35,400 — —Non-executive:Fees 215,500 90,000 130,000 90,000____________ ____________ ____________ ____________Total 1,115,290 829,289 210,000 170,000____________ ____________ ____________ ____________Total excluding benefit-in-kind 1,072,590 793,889 210,000 170,000____________ ____________ ____________ ____________

17. FINANCE COSTS

Included in finance costs of the Group are:

2002 2001RM RM

Interest expenses on borrowings 833,092 1,782,740Interest income on deposits (193,361) (101,984)____________ ____________



18. TAXATION

GROUP COMPANY2002 2001 2002 2001

RM RM RM RM

Current year’s provision 1,242,821 812,313 2,457,778 280,000Transfer to deferred taxation 970,000 500,000 — —____________ ____________ ____________ ____________

2,212,821 1,312,313 2,457,778 280,000____________ ____________ ____________ ____________The effective rate of taxation of the Group is lower than the statutory rate of taxation principally due to the claim of reinvestment allowanceby certain subsidiaries.

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

19. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the Group’s profit after taxation and minority interests of RM18,059,406 (2001:RM15,901,527) by the weighted average number of shares during the year of 65,000,000 (2001: 55,116,226). The number of ordinaryshares used in the computation of earnings per share for 2001 have been adjusted for the bonus issue of 15,000,000 ordinary sharesduring the year retrospectively.

20. DIVIDENDS

GROUP AND COMPANYAMOUNT DIVIDEND PER SHARE

2002 2001 2002 2001RM RM Sen Sen

Ordinary first interim tax exempt dividend of 5% — 2,500,000 — 5Ordinary final tax exempt dividend of 3% 1,500,000 — 3 —____________ ____________

1,500,000 2,500,000____________ ____________At the forthcoming Annual General Meeting, a first and final dividend in respect of the current financial year ended 31 August 2002 of 6%on 65,000,000 ordinary shares less 28% taxation amounting to a total dividend of RM2,808,000 (4.32 sen per share) will be proposed forshareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approvedby the shareholders, will be accounted for in shareholders’ equity as an appropriation of retained profits in the next financial year ending 31 August 2003.

21. COMMITMENTS

GROUP2002 2001

RM RM

Capital expenditure:Approved and contracted for 2,629,000 —Approved but not contracted for 8,117,000 592,000____________ ____________

92 0 0 2 A N N U A L R E P O R T 52


22. SIGNIFICANT RELATED PARTY TRANSACTIONS

GROUP2002 2001

RM RM

Purchases of raw materials from Titi Latex Sdn Bhd,a company in which a director, Dr. Lim Wee Chai has interest 4,801,880 6,474,286____________ ____________

The directors are of the opinion that the transactions above have been entered into in the normal course of business and have beenestablished on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.

23. CONTINGENT LIABILITIES

GROUP2002 2001

RM RM

Corporate guarantee issued to financial institutions for credit facilities granted to subsidiaries (unsecured) 9,263,062 2,991,663____________ ____________

In addition, a wholly owned subsidiary of the Company, Top Glove Sdn Bhd (“TGSB”) is subject to a litigation suit, which details are set outbelow:

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

TGSB’s appointed solicitors have opined that SGM’s case against TGSB is weak and unlikely to succeed. As such, the directors are of the opinion that no provision for any liabilities are required in the financial statements. The hearing of the Plaintiff’s application to attendPre-Trial Case Management was fixed on 14 April 2003.

24. FINANCIAL INFORMATION BY SEGMENTS

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


The landed properties owned by the Top Glove Group as at 31 August 2002 are set out below:

AUDITED NETDATE OF AGE OF BOOK VALUE

ACQUISITION (A)/ BUILDING DESCRIPTION/ LAND AREA/ AS AT 31.8.2002PARTICULARS OF PROPERTY REVALUATION(R) (YEARS) TENURE EXISTING USE BUILD-UP AREA (RM)

Top Glove Sdn Bhd

18, Jalan Mempari 10, HS (M) 15256, PT 8368, 23/10/97 (A) 5 Freehold Terrace house/ 1,300 121,329Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation square feet /Jalan Meru, Klang District of Selangor for staff 1,100 square feet

36, Jalan Mempari 1, HS (M) 15297, PT 8411, 13/2/98 (A) 5 Freehold Terrace house/ 1,300 118,821Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation square feet /Jalan Meru, Klang District of Selangor for staff 1,100 square feet

11, Jalan Mempari 11, HS (M) 15238, PT 8349 15/9/97 (A) 5 Freehold Terrace house/ 1,300 113,185Taman Bayu, Batu 51/2, HS (M) 15238, PT 8445, Accommodation square feet /Jalan Meru, Klang Mukim of Kapar, District of Selangor for staff 1,100 square feet

Lot 4968, Jalan Teratai, EMR 6629, Lot 4968, 13/10/93 (A) 11 Freehold Factory /Glove 3 acres/ 6,159,016Batu 6, Off Jalan Meru, Mukim of Kapar, District manufacturing 66,98041050 Klang of Klang and State of Selangor square feet

4, Jalan Seri Kenangan 8, HS (M) 10354, PT 15485, 29/7/95 (A) 9 Freehold Terrace house/ 1,640 square 92,250Taman Meru 3, Meru, Mukim of Kapar, Accommodation feet /1,40041050 Klang District of Selangor for staff square feet



22, Jalan Mempari 1, HS (M) 15304, PT 8419, 15/9/97 (A) 9 Freehold Terrace house/ 1,300 square 121,580Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation feet /1,100Jalan Meru, Klang District of Selangor for staff square feet

Lot 5987, Jalan Teratai EMR 8780, Lot No 5987 18/4/96 (A) 3 Freehold Factory /Glove 2.8 acres/ 3,594,364Batu 5, Off Jalan Meru, Mukim of Kapar, manufacturing 57,25041050 Klang District of Klang square feet

Lot 4969, Jalan Teratai, G.M. 2143, Lot No 4969 11/10/00 (A) Factory & office Freehold Factory & office 3 acres 2,240,028Batu 6, Off Jalan Meru, Mukim of Kapar, Building under Building under41050 Klang District of Klang construction construction

Lot 18, 27, 38 & 57, Lot 18, 27, 38 & 57, 22/11/99 (A) 15 Leasehold Factory /Glove 31,192 9,903,919Medan Tasek, Medan Tasek, Kawasan (expiring on: manufacturing square feet /Kawasan Perindustrian Tasek, Perindustrian Tasek, Lot 18–30.9.2072 197,675Ipoh, Perak Ipoh, Perak Lot 27–28.12.2063 square feet

Lot 38–23.12.2069Lot 57–1.10.2064)

TG Medical Sdn Bhd

Lot 5091, Jalan Teratai, EMR 6510, Lot No 5091, 8/5/98 (A) 5 Freehold Factory /Glove 3 acres/ 6,042,567Batu 5, Off Jalan Meru, Mukim of Kapar, District manufacturing 68,49041050 Klang of Klang, State of Selangor square feet

19, Jalan Mempari 11, HS (M) 15241, PT No 8352, 25/10/95 (A) 5 Freehold Terrace house/ 1,300 square 111,942Batu 51/2, HS (M) 15325, PT No 8442, Accommodation feet /1,100Jalan Meru, Klang Mukim of Kapar, for staff square feet

District of Selangor

Lot 5972 & 5974, EMR 8769, Lot 5972 & 1/7/99 (A) 2 Feehold Factory /Glove 17,935 acres/ 3,916,762Jalan Teratai, Batu 5, 5974, Mukim of Kapar, manufacturing 47,200Jalan Meru, District of Klang, square feet41050 Klang State of Selangor

Top Glove Engineering Sdn Bhd

Lot 5987, Jalan Teratai, EMR 8780, Lot No 5987, 18/4/96 (A) 3 Freehold Factory /Glove 2.8 acres/ 2,106,872 Batu 5, Off Jalan Meru, Mukim of Kapar, manufacturing 57,25041050 Klang, District of Klang, square feetSelangor Darul Ehsan State of Selangor

TG Medical (USA) Inc

1906N, 16th Street, Caronado Park MCR 26/4/95 (A) 17 Freehold Office Building 60ft x 115ft 410,482Phoenix, AZ 85006 19-36, Lot4 Blk 1 2,400 square feet (US$108,036)

Ex E7F (Parcel # 117–17–0047)

Top Glove Medical (Thailand) Co Ltd

188, Moo 5, Nor Sor 3 Kor 5/10/01 (A) Factory & Office Freehold Factory & Office Approx. 1,935,795Karnchanawanich Road No. 2655, Tambon Sumnukgarm Building under Building under 16.06 acres (Thai BahtTambon Sumnukgarm Ampur Sadao construction construction 21,506,678)Sadao, Songkhla 90320 Songkhla, ThailandThailand

list of properties

92 0 0 2 A N N U A L R E P O R T 54

analysis of shareholdingsAS AT 14 OCTOBER 2002

Authorised Share Capital : RM100,000,000

Issued and Paid Up Capital : RM65,000,000

Class of Shares : Ordinary Shares of RM1.00 each

Voting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

NUMBER OF NUMBER OFRANGE OF SHAREHOLDINGS SHAREHOLDERS % OF SHARES %

Less than 1,000 86 5.47 32,101 0.051,000 — 10,000 1,313 83.47 2,997,600 4.6110,001 — 100,000 118 7.50 2,375,700 3.65100,001 to less than 5% of issued shares 52 3.31 36,645,481 56.385% and above of issued shares 4 0.25 22,949,118 35.31____________ ____________ ____________ ____________Total 1,573 100.00 65,000,000 100.00____________ ____________ ____________ ____________SUBSTANTIAL SHAREHOLDERS

DIRECT INTEREST INDIRECT INTERESTNUMBER OF NUMBER OF

NAME SHARES % SHARES %

Dr. Lim Wee Chai 19,091,556 29.37 11,194,537 (a) 17.22Tong Siew Bee (f) 1,187,213 1.83 29,098,880 (b) 44.77Lim Hooi Sin 1,813,975 2.79 28,472,118 (c) 43.80Lim Quee Choo (f) 795,171 1.22 29,490,922 (d) 45.37Top Glove Holding Sdn Bhd 7,398,178 11.38 — —United Gloves Sdn Bhd 4,024,275 6.19 — —

NOTE:

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

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

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

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

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


analysis of shareholdings (cont’d)

DIRECTORS’ SHAREHOLDINGS

DIRECT INTEREST INDIRECT INTERESTNUMBER OF NUMBER OF

NAME SHARES % SHARES %

Dr. Lim Wee Chai 19,091,556 29.37 11,194,537 (a) 17.22Tan Sri Datuk (Dr) Arshad bin Ayub 1,926,600 2.96 — —Tong Siew Bee (f) 1,187,213 1.83 29,098,880 (b) 44.77Haji Shahadan bin Haji Abd Manas 13,000 0.02 — —Lim Hooi Sin 1,813,975 2.79 28,472,118 (c) 43.80Sekarajasekaran a/l Arasaratnam 2,695,849 4.15 — —Lau Boon Ann 13,000 0.02 — —Quah Chin Chye — — — —

NOTE:

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

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

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

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

92 0 0 2 A N N U A L R E P O R T 56

analysis of shareholdings (cont’d)

THIRTY LARGEST SECURITIES ACCOUNTS HOLDERS

NO. NAME OF SHAREHOLDER NO. OF SHARES %

1. Dr. Lim Wee Chai 19,091,556 29.372. Top Glove Holding Sdn Bhd 7,398,178 11.383. United Gloves Sdn Bhd 4,024,275 6.194. AMMB Nominees (Tempatan) Sdn Bhd 3,676,800* 5.665. Bumiputra Commerce Nominees (Tempatan) Sdn Bhd 3,151,700 4.85

Pledged Securities Account for Koperasi Polis Diraja6. Sekarajasekaran a/l Arasaratnam 2,695,849 4.157. AllianceGroup Nominees (Tempatan) Sdn Bhd 2,000,000 3.08

Pheim Asset Management Sdn Bhd for Employees Provident Fund8. Maju Nominees (Tempatan) Sdn Bhd 1,820,000 2.80

Pledged Securities Account for Tan Sri Datuk (Dr) Arshad bin Ayub9. Lim Hooi Sin 1,813,975 2.7910. High Momentum Sdn Bhd 1,683,800 2.5911. Employees Provident Fund Board 1,212,000 1.8612. Tong Siew Bee 1,187,213 1.8313. Kenanga Nominees (Tempatan) Sdn Bhd 1,112,800 1.71

Bright Element Sdn Bhd14. Amanah Raya Nominees (Tempatan) Sdn Bhd 977,000 1.50

Amanah Saham Johor — Dana Johor15. Able Dimension Sdn Bhd 841,000 1.2916. Lim Quee Choo 795,171 1.2217. Lim Sook Chin 546,000 0.8418. Universal Trustee (Malaysia) Berhad 500,000 0.7719. John Hancock Life Insurance (Malaysia) Berhad 500,000 0.7720. Chew Teck Chiang 495,968 0.7621. HSBC Nominees (Tempatan) Sdn Bhd 495,000 0.76

HSBC (M) Trustee Bhd for OSK UOB Small Cap Opportunity Unit Trust22. Liew Chin Khew 468,468 0.7223. Hup Hin (Titi) Sdn Bhd 461,500 0.7124. Bright Element Sdn Bhd 332,000 0.5125. Thai Tim Kok (Tim Thai) 300,000 0.4626. Sinmex Rubber Sdn Bhd 296,400 0.4627. Lim Kwee Fatt 259,000 0.4028. Lee Kim Meow 254,647 0.3929. TMT Transport Sdn Bhd 211,900 0.3330. CIMB Securities Sdn Bhd 203,000 0.31____________ ____________

Total 59,204,300 91.08____________ ____________* Being nominee account monitored by AmMerchant Bank Berhad for the remaining unsubscribed Bumiputra shares which were allocated to

Bumiputra investors approved by Ministry of International Trade and Industry (MITI) pursuant to the Company’s Initial Public Offering


notice of nomination of auditors

Lee Kim Meow49, Jalan SS2/19,47300 Petaling JayaSelangor D. E., Malaysia

21 October 2002

The Board of DirectorsTop Glove Corporation BerhadLot 5091, Jalan Teratai5th Mile, Off Jalan Meru41050 KlangSelangor D. E., Malaysia

Dear Sirs,

NOTICE OF NOMINATION OF AUDITORS

Pursuant to Section 172 (11) of the Companies Act, 1965, I, being a shareholder of the Company hereby give notice ofmy intention to nominate Messrs Ernst & Young for appointment as auditors of the Company and to propose the followingas an ordinary resolution to be tabled at the forthcoming Annual General Meeting:

“That Messrs Ernst & Young, be and are hereby appointed auditors of the Company in place of Messrs Arthur Andersen& Co. and such appointment shall be until the conclusion of the next Annual General Meeting at a remuneration to beagreed between the Directors and the Auditors.”

Yours truly,

LEE KIM MEOW

92 0 0 2 A N N U A L R E P O R T 58

notice of annual general meeting

AGENDA

1. To lay before the Company the Report of the Directors and the Audited Financial Statements for the financial year ended31 August, 2002 together with the Report of the Auditors thereon.

2. To approve the declaration of a First and Final Dividend of 6% less 28% income tax for the financial year ended 31 August, 2002.

3. To approve the payment of Directors’ Fees for the financial year ended 31 August, 2002.

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

“That pursuant to Section 129(6) of the Companies Act, 1965, the following Directors who have attained the age ofseventy (70) years, be and are hereby re-appointed as Directors of the Company and to hold office until the conclusionof the next Annual General Meeting:(a) Tan Sri Datuk (Dr) Arshad bin Ayub(b) Mr. Sekarajasekaran a/l Arasaratnam

5. To re-elect the following retiring Directors who retire pursuant to Article 94 of the Company’s Articles of Association:(a) Mr. Lim Hooi Sin(b) Mr. Lau Boon Ann

6. To re-elect the retiring Director, Mr. Quah Chin Chye who retires pursuant to Article 100 of the Company’s Articles ofAssociation.

7. To appoint Auditors and to authorise the Directors to fix their remuneration.

Notice of Nomination pursuant to Section 172 (11) of the Companies Act, 1965, a copy of which is annexed on page 57has been received by the Company for the nomination of Messrs. Ernst & Young who have given their consent to act,for appointment as Auditors and of the intention to propose the following ordinary resolution:

“That Messrs. Ernst & Young be and are hereby appointed as Auditors of the Company in place of the retiring Auditors,Messrs. Arthur Andersen & Co. to hold office until the conclusion of the next Annual General Meeting at a remunerationto be agreed between the Directors and the Auditors.”

8. As Special BusinessTo consider and, if thought fit, to pass the following resolution as Ordinary Resolution:

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

“That pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue andallot shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directorsmay, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to thisresolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors beand are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on theKuala Lumpur Stock Exchange and that such authority shall continue in force until the conclusion of the next AnnualGeneral Meeting of the Company, subject always to the Companies Act, 1965, the Articles of Association of the Companyand approval of all relevant regulatory bodies being obtained for such allotment and issues.”

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

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will

be held at East VIP Lounge, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Jalan

Bukit Kiara, 60000 Kuala Lumpur on Thursday, 9 January, 2003 at 9.30 a.m. for the following

purposes:

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)(Resolution 5)

(Resolution 6)(Resolution 7)

(Resolution 8)

(Resolution 9)

(Resolution 10)


notice of annual general meeting (cont’d)

Notice Of Dividend Entitlement

NOTICE IS ALSO HEREBY GIVEN that the Register of Members of the Company will be closed at 5.00 p.m. on 14 February, 2003 for purpose ofdetermining shareholders’ entitlement to the first and final dividend of 6% less 28% income tax in respect of the financial year ended 31 August 2002.

The dividend, if approved, will be paid on 27 February 2003 to shareholders whose names appear in the Record of Depositors (ROD) on 14 February 2003.

A Depositor shall qualify for entitlement only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 12.30 p.m. on 14 February, 2003 in respect of ordinary transfers; and

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

By Order of the Board

CHUA SIEW CHUAN(MAICSA 0777689)Company Secretary

Kuala Lumpur19 November, 2002

Explanatory Notes to Special Business:

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

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may butneed not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1) (a), (b),(c) and (d) of the Companies Act, 1965 shall not apply to the Company.

2. Where a holder appoints two or more proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

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

92 0 0 2 A N N U A L R E P O R T 60

notice of annual general meeting (cont’d)

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING

The Directors standing for re-election at the Fourth Annual General Meeting of the Company to be held at East VIP Lounge, Kuala Lumpur Golf &Country Club, No. 10, Jalan 1/70D, Off Jalan Bukit Kiara, 60000 Kuala Lumpur on Thursday, 9 January, 2003 at 9.30 a.m. are as follows:

DETAILS OF ATTENDANCE DETAILS OF INDIVIDUAL DIRECTOR AND NAME OF DIRECTORS AT BOARD MEETING OTHER DISCLOSURE REQUIREMENTS

Tan Sri Datuk (Dr) Arshad bin Ayub Refer to page 17 of the Annual Report. Refer to page 13 of the Annual Report.(Section 129 (6) of the Companies Act, 1965)

Sekarajasekaran a/l Arasaratnam Refer to page 17 of the Annual Report. Refer to page 14 of the Annual Report.(Section 129 (6) of the Companies Act, 1965)

Lim Hooi Sin Refer to page 17 of the Annual Report. Refer to page 14 of the Annual Report.(Article 94 of the Company’s Articles of Association)

Lau Boon Ann Refer to page 17 of the Annual Report. Refer to page 15 of the Annual Report.(Article 94 of the Company’s Articles of Association)

Quah Chin Chye Refer to page 17 of the Annual Report. Refer to page 15 of the Annual Report.(Article 100 of the Company’s Articles of Association)

proxy form

I/We (full name in capital letters) ___________________________________________ (NRIC/Company No. _____________________)

of (full address) ____________________________________________________________________________________________

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

____________________________________________________________________ (NRIC No._____________________________)

of (full address) ____________________________________________________________________________________________

or failing him/her, the CHAIRMAN OF THE MEETING, as *my/our proxy to vote and act for *me/us, and on *my/our behalf at the Fourth AnnualGeneral Meeting of the Company to be held at East VIP Lounge, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Jalan Bukit Kiara,60000 Kuala Lumpur on Thursday, 9 January, 2003 at 9.30 a.m. and at every adjournment thereof.

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

NO. RESOLUTIONS FOR AGAINST

1 Receiving the Report of the Directors and the Audited Financial Statements for thefinancial year ended 31 August, 2002 together with the Report of the Auditors thereon.

2 Approval of the declaration of a First and Final dividend of 6% less 28% income tax forthe financial year ended 31 August, 2002.

3 Approval of the payment of Directors’ Fees for the financial year ended 31 August, 2002.

4 Re-election of Director, Tan Sri Datuk (Dr) Arshad bin Ayub who retires pursuant toSection 129 (6) of the Companies Act, 1965.

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

6 Re-election of Director, Mr. Lim Hooi Sin who retires pursuant to Article 94 of theCompany’s Articles of Association.

7 Re-election of Director, Mr. Lau Boon Ann who retires pursuant to Article 94 of theCompany’s Articles of Association.

8 Re-election of Director, Mr. Quah Chin Chye who retires pursuant to Article 100 of theCompany’s Articles of Association.

9 To appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of thenext Annual General Meeting and to authorise the Directors to fix their remuneration.

10 Special BusinessOrdinary Resolution Authority to issue shares pursuant to Section 132D of the Companies Act, 1965.

* Strike out whichever not applicable.

As witness my/our hand this ____________________ day of _________________ 2002/2003

Signature of Member/Common Seal

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled toappoint one or more proxies to attend and vote in his stead. A proxy may but neednot be a member of the Company and a member may appoint any person to be hisproxy without limitation and the provisions of Section 149(1) (a), (b), (c) and (d) of theCompanies Act, 1965 shall not apply to the Company.

2. Where a holder appoints two or more proxies, the appointment shall be invalid unlesshe specifies the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointoror of his attorney duly authorised in writing or, if the appointor is a corporation, eitherunder its seal or under the hand of an officer or attorney duly authorised.

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

Number of Shares Held CDS Account No.

StampTHE COMPANY SECRETARY

TOP GLOVE CORPORATION BERHAD (474423–X)

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

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