AR 2019 (Part1)

SALUTICA BERHAD (1024781-T)
ANNUAL
REPORT
2019
Mission & Vision
Saluting the Extraordinaire™. To build a business where
our efforts and results in whatever we do are saluted by our
colleagues, partners, customers, stakeholders and even
ourselves.
The saxophone was borne out of a need for an instrument

to balance the tonal disparity between the brass and
woodwinds. The Belgium inventor, Adolphe Sax, wanted
an instrument with the projection of a brass instrument
and the agility of a woodwind. An instrument so versatile
that it is used in classical music, military bands, marching
bands, jazz and contemporary music. Creating a niche
to fill a need is what we do at Salutica with our vertically
integrated facility and in-house product development
team. Going above and beyond what is expected of us to
bring ideas into reality is a salute to the extraordinaires.
TABLE OF CONTENTS
2Corporate Information 14
Chairman’s Statement
52
Statement on Risk Management
and Internal Control
3Group Structure 16
CEO’s Message
56
Directors’ Responsibility
Statement
4Financial Highlights 18
Management Discussion
57
Additional Compliance
and Analysis Information
5Board of Directors 23
Sustainability Statement
58
Reports and Statutory
Financial Statements
6Profile of Directors 27
Company Highlights 2019
137
List of Properties
12
Key Senior Management
35
Corporate Governance
138
Analysis of Shareholdings
Overview Statement
13
Profile of Key Senior
47
Audit and Risk Management
141
Notice of
Management Committee Report Annual General Meeting
Form of Proxy
CORPORATE INFORMATION
BOARD OF DIRECTORS
CHIA CHEE HOONG LIM CHONG SHYH

Chairman/Independent Non-Executive Director Managing Director/Chief Executive Officer
LOW TENG LUM JOSHUA LIM PHAN YIH

Senior Independent Non-Executive Director Executive Director/Deputy Chief Executive Officer
LEOW CHAN KHIANG CHAN SHOOK LING

Independent Non-Executive Director Executive Director/Chief Financial Officer
AUDIT AND RISK REGISTERED OFFICE AUDITORS

MANAGEMENT COMMITTEE
41, Jalan Medan Ipoh 6 PricewaterhouseCoopers PLT
LEOW CHAN KHIANG Bandar Baru Medan Ipoh (LLP0014401-LCA & AF1146)
Chairman 31400 Ipoh, Perak Chartered Accountants
Tel: (05) 548 0888 1st Floor, SCB Chambers
CHIA CHEE HOONG Fax: (05) 545 9222 21-27, Jalan Dato’ Maharaja Lela
Member 30000 Ipoh, Perak
LOW TENG LUM Tel: (05) 220 2500
HEAD/MANAGEMENT OFFICE Fax: (05) 253 2366
Member
3 Jalan Zarib 6
Kawasan Perindustrian Zarib SHARE REGISTRAR
NOMINATION AND 31500 Lahat, Ipoh, Perak AND ISSUING HOUSE
REMUNERATION COMMITTEE Tel: (05) 320 6800
Fax: (05) 322 2029 Tricor Investor & Issuing House
LOW TENG LUM Services Sdn. Bhd.
Website: www.salutica.com
Chairman Unit 32-01, Level 32, Tower A
E-mail address: invest@salutica.com.my
Vertical Business Suite
CHIA CHEE HOONG Avenue 3, Bangsar South
Member No. 8 Jalan Kerinchi
PRINCIPAL BANKERS 59200 Kuala Lumpur
LEOW CHAN KHIANG
Member OCBC Bank (Malaysia) Berhad Tel: (03) 2783 9299
Fax: (03) 2783 9222
OCBC Al-Amin Bank Berhad
2, Jalan Dato’ Maharaja Lela
COMPANY SECRETARIES 30000, Ipoh, Perak
STOCK EXCHANGE LISTING
Tel: (05) 241 2200
YENG SHI MEI
(MAICSA 7059759) Main Market of Bursa Malaysia
Securities Berhad
CHONG LAY KIM Stock name: SALUTE
(LS 0008373) Stock code: 0183
CHAN SHOOK LING

(MIA 17167)
2 SALUTICA BERHAD (1024781-T)

GROUP STRUCTURE
Overview
Salutica Berhad (the “Company”) was incorporated in Malaysia
on 19 November 2012 as a private limited company under the
name of Blue Ocean Genius Sdn. Bhd. The principal activity of
the Company is that of investment holding.
On 29 June 2015, we changed our name to Salutica Sdn. Bhd.

and subsequently on 4 November 2015, we became a public
limited company.
The Company was listed on the ACE Market on 18 May 2016

before transferred to the Main Market of Bursa Malaysia
Securities Berhad on 24 March 2017.
Group structure as at 30 June 2019 is as follows:-
SALUTICA BERHAD (1024781-T)
100 %
Salutica Allied Solutions Sdn.Bhd.
(“Salutica Allied”)
Salutica Allied was incorporated on 15 October 1990 and had

adopted its current corporate name in 2013.
Annual Report 2019 3

FINANCIAL HIGHLIGHTS
Financial Year Ended 30-Jun 2015 2016 2017 2018 2019
Revenue (RM’000) 192,518 241,827 247,091 261,474 138,972

Profit/(Loss) Before Tax (RM’000) 20,284 32,899 25,333 15,097 (935)
Profit/(Loss) After Tax (RM’000) 27,412 24,325 19,354 11,362 (550)
Total Assets (RM’000) 122,911 203,299 202,657 192,747 171,987
Total Liabilities (RM’000) 46,729 48,318 37,634 25,674 15,066
Total Assets/Total Liabilities 2.63 4.21 5.38 7.51 11.42
Weighted no. of ordinary shares in issue (‘000) 309,930 319,830 388,000 388,000 387,565
Earnings/(Loss) per share (sen) 8.84 7.61 4.99 2.93 (0.14)
Net assets per share (sen) 24.58 48.46 42.53 43.06 40.49
Net dividend per share (sen) 3.07 1.98 2.40 2.40 2.40
Dividend yield per share (%) 1.85% 1.55% 4.14% 8.00%
Revenue (RM’000) Profit/(Loss) Before Tax (RM’000)
2019 138,972 2019 (935)
2018 261,474 2018 15,097
2017 247,091 2017 25,333
2016 241,827 2016 32,899
2015 192,518 2015 20,284
0 100,000 200,000 300,000 -15,000 0 15,000 30,000
Total Assets/Total Liabilities Earnings/(Loss) per share (sen)
2019 11.42 2019 (0.14)
2018 7.51 2018 2.93
2017 5.38 2017 4.99
2016 4.21 2016 7.61
2015 2.63 2015 8.84
0 3.00 6.00 9.00 -3.00 0 3.00 6.00 9.00
Net assets per share (sen) Net dividend per share (sen)
2019 40.49 2019 2.40
2018 43.06 2018 2.40
2017 42.53 2017 2.40
2016 48.46 2016 1.98
2015 24.58 2015 3.07
0 15.00 30.00 45.00 0 1.00 2.00 3.00
Dividend yield per share (%)

1.85% 1.55% 4.14% 8.00%
8%
6%
4%
2%
0
2016 2017 2018 2019

BOARD OF DIRECTORS
CHAN SHOOK LING

CHIA CHEE HOONG
(“MICHELLE CHAN ”)
Executive Director/
Chief Financial Officer
Chairman/Independent LOW TENG LUM
Non-Executive Director Senior Independent
Non-Executive Director
LIM CHONG SHYH

(“JAMES LIM”)
Managing Director/ JOSHUA LIM PHAN YIH
Chief Executive Officer Executive Director/
Deputy Chief Executive Officer LEOW CHAN KHIANG
Independent
Non-Executive Director

PROFILE OF DIRECTORS
CHIA CHEE HOONG

Aged 42, Male, Malaysian
Chairman/Independent Non-Executive Director
Mr. Chia was appointed to our Board on 15 October

2015. He is also a member of the Nomination and
Remuneration Committee and the Audit and Risk
Management Committee respectively.
He obtained his undergraduate degree in law (LL.B)

from the University of London in 1999 and his post
graduate degree in law (LL.M) specialising in corporate
& securities law from University College London,
United Kingdom in 2004 under the auspices of the
British Chevening Scholarship awarded by the Foreign
and Commonwealth Office, United Kingdom. He
obtained the Certificate in Legal Practice in 2000 and
was called to the Malaysian Bar in 2001.
He started his career in 2001 as a legal assistant with

Zain & Co. In 2008, he left Zain & Co and joined Zaid
Ibrahim & Co as a senior associate. After leaving Zaid
Ibrahim & Co at the end of 2009, he joined Rahmat
Lim & Partners and has been a partner of Rahmat Lim
& Partners since then.
He does not hold any directorship in any other public

companies and public listed companies.
He does not have any family relationship with any

Director or major shareholder of the Company and
does not have any conflict of interest with the Group.

PROFILE OF DIRECTORS (continued)
James Lim was appointed to our Board on 26

November 2012.
He is a trained electrical and electronics engineer with

a degree (Hons) in Electrical Engineering from the
University of Malaya.
He began his career as a design engineer with ASEA AB

(presently known as ASEA Brown Boveri) of Sweden in
1982. He managed various senior positions from 1983
to 1995 in companies such as General Electric Malaysia
Appliance Components Sdn.Bhd., Maxtor Corporation
(Penang), Applied Magnetics (M) Sdn.Bhd. and Crest
Ultrasonics (M) Sdn.Bhd. as managing director.
In 1995, he joined the Malaysian operations of Seagate

Technology LLC as an executive director, where he was
in charge of the commencement, development and
growth of the company’s Ipoh facility. After the closure
of the Ipoh facility, he was subsequently transferred to
head the Seagate removable storage solutions division
in Penang as the managing director in 2000 until 2003.
Thereafter, he joined Knowles Electronics (M) Sdn
Bhd. as a managing director, playing a key role in the
development and growth of the company’s Penang
operations until 2004.
In 2004, he joined Salutica Allied where he set up the

Research and Development (“R&D”) division to focus
on R&D of Bluetooth technology and other wireless,
touchscreen and light guide technologies.
In 2013, he led a management buyout of Salutica Allied

from Balda AG Group when the latter intended to focus
on its core business in medical precision plastic parts
and solutions. He remained as the Chief Executive
Officer of Salutica Allied upon the completion of the
management buyout.
LIM CHONG SHYH James Lim is the director and substantial shareholder
(“JAMES LIM”) of Blue Ocean Enlightenment Sdn. Bhd. (“BOE”).
Aged 61, Male, Malaysian BOE, a company incorporated in Malaysia, is regarded
Managing Director/Chief Executive Officer as the Company’s ultimate holding company.
James Lim is the father of Joshua Lim Phan Yih, our

Executive Director, is also a substantial shareholder
and director of BOE. He is also the father of Joel Lim
Phan Hong, a substantial shareholder of BOE.
Other than as disclosed above, James Lim does not

have any family relationship with any Director or major
shareholder and does not have any conflict of interest
with the Group.

JOSHUA LIM PHAN YIH

Executive Director/Deputy Chief Executive Officer
Joshua Lim was appointed to our Board on 11

September 2013.
He graduated with an external LL.B (Hons) degree

from the University of London and subsequently
obtained the Certificate in Legal Practice in 2008. He
completed his pupillage with Shearn Delamore & Co
where he was confirmed as a legal assistant in 2009.
From 2010 to 2013, he joined Rahmat Lim & Partners
as an associate. From 1 June 2013 to 30 June 2018,
he was the founding partner of the law firm Joshua
Lim & Lee.
Joshua was appointed as the Deputy Chief Executive

Officer of Salutica Allied on 2 July 2018.
He does not hold any directorship in any other public

companies and public listed companies.
Joshua Lim is the son of James Lim, the Managing

Director and Chief Executive Officer of the Company.
He is also the director and substantial shareholder of
BOE. BOE, a company incorporated in Malaysia, is
regarded as the Company’s ultimate holding company.
He is also the brother of Joel Lim Phan Hong, a
substantial shareholder of BOE.
Other than as disclosed above, Joshua Lim does not

have any family relationship with any Director or major
shareholder of the Company and does not have any
conflict of interest with the Group.

Mr. Low was appointed to our Board on 15 October

2015. He is the Chairman of our Nomination and
Remuneration Committee and a member of our Audit
and Risk Management Committee.
He obtained his qualifications from the Association

of Chartered Certified Accountants (“ACCA”) and
Institute of Chartered Secretaries and Administrators,
both of the United Kingdom, in 1979. He attended
the Applied Management Program of the Swedish
Institute of Management in 1990. In 1996, he obtained
a Masters in Public Administration from the John
Fitzgerald Kennedy School of Government, Harvard
University.
He is a Chartered Accountant of the Malaysian Institute

of Accountants (“MIA”), a Fellow member of the
ACCA and Fellow Institute of Chartered Secretaries
and Administrators, and a member of the Association
of Corporate Treasurers, United Kingdom. He has also
served as a member of both the Taxation and Trade
committees of the Malaysian International Chamber
of Commerce and Industry, from 2002 and 2005
respectively until his resignation in 2011.
He started his career as an audit junior in Arthur Young

& Company (presently known as Ernst & Young) in
1977 and was subsequently promoted to audit senior
in 1978. He then left Arthur Young & Company in 1980
and joined Guthrie Malaysia Holdings Berhad as an
internal audit manager until 1981, and subsequently
joined Palmco Holdings Berhad in the same year as
an internal audit manager. In 1985, he left Palmco
Holdings Berhad and joined General Corporation
Berhad as a group internal auditor until 1987. Then,
he joined Southern Steel Berhad as a finance manager
and became the chief operating officer of the steel
business unit in 2000 until he left the company in 2001.
LOW TENG LUM

Subsequently, he joined Guinness Anchor Berhad
in 2001 as the finance director and a member of the
board of directors (appointed on 19 August 2001) and
retired in 2011.
Senior Independent Non-Executive Director
Presently, he is an independent non-executive director
of Boilermech Holdings Berhad and on 30 August
2019, he was appointed as an independent non-
executive director of QL Resources Berhad, all are
companies listed on Bursa Securities.
Mr. Low does not have any family relationship with any
Director or major shareholder of the Company and

LEOW CHAN KHIANG

Independent Non-Executive Director
Mr. Leow was appointed to our Board on 20 October

2015. He is the Chairman of our Audit and Risk
Management Committee and a member of our
Nomination and Remuneration Committee.
He is a Chartered Accountant and a member of the

Malaysian Institute of Accountants (“MIA”) and a
Fellow member of the Chartered Association of
Certified Accountants, United Kingdom (“FCCA”). He
also holds a Master Degree in Business Administration
from Northern University of Malaysia and a Bachelor
Degree in Economics from University of Malaya.
He began his career in 1991 as corporate banking

executive in Hong Leong Bank Berhad and resigned in
1996 to join Malaysian International Merchant Bankers
Berhad (“MIMB”). In MIMB, he was responsible for
various corporate debts and fund raising exercises as
well as general advisory works. In 2001, he resigned
from his position as an assistant manager of MIMB and
joined a local logistic company for a short stint of one
year. In 2002, he joined CAB Cakaran Sdn. Bhd. as a
director of corporate finance and subsequently in 2003
appointed to the board of CAB Cakaran Corporation
Berhad (“CAB”) as an executive director where he was
responsible for corporate planning, accounting and tax
as well as joint-ventures matters. In 2007, he resigned
from CAB and was subsequently appointed to the
board of SLP Resources Berhad as a non-independent
non-executive director. At present, he is running his
own business in providing corporate and financial
services as well as food and confectionery business.
Presently, he is a non-independent non-executive

director in SLP Resources Berhad and an independent
non-executive director of Ni Hsin Resources Berhad,
Tek Seng Holdings Berhad and Iconic Worldwide
Berhad (formerly known as Sanbumi Holdings Berhad),
all are companies listed on Bursa Securities.
Mr. Leow does not have any family relationship with

any Director or major shareholder of the Company and

CHAN SHOOK LING

(“MICHELLE CHAN”)
Aged 49, Female, Malaysian

Executive Director/Chief Financial Officer
Michelle Chan was appointed to our Board on 13

October 2017.
Ms. Chan is a Chartered Accountant and a member of

the Malaysian Institute of Accountants (“MIA”).
She is also a Fellow member of the Chartered

Association of Certified Accountants, United Kingdom
(“FCCA”).
She began her career as a settlement clerk for Overseas

Union Bank Ltd in Singapore in 1990. In 1992, she left
Overseas Union Bank Ltd to further her studies in
Tunku Abdul Rahman College, where she graduated in
1995. Then, she joined SSL Heavy Machinery Sdn. Bhd.
in 1995 as an accounts supervisor until 1999.
In 1999, she joined Salutica Allied as an accountant.

In 2013, she assumed her current position as our
Chief Financial Officer, where she is responsible
for overseeing the overall financial, accounting,
compliance and internal control functions of our
Group.
Presently, Ms. Chan does not hold any directorship in

any other public companies or listed corporations.
Ms. Chan does not have any family relationship with

any Director or major shareholder of the Company and
Notes:
Conviction of Offences
None of the Directors has been convicted of any offences within the
past 5 years other than possible traffic offences.
There were no public sanction or penalty imposed by the relevant
regulatory bodies during the financial year ended 30 June 2019.
Directors’ Shareholding
The details of the Directors’ interest in securities of the Company are set
out in the Analysis of Shareholding on page 138 of the Annual Report.

KEY SENIOR MANAGEMENT
JOSHUA LIM PHAN YIH

Executive Director/
HO KEAT SOONG Deputy Chief Executive Officer
Chief Supply Chain Officer
CHIN SEEN CHOON

Chief Operating Officer
CHAN SHOOK LING

(“MICHELLE CHAN”)
GOH BEE CHIN @
Executive Director/
OOI BEE CHIN
Chief Financial Officer
Chief Administrative Officer
LIM CHONG SHYH

(“JAMES LIM”)
Managing Director/
Chief Executive Officer

PROFILE OF KEY SENIOR MANAGEMENT
Mr. Ho graduated with a Bachelor of Science in Business Administration from Colorado

State University, United States of America (“US”) and obtained his Master of Business
Administration from the University of South Alabama, US.
He began his career as a production planner in Penang Seagate Industries (M) Sdn.
Bhd. in 1993 before promoted to senior materials manager in 1999. In 2000, he joined
Synerflex Consulting as a senior consultant specialising in the supply chain management
improvement projects and consultancy services.
Subsequently, in 2003, he was headhunted to join Salutica Allied as a general manager

of supply chain management. He assumed his current position as our Chief Supply
Chain Officer in 2015, where he is responsible for the plant-wide sourcing, purchasing,
planning, logistics, quality and key account functions.
Presently, Mr. Ho is an executive director of Salutica Allied, which is the subsidiary

of our Group. He does not hold any directorship in any public companies or listed
corporations.
HO KEAT SOONG
Aged 53, Male, Malaysian Mr. Ho does not have any family relationship with any Director or major shareholder of
Chief Supply Chain Officer the Company and does not have any conflict of interest with the Group.
Mr. Chin graduated with a Bachelor of Engineering in Electronic Engineering from

Oxford Brookes University, United Kingdom.
He began his career as an automation engineer with Sony Electronics (Malaysia) Sdn.
Bhd. in 1994 before he left and joined Seagate Industry (Malaysia) Sdn. Bhd. in 1995
as an automation engineer, and was subsequently promoted to senior manufacturing
engineer in 1997. In 1999, he left Seagate Industry (Malaysia) Sdn Bhd and joined
Certance (Malaysia) Sdn. Bhd. as a staff engineer until 2003. In 2003, he joined Knowles
Electronics (Malaysia) Sdn. Bhd. as a product engineering manager until 2005.
In 2005, he joined Salutica Allied as an engineering manager. He assumed his current

position as our Chief Operating Officer in 2015, where he is responsible for overseeing
factory operations.
Presently, Mr. Chin does not hold any directorship in any public companies or listed
corporations.
Mr. Chin does not have any family relationship with any Director or major shareholder CHIN SEEN CHOON
of the Company and does not have any conflict of interest with the Group. Aged 51, Male, Malaysian
Chief Operating Officer
Ms. Goh graduated with a Bachelor of Business Administration from Universiti Utara
Malaysia and also obtained her certified Diploma in Accounting and Finance from the
ACCA and a Master of Business Administration from the Universiti Utara Malaysia.
She began her career in 1990 as an administration officer with DNP Holdings Berhad
until 1992. In 1992, she joined Salutica Allied as an administrative executive, where her
role involved human resource and administrative functions.
Subsequently, in 2015, she assumed her current position as our Chief Administrative
Officer, where she is responsible for manpower planning, human resource management,
administration, insurance and the security and safety aspects of the assets and
properties of our Group.
Presently, Ms. Goh is an executive director of Salutica Allied, which is the subsidiary
of our Group. She does not hold any directorship in any public companies or listed
corporations.
GOH BEE CHIN Ms. Goh does not have any family relationship with any Director or major shareholder
@ OOI BEE CHIN
of the Company and does not have any conflict of interest with the Group.
Aged 54, Female, Malaysian
Note:
Chief Administrative Officer Conviction of Offences
None of the Key Senior Management has been convicted of any offences within the past 5 years other than
possible traffic offences.
There were no public sanction or penalty imposed by the relevant regulatory bodies during the financial year
ended 30 June 2019.

CHAIRMAN’S STATEMENT
Dear
Shareholders,
On behalf of the Board of Directors, I am pleased to
present the Annual Report and the Audited Financial
Statements of Salutica Berhad (the “Company”) for
the financial year ended 30 June 2019 (“FYE2019”).
Ever since becoming a public listed company,
FYE2019 could hardly be more challenging. During
this period, the Company and its subsidiary,
Salutica Allied Solutions Sdn Bhd (together with the
Company, the “Group”) had faced immense global
uncertainties, partly contributed by the current trade
tension between the United States of America and
China. This has affected our consumers’ demand
that in turn has significantly impacted the Group’s
revenue and financial performance.
Be that as it may, the management led by James Lim

continued with their extraordinary efforts in managing
the cost of business despite the lower revenue and
at the same time balancing it with the ongoing
transformative initiatives that is critical to meet the
expectations of current customers and to secure new
potential customers. In today’s technology-centric
markets, it is imperative that a company continues
to transform itself and move forward despite the
challenging global economy.
I also believe that this approach is a cornerstone in

creating a sustainable business in the long term as
well as for the Group in continuing to be a strategic
partner to our customers and not merely another link
in the supply chain.
The Board of Directors and I believe that James Lim

and his team have the necessary vision, strategy
and tenacity in managing the uncertainties faced BUSINESS OVERVIEW
by the Group and at the same time to execute the
key transformative steps that will realise the Group’s The Group’s role as an integrated manufacturer plays an
greater potential in the long run. integral role in product development for its customers,
and in this regard, the evolvement with the demand for
tomorrow’s is vital. Therefore, it is critical that the Group
not only enhances its R&D capabilities organically but also
strengthens itself through strategic collaborations to bring
the Group’s services and solution offering to another level.
As such, it is imperative for the Group to continue to invest in

technology and grow its current research and development
(R&D) capabilities in order to maintain its competitiveness in
the global market and build on our customers base.

CHAIRMAN’S STATEMENT (continued)
BUSINESS OVERVIEW (continued) Moving Forward

It cannot be gainsaid that the current trade tension Despite the financial result of FYE2019, the Group has
between the United States and China has impacted made strides in improving its competitive edge not
the Group’s business but in the midst of chaos, there only by ehancing its R&D capabilities but also by its
is also opportunity. In the second half of FYE2019, the collaboration with its technology partners. I believe that
Group has begun to create new opportunities arising the roadmap for the Group ahead as laid out by James
from the global trade tension between the United Lim and his team will entrench the Group with a stronger
States of America and China, culminating in the transfer foundation as the Group exploits any opportunities
of manufacturing of electronic products from China to ahead as we move into our next fiscal year.
Malaysia as well as onboarding new customers from
a wider product category. This presented the Group As the pieces of the transformative actions implemented
with the opportunity to diversify our product offerings by James Lim and his team start to fall in place, the
in addition to primarily Bluetooth headsets. Group is better prepared to meet any challenges ahead
as the global economic environment is changing so
rapidly since my last message for our previous fiscal year
FINANCIAL OVERVIEW end. The hurls of uncertainty in the global economic
today would have worn out most management teams,
As at FYE2019, the Group recorded a lower but the Board of Directors and I are confident that our
revenue of RM139.0 million compared to FYE2018 CEO James Lim and his team will pave the way for the
of RM261.5 million. This was mainly attributable to Group to grow.
the weaker demand for current running Bluetooth
headset products as well as the longer than expected The focus of the Group remains on further building its
development cycle of the latest generation Bluetooth capability and technology that is more vital than ever
headset that was co-developed with our European before in growing the Group’s business sustainably as
design partner. The Group also had a Loss before Tax well as for the diversification of the Group’s product
(“LBT”) of RM0.9 million compared to a Profit before offerings, with the aim of strengthening and growing
Tax (“PBT”) of RM15.1 million in FYE2018 due to the the Group’s revenue. This includes the continuing effort
lower revenue which is unable to fully absorb the in bolstering the Group’s own FOBO brand of products
Group’s fixed overheads as well as higher line set up further into existing markets not only with existing
cost due to under-utilisation of production line as a products but also with continuing new products with
result of lower production volume for current running better performance and user friendliness.
products.
Acknowledgment
As at FYE2019, the Group has RM156.9 million of
equity attributable to the owners of the Company Last but definitely not least, I would also like to take
(also known as shareholders’ funds) which is a 6.1% this opportunity to thank our customers, shareholders,
lower compared to RM167.1 million for FYE2018. partners and regulatory authorities their continuing
However, the Group continues to be in a net cash support to the Group. The Board would also like to thank
position with an approximately 0.002 gearing ratio.
James and his team of people in the Group for their hard
The Group continues to maintain a solid financial
work, dedication and loyalty to the Group.
strength to be able to take advantage of any
opportunities arising from the trade tension between
the United States of America and China as well as
Chia Chee Hoong
funding strategic collaborations with our technology
Chairman/Independent Non-Executive Director
partners globally. It is the Group’s ongoing mission
to drive its competitiveness to meet its current and
potential customers’ demands.
As for the Group’s effort to continuingly reward our

loyal shareholders, I am also happy to say that the
Company has paid a total of RM9.3 million as interim
single-tier dividends for FYE2019, representing
approximately 8% dividend yield (base on closing
share price on 28 June 2019 of RM0.30). The Group
has again exceeded its dividend policy pay-out of
30% of its annual net profit as the Group strives to
bring value to our shareholders, depending on our
profitability and strategies. In addition, a first interim
single-tier dividend of RM2.3 million was paid on 30
September 2019 for FYE2020.

CEO’S MESSAGE
GENERAL OVERVIEW
The fiscal year end of 2019 has brought greater
challenges to the Group with disruptive global events
that has brought significant impact to the Group’s
performance. Uncertain market conditions have
brought about weaker demand for our existing products
and lower revenue has impacted our profitability. But in
these challenges, I see the opportunity for the Group
to grow stronger and better with perseverance and
teamwork. I would like to firstly say thank you to my
team who has taken great pains to ensure that the
Group’s business operation is managed in the most cost
effective manner given this challenging year but not at
the expense of the quality or service of the products
that we provide to our international customers. And
yet, at the same time, they have managed to pursue
new transformative actions that improved our capability
in our product and services offerings to existing and
potential customers.
Despite the global economy being fraught with uncertainties, collaboration with our European design partner has played
we remain steadfast in our goal and mission in building the a critical role for the Group to deliver new generation of
Group’s business to be sustainable in the long run not only Bluetooth headsets with the focus to miniaturise without
from an economic perspective but also environmentally so. sacrificing performance and enjoyment.
I am pleased that the Group continues building its R&D and
production capabilities not only to provide our customers At the same time, new opportunities had arisen in this
with high quality products but also new generation of fiscal year which the Group has engaged that would allow
products that is capable of putting the Group on the the Group to diversify into a wider portfolio of products
competitive edge in the world’s arena. in addition to Bluetooth headsets. Some of these new
opportunities may benefit the Group with their higher
As in my previous fiscal year message, the role of Bluetooth production volume that would improve the absorption of
headsets is ever changing from its earliest role of only the Group’s fixed overhead cost and better utilisation of our
picking up a phone call. It is further integrating into our direct labour during low seasons. These new opportunities
lives, ever since it has become a go-to device for consumers also serve to widen our supply chain capability as well as
to enjoy music and to interact with devices though voice providing opportunities to further localise our sourcing. I
with services such as Siri, Google Assistant, Alexa and etc. believe that every bit of improvement in the Group tomorrow
The role of these headsets and music is so intertwined that goes towards building a better and stronger organisation
not only is it used for the artistic appreciation of music but than what we were yesterday.
also to improve performance of athletes. Our strategic

CEO’S MESSAGE (continued)
BUSINESS FORWARD
The world is moving into a new era where trade relations
between the large economies are re-aligning. This is a
double-edged sword where it has created uncertainties
in the market which has negatively impacted businesses
but also at the same time give rise to new opportunities
for the Group to engage. Therefore, it is vital that
the Group stay vigilant in keeping itself abreast with
technology whether through expanding its internal
R&D capabilities or through strategic collaboration with
GENERAL OVERVIEW (continued) technology partners in order to seize such opportunities
at the right time. In addition, the Group will continuingly
I am also proud that in addition to our focus of improve its production capability so that it is able to
building a better and stronger Group, we are also continuously improve quality and yet at the same time
moving towards having a cleaner and environmentally introduce cost improvement measure that will contribute
friendlier production facility with the latest installation to the Group’s long-term profitability.
of our grid connected solar system at our sole Ipoh plant
that is capable of generating annual solar energy yield Furthermore, the Group will continue its effort to diversify
of approximately 900 MWh. This will provide material into a wider product category so that it provides a good
energy saving for our production facility and at the mix of production volumes in its product offerings to
same time reduce the Group’s carbon footprint in the ensure a more stable production volume throughout
long term. It is our firm believe that businesses must its facility. This will ensure a better absorption of fixed
profit in a socially and environmentally responsible overheads as well as better utilisation of the production
manner so that the value and legacy that we create lines in the long run.
can be inherited by the generations after us.
Therefore, it is from this moment that we must continue
Our FOBO branded products continue to be sold with our efforts to carry out our goals and strategy plans
globally especially our Bluetooth tyre pressure to achieve the Group’s true potential. This has always
monitoring system (“TPMS”). There is also additional been the philosophy of the Group’s business to build
use case for the TPMS sensors that are used in non- a solid foundation in the interest of not only of our
automotive application which will serve to expand shareholders but also our employees, partners and all
our revenue stream. The R&D team will continue to stakeholders that are connected to us in one way or
further develop our FOBO branded products which is another.
a proud testament of our own home-grown Malaysia
product.
CONCLUSION
Since Salutica Berhad’s initial public offering (“IPO”)
and listing on the ACE Market of Bursa Securities on Despite the lacklustre results of FYE2019 and the
18 May 2016 and subsequent transfer to the Main uncertainties that lies ahead in the global market today,
Market on 24 March 2017, the Group has utilised rest assure that my team and I at Salutica will continue
approximately 89% of its IPO proceeds mainly for our dedication and perseverance for the growth of
capital expenditure, R&D expenditure and working the Group for the continuing creation of value to our
capital. These spending are vital for our business shareholders for years to come and I look forward to
expansion and transformation which are key to our a positive growth into FYE2020. As such, I am always
competitiveness in this industry. Which is why the grateful for the support by our customers, employees,
continual commitment of the Group to technology shareholders, investors, suppliers and stakeholder alike
that we obtain whether though machinery, expertise who have continued to be with us in this journey.
as well as strategic collaboration with technology
partners globally will drive the Group’s transformation
to bring our business to the next level which I believe Lim Chong Shyh
will bring value to our shareholders in a sustainable Managing Director/Chief Executive Officer
manner.
OPERATIONAL REVIEW
The operational review is presented under the
Management Discussion and Analysis (“MDNA”)
section of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS
(MDNA)
The information in the MDNA should be read in conjunction with the audited financial statements of the Group for FYE2019
as set out in the Reports and Statutory Financial Statements on page 59 to 136 of the Annual Report.
Overview of Group’s business and operations

Currently, the Group has one subsidiary, Salutica Allied Solutions Sdn.Bhd (“Salutica Allied”) which commenced its operations in
1990 as a contract manufacturing and an original equipment manufacturer principally involved in the manufacture of precision
plastic parts and components for the electronics industry. The Group has now evolved to become a vertically integrated
manufacturer, primarily focused on Bluetooth wireless devices with capabilities and expertise to carry out a full product
development lifecycle, from product design, product development, product testing/prototyping, product commissioning to
manufacturing and assembly as well as sales and marketing.
Our relentless effort to enhance knowledge and upgrade facilities have enabled us to keep up with technological requirements
to produce latest products and devices. The R&D division which was set up in 2004 proves to be the catalyst for growth
in technology. As a result of the R&D initiatives, the Group has managed to improve its capabilities as a one stop solution
provider to continuously secure contracts for new products and subsequent product upgrades from multinational companies.
Our continuous pursuit for innovation have resulted in the successful launch of the latest generation Bluetooth headset product
with a design partner in Europe. Both parties have brought together dedicated team who have excellent workmanship to
deliver a OEM headset product that has garnered rave reviews in the market since its launch in August 2019.
Bluetooth headsets continue to be the main revenue contributor for the Group. Nonetheless, the Group has also started to
move into new product categories increasing the Group’s product portfolio from its current staple of headsets. During the
financial year, the Group through its subsidiary, Salutica Allied have successfully secured four models from the computer
peripherals category and also have embark into new businesses such as sleep science (sensors for mattresses), smart homes
(sensors for controllers and switches) and next generation headsets.
The FOBO products which comprises tire pressure monitoring system (“tpms”) for light vehicles, multi-axle vehicles and
tracking devices have gone through a few upgrades since the launch of the maiden FOBO brand name in April 2013. The
introduction of FOBO products allows the Group to expand its customer base and diversify its revenue stream. The latest
FOBO TPMS, FOBO Bike 2 which was launched on a popular crowdfunding platform in Dec 2018 is a smart tpms using latest
Bluetooth 5.0 technology that works directly with smart devices using Android 5.0 and iOS 9.3 or later.
The Group has patents as follows:
CrossPairTM patent granted in Singapore, Russian, Korea, Japan, USA and Europe.
CrossPairTM is a system of storing the pairing keys of multiple Bluetooth devices separately from phone native Bluetooth
manager. The pairing can then be transferred to other third party mobile device through cloud or wireless protocol. This
enables multiple third party mobile devices to communicate with the same multiple Bluetooth devices seamlessly without
having to be re-paired.
WebSearchMeTM patent granted in Malaysia and USA.
WebSearchMeTM is a crowd searching tracking function to locate lost Bluetooth device through third party mobile devices that
has the app installed. This search is performed in the background without user intervention and creates a network of scouts
listening for a signal broadcast from the lost Bluetooth device.
SafeZoneTM patent granted in Malaysia and USA.
SafeZoneTM activates a function when a user enters the set of radius of a GPS coordinate. The alert system is enable or disable
when the user enters a selected proximity of a GPS coordinate.
X-Over HeadsetTM patent granted in USA.
X-Over HeadsetTM is a headset where the cable connecting to the earbuds is detachable.
The sales from FOBO continues to grow although contribution to the Group’s revenue is still low. Efforts are ongoing to secure
more distributors to grow the market for non-automotive industries such as printers, truck weighing and mining industries.

(MDNA) (continued)
Overview of Group’s business and operations (continued)

The Group continues to invest in automation to reduce wastages from efficient manpower and machine utilisation to responsible
supply chain via localisation of sourcing raw materials in order to reduce carbon footprint. The Group took a step further in
being environmental-friendly to install solar photovoltaic panels, which started commissioning in August 2019, on the factory
rooftops to harvest solar energy to power the plants’ machinery and equipment and lighting use. All these efforts are expected
to result in lower operational costs which in turn help to absorb the factory overheads.
Financial Performance Review

Revenue
The Group operates in Malaysia under one operating segment – Consumer Electronics. Operating segment information has
therefore not been prepared as the Group’s revenue and operating profit before taxation are mainly confined to this operating
segment.
In presenting information on the operating segment, an analysis of the revenue by geographical regions is shown below where
revenue is based on geographical markets where the goods are delivered rather than the origin of the customer.
Increase/
FYE 2019 FYE 2018 (Decrease)
Countries (RM’000) % (RM’000) % (RM’000) %
America 85,020 61.2 161,746 61.9 (76,726) 47.4

Asia (excluding Malaysia) 34,289 24.6 48,079 18.4 (13,790) 28.7
Europe 17,185 12.4 46,634 17.9 (29,449) 63.1
Australia (including New Zealand
and Oceania) 1,478 1.1 2,979 1.1 (1,501) 50.4
Malaysia 991 0.7 1,928 0.7 (937) 48.6
Africa (including Middle East) 9 ^ 108 ^ (99) 91.7
TOTAL 138,972 100 261,474 100 (122,502) 46.8
^ negligible
The Group’s revenue for FYE2019 was approximately RM139 million, a decline of 46.8% from previous FYE2018 of RM261.5
million. Bluetooth headsets revenue contributed more than 95% of total revenue with the balance 5% from non-Bluetooth
products such as light guides, camera sub-parts, smarthome controllers/switches, mouse and in-house brand FOBO products.
In FYE2019, the Group’s revenue was mainly derived from America, of which, more than 80% of revenue was attributable to
United States of America. The other countries that contributed to significant portion of revenue to the Group are China and
Netherlands, where their revenue made up of approximately 63% and 93% of the respective sales of Asia and Europe region.
Profit/(Loss) before Tax (“PBT/(LBT)”)
Increase/
FYE 2019 FYE2018 (Decrease)
PBT/(LBT) (RM’000) (935) 15,097 (16,032)

% over revenue 0.7 5.8 106.2

(MDNA) (continued)
Financial Performance Review (continued)

Profit/(Loss) before Tax (“PBT/(LBT)”) (continued)
In line with the decline in revenue for FYE2019, the Group posted LBT of approximately RM0.9 million, from a PBT of
approximately RM15.1 million in FYE2018. This was mainly due to the following:-
• Low revenue due to weak market sentiment from current running products;
• Delay in the mass production and shipment of a cordless Bluetooth headset by 9 months from October 2018 to June 2019
resulted in costs spent of approximately RM0.7 million for holding excess resources (salary and related costs);
• Higher line setup costs due to under-utilisation of production line because of the low production volume for the current
running products; and
• Inefficient absorption of fixed overheads due to low revenue.
The full impact of the unexpected costs as mentioned above has been partially off-set by cost savings arising from production
shut-downs in the months with low production volume and early termination of selected contract workers.
Profit/(Loss) after Tax (“PAT/(LAT)”)
Increase/
FYE 2019 FYE2018 (Decrease)
PAT/(LAT) (RM’000) (550) 11,362 (11,912)

% over revenue 0.4 4.3 104.8
In tandem with the LBT for FYE2019, the Group recorded LAT of approximately RM0.5 million compared to previous FYE2018
PAT of approximately RM11.4 million.
Liquidity
The Group’s trade and other receivables as at 30 June 2019 stood at RM6.3 million compared to FYE2018 of RM21.4 million,
a decrease of RM15.1 million or 70.6%. This is in tandem with the decrease in the revenue. There are no trade receivables that
are impaired during the financial year under review. Substantially all of the debts due have been collected subsequent to the
financial year end.
The Group’s trade and other payables as at 30 June 2019 stood at RM14.6 million compared to FYE2018 of RM23.5 million, a
decrease of RM8.9 million or 37.9%.
The Group’s borrowings had decreased as a result of the full settlement of hire purchases and repayment of term loans leaving
a balance of RM0.3 million as at 30 June 2019 compared to RM0.9 million as at 30 June 2018. Our current ratio continued to
improve from 6.1 times as at 30 June 2018 to 8.5 times as at 30 June 2019.
As at 30 June 2019 the Group has a total of RM81.7 million in deposits, bank, cash balances and short term investments. The
short term investments are in respect of investments in Islamic money market instruments.
Other key financial indicators are listed on the “Financial Highlights” of the Annual Report.
Capital Expenditure
During the current financial year, the addition to the Group’s property, plant & equipment (“PPE”) was RM6.8 million and
the closing carrying amount of the Group’s PPE for the FYE2019 was RM42.8 million. The major capital spending in FYE2019
comprising, amongst others, automation machinery/equipment, surface mount modular placement, computer numerical
control (“CNC”) machine, electrical discharge machining (“EDM”), 3D printer, wave soldering machine, moulding machine,
testing/reliability equipment and computers/software’s purchases.

(MDNA) (continued)

Potential Risks and Mitigating Factors
There are a number of risk factors, both specific to the Group and those relating to general business environment, which
may impact the operating performance and financial performance of the Group. Our competitive strengths, amongst others,
are being a vertically integrated manufacturer with the ability to provide a full range of manufacturing services, our R&D
capabilities, an experienced management team and our ability to comply with strict design and manufacturing requirements
set by our customers.
Risk relating to our industry:
We operate in the consumer electronics industry and are subject to competition given that we manufacture and sell
products to multinational companies in the global marketplace. The Group’s success and competitiveness largely depends
on our production and R&D capabilities, our technical expertise, our ability to keep abreast with the latest technology, our
understanding and ability to respond to the constantly changing economic conditions and changing consumer trends and
demand for consumer electronic products, as well as our planning and marketing strategies.
During our design process, our R&D engineers work closely with our customers to conceptualise, refine and complete the
product designs. Our design capabilities include mechanical, hardware and firmware design and with together with our
manufacturing capabilities, we are able to provide total design and manufacturing solutions to our customers.
We have more than ten years of experience in the manufacture of consumer electronic products and we are supported by
a capable and experience management team that is familiar with this competitive environment. Therefore, we believe that
the industry risks are mitigated. The collaboration with an European design house mark a key milestone for the Group, now
that it has a clear technology roadmap with this design partner to provide competitive advantage over other players in the
industry. We also maintain a good relationship with our customers to keep abreast with the latest trends and technology in the
consumer electronics industry.
The Group operates in Malaysia whilst our customers are mainly located overseas with operations mainly in America, Europe
and Asia. Like all other business entities, changes in political, economic and regulatory conditions in Malaysia and the markets
in which our customers operate may affect the overall profitability of the Group. We have adopted a proactive approach in
keeping abreast with the political, economic and regulatory developments in the relevant jurisdictions and will continue to
ensure compliance with the legal and regulatory frameworks in the countries in which we and the customers operate.
Risks relating to our business and operations:
The Group operates in a market where the products and services are prone to frequent new technology changes. The Group’s
future growth and success would depend on our ability to keep abreast with the latest technology to develop new products
and services to meet the needs of our customers. The design and development of a new or enhanced product may be time-
consuming. We may also encounter complexities in manufacturing, sales and marketing processes which may further delay
the mass production or delivery of our new or enhanced products to the customers or market in a timely and efficient manner.
Our ability to grow is also subject to the risk of future disruptive technology that may unexpectedly displaced the current
technology. Such disruptive technology could adversely affect the competitiveness of the Group if we are unable to respond
to the new technology accordingly.
We seek to limit or mitigate the above risks by actively engaging in R&D activities that focus on developing new products or
services as well as enhancing our proprietary solutions and process technology know-how. The collaboration with an European
design house came at an opportune time to charter a technology roadmap together to develop cutting edge technology in
order to stay one step ahead of competitors.
Forward-looking statement
The co-development project with the European design house had resulted in the successful launch of a cordless Bluetooth
headset in August 2019. This signifies an important milestone for the Group as it creates positive synergistic effect by working
effectively together and continue fostering a trusting relationship for the future. Both parties will continue to collaborate to
offer more innovative and cutting edge technology via the commercialization of products to the market.
Despite the negative impact from the US China trade tension, the Group has started commercializing products relocated from
China by our customers. We expect to see further growth in this area.

(MDNA) (continued)

Forward-looking statement (continued)
The Group’s strong emphasis on R&D will help in

further developing our FOBO products via user
experience enhancements or incorporating new
smart technology for ease of use. After all, FOBO Dividend Payment Policy
is the acronym For Our Better wOrld and that is our
commitment to the products that we make and the Our Board intends to adopt a stable and sustainable
customers we serve. dividend policy to allow our shareholders to participate in
the profits of the Company whilst maintaining an optimal
The Group will continue to be prudent in its spending capital structure and ensuring sufficient funds for our
and to focus more on investment in human talent, future growth. In this regard, the Group have a dividend
process re-engineering and automation in order to payment policy of not less than 30% of our annual net profit
improve costs and technology competitiveness. attributable to shareholders. However, actual dividend
payment may be varied depending on the Group’s financial
performance and cash flow and may be waived if the
payment of dividends would adversely affect our cash flow
and operations.
Despite the loss in the Group’s results for FYE2019, the Group
had consistently paid out dividend to its shareholders. The
Company had declared and paid a total of RM9.3 million
dividend in FYE2019, representing a dividend yield of
approximately 8.0% based on the closing share price on 28
June 2019 of RM0.30 per share. In addition, the Company
had also paid another interim single-tier dividend of RM2.3
million on 30 September 2019 for FYE2020.

SUSTAINABILITY STATEMENT
The Board is pleased to present the Sustainability Statement (“Statement”) which was prepared in pursuant to Appendix
9C Part A (29)/Practice Note 9 of the Main Market Listing Requirements (“MMLR”) and Sustainability Reporting Guide and
Toolkits issued by Bursa Securities Malaysia Berhad.
This Statement covers the sustainability activities for the FYE2019, unless otherwise stated.
The Board is cognisant of the fact that expectations from stakeholders are changing with them placing increasing importance
on the wider impact companies have on people and planet. Therefore, the Group has established a Sustainability Policy
(“Policy”) and a committee was established on 1 January 2018 to carry out the objectives of the Policy.
The Group’s sustainability governance structure is as follows:
Borad of Directors Sustainability Chairman Sustainability

Management Committee
• ensure sustainability intergated • headed by Deputy CEO
into the Company’s objectives • oversees the formulation and • headed by Senior Management
and goals champion the sustainability • responsible implementation of
activities sustainability activities into day
to day operations
The Board oversees the Group’s sustainability efforts and is assisted by the Sustainability Chairman and sustainability
management committee who are responsible for the formulation and implementation of the Group’s sustainability activities.
The sustainability framework of this Policy is to develop, identify, evaluate and manage the Group’s Economic, Environmental
and Social (“EES”) risks and opportunities in order to generate long term benefits and business continuity. The framework
considers the following:-
i) to have a positive impact on environmental sustainability and environmental justice by insuring that principles and core
concepts of environmental sustainability are a driving force in our partnerships with the community-at-large, and a key
factor in every aspect of our operations and implementations including our products throughout its life cycle; from design,
procurement, production, distribution, product use through end-of-life, thus optimising use of natural resources.
ii) to operate and manage the organisation in a way that enables all people to realize their potential and improve their quality
of life while protecting and enhancing the earth’s natural capital.
Our Sustainability Committee will be responsible for implementing this Policy to meet its objectives as far as is reasonably
practicable, ensure that all the projects are carried out in accordance with this Policy.

SUSTAINABILITY STATEMENT (continued)
Managing Sustainability
The Board is committed to incorporate environmental, social and governance factors in its business objectives and strategies.
This will ensure that the Group, in its pursuit of profitability, is also driven to doing it ethically right, and develop a positive
impact to the environment and the communities at large.
The Group is continuously enhancing the transparency on disclosure of material matters relating to EES aspects as follows:
Economic
The Group is principally involved in the product design and development, and manufacturing of mobile communication
products, wireless electronics and lifestyle devices. Therefore, the Group aims to maintain a sustainable business to continue
its contribution to Malaysia’s economic development. To achieve the sustainable development economically, the Group
endeavours to carry out its activities in a sustainable manner and promote responsible and ethical practices among our savvy
investors and valued business partners:
(i) Shareholders
The Group strives to develop a good relationship with investors and its accountable for providing timely information
about the Group’s business prospect and financial results. During the FYE2019, the Group’s revenue was RM139 million,
a decline by 46.8% compared to FYE2018 of RM261.5 million. The Group also posted Loss Before Tax of RM0.9 million
for FYE2019 compared to Profit Before Tax of RM15.1 million for FYE2018. Nevertheless, the Group consistently paid
dividends to its shareholders since the Group went public listed in May 2016. The Board is committed to continue with
sustainability efforts in its business processes and operations by maintaining prudent capital investment and working
capital management without forgoing business opportunities and growth.
(ii) Customers
We emphasis on “Customer First” philosophy and therefore we provide innovative and high quality products manufactured
in the most efficient manner and provide services that meet our customer’s stringent demand and earn their trust. We
establish customers’ complaint and feedback system to ensure their complaints and feedbacks are acknowledged and
resolved promptly. Continuous improvement driven internally or externally by customers have ensure processes and
products are manufactured “right the first time, all the time” to reduce wastages.
(iii) Suppliers
We respect our suppliers and work closely together to foster long term relationship to realise mutual growth. Therefore,
we engage with our suppliers to develop new business opportunities that will enhance each growth potentials with
the adoption of sustainable procurement policies. We conduct assessment and evaluation of existing and new suppliers
wherever necessary to ensure ethical procurement practices are followed through the supply chain. Raw materials and parts
supplied are in accordance with the Group’s materials requirements to avoid unnecessary wastage and scraps. The raw
materials are in compliance with Restriction of Hazardous Substances (“ROHS”), Registration, Evaluation, Authorisation
and Restriction of Chemicals (“REACH”) and halogen-free, amongst others, wherever applicable.
Environment
We support global initiatives in reducing carbon footprint through our own sustainable business operations and practices.
Environmental sustainability ensures that future generations are able to enjoy Earth natural resources in abundance. Among
the approaches that the Group had embarked on to drive towards a clean and sustainable energy for a better future are as
follows:
(i) Solar energy. The increase in electricity tariff hike is a concern as it translates to an increased in factory operating costs.
The Board is mindful of such increase and the impact it has on the environment. Therefore, the Group had installed solar
photovoltaic panels, which started commissioning in August 2019, on the factory rooftops to harvest solar energy to
power the factory electricity needs. Based on the one (1) month data captured since installation in August, the solar usage
have helped to reduce approximately 84.15 tonne carbon dioxide and equivalent tree planting of 4,598 trees.
(ii) Efficient use of energy. The Group has “TURN OFF power” practices for all lightings, air-conditioning, computers and
other equipment during lunch time or when they are not at their workplace, during weekends and also during long festive
seasons to save energy.
(iii) The implementation of ongoing product wastage elimination by process engineering to optimise materials usage, ie,
automate processes wherever applicable.

Managing Sustainability (continued)

The Group is continuously enhancing the transparency on disclosure of material matters relating to EES aspects as follows:
(continued)
Environment (continued)
We support global initiatives in reducing carbon footprint through our own sustainable business operations and practices.
Environmental sustainability ensures that future generations are able to enjoy Earth natural resources in abundance. Among
the approaches that the Group had embarked on to drive towards a clean and sustainable energy for a better future are as
follows: (continued)
(iv) The practice of 3Rs (Reduce, Recycle & Reuse) at the workplace. Employees are encouraged to go “paper-less” and used
electronic media whenever possible. Printouts are done double-sided or done on recycled papers, if possible.
(v) We complied with the relevant occupational health, safety and environment requirements as follows:
• OHSAS 18001:2007 which specifies requirements for an organisation to develop and implement occupational health
and safety management system;
• ISO14001:2015 which specifies requirements for an organisation to develop and implement an environmental
management system; and
• ISO 9001:2015 which specifies requirements for an organisation to develop and implement a quality management
system.
Social
The Group has its Code of Conduct and Ethics which focus on the principles of integrity, responsibility sincerity and corporate
social responsibility. This policy reflects the Group’s stance in promoting, amongst others, good labour practice, respect
for human rights and conservation of environmental resources. The Group complies with the Responsible Business Alliance
(“RBA”), formerly the Electronic Industry Citizenship Coalition (“EICC”) which establishes standards to ensure that working
conditions in the electronic industries in which electronics is a key component and its supply chain are safe, that workers are
treated with respect and dignity, and that business operations are environmentally responsible and conducted ethically.
The Group aims to create a healthy and diverse workforce through diversity and inclusion efforts and enhance employees
engagement at workplace to ensure staff stays loyal and grow with the Group. In pursuing this objective, we provide, amongst
others, the following:
(i) provide a working environment where our employees are treated with dignity and respect. Our Group complies with all
applicable legal and other requirements and strives to continuously improve our Labour and Ethics management system
to be in compliance with applicable standards and regulations.
(ii) open communication and direct engagement between workers and management are the most effective ways to resolve
workplace and compensation issued. The Group has Employees’ Helpdesk, Employee Suggestion Scheme (“ESS”),
Whistleblowing policy and a Collective Agreement with the workers (in-house union) to ensure that the workers have an
avenue to voice their concern and provide suggestions to further improve their working conditions.
(iii) emphasis on developing its employees skills and competency and are committed to ensure that each person involved in
their respective work areas has a meaningful opportunity to contribute to the success of our Group. The training section of
the Human Resources department prepares Training Needs Analysis (“TNA”) yearly to assess and identify the needs of the
employees. We contributes monthly to the Human Resources Development Fund (“HRDF”) and utilises it for employees’
training.
(iv) Anti-Corruption and Bribery Policy that inculcate sustainable behaviour and helps to regulate ethical behaviour among
employees and also business partners.
Whistleblowing is a mechanism established by the Group to receive feedback internally or externally to escalate any concerns
regarding ethical issues or engaging in non-environmental friendly practices or activities.

Continuous engagement with our stakeholders

Building an open and transparent relationship with our Group’s stakeholders are important in ensuring sustainability in the long
run. The Board recognises the importance of sustainability across all functions of the Group and will continue to be a socially
responsible corporate citizen. To cultivate continuous engagement with our stakeholders, we have established the following
platform:-
Stakeholders Group Stakeholder’s Concern Engagement platform Frequency of engagement
Employees • Career development • CEO communication sessions • Ad-hoc

• Health, safety & environment • Performance appraisals • Annually
• Salary & benefit scheme • Company events such as • Ad-hoc
annual dinners, and off-site
team building
Investors/ • Company’s performance and • Investors/Analyst briefings • Continuously

Shareholders growth prospect • Annual reports & Annual • Annually
• Ethical and responsible General Meetings
Management team • Company website • Continuously
• Corporate governance
Customers • Quality product/services and • Customer feedback • Continuously

on time delivery • Meetings • Continuously
• Competitive pricing
Suppliers • Quality materials/services and • Supplier evaluation form • During supplier

on time delivery screening
• Compliance with applicable • Meetings • Ad-hoc as and when
standards on hazardous required
substances
• Competitive pricing
Regulators and • Compliance with law and • Verification and compliance • Annually
government bodies legislation audit
• Compliance with Main market • Regulatory disclosures • Per Listing requirement
Listing Requirements
Local community • Caring community • Community programmes • Ad-hoc

• Social & environmental issues • Company website • Continuously
• Annual report • Annually

COMPANY HIGHLIGHTS 2019
AWARDS 2) Annual Productivity & Innovation Conference &

Exposition 2018 (APIC 2018)
1) MPC (Malaysia Productivity Corporation) TEAM
EXCELLENCE REGIONAL CONVENTION (RTEx) 2018 13 – 15 November 2018
Sunway Pyramid Convention Centre (SPCC)
24 – 25 July 2018 Won 4 stars awards (Sphere 1.0 Team)
Royale Chulan Damansara, Selangor
Won Gold Award (Sphere 1.0 Team)
The Best 20 Team for Electrical and Electronic

Sector

COMPANY HIGHLIGHTS 2019 (continued)
SUSTAINABILITY INITIATIVES
Successful installation and commissioning of solar power at company factory in August 2019
Solar Photovoltaic modules: 2,120 pieces

System capacity: 699.6 kWp (kilowatt peak)
Estimated annual solar energy yield: 936 MWh
COMPANY ACTIVITES
1) Annual Dinner – Secret Night
22 February 2019
Syeun Hotel Ipoh

COMPANY ACTIVITES (continued) EXHIBITIONS & TRADE SHOWS

1) Project Improvement Team 2019 2) Participated Trade Mission To Singapore
25 – 28 March 2019
Highest savings – Lean Manufacturing & FMEA
3) Majlis Pelancaran OPS Bersepadu dan Kempen

Keselamatan Jalan Raya Bersempena Perayaan Hari
Raya Aidilfitri Peringkat Kebangsaan Tahun 2019
26 May 2019
Aeon Mall Nilai, Negeri Sembilan
EXHIBITIONS & TRADE SHOWS

1) Participated Trade And Investment Mission To Germany,
France & Italy
Business Delegation Programme

5 – 9 November 2018

MBO MEETINGS
1) 5 – 6 January 2019 2) 6 – 7 July 2019

DoubleTree Resort by Hilton, Penang Meru Valley Golf & Country Club, Ipoh
STRATEGIC PARTNER’S PROJECT OFFICE IN SALUTICA
Opening ceremony on 13 August 2019

CORPORATE SOCIAL RESPONSIBILITIES 3) Academic Industrial Hybrid Programme – Signing

Ceremony
1) Gold Sponsor for Technology, Education & Career
(TEC) 2019, Universiti Teknologi Petronas, Perak. 15 March 2019
UTP Career Fair Technology Education & Career
2019
29 – 30 January 2019
The Star 26 March 2019
2) Visit from UTP Tronoh Product Design & Development

final year Mechanical Engineering Students
13 March 2019
4) Blood Donation Drive
18 October 2018
Salutica Allied Solutions Sdn Bhd

CORPORATE SOCIAL RESPONSIBILITIES (continued)

5) Salutica Run 2018
26 October 2018
6) Fire Drill 7) Health Screening
23 November 2018 11 January 2019

Salutica Allied Solutions Sdn Bhd Salutica Allied Solutions Sdn Bhd

CORPORATE SOCIAL RESPONSIBILITIES (continued)

8) Personal Protective Equipment (PPE) and Fit Test
Safety awareness conducted by an equipment supplier

18 March 2019
9) First Aid Training 10) Safe Handling of Chemical & Spillage Training
19 – 20 March 2019 16 – 17 April 2019

Salutica Allied Solutions Sdn Bhd Salutica Allied Solutions Sdn Bhd

CORPORATE SOCIAL RESPONSIBILITIES

(continued)
Anti-Corruption and Anti-Bribery training
7 August 2019
Salutica have ZERO-TOLERANCE on corruption and
bribery and strictly follow NO GIFT POLICY
ISO CERTIFICATIONS
1) OHSAS 18001:2007 Occupational 2) ISO 14001:2015 Environmental 3) ISO 9001:2015 Quality
Health and Safety Management Management System Management System
System

AR 2019 (Part1)

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AR 2019 (Part1)

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SALUTICA BERHAD (1024781-T)

The saxophone was borne out of a need for an instrument

CHIA CHEE HOONG LIM CHONG SHYH

LOW TENG LUM JOSHUA LIM PHAN YIH

LEOW CHAN KHIANG CHAN SHOOK LING

AUDIT AND RISK REGISTERED OFFICE AUDITORS

CHAN SHOOK LING

2 SALUTICA BERHAD (1024781-T)

On 29 June 2015, we changed our name to Salutica Sdn. Bhd.

The Company was listed on the ACE Market on 18 May 2016

Group structure as at 30 June 2019 is as follows:-

SALUTICA BERHAD (1024781-T)

Salutica Allied was incorporated on 15 October 1990 and had

Annual Report 2019 3

Financial Year Ended 30-Jun 2015 2016 2017 2018 2019

Revenue (RM’000) 192,518 241,827 247,091 261,474 138,972

Revenue (RM’000) Profit/(Loss) Before Tax (RM’000)

2019 138,972 2019 (935)

2018 261,474 2018 15,097

2017 247,091 2017 25,333

2016 241,827 2016 32,899

2015 192,518 2015 20,284

0 100,000 200,000 300,000 -15,000 0 15,000 30,000

Total Assets/Total Liabilities Earnings/(Loss) per share (sen)

2019 11.42 2019 (0.14)

2018 7.51 2018 2.93

2017 5.38 2017 4.99

2016 4.21 2016 7.61

2015 2.63 2015 8.84

0 3.00 6.00 9.00 -3.00 0 3.00 6.00 9.00

2019 40.49 2019 2.40

2018 43.06 2018 2.40

2017 42.53 2017 2.40

2016 48.46 2016 1.98

2015 24.58 2015 3.07

0 15.00 30.00 45.00 0 1.00 2.00 3.00

Dividend yield per share (%)

4 SALUTICA BERHAD (1024781-T)

CHAN SHOOK LING

LIM CHONG SHYH

Annual Report 2019 5

CHIA CHEE HOONG

Mr. Chia was appointed to our Board on 15 October

He obtained his undergraduate degree in law (LL.B)

He started his career in 2001 as a legal assistant with

He does not hold any directorship in any other public

He does not have any family relationship with any

6 SALUTICA BERHAD (1024781-T)

James Lim was appointed to our Board on 26

He is a trained electrical and electronics engineer with

He began his career as a design engineer with ASEA AB

In 1995, he joined the Malaysian operations of Seagate

In 2004, he joined Salutica Allied where he set up the

In 2013, he led a management buyout of Salutica Allied

James Lim is the father of Joshua Lim Phan Yih, our

Other than as disclosed above, James Lim does not

Annual Report 2019 7

JOSHUA LIM PHAN YIH

Joshua Lim was appointed to our Board on 11

He graduated with an external LL.B (Hons) degree

Joshua was appointed as the Deputy Chief Executive

He does not hold any directorship in any other public

Joshua Lim is the son of James Lim, the Managing