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SUPERMAX CORPORATION BERHAD
(Co No: 420405 – P)
Notes to the quarterly report for the first (1) quarter ended 31 March 2003 as
per KLSE listing requirements
1. Review Of The Performance Of The Company And Its Principal
Subsidiaries
Group turnover increased marginally from RM 29.8 Million in the preceding
quarter to RM 31.1 Million in current quarter. However, Group profit before
tax has increased by RM 0.84 Million from RM 2.58 Million in preceding
quarter when compared to current quarter of RM 3.42 Million.
The effective cost control measures coupled with the increase in the share of
profit from associated companies has contributed to the substantial increase in
profit for current quarter as compared to preceding quarter.
2. Comparison With Preceding Quarter’s Result
The Group achieved slight increase in turnover and higher profit before tax
for current quarter as compared to immediate preceding quarter. The reasons
as stated in Note 1.
3. Commentary On Current Year Prospect
Based on the 1st quarterly result of the Group, the Directors anticipate that the
Group will remain profitable for financial year 2003.
4. Variance Of Actual And Forecasted Profit And Shortfall In Profit
Guarantee
This is not applicable to the Company for the current quarter under review.
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5. Income Tax Expenses And Variance Between The Effective And
Statutory Tax Rate
Current Cumulative
Quarter ended Quarter ended
31. 3. 2003 31. 3 .2003
Income tax 85 85
Deferred tax 109 109
_____ _____
194 194
===== =====
The effective tax rate of the Group is lower than statutory income tax due
mainly to reinvestment allowance claimed by certain subsidiary companies.
6. Properties On Sale Of Investment And / Or Properties
There were no sales of investment and / or properties for the financial period
under review.
7. Quoted Investment
There were no purchases or disposal of quoted securities for the financial
period under review.
8. Status Of Corporate Proposals Announced But Yet To Be Completed
Save as disclosed below, there were no Corporate Proposal announced and
not completed as at 28.5.2003 (the latest practicable date that shall not earlier
than 7 days from the date of issue this quarterly report):-
On 10 October 2002, the Company via its adviser announced that the
Company has obtained approval from the Securities Commission (“SC”) vide
its letter dated 3 October 2002 (received on 9 October 2002) for the
following:-
(i) Proposed bonus issue of 13,333,333 new ordinary shares of RM 1.00
each in Supermax on the basis of One (1) new ordinary share for
every three (3) existing ordinary shares held by capitalising
RM13,333,333 from the share premium account of the Company;
(ii) Proposed rights issue of 26,666,667 new ordinary shares of RM 1.00
each on the basis of two (2) new ordinary shares for every three (3)
existing shares held;
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(iii) Proposed employees share option scheme (“ESOS”) for the eligible
executive directors and employees of up to ten per cent (10%) of the
issued and paid up share capital of the Company; and
(iv) Listing of and quotation for all new ordinary shares of Supermax
issued pursuant to the Proposed Bonus Issue, Proposed Rights Issue
and the exercise of the ESOS option on the Second Board of the Kuala
Lumpur Stock Exchange.
The SC has also approved the waiver for the Company from having to
comply with paragraph 2(a) of the SC’s ESOS Guidelines in relation to the
maximum allowable number of shares to be issued pursuant to the Proposed
ESOS in the event of a share buy-back exercise.
The utilisation of proceeds from the Proposed Rights Issue which has been
noted by the SC is shown in Table 1 below and are subject to the following
conditions as follows:-
(i) Approval from the SC is required for any changes to the original
utilisation of proceeds if the proceeds are utilised other than for the
core business of Supermax;
(ii) Approval from the shareholders of Supermax is required for the
utilisation of proceeds that deviates by 25% or more from the original
utlisation of proceeds. Where the deviation is less than 25% proper
disclosure needs to be made to all shareholders of Supermax;
(iii) The period for the utilisation of the proceeds from the Proposed
Rights Issue must be disclosed in the circular and abridged prospectus
to the shareholder of Supermax. Any extension of time for the
utilisation of proceeds from the initial time frame determined by
Supermax needs to be approved via a clear resolution by the Board of
Directors of Supermax and must be fully disclosed to the KLSE; and
(iv) Proper disclosure on the status of utilisation of proceeds from the
Proposed Rights Issue is required to be made in the quarterly report
and annual report of Supermax until the proceeds have been fully
utilised.
The shareholders of the Company have at the Extraordinary General Meeting
(“EGM”) held on 11 February 2003 approved all the resolutions set out in the
Notice of the EGM dated 23 January 2003.
On 2 April 2003, the Company announced that it has obtained the approval of
the Securities Commission for an extension of time to 3 October 2003 to
implement the aforementioned proposals.
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Table 1
RM’000
Capital expenditure 18,567
Implementation and upgrade of existing computer and ICT system 2,000
Working capital 5,000
Estimated expenses of the Proposals 1,100
----------
26,667*
======
*Based on the proposed Rights Issue price of RM1.00 per share
9. Group Borrowing And Debt Securities
Group borrowing as at 31.3.2003 are as follows: -
Secured
RM’000
Bank overdraft 746
Banker acceptance 8,863
Export credit refinancing 2,164
Term loan 20,908
______
32,681
Less: Amount due within 12 months (17,241)
(shown under current liabilities)
______
Non current portion 15,440
=====
10. Off Balance Sheet Financial Instruments
There were no financial instruments with off balances sheet risk as at 28.5.
2003 (the latest practicable date which shall not earlier than 7 days from the
date of this quarterly report).
11. Pending Material Litigation
Save as disclosed below, there were no pending material litigation as at
28.5.2003 (the latest practicable date which shall not be earlier than 7 days
the date of this quarterly report):-
1. Supermax Glove Manufacturing Sdn Bhd (“SGM”), a wholly owned
subsidiary of the Company had commenced action against Top Glove Sdn
Bhd (“TG“) on 19 October 2000 for the passing off by TG, dispenser
boxes containing gloves manufactured by TG under the brand name
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“SAFEMAX” which are similar in terms of colour and design to the
dispenser boxes containing gloves manufacturing by SGM under the
brand name of “SUPERMAX”. TG has also printed various certificate of
quality and / or accreditation belonging to SGM for sale in Brazil.
2. Pending disposal of the case, SGM has made an application for
injunction to prevent TG from passing off their dispenser boxes as
SGM’s dispenser boxes.
3. At the hearing of the application for the injunction on 20 March 2002,
TG though without admission of liability (which will be decided at the
full trial), consented to the following orders of the Court : -
a) TG undertakes not to manufacture or sell gloves under the
brand name “SAFEMAX” packaged in boxes as depicted in
Exhibit TKS-1 of the Affidavit of Thai Kim Sim affirmed on
31 October 2000 filed in support of SGM’s application for
injunction.
b) TG undertakes not to reproduce on any packaging material
produced by TG any registration number or any other
identification number belonging to SGM in respect of any
certificate of quality and/or accreditation.
c) TG undertakes to deliver to SGM all the unused infringed
dispenser boxes in their custody.
The court has fixed the hearing for pre-trial case management on 14
April 2003 for the parties to attend court for direction in preparation
for trial. The above matter has been adjourned to 20 October 2003 for
further case management.
12. Dividend
The directors propose a final dividend of 4.5% tax exempt, amounting to
RM 1.8 Million in respect of financial year ended 31 December 2002. This
dividend is subject to approval by the shareholders at the forthcoming Annual
General Meeting.
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13. Earnings per share
Basic earnings per share
2003 2003
Current qtr 3 months
ended 31.3.2003 Cumulative todate
Net profit (RM’000) 3,235 3,235
attributable to ordinary ==== ====
shareholders
Weighted average (‘000) 40,000 40,000
Number of ordinary ===== =====
Shares in issue
Basic earning per 8.09 8.09
Share (sen) === ====
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