TO P he Top The World's Largest AWARDEDTOP GLOVE CORPORATION BERHAD (474423-X) Incorporated in...

TOP GLOVE CORPORATION BERHAD (474423-X)

Incorporated in Malaysia under the Companies Act, 1965

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The World's LargestRubber Glove Manufacturer

ANNUALREPORT2 0 0 6For F inancia lY e a r E n d e d31 August 2006

A W A R D E DI S O 9 0 0 1

The World is Our MarketThe World is Our Market

,000ployees*

Lines*

y 31 March 2007

he Top

The World Is Our Market

• Alba• Ando• Arm• Aust• Azer• Bela• Belg• Bosn• Bulg• Cana• Croa• Cypr• Czec• Denm• Esto

North America

• Argentina • Bahamas• Barbados • Belize• Bolivia • Brazil• Chile • Colombia• Costa Rica • Cuba• Dominica • Dominican Republic• Ecuador • El Salvador• French Guiana

• Grenada• Guatemala • Guyana• Haiti • Honduras• Jamaica • Mexico• Nicaragua • Panama• Paraguay • Peru• Suriname • Trinidad & Tobago• Uruguay • Venezuela

LatinAmerica

TOP GLOVEEXPORTS TO 175COUNTRIES WORLDWIDE

• Alge• Ango• Ben• Bots• Burk• Buru• Cam• Cape• Cent Rep• Chad• Cong• Eritr• Ethi• Gabo• Gam• Gha• Guin• Ivory• Keny• Libe• Liby

• Canada• Puerto Rico• USA

• Australia• Fiji• Guam• Micronesia, Federated• New Zealand• Papua New Guinea• Samoa• Solomon Islands• Vanuatu

Oceania

• Afghanistan • Bangladesh• Bhutan • Brunei• Cambodia • China• Hong Kong • India• Indonesia • Japan• Kazakhstan • Korea• Laos• Macau

• Malaysia• Mongolia • Myanmar• Nepal • Pakistan• Philippines • Singapore• Sri Lanka • Taiwan• Thailand • Tajikistan• Uzbekistan• Vietnam

• Bahrain• Egypt• Iran• Iraq• Israel• Jordan• Kuwait• Lebanon• Oman• Palestine• Qatar• Saudi Arabia• Syria• UAE• Yemen

Middle East

• Albania • Andorra• Armenia • Austria• Azerbaijan • Belarus• Belgium • Bosnia Herzegovina• Bulgaria • Canary Islands• Croatia • Cyprus• Czech Republic • Denmark• Estonia

• Finland• France • Georgia• Germany • Greece• Hungary • Iceland• Ireland • Italy• Kosovo • Latvia

• Lithuania • Luxembourg• Macedonia, FYR • Malta• Moldova • Netherlands• Northern Ireland• Norway

• Poland • Portugal• Romania • Russia• Slovakia• Slovenia• Spain• Sweden• Switzerland

• Turkey• Ukraine • United Kingdom• Yugoslavia

Europe

Africa

Asia

• Madagascar• Malawi• Mauritius• Morocco• Mozambique• Namibia• Niger• Nigeria• Rwanda• Senegal• Sierra Leone• Somalia• South Africa

• Sudan• Swaziland• Tanzania• Togo• Tunisia• Uganda• Zambia• Zimbabwe

• Algeria• Angola• Benin• Botswana• Burkina Faso• Burundi• Cameroon• Cape Verde• Central African Republic• Chad• Congo• Eritrea• Ethiopia • Gabon• Gambia• Ghana• Guinea• Ivory Coast• Kenya• Liberia• Libya

A W A R D E DI S O 9 0 0 1

2

Always Staying at the Top

VIS IONWe strive to be the world’s leading manufacturer with

excellent quality glove products and services that enrich and

protect human lives

M ISS IONTo be a world class glove manufacturer providing top quality

products with excellent services through continuous

improvement and innovation

CORPORATE VALUES• Global customer satisfaction

• Do it right first time and every time

• Integrity and total commitment

• Excellence in quality and competitiveness

• Environmental friendly and social responsibilities

QUALITY POLICY• Quality and productivity are our business

• Continuous improvement and innovation are

our duties

• Towards zero defect is our target

Our business philosophies for the Company are:i) We work for our Customers;ii) We take care of the interests of our Shareholders;iii) We ensure that our Employees continue to

contribute positively to the Company & we takegood care of the well-being of our Employees; and

iv) We work closely with our Bankers, Suppliers, Business Associates and Friends.”

Dato’ Sri Dr. Lim, Wee-ChaiChairman

To p G l o v e C o r p o r a t i o n B e r h a d A n n u a l R e p o r t 2 0 0 6

“

A W A R D E DI S O 9 0 0 1

A n n u a l R e p o r t 2 0 0 6 To p G l o v e C o r p o r a t i o n B e r h a d 3

Contents

16 Chairman’s Statement(English, Bahasa Malaysia & Mandarin)

30 Corporate Song

31 Corporate Governance Statement

38 Statement On Internal Control

39 Audit Committee Report

43 Financial Statements 2006

84 List Of Properties

88 Analysis Of Shareholdings

91 Notice of AGM

Proxy Form

page

1

4

5

6

7

8

13

14

15

Export Markets

Corporate Structure

Quality Awards & Certifications

Corporate Information

Board of Directors

Directors’ Profile

Management Team

Six Year Group Financial Review

Share Performance

MALAYSIA THAILAND CHINA

A W A R D E DI S O 9 0 0 1

TOP GLOVE CORPORATION BERHAD (474423-X)

A W A R D E DI S O 9 0 0 1

100%

100%

100%

100%

100%

TG MEDICAL(USA) INC.

GREAT GLOVESDN BHD

TOP GLOVETOP GLOVESDN BHDSDN BHD

TG MEDICALSDN BHD

TOP GLOVE ENGINEERINGSDN BHD

100%Top Glove Medical(Thailand) Co Ltd:Thailand

74%Great Glove(Thailand) Co Ltd:Thailand

100%Top Glove InternationalSdn Bhd: Malaysia

100%Top Glove TechnologySdn Bhd: Malaysia

100%Top Glove Technology(Thailand) Co Ltd:Thailand

100%B Tech IndustryCo Ltd: Thailand

100%Top Glove (Zhangjiagang)Co Ltd: China

100%Great Glove(Xinghua)Co Ltd: China

100%TG Medical(Zhangjiagang)Incorporated: China

A W A R D E DI S O 9 0 0 1

CORPORATE STRUCTURE


TOP GLOVE CORPORATION BERHADIncorporated in Malaysia under the Companies Act, 1965

4

A W A R D E DI S O 9 0 0 1


2005

2004

2002

2001

1999

1998

1997

1994

S ince 199 1

Quality Awards &Certifications

A W A R D E DI S O 9 0 0 1


CORPORATEINFORMATION

6

Dato’ Sri Dr. Lim, Wee-ChaiChairman

Tan Sri Datuk (Dr.) Arshad Bin AyubIndependent Non-Executive Director

Datin Sri Tong Siew BeeExecutive Director

Haji Shahadan Bin Haji Abd ManasExecutive Director (retired on 31/8/06)

Lim Hooi SinExecutive Director

Sekarajasekaran a/l ArasaratnamIndependent Non-Executive Director

Lau Boon AnnNon-Executive Director

Quah Chin ChyeIndependent Non-Executive Director

Lee Kim MeowExecutive Director and AlternateDirector to Lim Hooi Sin

Lim Cheong GuanExecutive Director (appointed on 31/8/06)

REGISTERED OFFICELevel 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,MalaysiaTel : 03-2084 9000Fax : 03-2094 9940/

2095 0292

CORPORATE OFFICELot 4969, Jalan Teratai, Batu 6, Off Jalan Meru,41050 Klang, Selangor D.E. MalaysiaTel : 603-3392 1992 / 1905Fax : 603-3392 1291 / 8410E-mails : (i) [email protected]

(ii) [email protected](iii) [email protected]

Websites : http://www.topglove.com.myhttp://topglove.asiaep.com

COMPANY SECRETARYChua Siew Chuan(MAICSA No: 0777689)

REGISTRARSecurities Services (Holdings)Sdn BhdLevel 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,MalaysiaTel : 03-2084 9000Fax : 03-2094 9940 /

2095 0292

AUDITORErnst & YoungChartered AccountantsLot 1, 6th Floor,Menara Pertam, Jalan BBP 2,Taman Batu Berendam Putra,Batu Berendam,75350 Melaka, Malaysia

STOCK EXCHANGE LISTINGMain Board of BursaMalaysia Securities BerhadStock Code : 7113Stock Name : TOPGLOV

American Depository Receipt(ADR), USAADR Symbol : TGLVY

PRINCIPAL BANKERS• HSBC Bank Malaysia Berhad• Public Bank Berhad• Standard Chartered Bank Malaysia Berhad• OCBC Bank (M) Berhad• EON Bank Berhad• Hong Leong Bank Berhad• United Overseas Bank (Malaysia) Berhad• Malayan Banking Berhad• KBC Bank N. V.• Thai Military Bank Public Company Limited• China Construction Bank

SOLICITORSCheang & Ariff39 Court, 39, Jalan Yap Kwan Seng,50450 Kuala Lumpur, Malaysia

Soo Thien Ming & NashrahNo. 45-47, 1st Floor,Jalan Kapar, 41400 Klang,Selangor Darul Ehsan, Malaysia

Ranjit, Ooi & Robert LowNo. 53, Jalan Maarof, Bangsar,59000 Kuala Lumpur, Malaysia

Yong Dan Rakan-RakanNo. 39-1, 1st Floor,Jalan Tiara 2B, Bandar Baru Klang,41150 Klang,Selangor Darul Ehsan, Malaysia

Jeevaretnam & Co.Suite 504, 5th Floor, Wisma Lal-Doshi,135 Jalan Tuanku Abdul Rahman,50100 Kuala Lumpur, Malaysia

BOARD OF DIRECTORS


A W A R D E DI S O 9 0 0 1

BOARD OF DIRECTORS

Datin Sri Tong Siew BeeEXECUTIVE DIRECTOR

Dato’ Sri Dr. Lim, Wee-ChaiCHAIRMAN

Tan Sri Datuk (Dr.) Arshad bin AyubINDEPENDENT NON-EXECUTIVE DIRECTOR

Lee Kim MeowEXECUTIVE DIRECTOR &

ALTERNATE DIRECTOR TO LIM HOOI SIN

Lim Hooi SinEXECUTIVE DIRECTOR

Sekarajasekaran A/L Arasaratnam

INDEPENDENT NON-EXECUTIVE DIRECTOR

Lau Boon AnnNON-EXECUTIVE DIRECTOR

Quah Chin ChyeINDEPENDENT NON-EXECUTIVE DIRECTOR

Lim Cheong GuanEXECUTIVE DIRECTOR

A W A R D E DI S O 9 0 0 1

8 To p G l o v e C o r p o r a t i o n B e r h a d A n n u a l R e p o r t 2 0 0 6

DIRECTORS’ PROFILE

Aged 48, a Malaysian citizen, was appointed asChairman and Managing Director on 4 September2000. He is also the founder of Top Glove Groupof Companies. The Group was established in 1991and was listed on Bursa Malaysia SecuritiesBerhad on 27 March 2001.

He obtained a Bachelor of Science Degree withHonours in Physics in 1982 from UniversityMalaya and a Master of Business Administration in1985 from Sul Ross State University in Texas,USA. He also earned his Doctorate in BusinessAdministration from the Irish InternationalUniversity, London in 2001 and later was awardedwith the Fellow Membership of the BusinessManagement Association, UK in September 2001.

Dato' Sri Dr. Lim brings a wealth of experience inthe marketing of consumers products whilst he wasthe Sales Manager of a subsidiary company of OYLIndustries Bhd., a company listed on BursaMalaysia Securities Bhd. In 1991, he set up TopGlove Sdn Bhd, his own glove manufacturing andtrading business with only 3 second handproduction lines and has expanded this business tobe the World Largest's Rubber Glove Manufacturerwith 250 production lines in twelve (12) glovefactories as at August 2006. He has more than 20years of experience in the rubber and latexmanufacturing business.

He served as the President (1997 to 1999) of theMalaysian Rubber Glove Manufacturers'Association (MARGMA), prior to this, he was alsothe Vice-President, Treasurer, Honorary Secretaryfor the past seven (7) years in this association. In1998 and 1999, he was the Director of theAssociation of Malaysia Medical Industries(AMMI). In 1998 and 1999, he was the Boardmember of the Malaysia Rubber Board.

In 4 December 2004, Dato' Sri Dr. Lim, Wee-Chaiwas named and awarded the highly prestigiousaccolade, Master and Country Entrepreneur of TheYear 2004, by Ernst and Young. This award waspresented by Prime Minister of Malaysia, Y.A.B.Dato' Seri Abdullah bin Hj. Ahmad Badawi. Withthis award, Dato' Sri Dr. Lim represented Malaysiain Monte Carlo, Monaco for the World Entrepreneurof The Year contest on 28 May 2005.

His business philosophies for the Company are:-

i) We work for our Customers;

ii) We take care of the interests of ourShareholders;

iii) We ensure that our Employees continue tocontribute positively to the Company & we takegood care of the well-being of our Employees; and

iv) We work closely with our Bankers, Suppliers,Business Associates and Friends.

Dato' Sri Dr. Lim does not have any directorships inother public corporations. Dato' Sri Dr. Lim, Wee-Chaiis the husband of Datin Sri Tong Siew Bee and brotherof Mr. Lim Hooi Sin. He has no conflict of interestwith the Company. He has not been convicted of anyoffences within the past ten years.

DATO’ SRI DR. LIM, WEE-CHAICHAIRMAN

A W A R D E DI S O 9 0 0 1


DIRECTORS’PROFILE (Cont’d)

Aged 78, a Malaysian citizen, was appointed as an IndependentNon-Executive Director on 4 September 2000.

He graduated with a Diploma in Agriculture from College ofAgriculture, Serdang, Selangor in 1954 and later obtained aBachelor of Science (Hons) Economics and Statistics fromUniversity of Wales, Aberystwyth, United Kingdom in 1958. In1964, he obtained a postgraduate Diploma in BusinessAdministration from Management Development Institute(IMEDE), Lausanne, Switzerland.

He has vast experience having served as a member of numerousbodies in the fields of education, economic planning, finance,regional development, agriculture and science. He was the firstDirector of Institute Teknologi Mara from 1965 to 1975. Heheld senior positions with various Ministries in the MalaysianGovernment, from 1951 to 1983, including his appointment asDeputy Governor of Bank Negara Malaysia from 1975 to 1977,and Deputy Director General of Economic Planning Unit, PrimeMinister's Department. He currently serves as Chairman ofMalaysia Rubber Export Promotion Council, President ofMalaysia Rubber Products Manufacturers Association and aMember of Lembaga Getah Malaysia (LGM). He was a memberof Harun's Salary Commission for Statutory Bodies and LocalGovernment.

He is currently a Chairman of Asia Brands Corporation Berhad(formerly known as Audrey International (M) Bhd.), TomypakHoldings Bhd and a Director of Kulim Malaysia Bhd., SindoraBhd., KPJ Healthcare Bhd., LBI Capital Bhd., GreenyieldBerhad and Malayan Flour Mills Bhd. He is a Chairman ofcouncil of the University of Malaya and a council member ofMaktab Kerjasama Malaysia. He also sits on the Boards ofPelaburan Johor Bhd, Bata Sdn. Bhd., PFM Capital HoldingsSdn. Bhd., CSR Building Materials Sdn. Bhd., NakagawaRubber Industries Sdn. Bhd. and Zalaraz Sdn. Bhd.

Tan Sri Datuk (Dr.) Arshad bin Ayub does not have any familyrelationship with any other Director and/or major shareholder ofthe Company and has no conflict of interest with the Company.He has not been convicted for any offences within the past tenyears.

Aged 48, a Malaysian citizen, was appointed asExecutive Director on 4 September 2000. Prior tothat, she was the director and the co-founder of TopGlove Sdn. Bhd.

She graduated with a Bachelor of Science Degreewith Honours in Computer Science from UniversitySains Malaysia in Penang in 1983 and later obtainedher Master of Business Administration from Sul RossState University, Texas, USA in 1985.

She is responsible for the Information TechnologyDepartment, Human Resource Department and thegeneral administration for the Top Glove Group ofCompanies. Prior to this, she was working in thebanking industry in the information technology fieldfor more than 10 years. She was formerly attached toUnited Overseas Bank Berhad and Utama BankBerhad.

Datin Sri Tong Siew Bee does not have anydirectorships in other public corporations. She is thewife of Dato' Sri Dr. Lim, Wee-Chai and sister-in-lawof Mr. Lim Hooi Sin. She has no conflict of interestwith the Company. She has not been convicted for anyoffences within the past ten years.

TAN SRI DATUK (DR.) ARSHAD BIN AYUBINDEPENDENT NON-EXECUTIVE DIRECTOR

DATIN SRI TONG SIEW BEEEXECUTIVE DIRECTOR


DIRECTORS’ PROFILE (Cont’d)

10

A W A R D E DI S O 9 0 0 1

Aged 47, a Malaysian citizen, was appointed as anExecutive Director on 15 October 2003.

He obtained his Bachelor of Commerce Degree from theUniversity of New South Wales, Australia in 1982majoring in Accounting, Finance and InformationSystems. Upon his graduation, he worked for OCBCFinance Bhd, the finance subsidiary of OCBC Bank Bhdand subsequently with Asia Commercial Finance Bhd in1988. In 1991, he obtained his Bachelor of Law Degreefrom the University of London (External Degree).

He has more than twelve years of experience in themarketing of financial services and credit controloperations in the finance industry during his employmentwith OCBC Finance Bhd and Asia Commercial FinanceBhd. He was the Branch Manager at Asia CommercialFinance (M) Bhd in early 1996 before he was promoted asthe Personal Assistant to the Group Executive Director ofthe Lion Group, entrusted with the responsibility ofoverseeing the manufacturing, trading and financialservices under the Group's operation.

He left in 1997 to join Top Glove as the General Managerin charge of the marketing and promotion of theCompany's products to more than 175 countriesworldwide. He is actively involved in the local MalaysianRubber Glove Manufacturers' Association (MARGMA) andthe regional Asean Rubber Glove Manufacturers'Association (ARGMA). He is also a Trustee Board Memberof the Malaysian Rubber Export Promotion Council(MREPC).

Lee Kim Meow does not have any directorships in otherpublic corporations. He does not have any familyrelationship with any other Director and/or majorshareholder of the Company and has no conflict of interestwith the Company. He has not been convicted for anyoffences within the past ten years.

LEE KIM MEOWEXECUTIVE DIRECTOR AND ALTERNATE DIRECTOR TO LIM HOOI SIN

Aged 44, a Malaysian citizen, was appointed asExecutive Director on 4 September 2000. He obtainedhis Bachelor of Science Degree in ManagementScience from Oklahoma State University, USA in1985, Master of Business Administration Degree fromArizona State University, USA in 1986 and CharterFinancial Consultant Diploma from American College,PA, USA in 1990.

He is a resident of the United States and has spent 14 years of his career with MetLife Financial Services(one of the largest insurance & financial servicescompany in the US). Prior to this posting, he was aManagement Trainee, Associate Brand Manager,Regional Marketing Specialist, Agency Director andDirector of Asian Market. His experience includesproduct development, marketing, recruiting, trainingand supervision of a large highly productive salesforce. He also served as Director at AAAA (ArizonaAsian American Association) in 1996-1997.

He is founder of TG Medical USA Inc. in 1994, servedas Executive Vice President in 2001 and President in2005. He has vast experiences in the United Statesglove market.

Lim Hooi Sin does not have any directorships in otherpublic corporations. Lim Hooi Sin is the brother ofDato' Sri Dr. Lim, Wee-Chai and brother-in-law of DatinSri Tong Siew Bee. He has no conflict of interest withthe Company. He has not been convicted for anyoffences within the past ten years.

LIM HOOI SINEXECUTIVE DIRECTOR

A W A R D E DI S O 9 0 0 1


Aged 78, a Malaysian citizen, was appointed as anIndependent Non-Executive Director on 4 September2000. He obtained a Diploma in Civil Engineering in1951 from Technical College, Kuala Lumpur. In 1960, hepassed the Membership Examination of the Institution ofCivil Engineers (ICE), United Kingdom. Subsequently, hegraduated with a Diploma in Public Health Engineeringfrom the Imperial College of Science & Technology, UnitedKingdom in 1968.

From 1951, he was with the Public Works Department asthe Technical Assistant of Waterworks until 1959,thereafter as Assistant Resident Engineer, ExecutiveEngineer and Waterworks Engineer from 1960 to 1966.He joined the Ministry of Health in 1968 as a SeniorPublic Health Engineer and was promoted to Chief PublicHealth Engineer in 1972. In 1980, he was the Director ofEngineering Services, a position he held until 1983.

Presently, he is the President of Erinco Sdn. Bhd., acompany active in various fields of environmentalengineering. His wealth of knowledge gathered from over 50years of working experience in environmental engineering,environmental related studies, design and implementationof environmental engineering projects in Malaysia andOverseas make him a much sought out Consultant.

He is also a Fellow of the Institution of EngineersMalaysia, Member of the Institution of Civil Engineers,United Kingdom, Member of the Chartered Institution ofWater and Environmental Management, United Kingdom,Member of the American Society of Civil Engineers andMember of the Association of Consulting EngineersMalaysia.

Sekarajasekaran a/l Arasaratnam does not have anydirectorships in other public corporations. He does nothave any family relationship with any other Director and/orany major shareholder of the Company and has no conflictof interest with the Company. He has not been convictedfor any offences within the past ten years.

Aged 51, a Malaysian citizen, was appointed to theBoard of Directors as a Non-Executive Director on 4 September 2000.

He achieved his Diploma in AdministrativeManagement, Organization and Methods, and Diplomain Marketing in United Kingdom in 1980 and laterpursues his Post Graduate Diploma in Managementstudies. He obtained his Master in Business Analysisdegree in 1981 from Lancaster University, UnitedKingdom.

He started his career as a Corporate Planner in 1981and also involved in Management Consultancy andMarketing Manager for various property companies.

In August 1988, he was instrumented in the settingup of Top Glove's Factory 1, which was subsequentlyleased to Top Glove Sdn. Bhd. He returned to serve asan Assistant General Manager with Arab MalaysianDevelopment Bhd. from 1990 to 1996 and ispresently involved in the real estate and propertydevelopment sector.

Lau Boon Ann does not have any directorships in otherpublic corporations. He does not have any familyrelationship with any other Director and/ or majorshareholder of the Company and has no conflict ofinterest with the Company. He has not been convictedfor any offences within the past ten years.

SEKARAJASEKARAN A/L ARASARATNAMINDEPENDENT NON-EXECUTIVE DIRECTOR

LAU BOON ANNNON-EXECUTIVE DIRECTOR

DIRECTORS’PROFILE (Cont’d)


DIRECTORS’ PROFILE (Cont’d)

12

A W A R D E DI S O 9 0 0 1

Aged 41, a Malaysian citizen, was appointed as anExecutive Director on 31 August 2006. He joined TopGlove as the Group Financial Controller in 2005. He isresponsible for the accounting, treasury, corporatefinance and investor relations of Top Glove Group ofCompanies.

He graduated from University of Malaya with aBachelor Degree in Accounting in 1990. He is aChartered Accountant of Malaysian Institute ofAccountants and a member of Malaysian Institute ofCertified Public Accountants. He started his career asan Audit Assistant with Price Waterhouse (now knownas PriceWaterhouseCoopers) in 1990. He was involvedin auditing and business advisory of companies fromvarious industries. He left Price Waterhouse in 1993and joined Ciba Geigy (M) Sdn Bhd, a Swissmultinational company as an Accountant.Subsequently, he joined Timbermaster Industries Bhdas the Group Accountant. He was responsible for thecorporate finance, accounting and secretarialfunctions of the company and its subsidiaries. In1999, he joined Tanah Emas Corporation as theFinancial Controller. He was principally involved in thelisting of Tanah Emas group of companies through thereverse take over of Isuta Holdings Bhd.

Lim Cheong Guan does not have any directorships inother public corporations. He does not have any familyrelationship with any other Director and/ or majorshareholder of the Company and has no conflict ofinterest with the Company. He has not been convictedfor any offences within the past ten years.

LIM CHEONG GUANEXECUTIVE DIRECTOR

Aged 52, a Malaysian citizen, was appointed as anIndependent Non-Executive Director on 28 December2001. He was redesignated as Senior IndependentNon-Executive Director on 3 November 2003.

He is a fellow of the Chartered Institute ofManagement Accountants (CIMA), United Kingdomand also a member of the Malaysian Institute ofAccountants. He is also a member of the CharteredInstitute of Marketing, United Kingdom. Quah ChinChye gained vast experience having worked more than10 years with both the American and British multi-national companies holding various seniormanagement positions.

He sits on the Board of several private limitedcompanies. Prior to this, he was with anotherdiversified group listed on the Main Board of BursaMalaysia Securities Berhad for approximately sixyears.

Quah Chin Chye does not have any directorships inother public corporations. He does not have any familyrelationship with any other Director and/ or majorshareholder of the Company and has no conflict ofinterest with the Company. He has not been convictedfor any offences within the past ten years.

QUAH CHIN CHYEINDEPENDENT NON-EXECUTIVE DIRECTOR

A W A R D E DI S O 9 0 0 1


MANAGEMENTTEAM

Dato’ Sri Dr. Lim, Wee-Chai • Datin Sri Tong Siew Bee • David Lim • KM Lee • Lim Cheong Guan • Wu Kin Yeap• Ken Soo • Chookiad Usaha • Jeremy Liew

Dorothy Ressel • Hue Kon Fah • Jeff Lee • Danny Ong • Nagappen s/o Kumarasamy • Puon Tuck Seng • Audie Seow • Philip Thomas • Lew Sin Chiang • Noraziah Mahmud

KK Lim • Chee Ban Tuck • Kelvin Yong • Wong Chong Ban • Manmeet Singh • Khor Soon Seng• Lim Wee Meng • Looi Guat Kian • Wilawan • Wendy Yeoh

From Left to Right

From Left to Right

From Left to Right

A W A R D E DI S O 9 0 0 1


SIX YEAR GROUP FINANCIAL REVIEW

31.8.2001 31.8.2002 31.8.2003 31.8.2004 31.8.2005 31.8.2006Group (RM’000) (RM’000) (RM’000) (RM’000) (RM’000) (RM’000)

Turnover 138,862 180,202 265,089 418,133 641,827 992,611

Earning Before Interest,

Depreciation & Taxation 23,865 27,058 39,455 60,638 89,191 130,310

Profit Before Taxation 17,217 20,186 29,264 45,190 65,745 91,773

Taxation 2,533 4,170 5,457 5,848 12,262 12,712

Profit After Taxation & Minority Interests 14,680 16,102 23,349 38,932 53,447 78,392

Net Tangible Assets 89,991 104,000 123,524 148,523 197,136 261,028

Gross Earnings Per Share (RM) 0.31 0.31 0.32 0.49 0.35 0.48

Net Earnings Per Share (RM) 0.29 0.25 0.26 0.42 0.29 0.41

Gross Dividend Rate (%) 8.00 6.00 12.00 14.00 16.00 18.00

Net Dividend Rate (%) 8.00 4.32 10.32 13.16 14.88 16.60

Number of Shares in Issue 50,000 65,000 92,197 93,059 188,639 192,285

Par Value of Ordinary Share (RM) 1.00 1.00 1.00 1.00 0.50 0.50

Net Tangible Assets Per Share (RM) 1.80 1.60 1.36 1.60 1.05 1.37

Share Price (RM) 1.80 2.21 3.96 7.25 4.92 8.65

Market Capitalisation (at 31 August) 90,000 143,650 365,100 674,678 928,104 1,663,265

(i) During the FY 2006, the Group changed its accounting policy in compliance with MASB 25. The comparative amount from FY 2001 toFY 2005 have been restated.

(ii) Subdivision of shares from one ordinary share of RM1.00 to two ordinary shares of RM0.50 each which was completed in February 2005.

(iii) Issuance of bonus shares of 30% in FY2002 and 40% in FY2003

“ The Group continued to achieveanother year of remarkable revenuegrowth of 55% to RM993 million, fromRM641 million in 2006...”

A W A R D E DI S O 9 0 0 1


SHAREPERFORMANCE

‘01 ‘02 ‘03 ‘04 ‘05 ‘06

138.9

180.2

265.1

418.1

641.8

992.6

Turnover(RM million)

Financial year 31st August Financial year 31st August Financial year 31st August

‘01 ‘02 ‘03 ‘04 ‘05 ‘06

17.2

20.2

29.3

45.1

65.7

91.8

Profit Before Taxation(RM million)

‘01 ‘02 ‘03 ‘04 ‘05 ‘06

14.7

16.1

23.3

38.9

53.4

Profit After Taxation& Minority Interests(RM million)

MA

R '0

1

JUL

'01

NO

V '0

1

MA

R '0

2

JUL

'02

NO

V '0

2

MA

R '0

3

JUL

'03

NO

V '0

3

MA

R '0

4

JUL

'04

NO

V '0

4

MA

R '0

5

JUL

'05

NO

V '0

5

MA

R '0

6

JUL

'06

OC

T '0

6

-100%

100%

300%

500%

700%

900%

1100%

1300%

1500%

+1294%on 20th Oct '06at RM10.20

+48%on 20th Oct '06

TOP GLOVE

KLCI

+1294%on 20th Oct '06

at RM10.20

+48%on 20th Oct '06

A W A R D E DI S O 9 0 0 1

MA

R '0

1

JUL

'01

NO

V '0

1

MA

R '0

2

JUL

'02

NO

V '0

2

MA

R '0

3

JUL

'03

NO

V '0

3

MA

R '0

4

JUL

'04

NO

V '0

4

MA

R '0

5

JUL

'05

NO

V '0

5

MA

R '0

6

JUL

'06

OC

T '0

6

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

9.50

10.00

10.50

11.00 RM10.20on 20th Oct 2006

Top Glove’s Share Price Movement(Share Prices prior to 16 February 2005 adjusted inrelation to the Share Split Exercise)

Performance Of Top Glove’s Share Pricev.s. Bursa Malaysia’s Composite Index(From March 2001 to October 2006)

For comparative purpose, the share price of Top Glove has beenadjusted to reflect the subdivision of shares from one ordinaryshare of RM 1.00 to two ordinary shares of RM0.50 each on 16 Febuary 2005.

Month-Year

Between the periods of March 2001 to October 2006, Top GloveShare price gained an appreciation of 1,294% as at 20 October 2006 compared to the Composite Index of 48%within the same period.

Month-Year

78.4

A W A R D E DI S O 9 0 0 1


CHAIRMAN’SSTATEMENT

1) We work for our CUSTOMERS;

2) We take care of the interest ofour SHAREHOLDERS;

3) We ensure that ourEMPLOYEES continue tocontribute positively to theCompany and we take goodcare of the well-being of ouremployees; and

4) We work closely with ourBANKERS, SUPPLIERS,BUSINESS ASSOCIATES andFRIENDS.

Dear Stakeholder,

On behalf of the Board of Directors, I am pleased to present to you the annual report of Top Glove Corporation Bhd.for the financial year ended 31 August 2006. This edition marks the 5th time I am addressing you since our listingin March 2001.

The year 2006 witnessed one of the highest latex price increase in the past twenty years. Latex in bulk was priced atRM3.815 per kg at the start of the financial year and reached its peaked at RM6.595 per kg in July 2006, causingoperating cost to increase in tandem. This was coupled by rising oil prices, which to a certain extent, has resulted ininflationary pressure on our operating cost. In addition, the de-pegging of the Malaysian Ringgit in July 2005 had alsoresulted in the appreciation of the Malaysian Ringgit against the US Dollar, which indirectly impacted our sellingprices. These factors have resulted in a more challenging business environment for the Group as compared to theprevious years.

However, I am delighted to report that notwithstanding the various challenges and the volatility experienced in the last12 months from latex and foreign exchange fluctuations, the Group has once again excelled in our performance todeliver another year of high double-digit growth in revenue as well as in profits. I am also sure our valued shareholdershave every reason to be thrilled with the return on their capital investment. The shareholders' value and wealth createdhave been consistently increased pari passu with the strong growth momentum of the Group's business andprofitability of the past 5 years.

The challenges that we faced in the year under review have motivated the entire Group to work even harder and fromthis, I am pleased to state that it had made us to be even stronger than before. The escalating operating costs, hasforced us to be more productive and innovative and to study within the organisation for improvement. Cost savingexercises were implemented across the entire organisation, operation improvement was encouraged and further reviewinto improvements to product development was also stepped-up. This had resulted into more efficient manufacturingprocesses, better land utilisation rate, faster production cycles and more efficient glove compounding andmanufacturing processes.

Dato’ Sri Dr. Lim, Wee-ChaiChairman, Top Glove Corporation Bhd.


A W A R D E DI S O 9 0 0 1

CHAIRMAN’SSTATEMENT (Cont’d)

The ability of the Group to grow from strength to strength over the years have mainly been attributed to the Group'scontinuous effort in generating growth, capacity expansion, enhancing operation and building a management team thatdelivers value to our stakeholders. This is ever present in our business philosophies: -

1) We work for our CUSTOMERS;2) We take care of the interest of our SHAREHOLDERS;3) We ensure that our EMPLOYEES continue to contribute positively to the Company and we take good care of the well-

being of our employees; and4) We work closely with our BANKERS, SUPPLIERS, BUSINESS ASSOCIATES and FRIENDS.

Moving forward, we remained very focused on our strategic aspiration to maintain our position as the world’s largest rubberglove manufacturer in the world.

OVERVIEW OF OPERATIONS

The Group has continued to forge ahead and it has further strengthened its position by adding more new and highlyefficient glove production lines for this financial year. As at 31 August 2006, the Group has a total of 250 advanced gloveproduction lines from 12 factories located in Malaysia, Thailand and China with a production capacity of more than 22 billion pieces of gloves per annum. This is an increase of 70 lines or 39% from 180 lines with a production capacityof 15 billion pieces of gloves per annum for the corresponding period last year. With this capacity, the Group is alwayslooking at growing the business internationally and at the moment our products are exported to more than 175 countriesworldwide with a strong customer base of 750 customers.

This year not only saw the Group adding more production lines but also the decommissioning of some of the oldest linesto make way for the installation of new and more advanced production lines. This is one of the many ways that themanagement had identified to keep the efficiency of its lines and factories optimal. In addition to this, the Group hadinstalled biomass facilities at its two Thailand factories for cost saving measures. The biomass facilities are modelled afterthe Factory 5, located in Ipoh, Malaysia, which was the first in the Group to switch to a cheaper fuel alternative. With thebiomass facilities in place, we are confident in further improving the operating margins of the Group in the coming years.

The financial year under review also saw the completion of the construction of Factory 13 and Factory 14, which are locatedin Klang, Malaysia and Factory 15, located in Xinghua, China. Factory 15 is the Group's second plant in China. The

EARNING PER SHARE NET ASSETS

NET PROFIT

+55%

'05 '06

RM993 million

RM642 million

+47%

'05 '06

RM78.4 million

RM53.4 million

+44%

'05 '06

41.1 sen

28.5 sen

+39%

'05 '06

RM282.1 million

RM202.5 million

SALES REVENUE

A W A R D E DI S O 9 0 0 1

installation of new and advanced glove production lines will be carried out progressively in these new factories. Both Factory13 and 14 are targeted to house 32 lines each, whereas, for Factory 15, the first phase is earmarked to consist of 48 lineswith completion targeted for December 2007.

Financial year 2006 also marks the Group's commencement of its' upstream venture with the setting up of its first latexconcentration plant for the purpose of producing its own latex concentrate for the manufacturing of disposable natural latexgloves. This plant which is numbered, Factory 16L, will operate from Hatyai, Thailand. The plant will have a capacity forthe installation of 72 latex centrifuge machines, however as this is our first venture, a total of 36 latex centrifuge machineswill be installed. Upon completion of the plant, which is estimated to be by March 2007, it will be able to provideapproximately 50,000 tonnes of centrifuged latex per annum.

In addition to Factory 16L, the Company has also announced on 8 May 2006, on the acquisition of B Tech IndustryCompany Limited ("B Tech"), a company incorporated in Thailand. This company is the second latex concentration plantfor the Group. The rationale for the acquisition of this plant is to assist the Group in expediting its learning curve in themanufacture of latex concentrate due to its efficient systematic and strict quality control measures, B Tech was awardedthe ISO 9001:2000 certification for manufacturing of latex concentrate since June 2005. In addition to this, B Tech isalso recognised by the Thailand Environment Institute and Pollution Control Department in January 2005 for its goodpractices, and is also a model factory for wastewater treatment in Hatyai, Thailand. B Tech has a production capacity tosupply 40,000 metric tonnes of centrifuged latex per annum.

With these two latex concentrate plants coming on stream, it will meet about 70% to 80% of our latex requirement. As theGroup continued its aggressive expansion plan to achieve 25% of the global market share by December 2007, the upstreamventure would enable the Group to be in a better position to enhance control over the supply, timing of delivery, as well as,to ensure a more consistent quality latex supply to the Group's existing factories both in Malaysia and Thailand. This ismore pertinent in view of the escalating latex price trend as compared to the last financial year has resulted in latex costconstituting approximately 56% of the total manufacturing cost.

As mentioned in my report in 2005, Top Glove will continue with its aggressive capacity expansion to capture a bigger sharein the global market, which is anticipated to grow at a rapid rate contributed by, amongst others, the increasing group ofglove users created by rising affluence, hygiene awareness, more stringent health-care regulations, emergence of newviruses, bio-terrorism threats, natural disasters and the underlying fears of pandemics. Rising affluence have also triggereda new growth in the market attributed by the non-traditional medical markets particularly from the food and servicesindustries.

This financial year also marks the introduction of PE or polyethylene gloves by the Group, which is produced by its Chinafactory to complement its existing product range. This product is mainly to cater for the growing food and services industry.

FINANCIAL PERFORMANCE

The Top Glove Group continued to achieve another year of remarkable revenue growth of 55% to RM992.6 million for thefinancial year ended 31 August 2006 against RM641.8 million recorded in the previous financial year. The growth wasmainly attributed to the continued increase in customer base globally, higher volume of sales contributed by the increasedcapacity, as well as, to our continued ability to pass on the increase in operating cost.

Against this backdrop, the Group continued to turn in record profits for year 2006. Pre-tax profit registered of RM91.8million represented an increase of 40% over the previous record pre-tax profit of RM65.7 million achieved in 2005, whilstnet profit grew by 47% year-on-year to RM78.4 million from RM53.4 million achieved in 2005. Earnings per share roseto 41.13 sen from 28.53 sen in 2005 whilst return on equity continued to improve to 28% as compared to 26% in 2005.

Total assets of the Top Glove Group increased from RM506.5 million as at August 2005 to RM762.1 million in August2006, an increase of 50%, a reflection of the Group increase in asset base. In line with the strong financial performancefor the year, net assets also rose by 39% to RM282.1 million from RM202.5 million. Market capitalisation increased fromRM928.1 million for financial year 31st August 2005 to RM1.6 billion for financial year ended 31st August 2006.

DIVIDENDS

In line with the favorable results, the Board of Directors is pleased to recommend a final dividend of 11% which 6% (taxexempt) amounting to RM5.8 million and a 5% (with tax 28%) amounting to RM3.5 million for the financial year ended 31 August 2006. The proposed final dividend is subject to the shareholders' approval at the forthcoming Eighth AnnualGeneral Meeting. The Company had on 4 July 2006 declared an interim dividend of 7.0% (tax exempt) amounting toRM6.7 million in conjunction with the third quarter ended 31 May 2006 financial results announcement. Payment of theinterim dividend was made on 15 September 2006.



18

A W A R D E DI S O 9 0 0 1

Therefore, on a full year basis, subject to the shareholders’ approval for the proposed final dividend, together with theinterim dividend already declared and paid, represent a total dividend of 18% for the financial year ended 31 August 2006as compared to a total dividend of 16% for the financial year ended 31 August 2005. This would translate to a 13%increase in gross dividend payment. The total dividend proposed / paid represents a distribution to shareholders of 20.4%of the Group's net profits for this financial year.

PROPOSED BONUS ISSUE

To better reflect the value of the underlying assets employed and the existing operations of the Group, reward shareholdersand further enhance the liquidity and affordability of the Company's shares, the Board of Directors had proposed to increasethe issue and paid-up capital of the Company by a 2 for 5 bonus issue of new ordinary shares of RM0.50 each in theCompany credited as fully paid up by the capitalisation of the Company's share premium and unappropriated profitaccounts.

The new bonus shares shall upon allotment and issue, rank pari passu in all respects with the existing shares save andexcept that they shall not be entitled to any dividends, rights, allotments and/or other distributions, unless the allotmentand issuance of the bonus shares were made on or prior to the entitlement date of such dividends, rights, allotments and/orother distributions.

The above proposal is subject to the approvals of the shareholders, Bursa Malaysia Securities Berhad ("Bursa Malaysia") forthe listing of and quotation for the new bonus shares and any other relevant authorities.

CORPORATE DEVELOPMENTS

On 16 November 2005, the Company announced that Top Glove Sdn Bhd ("TGSB"), a wholly owned subsidiary of theCompany, has invested in a company in Thailand, Top Glove Technology Co. Ltd. for the purpose of producing its own latexconcentrate for the manufacturing of disposable gloves. This is in relation to Factory 16L as mentioned above.

On 29 December 2005, the Company announced to Bursa Malaysia that a Sponsored Level-1 American Depositary Receipt("ADR") Program, which is a program to facilitate the trading of the Company shares by investors in the United States ofAmerica ("the US"), has been declared effective by the Securities and Exchange Commission of the US on 27 December2005. The Bank of New York has been appointed as the depository bank for the ADR Program with Malayan Banking Berhadas the custodian of Top Glove's shares in Malaysia for the ADR. The total number of shares that can be purchased underthe ADR shall not exceed 5% of the total issued and paid-up capital of Top Glove at any point in time. The ADR programis anticipated to enhance the visibility of the Company in the US, as well as, to increase the awareness on the Companyamong the US brokers, analyst and investors as the ADR program provides an avenues for US investors access to the TopGlove's shares, thereby allowing the Company to broaden its' foreign shareholders base in addition to increasing its'shareholders diversity.

The Company has also on 30 March 2006 announced to Bursa Malaysia that TGSB, had incorporated a new company, TGMedical (Zhangjiagang) Incorporated, in China. The company is intended for the purpose of trading of disposable gloves.

In addition to the above, on 8 May 2006 the Company also announced the acquisition of B Tech, representing 100% ofthe issued and paid-up share capital of B Tech for a total purchase consideration of RM26.8 million. The principal activityof B Tech is the manufacturing of concentrated latex and block rubber products. Details and rationale of the acquisitionwas covered in the overview of operations. The completion of this acquisition was also made to Bursa Malaysia on 31 July2006.

This year also marks the Company being included as a component stock of the Kuala Lumpur Composite Index. In additionto this, Top Glove is also a component stock of the Mid 70 Index, 100 Index and the Emas Index of the newly created FTSEBursa Malaysia Index series.

PROSPECTS

In general the glove industry has been blessed with the exponential growth in recent years due to the strong global demandfrom the traditional medical markets driven by stringent regulatory on health-care standards, aging population andemergence of new viruses, as well as, from the growing non-medical sectors due to the increasing hygiene awarenessparticularly within the food and services industry.

With global demand growing and the product evolving to be somewhat a semi-commodity, the business operates in avirtually recession-proof market, taking into consideration the products are a basic necessity be it in the healthcare or in afood and services industry. As such, demand is anticipated to stay resilient at times when major consuming economies slowdown.



A W A R D E DI S O 9 0 0 1



20

Currently the developed countries in North America and Europe have the largest market for gloves. Whilst these marketsincluding Latin America and the Middle East will remain as the main export markets for our products, there is also muchpotential in developing countries like India and China, which going forward have remain relatively an untapped market andwill become a significant market as hygiene and healthcare standard increase.

The industry has also seen a certain degree of consolidation following the new technological advancement in gloveproduction together with higher latex prices have led to some marginal player leaving the industry.

Today, Top Glove supplies approximately 20% of the global market demand and taking the abovementioned reason intoconsideration, the Company is confident that there is still a lot of potential for growth in the coming years. Based on theGroup's target to grow by about 40% in 2007 and about 30% for the later year, it is optimistic of achieving the 25% globalmarket share by 31 December 2007 and 35% by December 2010.

For this coming year 2007, the Group expect to increase its production capacity to 350 production lines by 31 August2007 with a production capacity to produce more than 32 billion pieces of glove per annum. These will includes completingthe installation of Factory 14 in Klang and Factory 15 in China, which will house 32 and 48 lines respectively.

Overall, the Group maintains a positive outlook towards continuous growth and securing better performance and results forthe coming year in terms of revenue and profitability through the continued efforts of aggressive marketing strategies,increase in production capacity to capitalise on economies of scale coupled with the further improvement in product quality,cost control and efficiency. With such expansion plan, the Group will extend its leading position in glove manufacturingindustry.

IN APPRECIATION

My heartfelt thank you to all our customers for their support of our products and services; our shareholders and investmentanalysts for your continued support and confidence in the Group; our suppliers, bankers and business associates for theirongoing assistance; and to our management and employees for their commitment, dedication and contribution to theCompany.

I would also like to take this opportunity to express my gratitude and sincere appreciation to my esteemed colleagues onthe Board for their expert guidance and counsel amidst the challenges of the year. On behalf of the Board, I would also liketo welcome Mr. Lim Cheong Guan to the Board and to thank Mr Haji Shahadan Bin Haji Abd Manas, who retired from theBoard on 31 August 2006 and to wish him a happy retirement.

With reference to the recent workers' permit renewal issue with the Immigration Department, which announced to BursaMalaysia on 16 August 2006 and 6 October 2006, myself and other members of the Board of Directors would like to informthat since the incident, many new procedures have been introduced to improve the human resources system and the Grouphas also taken many proactive actions to rectify the situation including the following corrective actions: -

1. The restructuring of the human resources department by allocating more staff and decentralising the human resourcesdepartment to the respective individual factory in order to monitor, control and expedite the renewal of these workingpermits;

2. Introducing the human resources management computer system to enhance the control and monitoring of the workers’permit renewal; and

3. Working closely with FOMEMA (Foreign Workers Medical Examination and Monitoring Agency) on the medical check upof our foreign workers and the Immigration Department to expedite the renewal of the working permit of our workers, aswell as, to provide feedback and suggestions to improve the efficiency of the renewal system.

I trust all of you will continue to lend your utmost support to Top Glove as we strive to expand our business presence tocontinue to be "The World's Largest Rubber Glove Manufacturer".

Dato' Sri Dr. Lim, Wee-Chai,ChairmanTop Glove Corporation Bhd.Date: 30 October 2006.

A W A R D E DI S O 9 0 0 1


Para pemegang taruhan (stakeholder) yang dihormati,

Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan kepada anda laporan tahunan Top GloveCorporation Bhd bagi tahun kewangan berakhir 31 Ogos 2006. Edisi laporan ini menandakan kali kelima saya melaporkankepada anda sejak Syarikat kami disenaraikan pada Mac 2001.

Tahun 2006 menyaksikan salah satu peningkatan harga lateks yang paling tinggi dalam dua puluh tahun yang lalu. Latekspukal berharga RM3.815 sekilo pada awal tahun kewangan dan melambung ke kemuncaknya pada RM6.595 sekilo padaJulai 2006, menyebabkan kos operasi turut bertambah. Ini bersama-sama dengan harga minyak yang meningkat telahmenyebabkan tekanan inflasi kepada kos operasi kami pada takat yang tertentu. Selain itu, tindakan tidak memancangkan(depegging) Ringgit Malaysia pada Julai 2005 juga menyebabkan kenaikan nilai Ringgit Malaysia berbanding dengan DolarAmerika Syarikat dan ini secara tidak langsung mendatangkan kesan kepada harga jualan produk kami. Faktor-faktortersebut telah menyebabkan suasana perniagaan yang lebih mencabar kepada Kumpulan berbanding dengan tahun-tahunyang lalu.

Namun demikian, saya dengan gembiranya melaporkan bahawa walaupun Kumpulan mengalami berbagai cabaran dankemeruapan pada 12 bulan yang lalu dari segi turun naik harga lateks dan pertukaran asing, Kumpulan sekali lagi mencapaiprestasi yang cemerlang dengan mencatatkan kadar pertumbuhan sebanyak dua angka dalam hasil dan keuntungan. Sayajuga yakin bahawa para pemegang saham yang dihormati tentu merasa teruja dengan pulangan pelaburan modal mereka.Nilai dan kekayaan yang dicipta telah meningkat secara konsisten serentak dengan momentum pertumbuhan yang kuatdalam perniagaan dan keuntungan Kumpulan sejak 5 tahun yang lalu.

Cabaran yang dihadapi kami pada tahun yang sedang dikaji semula telah menggalakkan seluruh ahli Kumpulan lebih tekundan saya berasa suka cita melaporkan bahawa hasil ketekunan ini kami telah menjadi lebih kuat dan kukuh berbandingdengan masa yang lalu. Kos operasi yang melambung telah memaksa kami supaya lebih produktif dan inovatif sertamengkaji cara-cara untuk meningkatkan prestasi dalaman organisasi. Langkah-langkan menjimatkan kos telahpundilaksanakan di dalam seluruh organisasi dan peningkatan operasi digalakkan dan Kumpulan juga telah meningkatkanusaha dalam memperbaiki dan membangunkan produk. Usaha dan langkah tersebut telah menghasilkan proses pembuatanyang lebih berkesan, kadar penggunaan tanah yang lebih baik, kitaran pengeluaran yang lebih cepat, serta prosespengkompuanan dan pembuatan sarung tangan yang lebih cekap.

Kemampuan Kumpulan untuk terus berkembang pada beberapa tahun yang lalu adalah sebahagian besar disebabkan olehusaha berterusan dalam menjana pertumbuhan, perkembangan kapasiti, peningkatan operasi serta pembentukan pasukanpengurusan yang sanggup mencapai nilai kepada pemegang taruhan (stakeholder) kami. Unsur-unsur tersebut sentiasaterkandung dalam falfasah perniagaan kami seperti berikut: -

1) Kami berusaha untuk PELANGGAN kami;2) Kami menjaga kepentingan PEMEGANGAN SAHAM kami;3) Kami memastikan bahawa PEKERJA kami terus menyumbang secara positif kepada Syarikat dan kami menjaga

kebajikan pekerja kami; dan4) Kami bekerjasama rapat dengan pihak BANK, PEMBEKAL, RAKAN PERNIAGAAN dan KAWAN kami.

Meninjau ke hadapan, kami akan terus menumpukan perhatian kami kepada pencapaian hasrat kami untuk mengekalkankedudukan kami sebagai pembuat sarung tangan getah terbesar di dunia.

TINJUAN MENYELURUH OPERASI

Kumpulan terus berkembang dan mengukuhkan kedudukannya dengan menambah lebih mesin pengeluaran sarung tanganyang baru dan amat berkesan dalam tahun kewangan ini. Setakat 31 Ogos 2006, Kumpulan mempunyai 250 mesinpengeluaran sarung tangan canggih di 12 buah kilang yang terletak di Malaysia, Thailand dan China dengan jumlah kapasitipengeluaran melebihi 22 bilion sarung tangan setahun. Ini merupakan peningkatan sebanyak 70 mesin atau 39% dari 180 mesin dengan kapasiti pengeluaran sebanyak 15 bilion sarung tangan setahun untuk jangkawaktu yang sama tahunlalu. Dengan adanya kapasiti ini, Kumpulan dapat berusaha memperkembangkan perniagaannya di peringkat antarabangsa.Setakat ini, produk kami dieksport ke lebih 175 buah negara di seluruh dunia dengan kumpulan pelanggan yang kuatsebanyak 750 pelanggan.

Pada tahun kewangan ini, Kumpulan bukan sahaja menambah bilangan mesin pengeluaran tetapi juga telah menghentikanbeberapa mesin pengeluaran yang lama supaya digantikan dengan mesin pengeluaran yang baru dan lebih canggih. Ini


KENYATAAN PENGERUSI

A W A R D E DI S O 9 0 0 1



KENYATAAN PENGERUSI

22

merupakan salah satu dari banyak cara yang telah dikenal pasti oleh pihak Pengurusan untuk mengekalkan kecekapanmesin pengeluaran dan kilang di tahap optimum. Selain itu, Kumpulan telah memasangkan kemudahan biojisim di duabuah kilang di Thailand sebagai langkah menjimatkan kos. Kemudahan biojisim tersebut mencontohi kemudahan yangdipasang di Kilang 5 di Ipoh, Malaysia yang merupakan kemudahan biojisim pertama Kumpulan sebagai langkah untukmengalih kepada bahan bakar alternatif yang lebih murah. Dengan adanya kemudahan biojisim tersebut, kami yakinbahawa Kumpulan dapat meningkatkan margin operasi pada masa yang akan datang.

Pada tahun kewangan yang sedang dikaji semula, pembinaan Kilang 13 dan Kilang 14 yang terletak di Klang, Malaysiadan Kilang 15, yang terletak di Xinghua, China telah selesai. Kilang 15 adalah kilang kedua Kumpulan di China.Pemasangan mesin pengeluaran yang baru dan lebih canggih akan dijalankan secara progresif di kilang-kilang tersebut.Kedua-dua Kilang 13 and 14 disasarkan memasang 32 mesin pengeluaran di setiap kilang, manakala di Kilang 15, fasapertama dijangka terdiri dari 48 mesin pengeluaran yang dijadual siap pada Disember 2007.

Tahun kewangan 2006 juga merupakan kali pertama Kumpulan menceburi kegiatan hulu dengan menubuhkan loji latekspekat pertama untuk tujuan mengeluarkan lateks pekat secara sendiri untuk mengilangkan sarung tangan lateks asli. Lojiyang bernombor Kilang 16L ini akan beroperasi dari Hatyai, Thailand. Loji ini mempunyai kapasiti untuk memasang 72buah mesin emparan. Akan tetapi, oleh kerana ia merupakan usaha niaga kami dalam bidang ini, maka hanya 36 buahmesin emparan lateks akan dipasang di sana. Loji ini dijangka siap dibina pada Mac 2007. Apabila ia siap dibina, ia dapatmembekal lebih kurang 50,000 tan metrik lateks emparan setahun.

Selain dari Kilang 16L, Syarikat telah juga mengumumkan pada 8 Mei 2006 tentang pengambilalihan B Tech IndustryCompany Limited ("B Tech"), sebuah syarikat yang diperbadankan di Thailand. Syarikat ini adalah loji lateks pekat keduabagi Kumpulan. Tujuan pengambilalihan syarikat tersebut ialah membantu Kumpulan mempercepatkan prosespembelajaran dalam bidang pembuatan lateks pekat oleh kerana ia mempunyai langkah-langkah kawalan kualiti yangberkesan, sistematik dan ketat. B Tech telah dianugerah persijilan ISO 9001:2000 untuk pembuatan lateks pekat sejakJun 2005. Malah, B Tech diiktiraf oleh Institut Alam Sekitar dan Jabatan Kawalan Pencemaran Thailand untuk amalanbaiknya. Ia juga merupakan kilang contoh dalam rawatan sisa air di Hatyai, Thailand. B Tech mempunyai kapasitipengeluaran untuk membekal sebanyak 40,000 tan metrik lateks emparan setahun.

Dengan adanya kedua-dua loji lateks pekat tersebut, kira-kira 70% hingga 80% keperluan lateks Kumpulan akan dipenuhi.Oleh kerana Kumpulan terus berusaha melaksanakan pelan perkembangan yang agresif untuk mencapai bahagian pasarandunia sebanyak 25% menjelang Disember 2007, ini akan membolehkan Kumpulan mengukuhkan kedudukannya untukmeningkatkan kawalan ke atas bekalan, jadual penghantaran lateks serta kualiti lateks yang lebih konsisten kepada kilang-kilang Kumpulan yang sedia ada di Malaysia dan Thailand. Ini adalah lebih penting memandangkan trend harga lateks yangmeningkat berbanding dengan tahun kewangan yang lepas yang telah menyebabkan kos lateks menjadi kira-kira 56%daripada jumlah kos pembuatan.

Sepertimana yang dinyatakan dalam laporan saya pada tahun 2005, Top Glove akan terus melaksanakan rancanganperkembangannya secara agresif supaya memperbesarkan bahagian pasaran dunianya yang dijangka berkembang padakadar yang lebih cepat oleh kerana, antara lain, peningkatan golongan pengguna sarung tangan hasil taraf kekayaan yangmeningkat, peningkatan kesedaran tentang kebersihan, peraturan penjagaan kesihatan yang lebih ketat, kemunculan virusbaru, ancaman biokeganasan, bencana alam serta kebimbangan tentang berlakunya pandemik. Taraf hidup yang kianmeningkat juga menggalakkan pertumbuhan baru dalam pasaran oleh kerana permintaan dari pasaran selain dari pasarantraditional di sektor perubatan, khususnya dari industri makanan dan perkhidmatan.

Pada tahun kewangan ini, Kumupulan juga melancarkan sarung tangan PE atau polietilane yang dikeluarkan oleh Kilangdi China untuk melengkapkan barisan produk yang sedia ada. Produk ini ditujukan kepada industri makanan danperkhidmatan yang kian berkembang.

PENCAPAIAN KEWANGAN

Bagi tahun kewangan berakhir 31 Ogos 2006, Kumpulan Top Glove terus mencapai pertumbuhan hasil yang cemerlangsebanyak 55% kepada RM992.6 juta berbanding dengan RM641.8 juta yang tercatat pada tahun kewangan yang lepas.Sebahagian besar pertumbuhan ini disebabkan oleh perkembangan berterusan pelanggan di seluruh dunia, jumlah jualanyang lebih tinggi hasil peningkatan kapasiti pengeluaran serta keupayaan Kumpulan untuk terus mengawal kenaikan kosoperasi.


A W A R D E DI S O 9 0 0 1

Dalam keadaan tersebut, Kumpulan terus mencapai rekod baru dalam keuntungan bagi tahun 2006. Keuntungan sebelumcukai adalah berjumlah RM91.8 juta atau meningkat sebanyak 40% berbanding dengan keuntungan sebelum cukaisebanyak RM65.7 juta pada tahun 2005, dan keuntungan bersih meningkat sebanyak 47% dari tahun ke tahun kepadaRM78.4 juta dari RM53.4 juta yang tercapai pada tahun 2005. Perolehan sesaham meningkat kepada 41.13 sen dari28.53 sen pada tahun 2005 manakala pulangan atas ekuiti terus meningkat kepada 28% berbanding dengan 26% padatahun 2005.

Jumlah aset Kumpulan Top Glove meningkat dari RM506.5 juta pada Ogos 2005 kepada RM762.1 juta pada Ogos 2006,naik 50%, dan ini mencerminkan perkembangan asas aset Kumpulan. Sejajar dengan pencapaian kewangan yangcemerlang, aset bersih turut meningkat sebanyak 39% kepada RM282.1 juta dari RM202.5 juta. Pengumpulan modalpasaran (market capitalisation) telah meningkat daripada RM928.1 juta bagi tahun kewangan 31 Ogos 2005 kepadaRM1.6 billion bagi tahun kewangan yang berakhir pada 31 Ogos 2006.

DIVIDEN

Selaras dengan pencapaian yang menggalakkan, Lembaga Pengarah dengan sukacitanya mengesyorkan pembayarandividen akhir sebanyak 11% dimana ianya adalah 6% (bebas cukai) berjumlah RM5.8 juta dan 5% (tolak cukai 28%)berjumlah RM3.5 juta bagi tahun kewangan berakhir 31 Ogos 2006. Cadangan dividen akhir tertakluk kepada kelulusanpara pemegang saham pada Mesyuarat Agung Tahunan Kelapan yang akan datang. Pada 4 Julai 2006, Syarikat telahmengumumkan dividen interim sebanyak 7.0% (bebas cukai) berjumlah RM6.7 juta sempena pengumuman pencapaiankewangan suku ketiga berakhir 31 Mei 2006. Dividen interim tersebut telah dibayar pada 15 September 2006.

Oleh itu, tertakluk kepada kelulusan para pemegang saham bagi cadangan dividen akhir tersebut, bersama-sama divideninterim yang telah diumum dan dibayar, maka jumlah dividen yang dibayar bagi seluruh tahun kewangan berakhir 30 Ogos2006 ialah 18% berbanding dengan jumlah dividen sebanyak 16% bagi tahun kewangan berakhir 31 Ogos 2005. Inimerupakan peningkatan 13% dalam pembayaran dividen kasar. Jumlah dividen yang dicadangkan/dibayar tersebutmerupakan pengagihan kepada para pemegang saham sebanyak 20.4% daripada keuntungan bersih Kumpulan padatahun kewangan ini.

CADANGAN TERBITAN BONUS

Untuk mencerminkan secara lebih tepat nilai dan aset yang digunakan serta operasi sedia ada Kumpulan, sambilmenganjarkan para pemegang saham dan meningkatkan lagi jumlah saham dan kemampuan memiliki saham Syarikat,maka Lembaga Pengarah telah bercadang untuk menambahkan modal diterbitkan dan berbayar Syarikat melalui terbitanbonus 2 bagi 5 saham biasa baru bernilai RM0.50 setiap satu dalam Syarikat yang dikreditkan sebagai berbayar penuhdengan pengumpulan modal akaun premium saham dan keuntungan belum diagihkan Syarikat.

Apabila diperuntukkan dan diterbit, saham bonus baru tersebut akan bertaraf pari passu dari segala aspek dengan sahamyang sedia ada kecuali ia tidak berhak untuk apa-apa dividen, hak, peruntukan dan/atau pengagihan yang lain, melainkanperuntukan dan terbitan saham bonus dibuat pada atau sebelum tarikh hak dividen, hak, peruntukan dan/atau pengagihanyang lain serta dividen akhir bagi tahun kewangan berakhir Ogos.

Cadangan tersebut di atas tertakluk kepada kelulusan para pemegang saham, Bursa Malaysia Securities Berhad ("BursaMalaysia") untuk menyenaraikan dan menyebut harga saham bonus baru serta kelulusan pihak-pihak berkuasa berkenaanyang lain.

Perkembangan Korporat

Pada 16 November 2005, Syarikat mengumumkan bahawa Top Glove Sdn Bhd ("TGSB"), sebuah subsidiari milik penuhSyarikat, telah melabur di dalam sebuah syarikat di Thailand, Top Glove Technology Co. Ltd. untuk tujuan mengeluarkanlateks pekat milik sendiri bagi mengilangkan sarung tangan pakai buang. Ini adalah berkaitan dengan Kilang 16L yangtersebut di atas.

Pada 29 Disember 2005, Syarikat mengumumkan kepada Bursa Malaysia bahawa satu Program yang dikenali sebagaiSponsored Level-1 American Depositary Receipt ("ADR") yang bertujuan memudahkan perdagangan saham Syarikat olehpelabur di Amerika Syarikat telahpun diisytiharkan sebagai berkuatkuasa oleh Suruhanjaya Sekuriti dan Bursa Amerika


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Syarikat pada 27 Disember 2005. The Bank of New York telah dilantik sebagai bank depositori bagi Program ADR inimanakala Malayan Banking Berhad dilantik sebagai penjaga saham Top Glove di Malaysia bagi ADR. Jumlah bilangansaham yang boleh dibeli di bawah ADR tidak boleh melebihi 5% jumlah modal diterbitkan dan berbayar Top Glove padabila-bila masa. Program ADR dijangka meningkatkan kebolehlihatan Syarikat di Amerika Syarikat serta meningkatkankesedaran tentang Syarikat di golongan broker, pakar analisis dan pelabur Amerika Syarikat oleh kerana program ADRmenyediakan saluran bagi pelabur Amerika memiliki saham Top Glove, dan dengan itu membolehkan Syarikatmemperluaskan pangkalan pemegangan asingnya selain dari meningkatkan kepelbagaian pemegang sahamnya.

Syarikat juga pada 30 Mac 2006 mengumumkan kepada Bursa Malaysia bahawa TGSB, telah memperbadankan sebuahsyarikat baru, TG Medical (Zhangjiagang) Incorporated, di China. Syarikat tersebut ditubuhkan untuk menjalankanperdagangan sarung tangan pakai buang.

Selain dari perkembangan tersebut di atas, pada 8 Mei 2006, Syarikat juga mengumumkan pengambilalihan 100% modalsaham diterbitkan dan berbayar B Tech dengan jumlah harga pembelian sebanyak RM26.8 juta. Kegiatan utama B Techialah pembuatan lateks pekat dan produk getah bongkah. Butir-butir dan sebab pengambilalihan tersebut telah dibincangdalam tinjuan menyeluruh operasi. Penyelesaian pengambilalihan ini juga telah dilaporkan kepada Bursa Malaysia pada31 Julai 2006.

Pada tahun ini, Syarikat juga telah dimasukkan sebagai saham komponen Indeks Komposit Kuala Lumpur. Selain itu, TopGlove juga merupakan saham komponen Indeks Mid 70 , Indeks 100 dan Indeks Emas siri indeks FTSE Bursa Malaysiayang baru diperkenalkan.

PROSPEK

Secara am, industri sarung tangan telah menikmati pertumbuhan pesat sejak beberapa tahun kebelakangan ini oleh keranapermintaan global yang kuat dari pasaran traditional dalam sektor perubatan akibat mutu kawal selia yang ketat ataspenjagaan kesihatan, populasi yang kian menua, kemunculan virus baru serta dari permintaan dalam sektor bukanperubatan oleh kerana kesedaran kebersihan yang meningkat, khasnya dalam industri makanan dan perkhidmatan.

Oleh kerana permintaan global yang semakin meningkat dan produk sarung tangan berubah menjadi komoditi separa, makaindustri ini berjalan dalam pasaran yang hampir tidak terjejas kemelesetan ekonomi dengan mengambil kira kenyataanbahawa produk ini bukan sahaja satu keperluan asas dalam industri penjagaan kesihatan tetapi juga dalam industrimakanan dan perkhidmatan. Oleh itu, permintaan untuk sarung tangan dijangka terus bingkas pada masa ekonomipengguna utama merosot.

Pada masa sekarang, negara maju di Amerika Utara dan Eropah merupakan pasaran terbesar bagi sarung tangan. Walaupunpasaran tersebut serta pasaran di Amerika Latin dan Timur Tengah akan terus menjadi pasaran eksport utama bagi produkkami, terdapat potensi besar di negara-negara sedang membangun seperti India dan China yang merupakan pasaran yangkurang diterokai secara relatif dan akan menjadi pasaran penting serentak dengan peningkatan mutu kebersihan danpenjagaan kesihatan di negara-negara tersebut.

Industri sarung tangan juga menyaksikan setakat tertentu proses penyatuan susulan kemajuan teknologi baru dalampengeluaran sarung tangan dan harga lateks yang lebih tinggi telah menyebabkan sesetengah pekilang marginal menarikdiri dari industri ini.

Pada waktu ini, Top Glove membekal lebih kurang 20% permintaan pasaran global dan dengan mengambil kira sebabtersebut di atas, maka Syarikat yakin bahawa industri ini masih mempunyai potensi pertumbuhan yang besar lagi padamasa yang akan datang. Berdasarkan sasaran Kumpulan untuk mencapai pertumbuhan sebanyak kira-kira 40% pada tahun2007 dan kira-kira 30% bagi tahun berikutnya, maka, Kumpulan bersikap optimis akan mencapai bahagian pasaran globalsebanyak 25% menjelang 31 Disember 2007 dan 35% menjelang Disember 2010.

Bagi tahun depan, Kumpulan menjangkakan meningkatkan kapasiti pengeluaran kepada 350 mesin pengeluaran menjelang31 Ogos 2007 dengan kapasiti pengeluaran menghasilkan lebih 32 bilion sarung tangan setahun. Ini termasukpenyelesaian pemasangan mesin pengeluaran di Kilang 14 di Kelang dan Kilang 15 di China, yang masing-masing akanmenampung 32 dan 48 mesin pengeluaran.

A W A R D E DI S O 9 0 0 1


Secara menyeluruh, Kumpulan menpunyai pandangan positif terhadap pertumbuhan berterusan serta pencapaiankeputusan yang lebih cemerlang bagi tahun yang akan datang dari segi hasil dan keberuntungan melalui usaha berterusanyang agresif untuk menjalankan strategi pemasaran, meningkatkan kapasiti pengeluaran dengan menggunakan ekonomimengikut bidangan serta peningkatan lagi dalam kualiti produk, kawalan kos dan kecekapan.Dengan adanya rancanganperkembangan ini, Kumpulan akan terus mengekalkan kedudukannya sebagai pemimpin dalam industri pembuatan sarungtangan.

PENGHARGAAN

Saya ingin mengucapkan terima kasih yang iklhas kepada pelanggan sekalian atas sokongan mereka terhadap produk danperkhidmatan kami; kepada para pemegang saham kami dan pakar analisis pelaburan atas sokongan dan keyakinanberterusan anda terhadap Kumpulan ; kepada para pembekal, ahli bank dan rakan perniagaan atas bantuan anda yangberterusan; kepada pihak pengurusan dan kakitangan kami atas komitmen, dedikasi dan sumbangan anda kepada Syarikat.

Saya ingin mengambil kesempatan ini untuk menyampaikan penghargaan dan terima kasih kepada rakan sejawat diLembaga Pengarah atas panduan dan nasihat dalam keadaan yang sungguh mencabar pada tahun lalu. Bagi pihak LembagaPengarah, saya ingin mengalu-alukan Encik Lim Cheong Guan yang dilantik sebagai Pengarah dan juga mengucapkanterima kasih kepada En. Haji Shahadan Bin Haji Abd Manas, yang telah bersara dari Lembaga Pengarah pada 31 Ogos2006 dan mengucapkan selamat bersara kepada beliau.

Berkaitan dengan isu pembaharuan permit pekerja dengan jabatan imigresen yang berlaku baru-baru ini dan yang telahdilaporkan kepada Bursa Malaysia pada 16 Ogos 2006 dan 6 Oktober 2006, saya dan ahli-ahli lain dalam LembagaPengarah ingin memaklumkan bahawa sejak berlakunya kejadian ini, banyak prosedur baru telah diperkenalkan untukmemperbaiki sistem sumber manusia, dan Kumpulan telah mengambil banyak tindakan proaktif untuk membetulkankeadaan dan tindakan tersebut termasuk tindakan pembetulan seperti berikut: -

1) Menyusun semula bahagian sumber manusia dengan memperuntukkan lebih kakitangan dan mengagihkan kuasabahagian sumber manusia kepada kilang-kilang yang berkenaan supaya memantau, mengawal dan mempercepatkanproses pembaharuan permit pekerja tersebut;

2) Melaksanakan sistem komputer sumber manusia untuk meningkatkan kawalan dan pemantauan proses pembaharuanpermit pekerja; dan

3) Bekerjasama rapat dengan pihak FOMEMA (Foreign Workers Medical Examination and Monitoring Agency) tentangpemeriksaan perubatan pekerja asing kami dan bekerjasama dengan pihak Jabatan Imigresen untuk mempercepatkanpembaharuan permit pekerja kami, serta memberi maklum balas dan cadangan untuk memperbaiki kecekapan sistempembaharuan permit

Saya yakin anda sekalian akan terus memberi sokongan kuat kepada Top Glove dalam usaha untuk memperkembangkankami perniagaan kami dan terus menjadi "Pembuat Sarung Getah Terbesar Di Dunia".

Dato' Sri Dr. Lim, Wee-Chai,Pengerusi,Top Glove Corporation Bhd.Tarikh: 30 Oktober 2006.


KENYATAAN PENGERUSI

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A W A R D E DI S O 9 0 0 1

All over the world,

We are known,

For our superior quality gloves,

Through the years we have grown,

We have shown,

Our gloves stand out superior in the world,

Top Glove is the best,

Better than the rest,

Quality, Reliability and consistency,

Remain our policy,

At Top Glove’s Group of Companies

ENGLISH

MANDARIN THAI

BAHASA MALAYSIA


Dari mulanya,

Hingga terkini,

Top Glove nama diberi,

Pengeluar sarung tangan yang berkualiti

Yakinlah hasil pengeluaran kami,

Yang bermutu dan berkualiti tinggi,

Sentiasa menuju kejayaan,

Untuk mencapai keunggulan.

TOP GLOVE CORPORATE SONG


A W A R D E DI S O 9 0 0 1

CORPORATE GOVERNANCE STATEMENT

Top Glove Corporation Bhd ("Top Glove" or "the Company") recognises that itsexistence in the business community relies on the support, trust andconfidence of our shareholders, business associates, customers, suppliers,financiers and various other group of stakeholders with whom it interacts and/orconducts business with.

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

The Board of Directors recognises the importance of the role of good corporate governance in assisting the Company toachieve its corporate mission and in enhancing its shareholders' value. Thus, the Board of Directors is committed to ensurethat the corporate governance adopted by the Company is in line with the principles set out in Part 1 of the Malaysian Codeon Corporate Governance ("the Code") to the Company's particular circumstances. The Board further acknowledges therecommended best practices as set out in Part 2 of the Code and continues to evaluate the status of the practices and theadopted alternatives.

THE BOARD OF DIRECTORS

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

The Board currently comprises nine (9) members: five (5) executive Directors including the Chairman / Managing Director,three (3) independent non-executive Directors and one (1) non-executive Director. The composition reflects a balance ofexecutive Directors and non-executive Directors (including independent non-executive Directors) such that no individual orsmall group of individuals can dominate the Board's decision making. A brief description of the background of each Directoris presented on pages 8 to 12 of this Annual Report.

The Board has identified Mr. Quah Chin Chye as the senior independent non-executive Director to whom concerns may beconveyed where it could be inappropriate for the concerns to be dealt with by the Chairman or the Managing Director.

The Board meets quarterly to review its quarterly performances and discuss new policies and strategies. Additional meetingswill be called as and when necessary. During the financial year ended 31 August 2006, four (4) Board Meetings were heldand the attendance of the Board members is as follows:

Name of Director *No. of Meetings Attended

Dato’ Sri Dr. Lim, Wee-Chai 4/4Tan Sri Datuk (Dr.) Arshad Bin Ayub 4/4Datin Sri Tong Siew Bee 4/4Haji Shahadan Bin Haji Abd Manas (Retired on 31/08/2006) 4/4Lim Hooi Sin 4/4Sekarajasekaran a/l Arasaratnam 4/4Lau Boon Ann 4/4Quah Chin Chye 4/4Lee Kim Meow (Also an Alternate Director to Lim Hooi Sin) 4/4Lim Cheong Guan (appointed on 31/08/2006) 0/0

* The number of meetings attended by each Director may vary according to their dates of appointment.


CORPORATE GOVERNANCE STATEMENT (Cont’d)

32

A W A R D E DI S O 9 0 0 1

All of the above meetings were held in the Company's Board Room at Lot 4969, Jalan Teratai, Batu 6, Off Jalan Meru,41050 Klang, Selangor Darul Ehsan, Malaysia.

All the Board members have attended the Mandatory Accreditation Programme conducted by Bursatra Sdn Bhd. Directorsare encouraged to attend continuous education programmes and seminars to keep abreast with relevant changes in lawsand regulations and the development in the market place. Seminars attended by the Directors during the financial year areas follows:

1. International Currency Risk Management Another Asian Crisis Possible (Implication on Malaysia);

2. New Investment Instruments (Hedge Funds, Structured Products, ASB & Vertical Settlement) Investment PolicyAdjustment for Board Members & Performance Evaluation & Benchmarking;

3. ASEAN 100 Leadership Forum in Singapore;

4. National Economic Action Council Meeting;

5. Company Valuation, Restructuring & Funding;

6. Off-Balance Sheet Items, Offshore Accounts and Derivatives; and

7. International Currency Risk Management.

It is the Company's intention that each new Director is given a comprehensive briefing on the Company's history, operations,financial control system and plant visit to enable them to have first hand understanding of the Company's operation. Thisorientation programme had been implemented since 31 December 2001.

Clear demarcation of duties, responsibilities and authority are being practiced by the Board. The position of Chairman andManaging Director is held by Dato' Sri Dr. Lim, Wee-Chai. The Chairman is primarily responsible for the orderly conduct ofthe Board Meetings and workings of the Board. The Managing Director, assisted by the executive Directors is subject to thecontrol of the Board and is responsible for the implementation of Board policies, making operational decisions andmonitoring the day-to-day running of the business. He also defines the limits of the management's responsibilities. Theexecutive Directors are responsible for the day-to-day operations of the Group whereby operational issues and problems arediscussed, major transactions and matters relating to the Group are reviewed and also to formulate operational strategies.

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

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

In accordance with the Company's Articles of Association, all Directors who are appointed by the Board are subject toretirement at the first Annual General Meeting ("AGM") of the Company subsequent to their appointment. One third (1/3)of all the other Directors shall retire by rotation at each AGM provided always that all Directors shall retire from office atleast once in three (3) years. The Directors retiring from office shall be eligible for re-election by the shareholders.

Directors standing for re-election at the AGM of the Company to be held are Mr. Lee Kim Meow, Datin Sri Tong Siew Bee,Tan Sri Datuk (Dr.) Arshad Bin Ayub, Mr. Sekarajasekaran a/l Arasaratnam and Mr. Lim Cheong Guan.

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



A W A R D E DI S O 9 0 0 1

AUDIT COMMITTEE

This Committee was established on 5 September 2000. The terms of reference of the Audit Committee was reviewed bythe Board and all the members of the Committee were re-nominated and re-appointed on 4 September 2005. The termsof office of the Committee is two (2) years and may be re-nominated and re-appointed by the Board. Its role and functionis to assist the Board in overseeing the Group's activities within its clear defined terms of reference. Best Practices BB Part2 and Part 4 of the Code and Paragraph 15.13 of Bursa Malaysia Securities Berhad's Listing Requirements ("BursaSecurities' LR") spell out the duties of an Audit Committee. The scope of duties of Top Glove's Audit Committee includesprimarily the duties detailed therein. Pursuant to Paragraph 15.26 of Bursa Securities' LR, the Audit Committee Report forthe current financial year can be found on pages 39 to 42 of this Annual Report which also contain other information asrequired under the Code.

The Board shall review the term of office and performance of the Audit Committee and each of its members at least onceevery two (2) years to determine whether such Audit Committee and members have carried out their duties in accordancewith their terms of reference.

The Board has full access to both internal and external auditors and receives reports on all audits performed via thisCommittee.

NOMINATION COMMITTEE

This Committee was established on 7 November 2001. The terms of reference of the Nomination Committee was reviewedby the Board and all the members of the Committee were re-nominated and re-appointed on 4 September 2005. The termsof office of this Committee is two (2) years and may be re-nominated and re-appointed by the Board. Its role is to assistthe Board of Directors in their responsibilities in nominating new nominees to the Board of Directors. The NominationCommittee shall also assess the performance of the Directors of the Company on an on-going basis. The members of theNomination Committee are as follows:

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

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

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

(d) Quah Chin Chye(Independent Non-Executive Director)

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

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

• To consider, in making its recommendations, candidates for directorships proposed by the Managing Director and, withinthe bounds of practicability, by any other senior executive or any Director or Shareholder;

• To recommend to the Board of Directors the nominees to fill the seats on Board Committees;• To assess the effectiveness of the Board of Directors as a whole and each individual Directors/Committees of the Board;• To act in line with the directions of the Board of Directors; and• To consider and examine such other matters as the Nomination Committee considers appropriate.



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REMUNERATION COMMITTEE

This Committee was established on 7 November 2001. The terms of reference of the Remuneration Committee wasreviewed by the Board and all the members of the Remuneration Committee were re-nominated and re-appointed on 4September 2005. The terms of office of this Committee is two (2) years and may be re-nominated and re-appointed by theBoard. Its role is to assist the Board of Directors in their responsibilities in assessing the remuneration packages of theexecutive Directors. The members of the Remuneration Committee are as follows:

(a) Dato’ Sri Dr. Lim, Wee-Chai(Chairman / Managing Director) - Chairman

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

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

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

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

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

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

• To recommend to the Board of Directors the remuneration packages of the executive Directors; • To act in line with the directions of the Board of Directors; and• To consider and examine such other matters as the Remuneration Committee considers appropriate.

DIRECTORS’ REMUNERATION

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

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

ExecutiveDirectors 2,108 146 222 63 2539

Non-ExecutiveDirectors 0 131 0 0 131

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

Number of DirectorsRange of Remuneration Executive Non-Executive

Below RM50,000 0 4RM150,001 to RM200,000 2 0RM200,001 to RM250,000 1 0RM250,001 to RM300,000 1 0RM1,650,001 to RM1,700,000 1 0

The only area of non-compliance with the Code is the recommended disclosure of details of the remuneration of eachDirector. At this point, the Board of Directors is of the view that disclosure of the remuneration bands of the Directors ofthe Company is sufficient to meet the objectives of the Code.



A W A R D E DI S O 9 0 0 1

ESOS OPTION COMMITTEE

The Company, with approval of the shareholders during its Extraordinary General Meeting (“EGM”) held on 9 January 2003,has implemented the ESOS (“Employees’ Share Option Scheme”) officially on 29 April 2003.

An ESOS Option Committee was appointed by the Board on 11 April 2003 to oversee the administration as well as to ensureproper implementation of the ESOS according to the Bye-laws of the scheme. Currently the ESOS Option Committeecomprises the following members:

• Dato’ Sri Dr. Lim, Wee-Chai - Chairman• Haji Shahadan Bin Haji Abd Manas (retired on 31 August 2006) - member• Lee Kim Meow - member• Lim Cheong Guan (appointed on 31 August 2006) - member• Chee Ban Tuck - member

SUPPLY OF INFORMATION TO THE BOARD

All Directors are provided with an agenda of the meeting and board papers which contain Company's financial performance,business outlook, various committees' reports and disclosures by Directors of their interest in shares and their interest incontracts, properties and offices pursuant to Section 135 and Section 131 of the Companies Act, 1965 respectively priorto the Board meeting. The board papers are issued in advance to facilitate informed decision-making. The ManagingDirector will lead the presentation of board papers and provide comprehensive explanations of pertinent issues. Anyproposals and recommendations by the management will be deliberated and discussed by the Board before a decision ismade. Minutes are prepared on all Board proceedings and will be signed by the Chairman of the meeting in accordancewith the provision of Section 156 of the Companies Act, 1965. The Board is kept updated on the Company's financialactivities and operations on a regular basis.

The Directors are also notified of any corporate announcement released to Bursa Securities and the impending restrictionon dealing with the securities of the Company prior to the announcement of the quarterly financial results.

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

RELATIONSHIP WITH THE SHAREHOLDERS

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

In addition to the various announcements made during the year, the timely release of financial results on a quarterly basisin line with Bursa Securities' LR, the Company provides shareholders with an overview of the Company's performance andprogress. During the year, the executive Directors and senior management had regular dialogues and meetings with bothlocal and overseas institutional investors, fund managers, analysts, research houses and members of the press media tobrief them and to keep them updated on the various announcements relating to the Company's financial performance, majorcorporate proposals and pertinent issues within the disclosure requirements of Bursa Securities.

The AGM is an important forum where communications with shareholders can be effectively conducted. Shareholders arenotified of the meeting together with a copy of the Company's Annual Report at least twenty-one (21) days before themeeting. At each AGM, shareholders are given ample time and opportunity to ask for more information, without limiting thetype of questions asked, prior to seeking approval by show of hands from the members and proxies on the audited financialstatements. During the meeting, the Chairman and the Board members are prepared to response to all queries andundertake to provide sufficient clarification on issues and concerns raised by the shareholders. The external auditors arealso present to provide their professional and independent clarification on issues and concerns raised by the shareholders.Status of all resolutions proposed at the AGM is submitted to Bursa Securities at the end of the meeting day. The Boardhas ensured that each item of special business included in the notice of the annual or extraordinary general meeting areaccompanied by a full explanation of the effects of a proposed resolution.

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



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A W A R D E DI S O 9 0 0 1

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

ACCOUNTABILITY AND AUDIT

Financial Reporting

Statement of Directors' Responsibilities in respect of Audited Financial Statements pursuant to Paragraph 15.27 (a) ofBursa Securities' LR.

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

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

Internal Control

The Board acknowledges its responsibility for maintaining a sound system of internal controls, which provides reasonableassessment of effective and efficient operations, internal financial controls, and compliance with laws and regulations aswell as with internal procedures and guidelines. The internal control system also aims at identifying and managing any risksthat the Company may encounter in pursuit of its business objectives. A Statement on Internal Control of the Company isset out on page 38 of this Annual Report.

Relationship with the Auditors

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

OTHER COMPLIANCE INFORMATION

1. Utilisation Of Proceeds

The Company did not raise funds through any corporate proposal during the financial year.

2. Recurrent Related Party Transactions

During the financial year, there were no recurrent related party transactions of a revenue or trading nature involving theDirectors and / or substantial shareholders of the Company.

3. Share Buy-backs

During the financial year, the Company does not have a scheme to buy-back its own shares.

4. American Depository Receipt ("ADR") Or Global Depository Receipt ("GDR") Programmes

A Sponsored Level-1 ADR Programme for shares of the Company was registered with the Securities and ExchangeCommission of the United States of America on 27 December 2005.

Under the ADR Programme, a maximum of 5% of the total issued and paid-up capital of the Company will be tradedin the ADRs in the United States of America, in the ratio of four (4) shares to one (1) ADR.


A W A R D E DI S O 9 0 0 1

The Depository Bank for the ADR Programme is The Bank of New York and the sole custodian of the Company's sharesfor the ADR Programme is Malayan Banking Berhad, Kuala Lumpur.

As at 20 October, 2006, the total number of ADRs sold under the ADR Programme amounted to 56,700 shares.

During the financial year, the Company did not sponsor any GDR Programme.

5. Imposition Of Sanctions And/Or Penalties

Other than the compound paid by the Company to the Immigration Department in relation to the renewal of workers'permits, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors ormanagement by the relevant regulatory bodies.

6. Non-Audit Fees

During the financial year, the amount of non-audit fees paid to the external auditors was amounted to RM98,324.

7. Variation In Results

There was no material variance between the results of the financial year and the unaudited results previouslyannounced. The Company did not make any release on the profit estimate, forecast or projections for the financial year.

8. Profit Guarantees

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

9. Material Contracts

During the financial year, there were no material contracts entered into by the Company and its subsidiaries involvingDirectors’ and / or substantial shareholders’ interests.

10. Contracts Relating To Loans

There were no material contracts relating to loans entered into by the Company involving Directors and / or substantialshareholders.

11. Options, Warrants or Convertible Securities

The ESOS of the Company was officially implemented on 29 April 2003. During the current financial year ended 31 August 2006, a total of 3,646,700 new ordinary shares were issued and allotted pursuant to the exercise of theESOS. The details of the issued and paid-up share capital of the Company as at 31 August 2006 are as follows:-

No. of shares RM

As at 1 September 2005 188,638,600 94,319,300

Ordinary shares of RM0.50 each issued pursuant to the ESOS 3,646,700 1,823,350

As at 31 August 2006 192,285,300 96,142,650

Other than the above, there were no issuance of warrants or convertible securities during the financial year.

12. Revaluation of Landed Properties

The Company does not have a revaluation policy on landed properties.



STATEMENT ON INTERNAL CONTROL

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The Board acknowledges its responsibility in establishing an efficient and effective system of internal control covering notonly financial controls but also controls relating to operational compliance and risk management to safeguard shareholders'investment and the Group's assets. There is an on-going review process by the Board to ensure the adequacy and integrityof the system. Such a system is designed to identify and to manage rather than eliminate the risk of failure. Accordingly, thesystem can only provide reasonable and not absolute assurance against material misstatement, loss or fraud.

The Group's internal control mechanism is embedded in the various work processes and procedures at appropriate levels in theGroup. The Managing Director ("MD") and senior management team, comprising experienced personnel with vast specialisedindustry experience, are assigned the responsibility of managing the Group. They are accountable for the conduct andperformance of their operations within their respective businesses. The MD and senior management monitor the day-to-dayaffairs of the Group through review of performance and operations reports, as well as attending management meetings. Anysignificant issues are immediately brought to the attention of the MD, who in turn, will bring these matters before the Board.

The Audit Committee is also responsible for reviewing and monitoring the effectiveness of the Group's system of internalcontrol. In this respect, the Internal Audit Department of the Company, which was set up in the financial year ended 31August 2003, conducts regular reviews on the Group's various operations and reports directly to the Audit Committee. Theexternal auditors provide assurance in the form of their annual statutory audit of the financial statements. Further areas forimprovement identified during the course of the statutory audit by the external auditors are brought to the attention of theAudit Committee through management letters, or discussed at Audit Committee meetings.

The key processes that the Group has established in reviewing the adequacy and integrity of the Group's system of internalcontrol include the following:

1) Company's Policies and Procedures, which set out guidelines and the expected standards for the Group's operations. Thepolicies and procedures are under regular review and update so as to maintain its effectiveness at all time.

2) Periodical and/or annual budgeting and target setting and review system for every operation of the Group. Analysis, datacomparison and reporting of variances against targets are presented in the Group’s various management meetings, whichprovide the framework for monitoring and controlling mechanism.

3) Requirement for the submission of regular and timely financial and comprehensive management reports to themanagement.

4) Clearly defined organisation structure of the various departments with clearly defined delegation of responsibilities andaccountability. It sets out the decision that needs to be taken and the appropriate approving authority at various levelsof the management including matters that requires Board’s approval.

5) Setting up monetary limits to the various level of delegated authority in order to minimize the risks of unauthorizedtransactions.

6) Regular internal audit visits by the Company’s Internal Audit Department to assess and provide independent reports andassurance on the state of the internal control system of the Group’s various operations.

7) Continuous training and development programmes covering all level of the Group’s employees to ensure and to maintainthe competency and efficiency of the employees.

8) Compliance review functions to ensure adherence to rules and regulations laid down by the various regulators andauthorities.

The Board remains committed towards operating a sound system of internal control and therefore recognises that the systemmust continuously evolve to support the type of business and size of operations of the Group. As such, the Board will, whennecessary, put in place appropriate action to further enhance the Group's system of internal control.

Other than the flaw in the human resources system in keeping track of the renewal of workers' permits as announced to BursaMalaysia Securities Berhad on 16 August 2006 and 6 October 2006, there were no other material internal control failures,which resulted in material losses or contingencies during the financial year. Following from identification of the flaw,management has also taken the following corrective actions to improve the renewal procedures which included: -

1) The restructuring of the human resources department by allocating more staff and decentralising the human resourcesdepartment to the respective individual factory in order to monitor, control and expedite the renewal of these workingpermits;

2) Introducing the human resources management computer system to enhance the control and monitoring of the worker'spermit renewal; and

3) Working closely with FOMEMA (Foreign Workers Medical Examination Monitoring Agency) on the medical check up ofour foreign workers and the Immigration Department to expedite the renewal of the working permit of our workers, aswell as, to provide feedback and suggestions to improve the efficiency of the renewal system.

This statement is made in accordance with a resolution of the Board of Directors dated 30 October 2006.

AUDIT COMMITTEE REPORT


A W A R D E DI S O 9 0 0 1

TERMS OF REFERENCE OF AUDIT COMMITTEE

1. MEMBERSHIP

Members Designation

(a) Tan Sri Datuk (Dr.) Arshad Bin Ayub ChairmanIndependent Non-Executive Director

(b) Dato’ Sri Dr. Lim, Wee-Chai MemberChairman / Managing Director

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

(d) Quah Chin Chye MemberIndependent Non-Executive Director

2. COMPOSITION OF MEMBERS

The Board shall elect the Audit Committee members from amongst themselves, comprising no fewer than three (3)directors, where the majority shall be independent directors. The term of office of the Audit Committee is two (2) yearsand may be renominated and appointed by the Board of Directors.

In this respect, the Board adopts the definition of “independent director” as defined under the Bursa MalaysiaSecurities Berhad’s Listing Requirements (“Bursa Securities’ LR”).

At least one (1) member of the Audit Committee must be:

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

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

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

ii. he must be a member of one of the associations of the accountants specified in Part 11 of the First Scheduleof the Accountants Act 1967;or

(c) fulfills such other requirements as prescribed by Bursa Securities.

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

Retirement and resignation

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

3. CHAIRMAN

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


AUDIT COMMITTEE REPORT (Cont’d)

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4. SECRETARY

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

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

The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, circulating themto members of the Audit Committee and to the other members of the Board of Directors and for following upoutstanding matters.

5. MEETINGS

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

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

The members of the Audit Committee, Financial Controller, Finance Manager, head of operations and the internal auditwill normally be in attendance at the meetings. Representatives of the external auditors are to be in attendance atmeeting where matters relating to the audit of the statutory accounts and/or external auditors are to be discussed.

Other directors, officers and employees of the Company and/or Group may be invited to attend, except for those portionsof the meetings where their presence is considered inappropriate, as determined by the Audit Committee. However, atleast once a year the Audit Committee shall meet with the external auditors.

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

6. QUORUM

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

7. REPORTING

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

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

8. OBJECTIVES

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

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

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

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

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



A W A R D E DI S O 9 0 0 1

9. AUTHORITY

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

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

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

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

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

(e) be able to make relevant reports when necessary to the relevant authorities if a breach of the Bursa Securities’ LRoccurred.

10. DUTIES AND RESPONSIBILITIES

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

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

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

c) To ensure adequacy of internal and external audit procedures;

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

e) To provide liaison between the external auditors, the management and the Board of Directors and also to reviewthe assistance given by the management to the external auditors;

f) To review the findings of the internal and external auditors;

g) To review the quarterly results and financial statements and annual report prior to submission to the Board ofDirectors;

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

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

j) To verify the allocation of Employees' Share Option Scheme ("ESOS") in compliance with the criteria as stipulatedin the Bye-Laws of ESOS of the Company, if any;

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

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



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11. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

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

a) Reviewed the Quarterly Reports and the Annual Report to ensure adherence to legal and regulatory reportingrequirements and appropriate resolution of all accounting matters requiring significant judgment;

b) Reviewed and deliberated the significant risk areas, internal control and financial matters coming to the attentionof the external auditors in the course of their work;

c) Reviewed the related party transactions that are required to be transacted at an arm’s length basis and are notdetrimental to the interest of minority shareholders;

d) Deliberated the emerging financial reporting issues pursuant to the introduction of new accounting standards andadditional statutory/regulatory disclosure requirements;

e) Deliberated the best Board practices for meeting market expectations and protecting shareholders’ interests thatwere highlighted by the External Auditors;

f) Reviewed the measures being taken to fortify the existing risk assessment and management processes; and

g) Verified the allocation of option shares pursuant to the ESOS to eligible employees had been made in accordancewith the criteria of allocation of option shares as set out in the Bye-Laws of the ESOS.

12. SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT DEPARTMENT

The Company has an Internal Audit Department whose principal objective is to undertake regular reviews of the systemsof controls, procedures and operations so as to provide reasonable assurance that the internal control system is sound,adequate and satisfactory. The Internal Audit Department reports direct to the Audit Committee. Its role is to providethe Committee with independent and objective reports on the state of internal controls of the operating units withinthe Group and the extent of compliance by such units with the Group’s established policies and procedures and theregulatory requirements of the relevant authorities. The Audit Committee reviews and approves the internal audit planof the Group submitted by the internal audit manager.

During the financial year ended 31 August 2006, the areas audited included audits of the various departments coveringall the factories and subsidiaries within the Group. Internal audit reports were issued to the Audit Committee regularlyand tabled in the Audit Committee meetings. The reports are also issued to the respective operations management,incorporating audit recommendations and management responses with regards to any audit findings on the weaknessesin the systems and controls of the operations. The Internal Audit Department also follows up with management on theimplementation of the agreed audit recommendations.

MEETINGS AND ATTENDANCE OF AUDIT COMMITTEE

The Members of Audit Committee met four (4) times during the financial year ended 31 August 2006 and the attendanceof the members are as follows: -

Members Meetings Attended

(a) Dato’ Sri Dr. Lim, Wee-Chai 4/4(b) Tan Sri Datuk (Dr.) Arshad Bin Ayub 4/4(c) Sekarajasekaran a/l Arasaratnam 4/4(d) Quah Chin Chye 4/4


A W A R D E DI S O 9 0 0 1

F I N A N C I A L S T AT E M E N T

44 Directors’ Report

48 Statement by Directors

48 Statutory Declaration

49 Report of the Auditors

50 Income Statements

51 Balance Sheets

52 Statements of Changes in Equity

53 Cash Flow Statements

54 Notes to the Financial Statements


DIRECTORS’ REPORT

A W A R D E DI S O 9 0 0 1

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of theCompany for the financial year ended 31 August 2006.

PRINCIPAL ACTIVITIES

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

The principal activities of the subsidiaries are described in Note 12 to the financial statements.

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

RESULTS Group Company RM'000 RM'000

Net profit for the year 78,392 41,981============ ============

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year werenot substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The amount of dividends paid by the Company since 31 August 2005 were as follows :

RM'000In respect of the financial year ended 31 August 2005 :

Interim tax exempt dividend of 6%, paid on 16 September 2005 5,655 Final tax exempt dividend of 6%, paid on 14 March 2006 5,713Final dividend of 4% less 28% taxation, paid on 14 March 2006 2,742

––––––––––––14,110

============In respect of the financial year ended 31 August 2006 :

Interim tax exempt dividend of 7%, paid on 15 September 2006 6,727============

At the forthcoming Annual General Meeting, a final tax exempt dividend of 6% on 192,285,300 ordinary shares amountingto RM5,768,559 (3 sen per share) and a final dividend of 5% less 28% taxation amounting to RM3,461,136 (1.80 sen pershare) in respect of the financial year ended 31 August 2006 will be proposed for shareholders' approval. The financialstatements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders,will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 August 2007.

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are :

Dato' Sri Dr. Lim, Wee-ChaiTan Sri Datuk (Dr.) Arshad bin AyubDatin Sri Tong Siew BeeLim Hooi SinSekarajasekaran a/l ArasaratnamLau Boon AnnQuah Chin ChyeLee Kim Meow (also alternate to Lim Hooi Sin)Lim Cheong Guan (appointed on 31 August 2006)Haji Shahadan bin Haji Abd Manas (retired on 31 August 2006)


DIRECTORS’ REPORT (Cont’d)

A W A R D E DI S O 9 0 0 1

DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which theCompany was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of theCompany or any other body corporate, other than those arising from the share options granted under the Employee ShareOptions Scheme ("ESOS").

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 6to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by theCompany or a related corporation with the director or with a firm of which he is a member, or with a company in which he hasa substantial financial interest.

DIRECTORS' INTERESTAccording to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in sharesin the Company during the financial year were as follows:

Number of Ordinary Shares of RM0.50 Each1 September 31 August

2005 Bought Sold 2006

Dato' Sri Dr. Lim, Wee-Chai- direct 58,728,358 568,000 – 59,296,358- indirect 29,226,702 256,000 (1,516,000) 27,966,702Tan Sri Datuk (Dr.) Arshad bin Ayub 2,375,000 – (1,175,000) 1,200,000Datin Sri Tong Siew Bee- direct 3,284,196 – – 3,284,196- indirect 84,670,864 824,000 (1,516,000) 83,978,864Haji Shahadan bin Haji Abd Manas 276,400 112,000 (58,000) 330,400Lim Hooi Sin- direct 4,979,130 256,000 (256,000) 4,979,130- indirect 82,975,930 568,000 (1,260,000) 82,283,930Sekarajasekaran a/l Arasaratnam 7,567,978 – – 7,567,978Lau Boon Ann 196,400 – – 196,400Lee Kim Meow 537,012 80,000 (60,000) 557,012

Number of Options over Ordinary Shares of RM0.50 Each1 September 31 August

2005 Granted Exercised 2006

Dato' Sri Dr. Lim, Wee-Chai 252,000 252,000 (252,000) 252,000Datin Sri Tong Siew Bee 272,000 112,000 – 384,000Lim Hooi Sin 256,000 96,000 (256,000) 96,000Haji Shahadan bin Haji Abd Manas 112,000 112,000 (112,000) 112,000 Lee Kim Meow 272,000 112,000 (80,000) 304,000Lim Cheong Guan – 40,000 – 40,000

Dato' Sri Dr. Lim, Wee-Chai, Datin Sri Tong Siew Bee and Lim Hooi Sin by virtue of their interest in shares of the Companyare also deemed interested in shares of all the subsidiaries to the extent the Company has an interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its relatedcorporations or in share options in the Company during the financial year.



A W A R D E DI S O 9 0 0 1

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up share capital from RM94,319,300 to RM96,142,650by way of the issuance of 3,646,700 ordinary shares of RM0.50 each pursuant to the ESOS at an option price of betweenRM0.87 and RM8.37 per ordinary share.

Subsequent to the end of the financial year up to the date of this report, the Company increased its issued and paid-up sharecapital from RM96,142,650 to RM96,287,650 by way of the issuance of 290,000 ordinary shares of RM0.50 each pursuantto the ESOS at an option price of between RM3.14 and RM8.62 per ordinary share.

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

EMPLOYEE SHARE OPTIONS SCHEME

The Company's ESOS is governed by the by-laws which was approved by the shareholders at the Extraordinary General Meetingheld on 9 January 2003 and became effective on 29 April 2003.

The main features and other terms of the ESOS are disclosed in Note 23 to the financial statements.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names ofemployees who have been granted options to subscribe for less than 100,000 ordinary shares. The list of employees grantedoptions to subscribe for 100,000 or more ordinary shares during the financial year is disclosed in the section on Directors’Interests in this report.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets 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 the making of provisionfor doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had beenmade for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in theordinary course of business had been written down to an amount which they might be expected so to realise.

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

(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statementsof the Group and of the Company inadequate to any substantial extent; and

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

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading orinappropriate.

(d) At the date of this report, the directors are not aware of any circumtances not otherwise dealt with in this report or financialstatements of the Group and of the Company which render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

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

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



A W A R D E DI S O 9 0 0 1

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelvemonths after the end of the financial year which will or may affect the ability of the Group or of the Company to meetits obligations when they fall due; and

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

SIGNIFICANT EVENTS

The significant events are disclosed in Note 12 and Note 31 to the financial statements.

SUBSEQUENT EVENTS

The subsequent events are disclosed in Note 32 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

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

DATO' SRI DR. LIM, WEE-CHAI QUAH CHIN CHYE

Klang, MalaysiaDate: 30 October 2006


STATEMENTBY DIRECTORS PURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965

STATUTORYDECLARATION PURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965

A W A R D E DI S O 9 0 0 1

We, DATO' SRI DR. LIM, WEE-CHAI and QUAH CHIN CHYE, being two of the directors of TOP GLOVE CORPORATION BHD.,do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 50 to 83 aredrawn up in accordance with applicable MASB Approved Accounting Standards in Malaysia and the provisions of CompaniesAct, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 August 2006and of the results and the cash flows of the Group and of the Company for the year then ended.

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

DATO' SRI DR. LIM, WEE-CHAI QUAH CHIN CHYE

Klang, MalaysiaDate: 30 October 2006

I, DATO' SRI DR. LIM, WEE-CHAI, the director primarily responsible for the financial management of TOP GLOVECORPORATION BHD., do solemnly and sincerely declare that the accompanying financial statements set out on pages 50 to 83 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and byvirtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by theabovenamed DATO' SRI DR. LIM, WEE-CHAIat Klang in the State of Selangor on 30 October 2006 DATO' SRI DR. LIM, WEE-CHAI

Before me,

LEE PEI NAMCommissioner for Oaths

Klang, Selangor Darul EhsanMalaysia

))))


REPORT OF THE AUDITORS TO THE MEMBERS OF TOP GLOVECORPORATION BHD. (Incorporated in Malaysia)

A W A R D E DI S O 9 0 0 1

We have audited the financial statements set out on pages 50 to 83. These financial statements are the responsibility of theCompany’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report ouropinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do notassume responsibility to any other person for the content of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by the directors,as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonablebasis for our opinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 andapplicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of :

(i) the financial position of the Group and of the Company as at 31 August 2006 and of the results and the cash flowsof the Group and of the Company for the year then ended; and

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

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

We have considered the financial statements and the auditors' reports thereon of the subsidiaries of which we have not actedas auditors, as indicated in Note 12 to the financial statements, being financial statements that have been included in theconsolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements ofthe Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financialstatements and we have received satisfactory information and explanations required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to theconsolidated financial statements and, in respect of subsidiaries incorporated in Malaysia, did not include any commentrequired to be made under Section 174 (3) of the Act.

ERNST & YOUNGAF: 0039Chartered Accountants

ABRAHAM VERGHESE A/L T.V.ABRAHAMNo. 1664/10/08(J)Partner

Melaka, MalaysiaDate: 30 October 2006


INCOME STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2006 A W A R D E D

I S O 9 0 0 1

Group CompanyNote 2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Revenue 3 992,611 641,827 45,780 15,134 Cost of sales (822,959) (524,374) – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Gross profit 169,652 117,453 45,780 15,134Other operating income 2,393 3,676 – –Distribution and selling costs (34,799) (27,595) – –Administrative and general expenses (35,918) (23,107) (685) (887)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Profit from operations 4 101,328 70,427 45,095 14,247Finance costs, net 7 (9,555) (4,682) 107 –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Profit before taxation 91,773 65,745 45,202 14,247Taxation 8 (12,712) (12,262) (3,221) (777)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Profit after taxation 79,061 53,483 41,981 13,470Minority interests (669) (36) – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Net profit for the year 78,392 53,447 41,981 13,470

============== ============== ============== ==============

Earnings per share (sen)Basic 9 41.13 28.53Diluted 9 40.85 28.36

============== ==============

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


BALANCE SHEETS AS AT 31 AUGUST 2006 A W A R D E D

I S O 9 0 0 1

Group CompanyNote 2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

NON-CURRENT ASSETS

Property, plant and equipment 11 420,391 295,296 – –Investments in subsidiaries 12 – – 29,348 29,348Other investment 356 139 103 –Due from a subsidiary 13 – – 146,961 60,416Goodwill on consolidation 14 21,078 5,324 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––441,825 300,759 176,412 89,764

–––––––––––– –––––––––––– –––––––––––– ––––––––––––CURRENT ASSETS

Inventories 15 102,232 62,727 – –Trade receivables 16 149,761 112,321 – –Other receivables 17 9,042 5,569 70,820 19,887Tax recoverable 45 – 83 –Cash and bank balances 18 59,211 25,128 783 15

–––––––––––– –––––––––––– –––––––––––– ––––––––––––320,291 205,745 71,686 19,902

–––––––––––– –––––––––––– –––––––––––– ––––––––––––CURRENT LIABILITIES

Borrowings 19 126,229 84,291 24,880 –Trade payables 21 100,407 78,529 – – Other payables 22 68,650 41,440 1,189 339Tax payable – 593 – –Dividends payable 6,744 5,655 6,744 5,655

–––––––––––– –––––––––––– –––––––––––– ––––––––––––302,030 210,508 32,813 5,994

–––––––––––– –––––––––––– –––––––––––– ––––––––––––NET CURRENT ASSETS/(LIABILITIES) 18,261 (4,763) 38,873 13,908

–––––––––––– –––––––––––– –––––––––––– ––––––––––––460,086 295,996 215,285 103,672

============== ============== ============== ==============

FINANCED BY :

Share capital 23 96,143 94,319 96,143 94,319Reserves 185,963 108,141 49,142 9,353

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Shareholders' equity 282,106 202,460 145,285 103,672Minority interests 2,003 1,232 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––284,109 203,692 145,285 103,672

–––––––––––– –––––––––––– –––––––––––– ––––––––––––

Borrowings 19 146,439 69,899 70,000 –Deferred taxation 24 29,538 22,405 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Non-current liabilities 175,977 92,304 70,000 –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––460,086 295,996 215,285 103,672

============== ============== ============== ==============



STATEMENTS OFCHANGES IN EQUITY FOR THE YEAR ENDED 31 AUGUST 2006

A W A R D E DI S O 9 0 0 1

Non distributable DistributableForeign

Share Share exchange Legal Retained capital premium reserve reserve profits Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000Group

At 1 September 2004As previously stated 93,059 2,279 5 – 66,160 161,503Prior year adjustment (Note 27) – – – – (7,649) (7,649)

––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––At 1 September 2004 (restated) 93,059 2,279 5 – 58,511 153,854 Issuance of shares under ESOS 1,260 6,791 – – – 8,051Share issue expenses – (6) – – – (6)Currency translation differences * – – 413 – – 413Net profit for the year – – – – 53,447 53,447Amount transfer to legal reserve – – – 799 (799) –Dividends (Note 10) – – – – (13,299) (13,299)

––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––At 31 August 2005 94,319 9,064 418 799 97,860 202,460

============= ============= ============= ============= ============= =============At 1 September 2005As previously stated 94,319 9,064 418 799 110,203 214,803Prior year adjustment (Note 27) – – – – (12,343) (12,343)

––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––At 1 September 2005 (restated) 94,319 9,064 418 799 97,860 202,460 Issuance of shares under ESOS 1,824 13,005 – – – 14,829Share issue expenses – (15) – – – (15)Currency translation differences * – – 1,622 – – 1,622 Net profit for the year – – – – 78,392 78,392Amount transfer to legal reserve – – – 895 (895) –Dividends (Note 10) – – – – (15,182) (15,182)

––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––At 31 August 2006 96,143 22,054 2,040 1,694 160,175 282,106

============= ============= ============= ============= ============= =============

* Representing net gain not recognised in the income statement.Non

distributable DistributableShare Share Retained

capital premium profits Total RM'000 RM'000 RM'000 RM'000

Company

At 1 September 2004 93,059 2,279 118 95,456Issuance of shares under ESOS 1,260 6,791 – 8,051Share issue expenses – (6) – (6)Net profit for the year – – 13,470 13,470Dividends (Note 10) – – (13,299) (13,299)

––––––––––– ––––––––––– ––––––––––– –––––––––––At 31 August 2005 94,319 9,064 289 103,672Issuance of shares under ESOS 1,824 13,005 – 14,829Share issue expenses – (15) – (15)Net profit for the year – – 41,981 41,981Dividends (Note 10) – – (15,182) (15,182)

––––––––––– ––––––––––– ––––––––––– –––––––––––At 31 August 2006 96,143 22,054 27,088 145,285

============= ============= ============= =============



CASH FLOWSTATEMENTS FOR THE YEAR ENDED 31 AUGUST 2006

A W A R D E DI S O 9 0 0 1


Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 91,773 65,745 45,202 14,247

Adjustments for :Depreciation 28,210 18,620 – – (Gain)/loss on disposal of property, plant and equipment (11) 197 – –Property, plant and equipment written off 195 – – –Unrealised foreign exchange (gains)/losses (1,426) 244 – –Interest expense 10,818 4,826 – –Interest income (772) (144) (107) –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Operating profit before working capital changes 128,787 89,488 45,095 14,247Increase in receivables (31,370) (50,900) (26,118) (5,912)Increase in inventories (29,074) (22,422) – –Increase in payables 45,902 43,732 850 71

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Cash generated from operations 114,245 59,898 19,827 8,406Interest paid (10,818) (4,826) – –Tax paid (6,217) (5,681) (3,304) (777)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Net cash generated from operating activities 97,210 49,391 16,523 7,629

–––––––––––– –––––––––––– –––––––––––– ––––––––––––

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (138,153) (135,704) – –Acquisition of a subsidiary (Note 12(a)) (24,846) – – –Additional investment in subsidiaries – – – (3,372)Interest received 772 144 107 –Purchase of investment (217) (95) (103) –Proceeds from disposal of property, plant and equipment 327 287 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Net cash (used in)/generated from investing activities (162,117) (135,368) 4 (3,372)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––

CASH FLOWS FROM FINANCING ACTIVITIES

Advances to subsidiaries – – (111,360) –Proceeds from issuance of shares 14,829 8,051 14,829 8,051Share issue expenses (15) (6) (15) (6)Payment of dividends (14,093) (12,295) (14,093) (12,295)Repayment of hire purchase payables (1,781) (4,273) – –Drawdown of term loans 29,417 69,547 – –Repayment of term loans (20,186) (8,159) – –Drawdown of commercial papers 24,880 – 24,880 –Drawdown of medium term notes 70,000 – 70,000 –(Decrease)/increase in short term borrowings (4,199) 41,306 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Net cash generated from/(used in) financing activities 98,852 94,171 (15,759) (4,250)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––

NET INCREASE IN CASH AND CASH EQUIVALENTS 33,945 8,194 768 7CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 24,812 16,618 15 8

–––––––––––– –––––––––––– –––––––––––– ––––––––––––CASH AND CASH EQUIVALENTS

AT END OF YEAR (NOTE 18) 58,757 24,812 783 15 ============== ============== ============== ==============


NOTES TO THEFINANCIAL STATEMENTS31 AUGUST 2006

A W A R D E DI S O 9 0 0 1

1. CORPORATE INFORMATION

The principal activities of the Company are investment holding and the provision of management services. The principalactivities of the subsidiaries are described in Note 12. There were no significant changes in the nature of the principalactivities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the MainBoard of Bursa Malaysia Securities Berhad. The principal place of business of the Company is located at Lot 4969, JalanTeratai, Batu 6, off Jalan Meru, 41050 Klang, Selangor.

The number of employees in the Group and in the Company at the end of the financial year were 6,573 (2005 : 6,298)and Nil (2005 : 10) respectively.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of thedirectors on 30 October 2006.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial statements of the Group and of the Company have been prepared under the historical cost conventionand comply with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting Standardsin Malaysia.

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries.Subsidiaries are those entities in which the Group has power to exercise control over the financial and operatingpolicies so as to obtain benefits from their activities.

Acquisition of subsidiaries which meet the criteria for merger are accounted for using merger accounting principles.When the merger method is used, the cost of investment in the Company's book is recorded at the nominal value ofshares issued and the difference between the carrying value of the investment and the nominal value of sharesacquired is treated as merger reserve or merger deficit. The results of the companies being merged are included asif the merger has been effected through the current and previous financial years. All the subsidiaries are consolidatedusing the merger method of accounting except for the subsidiaries of Top Glove Sdn. Bhd., which are accounted forunder the acquisition method.

Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the year areincluded in the consolidated income statement from the effective date of acquisition or up to the effective date ofdisposal, as appropriate. The assets and liabilities of a subsidiary are measured at their fair values at the date ofacquisition and these values are reflected in the consolidated balance sheet. The difference between the cost of anacquisition and the fair value of the Group’s share of the net assets of the acquired subsidiary at the date ofacquisition is included in the consolidated balance sheet as goodwill or negative goodwill arising on consolidation.

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidatedfinancial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costscannot be recovered.

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’sshare of its net assets together with any unamortised balance of goodwill and exchange differences.

Minority interest in the consolidated balance sheet consist of the minorities' share of the fair value of the identifiableassets and liabilities of the acquiree as at acquisition date and the minorities' share of movements in the acquiree'sequity since then.

(c) Goodwill

Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiableassets and liabilities of a subsidiary at the date of acquisition.


NOTES TO THEFINANCIAL STATEMENTS31 AUGUST 2006 (Cont’d) A W A R D E D

I S O 9 0 0 1

Goodwill is stated at cost less impairment losses. The policy for the recognition and measurement of impairmentlosses is in accordance with Note 2(n). Goodwill arising on the acquisition of subsidiaries is presented separately inthe balance sheet.

Goodwill is not amortised.

(d) Investments in Subsidiaries

The Company's investments in subsidiaries are stated at cost less impairment losses. The policy for the recognitionand measurement of impairment losses is in accordance with Note 2(n).

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts isrecognised in the income statement.

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The policyfor the recognition and measurement of impairment losses is in accordance with Note 2(n).

Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated over the period of therespective lease which ranges from 50 years to 72 years. Depreciation of other property, plant and equipment isprovided for on a straight line basis to write off the cost of each asset to its residual value over the estimated usefullife at the following annual rates :

Buildings 2% - 5%Plant and equipment 10%Other assets 10% - 20%

Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceeds andthe carrying amount is recognised in the income statement.

(f) Inventories

Inventories are stated at the lower of cost (determined on the first-in, first-out basis) and net realisable value. Thecost of finished goods and work-in-progress comprise raw materials, direct labour, other direct costs and appropriateproportions production overheads.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and costs necessary to make the sale.

(g) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank anddeposits at call which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

(h) Hire Purchases

Assets acquired by way of hire purchase are stated at an amount equal to the lower of their fair values and the presentvalue of the minimum hire purchase payments at the inception of the hire purchase, less accumulated depreciationand impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating thepresent value of the minimum hire purchase payments, the discount factor used is the interest rate implicit in thelease, when it is practicable to determine; otherwise, the Company’s incremental borrowing rate is used.

Hire purchase payments are apportioned between the finance costs and the reduction of the outstanding liability.Finance costs, which represent the difference between the total hire purchase commitments and the fair value of theassets acquired, are recognised as an expense in the income statement over the term of the relevant hire purchaseso as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accountingperiod.

The depreciation policy for assets purchased under hire purchase is consistent with that for depreciable property,plant and equipment as described in Note 2(e).


NOTES TO THE FINANCIAL STATEMENTS31 AUGUST 2006 (Cont’d) A W A R D E D

I S O 9 0 0 1

(i) Provisions for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it isprobable that an outflow of resources embodying ecomonic benefits will be required to settle the obligation, and areliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted toreflect the current best estimate. Where the effect of the time value of money is material, the amount of a provisionis the present value of the expenditure expected to be required to settle the obligation.

(j) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amountof income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that havebeen enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date betweenthe tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferredtax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for alldeductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, unused tax losses and unused taxcredits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negativegoodwill or from the initial recognition of an asset or liability in a transaction which is not a business combinationand at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or theliability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.Deferred tax is recognised in the income statement, except when it arises from a transaction which is recogniseddirectly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a businesscombination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negativegoodwill.

(k) Employee Benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which theassociated services are rendered by employees of the Group. Short term accumulating compensated absencessuch as paid annual leave are recognised when services are rendered by employees that increase their entitlementto future compensated absences. Short term non-accumulating compensated absences such as sick leave arerecognised when the absences occur.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the Employees Provident Fund ("EPF"). Someof the Group's foreign subsidiaries make contributions to their respective countries' statutory pension schemes.Such contributions are recognised as an expense in the income statement as incurred.

(iii) Equity compensation benefits

The Company's ESOS allows the Group's employees to acquire ordinary shares of the Company. No compensationcost or obligation is recognised. When the options are exercised, equity is increased by the amount of theproceeds received.

(l) Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to theenterprise and the amount of the revenue can be measured reliably.

(i) Sale of goods

Revenue relating to sale of goods is recognised net of sales taxes, discounts and returns upon the transfer of risksand rewards.


A W A R D E DI S O 9 0 0 1

(ii) Revenue from services

Revenue from services rendered is recognised net of service taxes and discounts as and when the services areperformed.

(iii) Interest income

Interest is recognised on a time proportion basis that reflects the effective yield on the asset.

(iv) Dividend income

Dividend income is recognised when the right to receive payment is established.

(m) Foreign Currencies

(i) Foreign currency transactions

Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the dateof the transaction. At each balance sheet date, foreign currency monetary items are translated into RinggitMalaysia at exchange rates ruling at that date, unless hedged by forward foreign contracts, in which case the ratesspecified in such forward contracts are used. Non-monetary items initially denominated in foreign currencies,which are carried at historical cost are translated using the historical rate as of the date of acquisition and nonmonetary items which are carried at fair value are translated using the exchange rate that existed when the valueswere determined. All exchange differences are taken to the income statement.

(ii) Foreign entities

Financial statements of foreign consolidated subsidiaries are translated at year-end exchange rates with respectto the assets and liabilites, and at exchange rates at the date of the transactions with respect to the incomestatement. All resulting translation differences are recognised in equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets andliabilities of the Company and translated at the exchange rate ruling at the date of the transaction.

The principal exchange rates used for each respective unit of foreign currency ruling at balance sheet date used areas follows :

2006 2005 RM RM

United States Dollars 3.68 3.77 Singapore Dollars – 2.15 Thailand Baht 0.10 0.09 Chinese Renminbi 0.46 0.47

(n) Impairment of Assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is anyindication of impairment. If any such indication exists, impairment is measured by comparing the carrying values ofthe assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use,which is measured by reference to discounted future cash flows. An impairment loss is recognised as an expense inthe income statement immediately.

(o) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractualprovisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are

NOTES TO THEFINANCIAL STATEMENTS31 AUGUST 2006 (Cont’d)



I S O 9 0 0 1

reported as expense or income. Distributions to holders of financial instruments classified as equity are recogniseddirectly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset andintends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Other Non-Current Investments

Non-current investments other than investments in subsidiaries are stated at cost less impairment losses. Ondisposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised inthe income statement.

(ii) Trade Receivables

Trade receivables are carried at anticipated realisable values. Bad debts are written off when identified. Anestimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.

(iii) Trade Payables

Trade payables are stated at cost which is the fair value of the consideration to be paid in the future for goodsand services received.

(iv) Interest-Bearing Borrowings

Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transactioncosts.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which areassets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalisedas part of the cost of those assets, until such time as the assets are substantially ready for their intended use orsale. The amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation ratewhich is the weighted average of the borrowing costs applicable to the Group's borrowings that are outstandingduring the year, other than borrowings made specifically for the purpose of obtaining another qualifying asset.For borrowings made specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costseligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less anyinvestment income on the temporary investment of that borrowing.

All other borrowing costs are recognised as an expense in the income statement in the period in which they areincurred.

(v) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period inwhich they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity. Equity transactioncosts comprise only those incremental external costs directly attributable to the equity transaction which wouldotherwise have been avoided.

(vi) Derivative Financial Instruments

Derivative financial statements are not recognised in the financial statements on inception.

Forward foreign exchange contracts :

The underlying foreign currency assets or liabilities are translated at their respective hedged exchange rates andall exchange gains or losses are recognised as income or expense in the income statement in the same period asthe exchange differences on the underlying hedged items. Exchange gains and losses arising on contracts enteredinto as hedges of anticipated future transactions are deferred until the date of such transactions, at which timethey are included in the measurement of such transactions.


A W A R D E DI S O 9 0 0 1

3. REVENUEGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Sales of goods net of discounts 992,611 641,827 – – Management fees receivable from subsidiaries – – 280 334 Dividends received from subsidiaries – – 45,500 14,800

––––––––––– ––––––––––– ––––––––––– –––––––––––992,611 641,827 45,780 15,134

============= ============= ============= =============

4. PROFIT FROM OPERATIONS

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

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Auditors’ remuneration 128 111 25 18 Depreciation 28,210 18,620 – – Non-executive directors' remuneration (Note 6) 131 119 131 119 Net foreign exchange losses/(gains) : - Realised 3,823 (1,199) – – - Unrealised (1,426) 244 – –Staff costs (Note 5) 86,543 60,971 146 251Rental expenses 1,458 1,657 – –Property, plant and equipment written off 195 – – –Loss/(gain) on disposal of property, plant and equipment (11) 197 – –Rental income (333) (3) – –

============= ============= ============= =============

5. STAFF COSTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Wages and salaries 80,193 56,196 – 82 Social security costs 804 727 – 1 Pension costs - defined contribution plan 2,147 1,953 – 10 Other staff related expenses 3,253 1,936 – – Directors' fees 146 159 146 158

––––––––––– ––––––––––– ––––––––––– –––––––––––86,543 60,971 146 251

============= ============= ============= =============

Included in staff costs of the Group and of the Company are executive directors' remuneration amounting to RM2,476,000(2005 : RM2,087,000) and RM146,000 (2005 : RM193,000) respectively as further disclosed in Note 6.




I S O 9 0 0 1

6. DIRECTORS' REMUNERATIONGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Directors of the Company

Executive:Salaries and other emoluments 2,131 1,760 – 31 Pension costs - defined contribution plan 199 168 – 4 Fees 146 159 146 158 Benefits-in-kind 63 49 – –

––––––––––– ––––––––––– ––––––––––– –––––––––––2,539 2,136 146 193

––––––––––– ––––––––––– ––––––––––– –––––––––––Non-executive :

Fees 131 119 131 119 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Analysis excluding benefits-in-kind:Total executive directors' remuneration (Note 5) 2,476 2,087 146 193 Total non-executive directors' remuneration (Note 4) 131 119 131 119

––––––––––– ––––––––––– ––––––––––– –––––––––––Total directors' remuneration 2,607 2,206 277 312

============= ============= ============= =============

Executive directors of the Company have been granted the following number of options under the Company's ESOS :

Group and Company2006 2005 '000 '000

Number of options over ordinary shares of RM1.00 eachAt beginning of year – 500 Exercised – (180)Arising from share split – (320)

––––––––––– –––––––––––At end of year – –

============= =============

Number of options over ordinary shares of RM0.50 eachAt beginning of year 1,164 – Arising from share split – 640 Granted 724 684 Exercised (604) (160)

––––––––––– –––––––––––At end of year 1,284 1,164

============= =============

The share options were granted on the same terms and conditions as those offered to other employees of the Group asdisclosed in Note 23.


A W A R D E DI S O 9 0 0 1


7. FINANCE COSTS, NETGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Interest expense 10,818 4,826 – – Interest income (772) (144) (107) –

––––––––––– ––––––––––– ––––––––––– –––––––––––10,046 4,682 (107) –

Less: interest expense capitalised in capital work-in-progress (Note 11 (c)) (491) – – –

––––––––––– ––––––––––– ––––––––––– –––––––––––9,555 4,682 (107) –

============= ============= ============= =============

8. TAXATIONGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Tax expense for the year:Malaysian income tax 5,392 3,722 3,304 812 Foreign tax 371 398 – – (Over)/underprovided in prior years (184) 304 (83) (35)

––––––––––– ––––––––––– ––––––––––– –––––––––––5,579 4,424 3,221 777

––––––––––– ––––––––––– ––––––––––– –––––––––––Deferred tax (Note 24):

Relating to origination and reversal of temporary differences 7,890 7,254 – –

Under/(over) provided in prior years (757) 584 – –––––––––––– ––––––––––– ––––––––––– –––––––––––

7,133 7,838 – –––––––––––– ––––––––––– ––––––––––– –––––––––––

12,712 12,262 3,221 777============= ============= ============= =============

Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2005 : 28%) of the estimated assessableprofit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income taxexpense at the effective income tax rate of the Group and of the Company is as follows:

2006 2005RM'000 RM'000

Group

Profit before taxation 91,773 65,745============= =============

Taxation at Malaysian statutory tax rate of 28% (2005 : 28%) 25,696 18,409Effect of different tax rates in other countries 98 165 Effect of income subject to tax rate of 20% (41) (41)Effects of tax incentives claimed by foreign subsidiaries (4,542) (2,129)Effect of income not subject to tax (30) – Expenses not deductible for tax purposes 1,462 659 Expenses entitled for double deduction for tax purposes (56) (27)Utilisation of current year's reinvestment allowances (8,935) (5,663)Deferred tax assets not recognised in respect of current year's tax losses 1 1 (Over)/underprovision of deferred tax in prior years (757) 584(Over)/underprovision of income tax expense in prior years (184) 304

––––––––––– –––––––––––Tax expense for the year 12,712 12,262

============= =============



I S O 9 0 0 1

8. TAXATION (CONT’D)2006 2005

RM'000 RM'000 Company

Profit before taxation 45,202 14,247============= =============

Taxation at Malaysian statutory tax rate of 28% (2005 : 28%) 12,657 3,989Effect of income not subject to tax (9,466) (3,332)Expenses not deductible for tax purposes 113 155 Overprovision of tax expense in prior year (83) (35)

––––––––––– –––––––––––Tax expense for the year 3,221 777

============= =============

9. EARNINGS PER SHARE

(a) Basic

Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number ofordinary shares in issue during the financial year.

Group2006 2005

Net profit for the year (RM'000) 78,392 53,447Weighted average number of ordinary shares in issue ('000) 190,608 187,324

Basic earnings per share (sen) 41.13 28.53 ============= =============

(b) Diluted

For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares in issueduring the financial year have been adjusted for the effects of dilutive potential ordinary shares from conversion ofthe options granted under ESOS. The adjusted weighted average number of ordinary shares is the weighted averagenumber of ordinary shares in issue during the financial year plus the weighted average number of ordinary shareswhich would be issued on the conversion of the outstanding options granted under the Company's ESOS into ordinaryshares.

Group2006 2005

Net profit for the year (RM'000) 78,392 53,447––––––––––– –––––––––––

Weighted average number of ordinary shares in issue ('000) 190,608 187,324Effect of dilution: share options ('000) 1,290 1,116

––––––––––– –––––––––––Adjusted weighted average number of ordinary shares in issue and issuable ('000) 191,898 188,440

––––––––––– –––––––––––Diluted earnings per share (sen) 40.85 28.36

============= =============

The comparative basic and diluted earnings per share have been restated to take into account the effect of change inaccounting policy as disclosed in Note 27 on net profit for that year.


A W A R D E DI S O 9 0 0 1


10. DIVIDENDSAmount Net Dividends per Share

2006 2005 2006 2005RM'000 RM'000 Sen Sen

Group and Company

In respect of financial year 2005 :Interim tax exempt dividend of 6%,

paid on 16 September 2005 – 5,655 – 3.00 Final tax exempt dividend of 6%,

paid on 14 March 2006 – 5,713 – 3.00 Final dividend of 4% less 28% taxation,

paid on 14 March 2006 – 2,742 – 1.44

In respect of financial year 2006 :Interim tax exempt dividend of 7%,

paid on 15 September 2006 6,727 – 3.50 – Proposed :Final tax exempt dividend of 6% 5,769 – 3.00 – Final dividend of 5% less 28% taxation 3,461 – 1.80 –

––––––––––– ––––––––––– ––––––––––– –––––––––––15,957 14,110 8.30 7.44

============= ============= ============= =============

At the forthcoming Annual General Meeting, a final tax exempt dividend of 6% on 192,285,300 ordinary sharesamounting to RM5,768,559 (3 sen per share) and a final dividend of 5% less 28% taxation amounting to RM3,461,136(1.80 sen per share) in respect of the financial year ended 31 August 2006 will be proposed for shareholders' approval.The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approvedby the shareholders, will be accounted for in equity as an appropriation of retained profits in the financial year ending 31August 2007.

11. PROPERTY, PLANT AND EQUIPMENT

* Land Plant Capital and and **Other work-in-

Group buildings equipment assets progress TotalRM'000 RM'000 RM'000 RM'000 RM'000

Cost

At 1 September 2005 103,760 193,794 18,432 38,721 354,707Additions 24,511 68,851 5,647 39,551 138,560Disposals – (295) (106) – (401)Written off (76) (120) – – (196)Reclassification 5,324 39,352 (459) (44,217) –Acquisition of subsidiary 3,832 8,951 2,297 2 15,082Exchange differences 521 1,248 121 1,920 3,810

–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––At 31 August 2006 137,872 311,781 25,932 35,977 511,562

–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––

Accumulated Depreciation

At 1 September 2005 5,337 48,103 5,971 – 59,411Depreciation charge for the year 1,998 23,795 2,417 – 28,210Disposals – (43) (42) – (85)Written off – (1) – – (1)Reclassification – 493 (493) – –Acquisition of subsidiary 489 2,116 619 – 3,224Exchange differences 256 104 52 – 412

–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––At 31 August 2006 8,080 74,567 8,524 – 91,171

–––––––––––– –––––––––––– –––––––––––– –––––––––––– ––––––––––––



I S O 9 0 0 1

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

* Land Plant Capital and and **Other work-in-

Group buildings equipment assets progress TotalRM'000 RM'000 RM'000 RM'000 RM'000

Net Book Value

At 31 August 2006 129,792 237,214 17,408 35,977 420,391============== ============== ============== ============== ==============

At 31 August 2005 98,423 145,691 12,461 38,721 295,296============== ============== ============== ============== ==============

Details at 1 September 2004

Cost 71,840 130,042 12,842 4,453 219,177Accumulated Depreciation 4,057 32,656 4,259 – 40,972

============== ============== ============== ============== ==============

Depreciation charge for 2005 1,280 15,544 1,796 – 18,620============== ============== ============== ============== ==============

* Land and buildingsFreehold Long term

land leasehold land Buildings TotalRM'000 RM'000 RM'000 RM'000

Cost

At 1 September 2005 28,722 3,748 71,290 103,760Additions 10,171 1,881 12,459 24,511Written off – – (76) (76)Reclassification – – 5,324 5,324Acquisition of subsidiary 483 – 3,349 3,832Exchange differences (210) (66) 797 521

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At 31 August 2006 39,166 5,563 93,143 137,872

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Accumulated Depreciation

At 1 September 2005 – 322 5,015 5,337Depreciation charge for the year – 86 1,912 1,998Acquisition of subsidiary – – 489 489Exchange differences – (60) 316 256

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At 31 August 2006 – 348 7,732 8,080

–––––––––––– –––––––––––– –––––––––––– ––––––––––––

Net Book Value

At 31 August 2006 39,166 5,215 85,411 129,792============== ============== ============== ==============

At 31 August 2005 28,722 3,426 66,275 98,423============== ============== ============== ==============


A W A R D E DI S O 9 0 0 1

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

Freehold Long termland leasehold land Buildings Total

RM'000 RM'000 RM'000 RM'000

Details at 1 September 2004

Cost 19,832 3,736 48,272 71,840

Accumulated depreciation – 274 3,783 4,057============== ============== ============== ==============

Depreciation charge for 2005 – 48 1,232 1,280============== ============== ============== ==============

** Other assets comprise motor vehicles, renovation, office furniture and equipment.

(a) Property, plant and equipment of the Group with the following carrying values are pledged to banks for bankingfacilities granted to the Group as referred to in Note 19.

2006 2005RM'000 RM'000

Land and buildings 59,764 52,622Plant and equipment 125,266 77,985Other assets 8,123 5,076

––––––––––– –––––––––––193,153 135,683

============= =============

(b) During the financial year, the Group acquired property, plant and equipment at aggregate costs of RM138,560,000(2005 : RM136,028,000) of which RM407,000 (2005 : RM324,000) were acquired by means of hire purchasearrangements. Net book values of property, plant and equipment held under hire purchase arrangements are asfollows:

2006 2005RM'000 RM'000

Plant and equipment – 6,891Motor vehicles 1,252 1,305

––––––––––– –––––––––––1,252 8,196

============= =============

(c) Interest expense capitalised during the financial year under capital work-in-progress of the Group amounted toRM491,000 (2005: RM Nil), as disclosed in Note 7.

12. INVESTMENTS IN SUBSIDIARIES

Company2006 2005

RM'000 RM'000Unquoted shares, at cost :- in Malaysia 25,620 25,620- outside Malaysia 3,728 3,728

––––––––––– –––––––––––29,348 29,348

============= =============




I S O 9 0 0 1

12. INVESTMENTS IN SUBSIDIARIES (CONT’D)

Details of the subsidiaries are as follows :

Name of company Country of Equity interest (%)incorporation 2006 2005 Principal activities

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

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

Great Glove Sdn. Bhd. * Malaysia 100 100 Trading of gloves

Top Glove Engineering Sdn. Bhd. * Malaysia 100 100 Property investment and trading of machinery

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

Subsidiaries of TGSB :

Great Glove (Thailand) Co. Ltd.* Thailand 74 74 Manufacture of gloves

Top Glove Medical (Thailand) Co. Ltd.* Thailand 100 100 Manufacture of gloves

Top Glove Technology Thailand 100 – Producing and selling rubber (Thailand) Co. Ltd.* products

B Tech Industry Co. Ltd.* Thailand 100 – Producing and selling latexconcentrate

Top Glove (Zhangjiagang) Co. Ltd.* The People's 100 100 Manufacture of glovesRepublic of China

Great Glove (Xinghua) Co. Ltd.* The People's 100 – Manufacture of glovesRepublic of China

TG Medical (Zhangjiagang) Co. Ltd.* The People's 100 – Trading of glovesRepublic of China

Top Glove International Sdn. Bhd.* Malaysia 100 100 Dormant

Top Glove Technology Sdn. Bhd.* Malaysia 100 100 Dormant

* Audited by firms of auditors other than Ernst & Young.

(a) Acquisition of Subsidiary

On 8 May 2006, the Company through its wholly owned subsidiary, Top Glove Sdn. Bhd. ("TGSB") acquired 7.5 millionordinary shares of Baht 10 each representing 100% equity interest in B Tech Industry Co. Ltd. ("B Tech"), a companyincorporated in Thailand for a cash consideration of RM26.8 million, resulting in the Company to become the ultimateholding company of B Tech.

The acquisition had the following effect on the Group's financial results for the year:2006

RM'000

Revenue 18,078Profit from operations 1,451Net profit for the year 1,483

=============


A W A R D E DI S O 9 0 0 1


12. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The acquisition had the following effect on the financial position of the Group as at end of the year:2006

RM'000

Property, plant and equipment 11,933Inventories 9,590Trade and other receivables 8,164Cash and bank balances 1,209Trade and other payables (1,993)Borrowings (16,218)

–––––––––––Group's share of net assets 12,685

=============

The fair values of the assets acquired and liabilities assumed from the acquisition of the subsidiary were as follows:

31.7.2006 RM'000

Property, plant and equipment (Note 11) 11,858Inventories 10,431Trade and other receivables 9,791Cash and bank balances 1,954Trade and other payables (3,186)Borrowings (19,802)

–––––––––––Group's share of net assets 11,046Goodwill on acquisition (Note 14) 15,754

–––––––––––Cost of acquisition 26,800

=============Purchase consideration satisfied by:Cash 16,928Included in other payables (Note 22) 9,872

–––––––––––26,800

=============Cash outflow arising on acquisition:Purchase consideration satisfied by cash 26,800Cash and cash equivalents of subsidiary acquired (1,954)

–––––––––––Net cash outflow of the Company 24,846

=============

There were no acquistions in the financial year ended 31 August 2005.

13. DUE FROM A SUBSIDIARY

Company2006 2005

RM'000 RM'000

Interest bearing at 5.10% to 5.50% per annum 70,000 – Non interest bearing 76,961 60,416

––––––––––– –––––––––––146,961 60,416

============= =============

The amounts due from a subsidiary are unsecured and are not receivable within the next twelve months.



I S O 9 0 0 1

14. GOODWILL ON CONSOLIDATIONGroup

2006 2005RM'000 RM'000

At 1 September 5,324 5,330Acquisition of subsidiary (Note 12(a)) 15,754 –Exchange differences – (6)

––––––––––– –––––––––––At 31 August 21,078 5,324

============= =============

15. INVENTORIESGroup

2006 2005RM'000 RM'000

At cost:Raw materials 22,414 13,740Consumables and hardware 6,608 4,585Work-in-progress 8,379 5,605Finished goods 56,473 38,797

––––––––––– –––––––––––93,874 62,727

At net realisable value:Finished goods 8,358 –

––––––––––– –––––––––––102,232 62,727

============= =============

16. TRADE RECEIVABLESGroup

2006 2005RM'000 RM'000

Trade receivables 149,768 112,328Less: Provision for doubtful debts (7) (7)

––––––––––– –––––––––––149,761 112,321

============= =============

The Group's normal trade credit term ranges from 30 to 90 days. Other credit terms are assessed and approved on a case-by-case basis.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups ofdebtors.

17. OTHER RECEIVABLESGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Due from subsidiaries- interest bearing at 3.44% to 4.02% per annum – – 24,815 – - non interest bearing – – 46,003 19,885Other receivables, deposits and prepayments 9,042 5,569 2 2

–––––––––––– –––––––––––– –––––––––––– ––––––––––––9,042 5,569 70,820 19,887

============== ============== ============== ==============

The amounts due from subsidiaries are unsecured and with no fixed terms of repayment.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups ofdebtors.


A W A R D E DI S O 9 0 0 1


18. CASH AND CASH EQUIVALENTSGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Cash on hand and in banks 52,720 23,634 783 15Fixed deposits with a licensed bank 6,491 1,494 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Cash and bank balances 59,211 25,128 783 15 Less :Bank overdrafts (Note 19) (454) (316) – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––Cash and cash equivalents 58,757 24,812 783 15

============== ============== ============== ==============

Fixed deposits amounting to RM1,027,000 (2005 : RM767,000) are registered in the name of certain directors, who areholding them in trust for the Group.

Deposits with a licensed bank of the Group amounting to RM440,000 (2005 : RM913,000) are pledged to banks assecurities.

Cash in bank of the Company amounting to RM755,000 (2005: Nil) are pledged to bank for Murabahah/Ijarah commericalpapers and medium term notes facilities granted to the Company as referred to in Note 26.

The weighted average effective interest rates and maturities of the deposits at the end of the financial year were 2.8%(2005: 2.8%) and 365 days (2005: 365 days) respectively.

19. BORROWINGSGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Short Term Borrowings

Secured:Bank overdrafts (Note 18) 454 316 – –Bankers' acceptances 23,190 25,197 – – Commerical papers 24,880 – 24,880 –Export credit refinancing 20,808 13,918 – – Promissory notes – 4,566 – –Revolving credits 20,879 8,852 – –Trust receipts 12,255 11,271 – –Term loans 23,485 18,520 – –Hire purchase payables (Note 20) 278 1,651 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––126,229 84,291 24,880 –

============== ============== ============== ==============Long Term Borrowings

Secured:Medium term notes 70,000 – 70,000 –Term loans 76,219 69,695 – – Hire purchase payables (Note 20) 220 204 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––146,439 69,899 70,000 –

============== ============== ============== ==============



I S O 9 0 0 1

19. BORROWINGS (CONT’D)Group Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Total Borrowings

Bank overdrafts (Note 18) 454 316 – – Bankers' acceptances 23,190 25,197 – –Commerical papers 24,880 – 24,880 –Export credit refinancing 20,808 13,918 – –Medium term notes 70,000 – 70,000 – Promissory notes – 4,566 – –Revolving credits 20,879 8,852 – – Trust receipts 12,255 11,271 – – Term loans 99,704 88,215 – – Hire purchase payables (Note 20) 498 1,855 – –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––272,668 154,190 94,880 –

============== ============== ============== ==============

Maturity of borrowings (excluding hire purchase)Within one year 125,951 82,640 24,880 – More than 1 year and less than 2 years 24,544 22,060 – –More than 2 years and less than 5 years 58,034 40,316 15,000 –5 years or more 63,641 7,319 55,000 –

–––––––––––– –––––––––––– –––––––––––– ––––––––––––272,170 152,335 94,880 –

============== ============== ============== ==============

The weighted average effective interest rates at the balance sheet date for borrowings, excluding hire purchase payableswere as follows:

Group Company2006 2005 2006 2005

% % % %

Bank overdrafts 7.7 7.0 – – Bankers' acceptances 5.1 3.9 – – Commercial papers 3.9 – 3.9 – Export credit refinancing 4.5 3.3 – –Medium term notes 5.4 – 5.4 –Promissory notes 5.5 5.5 – – Revolving credits 5.7 5.8 – – Trust receipts 6.9 5.0 – – Term loans 5.0 4.5 – –

The above bank borrowings of the Group are secured by way of fixed and floating charges over certain property, plant andequipment and deposits with a licensed bank of the Group as disclosed in Note 11(a) and Note 18 respectively.


A W A R D E DI S O 9 0 0 1


20. HIRE PURCHASE PAYABLESGroup

2006 2005RM'000 RM'000

Minimum hire purchase payments:Not later than 1 year 323 1,762Later than 1 year and not later than 2 years 120 215Later than 2 years and not later than 5 years 109 8

––––––––––– –––––––––––552 1,985

Less :Future finance charges (54) (130)––––––––––– –––––––––––

Present value of hire purchase payables 498 1,855 ============= =============

Present value of hire purchase payables:Not later than 1 year 278 1,651Later than 1 year and not later than 2 years 104 197Later than 2 years and not later than 5 years 116 7

––––––––––– –––––––––––498 1,855

============= =============

Analysed as:Due within 12 months (Note 19) 278 1,651Due after 12 months (Note 19) 220 204

––––––––––– –––––––––––498 1,855

============= =============

The hire purchase bore interest at the balance sheet date of between 2.70% to 3.30% (2005 : 2.80% to 3.90% ) perannum.

21. TRADE PAYABLES

The normal trade credit term granted to the Group ranges from 30 to 90 days.

22. OTHER PAYABLESGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Amounts payable for acquisition of a subsidiary 9,872 – – – Sundry payables and accruals 58,778 41,440 1,189 339

–––––––––––– –––––––––––– –––––––––––– ––––––––––––68,650 41,440 1,189 339

============== ============== ============== ==============



I S O 9 0 0 1

23. SHARE CAPITALGroup and Company

Number of Ordinary Shares Amount2006 2005 2006 2005'000 '000 RM'000 RM'000

Authorised :

Ordinary shares of RM1.00 eachAt beginning of year – 200,000 – 200,000Arising from share split – (200,000) – (200,000)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At end of year – – – –

============== ============== ============== ==============Ordinary shares of RM0.50 eachAt beginning of year 400,000 – 200,000 –Arising from share split – 400,000 – 200,000

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At end of year 400,000 400,000 200,000 200,000

============== ============== ============== ==============Issued and fully paid :

Ordinary shares of RM1.00 eachAt beginning of year – 93,059 – 93,059Issued and paid up during the year:- Pursuant to ESOS – 621 – 621Arising from share split – (93,680) – (93,680)

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At end of year – – – –

============== ============== ============== ==============Ordinary shares of RM0.50 eachAt beginning of year 188,639 – 94,319 –Arising from share split – 187,359 – 93,680Issued and paid up during the year:- Pursuant to ESOS 3,647 1,280 1,824 639

–––––––––––– –––––––––––– –––––––––––– ––––––––––––At end of year 192,286 188,639 96,143 94,319

============== ============== ============== ==============

Subsequent to the end of the financial year, the Company increased its issued and paid-up share capital fromRM96,142,650 to RM96,287,650 by way of the issuance of 290,000 ordinary shares of RM0.50 each pursuant to theESOS at an option price of between RM3.14 and RM8.62 per ordinary share.

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

Employee Share Options Scheme

The Company's ESOS is governed by the by-laws which was approved by the shareholders at the Extraordinary GeneralMeeting held on 9 January 2003 and became effective on 29 April 2003.

The main features of the ESOS are as follows:

(a) The ESOS shall be in force for a period of five years from the date of the receipt of the last of the requisite approvals.

(b) Eligible persons are employees of the Group (including executive directors) who have been confirmed in theemployment of the Group and have served for at least one year before the date of the offer. The eligibility forparticipation in the ESOS shall be at the discretion of the Options Committee appointed by the Board of Directors.

(c) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share capitalof the Company at any point of time during the tenure of the ESOS.


A W A R D E DI S O 9 0 0 1


23. SHARE CAPITAL (CONT’D)

(d) The option price for each share shall be the 5-days weighted average market price of the underlying shares at the timethe ESOS Options are granted, with a discount of not more than ten percent (10%) if deemed appropriate, or the parvalue of the ordinary shares of the Company of RM0.50, whichever is the higher.

(e) No option shall be granted for less than 100 shares to any eligible employee.

(f) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to theCompany commencing from the date of the offer but before the expiry of five years from the date of the receipt of thelast of the requisite approvals.

(g) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respectwith the existing ordinary shares of the Company other than as may be specified in a resolution approving thedistribution of dividends prior to their exercise dates.

(h) The persons to whom the options have been granted have no right to participate by virtue of the options in any shareissue of any other company.

(i) The options shall not carry any right to vote at a general meeting of the Company.

The terms of share options outstanding as at end of the financial year are as follows :

2006Number of share options over the ordinary shares of RM0.50 each

Grant Expiry Exercise At beginning At end Date Date Price of year Granted Exercised Lapsed of year

RM '000 '000 '000 '000 '000

5.6.2003 29.4.2008 0.87 21.0 – (15.0) – 6.06.3.2004 29.4.2008 2.80 11.0 – (3.0) – 8.06.4.2004 29.4.2008 3.17 26.0 – (26.0) – – 6.5.2004 29.4.2008 3.50 14.0 – (12.0) – 2.07.6.2004 29.4.2008 3.14 1,422.0 – (967.6) (20.0) 434.46.7.2004 29.4.2008 3.20 16.0 – (4.0) – 12.06.8.2004 29.4.2008 3.33 15.0 – (15.0) – – 6.9.2004 29.4.2008 3.27 14.0 – (10.0) – 4.0 6.10.2004 29.4.2008 3.30 24.0 – (23.0) – 1.0 6.11.2004 29.4.2008 3.45 146.0 – (92.2) (0.4) 53.4 6.12.2004 29.4.2008 3.63 14.0 – (4.0) – 10.0 6.1.2005 29.4.2008 3.92 91.0 – (91.0) – – 4.2.2005 29.4.2008 4.12 22.8 – (8.0) (14.4) 0.4 7.3.2005 29.4.2008 4.19 67.8 – (37.8) (18.0) 12.0 7.4.2005 29.4.2008 4.17 182.0 – (155.0) – 27.0 6.5.2005 29.4.2008 4.03 157.2 – (97.0) – 60.2 6.6.2005 29.4.2008 4.01 2,079.6 – (1,323.8) (11.0) 744.8 5.7.2005 29.4.2008 4.12 77.8 – (62.4) – 15.4 5.8.2005 29.4.2008 4.43 101.9 – (67.5) – 34.4 5.9.2005 29.4.2008 4.50 – 67.9 (45.9) – 22.0 5.10.2005 29.4.2008 4.48 – 117.6 (78.2) – 39.4 5.11.2005 29.4.2008 4.67 – 127.3 (112.8) – 14.5 5.12.2005 29.4.2008 5.06 – 114.6 (57.2) – 57.4 5.1.2006 29.4.2008 6.10 – 179.7 (101.2) – 78.5 5.2.2006 29.4.2008 6.45 – 77.9 (60.5) – 17.4 3.3.2006 29.4.2008 6.88 – 88.9 (63.4) (0.2) 25.3 5.4.2006 29.4.2008 6.95 – 185.2 (51.5) (7.0) 126.7 5.5.2006 29.4.2008 8.92 – 158.8 – – 158.8 5.6.2006 29.4.2008 8.37 – 2,281.5 (54.7) (3.5) 2,223.35.7.2006 29.4.2008 8.14 – 112.2 (7.0) – 105.2 5.8.2006 29.4.2008 8.14 – 169.6 – – 169.6

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––4,503.1 3,681.2 (3,646.7) (74.5) 4,463.1

============= ============= ============= ============= =============



I S O 9 0 0 1


2005 (before share split)Number of share options over the ordinary shares of RM1.00 each

Balanceprior to

adjustmentGrant Expiry Exercise At beginning for share Date Date Price of year Granted Exercised Lapsed split*

RM '000 '000 '000 '000 '000

5.6.2003 29.4.2008 1.73 26.0 – (11.0) – 15.06.10.2003 29.4.2008 3.55 9.0 – (9.0) – – 6.1.2004 29.4.2008 4.33 15.0 – (15.0) – – 6.2.2004 29.4.2008 5.24 2.0 – (2.0) – – 6.3.2004 29.4.2008 5.60 8.0 – (1.0) – 7.0 6.4.2004 29.4.2008 6.34 14.0 – – – 14.0 6.5.2004 29.4.2008 7.00 19.0 – (3.0) – 16.0 7.6.2004 29.4.2008 6.28 1,606.0 – (435.0) – 1,171.06.7.2004 29.4.2008 6.39 50.0 – (24.0) – 26.0 6.8.2004 29.4.2008 6.66 44.0 – (21.0) – 23.0 6.9.2004 29.4.2008 6.53 – 14.0 (7.0) – 7.0 6.10.2004 29.4.2008 6.59 – 66.0 (48.0) – 18.0 6.11.2004 29.4.2008 6.90 – 136.1 (42.5) (2.4) 91.2 6.12.2004 29.4.2008 7.26 – 21.0 (2.0) – 19.0 6.1.2005 29.4.2008 7.83 – 52.0 – – 52.0 4.2.2005 29.4.2008 8.23 – 14.4 – – 14.4

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––1,793.0 303.5 (620.5) (2.4) 1,473.6

============= ============= ============= ============= =============

2005 (after share split) Number of share options over the ordinary shares of RM0.50 eachBalance after

Grant Expiry Exercise adjustment for At end Date Date Price share split* Granted Exercised Lapsed of year

RM '000 '000 '000 '000 '000

5.6.2003 29.4.2008 0.87 30.0 – (9.0) – 21.0 6.3.2004 29.4.2008 2.80 14.0 – (3.0) – 11.0 6.4.2004 29.4.2008 3.17 28.0 – (2.0) – 26.0 6.5.2004 29.4.2008 3.50 32.0 – (18.0) – 14.0 7.6.2004 29.4.2008 3.14 2,342.0 – (920.0) – 1,422.06.7.2004 29.4.2008 3.20 52.0 – (36.0) – 16.0 6.8.2004 29.4.2008 3.33 46.0 – (31.0) – 15.0 6.9.2004 29.4.2008 3.27 14.0 – – – 14.0 6.10.2004 29.4.2008 3.30 36.0 – (12.0) – 24.0 6.11.2004 29.4.2008 3.45 182.4 – (36.4) – 146.0 6.12.2004 29.4.2008 3.63 38.0 – (24.0) – 14.0 6.1.2005 29.4.2008 3.92 104.0 – (13.0) – 91.0 4.2.2005 29.4.2008 4.12 28.8 – (6.0) – 22.8 7.3.2005 29.4.2008 4.19 – 87.8 (20.0) – 67.8 7.4.2005 29.4.2008 4.17 – 186.6 (4.0) (0.6) 182.0 6.5.2005 29.4.2008 4.03 – 169.2 (12.0) – 157.2 6.6.2005 29.4.2008 4.01 – 2,216.4 (133.2) (3.6) 2,079.65.7.2005 29.4.2008 4.12 – 77.8 – – 77.8 5.8.2005 29.4.2008 4.43 – 101.9 – – 101.9

–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––2,947.2 2,839.7 (1,279.6) (4.2) 4,503.1

============= ============= ============= ============= =============

* Share split into two (2) new ordinary shares of RM0.50 each for every one (1) existing ordinary share of RM1.00 each.


A W A R D E DI S O 9 0 0 1


Details of share options exercised during the financial year and the fair value, at exercise date, of ordinary shares issuedare as follows :

Fair Valueof Ordinary Number of Considerations

Exercise Date Exercise Price Shares Share Options ReceivedRM RM '000 RM'000

2006September 2005 - August 2006 0.87 - 4.50 5.00 - 9.91 3,060.2 11,346October 2005 - August 2006 4.48 5.00 - 9.91 78.2 350November 2005 - August 2006 4.67 5.00 - 9.91 112.8 527December 2005 - August 2006 5.06 5.00 - 9.91 57.2 290January 2006 - August 2006 6.10 6.78 - 9.91 101.2 617February 2006 - August 2006 6.45 7.17 - 9.91 60.5 390March 2006 - August 2006 6.88 7.64 - 9.91 63.4 436April 2006 - August 2006 6.95 7.72 - 9.91 51.5 358June 2006 - August 2006 8.37 9.30 - 9.91 54.7 458July 2006 - August 2006 8.14 9.04 - 9.91 7.0 57

–––––––––––– ––––––––––––3,646.7 14,829

Less: Par value of ordinary shares ============== (1,824)––––––––––––

Share premium 13,005==============

2005Before share split

September 2004 - February 2005 1.73 - 6.66 7.26 - 9.14 528.0 3,224October 2004 - February 2005 6.59 7.32 - 9.14 48.0 316 November 2004 - February 2005 6.90 7.67 - 9.14 42.5 293 December 2004 - February 2005 7.26 8.07 - 9.14 2.0 14

After share split

February 2005 - August 2005 0.87 - 4.12 3.63 - 4.92 1,110.4 3,521March 2005 - August 2005 4.19 4.66 - 4.92 20.0 84 April 2005 - August 2005 4.17 4.63 - 4.92 4.0 17 May 2005 - August 2005 4.03 4.48 - 4.92 12.0 48 June 2005 - August 2005 4.01 4.46 - 4.92 133.2 534

––––––––––––8,051

Less: Par value of ordinary shares (1,260)––––––––––––

Share premium 6,791==============

24. DEFERRED TAXATIONGroup

2006 2005RM'000 RM'000

At 1 September 22,405 14,567Recognised in the income statement (Note 8) 7,133 7,838

––––––––––– –––––––––––At 31 August 29,538 22,405

============= =============

The deferred taxation provided in the financial statements represents the temporary differences arising between theamounts attributed to property, plant and equipment for tax purposes and their carrying amount in the financialstatements.

The Group has unabsorbed reinvestment allowances of approximately RM64,558,000 (2005 : RM46,365,000) which canbe used to offset against future taxable income, such amount has not been recognised as deferred tax assets in arrivingat the above deferred tax liabilities.




I S O 9 0 0 1

25. RETAINED PROFITS

As at 31 August 2006, the Company has tax exempt profits available for distribution of approximately RM42,338,000(2006 : RM15,414,000), subject to the agreement of the Inland Revenue Board.

The Company has sufficient tax credit under Section 108 of the Income Tax Act 1976 and the balance in the tax-exemptincome account to frank the payment of dividends out of its entire retained profits as at 31 August 2006.

26. ISLAMIC COMMERCIAL PAPERS/MEDIUM TERM NOTES

The Company entered into Murabahah/Ijarah commerical papers and medium term notes facilities which comprised thefollowing :

(a) RM100 million Murabahah Commercial Papers ("CP")

The CP facility has an availability period of 7 years from the date of the first issue under the CP programme. CP areissued at discount to face value and have a maturity periods of 1 (one), 2 (two), 3 (three), 6 (six), 9 (nine) or 12(twelve) months. The profit rates are determined on the formula specified in the rules of fully automated system fortendering of private debt securities ("FAST") issued by Bank Negara Malaysia ("BNM").

(b) RM100 million Murabahah Medium Term Notes ("MTN")

The MTN facility has an availability period of 15 years from the date of the first issue under the MTN programme.MTN are issued at par or at discount to face value and have a maturity period of more than 1 year to not more than15 years. The profit rates are determined on the formula specified in FAST rules issued by BNM.

The CP and MTN are secured by an assignment of the Finance Service Reserve Account as disclosed in Note 18.

27. CHANGE IN ACCOUNTING POLICY AND PRIOR YEAR ADJUSTMENT

(a) Change in Accounting Policy

MASB 25: Income Taxes

In prior years, the Group recognised deferred tax assets on unused reinvestment allowances. During the current year,the Group changed its accounting policy and accordingly, deferred tax assets on unused reinvestment allowances areno longer recognised.

(b) Prior Year Adjustment

The change in accounting policy has been applied retrospectively and comparatives have been restated. The effectsof change in accounting policy are as follows:

Group2006 2005

RM'000 RM'000

Effect on retained profits:At 1 September, as previously stated 110,203 66,160Effects of change in accounting policy (12,343) (7,649)

––––––––––– –––––––––––At 1 September, as restated 97,860 58,511

============= =============


A W A R D E DI S O 9 0 0 1

27. CHANGE IN ACCOUNTING POLICY AND PRIOR YEAR ADJUSTMENT (CONT’D)Group

2006 2005RM'000 RM'000

Effect on net profit for the year:Net profit before changes in accounting policy 84,125 58,141Effects of change in accounting policy (5,733) (4,694)

––––––––––– –––––––––––Net profit for the year 78,392 53,447

============= =============

Comparative amount of the Company as at 31 August 2005 have been restated as follows:

PreviouslyStated Adjustment Restated

RM'000 RM'000 RM'000

Deferred tax liabilities 10,062 12,343 22,405============= ============= =============

28. COMMITMENTSGroup

2006 2005RM'000 RM'000

Capital expenditure:Approved and contracted for 28,342 12,546

============= =============

29. SIGNIFICANT RELATED PARTY TRANSACTIONSCompany

2006 2005RM'000 RM'000

Gross dividends from subsidiaries 45,500 14,800Management fees from subsidiaries 280 334

============= =============

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

30. CONTINGENT LIABILITIESCompany

2006 2005RM'000 RM'000

Corporate guarantee issued to financial institutions for credit facilities granted to subsidiaries (unsecured) 149,668 137,719

============= =============




I S O 9 0 0 1

30. CONTINGENT LIABILITIES (CONT’D)

Save as disclosed below, the Group is not engaged in any litigation, either as plaintiff or defendant, which may have amaterial effect on the financial position of the Group.

(i) On 8 November 2000, Top Glove Sdn. Bhd. ("TGSB"), a subsidiary of the Company was served a writ of summons bySupermax Glove Manufacturing Sdn. Bhd. ("SGM") claiming damages for alleged passing off by TGSB of certaincoloured boxes bearing the device of a glove containing gloves manufactured by TGSB under the brand name"Safemax" as boxes containing gloves manufactured by SGM under the brand name "Supermax". TGSB’s appointedsolicitors, have opined that SGM’s case against the TGSB is weak and unlikely to succeed.

TGSB, in relation to the suit above, has filed its defence and has also filed a counterclaim in the same suit againstSGM seeking general damages for the abuse of process and/or unlawful interference with trade or business and/or thecommission of deliberate and positive acts designed to injure the Company.

To date, the learned Judge was not in favour of fixing trial dates until all pre-trial directions have been complied withincluding, inter alia, the filing of the relevant bundles of documents. The pre-trial case management was fixed for 6July 2004 for parties to file all relevant documents for purposes of trial. This date has been extended to 13 March2007 for mention for pre-trial case management pending a decision on an application for Further and BetterParticulars on this suit by TGSB as set out below.

The court had also fixed 16 May 2005 for hearing of an application by TGSB for Further and Better Particulars onthe above suit. This date was extended to 2 August 2005 and subsequently heard on 13 September 2005 and thesaid application was fixed for decision on 11 October 2005. The matter however was not listed before the court on11 October 2005 as the file could not be located. The file was subsequently located and on 22 February 2006 thecourt fixed 31 March 2006 for a decision which was given on 3 April 2006. On that date, the court allowed TGSB'sapplication for Further and Better Particulars on the above suit and SGM was given one month to comply with the saidorder dated 3 April 2006 which was fixed to be heard on 6 September 2006 and extended to 13 March 2007.

(ii) TGSB had commenced legal proceedings against SGM, pursuant to a writ filed at the Shah Alam High Court on 10November 2004.

TGSB among others is claiming for general, aggravated and exemplary damages for maliciously distributing andpublishing defamatory words contained in documents relating to Summon No. 22-431-2000 filed by SGM at the ShahAlam High Court. TGSB among others avers that SGM had, with mala fide, distributed the said documents with intentto lower TGSB's reputation. SGM had also published defamatory words in its quaterly reports announced by its holdingcompany, Supermax Corporation Berhad to Bursa Malaysia Securities Berhad ("Bursa Securities") in the years 2000and 2001. The commencement of these legal proceedings was announced to Bursa Securities on 20 December 2004.SGM has filed a statement of defence on the above suit on 17 January 2005 and the TGSB has filed the reply todefence on 14 February 2005.

The court had fixed 6 July 2005 for hearing of an application by TGSB to amend the Statement of Claim to includethe Company as an additional plaintiff and Supermax Corporation Berhad as an additional defendant. The matter washeard on 28 September 2005 and a decision was to be given on 14 October 2005 but this was deferred to 18November 2005 where the court allowed TGSB's application to amend the Statement of Claim and instructed SGMto file its amended Statement of Defence.

SGM had filed an application to strike out certain paragraphs of TGSB's Statement of Claim. This matter was alsoheard on 28 September 2005 and a decision was to be given on 14 October 2005 but this was also deferred to 18November 2005 when the court dismissed SGM's application to strike out with costs to be paid by SGM. SGM fileda notice of appeal against both decisions given by the Senior Assistant Registrar on 18 November 2005 above.Appeals against both these decisions were allowed and they were to be heard on 12 and 29 June 2006 andsubsequently adjourned to 2 November 2006.

SGM had also on 14 December 2005 filed an application to stay the above proceedings until the disposal of SGM'sappeal. This application was allowed on 7 March 2006.


A W A R D E DI S O 9 0 0 1

31. SIGNIFICANT EVENTS

Significant events during the financial year were as follows :

(i) A wholly owned subsidiary of the Company, TGSB incorporated a new company, Great Glove (Xinghua) Co. Ltd. ("GreatGlove China") in The People's Republic of China with an authorised capital of USD10.05 million or approximatelyRM38,190,000 and initial paid up capital of USD3 million or approximately RM11,100,000.

(ii) TGSB invested in a total of Baht 77 million or approximately RM7,300,000 which represents 100% equity interestin Top Glove Technology (Thailand) Co. Ltd. ("Top Glove Tech"), a company incorporated in Thailand, resulting in theCompany to become the ultimate holding company of Top Glove Tech.

(iii) TGSB invested in a total of USD200,000 or approximately RM734,000 which represents 100% equity interest in TGMedical (Zhangjiagang) Incorporated ("TG Zhangjiagang"), a company incorporated in The People's Republic of China,resulting in the Company to become the ultimate holding company of TG Zhangjiagang.

32. SUBSEQUENT EVENTS

(a) The Company proposed to undertake the following corporate exercise:

(i) Proposed bonus issue of up to 80,491,412 new ordinary shares of RM0.50 each in the Company on the basis oftwo (2) new ordinary shares of RM0.50 each for every five (5) existing ordinary shares of RM0.50 each held.

(ii) Proposed purchase of its own ordinary shares of up to 10% of the issued and paid-up share capital of theCompany.

The above proposals are subject to the approvals by the relevant authorities and the shareholders of the Companyin general meeting.

(b) On 12 October 2006, the Company announced that it has accepted the key terms of an offer from Medi-Flex Limited("Medi-Flex"), a company listed on the Singapore Exchange Trading Limited Dealing and Automated System ("SGX-SESDAQ") for the Company to subscribe for new ordinary shares in Medi-Flex ("Medi-Flex Shares") subject to the signingof a definitive agreement ("Proposed Subscription"). The salient terms of the Proposed Subscription are as follows:

The Proposed Subscription involves the subscription of 300,305,829 new Medi-Flex Shares at an issue price ofSGD0.07 each subject to both the Company and Medi-Flex entering into a definitive subscription agreement within30 days from 12 October 2006 or such other date to be mutually agreed by the parties, failing which the acceptanceshall lapse and thereafter no party shall have any claims against the other.

One of the major shareholders of Medi-Flex undertakes not to dispose of or transfer his shareholdings in Medi-Flex(except the Medi-Flex Shares pledged to a nominee company) for a period of six months from the date of admissionof the new Medi-Flex shares to be issued under the Proposed Subscription on the official list of the SGX-SESDAQ andupon the expiry of the said 6 months period, the major shareholder shall maintain 50% of his shareholding for thenext 6 months period.

Certain directors and key management will enter into service agreements with Medi-Flex upon terms agreeable to theCompany for an initial term of one year and subject to annual renewal by Medi-Flex.

The Proposed Subscription is subject to the following conditions precedent:

(i) Due diligence on Medi-Flex by the Company to be completed within four weeks from the date of the definitesubscription agreement and the results of such due diligence being to the Company's satisfaction;

(ii) Approval in principle of the Singapore Exchange Securities Trading Limited ("SGX-ST") for the listing andquotation of the new Medi-Flex Shares on the official list of the SGX-SESDAQ;

(iii) The approvals of Medi-Flex's shareholders and SGX-ST in accordance with the provisions of the SGX-ST ListingManual;

(iv) Whitewash waiver to be obtained from Securities Industry Council ("SIC") of Singapore and a whitewash resolutionto be obtained from Medi-Flex's shareholders such that the Company need not make a general offer for the Medi-Flex Shares.




I S O 9 0 0 1

32. SUBSEQUENT EVENTS (CONT’D)

(v) Approval from shareholders of the Company, if required;

(vi) Any other regulatory approvals required from the relevant authorities in Malaysia or Singapore by both theCompany and Medi-Flex, if any;

(vii) The execution of the service agreements as described above; and

(viii) Such other conditions precedent as may advised by the Company's legal adviser, subject to mutual agreementbetween the Company and Medi-Flex.

Upon the completion of the Proposed Subscription, Medi-Flex will become a subsidiary of the Company.

(c) Subsequent to the Budget 2007 announcement, the domestic statutory tax rate is reduced from the current year'srate of 28% to 27%, effective year of assessment 2007 and to 26%, effective year of assessment 2008. This changewill have significant effects on the Group's computation of deferred tax as at balance sheet date as follows:

Increase/(decrease) GroupRM'000

Deferred tax liabilities (1,053)Deferred tax expense (1,053)Net profit for the year 1,053

=============

The financial statements for the current financial year do not reflect the above effects. These effects will be accountedfor in the financial year ending 31 August 2007.

33. SEGMENTAL INFORMATION

(a) Primary reporting segment - Geographical segments

The Group operates in four principal geographical areas of the world and is primarily involved in the glovesmanufacturing industry.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course ofbusiness and have been established on terms and conditions that are not materially different from those obtainablein transactions with unrelated parties.

31 August 2006The People'sRepublic of

Malaysia Thailand China Others Eliminations ConsolidatedRM'000 RM'000 RM'000 RM'000 RM'000 RM'000

RevenueExternal sales 766,980 132,125 38,148 55,358 – 992,611Inter-segment sales 48,000 22,773 53,715 – (124,488) –

––––––––––– ––––––––––– ––––––––––– –––––––––– ––––––––––– –––––––––––Total revenue 814,980 154,898 91,863 55,358 (124,488) 992,611

============= ============= ============= ============ ============= =============Result

Profit from operations 83,378 8,576 9,382 1,596 (1,604) 101,328Finance costs, net (9,555)Taxation (12,712)

–––––––––––Profit after taxation 79,061Minority interests (669)

–––––––––––Net profit for the year 78,392

=============


A W A R D E DI S O 9 0 0 1


33. SEGMENTAL INFORMATION (CONT’D)



AssetsSegment assets 514,354 131,222 66,125 29,337 741,038Goodwill arising

from consolidation 21,078–––––––––––

762,116=============

LiabilitiesSegment liabilities 366,921 66,614 37,056 7,416 478,007

=============Other information

Capital expenditure 103,029 14,719 20,520 292 138,560Depreciation 21,304 4,890 1,787 229 28,210



RevenueExternal sales 479,484 74,980 55,494 31,869 – 641,827 Inter-segment sales 23,753 23,230 25,162 – (72,145) –

––––––––––– ––––––––––– ––––––––––– –––––––––– ––––––––––– –––––––––––Total revenue 503,237 98,210 80,656 31,869 (72,145) 641,827

============= ============= ============= ============ ============= =============Result

Profit from operations 60,310 1,267 7,793 1,057 70,427 Finance costs, net (4,682)Taxation (12,262)

–––––––––––Profit after taxation 53,483Minority interests (36)

–––––––––––Net profit for the year 53,447

=============Assets

Segment assets 350,864 76,214 50,787 23,315 501,180Goodwill arising

from consolidation 5,324–––––––––––

506,504=============

LiabilitiesSegment liabilities 212,252 45,328 36,432 8,800 302,812

=============Other information

Capital expenditure 84,280 33,247 8,569 9,932 136,028Depreciation 14,782 2,532 1,214 92 18,620

(b) Secondary reporting segment - Business segments

As the Group is principally involved in gloves manufacturing industry, segment reporting by business segment is notprepared.



I S O 9 0 0 1

34. COMPARATIVES

The presentation and classification of items in the current year financial statements have been consistent with the previousyear except that certain comparative amounts have been adjusted as a result of change in accounting policy as disclosedin Note 27.

35. FINANCIAL INSTRUMENTS

The Group's financial risk management policy seeks to ensure that adequate financial resources are available for thedevelopment of the Group's businesses whilst managing its interest rate, foreign exchange, credit and liquidity risks.

(a) Interest Rate Risk

The Groupís primary interest rate risk relates to interest-bearing debt, as the Group had no substantial long-terminterest-bearing assets as at 31 August 2006. The investments in financial assets are mainly short term in nature andthey are not held for speculative purposes but have been mostly placed in fixed deposits.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. TheGroup actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets.This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain levelof protection against rate hikes.

The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in theirrespective notes.

(b) Foreign Exchange Risk

The Group is exposed to various currencies especially in United States Dollars, Thailand Baht and Chinese Renminbi.Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchasesand sales give rise to foreign exchange exposures.

Foreign exchange exposures in transactional currencies other than functional curencies of the operating entities arekept to an acceptable level.

Material foreign currency transaction exposures are hedged, mainly with derivative financial instruments such asforward foreign exchange contracts.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in theirfunctional currencies are as follows :

Net Financial Assets/(Liabilities) Held in Non-Functional CurrencyFunctional Currency of Ringgit United States Euro Group Companies Malaysia Dollars Dollars Total

RM'000 RM'000 RM'000 RM'000

At 31 August 2006 :Ringgit Malaysia – (719) – (719)Thailand Baht (290) 17,270 – 16,980Chinese Renminbi – (2,939) – (2,939)

––––––––––– ––––––––––– ––––––––––– –––––––––––(290) 13,612 – 13,322

============= ============= ============= =============At 31 August 2005 :Ringgit Malaysia – (2,042) – (2,042)Thailand Baht – 9,486 39 9,525 Chinese Renminbi – 6,369 – 6,369

––––––––––– ––––––––––– ––––––––––– –––––––––––– 13,813 39 13,852

============= ============= ============= =============


A W A R D E DI S O 9 0 0 1


35. FINANCIAL INSTRUMENTS (CONT’D)

As at balance sheet date, the Group had entered into United States Dollars forward foreign exchange contracts withnotional amount of RM192,142,000 (2005 : RM156,334,000) to hedge anticipated sales.

The net unrecognised (losses)/gains as at balance sheet date on forward contracts used to hedge anticipated saleswhich are expected to occur during the next twelve months and are deferred until the related sales occur, at whichtime they will be included in the measurement of the sales is as follows:

Group2006 2005

RM'000 RM'000

Net unrealised (losses)/gains (284) 944============= =============

(c) Credit Risk

Credit risks or the risk of customers defaulting are minimised and monitored via strictly limiting the Group'sassociations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis viaGroup management reporting procedures.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have anymajor concentration of credit risk related to any financial instruments.

(d) Liquidity

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure thatall repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintainssufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, theGroup strives to maintain available banking facilities of a reasonable level to its overall debt position. As far aspossible, the Group raises committed funding from financial institutions and prudently balances its portfolio withsome short term funding so as to achieve overall cost effectiveness.

(e) Fair Values

The carrying amounts of financial assets and liabilities of the Company at the balance sheet date approximated theirfair values except for the following:

Carrying FairAmount Value

Note RM'000 RM'000

Financial AssetsAt 31 August 2006Due from a subsidiary 13 146,961 *Due from subsidiaries 17 70,818 *

============= =============At 31 August 2005Due from a subsidiary 13 60,416 *Due from subsidiaries 17 19,885 *

============= =============

* It is not practicable to estimate the fair value of the amount due from subsidiaries due principally to a lack of fixedrepayment terms entered into by the parties involved and without incurring excessive costs.


LIST OF PROPERTIES

A W A R D E DI S O 9 0 0 1

DATE OF AGE OF LAND AREA/ AUDITED NETACQUISITION(A)/ BUILDING DESCRIPTION/ BUILD-UP BOOK VALUE

PARTICULARS OF PROPERTY REVALUATION(R) (YEARS) TENURE EXISTING USE AREA AS AT 31.8.2006 (RM’000)

Top Glove Sdn Bhd18,Jalan Mempari 10, HS (M) 15256, PT 8368, 23/10/97 (A) 9 Freehold Terrace house/ 1,300 square 114Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation feet/1,100Jalan Meru, Klang District of Selangor for staff square feet

36,Jalan Mempari 1, HS (M) 15297, PT 8411, 13/2/98 (A) 8 Freehold Terrace house/ 1,300 square 112Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation feet/1,100Jalan Meru, Klang District of Selangor for staff square feet

11, Jalan Mempari 11, HS (M) 15238, PT 8349 15/9/97 (A) 9 Freehold Terrace house/ 1,300 square 106Taman Bayu, Batu 51/2, HS (M) 15238, PT 8445 Accommodation feet/1,100Jalan Meru, Klang Mukim of Kapar, for staff square feet

District of Selangor

Lot 4968, Jalan Teratai, EMR 6629, Lot 4968, 13/10/93 (A) 12 Freehold Factory/Glove 3 acres/ 5,733Batu 6, Off Jalan Meru, Mukim of Kapar, District manufacturing 66,980 41050 Klang of Klang and State of Selangor. square feet

4, Jalan Seri Kenangan 8, HS (M) 10354, PT 15485, 29/7/95 (A) 11 Freehold Terrace house/ 1,640 square 85Taman Meru 3, Meru, Mukim of Kapar, Accommodation feet/1,40041050 Klang District of Selangor for staff square feet



22, Jalan Mempari 1, HS (M) 15304, PT 8419, 15/9/97 (A) 9 Freehold Terrace house/ 1,300 square 114Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation feet/1,100Jalan Meru, Klang District of Selangor for staff square feet

Lot 5987, EMR 8780, Lot No 5987, 18/4/96 (A) 6 Freehold Factory/Glove 2.8 acres/ 3,517Jalan Teratai Batu 5, Mukim of Kapar, manufacturing 57,250 Off Jalan Meru, District of Selangor square feet41050 Klang

Lot 4969, Jalan Teratai, G.M. 2143, Lot No 4969, 11/10/00 (A) 4 Freehold Factory & Office 3 acres 8,104Batu 6, Off Jalan Meru, Mukim of Kapar, Building41050 Klang District of Selangor

Lot 18, 27, 38 & 57, Lot 18, 27, 38 & 57, 22/11/99 (A) 18 Leasehold Factory/Glove 31,192 11,653Medan Tasek, Kawasan Medan Tasek, Kawasan (expiring on: manufacturing square feet/Perindustrian Tasek, Perindustrian Tasek, Lot 18-30.9.2072 197,675Ipoh, Perak Ipoh, Perak Lot 27-28.12.2063 square feet

Lot 38-23.12.2069Lot 57-1.10.2064)

Lot 4960, Jalan Teratai, GM 2326, Lot No. 4960, 24/09/03 (A) 1 Freehold Vacant 3 acres 7,664Batu 6, Off Jalan Meru, Mukim of Kapar, District of41050 Klang Klang, State of Selangor

Lot 4970, Jalan Teratai, HS(M) 19530-19545, PT Nos. 20/11/03 (A) 3 Freehold Factory/Glove 3 acres/ 7,040Batu 6, Off Jalan Meru, 26095-26110, Mukim of Kapar, manufacturing 67,924 41050 Klang District of Klang, State of square feet

Selangor

Lot 4967, Jalan Teratai, GM 5584, Lot No. 4967, 19/03/04 (A) 2 Freehold Factory/Glove 3 acres 7,690Batu 6, Off Jalan Meru, Mukim of Kapar, District of manufacturing41050 Klang Klang, State of Selangor

The landed properties owned by Top Glove as at 31 August 2006 are set out below:-


LIST OFPROPERTIES (Cont’d)

A W A R D E DI S O 9 0 0 1



Lot 5104, Jalan Teratai, GM 5064, Lot No. 5104, 29/03/04 (A) N/A Freehold Vacant 3 acres 1,806Batu 5, Off Jalan Meru, Mukim of Kapar, District of 41050 Klang Klang, State of Selangor

Lot 4975, Jalan Teratai, GM 626, Lot No. 4975, 05/05/04 (A) N/A Freehold Vacant 3 acres 1,080Batu 6 1/2, Off Jalan Meru, Mukim of Kapar, District of 41050 Klang Klang, State of Selangor

21, Jalan Mempari 11, HS(M) 15324, PT 8441, 12/05/05 (A) 1 Freehold Terrace house/ 1,300 square 129Taman Bayu, Batu 51/2, HS(M) 15242, PT 8353, Accommodation feet/1,100Jalan Meru, Klang Mukim of Kapar, District of Klang for staff square feet

37, Jalan Mempari 1, HS (M) 18522, PT 24689, 12/05/05 (A) 1 Freehold Terrace house/ 1,300 square 147Taman Bayu, Batu 51/2, Mukim of Kapar, Accommodation feet/1,100Jalan Meru, Klang District of Klang for staff square feet

6, Jalan Sg. Binjai, Klang, HS (M) 26112 PT 39636, 21/03/05 (A) 1 Freehold Terrace house/ 1,300 square 152PT 39636, Jln Sg, Binjai Mukim of Kapar, Accommodation feet/1,100

District of Klang for staff square feet

21, Jalan Sesenduk 20, HS (M) 22145, No. PT 29907, 13/05/05 (A) 1 Freehold Terrace house/ 1,300 square 157Off Taman Meru Jaya, Mukim of Kapar, Accommodation feet/1,10041050 Klang District of Klang for staff square feet

23, Jalan Sesenduk 20, HS (M) 22146, No. PT 29908, 13/05/05 (A) 1 Freehold Terrace house/ 1,300 square 157Off Taman Meru Jaya, Mukim of Kapar, Accommodation feet/1,10041050 Klang District of Klang for staff square feet

27, Lorong Tempinis 1, HS (M) 3773, PT 1286, 25/05/05 (A) 1 Freehold Terrace house/ 1,300 square 127Pekan Meru, 42200 Klang Mukim of Kapar, Accommodation feet/1,100

District of Klang for staff square feet

57, Jalan Sesenduk 5, GM 7330, Lot No 43375, 19/07/05 (A) 1 Freehold Terrace house/ 1,300 square 156Taman Meru Utama, Mukim of Kapar, Accommodation feet/1,100 41050 Klang District of Klang for staff square feet

51, Jalan Sesenduk 5, GM 7327, Lot No 43372, 19/07/05 (A) 1 Freehold Terrace house/ 1,300 square 156Taman Meru Utama, Mukim of Kapar, Accommodation feet/1,10041050 Klang District of Klang for staff square feet

67, Jalan Sesenduk 6, GM 7311, Lot No 43353, 19/07/05 (A) 1 Freehold Terrace house/ 1,300 square 146Taman Meru Utama, Mukim of Kapar, Accommodation feet/1,10041050 Klang District of Klang for staff square feet

65, Jalan Sesenduk 6, GM 7310, Lot No 43352, 19/07/05 (A) 1 Freehold Terrace house/ 1,300 square 146Taman Meru Utama, Mukim Kapar, District of Klang Accommodation feet/1,10041050 Klang for staff square feet

Lot 4947, Jalan Teratai, GM 5101, Lot No 4947 23/11/04 (A) N/A Freehold Vacant 3 acres 8,042Batu 51/2 Off Jalan Meru, Mukim of Kapar, District of41050 Klang Klang, State of Selangor.

1,3,5 & 7, HS(M) 28465 - 28468 29/04/06 (A) 3 months Freehold Terrace house/ 70,973 6,643Jalan Abadi 1A/KU8, (PT No. 40352 - 40355) Accommodation square feet

for staff

1 - 8, Jalan Abadi 1B/KU8, HS(M) 28469 - 28476 (PT No. 40356 - 40363)

1,3,5 & 7, HS(M) 28477- 28480 & 28484Jalan Abadi 1C/KU8, (PT No. 40367 - 40370

& 40374)

62,64,66,67,69,71,73,75 HS(M) 28481 - 28483 && 77, Jalan Abadi 4/KU8, 28486 - 28491 (PT No. 40371

- 40373 & 40376 - 40381)


LIST OF PROPERTIES (Cont’d)

A W A R D E DI S O 9 0 0 1



49, 51, 53, 55, 57, 59, HS(M) 28492 - 28497 & 62, 64, 66, 68, 70 & 72, 28499 - 28504 (PT No. 40382 Jalan Abadi 5/KU8 - 40387 & 40389 - 40394)

46, 48, 50, 52, 54 & 56, HS(M) 28505 - 28510 Jalan Abadi 6/KU8, (PT No. 40395 - 40400),Taman Daya Maju, Mukim Kapar, District of Klang.41050 Klang State of Selangor.

41, Jalan Abadi 3, HS (M) 18218, PT 24467, 02/12/05 (A) 8 months Freehold Terrace house/ 1,098 120Taman Daya Meru, Mukim Kapar, District of Klang Accommodation square feet41050 Klang for staff

Lot 4991, Jalan Teratai, GM 1617, Lot 4991, 19/10/04 (A) N/A Freehold Vacant 3 acres 2,379Batu 5 1/2 Off Jalan Meru, Mukim of Kapar, 41050 Klang District of Klang

Lot 4908, Jalan Teratai, EMR No. 6605, Lot No 4908, 08/07/97 (A) 2 Freehold Hostel/ 3 acres 2,285Batu 5 1/2 Off Jalan Meru, Mukim of Kapar, Accommodation41050 Klang District of Klang for workers

Lot 4988 & 4989, GM 1584, Lot 4988 & GM 703, 10/10/05 (A) N/A Freehold Vacant 3 acres & 3,278Mukim Kapar, Lot 4989, Mukim Kapar, 3. a 05 pKlang, Selangor. District of Klang,

State of Selangor.

Lot 4986, Batu 5, GM 1102, Mukim Kapar, 24/02/06 (A) N/A Freehold Vacant 3 acres 1,648Jalan Sungai Binjai, District of Klang, Selangor.Mukim Kapar, Klang

Lot 4987, Batu 5, GM 2619, Mukim Kapar, 24/05/06 (A) N/A Freehold Vacant 3 acres 1,618Jalan Teratai, District of Klang, Mukim Kapar, Klang State of Selangor.

TG Medical Sdn BhdLot 5091, Jalan Teratai, EMR 6510, Lo No 5091, 8/5/98 (A) 8 Freehold Factory/Glove 3 acres/ 5,879Batu 5, Off Jalan Meru, Mukim of Kapar, District Manufacturing 68,490 41050 Klang of Klang, State of Selangor square feet

19, Jalan Mempari 11, HS (M) 15241, PT No 8352, 25/10/95 (A) 8 Freehold Terrace house/ 1,300 square 105Batu 51/2 Jalan Meru, HS (M) 15325, PT No 8442, Accommodation feet/ 1,100Klang Mukim of Kapar, for staff square feet

District of Selangor

Lot 5972 & 5974, EMR 8769, Lot 5972 & 5974, 1/7/99 (A) 5 Freehold Factory/Glove Approx 3,931Jalan Teratai, Batu 5, Mukim of Kapar, Manufacturing 1.7935 acres/Jalan Meru, 41050 Klang District of Klang, 47,200

State of Selangor square feet

Top Glove Engineering Sdn BhdLot 5987, Jalan Teratai, EMR 8780, Lot No 5987, 18/4/96 (A) 6 Freehold Factory/Glove 2.8 acres/ 2,107Batu 5, Off Jalan Meru, Mukim of Kapar, Manufacturing 57,250 41050 Klang, District of Klang, square feetSelangor Darul Ehsan State of Selangor


LIST OFPROPERTIES (Cont’d)

A W A R D E DI S O 9 0 0 1



Top Glove Medical(Thailand) Co Ltd188, Moo 5, Nor Sor 3 Kor 5/10/01 (A) 4 Freehold Factory & Office Approx 8,530Karnchanawanich No. 2655, Tambon Sumnukgarm Building 16.06 acres (Thai Baht87,066)Road Tambon Ampur SadaoSumnukgarm Sadao, Songkhla, ThailandSongkhla 90320, Thailand

Top Glove (Zhangjiagang) Co Ltd3, Xitang Road, No. 21-7-14, Zhangjiagang City, 10/09/02 (A) 4 Leasehold Factory & Office Approx 10,604Xizhang Town, Xizhang Town, West Road, (Expiring on Building 639,499 (RMB22,936)ZhangJiaGang, 215614 Southern Side. 01.06.2052) square feet/Jiang Su, China 355,080

square feet

TG Medical (U.S.A) INC.,165-167 Ssessor's ID 31/03/05 (A) 1 Freehold Warehouse & Approx 9,435North Aspan Avenue, #8615 018 010 05 000 Office Building 47,896 sq ft/ (USD2,565)Azusa , CA 91702 25,878 sq ft

Top Glove Technology (Thailand) Co Ltd188, Moo 5, Nor Sor 3 Kor 23/02/06 (A) N/A Freehold On construction Approx 2,462Karnchanawanich No. 3275,3277,6010 , 40.4 acres (Thai Baht25,130)Road Tambon Sumnukgarm Tambon Pangla Ampur SadaoSadao, Songkhla Songkhla, Thailand90320 Thailand

Great Glove (Xinghua) Co. Ltd.Xinghua Economic South Wei Wu Lu, 13/10/05 (A) 10 months Freehold Factory & Office 1,207,646 944Development Region, Zhao Yang Zheng, Xinghua City. building, square feet (RMB2,041)Xinghua City, Industrial usage.Jiangsu Province, Peoples' Republic of China.

B Tech Industry Co. Ltd,268 M.5 T.Kampangphet 1. Nor Sor 3 Kor No. 2361 01/08/06(A) 4 Freehold Factory & Office Approx 3,300A.Rattaphum,Songkhla 2. Nor Sor 4 Jor No.5943 Building 482,048 (Thai Baht33,679) 90180 3. Nor Sor 4 Jor No.5944 square feet


ANALYSIS OFSHAREHOLDINGSAS AT 17 OCTOBER 2006 A W A R D E D

I S O 9 0 0 1

Authorised Share Capital : RM200,000,000Issued and Fully Paid-Up Capital : RM192,376,500Class of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDERS

Size of Holdings No. of Holders % No. of Shares %

1 - 99 217 13.42 9,788 0.01100 - 1,000 422 26.10 302,052 0.161,001 - 10,000 658 40.69 2,579,400 1.3410,001 - 100,000 208 12.86 6,810,327 3.54100,001 - 9,618,824 (less than 5% of Issued Shares) 107 6.62 90,000,565 46.789,618,825 (5% Issued Shares) and above 5 0.31 92,674,368 48.17

––––––––––––– ––––––––––– ––––––––––––– –––––––––––1,617 100.00 192,376,500 100.00

==================== ============= ==================== =============

LIST OF SUBSTANTIAL SHAREHOLDERS

The Substantial Shareholders of Top Glove Corporation Berhad ("Top Glove") based on the Register of Substantial Shareholdersof the Company and their respective shareholdings are as follows:-

No. of Ordinary Shares HeldNo. Direct % Indirect %

1. Dato ' Sri Dr. Lim, Wee-Chai 59,296,358 30.82 27,966,702* 14.542. Datin Sri Tong Siew Bee 3,284,196 1.71 83,978,864** 43.653. Lim Hooi Sin 4,979,130 2.59 82,283,930*** 42.774. Lim Quee Choo 2,188,478 1.14 85,074,582**** 44.225. Top Glove Holding Sdn. Bhd. 17,514,898 9.10 – –6. The Overlook Partners Fund LP 10,275,200 5.34 – –7. United Gloves Sdn. Bhd. 9,707,970 5.05 – –

Note :* Deemed interested through Datin Sri Tong Siew Bee, Mr. Lim Hooi Sin, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd's direct

interest in Top Glove

** Deemed interested through Dato' Sri Dr. Lim, Wee-Chai, Mr. Lim Hooi Sin, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd's directinterest in Top Glove

*** Deemed interested through Dato' Sri Dr. Lim, Wee-Chai, Datin Sri Tong Siew Bee, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd'sdirect interest in Top Glove

**** Deemed interested through Dato' Sri Dr. Lim, Wee-Chai, Datin Sri Tong Siew Bee, Mr. Lim Hooi Sin and Top Glove Holding Sdn Bhd'sdirect interest in Top Glove


ANALYSIS OFSHAREHOLDINGSAS AT 17 OCTOBER 2006 (Cont’d)

A W A R D E DI S O 9 0 0 1

DIRECTORS' SHAREHOLDINGS

The Directors' Shareholdings of Top Glove based on the Register of Directors' Shareholdings are as follows:-

No. of Ordinary Shares HeldNo. Direct % Indirect %

1. Dato ' Sri Dr. Lim, Wee-Chai 59,296,358 30.82 27,966,702* 14.542. Datin Sri Tong Siew Bee 3,284,196 1.71 83,978,864** 43.653. Lim Hooi Sin 4,979,130 2.59 82,283,930*** 42.774. Sekarajasekaran A/L Arasaratnam 7,577,978 3.94 – –5. Lau Boon Ann 196,400 0.10 – –6. Tan Sri Datuk (Dr.) Arshad Bin Ayub 1,200,000 0.62 – –7. Lee Kim Meow (Also Alternate Director to Lim Hooi Sin) 535,012 0.28 – –8. Quah Chin Chye – – – –9. Lim Cheong Guan – – – –

Note :* Deemed interested through Datin Sri Tong Siew Bee, Mr. Lim Hooi Sin, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd's direct

interest in Top Glove

** Deemed interested through Dato' Sri Dr. Lim, Wee-Chai, Mr. Lim Hooi Sin, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd's directinterest in Top Glove

*** Deemed interested through Dato' Sri Dr. Lim, Wee-Chai, Datin Sri Tong Siew Bee, Ms. Lim Quee Choo and Top Glove Holding Sdn Bhd'sdirect interest in Top Glove

LIST OF THIRTY LARGEST SECURITIES ACCOUNTS HOLDERS

No. Names Shareholdings %

1. Dato' Sri Dr. Lim, Wee-Chai 43,566,034 22.65

2. Dato' Sri Dr. Lim, Wee-Chai 14,778,324 7.68

3. Top Glove Holding Sdn. Bhd. 14,346,840 7.46

4. HSBC Nominees (Asing) Sdn. Bhd. 10,275,200 5.34- HSBC-FS for The Overlook Partners Fund LP

5. United Gloves Sdn. Bhd. 9,707,970 5.05

6. Mayban Nominees (Tempatan) Sdn. Bhd. 7,842,400 4.08- Mayban Trustees Berhad for Public Ittikal Fund

7. Employees Provident Fund 6,866,200 3.57

8. Cartaban Nominees (Asing) Sdn. Bhd. 4,905,500 2.55- SSBT Fund D26J for Emerging Markets Global Small Capitalization Fund

9. EB Nominees (Tempatan) Sendirian Berhad 4,400,000 2.29- Pledged Securities Account for Sekarajasekaran A/L Arasaratnam

10. HSBC Nominees (Asing) Sdn. Bhd. 3,338,628 1.74- BBH and Co. Boston for GMO Emerging Markets Fund

11. HSBC Nominees (Asing) Sdn. Bhd. 3,185,600 1.66- Exempt An for Morgan Stanley & Co. Incorporated

12. Lim Hooi Sin 3,141,726 1.63

13. Amanah Raya Nominees (Tempatan) Sdn. Bhd. 2,934,100 1.53- Public Islamic Equity Fund


ANALYSIS OFSHAREHOLDINGSAS AT 17 OCTOBER 2006 A W A R D E D

I S O 9 0 0 1

LIST OF THIRTY LARGEST SECURITIES ACCOUNTS HOLDERS (cont’d)

No. Names Shareholdings %

14. Sekarajasekaran A/L Arasaratnam 2,772,978 1.44

15. Amanah Raya Nominees (Tempatan) Sdn. Bhd. 2,508,500 1.30- Public Equity Fund

16. Mayban Nominees (Tempatan) Sdn. Bhd. 2,295,700 1.19- Mayban Trustees Berhad for Public Regular Savings Fund

17. Datin Sri Tong Siew Bee 2,088,218 1.09


19. Lim Hooi Sin 1,837,404 0.96

20. HSBC Nominees (Asing) Sdn. Bhd. 1,690,200 0.88BBH (Lux) SCA for Fidelity Funds ASEAN

21. Lim Quee Choo 1,389,770 0.72

22. Amanah Raya Nominees (Tempatan) Sdn. Bhd. 1,365,300 0.71- Public Savings Fund

23. Datin Sri Tong Siew Bee 1,195,978 0.62


25. Amanah Raya Nominees (Tempatan) Sdn. Bhd. 1,075,000 0.56- Public Islamic Dividend Fund

26. Mayban Nominees (Tempatan) Sdn. Bhd. 1,000,000 0.52- Pledged Securities Account for Tan Sri Datuk (Dr.) Arshad Bin Ayub

27. Chin Hooi Nan 900,000 0.47

28. HSBC Nominees (Asing) Sdn. Bhd. 900,000 0.47- TNTC for The Establishment Investment Trust PLC

29. Amanah Raya Nominees (Tempatan) Sdn. Bhd. 836,000 0.43- Public Index Fund

30. Citigroup Nominees (Tempatan) Sdn. Bhd. 835,400 0.43- Manulife Insurance (Malaysia) Berhad

NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Hilton Kuala Lumpur,Ball Room A (Level 6), 3 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Wednesday, 10 January 2007at 11.30 a.m. for the following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 August 2006 together withthe Reports of the Directors and the Auditors thereon.

2. To approve the declaration of the Final Dividend of 6% Tax Exempt and 5% less 28% Malaysian IncomeTax for the financial year ended 31 August 2006.

3. To approve the payment of Directors' Fees for the financial year ended 31 August 2006.

4. To re-elect the following Directors who retire pursuant to Article 94 of the Company's Articles ofAssociation and being eligible, have offered themselves for re-election:-

(a) Datin Sri Tong Siew Bee(b) Mr. Lee Kim Meow

5. To re-elect Mr. Lim Cheong Guan who retires pursuant to Article 100 of the Company's Articles ofAssociation and being eligible, have offered himself for re-election.

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

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

(a) Tan Sri Datuk (Dr.) Arshad Bin Ayub(b) Mr. Sekarajasekaran A/L Arasaratnam"

7. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next AnnualGeneral Meeting and to authorise the Directors to fix their remuneration.

8. As Special Business

To consider and, if thought fit, with or without any modification, to pass the following resolution as anOrdinary Resolution:-

Ordinary Resolution - Authority To Issue Shares Pursuant To Section 132D Of The Companies Act, 1965

"THAT subject to Section 132D of the Companies Act, 1965 and approvals of the relevantgovernmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot sharesin the Company, at any time and upon such terms and conditions and for such purposes as the Directorsmay, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuantto this Resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of theCompany for the time being; AND THAT the Directors be and are also empowered to obtain the approvalfor the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad;AND THAT such authority shall commence immediately upon the passing of this Resolution and continueto be in force until the conclusion of the next Annual General Meeting of the Company."

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

NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN THAT the Final Dividend of 6% Tax Exempt and 5% less 28% Malaysian Income Tax inrespect of the financial year ended 31 August 2006 will be payable on 15 March 2007 to depositors who are registered inthe Record of Depositors at the close of business on 16 February 2007, if approved by Members at the forthcoming EighthAnnual General Meeting on Wednesday, 10 January 2007.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)(Resolution 5)

(Resolution 6)

(Resolution 7)(Resolution 8)

(Resolution 9)

(Resolution 10)


A W A R D E DI S O 9 0 0 1

NOTICE OF ANNUAL GENERALMEETING


NOTICE OF ANNUAL GENERALMEETING (Cont’d)

A W A R D E DI S O 9 0 0 1

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

(a) Shares transferred into the Depositor's Securities Account before 4 p.m. on 16 February 2007 in respect of ordinarytransfers; and

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

By Order of the Board

CHUA SIEW CHUAN(MAICSA 0777689)Company Secretary

Kuala LumpurDated: 13 November 2006

Explanatory Note to Special Business:

1. Authority pursuant to Section 132D of the Companies Act, 1965.

The proposed adoption of the Ordinary Resolution is primarily to give flexibility to the Board of Directors to issue and allotshares at any time in their absolute discretion without convening a general meeting.

Notes:-

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

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

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

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat BandarDamansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING

The Directors who are standing for re-election at the Eighth Annual General Meeting of the Company to be held at Hilton KualaLumpur, Ball Room A (Level 6), 3 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Wednesday, 10 January 2007 at 11.30 a.m. are as follows:-

Name of Directors Details of Attendance at Details of Individual Director and Board Meeting other Disclosure Requirements

Datin Sri Tong Siew Bee Refer to page 31 of the Refer to page 9 of the(Article 94 of the Company's Articles Annual Report. Annual Report.of Association)

Mr. Lee Kim Meow Refer to page 31 of the Refer to page 10 of the(Article 94 of the Company's Articles Annual Report. Annual Report.of Association)

Mr. Lim Cheong Guan Refer to page 31 of the Refer to page 12 of the(Article 100 of the Company's Articles Annual Report. Annual Report.of Association)

Tan Sri Datuk (Dr.) Arshad Bin Ayub Refer to page 31 of the Refer to page 9 of the(Section 129 (6) of the Companies Act, 1965) Annual Report. Annual Report.

Mr. Sekarajasekaran A/L Arasaratnam Refer to page 31 of the Refer to page 11 of the(Section 129 (6) of the Companies Act, 1965) Annual Report. Annual Report.

A W A R D E DI S O 9 0 0 1


FORM OF PROXY

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

(NRIC/Company No. ______________________) of (full address) ______________________________________________________

_______________________________________________________________________ being a *Member/Members of TOP GLOVE

CORPORATION BERHAD ("the Company"), do hereby appoint (full name in capital letters) _______________________________

(NRIC No. _________________________) of (full address) __________________________________________________________

or failing *him/her, (full name in capital letters) _______________________________ (NRIC No. ________________________)

of (full address) _____________________________________________________________________________________________ or

failing *him/her, *the CHAIRMAN OF THE MEETING, as *my/our proxy to attend and vote for *me/us, and on *my/our behalfat the Eighth Annual General Meeting of the Company to be held at Hilton Kuala Lumpur, Ball Room A (Level 6), 3 JalanStesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Wednesday, 10 January 2007 at 11.30 a.m. and at anyadjournment thereof.

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

* Strike out whichever not applicable.

Signed on this ________________ day of ________________ 2006/2007

___________________________________Signature of Member/Common SealNotes:

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

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

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

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat BandarDamansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

Number of Shares held CDS Account No.

Resolution Resolutions For AgainstNos.

1 To receive the Audited Financial Statements for the financial year ended 31 August 2006 together with the Reports of the Directors and the Auditorsthereon.

2 To approve the declaration of the Final Dividend of 6% Tax Exempt and 5%less 28% Malaysian Income Tax for the financial year ended 31 August 2006.

3 To approve the payment of Directors' Fees for the financial year ended 31 August 2006.

4 To re-elect the Director, Datin Sri Tong Siew Bee who retires pursuant toArticle 94 of the Company's Articles of Association.

5 To re-elect the Director, Mr. Lee Kim Meow who retires pursuant to Article 94of the Company's Articles of Association.

6 To re-elect the Director, Mr. Lim Cheong Guan who retires pursuant to Article100 of the Company's Articles of Association.

7 To re-appoint the Director, Tan Sri Datuk (Dr.) Arshad Bin Ayub who retirespursuant to Section 129 (6) of the Companies Act, 1965.

8 To re-appoint the Director, Mr. Sekarajasekaran A/L Arasaratnam who retirespursuant to Section 129 (6) of the Companies Act, 1965.

9 To re-appoint Messrs. Ernst & Young as Auditors of the Company until theconclusion of the next Annual General Meeting and to authorise the Directorsto fix their remuneration.

10 As Special Business Ordinary ResolutionAuthority to issue shares pursuant to Section 132D of the Companies Act,1965.

To p G l o v e C o r p o r a t i o n B e r h a d(474423-X)(Incorporated in Malaysia)

DIRECTORS’ REPORT

A W A R D E DI S O 9 0 0 1

FOLD HERE

FOLD HERE

STAMP

The Company Secretary

Top Glove Corporation Berhad (474423-X)

Level 7, Menara Milenium,Jalan Damanlela, Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur, Malaysia.

A W A R D E DI S O 9 0 0 1

TOP GLOVE CORPORATION BERHAD

CORPORATE OFFICE & FACTORYFACTORY 9 (CORPORATE OFFICE)Address : Lot 4969, Jalan Teratai,

Batu 6, Off Jalan Meru,41050 Klang,Selangor D.E. Malaysia

Tel : 603-3392 1992 / 1905Fax : 603-3392 1291 / 8410E-mails : (i) [email protected]

(ii) [email protected](iii) [email protected]

Websites : www.topglove.com.myhttp: //topglove.asiaep.com

FACTORY 2Lot 4968, Jalan Teratai, Batu 6, Off Jalan Meru, 41050 Klang,Selangor D.E., MalaysiaTel : 603-3392 1992 / 1905Fax : 603-3392 1291 / 8410


FACTORY 4Lot 5987, Jalan Teratai, Batu 5, Off Jalan Meru, 41050 Klang,Selangor D.E., MalaysiaTel : 603-3392 8588 / 8996Fax : 603-3392 6788

FACTORY 5Lot 18, 27, 38 & 57Medan Tasek, KawasanPerindustrian Tasek,31400 Ipoh, Perak D.R., MalaysiaTel : 605-546 6360 / 547 9271Fax : 605-547 8975

FACTORY 6180/3, M. 7, Srisonthon Rd. A,Thalang, Phuket 83110,ThailandTel : 6676-272572 / 272573Fax : 6676-325354

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FACTORY 7188, Moo 5,Karnchanawanich Rd.Tambon, Sumnukgram, Sadao,Songkhla, 90320 ThailandTel : 6674-410000Fax : 6674-410008

USA Marketing OfficeTg Medical (U.S.A.) Inc., 9517e, Rush Street, Unit B, South El Monte, Ca 91733. Tel : 1-626 448 4445 Fax : 1-626 448 4447 E-mail : [email protected]

FACTORY 83, Xitang Road,Xizhang TownZhangjiagang City,Jiangsu Province 215614,ChinaTel : 86-512-5842 2860Fax : 86-512-5842 2870

FACTORY 10Lot 4970, Jalan Teratai,Batu 6, Off Jalan Meru,41050 Klang,Selangor D.E., MalaysiaTel : 603-3392 1992 / 1905Fax : 603-3392 1291 / 8410

FACTORY 11Lot 4967, Jalan Teratai,Batu 6, Off Jalan Meru,41050 Klang,Selangor D.E., MalaysiaTel : 603-3392 1899Fax : 603-3363 5771

FACTORY 12Lot 4960, Jalan Teratai,Batu 6, Off Jalan Meru,41050 Klang,Selangor D.E., MalaysiaTel : 603-3392 3375Fax : 603-3392 5200

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FACTORY 13Lot 4947, Jalan Teratai,Batu 6, Off Jalan Meru, 41050 Klang,Selangor D.E., MalaysiaTel : 603-3393 1288Fax : 603-3393 1993


FACTORY 15South of Weiwu Road,West of Xihuan Road,Xinghua Economic Developing District.Jiang Su Provience, ChinaTel : 86-523-3268976

86-523-3495661Fax : 86-523-3268676

FACTORY 17LB-Tech Industry Co., Ltd268, M.5 T. Kampangpech,A. Rattaphume Songkhla90180 ThailandTel : 6674-318411Fax : 6674-318411

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TO P he Top The World's Largest AWARDEDTOP GLOVE CORPORATION BERHAD (474423-X) Incorporated in...

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Transcript of TO P he Top The World's Largest AWARDEDTOP GLOVE CORPORATION BERHAD (474423-X) Incorporated in...