Contents 2 Corporate Information 3 Group Structure Year Group Financial Highlights Year Transformation, Enhancing Shareholder Value 8-11

Transcription

1 ANNUAL REPORT (Company No.: 7867-P)

2 Contents 2 Corporate Information 3 Group Structure Year Group Financial Highlights Year Transformation, Enhancing Shareholder Value 8-11 Profile Of The Board Of Directors Chairman s Statement Operational Highlights Of The Year Review Of Operations Corporate Responsibility Statement 30 Scientex Management System 31 Statement On Internal Control Audit Committee Report Statement On Corporate Governance 38 Additional Compliance Information Financial Statements 106 List Of Properties Held By The Group Analysis Of Shareholdings Notice Of Annual General Meeting 111 Statement Accompanying Notice Of Annual General Meeting Form Of Proxy

3 2 Corporate Information Board of Directors Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman & Independent Non-Executive Director Lim Teck Meng Executive Deputy Chairman Lim Peng Jin Managing Director Lim Peng Cheong Non-Independent Non-Executive Director Fok Chuan Meng Non-Independent Non-Executive Director Wong Mook Wong Tsap Loy Independent Non-Executive Director Cham Chean Sian Chean Fong Independent Non-Executive Director Dato Hazimah Binti Zainuddin Independent Non-Executive Director Teow Her Chang Choo Chau Independent Non-Executive Director Company Secretary Ng Boon Ngee (MAICSA ) Audit Committee Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman Cham Chean Sian Chean Fong Member Wong Mook Wong Tsap Loy Member Fok Chuan Meng Member Nomination Committee Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman Wong Mook Wong Tsap Loy Member Cham Chean Sian Chean Fong Member Remuneration Committee Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman Lim Peng Jin Member Cham Chean Sian Chean Fong Member Auditors Ernst & Young Level 23A, Menara Milenium Jalan Damanlela, Pusat Bandar Damansara Kuala Lumpur Solicitors Koh Kim Leng & Co Principal Bankers Malayan Banking Berhad HSBC Bank Malaysia Berhad Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad United Overseas Bank (Malaysia) Berhad RHB Bank Berhad CIMB Bank Berhad Registered Office & Principal Place of Business Jalan Utas 15/7, Shah Alam Selangor Darul Ehsan Tel: Fax: Website: Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad [Stock code: 4731] Share Registrar Symphony Share Registrars Sdn Bhd Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Jalan PJU 1A/46, Petaling Jaya Selangor Darul Ehsan Tel: Fax: /8152 Website:

4 3 Group Structure Scientex Berhad (Company No P) Manufacturing Scientex Packaging Film Sdn Bhd Pan Pacific Straptex Sdn Bhd Scientex Industries Group Sdn Bhd Scientex Tsukasa (Vietnam) Co., Ltd. Scientex Polymer (Vietnam) Co., Ltd. PT. Scientex Indonesia Property Scientex Quatari Sdn Bhd Scientex Park (M) Sdn Bhd Scientex (Skudai) Sdn Bhd Scientex Heights Sdn Bhd Texland Sdn Berhad KC Contract Sdn Bhd

5 4 5-Year Group Financial Highlights Year ended 31 July RM 000 RM RM RM RM 000 Results Revenue 694, , , , ,316 Operating Profit 70,047 42,490 59,282 43,765 47,467 EBITDA 95,586 69,166 84,205 65,856 68,298 Profit Before Taxation 70,754 42,051 57,414 40,219 44,048 Profit After Taxation 62,140 38,576 53,035 41,451 37,485 Net Profit 60,318 37,458 47,698 35,184 28,472 Group Assets Non-Current Assets 435, , , , ,907 Current Assets 239, , , , ,905 Total Assets Employed 675, , , , ,812 Financed by Share Capital 115, , , ,000 63,525 Reserves 299, , , , ,553 Equity attributable to equity 414, , , , ,078 holders of the Company Minority Interest 36,449 36,136 34, ,173 99,955 Current Liabilities 171, , , , ,712 Non-Current Liabilities 53,121 45,853 56,593 34,718 49,067 Total Funds Employed 675, , , , ,812 Performance Indicators Earnings Per Share (Sen)* Gross Dividend Per Share (%)* # ^^ ^ Net Dividend Per Share (%)* # ^^ ^ Net Assets Per Share (RM)* Net Gearing Ratio (times) Return on Equity (%) * For year 2006, the figures have been restated to take into account the share split and bonus issue in ^ Include a special dividend of 6.67% per share less 28% taxation. ^^ Include a share dividend on the basis of one (1) treasury share for every fifty (50) existing ordinary shares held based on market value. # Include a single tier final dividend of 12% per share proposed for shareholders approval.

6 5 5-Year Group Financial Highlights Delivering Solid Results 800, , , , ,000 RM 000 GROUP FINANCIAL RESULTS RM ,316 47, ,092 43, ,596 59,282 47, ,731 42, ,816 70,047 60,318 80,000 70,000 60,000 50,000 40, ,000 35,184 37,458 30, ,000 28,472 20, ,000 10, FINANCIAL YEAR Revenue Operating Profit Net Profit 0 RM , , , ,000 ROE & SHAREHOLDERS EQUITY , , , , , % RM ,000 60,000 40,000 GEARING RATIO & NET BORROWINGS 63, , ,304 44,834 Times , , , FINANCIAL YEAR FINANCIAL YEAR 0.00 Shareholders Equity Return on Equity Net Borrowings Gearing Ratio Sen EARNINGS PER SHARE % DIVIDEND PER SHARE FINANCIAL YEAR FINANCIAL YEAR Earnings Per Share Gross Dividend Per Share Net Dividend Per Share

7 6 10-Year Transformation Streamlining Of Business and Focus On Core Competencies Delivering Strong Performance MANUFACTURING Packaging products Industrial products for niche market Acquisition and Expansion To be a global packaging leader Set up 2nd stretch film plant in Pulau Indah, Port Klang with 2 new production lines Invested in 6 additional new stretch film production lines and factory extension. Annual production capacity increased from 40,000MT to 100,000MT. One of the largest stretch film producers in Asia Pacific region Acquired 8 new PP strapping band production lines. Annual production capacity increased from 1,500MT to 16,200MT Acquired automotive carpet mat operations in Japan and Vietnam Built manufacturing plant in Vietnam for PP and PE woven bags and FIBC bags Commenced chemical adhesives business in Indonesia Set up joint venture with Tsukasa Chemical Industry Co., Ltd. of Japan in Vietnam to manufacture HDPE raffia tape. Full commercial operations of 9 raffia production lines in 2010 Acquired rigid film business. Consolidated and streamlined operations of corrugated carton boxes, woven bags, automotive carpet mats, polymer products and rigid film to focus on niche markets Focus on our core competencies of Cost, Quality & On-time Delivery PROPERTY Pasir Gudang Kulai Completed more than 6,500 units of residential and commercial properties Acquired new land bank totaling 637 acres 95 acres in Pasir Gudang, Johor 250 acres in Kulai, Johor 136 acres in Ayer Keroh, Melaka 156 acres in Skudai, Johor 10 year sales from FY2001-FY2010 totaling approximately 6,500 units Products ranging from single and double storey terrace houses to shop offices, cluster semi-detached units and 2 1/2 storey terrace houses Ayer Keroh Skudai Developed new townships with mixed development at Taman Scientex in Pasir Gudang and Kulai with focus on our core competencies of Cost, Speed & Quality Developed new townships with mixed development at Taman Muzaffar Heights in Ayer Keroh and Taman Mutiara Mas in Skudai with focus on high-end properties and niche market segment

8 7 Enhancing Shareholder Value RM ,000 60,000 50,000 NET PROFIT GROWTH Compounded Growth 47,698 60,318 40,000 = 31% 35,184 37,458 30,000 23,118 28,472 20,000 16,704 10,000 5,426 5,576 3, FINANCIAL YEAR RM ,000 SHAREHOLDERS REWARDS 17,232 19,387 16,000 14,229 12,000 8,000 4,000 2,669 2,670 2,670 4,457 8,091 10,101 10, FINANCIAL YEAR ^ * ^^ Net Dividend Payout Share dividend 450,000 RM 000 SHAREHOLDERS EQUITY GROWTH 414, , , , , , , , , , , , , , , , # # # FINANCIAL YEAR ^ Include a special dividend of 6.67% per share less 28% taxation. * Include a share dividend on the basis of one (1) treasury share for every fifty (50) existing ordinary shares held based on market value. ^^ Include a single tier final dividend of 12% per share proposed for shareholders' approval. # The figures have been restated for consistency.

9 8 Profile Of The Board Of Directors Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman and Independent Non-Executive Director Tan Sri Dato Mohd Sheriff Bin Mohd Kassim, a Malaysian, aged 71, is an Independent Non-Executive Director and Chairman of the Company. He was appointed to the Board as Non-Executive Chairman on 20 June He is also the Chairman of the Board s Audit Committee, Nomination Committee and Remuneration Committee. Tan Sri Dato Mohd Sheriff graduated with a Bachelor of Arts (Honours) Economics degree from University of Malaya in 1963 and a Diploma in Economic Development from Oxford University, United Kingdom in He graduated with a Master of Arts in Economics from Vanderbilt University, USA in He served as the Secretary General of Treasury, Ministry of Finance for 3 years from 1991 to 1994 and as Managing Director of Khazanah Nasional Berhad for 9 years from 1994 to He was also a former Director of United Engineers (Malaysia) Berhad, RHB Bank Berhad and former Chairman of Renong Berhad. He is the Chairman of the Malaysian Institute of Economic Research and President of the Malaysian Economic Association. He also sits on the Board of Projek Lebuhraya Utara-Selatan Berhad, PLUS Expressways Berhad, Projek Penyelenggaraan Lebuhraya Berhad, Standard Chartered Bank Malaysia Berhad and Manulife Insurance Malaysia Berhad as Non-Executive Director and Chairman; and Yayasan UEM as Non-Executive Director. He does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has not been convicted for any offences within the past 10 years. Lim Teck Meng Executive Deputy Chairman Lim Teck Meng, a Malaysian, aged 73, is presently the Executive Deputy Chairman of the Company. He is the founder of the Company and was appointed to the Board as Managing Director in September 1969 and he held this position until 6 November 2001 when he was appointed as an Executive Chairman of the Company. Subsequently, on 20 June 2003, he was re-designated as Executive Deputy Chairman. He received his education in Melaka and is a businessman with more than 40 years experience in the polymer industry. He also has vast experience in trading and property development. Through his entrepreneurial skills, Lim Teck Meng has been responsible and is instrumental to the growth of the Group. He is the father of Lim Peng Cheong and Lim Peng Jin, who are also Directors and major shareholders of Scientex Berhad. He has no conflict of interest with the Company and has not been convicted for any offences within the past 10 years.

10 9 Profile Of The Board Of Directors Lim Peng Jin Managing Director Lim Peng Jin, a Malaysian, aged 43, is currently the Managing Director of the Company. He was appointed to the Board on 20 January 1995 as the Group Executive Director and was re-designated as Managing Director on 6 November He is also a member of the Board s Remuneration Committee. Lim Peng Jin graduated with a Bachelor of Science (Honours) in Chemical Engineering from the University of Tokyo, Japan in He began his career in chemical industry in Japan before joining the Company in He had also completed a course in Programme Management Development at Harvard University, USA in He has local and international working experience in the field of polymer and chemicals during the early years of his career and is very hands-on in the business of Scientex Group of Companies involving polymer, packaging, property and chemicals industries for the past 19 years. The success of the Group owes much to his extensive involvement in its operations and managements. He is the youngest son of Lim Teck Meng and the brother of Lim Peng Cheong, who are also Directors and major shareholders of Scientex Berhad. He has no conflict of interest with the Company and has not been convicted for any offences within the past 10 years. Lim Peng Cheong Non-Independent Non-Executive Director Lim Peng Cheong, a Malaysian, aged 48, is a Non-Independent Non-Executive Director of the Company. He was appointed to the Board as an Executive Director on 9 September 1988, and has held this position until 10 November 2003 when he was re-designated as Non-Executive Director. He graduated with a Bachelor of Science (Honours) in Business Studies from the City University, London, UK in June He is currently the Managing Director of Malacca Securities Sdn Bhd. He is the eldest son of Lim Teck Meng and the brother of Lim Peng Jin, who are also Directors and major shareholders of Scientex Berhad. He has no conflict of interest with the Company and has not been convicted for any offences within the past 10 years.

11 10 Profile Of The Board Of Directors Fok Chuan Meng Non-Independent Non-Executive Director Fok Chuan Meng, a Malaysian, aged 44, was appointed to the Board as a Non-Independent Non-Executive Director on 18 March He is also a member of the Board s Audit Committee. Mr Fok is an associate member of Chartered Institute of Management Accountants (UK), a chartered accountant of the Malaysian Institute of Accountants and also is a Certified Financial Planner. He has worked in various industries in Malaysia and Singapore in various capacities relating to finance management and management roles. Presently, he is an Executive Director of Malacca Securities Sdn Bhd since 2002 overseeing the stock broking operations. He does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has not been convicted for any offences within the past 10 years. Wong Mook Wong Tsap Loy Independent Non-Executive Director Wong Mook Wong Tsap Loy, a Malaysian, aged 78, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 29 November He is also a member of the Board s Audit Committee and Nomination Committee. He received his early education in Kuala Lumpur and is a businessman with over 30 years experience of owning and managing businesses dealing in property development, manufacturing and trading. He does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has not been convicted for any offences within the past 10 years. Cham Chean Sian Chean Fong Independent Non-Executive Director Cham Chean Sian Chean Fong, a Malaysian, aged 43, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 24 May 2001 as a Non-Executive Director. He is also a member of the Board s Audit Committee, Nomination Committee and Remuneration Committee. He graduated with a LLB (Honours) from Bristol Polytechnic, U.K. in 1991 and obtained a Certificate of Legal Practice in He was called to Bar in September 1995 and since then, he has been in private practice. Currently, he is a partner of a law firm in Kuala Lumpur. He does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has not been convicted for any offences within the past 10 years.

12 11 Profile Of The Board Of Directors Dato Hazimah Binti Zainuddin Independent Non-Executive Director Dato Hazimah Binti Zainuddin, Malaysian, aged 48 is an Independent Non-Executive Director of the Company. She was appointed to the Board as a Non-Independent Non-Executive Director on 27 January 2004 and has held this position until she was re-designated as Independent Non-Executive Director on 7 November She graduated with a Business Management Discipline from MARA University of Technology. Dato Hazimah has been a Board Member of Malaysia External Trade Development Corporation (Matrade) since June She is also the President of Persatuan Wanita Bumiputra Dalam Perniagaan & Profesyen Malaysia (Peniagawati) which is an established non-governmental organization with the objective of developing women entrepreneurs in Malaysia. She is the Founder and Managing Director of Hyrax Oil Sdn Bhd which produces top quality and high performance automotive, industrial and specialty lubricants and other petroleum derivatives. Her astute business acumen propelled Hyrax Oil Sdn Bhd to grow from strength to strength, now exporting to 38 countries including to Australia, New Zealand, Africa and the Middle East. Over the years, Dato Hazimah received numerous accolades for her contributions and achievements including the Ernst & Young Woman Entrepreneur Of The Year Malaysia Through her promotion of entrepreneurship, Dato Hazimah has inspired many budding entrepreneurs, of both genders, to venture into the business world. She does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. She has not been convicted for any offences within the past 10 years. Teow Her Chang Choo Chau Independent Non-Executive Director Teow Her Chang Choo Chau, Malaysian, aged 71 is an Independent Non-Executive Director of the Company. He was appointed to the Board on 19 December He had his early education at the Royal Military College and gained his Diploma in Estate Management in the early sixties. He was appointed as an Executive Director of the Yule Catto Plantations in 1976 after returning from a Financial/Management course at London Business School. He was the Managing Director of Revertex Malaysia Sdn Bhd ( Revertex ), a subsidiary of a British company, Yule Catto & Co. PLC, from 1990 to During that period, he was also the Managing Director of Rexplas Sdn Bhd, a joint venture company between Exxon and Revertex. He was on the Boards of Revertex Fincwater Sdn Bhd and Revertex (Guangdong) Chemicals Co. Ltd. Currently, he sits on the Board of Chemical Mate Sdn Bhd, a consultancy and trading/distribution company. He was conferred the Amanah Mangku Negara (A.M.N) by His Majesty Yang Dipertuan Agung in He does not have any family relationship with any Director and/or major shareholder of the Company and has no conflict of interest with the Company. He has not been convicted for any offences within the past 10 years.

13 12 Chairman s Statement Dear Shareholders, On behalf of the Board of Directors of Scientex Berhad, I am pleased to present the Annual Report and Audited Financial Statements of the Company and the Group for the financial year ended 31 July Operating Results I am pleased to report that our Group ended the financial year on a very positive note by achieving substantial growth in both revenue and pre-tax profits. For the financial year ended 31 July 2010, total revenue for the Group increased by a noteworthy 36.3% to RM694.8 million compared with RM509.7 million last year. This marks the highest ever revenue achieved in the Group s financial history. The Group s pre-tax profits rose to a record high of RM70.8 million from RM42.1 million in Consequently, the Group s earnings per share increased to 28.0 sen from 17.4 sen and net assets stood at RM1.92 per share compared to RM1.74 in the previous financial year. The strong financial performance of the Group was attributed to contributions made by the manufacturing and property divisions. For the manufacturing division, the increase in revenue was due to the increase in tonnage sales for stretch film and the capacity expansion drive undertaken by the Group for its other industrial packaging products to meet the growing demand from its key markets. Our niche products saw lower operating costs due to prudent management, better product mix and higher level of operational efficiency which contributed to the Group s higher revenue and better operating results. The property division also registered strong performance for the financial year with a 84% increase in revenue compared to the previous financial year. The revenue increase came from the successful new launches of its projects in Pasir Gudang, Skudai and Kulai, all in the State of Johor and Ayer Keroh in the State of Melaka. The Group continued to retain a strong balance sheet with shareholders equity increased to RM414.3 million for the current financial year ended 31 July 2010 compared to RM375.1 million in the previous year. More importantly, the Group s strong operating cash flow attributable to the prudent management and strict internal control measures has enabled the net gearing ratio to remain healthy at a manageable level of Our Growth Strategies The growth of the Group for the last 5 years was achieved by restructuring and divesting its non-core businesses and consolidating its businesses to focus on the core businesses of property development and manufacturing. For our property division, we have charted our plans to grow via expansion of our land-bank in choice locations through strategic acquisitions in Melaka and Johor. For our manufacturing division, we are growing the businesses by investing in the new lines and machinery to increase production capacity to cater for the demand for these products from our customers. The manufacturing of our products such as stretch film and strapping bands, which are volume-based businesses has seen greater demand for these products and with the increase in our production capacity, our Pulau Indah and Melaka plants have been able to achieve greater economies of scale in terms of lower production costs. With new and state-of-the-art machinery, our plants are also able to achieve faster turnaround time as market competition increases and our ability to deliver quality products on schedule to our customers as well as our ability to service our customers well has enabled us to remain competitive in our line of business. We also diversified our manufacturing portfolio by acquiring the rigid film business through the acquisition of Scientex Industries Group Sdn Bhd (formerly known as Rigidtex Sdn Bhd) in August Our other industrial products such as adhesives, polymer products, corrugated carton boxes, woven bags and automotive carpet mats cater to niche customers and we have been able to sustain that portion of the businesses as well. Our property division continues to focus on offering a wider range of affordable homes as well as commercial properties to cater for the growing market demand for such properties. The strong demand for such products has underpinned our land-bank expansion predominantly in Johor and Melaka. With the completion of the acquisition of two property development companies in 2009 and in the first half of 2010, the Group has increased its land-bank by 292 acres with potential gross development value of approximately RM1 billion. In May 2010, the Group marked its maiden foray into the lucrative high-end property market segment with the successful launch of its first phase of commercial units in Skudai, Johor. With the implementation of the 10th Malaysia Plan and the recent announcements made between the Governments of Malaysia and Singapore, we foresee that there would be more developments in Iskandar Malaysia and the Group is well positioned to leverage on its strategic location in Skudai to create more value and to sustain its growth in the coming years. Dividends Given our improved performance, the Board has declared a single tier interim dividend of 6% which was paid on 10 August We are pleased to inform that the Board would also be recommending a single tier final dividend of 12% for the year ended 31 July 2010, subject to shareholders approval at the forthcoming Annual General Meeting.

14 13 Chairman s Statement In arriving at the rate of dividend, the Board is satisfied that a performance-based dividend policy can be prudently maintained. The policy ensures satisfactory return on investment to shareholders while enabling the Group to retain sufficient funds for capital requirement, offering long term sustainable benefits to all shareholders. Operating Environment & Prospects Based on Bank Negara Quarterly Bulletin issued for Second Quarter 2010, the global economic recovery continued in the second quarter of 2010, albeit on a moderate scale, due to the continuing uncertainties arising from the sovereign debt crisis in the Euro zone and the dangers of fiscal cutbacks proposed by some of the recovering economies. On the other hand, regional economies continue to enjoy strong growth supported by robust domestic and external demand. Bank Negara foresees that there would be an increased risk of a moderation in global growth due to the concerns on the sovereign debt crisis and the proposed fiscal cutbacks which may jeopardize the recovery momentum. Volatility in the international financial markets has also increased following concerns over the economic slowdown being experienced in several advanced economies compounded by rising fears of a double dip recession occurring in the United States of America have raised uncertainties on the potential impact on the international financial system and global economic activity. Going forward, while the assessment is that the global economic recovery is expected to continue, there are increasing risks that the global growth momentum could be affected by the economic slowdown in some advanced economies as well as currency fluctuations of major trading countries such as United States which has a direct impact on our export revenue and profitability. The Group will continue to be vigilant against such risks. For the domestic economy, rising consumer spending and confidence indicate that economic activity has remained robust in the second quarter and is likely to remain positive with the country s GDP growth expected to achieve 6.5% for the year 2010 (Source : Malaysian Institute of Economic Research). Whilst the volatile external environment may result in some moderation in the pace of growth, we expect the domestic economy to remain resilient with continued improvements in private consumption and investment and augmented by public investment spending under the 10th Malaysia Plan. To this end, we will continue to expand our customer base in both the local and overseas markets by continuous marketing activities, road shows and exhibitions to create publicity for our products and building up our Scientex brand by producing broader range of high quality products and providing good customer services. According to the Property Market Report 2009, the property market recorded modest performance in 2009 with signs of recovery as market activities and value increased especially in the last quarter of As in the past years, the residential property sub-sector continued to spearhead market transactions in terms of volume and value. By price range, transactions within the price range of RM100,000 to RM150,000 had the largest market share totaling 38,382 followed by those priced between RM250,000 and RM500,000 (28,600 transactions). Terraced houses were the most sought-after capturing 38.7% compared with condominiums/apartments of only 13.5%. The above data indicated that we have been adopting the right strategy by focusing on medium cost residential houses in order to enjoy sustainable growth. Over the years, we have carved a niche as a property developer in the affordable housing segment based on our critical success factors of timely delivery, affordable pricing and product quality which are our key selling points for our developments in Kulai and Pasir Gudang, Johor to cater to the lower and middle income groups. We will continue to launch new and innovative products to cater for the insatiable demand for affordable housing in Kulai and Pasir Gudang which serve the industrial areas in the vicinity. To take advantage of the increasing demand for quality homes and to tap into enormous potential of Iskandar Malaysia, the country s foremost economic corridor of growth, our Skudai project will focus on higher end mixed residential and commercial properties. Our strategy for our Skudai project is to leverage on the existing good infrastructure and capitalize on its excellent location and close proximity to Singapore as strong selling points by offering higher end products to attract Singaporeans and Malaysians who commute to Singapore daily to work to live in a secured and gated surroundings with a full range of facilities and amenities. The high end development would also complement the other on-going up-market property projects within the vicinity of our Skudai project which are being developed by established property developers in these surrounding areas. We believe that continuous innovation and improvements in our industrial packaging products are crucial in meeting the fast changing needs of the market and in maintaining our competitive edge. The Group s future growth will continue to be driven by capacity expansion to fulfill the demand for our existing products, development of new products, penetration into new markets and continuous marketing activities to boost sales. On the property front, we will continue to look for lands in strategic locations where we can replenish our existing land-bank with lands which can provide good returns over the middle and longer term. Acknowledgement On behalf of the Board, I would like to express my heartfelt gratitude to the management and staff for their commitment and hard work in making all our achievements in this financial year possible. I would also like to take this opportunity to express my sincere thanks in appreciation of the invaluable support rendered to us by our valued customers, business associates, and shareholders and with your full support, we look forward to a better year together with you. I personally would like to thank my colleagues in the Board of Directors for their support and commitment to the Company. Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Chairman

15 14 Penyata Pengerusi Pemegang-pemegang Saham yang dihormati, Bagi pihak Lembaga Pengarah Scientex Berhad, saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Teraudit Syarikat dan Kumpulan bagi tahun kewangan berakhir 31 Julai Prestasi Operasi Saya dengan sukacitanya melaporkan bahawa Kumpulan kami telah mengakhiri tahun kewangan dengan prestasi yang amat positif apabila mencapai pertumbuhan yang memberangsangkan sama ada dari segi hasil pendapatan mahupun keuntungan pra cukai. Bagi tahun kewangan 2010, dengan bangganya jumlah hasil pendapatan Kumpulan telah meningkat sebanyak 36.3% kepada RM694.8 juta berbanding dengan RM509.7 juta tahun sebelumnya. Ini merupakan hasil pendapatan tertinggi yang pernah dicapai dalam sejarah kewangan Kumpulan. Keuntungan pra cukai Kumpulan telah melonjak mencatat peningkatan sebanyak RM70.8 juta berbanding RM42.1 juta pada tahun sebelumnya. Oleh yang demikian, perolehan setiap saham Kumpulan meningkat kepada 28.0 sen daripada 17.4 sen dan aset bersih berjumlah RM1.92 pada setiap saham berbanding dengan RM1.74 pada tahun sebelumnya. Prestasi kewangan Kumpulan yang kukuh adalah berpunca daripada sumbangan yang disumbangkan oleh sektor pengilangan dan hartanah. Bagi sektor pengilangan, peningkatan hasil pendapatan adalah disebabkan oleh peningkatan dalam tanan jualan bagi saput regang dan usaha peningkatan kapasiti pengeluaran yang dilaksanakan oleh Kumpulan bagi produk-produk pembungkusan perusahaan lainnya bagi memenuhi permintaan yang semakin meningkat dari pasaran utamanya. Kos kendalian yang lebih rendah dicatatkan oleh produk nic kami disebabkan oleh pengurusan yang bijak, gabungan produk yang lebih baik dan tahap kecekapan operasi yang lebih tinggi seterusnya menyumbang kepada hasil Kumpulan yang lebih memberangsangkan dan keputusan kendalian yang lebih baik. Sektor hartanah juga telah mencatat prestasi yang kukuh bagi tahun kewangan dengan peningkatan sebanyak 84% dari segi hasil berbanding dengan tahun kewangan sebelumnya. Peningkatan hasil ini berpunca dari kejayaan beberapa projek yang baru dilancarkan iaitu di Pasir Gudang, Skudai dan Kulai, kesemuanya terletak di Negeri Johor dan Ayer Keroh di Negeri Melaka. Kumpulan terus mengekalkan kunci kira-kira yang kukuh dengan ekuiti pemegang-pemegang saham meningkat kepada RM414.3 juta bagi tahun kewangan semasa berakhir 31 Julai 2010 berbanding dengan RM375.1 juta pada tahun sebelumnya. Lebih penting lagi, aliran tunai kendalian operasi Kumpulan yang kukuh berpunca daripada pengurusan yang bijak dan langkah-langkah kawalan dalaman yang ketat telah membolehkan nisbah penggearan bersih kekal memberangsangkan pada tahap yang boleh diurus sebanyak Strategi-strategi Pertumbuhan Kami Pertumbuhan Kumpulan kami bagi tempoh 5 tahun yang terdahulu telah dicapai melalui penyusunan semula dan pelupusan perniagaan bukan terasnya serta penyatuan perniagaannya untuk menumpukan perhatian pada perniagaan teras iaitu pembangunan sektor hartanah dan pengilangan. Bagi sektor hartanah, kami telah merangka rancangan untuk berkembang melalui pengembangan simpanan tanah di lokasi-lokasi pilihan melalui pembelian strategik di Melaka dan Johor. Bagi sektor pengilangan, kami telah meluaskan perniagaan dengan melabur dalam talian produksi dan mesin-mesin baru untuk meningkatkan kapasiti pengeluaran bagi memenuhi permintaan bagi produk-produk ini daripada pelanggan-pelanggan kami. Produk pengilangan kami seperti saput regang dan pita pengikat, yang merupakan perniagaan berasaskan kuantiti telah menyaksikan permintaan yang lebih tinggi bagi produk-produk ini dan dengan peningkatan dalam keupayaan pengeluaran kami, loji Pulau Indah dan loji Melaka kami telah berupaya mencapai ekonomi bidangan yang lebih besar dari segi kos pengeluaran yang lebih rendah. Di lengkapi dengan mesin baru yang canggih, loji-loji ini juga berupaya mencapai masa pusingan yang lebih pantas seiring dengan peningkatan persaingan pasaran. Kami juga berupaya menghantar produk berkualiti mengikut jadual kepada pelanggan serta berupaya untuk memberi perkhidmatan kepada pelanggan-pelanggan, seterusnya telah membolehkan kami kekal berdaya saing dalam bidang perniagaan ini. Kami juga telah mempelbagaikan portfolio pengilangan kami dengan membeli perniagaan saput tegar melalui pengambilalihan Scientex Industries Group Sdn Bhd (dahulunya dikenali sebagai Rigidtex Sdn Bhd) pada bulan Ogos Produk perusahaan kami yang lain seperti perekat, produk polimer, kotak karton berombak, beg anyaman dan pelapik permaidani automotif memenuhi keperluan pelanggan nic dan kami juga telah berupaya untuk mengekalkan bahagian perniagaan tersebut. Bahagian hartanah terus memberi tumpuan pada penawaran pelbagai jenis rangkaian rumah yang mampu dibeli serta hartanah-hartanah komersial bagi memenuhi permintaan pasaran yang semakin meningkat bagi sektor hartanah. Permintaan kukuh bagi produk sedemikian telah mendorong pengembangan simpanan tanah yang terutamanya terletak di Johor dan Melaka. Berikutan pengambilalihan dua syarikat pembangunan hartanah pada tahun 2009 dan pertengahan tahun 2010, Kumpulan kami telah menambah simpanan tanah sebanyak 292 ekar dengan potensi nilai pembangunan kasar sebanyak RM1 billion. Pada bulan Mei 2010, Kumpulan kami telah membuat penglibatan sulungnya ke dalam segmen pasaran hartanah mewah yang menguntungkan apabila berjaya melancarkan fasa pertama unit komersialnya di Skudai, Johor. Dengan pelaksanaan Rancangan Malaysia Ke-10 dan pengumuman baru-baru ini yang dibuat antara Kerajaan Malaysia dan Singapura, kami meramalkan bahawa terdapat lebih banyak pembangunan di Iskandar Malaysia dan Kumpulan kami cukup bersedia untuk mengambil peluang di lokasi strategiknya di Skudai untuk mewujudkan lebih banyak pulangan dan mengekalkan pertumbuhannya pada tahun-tahun yang akan datang. Dividen Berikutan prestasi kami yang bertambah baik, Lembaga telah mengisytiharkan dividen satu tier sebanyak 6% yang telah dibayar pada 10 Ogos Kami dengan sukacitanya memaklumkan bahawa Lembaga juga akan mencadangkan dividen akhir satu tier sebanyak 12% bagi tahun berakhir 31 Julai 2010, tertakluk kepada kelulusan pemegang-pemegang saham pada Mesyuarat Agung Tahunan akan datang. Dalam pengiraan kadar dividen, Lembaga berpuas hati bahawa polisi dividen berasaskan prestasi boleh dikekalkan secara berhemat. Polisi ini memastikan pulangan yang memuaskan ke atas pelaburan pemegang-pemegang saham, manakala pada masa yang sama membolehkan Kumpulan mengekalkan dana yang mencukupi untuk keperluan modal, menawarkan manfaat mapan jangka panjang kepada semua pemegang saham.

16 15 Penyata Pengerusi Persekitaran Kendalian & Prospek Mengikut Buletin Suku Tahunan Bank Negara yang dikeluarkan bagi suku Kedua 2010, pemulihan ekonomi global berterusan sehingga suku kedua Walaupun pada skala sederhana yang disebabkan oleh ketidakpastian berterusan yang timbul daripada krisis hutang Kerajaan di zon Eropah dan bahaya pengurangan fiskal yang dicadangkan oleh beberapa ekonomi yang sedang pulih. Sebaliknya, ekonomi-ekonomi serantau terus menikmati pertumbuhan yang kukuh dan disokong oleh permintaan domestik serta permintaan luar yang teguh. Bank Negara meramalkan bahawa akan terdapat peningkatan risiko terhadap kesederhanaan dalam pertumbuhan global disebabkan oleh kebimbangan mengenai krisis hutang Kerajaan dan cadangan pengurangan fiskal yang boleh menjejaskan momentum pemulihan. Naik turun dalam pasaran kewangan antarabangsa juga semakin meningkat berikutan kebimbangan terhadap kelembapan ekonomi yang dialami oleh beberapa ekonomi maju yang diburukkan lagi oleh peningkatan kebimbangan terhadap kemelesetan teruk berganda yang berlaku di Amerika Syarikat. Ini telah menimbulkan ketidakpastian ke atas potensi kesan ke atas sistem kewangan antarabangsa dan kegiatan ekonomi global. Walaubagaimanpun, taksiran menunjukkan bahawa pemulihan ekonomi global dijangka akan berterusan, terdapat peningkatan risiko bahawa momentum pertumbuhan global mungkin terjejas akibat kelembapan ekonomi di beberapa ekonomi maju serta naik turun mata wang negara-negara perdagangan utama seperti Amerika Syarikat yang mempunyai kesan langsung ke atas hasil eksport dan keuntungan kami. Kumpulan kami akan sentiasa berwaspada terhadap risiko-risiko tersebut. Bagi ekonomi domestik, perbelanjaan dan keyakinan pengguna yang semakin meningkat menunjukkan bahawa kegiatan ekonomi kekal teguh pada suku kedua dan berkemungkinan akan kekal positif dengan pertumbuhan KDNK negara yang dijangka akan mencapai 6.5% bagi tahun 2010 (Sumber: Institut Penyelidikan Ekonomi Malaysia). Manakala persekitaran luaran yang tidak menentu boleh menyebabkan beberapa penyederhanaan dalam kadar pertumbuhan, kami menjangkakan ekonomi domestik akan kekal berdaya saing dengan peningkatan berterusan dalam penggunaan dan pelaburan swasta serta diperkukuhkan oleh perbelanjaan pelaburan awam di bawah Rancangan Malaysia Ke-10. Berdasarkan ulasan di atas, kami akan sentiasa meluaskan pangkalan pelanggan kami sama ada dalam pasaran tempatan mahupun luar negeri dengan kegiatan pemasaran, roadshow dan pameran yang berterusan untuk mewujudkan publisiti bagi produk-produk dan mengangkat jenama Scientex dengan memperkenalkan pelbagai jenis produk berkualiti tinggi serta menyediakan perkhidmatan pelanggan yang terbaik. Menurut Laporan Pasaran Hartanah 2009, pasaran hartanah telah mencatat prestasi sederhana pada tahun 2009 dengan tanda-tanda pemulihan apabila kegiatan dan nilai pasaran meningkat terutamanya pada suku terakhir Seperti tahun-tahun sebelumnya, subsektor hartanah kediaman terus menerajui urus niaga pasaran dari segi kuantiti dan nilai. Dari segi julat harga, urus niaga dalam julat RM100,000 hingga RM150,000 mempunyai bahagian pasaran terbesar berjumlah 38,382 diikuti oleh urus niaga yang berjulat harga antara RM250,000 dan RM500,000 (28,600 urus niaga). Rumah teres adalah jenis kediaman yang paling laris, menguasai 38.7% berbanding dengan kondominium/apartmen hanya sekadar 13.5%. Data di atas menunjukkan bahawa kami telah membentuk strategi yang betul dengan memberi tumpuan pada rumah-rumah kediaman kos sederhana untuk menikmati pertumbuhan yang berterusan. Selama ini, kami telah mengukir nama sebagai pemaju hartanah dalam industri perumahan mampu beli berdasarkan faktor-faktor kejayaan penting kami iaitu penyerahan tepat pada masa, peletakan harga mampu dibeli dan kualiti produk yang merupakan kekuatan jualan bagi pembangunan di Kulai dan Pasir Gudang, Johor yang memenuhi keperluan kumpulan berpendapatan rendah dan sederhana. Kami akan terus melancarkan produk-produk baru dan inovatif untuk memenuhi permintaan yang tidak pernah putus-putus bagi mendapatkan rumah mampu beli di Kulai dan Pasir Gudang seterusnya memenuhi keperluan kawasan perindustrian berdekatan. Diatas permintaan yang semakin bertambah, kami telah mengambil kesempatan menghasilkan rumah-rumah berkualiti seterusnya mengambil peluang ke atas potensi besar wilayah Iskandar Malaysia, iaitu koridor pertumbuhan ekonomi terpenting negara, projek Skudai kami akan menumpukan pada kediaman bercampur dan hartanah komersial mewah. Strategi kami bagi projek Skudai adalah untuk mengambil peluang ke atas infrastruktur sedia ada yang baik serta mengambil peluang ke atas lokasi strategiknya dan berdekatan dengan Singapura sebagai tarikan jualan yang kukuh dengan menawarkan produk-produk bernilai tinggi seterusnya menarik warga Singapura dan Malaysia yang berulang-alik ke Singapura setiap hari kerana bekerja untuk tinggal dalam persekitaran yang selamat dan berpagar serta dilengkapi dengan pelbagai jenis kemudahan dan keselesaan. Pembangunan ini juga akan melengkapi projek-projek pasaran mewah lain yang sedang dilaksanakan dalam kawasan sekitar projek Skudai yang dibangunkan oleh pemaju-pemaju hartanah terkemuka di kawasan-kawasan sekitarnya. Kami percaya bahawa inovasi dan penambahbaikan berterusan dalam produk pembungkusan perusahaan adalah penting dalam memenuhi keperluan pasaran yang pantas berubah dalam mengekalkan kelebihan daya saing kami. Pertumbuhan masa hadapan Kumpulan kami akan terus dipacu oleh pengembangan keupayaan seterusnya memenuhi permintaan bagi produk sedia ada, pembangunan produk baru, penembusan ke dalam pasaran-pasaran baru dan kegiatan pemasaran yang berterusan untuk merangsang jualan. Bagi sektor hartanah, kami akan terus mencari lokasi tanah yang strategik di mana kami boleh menambah simpanan sedia ada yang boleh menyediakan pulangan yang baik bagi jangka masa sederhana dan jangka panjang. Penghargaan Bagi pihak Lembaga, saya ingin mengucapkan jutaan terima kasih yang tulus ikhlas kepada pengurusan dan kakitangan atas komitmen dan kerja keras mereka yang telah memungkinkan pencapaian kami dalam tahun kewangan ini. Saya juga ingin mengambil kesempatan untuk mengucapkan ribuan terima kasih sebagai penghargaan atas sokongan yang amat berharga kepada pelanggan-pelanggan kami yang dihormati, sekutu-sekutu perniagaan, pemegang-pemegang saham. Dengan sokongan padu anda semua, kami berazam untuk mencapai prestasi yang lebih baik bersama dengan anda pada masa hadapan. Secara peribadi, saya juga ingin mengucapkan terima kasih kepada rakan-rakan Lembaga Pengarah diatas sokongan dan komitmen mereka kepada Syarikat. Tan Sri Dato Mohd Sheriff Bin Mohd Kassim Pengerusi

17 16 主席報告書 親愛的股東, 本人謹此欣然代表森德有限公司的董事部為您提呈本公司与集團截至 2010 年 7 月 31 日財政年度的常年報告与已審核財務報表 營運業績 我謹此非常榮幸的向各位匯報, 森德公司在本財政年取得非常可觀的營業額和稅前盈利成長 森德公司在截至 2010 年 7 月 31 日財政年的營業額, 比前一年的 5 億 970 万令吉, 顯著地增長了 36.3%, 達到 6 億 9480 万令吉的歷史新高 与此同時, 稅前盈利也同步創新高, 達到 7080 万令吉,2009 財政年的稅前盈利是 4210 万令吉 有鑒于此, 森德公司的每股盈利, 也從 2009 財政年的 17.4 仙增加至 28 仙 每股淨資產值從去年的 1 令吉 74 仙增加至 1 令吉 92 仙 森德公司能取得標青的業績, 歸功于旗下的制造業与產業業務 在制造業方面, 拉伸膜的銷售增加, 加上森德公司為了迎合主要市場需求成長而增加其他工業包裝產能, 推高了制造業的營業額 管理層的精明監管, 更好的多元產品組合, 更高的營運效率, 不僅減低特定產品的營運成本, 也為森德公司帶來更高的營業額和營運業績 另一方面, 產業業務也取得了強穩的增長 与去年同期比較,2010 財政年的營業額增加了 84%, 主要是公司在柔佛州巴西古當 士古來与古來以及馬六甲州愛极樂新推介的產業計划, 成功取得熱烈的回響 截至 2010 年 7 月 31 日財政年, 森德公司的資產負債表依然保持強穩, 股東權益為 4 億 1430 万令吉, 去年同期是 3 億 7510 万令吉 更重要的是, 森德公司的營運流動現金壯況強穩, 管理層的精明監管和嚴謹的內部監控措施促使淨資產負債比率得以維持在 0.11 的可掌控健康水平 我們的成長策略 過去的 5 年里, 業務重組, 摒棄非核心業務, 整合業務, 以便集中專注力在產業發展和制造業兩大核心業務的措施, 為集團帶來了業務成長 在產業業務方面, 我們鎖定了在柔佛和馬六甲州适中地點增購地庫的策略, 而在制造業領域, 我們則通過投資新的生產線和增設机械來提高生產力, 以滿足客戶對我們各項產品的需求 以龐大訂單為主的拉伸膜和捆綁帶也出現更高的需求 而隨著產能的增加, 森德公司位于英達島和馬六甲的厂房也因為生產成本降低而取得更高的經濟效益 此外, 在市場競爭加劇之際, 我們新穎与先進的机械設備, 也縮短了生產時間, 加快了交貨時間, 不僅幫助公司如期交出优質產品, 提高我們的服務素質, 更能在領域中, 保持良好的競爭能力 另一方面, 森德公司在 2009 年 8 月通過收購森德工業集團有限公司 (Scientex Industries Group Sdn Bhd), 前稱 Rigidtex 有限公司的股份, 將工業包裝生產多樣化, 加入生產剛性膜的行列 而我們也成功通過其他產品, 比方粘合劑 聚合物產品 瓦楞紙箱 編織袋和汽車地毯, 繼續維持特定市場的業務 我們的產業業務將會繼續集中在推介各類大眾化价格的房產与商業單位, 以迎合市場的成長需求 來自市場強穩的需求, 鞏固了我們在柔佛与馬六甲州擴展地庫面積的地位 森德公司成功在 2009 年和 2010 年上半年收購兩家產業發展公司, 促使公司的地庫面積增加了 292 英畝, 潛在發展總值高達 10 億零吉 2010 年 5 月, 森德公司更邁入另一個里程碑, 進軍有利可圖的高檔產業領域, 成功在柔佛士古來推介第 1 期的商業單位 隨著第 10 大馬計划的推行以及馬新兩國政府近期的公告, 我們預期大馬伊斯干達區會有更多的發展計划, 而森德公司也將把握士古來地庫适中地點的优勢, 增加其產業業務价值并在未來几年維持其成長 股息 隨著業績的改善, 董事部已經宣布派發 6% 的中期股息 有關的股息已經在 2010 年 8 月 10 日派發 另外, 董事部也建議在截至 2010 年 7 月 31 日的財政年, 派發 12% 的終期股息 有關終期股息的派發還有待即將來臨的常年股東大會的通過 在斟酌股息派發之際, 董事部對以績效為基礎的股息派發政策深感滿意, 并且相信有關的政策得以明智的延續下去 有關的股息派發不僅确保投資者得到滿意的回酬, 与此同時也能讓森德公司持有足夠的資金, 應對資本需求, 對所有的股東皆帶來長遠的持續性利益

18 17 主席報告書 營運環境以及前景 根据大馬國家銀行 2010 年的第 2 季度報告, 全球經濟繼續在第 2 季适度的复蘇 主要是受到歐洲主權債務危机持續不明朗化和部分經濟复蘇國家建議實行財政削減的隱憂所影響 然而, 區域經濟卻在國內外需要強穩中, 持續取得強勁的成長 國家銀行預測, 上述主權債務危机和財政削減的隱憂, 可能帶來全球經濟成長受限制的風險并減弱其回彈動力 國際金融市場的波動也因為主要經濟体面對經濟放緩的擔憂而加劇 這是因為市場擔心美國經濟將會出現二次衰退, 對國際金融系統和全球經濟活動帶來不明朗的潛在影響 展望未來, 雖然全球經濟預計會持續复蘇, 不過, 同一時間, 成長動力也可能因為主要經濟体經歷經濟放緩和主要貿易國 ( 如美國 ) 面對貨幣波動而受到限制 這些都會對我們的出口營業額和收益造成影響 為此, 森德公司已經對可能出現的風險提高警惕 至于國內經濟, 私人消費和消費人信心指數增加, 推動第 2 季的經濟繼續保持強穩, 預料有關的正面情況將會持續 根据大馬經濟研究院,2010 年的國內生產總值將會取得 6.5% 的成長 在充滿變數的外在因素或導致全球經濟成長放緩之際, 我們預期國內的經濟成長將因為私人消費, 私人投資以及第 10 大馬計划下的公共開支增加而保持回彈力 為此, 我們會繼續通過市場行銷 巡回展和展銷, 于國內外擴大我們的客戶群, 提高森德公司各產品的知名度, 并塑造森德公司為提供多項高素質產品和优質客戶服務的品牌 至于產業領域, 根据 2009 年產業市場報告, 產業市場在該年度取得适中的成長 有跡象顯示市場活動与產業价值已經回升, 特別是在 2009 年的第 4 季度 跟前几年一樣, 住宅產業繼續領導成長 价格介于 10 至 15 万令吉的房產占了最大的市場份額, 相等于 3 万 8382 宗交易 其次是价格介于 25 万至 50 万令吉的房產, 交易量達 2 万 8600 宗 以房產种類區分, 排屋依然是熱門的選擇 占了總交易的 38.7% 公寓 / 高級公寓只是當中的 13.5% 此外, 我們也會善用市場對高素質住宅的需求, 參与大馬伊斯干達區的發展 大馬伊斯干達區是國內首要的經濟發展走廊, 擁有無限的商机, 而我們位于士古來的計划將會專注高檔住宅和商業單位的產業發展 我們的策略是善用現有的良好基本建設, 适中的地點和毗鄰新加坡的良好銷售條件, 推出高檔產業, 吸引每天前往新加坡工作的新加坡人和馬來西亞人在安全的圍篱住宅區居住, 全面享用住宅區里的設施和便利 我們的這項發展也剛好補足附近多個知名發展商目前所涉及的高檔產業計划和發展 我們相信繼續創新和改善現有的產品是我們在工業包裝領域中, 符合市場快速變化需求和保持競爭能力的主要因素 森德公司未來的業務成長將持續以增加產能來滿足原有的市場, 開發新產品, 滲透新市場以及通過市場行銷推搞銷售為主導 至于產業業務的前景, 我們也會繼續購入地點合适的地庫, 補充地庫面積, 在中長期為森德公司帶來丰厚的回酬 感謝篇 我謹代表董事部, 衷心感謝我們的管理層与員工, 感激他們的奉獻和努力, 共同達致本財政年的所有成就 我也借此机會, 至誠感激忠誠客戶 生意伙伴与股東對我們的全力支持 ; 我們一起期待更好的下一個財政年 我個人也在此感謝董事部的同僚, 謝謝你們的支持和付出 Tan Sri Dato Mohd Sheriff Bin Mohd Kassim 主席 以上的數据顯示, 我們專注中价房產的策略是正确的, 也為我們帶來了持續的盈利成長 這些年以來, 我們已成功標榜為大眾化价格房產的發展商, 為低收入和中等收入的家庭提供住宅 我們准時交出產業, 大眾化的价格和高素質房產的銷售口碑, 是我們立足巴西古當和古來產業市場的成功要訣 我們將配合臨近工業區的工作机會, 繼續通過推介新的房產和創新的產業, 滿足巴西古當和古來的住宅需求

19 18 Operational Highlights Of The Year MANUFACTURING Scientex Packaging Film Sdn Bhd Production capacity of 100,000MT July 2010 Arrival of new 4 meter cast stretch film line Commenced commercial operations with additional annual capacity of 15,000MT. Total production capacity increased to 100,000MT per annum Pan Pacific Straptex Sdn Bhd Production capacity of 16,200MT June 2009 Mar 2010 July 2010 Increased to 8 strapping bands production lines with commissioning of 2 new lines. Total annual capacity increased to 13,200MT Invested in new production line Invested in additional line for production of new product, 5mm and 6mm tapes - combined total of 10 lines will raise total production capacity to 16,200MT per annum Scientex Tsukasa (Vietnam) Co., Ltd. Production capacity of 3,600MT Current Commercial operations of 9 raffia production lines. Total annual capacity of 3,600MT Scientex Industries Group Sdn Bhd Streamlining of operations and niche Aug 2009 Current Completed acquisition of rigid film business with subsequent increase in annual production capacity to 4,800MT Streamline manufacturing operations of corrugated carton boxes, woven bags, automotive carpet mats, polymer products and rigid film with focus on niche markets

20 19 Operational Highlights Of The Year PROPERTY Scientex (Skudai) Sdn Bhd Jan 2010 Completed acquisition of Johline Realty Sdn Bhd which has development landbank of 156 acres in Skudai, Johor with subsequent name changed to Scientex (Skudai) Sdn Bhd May 2010 Launched 1st phase of 3 storey shop offices (S1) comprising 70 units and received overwhelming response Sep 2010 Grand opening of Taman Mutiara Mas Scientex Heights Sdn Bhd June 2009 Aug Jul 2010 Completed acquisition with landbank of 136 acres in Ayer Keroh, Melaka Launched 4 phases of shop offices and residential units totaling 165 units with 99% sold

21 20 Review Of Operations MANUFACTURING PP strapping band production line For the year under review, the Group s manufacturing businesses achieved a total turnover of RM545.0 million, an increase of RM116.6 million compared to the turnover of RM428.4 million achieved in the previous financial year. Concurrently with the higher turnover, operating profit achieved was RM36.9 million, a 69% increase from the previous financial year. In line with our capacity expansion plans, we are pleased to report that our second 4000mm, 7-layer cast stretch film line has been successfully installed and commenced operations since August 2010 at our Pulau Indah plant. With the latest installation, our Pulau Indah plant now has a total of 8 lines with an annual production capacity of approximately 100,000 metric tons of high quality films. The latest state-of-the-art machine is expected to produce an additional 15,000 metric tons per annum and this would provide a timely boost for Scientex to move aggressively into new markets whilst retaining and expanding its market share in its key global markets. As part of our plans to move up the value chain and to produce higher value added products, Scientex has, through its research and development, developed a higher performance film which we have launched in Japan under the Neo Telite brand. Possessing better performance qualities, this new generation super thin 10 micron film is more friendly to the environment as it consumes less raw materials. Initially launched for our Japan market where this new product has gained wide acceptance, we have also successfully made in-roads for this product in the European Union and USA markets as well as the Asia Pacific markets outside Japan under the brand name of Elite Premium. Elite Premium and Neo Telite Since the last financial year, we have invested in two additional lines in our subsidiary, namely, Pan Pacific Straptex Sdn Bhd ( PPS ) which produces PP strapping bands. With the latest additions which shall be operational in the coming financial year, PPS would have a total of 10 lines with an estimated total production capacity of 16,200 metric tons per year. PPS is now one of the largest PP strapping bands producers in the world and with the high demand for the products, we are confident that we would be able to achieve sustainable growth for such products with the increase in capacity. The demand for our raffia products remains relatively constant and our plant in Vietnam has 9 lines with an annual production capacity of 3,600 metric tons. Most of our strapping bands and raffia products are exported to countries in the Asia Pacific region, including Japan which is one of the fastest growing markets. The countries in the Asia Pacific region have generally shown greater resilience and demonstrated stronger economic recovery compared to the European and Western economies which are still struggling

22 21 Review Of Operations 4000mm, 7-layer cast stretch film production line with their recession hit economies. The quick recovery and strong economic performance recorded tilldate by the Asia Pacific countries has given us the comfort that, barring unforeseen circumstances and the occurrence of a double dip recession in the Western economies, demand for our products would remain sustainable for the coming financial year as the bulk of the demand for our products comes from the Asia Pacific region. In the beginning of the current financial year under review, we acquired the PVC rigid film business via acquisition of shares of the company, Rigidtex Sdn Bhd from our Japanese partner and renamed it Scientex Industries Group Sdn Bhd. The PVC rigid film plant in Melaka has a yearly production capacity of approximately 4,800 metric tons with ready markets for this product in Malaysia, Singapore, Bangladesh and Vietnam. Besides PVC rigid film, our other products such as woven products, tufted carpet mats, polymer products, corrugated carton boxes and urethane pre-polymer adhesives have been streamlined into our industries division since the beginning of the current financial year. For this industries division, our focus would be on developing niche markets for our products and to continuously improve operational efficiency for better results. We have also taken pro-active steps to control our costs through tighter control of inventory, better cash flow management, improve productivity and sourcing new suppliers for raw materials from local and overseas to further reduce the costs of production in order to achieve higher profit margins. With all these activities being carried out, the Group managed to achieve better results for the current financial year. We have also seen an increase in demand for the sales of urethane pre-polymer adhesives, an essential component in the manufacture of flexible packaging materials which is extensively used in the food and beverages industry. Through our joint venture with Mitsui Chemicals Inc. of Japan (MCI), our manufacturing entity Cosmo Scientex (M) Sdn Bhd has experienced very encouraging growth over the past few years and we have recently increased our production capacity from 11,000 metric tons to 18,000 metric tons per year with additional investment of approximately RM8 million. Our immediate plans are to expand aggressively into the ASEAN market and in particular Indonesia to cater for the growing market demand where we currently enjoy a market share of Raffia production line an estimated 23% and which we hope to achieve a targeted 33% market share by Demand for our polymer products has been very good due to the recovering worldwide automotive industry and in tandem with that, the demand from our customers in Malaysia, Japan, India, Australia and Indonesia has shown corresponding increase accordingly. Carton Boxes Polymer Rigid Films Woven bags We are supplying PVC sheet material for the manufacture of sun visors for Honda and Nissan vehicles for the Thailand market. In recognition to the high quality of our products, we have been able to achieve the prestigious ISO/TS certification which has enabled us to penetrate more international markets and to make greater in-roads especially in Japan, Thailand and India to form strategic alliances with the various automotive manufacturers. Since the last financial year, and as part of our continuous efforts to reduce costs, we have relocated the production of our tufted carpet mats from our Shah Alam plant to our plant in Vietnam. The results for the current financial year has proven that the actions taken were effective. Since the inception of the global economic crisis which had adversely impacted the demand for our woven products in the previous financial year, the Group has focused on penetrating niche markets whilst actively rationalizing our operations to achieve economies of scale and cost efficiency and control through rightsizing of our operations. Based on the actions taken, we have witnessed and achieved marked improvements in our profit margins. For corrugated carton boxes, demand for the products has remained consistent in tandem with the recovery in global demand for electrical and electronics products which consumes a high volume of carton boxes. However, the market volatility of paper prices remain a concern and pursuant thereto, the Management has taken pro-active steps to address the problem in order to minimize the impact of the raw material price fluctuations and to sustain the results.

23 22 Review Of Operations PROPERTY Pasir Gudang The property division achieved encouraging results for the current financial year with revenue of RM149.8 million and operating profits of RM33.1 million. This represents an increase of 84% in terms of revenue and 60% in terms of operating profits vis-a-vis the preceding financial year. Scientex Pasir Gudang Our flagship development known as Taman Scientex Pasir Gudang witnessed 3 new development launches for the current financial year: Phase Q9b (Aster 2) comprising 139 units of double storey terrace houses which was launched in November 2009 with a 100% take-up rate todate. Meanwhile, Phase Q10a (Iris) which comprises 152 units of double storey terrace houses was launched in February 2010 and enjoyed very good response with a 95% take-up rate. Phase Q10b (Iris Elite) comprising 147 units of double storey terrace houses which was launched in May 2010 saw a high 80% take-up rate. The current financial year also witnessed the delivery of keys and handing over of 650 units of houses to our purchasers. Phase Q8B2 (Amanpuri Elit) comprising 212 units of double storey terrace houses was handed over to the purchasers in August Meanwhile, Phase 6C (Heliconia) comprising 192 units double storey low medium cost houses and Phase Q8D (Jasmine) comprising 246 units of double storey terrace houses were handed over in April During the current financial year, our subsidiary Scientex Park (M) Sdn Bhd launched 50 units of double storey cluster houses in December 2009 which was targeted at the niche market. To date, this product has achieved a 50% take-up rate. Scientex Kulai The current financial year 2010 saw 5 launches for our development located in Kulai, Johor known as Taman Scientex Kulai. Phase K2 (Lavender) which comprises 58 units double storey semi-detached houses was launched in August It was targeted at the niche market in Kulai and its surrounding areas. With strategic marketing efforts being carried out, the project received very good response with 90% of the available units being sold out todate. Meanwhile, Phase K4 (Heliconia) which comprises 165 units double storey low medium cost terrace houses was launched in September The product was targeted at a different segment of purchasers and the launch saw good response with 80% of the available units being sold out todate. Due to the overwhelming response and demand for Phase K1 & K3 type of homes, Phase K5a (Casuarina) and Phase K6a (Casuarina Classic) were launched in November 2009 and February 2010 respectively to cater for the demand for such homes. We are pleased to state that Phase K5a currently enjoys a 90% take up rate whilst Phase K6a enjoys a 75% take up rate.

24 23 Review Of Operations Kulai Skudai Ayer Keroh Apart from residential homes, Scientex Kulai also launched 14 units of double storey terrace shops under Phase K7. These highly visible shops are fronting the Air-Hitam Skudai trunk road and construction works for these products have started in July Sales is currently on-going with four units sold todate. The construction works are expected to be completed by May 2011 and we are optimistic that more sales is expected to be concluded once the potential purchasers view the completed units. Apart from the launches made, this year also saw the handing over of keys and delivery of vacant possession to 211 proud owners for Phase K1 homes in November Scientex (Skudai) Sdn Bhd (formerly known as Johline Realty Sdn Bhd) Given the strong demand for the affordable homes segment and in line with the expansion and growth plans of the property division, Scientex Quatari Sdn Bhd had on 19 October 2009 entered into a Share Sale Agreement to acquire Johline Realty Sdn Bhd ( Johline ). Johline is a property development company with a landbank of approximately 156 acres of approved development lands located in Skudai, Johor. The acquisition was completed on 15 January 2010, thus making Johline a wholly owned subsidiary of Scientex Quatari Sdn Bhd. Johline was renamed as Scientex (Skudai) Sdn Bhd to reflect its association with the Scientex group of companies and to capitalize on the established Scientex brandname which was built up over the years through its flagship development in Pasir Gudang. With its strategic landbank located within the vicinity of Iskandar Malaysia and its close proximity to Singapore via the Second Link, this region is expected to be an economic corridor of growth in the future. Tapping on this strength, Scientex Skudai conducted its maiden Phase S1 launch comprising 73 units of 3 storey shops in May 2010 and there was an overwhelming response to the launch which saw all the non-bumiputera units being sold out during the launch day itself. The local economy is expected to remain robust despite anticipated slowdown in the second half of With the implementation of the 10th Malaysia Plan where Iskandar Malaysia has been identified as one of the catalysts of growth, we are confident that the property market within Iskandar Malaysia can be sustained. Following the success of Phase S1, we have launched Phase S2 which comprises 128 units of cluster houses in August 2010 which received very good response. Scientex Heights Sdn Bhd (Ayer Keroh, Melaka) Since acquiring control and management in 2009, Scientex Heights has contributed positively to the property division and recorded a total revenue of RM22.6 million for the current financial year. The revenue was derived from the successful launching of 4 phases comprising 10 units of single storey semi detached houses, 62 units of double storey terrace houses, 58 units of double storey terrace houses and 35 units of double storey shop offices respectively. Due to its strategic location in Ayer Keroh, there was an overwhelming response to the abovesaid launches with a take-up rate of 99% out of the total of 165 units available for sale. For the current financial year, Scientex Heights has also successfully handed over 30 units of single storey semi detached houses and 10 units of double storey semi detached houses to the house purchasers. For the coming financial year, plans are underway for the launch of a further 324 units of double storey shop offices and double storey terrace houses to leverage on the demand for our affordable products. We are confident that with proper pricing and marketing strategy adopted, we are optimistic that the demand for our products can be sustained. Outlook As the global economy continues with its fragile recovery, we are optimistic that the property division will continue to perform reasonably well for the coming financial year 2011 as the demand for affordable housing remains high. Based on the strategic locations of our development properties, we are reasonably confident that by adopting the right marketing and pricing strategies, both our mid range and higher range products would be able to attract the right buyers.

25 24 Corporate Responsibility Statement Healthcare Objective Formation Of Scientex Foundation And Objectives In the area of healthcare, Scientex is aware that healthy people are a major positive force in the workplace and Scientex strongly advocates that everyone should adopt a healthy lifestyle. In line with that belief, Scientex has adopted the healthy, friendly and happy tagline as part of its efforts to promote such awareness amongst its stakeholders, business partners and in particular its employees. A happy and healthy person can bring about and have a positive influence on family, friends and at the workplace. Scientex Berhad has, through the formation of Scientex Foundation, carried out activities in the areas of healthcare and environmental concerns as part of its corporate responsibility initiative. The activities of Scientex Foundation are driven mainly by funding secured from its principal Scientex Berhad. In addition, the Foundation may also seek contributions and donations from the public. Effective from 15 February 2009, all contributions and donations made to the Foundation are tax exempt in accordance to the provisions of the Income Tax Act. In an interdependent globalised world, Scientex is cognizant of the need to work together with various stakeholders and interest groups to address issues which may affect the way businesses ought to be run, how its operations and business activities may have an impact on people and the surrounding environment. With that in mind, Scientex Foundation has entered into alliances with various interest groups to address specific issues pertaining to healthcare and the environment as part of its corporate responsibility initiatives. Collaboration with MAJLIS KANSER NASIONAL (MAKNA) Emeritus Professor Dr S.K.Cheong Research in Mesenchymal Stem Cells (MSC) by Emeritus Professor Dr S.K.Cheong and team Through collaborative efforts with Majlis Kanser Nasional or more commonly known as MAKNA, Scientex Foundation has made an initial allocation of RM200,000 for research in relation to Mesenchymal Stem Cells (MSC) and MSC based gene therapy for treatment of cancers. The research is currently undertaken by Emeritus Professor Dr S.K. Cheong and his team from Universiti Kebangsaan Malaysia. The use of MSC, with its regenerative properties, may be used to repair body organs which has been afflicted with cancer and the pre clinical trials conducted have borne positive results. Research is still on-going and is expected to be completed by Through the Foundation, it is hoped that the results of the research on MSC would be able to provide a solution or cure in the combat against the scourge of various types of cancers.

26 25 Corporate Responsibility Statement Collaboration with NATIONAL AL CANCER SOCIETY MALAYSIA (NCSM) Provision of free screening for cervical cancer for underprivileged women and families in Klang Valley Mesenchymal Stem Cells (MSC) For the MSC gene based therapy, the research attempts to show the ability of the MSC to act as a carrier of a certain gene which could be used to deliver the gene to the areas affected by cancer to induce the generation of certain hormones required by the body to counter the cancerous cells. Under laboratory settings, it was shown that the MSC injected with erythropoietin (EPO) gene could stimulate the production of red blood cells to counter anaemia. With this finding, the research team hopes to conduct pre clinical trials using animals in its next stage of research in the coming year. The research team is also conducting research on the generation of MSC through induced stem cells. The prevalence of cancer has also prompted the Foundation to collaborate with the National Cancer Society Malaysia (NCSM) to undertake and promote a community-supported cervical cancer screening and awareness program targeted at underprivileged women and families. The program aims to raise awareness on cervical cancer and educate them on the availability of early detection screening as an effective preventive tool in combating this dreaded disease which can be cured with early detection. Till July of this year, a total of 12 sessions have been conducted by NCSM in collaboration with various community groups within the Klang Valley and a total of 1,209 women have been screened at NCSM Women s Cancer Detection Centre. Awareness Cum Education Program on Cervical Cancer Through approximately 1,000 locations in the Klang Valley, Penang, Perak and Johor, NCSM has collaborated with general practitioners and clinics to distribute in excess of 95,000 cervical cancer awareness leaflets to the public as part of its awareness cum education program.