LATEXX-AnnualReport2010 (1.9MB)

OUR VISIONTo be a glove manufacturer of preferred choice bybeing reliable, dynamic, humane andpracticing the highest standards of workand business ethics.

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OUR MISSIONLATEXX will continuously strive to produce the highest quality gloves to meet theexpectations of our valued customers, to adopt/adapt the appropriate up-to-datetechniques, technology and to train and motivate our employees for the enhancement of efficiency and productivity, to be a caring organization through our commitment to the well-being of the environment and community.

Distinct

Manufacturer

Global ExportMarket

High QualityGloves

Over 100 Countries and Counting

Total Customer’s SatisfactionContinuous

Improvement

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02 Corporate Information

03 Corporate Structure

04 Financial Highlights

05 Board Of Directors

06 Profile Of Directors

08 Corporate Statement

11 Corporate Governance Statement

16 Directors’ Responsibility Statement

17 Statement On Internal Control

19 Audit Committee Report

25 Additional Compliance Information

27 Financial Statements

76 Analysis Of Shareholdings

79 Analysis Of Warrantholdings

81 List Of Group Properties

83 Notice Of Annual General Meeting

86 Notice of Dividend Entitlement

86 Statement AccompanyingNotice Of Annual General Meeting

Form Of Proxy

Contents>>

2 LATEXX PARTNERS BERHAD 86100-VANNUAL REPORT 2010

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LATEXX PARTNERS BERHAD 86100-VANNUAL REPORT 20102

>> Corporate Information

BOARD OF DIRECTORS

Low Bok Tek

(Executive Chairman & Chief Executive Officer)

Peter Wong Hoy Kim(Senior Independent & Non-Executive Director)

Ibrahim bin Hamzah(Independent & Non-Executive Director)

Malik Parvez Ahmad bin Nazir Ahmad(Independent & Non-Executive Director)

AUDIT COMMITTEE

Peter Wong Hoy Kim ChairmanIbrahim bin Hamzah Malik Parvez Ahmad

bin Nazir Ahmad

REMUNERATION COMMITTEE

Peter Wong Hoy Kim ChairmanIbrahim bin Hamzah Malik Parvez Ahmad

bin Nazir Ahmad

NOMINATION COMMITTEE

Peter Wong Hoy Kim ChairmanIbrahim bin Hamzah

COMPANY SECRETARIES

Jesslyn Ong Bee Fang(MAICSA 7020672)Eric Toh Chee Seong (LS 0005656)

PRINCIPAL BANKERS

Malayan Banking BerhadRHB Islamic Bank BerhadAlliance Bank Malaysia BerhadAmBank (M) Berhad

REGISTERED OFFICE

Lot 18374, Jalan Perusahaan 3Kamunting Industrial Estate34600 KamuntingPerak Darul Ridzuan, Malaysiatel 605-829 5555fax 605-891 1688

REGISTRARS

Insurban Corporate Services Sdn Bhd149, Jalan Aminuddin BakiTaman Tun Dr. Ismail60000 Kuala Lumpur, Malaysiatel 603-7729 5529fax 603-7728 5948

WEBSITE AND E-MAIL ADDRESS

Homepage : www.latexx.com.myE-mail Address :

HEAD OFFICE / FACTORY

Lot 18374, Jalan Perusahaan 3Kamunting Industrial Estate34600 KamuntingPerak Darul Ridzuan, Malaysiatel 605-829 5555fax 605-891 1688

AUDITORS

STYL Associates (AF 001929)Chartered Accountants107B, Jalan Aminuddin BakiTaman Tun Dr Ismail60000 Kuala Lumpur, Malaysia

STOCK EXCHANGE LISTING

Main Market of Bursa MalaysiaSecurities Berhad Sector : Industrial

ProductsStock Name : LATEXXStock Code : 7064

..by working in long-term partnerships

with our customers.

[email protected]

3LATEXX PARTNERS BERHAD 86100-VANNUAL REPORT 2010

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3

>>Corporate Structure

LATEXX PARTNERS BERHAD GROUP

LATEXX PARTNERS BERHAD (86100-V)

MEDTEXX MANUFACTURING SDN BHD (50880-A)

WORLDMED MANUFACTURING SDN BHD (891032-D)

TOTAL GLOVE COMPANY SDN BHD (472513-W)

LATEXX MANUFACTURING SDN BHD (165989-U) 100 %

100 %

100 %

51 %

RevenueRM’mil

Net AssetRM’mil

Basic Earning Per shareSEN

Pre-Tax ProfitRM’mil

RevenueRM’mil

Net AssetRM’mil

Dividend PayoutRM’mil

Dividend PayoutRM’mil

0

100

200

300

400

500

0

20

40

60

80

100

0

50

100

150

200

250

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010

2009 2010

2005 2006 2007 2008 2009 20102005 2006 2007 2008 2009 2010

Reco

rded

CAG

R of

31.

3%

Reco

rded

CAG

R of

81.

5%

Reco

rded

CAG

R of

42.

1%

Reco

rded

CAG

R of

43.

1%

0

5

10

15

20

127.6

141.0

150.8

223.3

328.4

497.2

127

.6

141

.0

15

0.8

223.

3

3

28.4

49

7.2

41.3

45.2

105.7

120.8

169.8

234.841

.3

4

5.2

1

05.

7

1

20.8

1

69.8

2

34.8

nil

nil

nil

nil

3.920

10.716

Pre-Tax ProfitRM’mil

4.3

3.9

4.9

15.2

51.8

84.1

4.3

3.9

4

.9

15

.2

51.

8

8

4.1

Basic Earning Per shareSEN

5.20

4.80

3.30

7.80

26.32

31.21

5.2

0

4

.80

3.3

0

7.8

0

2

6.32

3

1.21

2005

2006

2007

2008

2009

2010

3.92

10.716

5.533 Proposed

Paid


>>>> Financial Highlights

*Notes : Proposed final tax exempt dividend 5.533 million subject to shareholders’ approval during theforthcoming AGM.


Board of Directors >>>>

1 LOW BOK TEK Executive Chairman & Chief Executive Officer

2 MALIK PARVEZ AHMAD BIN NAZIR AHMAD Independent & Non-Executive Director

3 IBRAHIM BIN HAMZAH Independent & Non-Executive Director

4 PETER WONG HOY KIM Senior Independent & Non-Executive Director

1

2

34


>> Profile of Directors

LOW BOK TEKExecutive Chairman & Chief Executive Officer

Low Bok Tek, aged 53, a Malaysian, is the Executive Chairman & Chief Executive Officer of Latexx Partners Berhad,one of the top manufacturers of rubber glove in Malaysia. He was one of the founders of the Group in 1987, hehad greatly contributed to the successful the listing of Latexx Partners Berhad in 1996. Mr. Low has relinquishedthe rein of the Group in 2001, and was reappointed back to the Board of the Company on 16 August 2004.

Since 2004, with his exceptional entrepreneurial traits, undivided focus, and distinctive vision, he has led theGroup to become a world class rubber gloves manufacturer today. His characteristics of seeking opportunities,taking risks beyond security, and having the tenacity to push an idea through to reality combine into a specialperspective that brings the Group into a new height in the glove industry. The Group’s continuous growth is hismain agenda currently.

Mr. Low’s expertise and vast experience is not only limited to the rubber glove industry, he has tactical knowledgeand experience in the transport industry, hotel and property development.

He is currently in the Board of Gunung Capital Berhad, another public listed company and also several privatelimited companies. He is deemed interested in related party transactions as disclosed on page 26 of the AnnualReport. He does not have any family relationship with any other Director and/or substantial shareholder of theCompany.

MALIK PARVEZ AHMAD BIN NAZIR AHMADIndependent & Non-Executive Director

Malik Parvez Ahmad bin Nazir Ahmad, aged 42, a Malaysian, was appointed as the Non-Independent Non-Executive Director of the Company on 24 June 2008 and currently re-designated as Independent Non-ExecutiveDirector on 25 April 2011. He is a member of the Audit Committee and Remuneration Committee. He is anaccountant by profession and has over 10 years experience in the profession. He graduated from the InternationalIslamic University in 1992 with a Bachelor of Accounting Degree. He is also a Chartered Accountant with theMalaysian Institute of Accountants. He worked in KPMG Peat Marwick from 1993 to 1997 and held the positionof Senior Auditor when he left and joined Medtexx Partners Incorporated in the United States of America as anAccountant in 1998. From 2002 to 2004, he was the Financial Controller of D.B.E. Gurney Resources Berhad,another public listed company. He then became the Financial Controller of Latexx Partners Berhad before hisappointment in 2008 as Non-Independent Non-Executive Director of the Company. Currently, he also sits on theBoard of Gunung Capital Berhad. He does not have any family relationship with any director and/or substantialshareholder of the Company.


>>Profile of Directors (cont’d)

IBRAHIM BIN HAMZAHIndependent & Non-Executive Director

Ibrahim bin Hamzah, aged 62, a Malaysian, was appointed to the Board of the Company on 15 December 1993.He is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He obtained aBachelor’s Degree in Economics from University of Malaya in 1971 and a Master’s Degree in Economics fromUniversity Kebangsaan Malaysia in 1980. His other qualifications include a Diploma in Management Science(INTAN) and a Diploma in Industrial Management (Delft). He was active in government service from 1971 to 1993as an officer in the administrative and diplomatic service. He does not hold any directorship in other publiccompanies. He does not have any family relationship with any other Director and/or substantial shareholder ofthe Company.

PETER WONG HOY KIMSenior Independent & Non-Executive Director

Peter Wong Hoy Kim, aged 69, a Malaysian, was appointed to the Board of the Company on 16 August 2004. Heis the Chairman of the Audit Committee, Nomination Committee and Remuneration Committee of the Company.He is an ex-Banker who was previously with HSBC Bank Malaysia Berhad for 33 years until his retirement in 1996from the Bank’s Ipoh Branch where he was the Manager. He underwent numerous training overseas in HongKong, U.S.A. and United Kingdom and has served in various other capacities in the Bank including, amongstothers, Deputy Manager Credit Control and Manager Regional Credit, Peninsula North. His directorship in otherpublic companies is in Gunung Capital Berhad. He does not have any family relationship with any other Directorand/or substantial shareholder of the Company.

None of the Directors has any conflicts of interests with the Company nor has any convictions for offences withinthe past ten years other than traffic offences.


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Corporate Statement

Business Review

2010 was an eventful year for the Malaysian rubber glove industry, with great concerns on the persistently highraw material prices and the weakening of the US currency against RM. For the last 12 months leading to 31December 2010, the monthly average latex price has increased by approximately 61% and the US dollar hasweakened against RM by approximately 10%.

Despite the headwinds, global demand for gloves still growing at a pace of 10-12% annually, contributed by thegrowing hygiene awareness and standard in both medical and non-medical sectors; the aging of worldpopulation; and last but not the least, the expanded healthcare expenditure worldwide. In fact, it is foreseeablethat the rapid growing awareness of daily personal hygiene and higher occupational safety will further expandedthe demand for gloves globally, beyond the 10-12% growth rate starting 2011.

Against this background, the Group remains optimistic on the outlook of the rubber glove industry. The businessopportunity for rubber glove manufacturers is still bright in the near future, as well as in the longer term, spursby the growing demand and the relative resilient nature of the industry to the macro economic conditions. Thisis proven by the Group’s outstanding performance in FY2010.

Financial Review

For the financial year under review, Group revenue increased by RM 168.9 million to RM 497.3 million from RM328.4 million, a recorded increase of 52%. Profit before tax increased by RM 32.3 million to RM 84.1 million fromRM 51.8 million, an increase of 62%. The significant increase in revenue was driven by the continuous capacityexpansion and higher capacity utilization. The substantial improvement in profit was attributed to better marginderived from the change in product mix with sales of more premium products; and overall cost savings fromeconomic of scale and effective operation control.

Dividends

The Group has declared a total interim dividend of 5 sen per share for the financial year ended 31 December2010. In line with the favorable results, the Group further proposed a final tax exempt dividend of 2.5 sen pershare for the financial year ended 31 December 2010, amounting to approximately RM5.533 million. Theproposed final dividend is subject to the shareholders’ approval in the forthcoming Annual General Meeting.

The 1st and 2nd interim dividends declared in the first two quarters for FY2010 alone that were pay outrespectively on 5 July 2010 and 5 October 2010, amounted to RM10.716 million, which is 150% higher than thetotal dividend declared for FY2009, and the Group is committed to consistent dividend payout in the future.

We have great pleasure to present to

all the stakeholders the Annual Report and Audited FinancialStatements of the Group for the financial year ended 31 December 2010


>>>>Corporate Statement (cont’d)

Company Review

The installation of 28 new high performance lines in the newly constructed production plant adjacent to ourexisting plants was completed. The newly expanded facilities have increased the Group’s total capacity to 9billion pieces per annum from the previously 6 billion pieces per annum. The Group will continue to initiate aseries of upgrading works on the existing lines to improve machine efficiency as well as operation effectiveness.The execution of the current joint venture (JV) project, Total Glove Company Sdn Bhd, with Budev B.V. onundetectable protein level NR glove was in accordance to the plan and schedule. The first unit of thecommercial machine has arrived in the facility site in Kamunting. Commercialization will kick off once theinstallation is completed.

Previously, the Group customer base was, and it is still, very much centric to the US market, taken upapproximately 70 per cent of the total sales at the end of FY2010. In the past, the Group has not tried to tapinto the rest of the regions beside the North America market. These regions are inclusive of the Europe, MiddleEast, Japan, India, China, etc that are potentially big. In 2010, the Group has taken up highly effective strategicinitiatives to enter into these markets that are potentially large and promising.

Con-currently, the Group also aggressively penetrating into the non-medical markets, particularly the food-handling, beauty and daily personal hygiene as well as the industrial sectors, via the latest ultra-thin nitrileglove range that were successfully developed by the Group’s R&D. The Group is ready to tap on the potentialdemand growth in these sectors that is driven by the heightening of hygiene and work safety awareness.

The Group strongly believe the above two strategic moves will successfully help the Group to enlarge itsregional customer base and increase of capacity expansions in the coming years. In line with the businessdevelopment strategies, the Group would continue to allocate more capacity to nitrile production in the future,ultimately to achieve 80% of nitrile gloves production in the product mix.

The Group continued to adopt effective cost saving measures to mitigate the impact of the rising raw materialcosts. The Group has managed to maintain high level of flexibility as majority of the facilities and lines wereinterchangeable between the production of NR and nitrile gloves, with minimum conversion time.

The Board is confident that the growth in FY 2010 will be sustained in tandem with the growth of worlddemand for both medical and non-medical gloves in the healthcare and industry sectors. The strategy ofcapacity expansion and switching to a better mix of products, coupled with even more aggressive marketingefforts into the existing market in medical sector; and the new and potential markets in the non-medical sector,specifically the food and industry markets will contribute to a sustainable flow of profitability.

Corporate Governance

The Board is committed to observe the Malaysian Code of Corporate Governance (Revised 2007) and ListingRequirements of Bursa Securities and has ensured that a high standard of corporate governance is practicedthroughout the Group to protect the assets of the Group and operations and shareholder value. Our statementon corporate governance can be found on pages 11 to 15.

Corporate Social Responsibility

The Group is committed to Corporate Social Responsibility (“CSR”) by integrating it into the businessoperations. The Group’s business responsibility of improving profitability goes hand in hand with maintaininggood manufacturing practices that will safeguard our people and the environment.

During the year 2010, the Group continues to make contributions to the local and national communities,especially welfare of needy groups, sporting, educational and charitable organizations.


>> Corporate Statement (cont’d)

Awards & Recognitions

2010 is a banner year for the Group, of which the Group’s excellence performance and continuing efforts increating shareholder values were proven and acknowledged.

The Group was ranked 2nd in the Industrial Market-Manufacturing Sector, and ranked 21st in Top 100 Rank ofthe KPMG Shareholder Value Award 2010 Malaysia.

The Group was also the recipient of the Forbes Asia “Best Under A Billion” Award 2010. The Group was among9 of the Malaysian companies in the award list.

It also has been voted as the Best Small Cap in Malaysia by Financial Asia’s 11th Annual Poll on Asia’s TopCompanies.

Word of appreciation

On behalf of the Group, we would like to express our sincere thanks and appreciation to the managementand all employees of the Group for their unwavering contribution, dedication, commitment and loyalty to theGroup during 2010. The year 2011 will continue to be challenging and we look forward to working with all ofyou as we collectively and individually face whatever opportunity and difficulty that may present itself.

We would also like to extend our sincere and heartfelt appreciation to the stakeholder community, inclusiveof our shareholders, bankers, valued customers, suppliers, business associates and the regulatory authoritieswho have supported and believed in us over these years. We look forward to your continuing support andtrust for the year ahead.

Last, but not least, we thank the members of the Board for their counsel and support throughout the year.

LOW BOK TEKExecutive Chairman & Chief Executive Officer

20 May 2011


>>

The Board recognises that corporate governance is about commitment to values and ethical conduct and thus,the Board is fully committed in ensuring that the interests of all stakeholders are not just safeguarded, butcontinually enhanced in values. The stakeholders’ expectations must be assessed and managed, and notassumed.

The Board is pleased to report to the shareholders on the manner in which the Company has strengthened itsapplication of the principles of corporate governance and adopted the corporate governance best practiceslaid down in the Malaysian Code on Corporate Governance (the Code).

BOARD OF DIRECTORS

Board Composition and Balance

The Board currently comprise of four (4) members, three (3) of whom are Independent Non-Executive Directorsand one (1) Executive Chairman. The Board complies with paragraph 15.02 of the Main Market ListingRequirements, which requires that at least two or one-third of the Board members, whichever is higher, to beIndependent Directors. A brief profile of each Director is presented under the Directors’ Profile section of thisAnnual Report.

The Board recognizes that there should be a clear division of responsibilities in respect of the running of theBoard and day to day management of the Group as this will ensure a balance of power and authority. Mr LowBok Tek has been holding the positions of Executive Chairman and Chief Executive Officer since 2004. Hecontinues to act in the combined role during the financial year. He is the most appropriate to head theoperations of the Group due to his extensive knowledge and experience in the Group’s business. Togetherwith an experienced management team, they are responsible for the operational and business units,organizational effectiveness and the implementation of corporate policies, strategies, decisions and internalcontrols.

The Board’s composition represents a mix of knowledge, skills and expertise relevant to the Company’soperations to provide strong and effective leadership and control of the Group. The presence of IndependentNon-Executive Directors is essential for corporate accountability and in providing the Group with a widergeneral experience of strategy formulation, unbiased and independent opinions, advices, judgements andobjective view of the performance of the Group to ensure that adequate systems are used to safeguard theinterests not only to the Group, but also to its minority shareholders and stakeholders. They have ensured thepractice of a balanced Board’s decision making process. In accordance with the requirements of the Code, theBoard has identified a senior independent non-executive director to whom concerns or issues affecting theGroup may be conveyed where it could be inappropriate for these to be dealt by the Chairman or Management.

Board Responsibility

The Board of Directors is responsible for planning the strategic direction of the Group, the allocation ofresources, the continuous review of the Group’s business operations and performance, the monitoring,implementation and review of appropriate processes and internal controls to manage business risk, andgenerally, for ensuring that the Company is being managed and its business conducted in accordance withhigh standards of accountability and transparency.

Board Meetings

Board meetings are held at least five (5) times per year with additional meetings convened when urgentdecisions need to be taken between the scheduled meetings. During the financial year ended 31 December2010, five (5) meetings were held, where it discussed a variety of matters including the Group’s financial results,corporate development, strategic decisions, business plan and directions of the Group, operational issues andcompliance matters.

Corporate Governance Statement


>> Corporate Governance Statement (cont’d)

BOARD OF DIRECTORS (CONT’D)

Board Meetings (cont’d)

All Directors fulfilled the requirements of the Articles of Association with respect to the Board meetingattendance. The following is the record of attendance of the Board members:-

Directors No. of Meetings Attended

Low Bok Tek 5/5Peter Wong Hoy Kim 5/5Ibrahim bin Hamzah 5/5Malik Parvez Ahmad bin Nazir Ahmad 4/5

Supply of Information

All scheduled meetings held during the year were preceded by a formal notice issued by the Company Secretaryin consultation with the Chairman. The Chairman ensures that all Directors have full and timely access toinformation, with Board Papers distributed in advance of meetings. The notice for each of the meetings isaccompanied by the minutes of preceding Board meetings, together with relevant information and documentsfor matters on the agenda to enable them to consider and deliberate knowledgeably on issues and facilitateinformed decision making.

The Directors meet, review and approve all corporate announcements, including announcement of thequarterly financial reports and annual audited accounts, prior to releasing them to the Bursa Malaysia SecuritiesBerhad. The Board is also notified of the impending restriction in dealing with the securities of the Companyat least one month prior to release of the quarterly financial results announcement.

The Company Secretary ensures that all Board meetings are properly convened, and that accurate and properrecords of the proceedings and resolutions passed are recorded and maintained in the statutory register ofthe Company.

The Directors have full and unrestricted access to the advice and services of the Company Secretary and theexternal auditors at all times in the discharge of their duties and responsibilities. Where necessary, the Directors,whether collectively as a Board or in their individual capacity are empowered to seek independent professionaladvice and services in furtherance of their duties.

Board Committees

The Board has established several committees, namely Audit Committee, Nomination Committee andRemuneration Committee, with specific terms of references to support and assist the Board in discharging itsfiduciary duties and responsibilities. These committees have the authority to analyze on relevant issues andreport to the Board with their proceedings and deliberations.

Nomination Committee

The Nomination Committee, which comprises wholly Non-Executive Directors and its primary function, is torecommend candidates to the Board and assess Directors on an on-going basis. The final decision onappointments shall be the responsibility of the full Board after considering the recommendations of theNomination Committee.


>>Corporate Governance Statement (cont’d)


Nomination Committee (cont’d)

The Nomination Committee comprises the following members:• Peter Wong Hoy Kim (Chairman / Senior Independent & Non-Executive Director)• Ibrahim bin Hamzah (Member / Independent & Non-Executive Director)

The nomination of Directors for purpose of re-election shall also be determined and thereafter recommendedby the Nomination Committee for approval by the Board. In nominating Directors for re-election, theNomination Committee is guided by the provisions of the Articles of Association of the Company.

Remuneration Committee

The Remuneration Committee, comprising of Non-Executive Directors, is responsible for the implementationof remuneration policy and to make recommendation to the Board on the remuneration packages of theExecutive Directors. The Executive Directors do not participate in decisions relating to their remuneration. Theultimate responsibility for determining remuneration of the Executive Directors lies with the Board. The Boardalso determines the remuneration of the Non-Executive Directors, and the Director concerned abstaining fromparticipating in decisions regarding his own remuneration package. The Directors’ fees recommended for theNon-Executive Directors are endorsed by the Board and subject to the approval of shareholders at the AnnualGeneral Meeting.

The Remuneration Committee comprises the following members:• Peter Wong Hoy Kim (Chairman / Senior Independent & Non-Executive Director)• Ibrahim bin Hamzah (Member / Independent & Non-Executive Director)• Malik Parvez Ahmad bin Nazir Ahmad (Member / Independent & Non-Executive Director)

Audit Committee

The Audit Committee is primarily responsible for matters relating to financial accounting and controls to ensurethat good practices are adopted in the review and disclosure in the financial affairs of the Group. The AuditCommittee also provides an independent and neutral avenue for reporting and feedback both between theinternal and external auditors; and the Directors and management representatives of the Group.

The composition and terms of reference of the Audit Committee together with its report are presented in theAudit Committee section in this Annual Report.

Appointments to the Board and Re-election

In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board duringthe year are subject to re-election by shareholders at the following Annual General Meeting.

The Company’s Articles of Association also provide that at least one-third (1/3) of the Directors shall retire fromoffice at each Annual General Meeting. All Directors shall retire from office once at least in every three (3)years but shall be eligible for re-election.


>> Corporate Governance Statement (cont’d)


Directors’ Training

The Board acknowledges that its Directors must keep abreast on various issues having relevance to theconstantly changing environment within which the business of the Group operates and enhance their businessacumen and skills to meet challenging commercial risks.

The Board endeavours to provide continuous training and development to its Directors on an annual basis.The Board also encourages its Directors to attend talks, seminars, workshops and conferences to update andenhance their skills and knowledge to enable them to carry out their roles effectively as Directors in dischargingtheir responsibilities towards corporate governance, operational and regulatory issues.

During the financial year ended 31 December 2010, all the Directors of the Company attended the followingtraining programme and professional development course:-

Low Bok Tek Corporate Governance For Company Directors 10 Nov 2010Peter Wong Hoy Kim Corporate Governance For Company Directors 10 Nov 2010Ibrahim bin Hamzah Corporate Governance For Company Directors 10 Nov 2010Malik Parvez Ahmad bin Strategic Islamic Finance 16 June 2010Nazir Ahmad Global Investment Performance Standard 8 July 2010

IFN 2010 Issuers & Investor Asia Forum 26 & 27 Oct 2010

In addition to the above, Directors’ education also includes briefings by the Internal Auditors, External Auditorsand the Company Secretaries on the relevant updates on statutory and regulatory requirements from time totime during the Audit Committee and Board meetings.

DIRECTORS’ REMUNERATION

The details of the remuneration of the Directors of the Company for services rendered to the Group for thefinancial year ended 31 December 2010 are as follows:-

Executive Directors Non Executive Directors(RM) (RM)

Remuneration- Fees - 75,000- Salaries & Other Emoluments 1,415,700 19,750

The number of Directors whose remuneration falls within the following bands is as follows:

Number of DirectorsRange of Remuneration Executive Non Executive

Below RM50,000 - 3RM1,400,000 – RM1,450,000 1 -

SHAREHOLDERS

Relations with Shareholders and Investors

The Board maintained an effective communication policy that enables both the Board and the managementto communicate effectively with its shareholders, stakeholders and the public. The policy effectively interpretsthe operations of the Group to the shareholders and accommodates feedback from the shareholders, whichare factored into the Group’s business decision.


>>Corporate Governance Statement (cont’d)

SHAREHOLDERS (CONT’D)

Relations with Shareholders and Investors (cont’d)

The Board communicates information on the operations, activities and performance of the Group to theshareholders, stakeholders and the public through the followings:-

• The Annual Report which contains the financial and operational review of the Group’s business, corporateinformation, financial statements, and information on Audit Committee and Board of Directors;

• Circular to Shareholders;• Various announcements made to Bursa Malaysia Securities Berhad, which includes announcement on

quarterly results; and• The Company’s website at http://www.latexx.com.my

At each Annual General Meeting, the principal forum for dialogue with all shareholders, the Board takespleasure in presenting the progress and performance of the Group’s business. Shareholders are encouragedto participate in the Questions and Answers sessions on the proposed resolutions or about the Group’soperations in general. The Chairman and the Board will respond to the questions raised by the shareholdersduring the Annual General Meeting.

The Board has ensured each item of special business included in the notice of meeting will be accompanied byan explanatory statement on the effects of the proposed resolution.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to provide and present a clear, balanced and meaningful assessment of the Group’s financialperformance and prospects at the end of the financial year, primarily through the annual financial statements,quarterly announcement of results to shareholders as well as the Chairman’s statement and review ofoperations in the annual report. The Board is assisted by the Audit Committee to oversee the Group’s financialreporting processes and the quality of its financial reporting.

Internal Control

The Board acknowledges its overall responsibilities for maintaining a sound system of internal control tosafeguard shareholders’ investment and the Group’s assets, covering not only financial controls but also controlsrelating to operational, compliance and risk management. Whilst emphasis is being placed on ensuring theeffectiveness of the control system, there can only be reasonable assurance against misstatement, irregularitiesor losses.

The Statement on Internal Control of this Annual Report provides an overview of the state of internal controlswithin the Group.

Relationship with Auditors

The Audit Committee supports the Board in its responsibility to oversee the financial reporting and theeffectiveness of the internal control of the Group. The Group has always maintained a formal and transparentrelationship with its external and internal auditors through the Audit Committee. The Audit Committee actsas an independent channel of communication for the auditors to convey its objective views and professionaladvice on the Group’s financial and operational activities.

Key features for the relationship of the Audit Committee with both the internal and external auditors aremore particularly described in the Audit Committee Report of this Annual Report.

This Statement was made in accordance with a resolution of the Board of Directors dated 14 May 2011


>> Directors’ Responsibility Statement

The Directors acknowledge their responsibility in ensuring that the financial statements of the Company andthe Group give a true and fair view of the state of affairs of the Company and the Group at the end of thefinancial year and of their results and cash flows for that year ended.

In the preparation of the financial statements, the Directors have:-

• adopted appropriate accounting policies and applied them consistently;• made judgements and estimates that are prudent and reasonable; • ensured applicable approved accounting standards, the Listing Requirements of Bursa Securities and other

statutory requirements have been complied with; and• confirmed that the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group keeps proper accounting records which disclose withreasonable accuracy at any time the financial position of the Group and the Company and that the underlyingfinancial statements are prepared in compliance with the provisions of the Companies Act, 1965.

The Directors are also responsible for taking reasonable steps to prevent and detect fraud and otherirregularities, in order to safeguard the assets of the Group.

This Statement was made in accordance with a resolution of the Board of Directors dated 14 May 2011


>>Statement On Internal Control

Introduction

Pursuant to paragraph 15.26(b) of the Bursa Securities Main Market Listing Requirements, the Board ofDirectors of Latexx Partners Berhad is pleased to provide the following statement on the internal control whichoutlines the nature and scope of internal control of the Group during the year under review.

Directors’ Responsibilities

The Board of Directors acknowledges responsibility for maintaining a sound system of internal control for theGroup and for reviewing its adequacy and integrity so as to safeguard shareholders’ investment and the assetsof the Group whilst the Management’s role is to implement Board policies on risk and control.

However, due to inherent limitation the Board recognises that the system of internal control is designed tomanage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonableand not absolute assurance against material misstatement or loss.

In pursuing its responsibility, the Board has an on-going process for identifying, evaluating and managing thesignificant risks faced by the Group, which has been in place for the financial year under review. This processis regularly reviewed by the Board through its Audit Committee. The Audit Committee assists the Board inreviewing the adequacy and integrity of the system of internal controls of the Group.

Internal Control Environment

Within the Group, there are organisational structures in place for each operating unit with clearly definedlevels of authority. Management of each operating unit has clear responsibility for identifying risk affectingtheir unit and the overall Group’s business as a whole. They are also charged with instituting adequateprocedures and internal controls to mitigate and monitor such risks on an ongoing basis.

Key elements of the Group’s internal control system comprised:-

• An organization structure that clearly defines the lines of responsibility, proper segregation of duties anddelegation of authority;

• Strategic business planning and budgeting process which establishes plans and targets against whichperformance are monitored on an on-going basis;

• The Group has adequately qualified and experienced financial management personnel responsible for theoperation and monitoring of the effectiveness of internal controls. Management accounts and reports areprepared monthly for effective monitoring and decision-making;

• Timely financial reporting in providing relevant financial information for management review.Announcement of financial information is further subjected to the Audit Committee’s reviews prior tothe Board’s approval;

• Regular Management meetings to assess the Group’s performance and controls;

• Board members meet regularly to review the Group’s financial performance, business initiatives,management and corporate issues. Board Papers are distributed to the members ahead of the meetingsand Board members have access to all relevant information;

• Experienced and dedicated team of personnel across key functional units;

• Established internal policies and procedures for key business units within the Group;


>> Statement On Internal Control (cont’d)

Internal Control Environment (cont’d)

• Ensuring the operation is in adherence to the relevant regulatory and legislative requirement;

• Continuous staff training and development to ensure that the employees are well trained and equippedwith all the necessary knowledge, skills and abilities to carry out their responsibility effectively.

Audit Committee

The Board has empowered the Audit Committee with the duty of reviewing and monitoring the effectivenessof the Group’s system of internal control. The Audit Committee reviews the Group’s financial reports, externalaudit reports, internal audit findings, management responses and the internal control system. Its independenceis assured by the composition of all Independent Directors. As highlighted in the Audit Committee Report, theAudit Committee has full access and direct communication with the External and Internal Auditors indischarging its responsibilities.

Internal Audit Function

The Group’s internal control systems are continually being reviewed and enhanced to ensure that changes inthe Group’s business and operating environment are adequately managed. The Audit Committee and Boardobtain regular assurance on the adequacy and effectiveness of the internal control system throughindependent reviews performed by the internal audit function which is outsourced to a professional servicesfirm.

The review by the internal auditors covers financial and operational controls together with compliance topolicies and procedures. These are designed to provide sufficient assurance of regular reviews and appraisalsof the effectiveness of the system of internal controls within the Group. The internal audit team assists theAudit Committee in identifying, evaluating, monitoring and managing the significant risks to ensure properrisk management, adequacy and integrity of the internal control systems in all operational units within theGroup. During the financial year, the internal audit function carried out audits in accordance with the riskbased internal audit plan approved by the Audit Committee. Based on the internal audit reviews carried out,the results of the review were presented to the Audit Committee at the committee’s scheduled meetings. TheAudit Committee, in turn reports to the Board, its findings and consequently its conclusion on the effectivenessof internal control system quarterly.

Conclusion

The Board is of the view that there were no material losses incurred by the Group during the financial year asa result of weaknesses in internal control. Nevertheless, the Board and Management continue to takeappropriate measures from time to time to strengthen the existing control environment within the Group.

The external auditors have reviewed this Statement on Internal Control for inclusion in the Annual Report ofthe Group for the financial year ended 31 December 2010 and reported to the Board that nothing has cometo their attention that causes them to believe that the statement is inconsistent with their understanding ofthe process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.

This Statement is made in accordance with a resolution of the Board of Directors dated 14 May 2011.


>>Audit Committee Report

CONSTITUTION

The Audit Committee was established by the Board as the prime body to ensure a high standard of corporateresponsibility, integrity and accountability to shareholders in line with the corporate governance and disclosurestandard expected from that of a public listed company.

The present members of the Audit Committee of the Company are:

• Peter Wong Hoy Kim (Chairman)Senior Independent Non-Executive Director

• Ibrahim bin Hamzah Independent Non-Executive Director

• Malik Parvez Ahmad bin Nazir Ahmad Independent Non-Executive Director

MEETINGS AND ATTENDANCE

The Audit Committee meets periodically to carry out its functions and duties in accordance with its Terms ofReference. During the financial year ended 31 December 2010, the Audit Committee held a total of five (5)meetings with attendance as follows:-

Name Attendance

Peter Wong Hoy Kim 5/5Ibrahim bin Hamzah 5/5Malik Parvez Ahmad bin Nazir Ahmad 4/5

TERMS OF REFERENCE

Objective

The primary objective of the Audit Committee is to assist the Board of Directors in the effective discharge ofits fiduciary responsibilities for corporate governance, financial reporting, risk management, internal controland compliance of statutory and legal requirements.


>> Audit Committee Report (cont’d)

TERMS OF REFERENCE (CONT’D)

Membership

The members of the Audit Committee shall be appointed by the Board of Directors from amongst their numberand must be composed of no fewer than three (3) members. All the Audit Committee members must be non-executive directors, with a majority are independent Non-Executive Directors.

At least one member of the Committee:-

(a) must be a member of the Malaysian Institute of Accountants; or

(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years workingexperience and:

(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act1967; or

(ii) he must be a member of one of the associations of accountants specified in Part II of the 1st Scheduleof the Accountants Act 1967;or

(c) fulfils such other requirements prescribed or approved by the Bursa Malaysia Securities Berhad.

The members of Audit Committee shall elect a Chairman from among their number who shall be anindependent Non-Executive Director. No alternate director can be a member of the Committee. A quorumshall be two (2) members and a majority of members present must be independent Directors.

The Board shall, within three (3) months of a vacancy occurring in the Audit Committee which results in thenumber of members reduced to below three (3), appoint such number of new members as may be required tomake up the minimum number of three (3) members.

Notice of Meeting and Attendance

The agenda for Audit Committee meetings shall be circulated before each meeting to members of theCommittee. The Committee may require the external auditors, Head of Finance, Head of Internal Audit or anyofficial of the Group to attend any of its meetings as it determined. The external auditors shall have the rightto appear to be heard at any meeting of the Audit Committee and shall appear before the Committee whenrequired to do so by the Committee.

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

Frequency of Meetings

The Committee shall meet at least five (5) times during each financial year with authority to convene additionalmeetings as required. Upon request of any of its members or the internal or external auditors, the Chairmanof the Audit Committee shall convene a meeting of the Committee.


>>Audit Committee Report (cont’d)


Authority

The Audit Committee has the following authority as empowered by the Board:-

• to investigate any activity of the Company within its terms of reference;

• have the resources which are required to perform its duties;

• have full and unrestricted access to any information and personnel pertaining to the Group;

• have direct communication channels with the external and person(s) carrying out the internal auditfunction or activity;

• to convene meetings with the external auditors, the internal auditors or both, excluding the attendanceof other directors and employees of the Company, whenever deemed necessary;

• to obtain independent professional advice as necessary.

Reporting Procedure

The Audit Committee shall cause minutes to be made of all proceedings at all meetings of the Committee. TheSecretary shall circulate the minutes of meetings of the Audit Committee to all members of the Committeeand also members of the Board. Circular Resolutions signed by all the members shall be valid and effective asif it had been passed at a meeting of the Audit Committee.

Duties and Responsibilities

In fulfilling its primary objectives, the Audit Committee shall undertake the following duties andresponsibilities:-

1. Review the quarterly results and year end financial statements, prior to the approval by the Board ofDirectors, focusing particularly on:-

• going concern assumptions;

• changes in or implementation of major accounting policy;

• significant and unusual events; and

• compliance with accounting standards, regulatory and other legal requirements.

2. Review and discuss with the external auditors of the following:-

• the audit plan prior to the commencement of audit;

• their audit report;

• their evaluation of the system of internal control;

• problems and reservations arising from the interim and final external audits, and any matters theexternal auditors may wish to discuss (in the absence of management, where necessary); and

• their management letter and management’s response.


>>


Duties and Responsibilities (cont’d)

3. Review any related party transaction and conflict of interest situation that may arise within the Companyor the Group, including any transaction, procedure or course of conduct that raises questions ofmanagement integrity and to ensure that the Directors report such transactions annually to theshareholders vide the Annual Report.

4. Review the following in respect of Internal Audit:-

• adequacy of the scope, functions, competency and resources of the internal audit function and thatit has the necessary authority to carry out its work;

• internal audit programme, processes and results of the internal audit programme, processes orinvestigation undertaken and whether or not appropriate actions are taken on the recommendationsof the internal audit function;

• effectiveness of the system of internal control;

• major findings of internal audit investigations and management’s response;

• review any appraisal or assessment of the performance of the staff of the internal audit function;

• approve any appointment or termination of senior staff member of the internal audit function; and

• note resignations of internal audit staff members and provide the resigning staff member anopportunity to submit his/her reason for resignation.

5. Consider and recommend the nomination and appointment, the audit fee and any questions ofresignation, dismissal or re-appointment of the external auditors.

6. Report promptly to the Bursa Malaysia Securities Berhad on any matter reported by it to the Board ofDirectors which has not been satisfactorily resolved resulting in the breach of the Listing Requirements.

7. Prepare Audit Committee Report at the end of each financial year.

8. Carry out such other responsibilities, functions or assignments as may be defined jointly by the AuditCommittee and Board of Directors from time to time.

Modifications

The terms and provisions hereinbefore contained are subject to such revisions by way of modification, additionsor otherwise as the Board from time to time may consider fit.

Audit Committee Report (cont’d)


>>

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were carried out by the Audit Committee during the financial year ended 31 December2010:-

• Reviewing the unaudited quarterly financial results announcements and annual audited financialstatements of the Group prior to making recommendation to the Board for consideration and approval;

• Assessing the Group’s financial performance;

• Reviewing and discussing with the External Auditors, the results of the audit process, issues arising fromthe audits and updates on new developments pertaining to accounting standards issued by the MalaysianAccounting Standards Board;

• Recommending the nomination of External Auditors for Board’s approval;

• Reviewing the procedures monitoring recurrent related party transactions within the Group and therenewal of shareholders’ mandate;

• Examining the major findings of the internal audit investigation and management’s responses and ensurethat appropriate actions are taken on the recommendation of the internal audit function;

• Discussing and adopting the internal audit plan and reviewing the overall assessment of the system ofinternal controls of the Group;

• Reviewing the Audit Committee Report and Statement on Internal Control to be published in the AnnualReport.



>>

INTERNAL AUDIT FUNCTION

The Board of Directors recognizes that an internal audit function is essential to ensuring the effectiveness ofthe Group’s systems of internal control and is an integral part of the risk management process.

In this regards, the internal audit function of the Company is being out-sourced to a professional services firm,which is tasked with the aim of assisting the Audit Committee in assessing risks, recommend measures tomitigate risks, establish cost effective controls and assess proper governance process. The internal auditor actsindependently with impartiality and proficiency and reports directly to the Audit Committee.

The activities undertaken by the internal auditors during the financial year under review included thefollowings:-

1. Formulated, reviewed and agreed with the Audit Committee the strategy, scope of work and annualinternal audit plan;

2. Reviewed and assessed the Group’s compliance to its established policies, guidelines and proceduresrelated to internal control;

3. Assessed the reliability and integrity of financial and operational information;

4. Analysed and discussed with the Audit Committee on the internal audit findings and maderecommendations for improvements;

5. Follow-up audit review was conducted to monitor and ensure that all audit recommendations have beeneffectively implemented.

The cost incurred in maintaining the Internal Audit Function for the financial year ended 31 December 2010was RM31,000.



>>

The information set out below is disclosed in compliance with the Main Market Listing Requirements of BursaMalaysia Securities Berhad.

1. Utilisation of Proceeds

The Company did not raise any funds through any corporate proposal during the financial year ended 31December 2010.

2. Options, Warrants and Convertible Securities

During the financial year under review, the Company issued 21,218,157 new ordinary shares of RM0.50each at an issue price of RM0.53 per share arising from the exercise of warrants issued by the Company.

During the financial year, the Company also granted 7,033,000 share options pursuant to the EmployeeShare Option Scheme.

3. Non-Audit Fees

There is no non-audit fees paid to the external auditors for the financial year ended 31 December 2010.

4. Material Contracts Involving Directors and Major Shareholders

There were no material contracts subsisting as at 31 December 2010 or entered into since the end of theprevious financial year, by the Company and its subsidiaries involving Directors’ and major shareholders’interest other than those disclosed under notes to the account on Related Party Transactions of revenuein nature.

5. Contract Relating to Loans

During the financial year, there were no contracts relating to loans entered into by the Company involvingthe interests of directors and/or major shareholders.

6. Share Buy-Back

The details of the shares repurchased and retained as treasury shares during the financial year ended 31December 2010 are set out as below:-

TotalNo of Latexx Highest Lowest Average Amount

Shares Price Price Price PaidPurchased RM RM RM RM

August 2010 306,000 3.61 3.19 3.50 1,073,344September 2010 47,500 3.03 2.97 3.00 142,678

Total 353,500 1,216,022

No shares were resold or cancelled during the financial year.

7. Depository Receipt (“DR”) Programme

The Company did not sponsor any DR programme during the financial year ended 31 December 2010.

8. Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors ormanagement by the regulatory bodies.

Additional Compliance Information


>>

9. Profit Estimate, Forecast or Projection

The Company and its subsidiaries did not release any profit estimate, forecast or projection and there wasno variation in results by 10% or more between the audited and the unaudited results announced duringthe financial year ended 31 December 2010.

10. Profit Guarantees

During the financial year, there were no profit guarantees given by the Company.

11. Revaluation Policy on Landed Properties

The revaluation policy on landed properties is as set out in the Financial Statements.

12. Recurrent Related Party Transactions (“RRPT”) of a Revenue or Trading Nature

The Company had at the 28th Annual General Meeting held on 18 June 2010 obtained shareholders’mandate for the Company and/or its subsidiary companies to enter into recurrent transactions of a revenueor trading nature, which are necessary for its day to day operations and are in the ordinary course ofbusiness, with related parties. The said general mandate took effect from 18 June 2010 until the conclusionof the forthcoming Annual General Meeting of the Company. The Company does not intend to seek arenewal of the said general mandate for recurrent related party transactions at the forthcoming AnnualGeneral Meeting of the Company as all RRPT on latex trading between Latexx Manufacturing Sdn Bhd(“LMSB”) and Gunung Resources Sdn Bhd (“GRSB”) had ceased effective from January 2011.

The aggregate value of the recurrent transactions of a revenue or trading nature conducted during thefinancial year under review between the Company and/or its subsidiary company with related party areset out below:-

Nature of Aggregate valueTransactions Related Party Interested Party (RM)

* The RRPT was in the ordinary course of business and on terms and conditions that the latex concentratepurchased from GRSB, a related party, is 3% higher in purchase price compared to those obtainable intransactions with unrelated parties. GRSB granted a longer credit term of 60 to 90 days to LMSB comparedto those unrelated parties’ credit terms which range from 21 to 30 days.

Additional Compliance Information (cont’d)

Purchase of latexconcentrate by asubsidiary ofLatexx PartnersBerhad (“LPB”)from a subsidiaryof GunungCapital Berhad(“GCB”)

Subsidiary of GCB• Gunung

Resources Sdn Bhd

➢ Low Bok Tek (“LBT”), a Director anda major shareholder of GCB andGRSB. He has a deemed interest of16.58% in GCB held throughErayear Equity Sdn Bhd (“Erayear”)

➢ Erayear, a party connected to LBTwhich is also a major shareholder ofGCB

➢ LBT, a Director and a majorshareholder of LPB and LMSB. Hehas a direct interest of 7.08% in LPBand a deemed interest of 22.69% inLPB held through BT Capital SdnBhd (“BTC”)

➢ BTC, a party connected to LBTwhich is also a major shareholder ofLPB

RM32,651,419

28 Directors’ Report

34 Statement By Directors

34 Statutory Declaration

35 Independent Auditors’ Report

37 Statements of Financial Position

39 Statements of Comprehensive Income

40 Statements of Changes In Equity

41 Statements of Cash Flows

43 Notes To The Financial Statements

Financial Statements>>


>> Directors’ Report for the year ended 31 December 2010

The directors hereby submit their report and the audited financial statements of the Group and of the Companyfor the financial year ended 31 December 2010.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding and trading of rubber gloves. The principal activitiesof its subsidiaries are listed in Note 6 to the financial statements. There have been no significant changes inthese principal activities during the financial year.

FINANCIAL RESULTS

Group CompanyRM RM

Net profit for the year 65,454,307 45,971,719

In the opinion of the directors, the results of operations of the Group and of the Company during the financialyear have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDEND

During the year, the Company declared and paid the following interim dividends in respect of the financialyear ended 31 December 2010:

a) A first interim tax-exempt dividend of 2.5 sen per ordinary share of RM0.50 each amounting toRM5,271,377.80 in respect of the current financial year which was paid on 5 July 2010; and

b) A second interim tax-exempt dividend of 2.5 sen per ordinary share of RM0.50 each amounting toRM5,445,291.71 in respect of the current financial year which was paid on 5 October 2010.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than thosedisclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company issued 21,218,157 new ordinary shares of RM0.50 each at an issue priceof RM0.53 per share arising from the exercise of warrants issued by the Company.

The Company has not issued any debenture during the financial year.

Directors’ Reportfor the year ended 31 December 2010


>>Directors’ Report (cont’d)

for the year ended 31 December 2010

TREASURY SHARES

During the financial year, the Company repurchased 353,500 (2009: nil) ordinary shares of its issued sharecapital from the open market. The average price paid for the shares repurchased was RM3.44 (2009: nil) pershare. The repurchase transactions were financed by internally generated funds. The shares repurchased arebeing held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

As at 31 December 2010, the Company held as treasury shares a total of 353,500 (2009: nil) of its 218,823,670(2009: 197,605,513) issued ordinary shares. Such treasury shares are held at a carrying amount of RM 1,216,022(2009: nil).

SHARE OPTIONS

No options were granted to any person during the financial year to take up unissued shares of the Companyother than the employee share option scheme described below.

As at the end of the financial year, there were no unissued shares of the Company under option apart fromthe issue of options granted under the warrants 2007/2017 and pursuant to the Employee Share OptionScheme.

WARRANTS 2007/2017

Pursuant to a deed poll dated 6 April 2007 (“Deed Poll”), the Company has issued 80,151,858 free detachablewarrants (“Warrants”) pursuant to a Debt Settlement and Placement exercise.

The salient features of the Warrants as stated in the Deed Poll are as follows:-

a) Each Warrant entitles the registered holder at any time during the exercise period to subscribe for one (1)new ordinary share at an exercise price of RM0.53 per ordinary share.

b) The exercise price and number of Warrants are subject to adjustment in accordance with the conditionsprovided in the Deed Poll.

c) In the case of winding up of the Company, all Subscription Rights which have not been exercised withinsix (6) weeks of the passing of such resolution of granting of the court order shall lapse and the Warrantswill cease to be valid for any purpose.

d) The exercise period is 10 years from the date of issue to expire on 6 June 2017.

e) Upon expiry of the exercise period, any Warrants which have not been exercised will lapse and cease tobe valid for any purpose.

The Warrants were granted for listing and quotation with effect from 12 June 2007. There were 21,218,157warrants being exercised during the financial year ended 31 December 2010.

Directors’ Report (cont’d)



>>

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)

The Company’s Employee Share Option Scheme (“ESOS”) is governed by the By-Laws approved by theshareholders at an Extraordinary General Meeting held on 16 June 2010.

The main features of the ESOS are as follows:-

a) The total number of shares to be issued under the ESOS shall not exceed in aggregate 15% of the issuedand paid-up share capital of the company at any point of time during the duration of the ESOS whichshall be in force for a period of five (5) years commencing from 28 June 2010 and may be extended for afurther period of up to five (5) years.

b) Eligible persons are those directors holding full time executive positions as at date of offer, involved inthe day-to day management and on the payroll of the Group who are specifically approved as eligible toparticipate in the ESOS by the Company in general meeting and are not prohibited or disallowed by therelevant authorities or laws from participating in the ESOS or employees who have been confirmed ofcontinuous service in the Group (including a foreign employee who is not a contract employee of theGroup) as at the date of offer.

c) The option price of each share shall be based on the 5-day weighted average market price of theunderlying shares immediately prior to the offer date with a discount of not more than ten per centum(10%), if deemed appropriate, or the par value of the Company’s shares, whichever is the higher. Theoption price shall be subject to certain adjustments in accordance with provisions under the By-Laws.

d) The selection of the eligible employees to subscribe for ordinary shares of the Company and the allocationof shares thereafter shall be at the discretion of the ESOS Committee subject to the following:-

(i) Not more than fifty percent (50%) of the shares available under the ESOS should be allocated, inaggregate, to the executive directors and senior management of the Group;

(ii) Not more than ten percent (10%) of the shares available under the ESOS should be allocated to anyindividual director or employee, who, either singly or collectively through persons connected withhim/her holds 20% or more of the issued and paid-up capital of the Company; and

(iii) Subject always to the By-Laws, the number of new shares that may be offered and allotted to anyselected employee under the ESOS shall be at the absolute discretion of the ESOS Committee aftertaking into consideration the job grade, seniority, performance and length of service of the selectedemployee in the Group.

e) No option shall be granted for less than 100 ordinary shares and shall be granted in multiples of 100ordinary shares only.

f) The option is personal to the grantee and is not to be assigned, transferred, charged or disposed off.

g) The shares to be allocated and upon any exercise of the option will, upon allotment and issue, rank paripassu in all respects with the then existing issued shares of the Company except that they shall not rankfor any dividends, rights or other distributions declared, made or paid to shareholders prior to the dateof allotment.

During the financial year, the total number of options over ordinary shares that have been forfeited onresignation of employees amounted to 430,000.

Directors’ Report (cont’d)for the year ended 31 December 2010


>>

EMPLOYEE SHARE OPTION SCHEME (“ESOS”) (CONT’D)

The details of the options offered to take up unissued ordinary shares of RM0.50 each and the optionprice are as follows:

Number of options over ordinary shares of RM0.50Option Granted Exercised Lapsed due Balance as at

Date of Offer Price To Resignation 31.12.2010

12.07.2010 RM3.19 7,033,000 - 430,000 6,603,000

DIRECTORS

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

Low Bok TekPeter Wong Hoy KimIbrahim Bin Haji HamzahMalik Parvez Ahmad Bin Nazir Ahmad

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interest of directors in office at the end of the financialyear in shares, options over shares and warrants in the Company and its related corporations were as follows:

Number of ordinary shares of RM0.50 eachShares in the company Balance at Balance atLatexx Partners Berhad 01.01.2010 Bought Sold 31.12.2010

Direct InterestLow Bok Tek 9,664,300 5,806,557 - 15,470,857Ibrahim bin Haji Hamzah 304,000 30,000 115,000 219,000Malik Parvez Ahmad bin Nazir Ahmad 50,000 10,000 60,000 -

Indirect interestLow Bok Tek* 49,421,600 150,000 - 49,571,600Ibrahim bin Haji Hamzah** 50,000 165,000 50,000 165,000

Number of warrantsWarrants in the Company Balance at Sold/ Balance atLatexx Partners Berhad 01.01.2010 Bought Exercised 31.12.2010

Direct InterestLow Bok Tek 5,721,557 - 5,721,557 - Ibrahim bin Haji Hamzah 30,000 - 30,000 - Malik Parvez Ahmad bin Nazir Ahmad 155,000 - 155,000 -

Indirect interestLow Bok Tek* 35,000,000 - - 35,000,000Ibrahim bin Haji Hamzah** 10,000 155,000 165,000 -

None of the other directors holding office at the year end had any interest in shares, options over shares andwarrants of the Company and its related corporations during the financial year.

By virtue of his interest in the shares of the Company, Low Bok Tek is also deemed to have interest in the sharesof all the subsidiary companies to the extent that the Company has an interest.




>>

DIRECTORS’ INTERESTS (CONT’D)

* Deemed to have an interest in the shares and warrants by virtue of Section 6A(4)(c) of the Companies Act,1965.

** Deemed interested through his son’s interest in Latexx Partners Berhad

DIRECTORS’ BENEFITS

Since the end of the last financial year, no director of the Company has received or entitled to receive anybenefit (other than the directors’ remuneration as disclosed in the financial statements) by reason of a contractmade by the Company or a related corporation with the director or with a firm of which the director is amember, or with a company in which the director has a substantial financial interest except for the relatedparty transactions as disclosed in Note 28 to the financial statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a partywhereby directors of the Company might acquire benefits by means of the acquisition of shares in, ordebentures of the Company or any other body corporate.

OTHER STATUTORY INFORMATION

a) Before the financial statements of the Group and of the Company were made out, the directors tookreasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and have satisfied themselves that all known bad debts havebeen written off and that adequate allowance had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their book values in the ordinarycourse of businesses have been written down to their estimated realisable value.

b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts in thefinancial statements of the Group and of the Company inadequate to any substantial extent; or

(ii) the values attributed to current assets in the financial statements of the Group and of the Companymisleading.

c) At the date of this report, the directors are not aware of any circumstances which have arisen which wouldrender adherence to existing method of valuation of assets or liabilities of the Group and of the Companymisleading or inappropriate.

d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with inthis report or the financial statements of the Group and of the Company which would render any amountstated in the financial statements misleading.

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

(i) any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

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

Directors’ Report (cont’d)for the year ended 31 December 2010


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OTHER STATUTORY INFORMATION (CONT’D)

f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable, or is likely to become enforceable withinthe period of twelve months after the end of the financial year which will or may substantially affectthe ability of the Group and of the Company to meet their obligations as and when they fall due;and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between theend of the financial year and the date of this report which is likely to affect substantially the resultsof the operations of the Group and of the Company for the financial year in which this report is made.

AUDITORS

The auditors, Messrs STYL Associates, have indicated their willingness to continue in office.

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

LOW BOK TEK MALIK PARVEZ AHMAD BIN NAZIR AHMADDirector Director

Taiping, Perak Darul RidzuanDate : 25 April 2011




>>

We, Low Bok Tek and Malik Parvez Ahmad Bin Nazir Ahmad, being directors of Latexx Partners Berhad, dohereby state on behalf of the directors that in our opinion, the accompanying financial statements of theGroup and of the Company as set out on pages 37 to 75 are properly drawn up in accordance with theprovisions of the Companies Act, 1965 and Financial Reporting Standards in Malaysia so as to give a true andfair view of the financial position of the Group and of the Company as at 31 December 2010 and of the resultsand cash flows of the Group and of the Company for the financial year ended on that date.

The supplementary information as set out in Note 32 is prepared in accordance with Guidance on SpecialMatter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuantto Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountantsand the directive of Bursa Malaysia Securities Berhad.

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

LOW BOK TEK MALIK PARVEZ AHMAD BIN NAZIR AHMADDirector Director

Taiping, Perak Darul Ridzuan Date : 25 April 2011

I, Loke Peng Sin, I/C No: 800111-08-5859, being the officer primarily responsible for the accounting recordsand financial management of Latexx Partners Berhad, do solemnly and sincerely declare that the accompanyingfinancial statements of the Group and of the Company as set out on pages 37 to 75, are to the best of myknowledge and belief, correct and I make this solemn declaration conscientiously believing the same to betrue, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by LOKE PENG SINLoke Peng Sin, I/C No: 800111-08-5859at Taiping, Perak Darul Ridzuan on 25 April 2011

Before me:SABIR AHMAD B.BADARUDDINCOMMISSIONER FOR OATHS

Statement By Directors

Statutory Declaration


>>STYL Associates[AF 001929]Chartered Accountants

107-B, Jalan Aminuddin Baki,Taman Tun Dr Ismail, 60000 Kuala Lumpur

Tel: 603-77275573 Fax: 603-77270771e-mail: [email protected]

Independent Auditors’ Report to the members of Latexx Partners Berhad(Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of Latexx Partners Berhad, which comprise the statements offinancial position as at 31 December 2010 of the Group and of the Company, and the statements ofcomprehensive income, statements of changes in equity and cash flow statements of the Group and of theCompany for the year then ended, and a summary of significant accounting policies and other explanatoryinformation, as set out on pages 37 to 75.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true andfair view in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and forsuch internal control as the directors determine are necessary to enable the preparation of financial statementsthat are free from material misstatements, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with approved standards on auditing in Malaysia. Those standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on our judgement, including the assessment of the risksof material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, we consider internal control relevant to the entity’s preparation of the financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial ReportingStandards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial positionof the Group and of the Company as of 31 December 2010 and of their financial performance and cash flowsfor the year then ended.


>> Independent Auditors’ Report (cont’d)to the members of Latexx Partners Berhad

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

a) In our opinion the accounting and other records and the registers required by the Act to be kept by theCompany and its subsidiaries have been properly kept in accordance with the provisions of the Act.

b) we are satisfied that the financial statements of the subsidiaries that have been consolidated with theCompany’s financial statements are in form and content appropriate and proper for the purposes of thepreparation of the financial statements of the Group and we have received satisfactory information andexplanations required by us for those purposes.

c) the audit reports on the financial statements of the subsidiaries did not contain any qualification or anyadverse comment made under Section 174(3) of the Act.

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. Theinformation set out in Note 32 to the financial statements has been compiled by the Company as required bythe Bursa Malaysia Securities Berhad Listing Requirements. We have extended our audit procedures to reporton the process of compilation of such information. In our opinion, the information has been properly compiled,in all material respects, in accordance with the Guidance of Special Matter No.1, Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities BerhadListing Requirements, issued by the Malaysian Institute of Accountants and presented based on the formatprescribed by Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of theCompanies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other personfor the content of this report.

STYL ASSOCIATES YEO ENG HUI[AF 001929] 1723/09/12(J)Chartered Accountants Partner

Kuala LumpurDate : 25 April 2011


>>Statements of Financial Positionas at 31 December 2010

Group CompanyNote 2010 2009 2010 2009

RM RM RM RMRestated

AssetsNon-current AssetsProperty, plant and equipment 5 214,927,125 179,663,146 - - Investment in subsidiaries 6 - - 65,645,201 29,265,011Available for sale financial assets 7 1 1 1 1Goodwill on consolidation 8 20,370,773 20,358,221 - -

235,297,899 200,021,368 65,645,202 29,265,012

Current AssetsInventories 9 47,237,646 38,417,219 - - Receivables 10 56,242,994 58,688,116 496,190 3,088,000Amount due from subsidiaries 11 - - 79,947,446 68,077,160Held for trading financial assets 12 16,406,480 14,856,480 - - Cash and bank balances 13 43,979,929 19,187,538 12,426 124,321

163,867,049 131,149,353 80,456,062 71,289,481

Total assets 399,164,948 331,170,721 146,101,264 100,554,493

Equity and Liabilities

Capital and reservesShare capital 14 109,411,835 98,802,757 109,411,835 98,802,757Reserves 15 126,587,891 70,948,727 37,810,454 1,653,878Treasury shares 14 (1,216,022) - (1,216,022) -

Shareholders’ equity 234,783,704 169,751,484 146,006,267 100,456,635

Non-current LiabilitiesHire purchase and finance lease payables 16 34,115,450 28,856,957 - -

Borrowings 17 17,472,252 20,704,763 - - Deferred tax liabilities 18 9,364,791 1,314,102 - -

60,952,493 50,875,822 - -

The accompanying notes form an integral part of the financial statements.


>> Statements of Financial Position (cont’d)as at 31 December 2010


RM RM RM RMRestated

Current LiabilitiesPayables 19 59,315,342 68,001,106 94,997 97,858Hire-purchase and financelease payables 16 12,499,533 8,396,677 - -

Tax liabilities 3,793,532 5,029 - - Borrowings 17 27,820,344 34,140,603 - -

103,428,751 110,543,415 94,997 97,858

Total equity and liabilities 399,164,948 331,170,721 146,101,264 100,554,493



>>Statements of Comprehensive Incomefor the year ended 31 December 2010


RM RM RM RM

Revenue 20 497,245,113 328,473,188 62,770,167 5,087,129Cost of sales (372,274,083) (247,910,166) (61,687,805) (4,983,776)

Gross profit 124,971,030 80,563,022 1,082,362 103,353Other income 489,171 495,836 48,369,814 16,257,307Direct operating expenses (8,379,192) (7,152,107) - - Administrative and general expenses (19,689,763) (10,639,191) (3,480,457) (1,367,851)

Selling and distribution expenses (7,633,549) (4,849,409) - -

Profit from operation 89,757,697 58,418,151 45,971,719 14,992,809

Finance costs 21 (5,704,171) (6,637,426) - -

Profit before taxation 22 84,053,526 51,780,725 45,971,719 14,992,809Taxation 23 (18,599,219) (463,555) - 9,060

Total comprehensive income 65,454,307 51,317,170 45,971,719 15,001,869

Attributable to:Shareholders of the Company 65,454,307 51,317,170

Earning per ordinary share (sen) 24- basic 31.21 26.32- diluted 24.68 19.88



>> Statements of Changes In Equityfor the year ended 31 December 2010

Attributable to Equity Holders of the Company

Non-Distributable

Revaluation

Share

Treasury

ESOS

Retained

Group

Share Capital

Reserves

Premium

Shares

Reserve

Earnings

Total

RM

RM

RM

RM

RM

RM

RM

Balance as at 1 January 2009

97,348,707

792,252

739,943

-

-

21,932,157

120,813,059

Issue of shares during the year

1,454,050

-

87,243

-

-

-1,541,293

Divided paid

-

-

-

-

-

(3,920,038)

(3,920,038)

Total comprehensive income

-

-

-

-

-

51,317,170

51,317,170

Balance as at 31 Decem

ber 2009

98,802,757

792,252

827,186

-

-

69,329,289

169,751,484


10,609,078

-

636,545

-

-

-

11,245,623

Shares purchased during the year

held as treasury shares

-

-

-

(1,216,022)

-

-

(1,216,022)

Equity contribution arising

from ESOS schem

e-

--

-256,144

-

256,144


-

--

--

65,454,307

65,454,307

Dividend paid

-

-

-

-

-

(10,707,832)

(10,707,832)


ber 2010

109,411,835

792,252

1,463,731

(1,216,022)

256,144

124,075,764

234,783,704

Attributable to Equity Holders of the Company

Non-Distributable

Share

Treasury

ESOS

Retained

Company

Share Capital

Premium

Shares

Reserve

Earnings

Total

RM

RM

RM

RM

RM

RM

Balance as at 1 January 2009

97,348,707

739,943

-

-

(10,255,139)

87,833,511


1,454,050

87,243

-

-

-

1,541,293

Dividend paid

-

-

--

(3,920,038)

(3,920,038)


-

-

-

-

15,001,869

15,001,869


ber 2009

98,802,757

827,186

-

-

826,692

100,456,635


10,609,078

636,545

-

-

-

11,245,623

Shares purchased during the year

held as treasury shares

-

-

(1,216,022)

-

-

(1,216,022)

Equity contribution arising

from ESOS schem

e-

-

-

256,144

-

256,144

Dividend paid

-

-

-

-

(10,707,832)

(10,707,832)


-

-

-

-

45,971,719

45,971,719


ber 2010

109,411,835

1,463,731

(1,216,022)

256,144

36,090,579

146,006,267



>>Statements of Cash Flowsfor the year ended 31 December 2010

Group Company2010 2009 2010 2009RM RM RM RM

Cash Flows from Operating ActivitiesProfit before taxation 84,053,526 51,780,725 45,971,719 14,992,809Adjustments for:Amortisation of long leasehold land 137,455 57,859 - - Bad debts written off 614,687 679,111 - 580,997Dividend income (147,776) (35,785) (10,750,000) - Depreciation of property, plant and equipment 10,768,690 8,327,697 - -

Deemed disposal in subsidiary company (12,552) - - - Gain on disposal of property, plant and equipment (76,300) (339,206) - (257,307)Interest income (48,924) (92,466) - - Interest expenses 5,704,171 6,637,426 - - Impairment loss written back - - (37,619,047) - Impairment loss on investment - - 2,000,000 - Property, plant and equipmentwritten off - 109 - -

Staff cost arising from ESOS schemes 256,144 - - - Unrealised loss on foreign exchange 807,032 2,110,776 10,693 -

Operating profit before working capital changes 102,056,153 69,126,246 (386,635) 15,316,499Changes in inventories (8,820,427) (2,285,290) - - Changes in receivables 946,717 (17,373,704) 2,581,117 (2,715,693)Changes in payables (8,449,015) 20,247,875 (2,861) (99,203)

Cash from Operations 85,733,428 69,715,127 2,191,621 12,501,603Interest paid (5,675,567) (6,610,658) - - Tax paid (6,876,692) (93,228) - -

Net Cash from Operating Activities 73,181,169 63,011,241 2,191,621 12,501,603

Cash Flows from Investing ActivitiesPurchase of property, plant and equipment (27,195,599) (33,803,215) - - Disposal of investment - 288,480 - -

Proceeds from disposal of property,plant and equipment 237,775 1,324,996 - 500,000Dividend received 147,776 35,785 10,750,000 - Interest received 48,924 92,466 - -

Subscription of shares insubsidiary company (2) - (504,999) (1,307,000)

Net Cash (used in)/from Investing Activities (26,761,126) (32,061,488) 10,245,001 (807,000)


>> Statements of Cash Flows (cont’d)for the year ended 31 December 2010


Cash Flows from Operating ActivitiesIssuance of shares 11,245,623 1,541,293 11,245,623 1,541,293Repayment of hire purchase andfinance lease payables (9,846,651) (4,778,712) - - Purchases of treasury shares (1,216,022) - (1,216,022) - Dividend paid (10,707,832) (3,920,038) (10,707,832) (3,920,038)(Repayment)/drawdown of bank borrowings (9,552,770) 2,367,546 - - Holding/related companies’ advances - - (11,870,286) (14,432,955)

Net Cash from Financing Activities (20,077,652) (4,789,911) (12,548,517) (16,811,700)

Net Increase/(Decrease) in Cashand cash equivalents 26,342,391 26,159,842 (111,895) (5,117,097)Cash and Cash Equivalents brought forward 34,044,018 7,884,176 124,321 5,241,418

Cash and Cash Equivalents carried forward (Note 13) 60,386,409 34,044,018 12,426 124,321

Significant Non-Cash TransactionSignificant non-cash transaction during the year consist of:- acquisition of property, plant and equipmentunder hire-purchase and finance lease 19,208,000 26,825,000 - -


>>Notes to the Financial Statements31 December 2010

1 GENERAL

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed onthe Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is at PT 18374,Jalan Perusahaan 3, Kamunting Industrial Estate, 34600 Kamunting, Perak Darul Ridzuan.

The Company is principally involved in investment holding and trading of rubber gloves.

The principal activities of its subsidiary companies are disclosed in Note 6 below. There have been nosignificant changes in these principal activities during the financial year.

The financial statements of the Company have been authorised by the Board of Directors for issuance on25 April 2011.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis Of Preparation

The financial statements of the Group and of the Company are prepared under the historical costconvention unless otherwise indicated in the accounting policies below, and comply with applicableMASB approved accounting standards in Malaysia for Entities Other Than Private Entities andprovisions of the Companies Act, 1965.

The financial statements are presented in Ringgit Malaysia (RM).

2.2 Changes in Accounting Policies

The accounting policies adopted are consistent with those of the previous financial year except asfollows:

On 1 January 2010, the Group and the Company adopted the following new and amended FRSs andIC Interpretations mandatory for annual financial periods beginning on or after 1 January 2010.

FRS 7 Financial Instruments: DisclosuresFRS 8 Operating SegmentsFRS 101 Presentation of Financial Statements (Revised)FRS 123 Borrowing Costs (Revised)FRS 139 Financial Instruments: Recognition and MeasurementAmendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 FinancialInstruments: Disclosures and IC Interpretation 9 Reassessment of Embedded DerivativesImprovements to FRSs issued in 2009IC interpretation 9 Reassessment of Embedded DerivativesIC Interpretation 10 Interim Financial Reporting and ImpairmentIC Interpretation 11 FRS 2 – Group and Treasury Share TransactionsIC Interpretation 13 Customer Loyalty ProgrammesIC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum FundingRequirements and Their Interaction

FRS 4 Insurance Contracts and TR i-3 Presentation of Financial Statements of Islamic FinancialInstitutions are also effective for annual periods beginning on or after 1 January 2010. TheseFRSs are, however, not applicable to the Group or the Company.


>>

2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 Changes in Accounting Policies (cont’d)

The adoption of the new and amended standards and interpretations does not have any effect onthe financial statements of the Group and the Company except for those discussed below:

i) FRS 7 Financial Instruments: DisclosuresPrior to 1 January 2010, information about financial instruments was disclosed in accordancewith the requirement of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7introduces new disclosures to improve the information about financial instruments. It requiresthe disclosure of qualitative and quantitative information about exposure to risks arising fromfinancial instruments, including specified minimum disclosures about credit risk, liquidity risk andmarket risk, including sensitivity analysis to market risk.

ii) FRS 101 Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financialstatements. The revised standard separates owner and non-owner changes in equity. Thestatement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line item. The standard also introduces thestatement of comprehensive income, with all items of income and expense recognised in profitor loss, together with all other items of recognised income and expense recognised directly inequity, either in one single statement, or in two linked statements. The Group and the Companyhave elected to present this statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliestcomparative period following a change in accounting policy, the correction of an error or theclassification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users of thefinancial statements to evaluate the Group’s objectives, policies and processes for managingcapital.

iii) Amendments to FRS 117 LeasesPrior to 1 January 2010, for all leases of land and buildings, if title is not expected to pass to thelessee by the end of the lease term, the lessee normally does not receive substantially all the risksand rewards incidental to ownership. Hence, all leasehold land held for own use was normallyclassified by the Group as operating lease and where necessary, the minimum lease payments orthe up-front payments made were allocated between the land and the building elements inproportion to the relative fair values for leasehold interests in the land element and buildingelement of the lease at the inception of the lease. The up-front payments represented prepaidlease payments and were amortised evenly on a straight-line basis over the lease term.

The amendments to FRS 117 Leases clarify that leases of land and buildings are classified asoperating or finance leases in the same way as leases of other assets. They also clarify that thepresent value of the residual value of the property in a lease with a term of several decades wouldbe negligible and accounting for the land element as a finance in such circumstances would beconsistent with the economic position of the lessee. Hence, the adoption of the amendments toFRS 117 has resulted in certain unexpired land leases to be reclassified as finance lease.

Notes to the Financial Statements (cont’d)31 December 2010


>>


2.2 Changes in Accounting Policies (cont’d)

iii) Amendments to FRS 117 Leases (cont’d)

The Group has applied this change in accounting policy retrospectively and certain comparativefigures have been restated. The following are the effects to the statement of financial positionas at 31 December 2010 arising from the above change in accounting policy:

GroupRM

Increase/(Decrease) in:

Property, plant and equipment 6,127,009Prepaid lease payments (6,127,009)

The following comparatives have been restated:

As previously AsStated Adjustments RestatedRM RM RM

Statement of financial positionGroup31 December 2009:Property, plant and equipment 173,398,682 6,264,464 179,663,146Prepaid lease payments 6,264,464 (6,264,464) -

1 January 2009:Property, plant and equipment 118,869,375 6,294,318 125,163,693Prepaid lease payments 6,294,318 (6,294,318) -

2.3 Standards Issued but not yet Effective

The management does not anticipate the adoption of the new and amended Financial ReportingStandards and Interpretations which are issued but not yet effective to have any material impact onthe financial statements in the period of initial application.

2.4 Basis of Consolidation

The consolidated financial statements incorporate the audited financial statements of the Companyand its subsidiaries made up to the same financial year. Subsidiaries are companies in which the Grouphas the power to exercise control over the financial and operating policies so as to obtain benefitsfrom their activities, generally accompanying a shareholding of more than one half of the votingrights.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisitionmethod, subsidiaries are fully consolidated from the date on which control is transferred to the Groupand are de-consolidated from the date control ceases. The financial statements of subsidiaries areprepared for the same reporting date as the Company, and uniform accounting policies are adoptedin the financial statements for like transactions and events in similar circumstances. All inter-companybalances, transactions and resulting unrealised profits or losses are eliminated on consolidation andthe consolidated financial statements reflect external transactions only.



>>


2.4 Basis of Consolidation (cont’d)

The cost of acquisition is measured as the aggregate of their fair values, at the date of exchange, ofthe assets given, liabilities incurred or assumed, and equity instruments issued, plus any cost directlyattributable to the acquisition. The excess of the acquisition cost over the Group’s interest in thesubsidiaries’ fair values is reflected as goodwill, which is not amortised but reviewed for impairmentloss, annually or more frequently if events of changes in circumstances indicate that the carryingamount may be impaired. The excess of the Group’s interest in the subsidiaries’ fair values over theacquisition cost represents negative goodwill, which is recognised directly in the income statement.

Material intra-group transactions, balances and resulting unrealised gains are eliminated onconsolidation and the consolidated financial statements reflect external transactions only. Unrealisedlosses are eliminated on consolidation unless cost cannot be recovered.

Minority interests represent the portion of profit or loss and net assets in subsidiaries that is not heldby the Group and is presented separately within equity in the consolidated balance sheet. It ismeasured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilitiesat the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and theGroup’s share of its assets together with any unamortised balance of goodwill.

2.5 Change in Group Composition

Where a subsidiary issues new equity shares to minority interest for cash consideration and the issueprice has been established at fair value, the reduction in the Group’s interests in the subsidiary isaccounted for as a disposal of equity interest with the corresponding gain or loss recognised in theincome statements.

When a group purchases a subsidiary’s equity share from minority interest for cash consideration andthe purchase price has been established at fair value, the accretion of the Group’s interests in thesubsidiary is accounted for as a purchase of equity interest for which the acquisition accountingmethod of accounting is applied.

The Group treats all other changes in group composition as equity transactions between the Groupand its minority shareholders. Any difference between the Group’s share of net assets before andafter change, and any consideration received or paid, is adjusted to or against Group reserves.

2.6 Investment in Subsidiaries

In the Company’s separate financial statements, investments in subsidiaries are stated at cost lessimpairment losses, if any. On disposal of such investments, the difference between net disposalproceeds and their carrying amounts is taken up in the income statement.

2.7 Property, Plant And Equipment

Property, plant and equipment are stated at cost or valuation less accumulated depreciation andimpairment losses, if any. Cost includes expenditure that are directly attributable to the acquisitionof the asset.



>>


2.7 Property, Plant And Equipment (cont’d)

Certain land and buildings of the Group are shown at 1995 valuation less subsequent depreciationand impairment losses. The Director have not adopted a policy of regular valuation, and have appliedthe transitional provisions of Financial Reporting Standard 116, Property, Plant and Equipment whichpermits these assets to be stated at their prevailing valuations less depreciation. The valuation wasdetermined by independent professional valuers on the open market basis, and no later valuationwas recorded.

Surplus arising from revaluation are dealt with the property revaluation reserve. Any deficit arisingis offset against the revaluation reserve to the extent of a previous increase for the same property. Inall other cases, a decrease in carrying amount will be charged to the income statements.

Depreciation is calculated to write off the cost or valuation of property, plant and equipment to theirresidual values on the straight line method over their expected useful lives. Freehold land is notamortised. Other assets are depreciated on the straight line method at the following annual rates:

%Buildings 2Plant and machinery 5 – 10Motor vehicles 20Office equipment and others 10 – 12Equipment and tools 10Renovation 10

The residual values, useful lives and depreciation method are reviewed at each financial year end toensure that the amount, method and period of depreciation are consistent with previous estimatesand the expected pattern of consumption of the future economic benefits embodied in the items ofthe property, plant and equipment.

Capital work-in-progress comprise the cost of machinery and all other direct attributable costs forsetting up of machinery for the treatment of latex examination and surgical gloves to reduce thelevels of proteins and allergens to non detectable level to prevent users from having an allergicreaction.

An item of property, plant and equipment is derecognised upon disposal or when no future economicbenefits are expected from its use or disposal. Any gain or loss arising from de-recognition of theassets is included in the income statement in the year in which the assets is derecognised.

2.8 Financial Assets

Financial assets are recognised in the statement of financial position when, and only when, the Groupand the Company become a party to the contractual provisions of the financial instrument. Financialassets are classified as either financial assets at fair value through profit and loss, loans and receivables,held-to-maturity investments or available-for-sale financial assets, as appropriate.

Financial assets are initially recognised at fair value, plus directly attributable transaction cost exceptfor financial assets at fair value through profit and loss, which are recognised at fair value. The Groupdetermines the classification of its financial assets after initial recognition and where appropriate, re-evaluates this designation at each financial year end.

.



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2.8 Financial Assets (cont’d)

i) Financial assets at fair value through profit and loss

Financial assets held for trading are included in the category “financial assets at fair value throughprofit and loss and are classified as current assets. Financial assets are classified as held for tradingif they are acquired for the purpose of selling in the near term. Derivative financial instrumentsare also classified as held for trading unless they are designated as effective hedging instruments.Gains or losses on investments held for trading are recognised in profit or loss.

ii) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market areclassified as loans and receivables. Subsequent to initial recognition, loans and receivables aremeasured at amortised cost using the effective interest method. Gains or losses are recognised inprofit or loss when the loans and receivables are derecognised or impaired, and throughamortisation process.

A financial asset is derecognised when the contractual right to receive cash flow from the asset hasexpired. On derecognition of a financial asset in its entirety, the difference between the carryingamount and the sum of the consideration received and any cumulative gain or loss that had beenrecognised in other comprehensive income is recognised in profit or loss.

2.9 Investment Securities

Investment securities are classified as financial assets at fair value through profit or loss, the policyfor which is stated no Note 2.8 above.

2.10Determination of Fair Value

The fair value of quoted financial assets are based on quoted market prices at the reporting date. Ifthe market for a financial asset is not active, the Group establishes fair value by using valuationtechniques.

2.11 Financial LiabilitiesFinancial liabilities are recognised when, and only when, the group and the company become a partyto the contractual provisions of the financial instrument.

The Group’s and the Company’s financial liabilities included borrowings, trade and other payablesand advances. Trade and other payables are measured at cost which is the fair value of theconsideration to be paid in the future for goods and services received. Loans and borrowings arerecognised initially at fair value, net of transaction costs incurred and subsequently measured atamortised cost using the effective interest method.

A financial liability is derecognised when, and only when, the obligation under the liability isdischarged or extinguished. On derecognition of a financial liability, the difference between thecarrying amount of the financial liability extinguished or transferred to another party and theconsideration paid, including any non-cash assets transferred or liabilities assumed, is recognised inprofit or loss.



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2.12Lease

Finance leases, which transfer to the Group substantially all the risks and rewards incidental toownership of the leased item, are capitalised at the inception of the lease at fair value of the leaseasset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are alsoadded to the amount capitalised. Lease payments are apportioned between the finance charges andreduction of the lease liability so as to achieve a constant rate of interest on the remaining balanceof the liability. Finance charges are charged to the profit or loss.

Leased assets are depreciated over the estimated useful lives of the assets concerned.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis overthe lease term.

2.13 Other investments

Other investments are stated at cost less impairment losses.

2.14 Impairment of Non-financial Assets

The carrying amounts of the Group’s and of the Company’s assets are reviewed for impairment losseswhen there is an indication that the assets might be impaired. Impairment is measured by comparingthe carrying amounts of the assets with their recoverable amounts. An impairment loss is charged tothe income statement immediately.

Reversal of impairment losses recognised in prior year is recorded where there is indication that theimpairment losses recognised for the assets no longer exist or have decreased. The reversal isrecognised to the extent of the asset’s carrying amount that would have been determined, net ofdepreciation and amortisation, had no impairment loss been recognised. The reversal is recognisedin the income statement immediately.

An impairment loss in respect of goodwill is not reversed unless the loss is caused by a specific externalevent of an exceptional nature that is not expected to recur and subsequent external events haveoccurred that reverse the effect of that event.

2.15 Inventories

The cost of raw materials comprises costs of purchase plus cost of bringing these inventories to thepresent location. The cost of finished goods and work-in-progress comprise raw materials, directlabour, other direct costs and appropriate proportions of production overheads are stated at the lowerof cost, determine on the “weighted average” method, and net realisable value.

2.16Cash and Cash Equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, depositsheld at call with banks, other short term, highly liquid investments with original maturities of threemonths or less, and bank overdrafts. Bank overdrafts are included within borrowings in currentliabilities on the statement of financial position.



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2.17Equity Instrument

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in theperiod that they are declared.

When share capital recognised as equity is repurchased, the amount of the consideration paid,including directly attributable costs, net of any tax effects, is recognised as a deduction from equity.Repurchased shares are reclassified as treasury shares and are presented as a deduction from totalequity.

Where treasury shares are distributed as share dividend, the cost of the treasury shares is applied inthe reduction of the share premium account or distributable reserves, or both.

Where treasury shares are reissued by re-sale in the open market, the difference between the salesconsideration net of directly attributable cost and carrying amount of the treasury shares is recognisedin equity, and the resulting surplus or deficit on the transaction is presented in share premium.

2.18 Earnings per Ordinary Share

The Group presents basic and diluted earnings per ordinary share (EPS) data for its ordinary shares.Basic EPS is calculated by dividing the profit of loss attributable to ordinary shareholders of theCompany by the weighted average number of ordinary shares outstanding during the period,adjusted for own shares held.

2.19 Income Tax

Tax on the profit or loss for the financial year comprises current and deferred tax. Income tax isrecognised in the income statement except to the extent that it relates to items recognised directlyin equity, in which case it is recognised in equity.

Current tax expense is the expected tax payable on the taxable income for the financial year, usingtax rates enacted or substantially enacted at the balance sheet date, and any adjustment to taxpayable in respect of previous financial years.

Deferred tax is provided, using the liability method, on all material temporary differences arisingbetween tax bases of assets and liabilities and their carrying amounts in the financial statements.Temporary differences are not recognised for the initial recognition of assets or liabilities that at thetime of the transaction affects neither accounting nor taxable profit. The amount of deferred taxprovided is based on the expected manner of realisation or settlement of the carrying amounts ofassets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits willbe available against which the asset can be utilised.

2.20 Employee Benefits

2.20.1 Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense inthe year in which the associated services are rendered by employees of the Group and ofthe Company. Short term accumulating compensated absences such as paid annual leave arerecognised when services are rendered by employees that increase their entitlement tofuture compensated absences, and short term non-accumulating compensated absences suchas sick leave are recognised when the absences occur.



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2.20 Employee Benefits (cont’d)

2.20.2 Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme,the Employees Provident Fund (“EPF”). Such contributions are recognised as expense in theincome statement in the year to which they relate.

2.20.3 ESOS

The Company’s Employees’ Share Option Scheme (“ESOS”), an equity-settled, share-basedcompensation plan, allows the Company and its subsidiary companies’ employees to acquireordinary shares of the Company.

The fair value of the employee services received in exchange for the grant of the shareoptions is recognised as an expense in the statement of comprehensive income over thevesting periods of the grant with a corresponding increase in equity.

The total amount to be expensed over the vesting period is determined by reference to thefair value of the share options granted and the number of share options to be vested byvesting date. At each statement of financial position date, the Group revises its estimates ofthe number of options that are expected to vest. It recognises the impact of the revision oforiginal estimates, if any, in the statement of comprehensive income, with a correspondingadjustment to equity. For options granted by the Company to its subsidiaries’ employees,the expense will be recognised in the subsidiaries’ financial statements over the vestingperiods of the grant.

The proceeds received net of any directly attributable transaction costs are credited to equitywhen the options are exercised.

2.21Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to theGroup and the revenue can be reliably measured.

Revenue from the sale of goods and services is recognised upon delivery of goods sold and completionof services rendered. Rental and interest income is recognised on accrual basis when the right toreceived payment is established. Dividend income is recognised on receipt basis.

2.22Foreign Currency Transactions

The individual financial statements of each entity in the Group are measured using the currency ofthe primary economic environment in which the entity operates (“the functional currency”). Theconsolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also thefunctional currency of the Company. All transactions are recorded in Ringgit Malaysia.

Transactions in foreign currencies are measured in the respective functional currencies of the Companyand its subsidiaries are recorded on initial recognition in the functional currencies at exchange rateapproximating those ruling at the transaction dates. All exchange gains and losses are dealt with inthe income statement.

Monetary assets and liabilities in foreign currencies at the balance sheet date are translated intoRinggit Malaysia at the rate ruling at the balance sheet date. All resulting exchange differences aredealt with in the income statement.



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2.22Foreign Currency Transactions (cont’d)

Non monetary items are measured in term of historical cost in a foreign currency or translated usingthe exchange rates as at the date of the initial transaction. Non monetary items measured at fairvalue in foreign currency are translated using the exchange rates at the date when the fair value isdetermined.

The closing rates used in the translation of foreign currency monetary liabilities are as follows:

2010 2009RM RM

1 United States Dollar 3.08 3.511 Euro 4.08 4.96

2.23Financial Instruments

Financial instruments are recognised in the balance sheet when the Group and the Company havebecome a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of thecontractual agreement. Interest, dividends, gains and losses relating to the financial instrumentsclassified as liability, are reported as expense or income. Distribution to holders of financialinstruments classified as equity are charged directly to equity. Financial instruments are offset whenthe Group and he Company have a legally enforceable right to offset and intends to settle either ona net basis or to realise the assets and settle the liability simultaneously.

The accounting policies for financial instruments recognised on the statement of financial positionare disclosed in the individual policy statements associated with each item.

The fair values of the financial assets and financial liabilities reported in the statements of financialposition as at 31 December 2010 approximate the carrying amounts of these assets and liabilitiesbecause of the immediate or short-term maturity of these financial instruments, except for amountsdue from subsidiary companies.

It is not practical to estimate the fair value of subsidiaries’ balances due principally to a lack of fixedrepayment terms entered by the parties involved and without incurring excessive cost. However, theGroup and the Company do not anticipate the carrying amounts recorded at the balance sheet dateto be significantly different from the values that would eventually be received or settled.

3 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates, assumptions concerning the future and judgements are made in the preparation of the financialstatements. They affect the application of the Group’s and the Company’s accounting policies and reportedamounts of assets, liabilities, income, expenses and disclosures made. They are assessed on an on-goingbasis and are based on experience and relevant factors, including expectations of future events that arebelieved to be reasonable under the circumstances.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at thestatement of financial position date, that have significant risk of causing a material adjustment to thecarrying amount of assets and liabilities within the next financial year are discussed below:-



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3 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives.Management estimated the useful lives of these assets to be between 5 to 99 years. Changes in theexpected level of usage and technological developments could impact the economic useful lives and theresidual values of these assets, therefore future depreciation charges could be revised.

Impairment of property, plant and equipment and intangible assets.

The Group carries out the impairment test based on a variety of estimation including the value-in-use ofthe cash-generating unit (“CGU”) to which the property, plant and equipment and intangible assets areallocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cashflows from the CGU and also to choose a suitable discount rate in order to calculate the present value ofthose cash flows.

Recoverability of receivables

The Group makes allowances for doubtful debts based on an assessment of the recoverability ofreceivables. Allowances for doubtful debts is provided where event or changes in circumstances indicatethat the balances may not be collectible. The identification of doubtful debts requires use of judgementand estimates. Where the estimation is different from the original estimate, such difference will impactthe carrying values of the receivables and doubtful debts expenses in the period in which such estimatehas been changed.

Net realisable values of inventories

The management reviews for slow-moving and obsolete inventories. This review requires judgement andestimates. Possible changes in these estimates could result in revision to the valuation of inventories.

4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s and the Company's financial risk management policy seeks to ensure that adequate financialresources are available for the development of its businesses and has adopted risk management policiesthat seek to mitigate these risks in a cost-effective manner.

Foreign exchange risk

The Group is exposed to foreign currency risk as a result of its normal trade activities when the currencydenomination differs from its functional currency. The currency giving rise to this risk is primarily theUnited States Dollar. Exposure to foreign currency risk is monitored on an ongoing basis to keep itsexposure to an acceptable level.

The net unhedged financial assets of the Group that are not denominated in its functional currency areas follows:

United States EuroDollarRM RM

As at 31 December 2010Trade receivables 21,339,540 - Bank balance 13,911,917 1,076Trade payables 10,779,129 -

As at 31 December 2009Trade receivables 50,846,571 - Bank balance 15,820,060 -



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4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

Interest rate risk

The Group finances its operations through operating cash flows and borrowings which are principallydenominated in Ringgit Malaysia. The Group is exposed to interest rate risk primarily from depositplacements and interest-bearing financial liabilities. The Group manages its interest rate risk for theinterest-earning deposit placements by placing such balance on varying maturities and interest rate terms.

The Group’s policy in dealing with interest-bearing financial liabilities is to minimise the interest expenseby obtaining the most favourable interest rates available and to derive the desired interest rate profilethrough a mix of fixed and floating rate banking facilities.

Credit risk

The Group is exposed to credit risk mainly from trade and other receivables. The Group extends credit toits customers based upon careful evaluation of the customer’s financial condition and credit history.

The Group does not have any significant exposure to any individual customer or counterparty nor does ithave any major concentration of credit risk related to any financial assets.

Liquidity risk and cash flow risk

The Group and the Company practice prudent liquidity risk management to minimise the mismatch offinancial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirementof working capital.

The Group reviews its cash flow position regularly to manage its exposure to fluctuation in future cashflows associated with its monetary financial instruments.



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5 PROPERTY, PLANT AND EQUIPMENT

As at As at01.01.2010 Additions Disposals 31.12.2010

RM RM RM RM

COST/VALUATIONAt ValuationLeasehold buildings 6,467,430 - - 6,467,430Effect of adopting the amendments to FRS 117

Leasehold land 6,922,426 - - 6,922,426

13,389,856 - - 13,389,856At Cost - Freehold land 439,258 417,363 - 856,621Leasehold buildings 46,214,388 3,918,641 - 50,133,029Plant and machinery 167,086,790 39,367,004 (208,099) 206,245,695Office equipment and others 1,566,188 644,454 - 2,210,642Renovation 284,611 50,140 - 334,751Motor vehicles 2,379,026 438,710 (242,500) 2,575,236Equipment and tools - 70,616 - 70,616Capital work-in-progress - 1,496,671 - 1,496,671

231,360,117 46,403,599 (450,599) 277,313,117

ACCUMULATED DEPRECIATIONAt ValuationLeasehold buildings 1,918,669 - - 1,918,669Effect of adopting the amendments to FRS 117

Leasehold land 657,962 137,455 - 795,417

2,576,631 137,455 - 2,714,086At CostFreehold land - - - - Leasehold buildings 5,358,709 1,006,161 - 6,364,870Plant and machinery 41,985,082 9,108,500 (69,116) 51,024,466Office equipment and others 444,377 237,068 - 681,445Renovation 243,720 11,897 - 255,617Motor vehicles 1,088,452 402,327 (148,008) 1,342,771Equipment and tools - 2,737 - 2,737Capital work-in-progress - - - -

51,696,971 10,906,145 (217,124) 62,385,992



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5 PROPERTY, PLANT AND EQUIPMENT

2010 2009RM RM

NET BOOK VALUEAt valuationLeasehold buildings 4,548,761 4,548,761Effect of adopting the amendments to FRS 117Leasehold land 6,127,009 6,264,464

10,675,770 10,813,225At CostFreehold land 856,621 439,258Leasehold buildings 43,768,159 40,855,679Plant and machinery 155,221,229 125,101,708Office equipment and others 1,529,197 1,121,811Renovation 79,134 40,891Motor vehicles 1,232,465 1,290,574Equipment and tools 67,879 - Capital work-in-progress 1,496,671 -

214,927,125 179,663,146

(a) Net carrying amount of property, plant and equipment held under hire purchase and finance leasearrangements are as follows:

2010 2009RM RM

Motor vehicles 1,039,866 1,138,457Plant and machinery 59,792,708 43,435,482

Total 60,832,574 44,573,939



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6 INVESTMENT IN SUBSIDIARIES


Unquoted shares, at cost - - 67,580,445 66,273,445Add:Additions - - 504,999 1,307,000

- - 68,085,444 67,580,445Less:Impairment lossesBalance 1 January - - 38,315,434 38,315,434Addition - - 2,000,000 - Reversal of impairment loss - - (37,619,047) -

- - 2,696,387 38,315,434

65,389,057 29,265,011Add:Equity contribution arising from ESOS scheme - - 256,144 -

Net balance at 31 December - - 65,645,201 29,265,011

The details of the subsidiaries are as follows:-

Country of Company’s name Incorporation Effective interest Principal activities

2010 2009% %

Latexx Manufacturing Malaysia 100 100 Manufacturing of Sdn. Bhd. rubber gloves

Medtexx Manufacturing Malaysia 100 100 Trading of rubber gloves Sdn. Bhd. and letting of glove

manufacturing plantand machinery

Total Glove Company Malaysia 50.01 100 Treating and processing of Sdn. Bhd. natural rubber latex

examination and surgical gloves

Worldmed Manufacturing Malaysia 100 - Trading of rubber glovesSdn. Bhd.

During the year, the Company acquired 100% equity interest in Worldmed Manufacturing Sdn. Bhd. forcash consideration of RM500,000.



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7 AVAILABLE FOR SALE FINANCIAL ASSETS


Quoted shares in Malaysia, at cost 5,293,900 5,293,900 5,293,900 5,293,900Less: Impairment loss (5,293,899) (5,293,899) (5,293,899) (5,293,899)

Net balance 1 1 1 1

Market value 6,050 41,140 6,050 41,140

8 GOODWILL ON CONSOLIDATION


Gross balance 20,569,336 20,556,784 - -

Less:Cumulative amortisation (198,563) (198,563) - -

Balance as at 31 December 20,370,773 20,358,221 - -

9 INVENTORIES


At cost:Raw materials 10,950,068 9,250,576 - - Packing materials 5,795,438 4,533,773 - - Finished goods 17,894,077 15,899,099 - - Work-in-progress 12,598,063 8,733,771 - -

47,237,646 38,417,219 - -

10 RECEIVABLES


TradeTrade receivables 54,016,137 61,586,454 450,684 3,045,328Less: Allowance for doubtful debts (614,689) (5,291,634) - -

53,401,448 56,294,820 450,684 3,045,328



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10 RECEIVABLES (CONT’D)


Non-tradeDeposits 1,196,574 1,351,769 27,485 27,485Prepayments 1,379,354 957,235 15,869 13,035Other receivables 265,618 84,292 2,152 2,152

2,841,546 2,393,296 45,506 42,672

Total 56,242,994 58,688,116 496,190 3,088,000

a) The currency profiles of receivables is as follows:


Trade- Ringgit Malaysia 4,947,059 5,448,249 450,684 3,045,328- United States Dollar 48,454,389 50,846,571 - -

53,401,448 56,294,820 450,684 3,045,328

Non-trade- Ringgit Malaysia 2,841,546 2,393,296 45,506 42,672

b) The Group’s and the Company’s normal credit terms ranged from 30 to 60 days. Other credit termsare assessed and approved on a case-by-case basis.

c) The ageing analysis of trade receivables of the Group are as follows:-


Neither past due nor impaired 43,550,101 54,922,949 450,684 2,608,041

Past due, not impaired61 - 90 days 6,859,874 - - - More than 90 days 2,991,473 1,371,871 - 437,287

9,851,347 1,371,871 - 437,287Past due and impaired 614,689 5,291,634 - -

54,016,137 61,586,454 450,684 3,045,328



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10 RECEIVABLES (CONT’D)

Receivables that neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy trade receivables with goodpayment records with the Group.

None of the trade receivables of the Group that are neither past due nor impaired have beenrenegotiated during the financial year.

Receivables that are past due but not impairedThe Group has trade receivables amounting to RM9,851,347 (2009: RM1,371,871) that past due at theend of the reporting period but not impaired. Trade receivables of the Group that are past due butnot impaired are unsecured in nature. The Group closely monitors the financial standing of thesecounter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

Receivables that are past due and impairedTrade receivables of the Company that are past due and impaired at the end of the reporting periodhad been individually impaired.

The reconciliation of movement in the impairment loss is as follows:


At 1 January 5,291,634 5,291,634 - - Charge for the financial year 614,689 679,111 - 580,997Written off (5,291,634) (679,111) - (580,997)

As 31 December 614,689 5,291,634 - -

The receivables that are individually determined to be impaired at the end of the reporting periodrelate to those trade receivables that exhibit significant financial difficulties and have defaulted onpayment. These receivables are not secured by any collateral or credit enhancements.

11 AMOUNT DUE FROM SUBSIDIARIES

The amount owing due from subsidiaries which arose mainly out of unsecured advances, are interest-free and repayable on demand.

12 HELD FOR TRADING FINANCIAL ASSETS


Unit trust, at cost 16,406,480 14,856,480 - -

Market price 16,402,591 14,852,591 - -



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12 HELD FOR TRADING FINANCIAL ASSETS


Unit trust, at cost 16,406,480 14,856,480 - -

Market price 16,402,591 14,852,591 - -

13 CASH AND CASH EQUIVALENTS


Deposits with licensed banks 4,024,950 2,653,550 - - Cash and bank balances 39,954,979 16,533,988 12,426 124,321

43,979,929 19,187,538 12,426 124,321

Held for trading financial assets (Note 12) 16,406,480 14,856,480 - -

60,386,409 34,044,018 12,426 124,321

The currency profile of cash and cash equivalents is as follows:


Cash and bank balancesRinggit Malaysia 30,066,936 3,358,109 12,393 124,309United Stated Dollar 13,911,917 15,820,060 33 12Euro 1,076 9,369 - -

43,979,929 19,187,538 12,426 124,321Held for trading financial assets- Ringgit Malaysia 16,406,480 14,856,480 - -

60,386,409 34,044,018 12,426 124,321

The average interest rates of the Company’s deposits with licensed banks range from 2.3% to 2.6% (2009:1.1% to 1.6%) per annum with an average maturity period of 1 year.



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14 SHARE CAPITAL

2010 2009No of Value No of ValueShares RM Shares RM

Group and Companya) Authorised:

Ordinary shares of RM0.50 each 400,000,000 200,000,000 400,000,000 200,000,000

b) Issued and fully paid:Ordinary shares of RM0.50 each:At 1 January 197,605,513 98,802,757 194,697,413 97,348,707- Issued pursuant to warrants exercised 21,218,157 10,609,078 2,908,100 1,454,050

At 31 December 218,823,670 109,411,835 197,605,513 98,802,757

(a) During the financial year, 21,218,157 new ordinary shares of RM0.50 each were issued by the Companyfor cash consideration arising from the exercise of warrants at an exercise price or RM0.53 per share.The new ordinary shares issued ranked pari passu in all respects with the existing ordinary shares ofthe Company.

(b) Treasury Shares

The shareholders of the Company granted a mandate to the Company to repurchase its own sharesat the Extraordinary General Meeting held on 16 June 2010. The Directors of the Company arecommitted to enhance the value of the Company to its shareholders and believe that repurchase plancan be applied in the best interest of the Company and its shareholders.

During the financial year, the Company repurchased 353,500 (2009: nil) ordinary shares of its issuedshare capital from the open market. The average price paid for the shares repurchased was RM3.44(2009: nil) per share. The repurchase transactions were financed by internally generated funds. Theshares repurchased are being held as treasury shares in accordance with Section 67A of the CompaniesAct, 1965.

As at 31 December 2010, the Company held as treasury shares a total of 353,500 (2009: nil) of its218,823,670 (2009: 197,605,513) issued ordinary shares. Such treasury shares are held at a carryingamount of RM 1,216,022 (2009: nil).

(c) Employee Share Option Scheme

The Company’s Employee Share Option Scheme (“ESOS”) is governed by the By-Laws approved bythe shareholders at an Extraordinary General Meeting held on 16 June 2010.

The main features of the ESOS are as follows:-

(i) The total number of shares to be issued under the ESOS shall not exceed in aggregate 15% ofthe issued and paid-up share capital of the Company at any point of time during the duration ofthe ESOS which shall be in force for a period of five (5) years commencing from 28 June 2010and may be extended for a further period of up to five (5) years.



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14 SHARE CAPITAL (CONT’D)

(c) Employee Share Option Scheme (cont’d)

The main features of the ESOS are as follows:- (cont’d)

(ii) Eligible persons are those directors holding full time executive positions as at date of offer,involved in the day-to day management and on the payroll of the Group who are specificallyapproved as eligible to participate in the ESOS by the Company in general meeting and are notprohibited or disallowed by the relevant authorities or laws from participating in the ESOS oremployees who have been confirmed of continuous service in the Group (including a foreignemployee who is not a contract employee of the Group) as at the date of offer.

(iii) The option price of each share shall be based on the 5-day weighted average market price of theunderlying shares immediately prior to the offer date with a discount of not more than ten percentum (10%), if deemed appropriate, or the par value of the Company’s shares, whichever isthe higher. The option price shall be subject to certain adjustments in accordance with provisionsunder the by-laws.

(iv) The selection of the eligible employees to subscribe for ordinary shares of the Company and theallocation of shares thereafter shall be at the discretion of the ESOS Committee subject to thefollowing:-

Not more than fifty percent (50%) of the shares available under the ESOS should be allocated, inaggregate, to the executive directors and senior management of the Group;

Not more than ten percent (10%) of the shares available under the ESOS should be allocated toany individual director or employee, who, either singly or collectively through persons connectedwith him/her holds 20% or more of the issued and paid-up capital of the Company; and

Subject always to the By-Laws, the number of new shares that may be offered and allotted toany selected employee under the ESOS shall be at the absolute discretion of the ESOS Committeeafter taking into consideration the job grade, seniority, performance and length of service of theselected employee in the Group.

(v) No option shall be granted for less than 100 ordinary shares and shall be granted in multiples of100 ordinary shares only.

(vi) The option is personal to the grantee and is not to be assigned, transferred, charged or disposedoff.



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(c) Employee Share Option Scheme (cont’d)

The main features of the ESOS are as follows:- (cont’d)

(vii) The shares to be allocated and upon any exercise of the option will, upon allotment and issue,rank pari passu in all respects with the then existing issued shares of the Company except thatthey shall not rank for any dividends, rights or other distributions declared, made or paid toshareholders prior to the date of allotment.

During the financial year, the total number of options over ordinary shares that have beenforfeited on resignation of employees amounted to 430,000.

The details of the options offered to take up unissued ordinary shares of RM0.50 each and theoption price is as follows:

Number of options over ordinary shares of RM0.50Option Granted Exercised Lapsed due Balance as at

Date of Offer Price to Resignation 31.12.2010

12.07.2010 RM3.19 7,033,000 - 430,000 6,603,000

Fair value of the share options

The fair value of the options granted was estimated using the Black-Scholes pricing model, takinginto account the terms and conditions upon which the options were granted. The fair value ofshare options measured at grant date and the assumptions are as follows:

Fair value of share options granted on 12 July 2010 RM0.56Share price RM3.61Exercise price RM3.19Expected volatility 30%Expected life 5 yearsRisk-free rate 2.90%Expected dividend yield rate 2.10%

The expected life of the options is based on historical data and is not necessarily indicative ofexercise pattern that may occur. The expected volatility reflects the assumption that the historicalvolatility is indicative of future trends, which may also not necessarily be the actual outcome.

(d) Warrants

Pursuant to a deed poll dated 6 April 2007 (“Deed Poll”), the Company has issued 80,151,858 freedetachable warrants (“Warrants”) pursuant to a Debt Settlement and Placement exercise.

The salient features of the Warrants as stated in the Deed Poll are as follows:-

(i) Each Warrant entitles the registered holder at any time during the exercise period to subscribefor one (1) new ordinary share at an exercise price of RM0.53 per ordinary share.

(ii) The exercise price and number of Warrants are subject to adjustment in accordance with theconditions provided in the Deed Poll.



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(d) Warrants (cont’d)

(iii) In the case of winding up of the Company, all Subscription Rights which have not been exercisedwithin six (6) weeks of the passing of such resolution of granting of the court order shall lapseand the Warrants will cease to be valid for any purpose.

(iv) The exercise period is 10 years from the date of issue to expire on 6 June 2017.

(v) Upon expiry of the exercise period, any Warrants which have not been exercised will lapse andcease to be valid for any purpose.

The Warrants were granted for listing and quotation with effect from 12 June 2007. There were21,218,157 warrants being exercised during the financial year ended 31 December 2010.

15 RESERVES


Non-distributable

(i) Share premium:At 1 January 827,186 739,943 827,186 739,943Add:Increase during the year 636,545 87,243 636,545 87,243

1,463,731 827,186 1,463,731 827,186

(ii) Property revaluation reserve: 792,252 792,252 - -

(iii) ESOS reserveEquity contribution arising from ESOS scheme 256,144 - 256,144 -

Distributable

(iv) Retained profits 124,075,764 69,329,289 36,090,579 826,692

Total 126,587,891 70,948,727 37,810,454 1,653,878

Section 108 credit and tax exempt account

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit andtax exempt account to frank the payment of dividends out of its entire retained earnings at 31 December2010.

The Finance Act, 2007 introduced a single tier company income tax system with effect from year ofassessment 2008. As such, the Section 108 tax credit as at 31 December 2007 will be available to theCompany until such time the credit is fully utilised or upon expiry of the six-year transitional period on 31December 2013, whichever is earlier.



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16 HIRE-PURCHASE AND FINANCE LEASE PAYABLES


Gross amount payables 52,349,830 42,667,516 - - Less: Unexpired interest (5,734,847) (5,413,882) - -

Principal portion 46,614,983 37,253,634 - -

Payable within twelve months 12,499,533 8,396,677 - - Payable after twelve months- between 1 - 2 years 13,027,010 8,997,824 - - - between 2 - 5 years 21,088,440 19,859,133 - -

34,115,450 28,856,957 - -

46,614,983 37,253,634 - -

The effective interest rates for the above hire-purchase and finance lease facilities ranged from 4.09% to7.42% (2009: 4.44% to 7.42%) per annum.

17 BORROWINGS


CurrentBankers’ acceptance 21,774,542 28,919,781 - - Term loans 6,045,802 5,220,822 - -

27,820,344 34,140,603

Non-currentTerm loans 17,472,252 20,704,763 - -

TotalBankers’ acceptance 21,774,542 28,919,781 - - Term loans 23,518,054 25,925,585 - -

45,292,596 54,845,366 - -

The above facilities are obtained from commercial banks which bear interest ranging from 3.45% to 7.22%(2009: 3.44% to 10.25%) per annum.

The term loans are secured by a specific debenture charge over certain plant and machinery belongs to asubsidiary company and corporate guarantee of the Company.



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18 DEFERRED TAX LIABILITIES

Accelerated RevaluationCapital of Land

Allowances Building TotalRM RM RM

2010Balance as at 1 January 2010 451,286 862,816 1,314,102Transferred to income statement 8,050,689 - 8,050,689

Balance as at 31 December 2010 8,501,975 862,816 9,364,791

2009Balance as at 1 January 2009 - 862,816 862,816Transferred to income statement 451,286 - 451,286

Balance as at 31 December 2009 451,286 862,816 1,314,102

The components and movements of deferred tax liabilities and assets during the financial year prior tooffsetting are follows:-

RMDeferred tax liabilities 8,816,272Deferred tax assets (314,297)

Presented after appropriate offsetting 8,501,975

a) Deferred tax liabilities

Accelerated Capital Allowances2010 2009RM RM

At 1 January 5,864,857 - Add: Recognised in the income statement 2,951,415 5,864,857

At 31 December 8,816,272 5,864,857

b) Deferred tax assets:Unabsorbed Tax Losses2010 2009RM RM

At 1 January (5,413,571) - Add: Recognised in the income statement 5,413,571 (5,413,571)

At 31 December - (5,413,571)



>>

18 DEFERRED TAX LIABILITIES (CONT’D)

b) Deferred tax assets: (cont’d)

Unrealised Loss on ForeignExchange

2010 2009RM RM

At 1 January - - Add: Recognised in the income statement (314,297) -

At 31 December (314,297) -

Grand Total2010 2009RM RM

At 1 January (5,413,571) - Add: Recognised in the income statement 5,099,274 (5,413,571)

At 31 December (314,297) (5,413,571)

19 PAYABLES


TradeTrade payables 46,904,977 52,681,528 - -

Non-tradeAccruals 4,076,314 4,660,254 27,237 25,000Amount owing to related company 169 169 169 169Deposit received 200,000 200,000 - - Other payables 8,133,882 10,459,155 67,591 72,689

12,410,365 15,319,578 94,997 97,858

Total 59,315,342 68,001,106 94,997 97,858

Trade- Ringgit Malaysia 36,125,847 34,416,981 - - - United States Dollar 10,779,130 18,264,547 - -

46,904,977 52,681,528 - -

Non-trade- Ringgit Malaysia 12,410,365 15,319,578 94,997 97,858- United States Dollar - - - -

12,410,365 15,319,578 94,997 97,858



>>

19 PAYABLES (CONT’D)

The normal credit terms granted to the Group and the Company by trade creditors ranged from 30 to 120days.

Included in trade payables is an amount of RM16,321,730 (2009: RM14,217,425), arising from purchase ofraw materials, owing to related party, Gunung Resources Sdn. Bhd.

20 REVENUE

The revenue of the Group and of the Company represents sales of rubber gloves at gross invoiced valuenet of discounts and returns during the financial year.

21 FINANCE COSTS


Bankers’ acceptance interest 943,871 1,163,510 - - Bank overdraft interest 3,423 4,401 - - Creditor overdue interest - 1,707,990 - - Hire purchase interest 2,754,602 1,523,896 - Foreign bill purchase interest - 221 - - Term loan interest 2,002,275 2,237,408 - -

5,704,171 6,637,426 - -

22 PROFIT BEFORE TAXATION


This is stated after charging/(crediting):-Amortisation of long leasehold land 137,455 57,859 - - Audit fee - current year 113,500 78,300 25,000 25,000

- over provision in prior year - (2,800) - (1,500)Bad debts written off 614,689 679,111 - 580,997Depreciation of property,plant and equipment 10,768,690 8,327,697 - -

Directors’ salaries andother emoluments 2,097,650 1,378,274 24,250 21,000

Directors’ fees 75,000 37,500 75,000 37,500Loss on foreign exchange 7,058,471 2,110,776 519,992 40,810Hire of machinery 47,306 54,842 - - Hostel rental 185,450 159,688 - - Impairment loss on investment - - 2,000,000 - Management fee - - 75,336 5,767Property, plant and equipment written off - 109 - - Rental of premises 900 - - - Dividend income (147,776) (35,785) (10,750,000) (16,000,000)



>>

22 PROFIT BEFORE TAXATION (CONT’D)


Impairment loss written back - - (37,619,047) - Short term deposits interest income (48,924) (62,466) (194) - Gain on disposal of property,plant and equipment (76,300) (339,206) - -


Executive directors:- fees - 22,500 - 22,500- salaries and other emoluments 2,077,900 1,366,774 4,500 9,500

2,077,900 1,389,274 4,500 32,000

Non-executive directors:- fees 75,000 15,000 75,000 15,000- salaries and other emoluments 19,750 11,500 19,750 11,500

94,750 26,500 94,750 26,500

2,172,650 1,415,774 99,250 58,500

The number of directors of the Company whose total remuneration during the year fall within thefollowing bands is analysed below:

Group Company2010 2009 2010 2009

Executive directors:Below RM50,000 - - 1 1RM50,001 - RM100,000 - 1 - - RM100,001 - RM150,000 - - - - RM150,001 - RM200,000 - - - - RM300,001 - RM350,000 - - - - RM350,001 - RM400,000 - 1 - - RM550,001 - RM600,000 1 - - -RM1,400,000 – RM1,450,000 1 1 - -

2 3 1 1Non-executive directors:Below RM50,000 3 3 3 3

5 6 4 4

The estimated monetary value of benefit-in-kind receivable by the directors during the financial year isRM28,000 (2009: Nil).



>>

23 TAXATION


Tax expense for the year 10,548,530 21,329 - - Over provision in prior year - (9,060) - (9,060)Transferred to deferred tax liabilities 8,050,689 451,286 - -

Total 18,599,219 463,555 - (9,060)

Reconciliation of income tax expense:


Profit before taxation 84,053,526 51,780,725 45,971,719 14,992,809

Income tax at Malaysian tax rate of 25% (2009: 25%) 21,013,382 12,945,181 11,492,929 3,748,202

Effect of tax incentive claimedduring the year (3,222,691) - - -

Expenses not deductible fortax purposes 915,723 2,238,278 718,777 142,857

Income not subject to tax (36,944) (29,421) - - Utilisation of deductibletemporary differences notrecognised in prior years (70,251) (14,681,423) (12,211,706) (3,891,059)

18,599,219 472,615 - - Over provision in prior year - (9,060) - (9,060)

Total tax expense 18,599,219 463,555 - (9,060)

24 EARNINGS PER ORDINARY SHARE

a) Basic Earnings Per Ordinary Share

Basic earnings per share is calculated by dividing profit for the year attributable to ordinary equityholders of the Company by the weighted average number of ordinary shares in issue during thefinancial year.

Group2010 2009

Profit attributable to ordinary equity holders of the Company (RM) 65,454,307 51,317,170Weighted average number of ordinary shares in issue 209,720,479 194,976,525Basic earnings per share (sen) 31.21 26.32



>>

24 EARNINGS PER ORDINARY SHARE (CONT’D)

b) Diluted Earnings Per Ordinary Share

For the purpose of calculating diluted earnings per share, the profit for the year attributable toordinary equity holders of the Company and the weighted average number of ordinary shares in issueduring the financial year have been adjusted for the dilutive effects of share options attributed tounexercised warrants issued by the Company.

Group2010 2009

Profit attributable to ordinary equity holders of the Company (RM) 65,454,307 51,317,170Weighted average number of ordinary shares in issue 265,177,099 258,110,363Diluted earnings per share (sen) 24.68 19.88

25 CONTINGENT LIABILITES


(a) Secured:Corporate guarantee in respect of banking facilities granted to a subsidiary - - 15,500,000 67,500,000

(b) Unsecured:Corporate guarantee in respect of banking facilities granted to a subsidiary - - 159,950,000 42,750,000

Corporate guarantee in respect of supplier’s credit facilitiesgranted to a subsidiary - - 2,000,000 2,150,000

On 24 September 2010, the Director General of the Inland Revenue Board (“IRB”) raised a notice ofadditional tax payable on a subsidiary company, Latexx Manufacturing Sdn. Bhd. (“LMSB”), arisingfrom a reassessment of tax liability for the year of assessment 2000. The additional tax payabletogether with penalty amounted to RM6,615,529.41.



>>

25 CONTINGENT LIABILITES (CONT’D)

The IRB raised the additional assessment alleging that LMSB had not complied with one of theconditions as stipulated in the pioneer status certificate issued by the Ministry of International Tradeand Industry. The condition required LMSB to export all its production. As some of the manufacturedgoods were exported through the holding company, Latexx Partners Berhad, the IRB is of the viewthat the said condition had not been fulfilled.

The Company is of the opinion that LMSB had complied with the conditions as it refers to export ofproduction rather than sales. Since all goods manufactured by LMSB were ultimately exported, eitherdirectly through its sales or indirectly via sales through its holding company. Accordingly, a notice ofappeal was filed on 20th October 2010 to the Special Commissioners of Income Tax to reverse thedecision of the IRB on the ground that LMSB had complied with the said condition and that the noticeof additional assessment was raised more than six years from the end of the relevant basis period.The Special Commissioners have yet to set a date for hearing of the appeal.

26 CAPITAL COMMITMENTS

The amount of commitments as at 31 December 2010 is as follows:

Group2010 2009RM RM

Approved capital expenditure:a) contracted for:

- plant and machinery 508,562 - - leasehold land - 95,400- leasehold buildings - 14,743,076

508,562 14,838,476

b) not contracted for:- plant and machinery 17,400,000 52,500,000

27 EMPLOYEE INFORMATIONS


Salaries, allowance and overtime 28,921,861 22,781,866 - - Defined contribution plan 938,431 810,762 - - Other employee benefits 834,913 519,220 - -

30,695,205 24,111,848 - -

Number of employees 1,998 1,976 - -



>>

28 RELATED PARTY TRANSACTIONS

Significant related party transactions during the year consist of:


Transactions with other related parties- Dividend received fromLatexx Manufacturing Sdn Bhd. - - (10,750,000) (16,000,000)- Purchases of goods from Latexx Manufacturing Sdn. Bhd. - - 61,687,805 4,983,776- Purchases of raw materials from Gunung Resources Sdn. Bhd. 63,299,248 37,238,863 - -

The recurring related party transactions (“RRPT”) Gunung Resources Sdn. Bhd. (“GRSB”) were in theordinary course of business and on terms and conditions that the latex concentrate purchased from GRSB,a related party, is 3% higher in purchase price compared to those obtainable in transactions with unrelatedparties. GRSB granted a longer credit terms of 60 to 90 days to group compared to those unrelated parties’credit terms which range from 21 to 30 days.

29 SEGMENTAL INFORMATION

Segmental information is not presented as the Group is primarily engaged in only one core businesssegment which is manufacturing and sale of examination rubber gloves and operates principally inMalaysia.

30 CAPITAL MANAGEMENT

The Group considers its capital to comprise its ordinary share capital, retained earnings and distributablereserves.

The Group’s objectives when managing its capital are to safeguard the Group’s ability to continue as agoing concern and to maintain an optimal capital structure so as to maximise shareholders value. In orderachieve this objective, the Group seeks to balance risk and returns at an acceptable level and also tomaintain a sufficient funding base to enable the Group to meet its working capital and strategic needs.Where necessary, adjustments to the amount of dividends paid to shareholders or the issuance of newshares may be considered.

There have been no significant changes to the Group’s capital management objectives, policies andprocesses in the year nor has there been any change in what the Group consider to be its capital.



>>

31 SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

(a) Between 17 January 2011 to 13 April 2011, the Company increased its paid up share capital fromRM109,411,835 to RM111,000,585 by allotment of 3,177,500 new ordinary shares of RM0.50 each atan issue price of RM0.53 per share arising from warrants exercised. The shares were issued for cashconsideration for the purpose of working capital.

(b) On 31 January 2011, the Company announced that it had on 27 January 2011, received from Navis AsiaVI Management Company Ltd (“Navis”), in association with Mettiz Capital Limited, a non-bindingindicative proposal to acquire the entire business and undertakings (including the entire assets andliabilities) of the Company as a going concern for a total consideration of RM852,032,740 (“IndicativePurchase Price”) or RM3.10 per ordinary shares of RM0.50 each in the Company (exclusive of treasuryshares and assuming all outstanding warrants of the Company as at 27 January 2011 are converted)(‘theProposal”).

The Indicative Purchase Price shall be fully settled in cash and/or through the issuance of securities bya special purpose vehicle nominated by Navis. If the Proposal is approved by shareholders, the cashand/or the securities will be distributed to the shareholders and warrrantholders of the Company inproportion to their shareholdings and warrantholdings respectively. The Company will be delistedafter the distribution of the cash and/or securities to shareholders and warrantholders.

(c) On 1 April 2011, a subsidiary company, Latexx Manufacturing Sdn. Bhd., entered into a conditionalsale and purchase agreement to acquire two parcels of industrial land with an open sided factoryerected thereon for a total purchase consideration of RM3,000,000 to be financed by internallygenerated funds.

32 SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS ORLOSSES

The breakdown of the retained earnings of the Group and of the Company as at 31 December, 2010, intorealised and unrealised profits is presented in accordance with the directive issued by the Bursa MalaysiaSecurities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profit and Losses in the Context of Disclosure Pursuant toBursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants,is as follows:

The TheGroup CompanyRM RM

Total retained profits:-- realised 133,676,477 38,101,272- unrealised (9,600,713) (2,010,693)(in respect of deferred tax recognised in the statementof comprehensive income/impairment loss on investment)

Total retained profits 124,075,764 36,090,579



>> Analysis of Shareholdingsas at 29 April 2011

Authorised Share Capital : RM200,000,000Issued and Paid-up Share Capital : RM111,000,585Adjusted Issued and Paid-up Share Capital : RM110,823,835(after deducting treasury shares pursuant toSection 67A of the Companies Act, 1965)Class of Securities : Ordinary Shares of RM0.50 eachVoting Rights : One vote for every Ordinary ShareNo. of Shareholders : 9,010

ANALYSIS BY SIZE OF SHAREHOLDINGS

No. of No. ofSize of Shareholdings Shareholders % Shares %

Less than 100 20 0.22 612 0.00

100 to 1,000 2,806 31.14 2,733,143 1.231,001 to 10,000 5,035 55.88 21,286,804 9.6010,001 to 100,000 997 11.07 29,122,975 13.14100,001 to less than 5% of issued shares 149 1.65 86,413,679 38.995% and above of issued shares 3 0.03 82,090,457 37.04

Total 9,010 100.00 221,647,670 100.00

LIST OF THIRTY (30) LARGEST SHAREHOLDERS/DEPOSITORS

Names No. of Shares %

1 BT Capital Sdn Bhd 49,571,600 22.37

2 Lembaga Tabung Haji 17,048,000 7.69

3 Low Bok Tek 15,470,857 6.98

4 DB (Malaysia) Nominee (Asing) Sdn Bhd 7,720,381 3.48Beneficiary : Deutsche Bank AG London

5 Best Time Venture Sdn Bhd 6,335,490 2.86

6 HSBC Nominees (Asing) Sdn Bhd 5,967,800 2.69Beneficiary : Exempt An for JPMorgan Chase Bank, National Association (Norges Bk Nlend)

7 DB (Malaysia) Nominee (Asing) Sdn Bhd 5,270,800 2.38Beneficiary : Exempt An for Deutsche Bank AG London (Prime Brokerage)

8 SBB Nominees (Tempatan) Sdn Bhd 4,065,100 1.83Beneficiary : Kumpulan Wang Persaraan (Diperbadankan)

9 SJ Sec Nominees (Tempatan) Sdn Bhd 3,305,000 1.49Beneficiary : Pledged Securities Account for Syed Abu Hussin Bin Hafiz Syed Abdul Fasal

10 HSBC Nominees (Asing) Sdn Bhd 3,170,000 1.43Beneficiary : Exempt An for The Hongkong and Shanghai Banking Corporation Limited

11 Public Nominees (Tempatan) Sdn Bhd 2,849,700 1.29Beneficiary : Pledged Securities Account for Sim Leong Thun


>>Analysis of Shareholdings (cont’d)as at 29 April 2011

LIST OF THIRTY (30) LARGEST SHAREHOLDERS/DEPOSITORS (CONT’D)

Names No. of Shares %

12 Tan You Loon 1,841,400 0.83

13 Koperasi Permodalan Felda Malaysia Berhad 1,688,200 0.76

14 Public Nominees (Tempatan) Sdn Bhd 1,500,000 0.68Beneficiary : Pledged Securities Account for Secret Recipe Cakes & Café Sdn Bhd

15 Koperasi Permodalan Felda Malaysia Bhd 1,261,000 0.57


17 Cimsec Nominees (Tempatan) Sdn Bhd 1,064,000 0.48Beneficiary : CIMB Bank for Nasri Binti Hashim

18 HSBC Nominees (Asing) Sdn Bhd 1,000,000 0.45Beneficiary : Exempt An for JPMorgan Bank Luxembourg S.A.

19 Public Nominees (Tempatan) Sdn Bhd 1,000,000 0.45Beneficiary : Pledged Securities Account for Low Bok Sang

20 Koperasi Permodalan Felda Malaysia Berhad 970,300 0.44

21 Cartaban Nominees (Asing) Sdn Bhd 952,300 0.43Beneficiary : SSBT Fund BZ52 for Levitt Capital Management, LCC

22 Mayban Nominees (Tempatan) Sdn Bhd 947,500 0.43Beneficiary : Pledged Securities Account for Lim Sim Kooi

23 CIMB Trustee Berhad 945,000 0.43Beneficiary : Amanah Saham Darul Iman

24 RHB Nominees (Tempatan) Sdn Bhd 900,000 0.41Beneficiary : RHB Investment Management Sdn Bhd for Kumpulan Wang Persaraan (Diperbadankan)

25 Tan Lee Hwa 780,000 0.35

26 JF Apex Nominees (Tempatan) Sdn Bhd 730,000 0.33Beneficiary : Pledged Securities Account for Chin Siew Yoong

27 Amanahraya Trustees Berhad 690,300 0.31Beneficiary : CIMB Islamic Equity Aggressive Fund

28 DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 649,900 0.29Beneficiary : Exempt An for Deutsche Trustees Malaysia Berhad

29 HSBC Nominees (Asing) Sdn Bhd 621,400 0.28Beneficiary : Exempt An for Morgan Stanley & Co. International PLC

30 Loke Yoke Toi @ Lim Yoke Toi 612,000 0.28


>> Analysis of Shareholdings (cont’d)as at 29 April 2011

SUBSTANTIAL SHAREHOLDERS AS AT 29 APRIL 2011 (EXCLUDING BARE TRUSTEES)

Direct IndirectNo. of No. of

Name of Shareholders Shares % Shares %

Low Bok Tek 15,470,857 6.98 49,571,600* 22.37BT Capital Sdn Bhd 49,571,600 22.37 - -Lembaga Tabung Haji 17,048,000 7.69 - -

* Deemed to have an interest in the shares by virtue of Section 6A of the Companies Act, 1965

DIRECTORS’ SHAREHOLDING AS AT 29 APRIL 2011


Name Shares % Shares %

Low Bok Tek 15,470,857 6.98 49,571,600# 22.37Ibrahim bin Hamzah 219,000 0.10 165,000^ 0.07Malik Parvez Ahmad bin Nazir Ahmad - - - -Peter Wong Hoy Kim - - - -

# Deemed to have an interest in the shares by virtue of Section 6A of the Companies Act, 1965^ Deemed interest by virtue of shares held through his son, Muhammad Nazim bin Ibrahim

By virtue of his interest in the shares of the Company, Mr. Low Bok Tek is deemed interested in the shares ofall the subsidiaries of the Company to the extent that the Company has an interest.


>>Analysis of Warrantholdingsas at 29 April 2011

Class of Securities : Warrants 2007/2017No. of Warrants Issued : 52,798,101Exercise Price of Warrants : RM0.53Exercise Period of Warrants : From 7 June 2007 to 6 June 2017Expiry Date of Warrants : 6 June 2017Voting Rights : One vote for every Warrant in respect of a

meeting of Warrantholders No. of Warrantholders : 528

DISTRIBUTION OF WARRANTHOLDINGS

No. of Size of Shareholdings No. of holders % Warrants %

Less than 100 1 0.19 94 0.00100 to 1,000 125 23.67 70,100 0.131,001 to 10,000 287 54.36 1,400,129 2.6510,001 to 100,000 105 19.89 3,171,500 6.01100,001 to less than 5% of issued warrants 8 1.52 3,158,900 5.985% and above of issued warrants 2 0.38 44,997,378 85.23

Total 528 100.00 52,798,101 100.00

LIST OF THIRTY (30) LARGEST WARRANT ACCOUNT HOLDERS No. of

Names of Holders Warrants %

1 BT Capital Sdn Bhd 35,000,000 66.29


3 Tan Booi Charn 700,000 1.33

4 Lim Khuan Eng 673,200 1.28

5 Exodius Holdings Sdn Bhd 614,000 1.16

6 Mayban Nominees (Tempatan) Sdn Bhd 360,400 0.68Beneficiary : Mayban Trustees Berhad for CIMB - Principal Strategic Bond Fund

7 Mary Tan @ Tan Hui Ngoh 309,500 0.59

8 Kok Yoon Lim 273,000 0.52

9 AAsia-East Capital Sdn Bhd 127,800 0.24

10 Gina Gan 101,000 0.19

11 Public Invest Nominees (Asing) Sdn Bhd 93,100 0.18Beneficiary : Exempt An for Phillip Securities Pte Ltd

12 CIMSEC Nominees (Tempatan) Sdn Bhd 83,400 0.16Beneficiary : CIMB Bank for Fong Eng Yeow


>> Analysis of Warrantholdings (cont’d)as at 29 April 2011

LIST OF THIRTY (30) LARGEST WARRANT ACCOUNT HOLDERS (CONT’D)No. of

Names of Holders Warrants %

13 TA Nominees (Tempatan) Sdn Bhd 80,000 0.15Beneficiary : Pledged Securities Account for Balraaj Singh A/L Tarlachon Singh

14 Lim Dean Yann 70,000 0.13

15 Lim Weng Heng 70,000 0.13

16 Liza Leong Su Min 65,000 0.12

17 TA Nominees (Tempatan) Sdn Bhd 62,000 0.12Beneficiary : Pledged Securities Account for Choong Seng Cheong

18 Lee Kuan Meng 60,000 0.11

19 Nancy Cheah 60,000 0.11

20 Teh Chean Ben 60,000 0.11

21 Yee Kwok Yim 56,000 0.11

22 Chiam Tau Meng 55,000 0.10

23 Lee Eng Shan 52,200 0.10

24 Siao Yen Ling 51,000 0.10

25 DB (Malaysia) Nominee (Asing) Sdn Bhd 50,000 0.09Beneficiary : Deutsche Bank AG London

26 Kamsiah Binti Ahmad Kusri 50,000 0.09

27 Lee Cheong 50,000 0.09

28 Ng Long Chong 50,000 0.09

29 TA Nominees (Tempatan) Sdn Bhd 50,000 0.09Beneficiary : Pledged Securities Account for Harbajan Kaur A/P Sadhu Singh

30 Teh Chean Ben 50,000 0.09

DIRECTORS’ WARRANTHOLDING AS AT 29 APRIL 2011


Name Warrants % Warrants %

Low Bok Tek - - 35,000,000# 66.29Malik Parvez Ahmad bin Nazir Ahmad - - - -Peter Wong Hoy Kim - - - -Ibrahim bin Hamzah - - - -

# Deemed to have an interest in the warrants by virtue of Section 6A of the Companies Act, 1965


>>

Location Description Tenure Land Area Approximate Net Date of Last Date of/Existing Use Age of Book Value Revaluation Acquisition

Building as at 31/12/2010

LATEXX MANUFACTURING SDN BHD

Lot PT5054, Factory cum 99 years 16,390 16 years RM6,442,779 12 Sept 1995 30 Nov 1993H. S. (D) LM 5127, Office lease sq metresMukim of Assam expiring onKumbang, 29 Nov 2092District of Larut and Matang, Perak Darul Ridzuan

Lot 15237, Factory cum 99 years 8,099 22 years RM4,131,977 12 Sept 1995 6 Jan 1988PN 63761, Office lease sq metresMukim of Assam expiring onKumbang, 6 Jan 2087District of Larut and Matang, Perak Darul Ridzuan

Lot PT4004, Mukim Factory cum Leasehold 12,588 20 years RM2,811,701 - 30 Mar 1993of Assam Kumbang, Office expiring on sq metresDistrict of Larut and 21 Dec 2089Matang, Perak Darul Ridzuan

Lot 10558, Factory cum 99 years 24,304 22 years RM9,864,222 - 11 June 1998Mukim of Assam Office lease sq metresKumbang, expiring onDistrict of Larut and 12 May 2081Matang, Perak Darul Ridzuan

PN 69587 No. Lot Factory cum Leasehold 32,378 2 years RM16,891,381 - 5 Dec 200618374, Mukim of Office expiring on sq metresAssam Kumbang, 2088District of Larut and Matang, Perak Darul Ridzuan

PN 95745 No. Lot Factory cum 99 years 12,629 1 year RM9,753,108 - 30 August18873, Mukim Office lease sq metres 2007Asam Kumbang, expiring onDistrict of Larut & 11 January 2092Matang, Perak Darul Ridzuan

Lot 5559, Mukim Vacant Land Freehold 8,190 - RM111,440 - 13 July 2010Assam Kumbang, sq metresDistrict of Larut & Matang, Perak Darul Ridzuan

List of Group Propertiesparticulars of group properties as at 31 December 2010


>> List of Group Properties (cont’d)

particulars of group properties as at 31 December 2010

Location Description Tenure Land Area Approximate Net Date of Last Date of/Existing Use Age of Book Value Revaluation Acquisition

Building 31/12/2010

MEDTEXX MANUFACTURING SDN BHD

PT5171, 5530-5534, Vacant Land Freehold 50,116 - RM440,039 - 2 Feb 1999Mukim of Assam sq metresKumbang,District of Larut and Matang, Perak Darul Ridzuan

Lot 5529, Mukim Vacant Land Freehold 8,381 - RM305,142 - 1 Feb 2010Assam Kumbang, sq metresDistrict of Larut & Matang, Perak Darul Ridzuan


>>Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twenty-Ninth (29th) Annual General Meeting of the Company will be heldat Sapphire Room, SSL Traders Hotel, No. 43, Jalan Medan Perwira Satu, Medan Perwira, 34600 Kamunting,Perak Darul Ridzuan on Saturday, 18 June 2011 at 12.00 p.m. for the following purposes:-

ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 December2010 and the Reports of the Directors and Auditors thereon.

2. To approve the payment of a final tax exempt dividend of 2.5 sen per share in respectof the financial year ended 31 December 2010 as recommended by the Directors.

3. To approve the payment of Directors’ fees of RM90,000 for the financial year ended31 December 2010.

4. To re-elect Low Bok Tek who retires by rotation pursuant to Article 90 of the Company’sArticles of Association.

5. To re-appoint Messrs STYL Associates as Auditors of the Company and to authorise theDirectors to fix their remuneration.

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions:-

Ordinary Resolutions

6. Renewal of Authority to Issue Shares Pursuant to Section 132D of the Companies Act,1965

“THAT subject always to the Companies Act, 1965, Articles of Association of theCompany and the approvals of the relevant government and/or regulatory authorities,the Directors be and are hereby empowered pursuant to Section 132D of theCompanies Act, 1965 to issue new shares in the Company at any time, upon such termsand conditions and for such purposes as the Directors may, in their absolute discretiondeem fit, provided that the aggregate number of new shares to be issued does notexceed 10% of the total issued share capital of the Company for the time being, andsuch authority shall continue to be in force until the conclusion of the next AnnualGeneral Meeting of the Company.”

7. Proposed Renewal of Share Buy-Back Authority

“THAT pursuant to Paragraph 12.03 of the Main Market Listing Requirements of BursaMalaysia Securities Berhad (“Bursa Malaysia”) and subject to Section 67A of theCompanies Act, 1965 (“Act”), the Company’s Memorandum and Articles of Associationand other applicable laws, rules and regulations and the approvals of all relevantregulatory authorities, the Company be and is hereby authorised to purchase and/orhold such number of ordinary shares of RM0.50 each in the Company as may bedetermined by the Directors from time to time through Bursa Malaysia upon such termsand conditions as the Directors may deem fit and expedient in the interest of theCompany, provided that the aggregate number of shares to be purchased and/or heldpursuant to this resolution shall not exceed ten percent (10%) of the issued and paid-up share capital of the Company as at the date of the share buy-back and that anamount of the funds not exceeding the retained profits and share premium reserve ofthe Company as at the date of the share buy-back, be utilised for the proposedpurchase AND THAT the shares of the Company to be purchased may be cancelled,retained as treasury shares, distributed as dividends or resold on Bursa Malaysia, or acombination of the above, at the absolute discretion of the Directors.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7


>> Notice of Annual General Meeting (cont’d)

AND THAT such approval shall take effect upon the passing of this ordinary resolutionand will continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, atwhich time it will lapse, unless by ordinary resolution passed at that meeting, theauthority is renewed, either unconditionally or subject to conditions;

(b) the expiration of the period within which the next AGM after that date is requiredby law to be held; or

(c) the authority is revoked or varied by ordinary resolution passed by theshareholders of the Company in a general meeting,

whichever occurs first.

AND FURTHER THAT the Directors be and are hereby authorised to do all such acts andthings (including executing any relevant documents) for and on behalf of the Company,as they may consider expedient or necessary to complete and give effect to theaforesaid authorisation.”

Special Resolution

8. Proposed Amendment to the Articles of Association

“THAT the Company’s Articles of Association be hereby amended by inserting thefollowing new Article 120A :-

New Article 120A

Any dividend, interest or other moneys payable in cash in respect of shares may bepaid by cheque or warrant sent through the post directed to the last registered addressof the members or to such person entitled thereto, or, if several persons are entitledthereto in consequence of the death or bankruptcy of the holder, to any one of suchpersons or to such person and to such address as such entitled persons may in writingdirect or paid via electronic transfer or other methods of funds transfer or remittanceto the account provided by the holder who is named in the Record of Depositors. Everysuch cheque or warrant or electronic transfer or remittance shall be made payable tothe order of the person to whom it is sent or remitted or to such person as the holdermay direct and the payment of any such cheque or warrant or electronic transfer orremittance shall be a good discharge to the Company in respect of the dividend,interest, or other money payable in cash represented thereby, notwithstanding that itmay subsequently appear that the same has been stolen or that endorsement thereon,or the instruction for the electronic transfer or remittance has been forged. Every suchcheque or warrant or electronic transfer or remittance shall be sent or remitted at therisk of the person entitled to the money thereby represented.”

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

By Order of the Board

Jesslyn Ong Bee Fang (MAICSA 7020672)Eric Toh Chee Seong (LS 0005656)Company Secretaries

27 May 2011Perak Darul Ridzuan

Resolution 8


>>Notice of Annual General Meeting (cont’d)

Notes

1. A member of the Company, eligible to attend and vote at the meeting, is entitled to appoint a proxy or proxies to votein his/her stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of theCompanies Act 1965 shall not apply to the Company.

2. Where a member appoints two or more proxies, the appointment shall be invalid unless he/she specifies the proportionof his/her shareholdings to be represented by each proxy. Where a member of the Company is an authorised nomineeas defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect ofeach securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

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

4. The instrument appointing a proxy must be deposited at the Registered Office at Lot 18374, Jalan Perusahaan 3,Kamunting Industrial Estate, 34600 Kamunting, Perak Darul Ridzuan not less than 48 hours before the time set forholding the meeting or any adjournment thereof.

Explanatory Notes On Special Business

Ordinary Resolution 6 - Renewal of Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965

The existing general mandate for the authority to issue shares pursuant to Section 132D of the Companies Act, 1965 wasapproved by the shareholders of the Company at the 28th Annual General Meeting held on 18 June 2010. The Companydid not issue any new shares pursuant to this general mandate as at the date of this notice.

The Company is continually looking for opportunities to broaden the operating base and earnings potential of the Company.This may require the issue of new shares not exceeding ten percent (10%) of the issued and paid-up share capital of theCompany for the time being.

The proposed Ordinary Resolution 6 would enable the Directors to avoid delay and cost of convening further generalmeetings to approve the issue of such shares for such purposes. This authority, unless revoked or varied by the Company ata general meeting, will expire at the conclusion of the next Annual General Meeting of the Company. The renewal of thismandate will provide flexibility to the Company for any potential fund raising activities, including but not limited toplacement of shares, for purpose of funding future investments, working capital and/or any acquisition.

Ordinary Resolution 7 - Proposed Renewal of Share Buy-Back Authority

The proposed Ordinary Resolution 7, if passed, will enable the Company to purchase its own shares of up to ten percent(10%) of the issued and paid-up share capital of the Company by utilising the funds allocated out of the retained profitsand the share premium reserve of the Company.

Further information on the proposed Ordinary Resolution 7 is set out in the Statement to Shareholders dated 27 May 2011which is enclosed together with the Company’s Annual Report 2010.

Special Resolution 8 - Proposed Amendment to the Articles of Association

The proposed Special Resolution 8, if passed, will facilitate the payment of cash dividend, interest or any money payable tothe shareholders via electronic payment such as telegraphic transfer or electronic transfer or remittance to shareholders’bank account in line with e-Dividend implemented by Bursa Malaysia Securities Berhad.


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NOTICE IS HEREBY GIVEN THAT subject to the approval of the shareholders at the 29th Annual GeneralMeeting to be held on 18 June 2011, a final tax-exempt dividend of 2.5 sen per share in respect of the financialyear ended 31 December 2010, if approved, will be paid on 18 July 2011 to the shareholders whose namesappear in the Record of Depositors at the close of business on Thursday, 30 June 2011.

A Depositor shall qualify for entitlement to the dividend only in respect of:-

(a) Shares transferred into the Depositor’s securities account before 4.00 p.m. on Thursday, 30 June 2011 inrespect of ordinary transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules ofthe Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

Jesslyn Ong Bee Fang (MAICSA 7020672)Eric Toh Chee Seong (LS 0005656)Company Secretaries

27 May 2011Perak Darul Ridzuan

Notice of Dividend Entitlement

Statement AccompanyingNotice of Annual General Meeting

The Director who is standing for re-election at the Twenty-Ninth (29th) Annual General Meeting of LatexxPartners Berhad is as follow:

Low Bok Tek (Article 90 of the Company’s Articles of Association)

Pursuant to paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad,the details of the above Director who is seeking re-election are set out in his profile which appears in theProfile of Directors on page 6 of this Annual Report.

The details of the Directors’ securities holdings in the Company are set out in the Analysis of Shareholdingsand Analysis of Warrantholdings which appear on pages 76 to 80 of this Annual Report.

I/We,

(Full name in block letters)

of

(Address)

being a member/members of LATEXX PARTNERS BERHAD hereby appoint

(Full Name in Block Letters)

of

(Address)

or failing him/her,

(Full Name in Block Letters)

of

(Address)

or failing him/her, the Chairman of the Company as my/our proxy, to vote for me/us on my/our behalf at the 29th Annual GeneralMeeting of the Company to be held at Sapphire Room, SSL Traders Hotel, No. 43, Jalan Medan Perwira Satu, Medan Perwira, 34600Kamunting, Perak Darul Ridzuan on Saturday, 18 June 2011 at 12.00 p.m. or at any adjournment thereof.

No. RESOLUTIONS FOR AGAINST

1. To receive the Audited Financial Statements for the financial year ended 31 December 2010 and the Reports of the Directors and Auditors thereon

2. To approve the payment of Final Tax Exempt Dividend

3. To approve the payment of Directors’ Fees

4. To re-elect Low Bok Tek

5. To re-appoint Messrs STYL Associates as Auditors of the Company

6. Renewal of Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965

7. Proposed Renewal of Share Buy-Back Authority

8. Proposed Amendment to the Articles of Association

(Please indicate with an ‘X’ in the spaces provided below how you wish your vote to be cast. In the absence of specific directions,your proxy may vote or abstain from voting at his/her discretion)

Signed this day of 2011 Numbers of shares held

Signature of Shareholder(s)

Note:-1. A member of the Company, eligible to attend and vote at the meeting, is entitled to appoint a proxy or proxies to vote in his/her stead. A proxy may

but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company.2. Where a member appoints two or more proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her shareholdings to be

represented by each proxy. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories)Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit ofthe said securities account.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing or, if theappointer is a corporation, either under its common 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 at Lot 18374, Jalan Perusahaan 3, Kamunting Industrial Estate, 34600Kamunting, Perak Darul Ridzuan not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

Form of Proxy

The Company SecretaryLATEXX PARTNERS BERHAD (86100-V)

Lot 18374, Jalan Perusahaan 3Kamunting Industrial Estate

34600 Kamunting Perak Darul Ridzuan

Malaysia

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