FA YOONG ONN.pdf 3/11/10 9:44:57 AM · 85,185 86,808 2009 2008 2007 2006 PROFIT BEFORE TAX...

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FA YOONG ONN.pdf 3/11/10 9:44:57 AM

02 Corporate Information

04 Corporate Structure

06 Corporate Profile

08 Financial Highlights

10 Our Listing

11 Press Release

12 Board of Directors

13 Profile of Directors

16 Chairman’s Statement

20 Managing Director’s Review

22 Audit Committee Report

27 Corporate Governance Statement

33 Statement on Internal Control

34 Statement on Directors’ Responsibility in Relation

to the Audited Financial Statements

35 Financial Statements

87 Additional Compliance Information

90 Analysis of Shareholdings

92 List of Group Properties

93 Notice of the Third Annual General Meeting

97 Statement Accompanying

Notice of Annual General Meeting

Form of Proxy

Contents

2 YOONG ONN CORPORATION BERHAD (814138-K)

Corporate Information

BOARD OF DIRECTORS

Datuk Kamaludin Bin Yusoff

Independent Non-Executive Chairman

Chew Hon FoongManaging Director and

Group Chief Executive Officer

Chew Hon KeongExecutive Director and

Group Chief Operating Officer

Datuk Hairuddin Bin Mohamed

Independent Non-Executive Director

Yeoh Chong Keng


Lee Kim Seng


AUDIT COMMITTEE

Lee Kim Seng Chairman

Yeoh Chong Keng


NOMINATION COMMITTEE

Yeoh Chong Keng Chairman


Lee Kim Seng

REMUNERATION COMMITTEE

Yeoh Chong Keng Chairman


Chew Hon Foong

COMPANY SECRETARIES

Dato’ Tang Swee Guan (MIA 5393)

Cheong Sin Yee (f) (MAICSA 7052271)

REGISTERED OFFICE

Suite 13A.01(A) Level 13A

Wisma Goldhill

67 Jalan Raja Chulan

50200 Kuala Lumpur

Tel (603) 2032 2895

Fax (603) 2032 2893

HEAD OFFICE

Lot No. PT 16690-16692

Jalan Permata 2

Arab-Malaysian Industrial Park

71800 Nilai

Negeri Sembilan Darul Khusus

Tel (606) 799 6012

Fax (606) 799 7015

Website www.yoongonn.com

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd

Level 6, Symphony House

Pusat Dagangan Dana 1

Jalan PJU 1A/46

47301 Petaling Jaya, Selangor

Tel (603) 7841 8000

Fax (603) 7841 8008

PRINCIPAL BANKERS

AmBank (M) Berhad

Hong Leong Bank Berhad

Standard Chartered Bank Malaysia Berhad

United Overseas Bank (Malaysia) Bhd

AUDITORS

Crowe Horwath (AF 1018)

(Formerly known as Horwath)

SOLICITORS

Iza Ng Yeoh & Kit

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia

Securities Berhad

Sector : Consumer Products

Stock Name: YOCB

Stock Code: 5159

INVESTORS RELATIONS

AND ENQUIRIES

Jon Tan Peng

Email [email protected]

Tel (603) 9172 5012

3ANNUAL REPORT 2010

Global

Acclaimed quality products reaching the masses

and affluent customers around the globe.

100%

SLEEP FOCUS SDN BHD

401252-V

Design / Manufacturingand Trading

100%

SYARIKATYOONG ONN

SDN BHD171966-W

Distribution /Trading and

Institutional Supply

100%

ELEGANTTOTAL HOME

SDN BHD268537-K

Distributionand

Trading

100%

MONSIEUR (M) SDN BHD

121889-W

Retailing

YOONG ONN CORPORATION BERHAD(814138-K)

Corporate Structure

A dynamic and exceptional place to work where

exceptional people come together and part with

exceptional ideas and products.

People with passion to

YOONG ONN CORPORATION BERHAD (814138-K)4

5ANNUAL REPORT 2010

A multitude of Brands andProducts, you're never short of inspiration to create yourhome the way you want it.

Corporate Profile

Yoong Onn Corporation Berhad (“YOCB”) was incorporated in Malaysia as a public limited company on

17 April 2008 under the Companies Act, 1965.

The principal activities of YOCB are that of investment holding company and provision of management services

whilst our wholly-owned subsidiaries are principally involved in design, manufacturing, distribution, retailing and

trading of home linen, homeware and bedding accessories.

Since our inception in 1960s, we have established our reputation in the home linen industry and have since

become one of the major companies involved in the design, manufacture and specialised retailing of home linen

and homeware in Malaysia.

Our Group is primarily an integrated manufacturer and distributor of our own brands of home linen. Our

manufacturing activities are focused on bed and bath linen, bedding accessories and curtains.

We undertake our own in-house design, which is supplemented by purchases from international independent

design houses to provide a variety of designs and help address diverse trends especially in overseas countries.

Our Group is also a supplier of homeware, which complements our own manufactured home linen and bedding

accessories. The homeware are externally sourced products which include:

(a) Bed and bath linen;

(b) Bed, bath, living room and kitchen accessories;

(c) Rugs, carpets and floor mats; and

(d) Other homeware.


corporate profilecontinued

7ANNUAL REPORT 2010

Our Group’s core revenue streams are derived from:

(a) Design, manufacturing and distribution of home linen and bedding accessories;

(b) Retailing of home linen and homeware; and

(c) Trading of home linen and homeware.

Our integrated design and manufacturing facilities enable us to be a one-stop supply centre for home linen and

bedding accessories particularly for our trade customers.

Our Group markets all our home linen under fourteen (14) brand names namely, Diana, Novelle, Jean Perry, Louis

Casa, Genova, Firenze, RedDanielle, BedTalk, Cotonsoft, Niki Cains, Oasis, Ann Taylor, Sarah Miller and Season.

Our Group’s target markets are:

(a) Retailers (including departmental stores, hypermarkets, supermarkets and specialty stores);

(b) Mass end-consumer market (through our fully owned retail outlets);

(c) Institutions (including hotels, resorts, hostels, hospitals, royal customs and military accommodations, and

cruise ships); and

(d) Intermediaries (including distributors and importers).

As at 30 June 2010, we have thirteen (13) fully owned retail outlets and one (1) retail outlet that is fully owned

and managed by an appointed dealer under the “Home’s Harmony” brand name. Our Group’s in-house

manufactured home linen and bedding accessories are available in another seventy eight (78) consignment

counters with departmental stores, hypermarkets, supermarkets and specialty stores in Malaysia. We also supply

to hotels, clubs, resorts, hospitals etc via our authorized agents.

Our Group’s in-house manufactured home linen and bedding accessories are also available in more than fifty

(50) third party retail locations in overseas countries like Singapore, Taiwan and Vietnam. We also currently export

our products to many overseas countries and for the Financial Year Ended 30 June 2010, our products were

sold in eleven (11) overseas countries namely Australia, Brunei, Dubai, Fiji, Japan, Papua New Guinea, New

Caledonia, Singapore, Taiwan, Turkey and Vietnam.

On 23 December 2009, Yoong Onn Corporation Berhad was listed on the Main Market of the Bursa Malaysia

Securities Berhad.

REVENUE(RM’000)

0

30

60

90

120

150

2010

127,541 130,084

102,200

85,185 86,808

2009 2008 2007 2006

PROFITBEFORE TAX(RM’000)

0

5

10

15

20

25

2010

21,66318,645

13,704

10,4348,468

2009 2008 2007 2006

PROFIT AFTER TAX(RM’000)

0

5

10

15

20

2010

15,528

13,881

10,706

7,249

6,136

2009 2008 2007 2006

TOTAL SHARE-HOLDERS’ EQUITY(RM’000)

0

20

40

60

80

100

2010

91,771

60,973

39,31733,612

28,822

2009 2008 2007 2006

Financial Highlights 2010

Pro-forma

30 June 06 30 June 07 30 June 08 30 June 09 30 June 10

Revenue (RM’000) 86,808 85,185 102,200 130,084 127,541

Profit before tax (RM’000) 8,468 10,434 13,704 18,645 21,663

Profit after tax (RM’000) 6,136 7,249 10,706 13,881 15,528

Total shareholders’ equity (RM’000) 28,822 33,612 39,317 60,973 91,771


9ANNUAL REPORT 2010

Focus on

Dedicated to quality and excellence,

ensuring consumers receive the

products they rightfully deserve.

Our Listing


11ANNUAL REPORT 2010

Press Release


Board of Directors

BOARD OF DIRECTORS (from right to left)

1. Datuk Kamaludin Bin Yusoff

Independent Non-Executive Chairman

2. Chew Hon FoongManaging Director and


3. Chew Hon KeongExecutive Director and

Group Chief Operating Officer

4 Datuk Hairuddin Bin MohamedIndependent Non-Executive Director

5. Yeoh Chong KengIndependent Non-Executive Director

6. Lee Kim Seng


3. 2. 1.

6.5. 4.


Profile of Directors

DATUK KAMALUDIN BIN YUSOFF (Independent Non-Executive Chairman / Malaysian)

Datuk Kamaludin Bin Yusoff, aged 62, was appointed to the Board of Yoong Onn Corporation Berhad on

28 September 2009. He is also a member of the Remuneration Committee of the Company.

He holds a BA (Honours) from University Malaya in 1974. Datuk Kamaludin started his career in 1974 as an

Administrative and Diplomatic Officer in the public sector and subsequently, he held various distinguished

positions in the Ministry of Finance, Ministry of Defence, Road Transport Department and Ministry of

Entrepreneur Development. In appreciation to his services, Datuk Kamaludin has been awarded with various

accolades. In 2000, he was awarded the Bintang Panglima Gemilang Darjah Kinabalu (P.G.D.K) which carries

the title “Datuk”.

Datuk Kamaludin also sits on several boards in the corporate sector. From 2004 to 2007, he was the Chief

Operating Officer of Fomema Sdn Bhd. He is currently the Chairman of Johore Tin Berhad, Executive Vice

Chairman of Loh & Loh Constructions Sdn Bhd (a subsidiary company of Loh & Loh Corporation Berhad),

Executive Director of Supremme Systems Sdn Bhd and also holds directorship in other private limited companies.

CHEW HON FOONG (Managing Director and Group Chief Executive Officer / Malaysian)

Chew Hon Foong, aged 51, was appointed to the Board of Yoong Onn Corporation Berhad on 17 April 2008.

He is also a member of the Remuneration Committee of the Company.

As the co-founder, he has more than thirty (30) years of experience in the home linen industry. He has been

instrumental in the development, growth and success of the Yoong Onn Corporation Berhad Group during his

tenure with the Group.

He started his career in 1979 when he joined Yoon On, a partnership company, which is involved in trading

and retailing of textiles and home linen. With his strong business acumen, he was involved in developing and

creating own brands of bed linen which was marketed under the names Diana and Novelle in 1982.

In 1988, together with his brother, Chew Hon Keong, he established Syarikat Yoong Onn Sdn Bhd and took

over the entire business of the partnership company, Yoon On. His main intention is to expand the business to

include international trades. Besides overseeing the Group activities, he is actively involved in creating fabric

designs for both the mass and niche markets. He has extensive experience in the development and creation

of home linen designs and he is currently heading the Group’s in-house design team. He is mainly responsible

for the overall operations of the Group with emphasis on strategic business planning and promoting brand

equity of products.

He does not have any other directorships of public companies.

CHEW HON KEONG (Executive Director and Group Chief Operating Officer / Malaysian)

Chew Hon Keong, aged 50, is the co-founder and was appointed to the Board of Yoong Onn Corporation

Berhad on 17 April 2008.

He has more than thirty (30) years of experience in the home linen industry. His career started in 1979 when he

joined Yoon On, a partnership, which is involved in trading and retailing of textiles and home linen. He also

assisted in establishing Syarikat Yoong Onn Sdn Bhd in 1988.

profile of directorscontinued


CHEW HON KEONG continued

As the other partner of Yoon On, he was also involved in many aspects of the business in textiles and home

linen, which includes technical specification in fabrics. His capability has enabled the Company to develop new

range of product to cater for different markets and industries.

With an in-depth knowledge in the production processes, he together with his brother, Chew Hon Foong were

involved in the establishment of Sleep Focus Sdn Bhd in 1996 and the construction of Nilai manufacturing plant

for the Group’s manufacturing operations. He is primarily responsible in overseeing the overall management

and strategic business development of the Group with emphasis on product development and product

research.

He does not have any other directorships of public companies.

DATUK HAIRUDDIN BIN MOHAMED (Independent Non-Executive Director / Malaysian)

Datuk Hairuddin Bin Mohamed, aged 60, was appointed to the Board of Yoong Onn Corporation Berhad on

28 September 2009. He is also a member of the Audit Committee and Nomination Committee of the Company.

Datuk Hairuddin obtained his Bachelor in Social Science (Honours) from Universiti Sains Malaysia in 1980. He

joined the Royal Malaysian Police Force in 1970. He was since promoted to various senior positions. He was

appointed the Director of Commercial Crime Department in Royal Malaysia Police in 2005, a position he held

until his retirement in 2006. During his tenure as Head of Commercial Crime Department, he was appointed to

be a member of the High Powered Corporate Governance Committee to oversee all government-linked

companies in the country. He has wide experience in fraud detection and commercial crime investigation.

He currently serves as an Independent Director on the board of BIMB Holdings Berhad, Formis Resources

Berhad, Triumphal Associates Bhd, ISS Consulting Solutions Berhad and several other private companies.

YEOH CHONG KENG (Independent Non-Executive Director / Malaysian)

Yeoh Chong Keng, aged 58, who is a lawyer by profession and was appointed to the Board of Yoong Onn

Corporation Berhad on 28 September 2009. He also serves as the Chairman of the Nomination Committee

and Remuneration Committee and a member of the Audit Committee of the Company.

He obtained his Barrister-at-law from Lincoln’s Inn, England in 1980. He was a senior police officer in the Royal

Malaysian Police Force before proceeding to study law at Lincoln’s Inn, England. He was called to the English

Bar and Malaysian Bar in 1980 and 1981 respectively and is the Managing Partner of a legal firm in Kuala

Lumpur. He has also acted as counsel for the Government of Hong Kong. He is an experienced lawyer

specialising in corporate and banking law.

He has, in the past served as an Independent Director in several public listed companies. Since 14 February

2000, he is an Independent Director of The Store Corporation Berhad. He is also the Chairman of the

Nomination Committee and serves as a member in the Audit Committee and Remuneration Committee of The

Store Corporation Berhad.

He is also currently an Independent Director of Tokio Marine Life Insurance Bhd. He has held this position since

2002 and is the Chairman of the Risk Management and Nomination Committee as well as member of the

Audit Committee.

profile of directorscontinued


LEE KIM SENG (Independent Non-Executive Director / Malaysian)

Lee Kim Seng, aged 64, was appointed to the Board of Yoong Onn Corporation Berhad on 28 September

2009. He also serves as the Chairman of the Audit Committee and a member of the Nominee Committee of

the Company.

He is a member of the Malaysian Institute of Accountants, Malaysian Institute of Taxation and The Institute of

Internal Auditors, Malaysia. He was previously a member of the Institute of Chartered Accountants in England

and Wales.

He has more than thirty (30) years of relevant working experience in the various services encompassing

upstream and downstream industries. He joined Harrisons & Crosfield (Sabah) Sdn. Bhd. in 1976 as a Senior

Accountant. He was subsequently transferred to Harrisons & Crosfield (Malaysia) Sdn. Bhd. in 1980 and after

a year, he was promoted to Chief Accountant. Thereafter, he was promoted to Associate Director (Finance) in

1986.

In 1987, he joined SP Holdings Ltd. in Papua New Guinea. Thereafter, in 1990, he joined a plantation group

Raja Garuda Mas (“RGM”) based in Medan, Indonesia. In 1993, he was promoted to Group Financial Controller

of the Forestry Division of the RGM group. In 1996, he was transferred to a joint-venture oil palm plantation

group, jointly owned by the RGM and the SALIM group. In 1997 after completing his assignment, he was then

transferred to a public listed subsidiary of RGM group as Senior Financial Controller.

In 2004, he joined Sinar Mas Group (“SMG”) as Vice-President of Internal Audit of a forestry group operating in

Riau, Sumatera. He was then transferred to the position of Vice-President Business Control in 2005. After a

year, he was transferred to the head office of SMG, Jakarta, as an adviser to Managing Director-Finance,

Forestry Division until his retirement in 2008.

He does not have any other directorships of public listed companies.

Currently, he is involved in engineering and construction as well as in the mining business.

Notes to Profile of Directors :

1. Chew Hon Keong is the brother of Chew Hon

Foong.

Save as disclosed, none of the directors has any

family relationship with any director of the

Company.

2. Save for Chew Hon Foong, Chew Hon Keong

and Yeoh Chong Keng, who have interest in

recurrent related party transactions as disclosed

in item 12 under additional compliance

information in this Annual Report, none of the

directors has any conflict of interest with the

Company.

3. None of the directors has been convicted of any

offences within the past ten (10) years other than

traffic offences, if any.

4. Please refer to the analysis of shareholdings of

this Annual Report for details of the directors’

shareholdings in the Company.

5. All directors attended all the two (2) Board

meetings of the Company held during the financial

year ended 30 June 2010 since its official listing

on Bursa Malaysia Securities Berhad on 23

December 2009.

Chairman’s

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the maiden

Annual Report of Yoong Onn Corporation Berhad (“YOCB” or “the Group”)

for the financial year ended 30 June 2010 as a public listed company.


REVIEW OF FINANCIAL PERFORMANCE

Despite the adverse economic situation around the globe, I am delighted to report that the

Group made an impressive profit before tax of RM21.7 million from a turnover of 127.5

million. This compares favourably with the pro-forma profit of RM18.6 million from a turnover

of RM130.1 million.

The results elevated the net profit attribute to shareholders to RM15.5 million from the

pro-forma figure of RM13.9 million.

STATUS OF UTILISATION OF INITIAL PUBLIC OFFERING (“IPO”) PROCEEDS

YOCB was successfully listed on the Main Market of Bursa Malaysia Securities Berhad on

23 December 2009 with over-subscription rates of 12.6 times.

The Group’s IPO raised a total of RM22.15 million from the public issue of 25,170,740

ordinary shares at 88 sen each. The status of utilisation as at 30 June 2010 is as follows:

Balance

Approved Actual pending

Utilisation Utilisation utilisation

RM’000 RM’000 RM’000

Repayment of bank borrowings 9,000 9,000 -

Local and overseas expansion 6,000 150 5,850

Working capital 3,650 3,650 -

Defray estimated listing expenses ^ 3,500 3,500 -

22,150 16,300 5,850

^ Unutilized estimated listing expenses of approximately RM1.0 million were used for working capital



chairman’s statementcontinued

OPERATION REVIEW

Presently, the Group’s products are sold in over 10 countries through various channels and trading partnerships.

Customers from other countries such as Australia, Dubai, Fiji, Japan, Papua New Guinea, and New Caledonia

have increased their orders and extended current purchase contracts into the next few years. Loyal customers

from Singapore, Brunei and Taiwan remained committed to the Group, and have put in orders for new and

innovative products.

The Group have also established a good trading partner in Vietnam, who share the same vision and aspiration

of the Group. They are operating through Departmental stores, hypermarkets, and retail chain, similar to the

marketing network of the Group. It is certain that contribution from the Vietnam customer will increase

significantly over the next two to three years, as the country itself is seeing a boom in economic prospects.

A strategic part of our expansion program is the development of innovative and ground breaking products

catering to the affluent market and customers. With this objective, the Advertising and Promotion Department

have been upgraded and strengthened to propel this market segment that will surely grow significantly in line

with the Government’s vision to transform our country to a high income nation.

DIVIDEND

In tandem with the Group’s commitment to increase shareholders returns, the Board is pleased to recommend a

final single tier tax exempt dividend of 2.0 sen per ordinary share (“Final dividend”) for this financial year ended 30

June 2010 for shareholders’ approval in the forthcoming Annual General Meeting. This makes a total dividend of

7.0 sen, in addition to the interim dividend paid earlier on 05 April 2010 (3.0 sen), and on 08 July 2010 (2.0 sen).

All in, since listing of the Group on 23 December 2009, the Group’s 7.0 sen dividend will total to RM8.4 million,

representing approximately 54% of the Group’s net profit for the financial year ended 30 June 2010.

In this respect, the Group will continue to enhance returns to shareholders whilst seeing that appropriate funds

are set aside for other purposes such as capital expenditure and for working capital.


chairman’s statementcontinued

OUTLOOK AND PROSPECTS

Irrespective of the Group’s prudent approach and planned strategies, the global forces driving the world

economies cannot be undermined. In a period where economic uncertainties prevail, we are fortunate to possess

strong fundamentals that not only allowed us to withstand adverse trading conditions but have also enabled us

to seize several timely opportunities.

With a committed global pursuit, amidst stochastic and unexpected turn of global events, we have formulated

contingent plans that have so far proved resilient and effective. With a dynamic team of leaders and capable

staff, I am certain the Group will move on to be a recognized name internationally and locally alike.

ACKNOWLEDGEMENT

On behalf of the Board, I extend my heartfelt thanks to our shareholders, customers, business associates,

trading partners, suppliers, bankers and government authorities for the trust and confidence in Yoong Onn

Corporation Berhad.

I would also like to thank my fellow board members, the management team and staff for their dedication,

invaluable contribution and commitment to achieve where we are today.


Chairman

Managing Director’s Review

OPERATIONS

This has been an exciting yet daunting year for me as a Managing Director and Group Chief Executive Officer

of the Group. I am happy to note the Group has progressed in many ways, notwithstanding the many challenges

facing the local industry and the incessant global economic instability.

Apart from the splendid financial results, we have also made advancements in

market penetration and in products development. These are important

features in a highly competitive industry like ours. It is my belief that these

new developments will pave the way for future growth in a market that

perhaps is rife with too many similar products.

Another notable achievement is the establishment of a trading partner in

Vietnam. In the humble beginning of our first trade with them, we stressed

that business in Vietnam is viable and has multitude platforms for expansion.

Convincingly, our customer finally opened out their business and took our

branding formulas to enter departmental stores, hypermarkets and planned to

start retail boutiques soon. I find this positive tenacity of our Vietnamese trading

partner very encouraging. Similarly, I expect contribution from this country to

grow significantly in the coming years. Above all, the success of this partnership

will provide the impetus for my team to move into other South East Asia nations.

Dear Shareholders,

I am pleased to present the first

review of operations of Yoong

Onn Corporation Berhad

(“ YOCB” or “the Group”)

as a public listed company.



FUTURE OUTLOOK AND DEVELOPMENTDuring the year we took an ambitious stride to bring in higher margin products for the upper echelon customers.The feedback is reassuring with double digit growth in this category. Reinforcing our confidence we stepped upproduct development, which include reinforcing the Advertising and Promotion team. Our aim to cater for thehigh end customers is quite timely as this vision falls in line with the government’s objective to transform Malaysiato a high income nation. Another positive element is the government’s initiatives to make Malaysia a shoppingdestination. The recent budget announcement has seen some very attractive enticements like lowering of salestax and duties on luxury goods. All these augurs well with the Group’s plan and vision.

Foreign customers are also looking for innovative products. Perhaps global markets are moving in tandem withsimilar changes and customers’ expectation. This is certainly a positive aspect as we can take advantage offavorable price negotiation for our raw materials, which remains unstable throughout the year.

Complementing products development, we also need to improve on skill development among the severalhundreds of employees. Marketing staff are now trained in technical areas on product issues that are necessaryto educate customers as well as making a convincing sell. Production and operation staff are sent for coursesto upgrade their skill and to learn quality cognition methods in products. Technical staff are similarly sent abroadto bring back new ideas and techniques.

Although there are early signs of an economic upturn, yet we leave nothing to chance as forces of nature canvery well wreck any likelihood of a full recovery without forewarn signals. Our previous experiences have preparedus to face such eventualities as we did the last couple of years. We have been resilient to many adverse situationslike soaring cotton prices of late, caused by the forces of nature. The Group recent financial results are testamentof our strong management acumen backed by strong fundamentals that are quintessential to a wavering marketexpectations and demands.

APPRECIATIONOn behalf of the Board of Directors, I wish to thank our shareholders, customers, business associates, suppliers,bankers and government authorities for their co-operation, continued support and confidence in YOCB.

I’ve enjoyed working with my team of fellow directors, management and operational staff. May I thank you allfor your support and I certainly look towards a more fruitful year ahead with all of you.

Chew Hon FoongManaging Director and Group Chief Executive Officer

Audit Committee Report


The Audit Committee of Yoong Onn Corporation Berhad is pleased to present the Audit Committee Report for

the financial year ended 30 June 2010.

COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee was established on 28 September 2009 and the members of the Audit Committee consist

of the following members:

Name Designation Directorship

Mr. Lee Kim Seng Chairman Independent Non-Executive Director

Datuk Hairuddin Bin Mohamed Member Independent Non-Executive Director

Mr. Yeoh Chong Keng Member Independent Non-Executive Director

TERMS OF REFERENCE OF AUDIT COMMITTEE

(a) Terms of Membership

The Audit Committee shall be appointed by the Board of Directors amongst its members and consist of at

least three (3) members, of whom all must be Non-Executive Directors with a majority of them being

Independent Directors. The Chairman, who shall be elected by the Audit Committee, must be an

Independent Director.

The Committee shall include one member who is a member of the Malaysian Institute of Accountants

(“MIA”); or if he is not a member of the MIA, he must have at least three (3) years’ working experience and

he must have passed the examinations specified in Part 1 of the First Schedule of the Accountants Act

1967; or he must be a member of one of the associations of accountants specified in Part II of the First

Schedule of the Accountants Act 1967; or he must hold a degree/master/doctorate in accounting or finance

and have at least 3 years’ post qualification experience in accounting or finance; or he must have at least

7 years’ experience being a chief financial officer of a corporation or having the function of being primarily

responsible for the management of the financial affairs of a corporation or fulfills such other requirements

as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

In the event of any vacancy in the Audit Committee resulting in the non-compliance with the Listing

Requirements of Bursa Securities, the Board shall appoint a new member within three (3) months.


audit committee reportcontinued

TERMS OF REFERENCE OF AUDIT COMMITTEE continued

(a) Terms of Membership continued

The Board of Directors shall review the term of office and the performance of an Audit Committee and each

of its members at least once in every three (3) years.

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

(b) Meetings and Quorum of the Audit Committee

In order to form a quorum in respect of a meeting of the Audit Committee, the majority of the members

present must be Independent Directors. The Company Secretary shall act as secretary of the Audit

Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and

circulating it prior to each meeting.

The Audit Committee met two (2) times during the financial year ended 30 June 2010. The details of the

attendance of the meetings are disclosed under the heading “Attendance of the Audit Committee Meetings”

on page 25 of this Annual Report.

The Audit Committee may require the attendance of any management staff from Finance/Accounts

Department or other departments deemed necessary together with a representative or representatives from

the external auditors and/or internal auditors.

In all two (2) meetings, the Chief Financial Officer was present to report on the results of the Group as well

as to answer questions posed by the Audit Committee in relation to the results to be announced. During

these Audit Committee meetings, representatives from the internal auditors had also been present to provide

updates on the progress of internal audit work that have been conducted to date, and to also provide

comments and recommendations, where applicable to improve the risk management framework supporting

the activities of the Group.

In any event, should the external auditors request, the Chairman of the Audit Committee shall convene a

meeting of the committee to consider any matter the external auditors believe should be brought to the

attention of the Directors or shareholders.




(c) Functions of the Audit Committee

The duties and responsibilities of the Audit Committee include the following :-

1. to consider the appointment of the external auditor, the audit fee and any questions of resignation or

dismissal;

2. to discuss with the external auditor before the audit commences, the nature and scope of the audit,

and ensure co-ordination where more than one audit firm is involved;

3. to discuss with the external auditor on the evaluation of the system of internal controls and the

assistance given by the employees to the external auditors;

4. to review and report to the Board if there is reason (supported by grounds) to believe that the external

auditor is not suitable for reappointment;

5. to review the quarterly and year-end financial statements of the Company and Group prior to the

approval of the Board, focusing particularly on :

a. changes in or implementation of major accounting policies and practices;

b. significant adjustments arising from the audit;

c. the going concern assumption; and

d. compliance with accounting standards and other legal requirements.

6. to discuss problems and reservations arising from the interim and final audit, and any matter the

auditors may wish to discuss (in the absence of the management where necessary);

7. to review the external auditor’s management letter and management’s response;

8. to do the following in relation to the internal audit functions:-

a. review the adequacy of the scope, functions, competency and resources of the internal audit

function, and that it has the necessary authority to carry out its work;

b. review the internal audit programme and the results of the internal audit processes or investigation

undertaken and where necessary to ensure the appropriate action is taken on the

recommendations of the internal audit function;

c. review any appraisal or assessment of the performance of the internal audit function;

d. approve any appointment or termination of the internal auditor ;

e. inform itself of resignations of internal auditor and provide the resigning internal auditor an

opportunity to submit his reasons for resigning.

9. to review any related party transactions and conflict of interest situation that may arise within the

Company or the Group;

10. to consider the major findings of internal investigations and the management’s response; and

11. to consider any other functions or duties as may be agreed by the Committee and the Board.




(d) Rights of the Audit Committee

The Audit Committee has ensured that it shall, wherever necessary and reasonable for the performance of

its duties and in accordance with a procedure determined by the Board :-

1. have authority to investigate any matter within its terms of reference;

2. have the resources which are required to perform its duties;

3. have full and unrestricted access to any information pertaining to the Company and Group;

4. have direct communication channels with the external auditors and person(s) carrying out the internal

audit function or activity (if any);

5. be able to obtain independent professional or other advice when needed; and

6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the

attendance of other directors and employees of the Group, whenever deemed necessary.

(e) Procedure of Audit Committee

The Audit Committee regulates its own procedures by :-

1. the calling of meetings;

2. the notice to be given of such meetings;

3. the voting and proceedings of such meetings;

4. the keeping of minutes; and

5. the custody, protection and inspection of such minutes.

(f) Review of the Audit Committee

The Board of Directors shall ensure that the term of office and performance of the Audit Committee and

each of its members are being reviewed at least once in every three years to determine whether such an

Audit Committee and members have carried out their duties in accordance with their terms of reference.

(g) Attendance of the Audit Committee Meetings

The details of attendance of each Audit Committee member in the Audit Committee meetings held during

the financial year ended 30 June 2010 are as follows :-

Meeting attended by the

Directors/Total Number of

Meeting held during the

financial year ended % of

Name 30 June 2010 Attendance

Mr. Lee Kim Seng 2/2 100%

Datuk Hairuddin Bin Mohamed 2/2 100%

Mr. Yeoh Chong Keng 2/2 100%




(h) Summaries of Activities of the Audit Committee

During the financial year up to the date of this Report, the Audit Committee carried out the following activities

in discharging their duties and responsibilities:

1. Control

evaluated the overall effectiveness of the system of internal control through the review of the results of

work performed by the internal and external auditors and discussions with the key management.

2. Financial Results

reviewed quarterly results and audited annual financial statements of the Group and Company before

recommending to the Board for release to Bursa Securities. The review should focus primarily on :

a) major judgmental areas, significant and unusual events;

b) significant adjustments resulting from audit;

c) the going concern assumptions;

d) compliance with applicable approved accounting standards in Malaysia; and

e) compliance with Listing Requirements of Bursa Securities and other regulatory requirements.

3. External Audit

a) reviewed with the external auditors, their audit plan for the financial year ended 30 June 2010 to

ensure that their scope of work adequately covers the activities of the Group;

b) reviewed the results and issues arising from their audit of the annual financial statements and their

resolution of such issues as highlighted in their report to the Committee; and

c) reviewed their performance and independence before recommending to the Board their

reappointment and remuneration.

4. Internal Audit

a) reviewed with the internal auditors, their audit plan for the financial year ended 30 June 2010

ensuring that principal risk areas were adequately identified and covered the plan;

b) reviewed the recommendations by internal audit, representations made and corrective actions

taken by the management in addressing and resolving issues as well as ensuring that all issues

were adequately addressed on a timely basis;

c) reviewed the competencies of the internal auditors to execute the plan, the audit programs used

in the execution of the internal audit work and results of their work; and

d) reviewed the adequacy of the terms of reference of internal audit.


Corporate Governance Statement

The Board of Directors (“the Board”) of Yoong Onn Corporation Berhad (“the Company” or “YOCB”) is fully

committed to promote and achieve the highest standard of corporate governance and to ensure that the

principles and best practices in corporate governance as detailed in the Malaysian Code on Corporate

Governance (“the Code”) are practised and adopted in YOCB and its subsidiaries (“the Group”).

The Board continuously evaluates the Group’s corporate governance practices and procedures with a view to

adopt and implement the principles and best practices as recommended by the Code, wherever applicable, as

a fundamental part of discharging its duties and responsibilities to protect and enhance shareholders’ value.

The Board believes that good corporate governance results in creation of long term value and benefits for all

shareholders.

SECTION 1 : THE BOARD OF DIRECTORS

The Board takes full responsibilities for the performance of the Group and guides the Group towards achieving

its short and long term objectives, setting corporate strategies for growth and new business development while

providing advice and direction to the management to enable the Group to achieve its corporate goal and

objectives.

(a) Composition of the Board and Board Balance

The Board members are professionals from diverse disciplines, tapping their respective qualifications

and experiences in business, commercial and financial aspects. Together, they bring a wide range of

competencies, experience and expertise which are vital towards the effective discharge of the Board’s

responsibilities for the successful direction and growth of the Group. A brief profile of each Directors is

presented on the Profile of the Directors in this Annual Report.

The Board currently consists of six (6) members, comprising of two (2) Executive Directors and four (4)

Independent Non-Executive Directors. This is in line with the Main Market Listing Requirements of Bursa

Malaysia Securities Berhad (“Bursa Securities”), which require that at least two (2) or one-third (1/3) of the

Board members, whichever is the higher, to be Independent Directors.

The Independent Directors also have the necessary skill and experience to bring an independent judgment

to bear the issues of strategy, performance, resources including key appointments and standard of

conducts.

The Independent Directors are independent of management and majority shareholders. They provide

independent views and judgment and at the same time, safeguard the interests of parties such as minority

shareholders. No individual or group of individuals dominates the Board’s decision making and the number

of directors fairly reflects the investment of the shareholders.

The roles of the Chairman and the Managing Director are distinguished and separated. The Chairman is

responsible to ensure that the Board functions properly with good corporate governance practices and

procedures, whilst the Managing Director is responsible for the day-to-day operations and business activities

of the Group in accordance with the standard practices set out in the Board Charter. This is to ensure a

balance of power and authority.

The Board does not consider it necessary to nominate a Senior Independent Non-Executive Director to

whom concerns may be conveyed. All members of the Board have demonstrated that they are always

available to members and stakeholders. All issues can be openly discussed during Board meetings. The

Company is not marred with conflicts and controversies and also has not received any notice of matters of

concern from stakeholders since its listing.

All Directors have given their undertaking to comply with the Main Market Listing Requirements of Bursa

Securities and the Independent Directors have confirmed their independence in writing.


corporate governance statementcontinued

SECTION 1 : THE BOARD OF DIRECTORS continued

(b) Board Responsibilities

Having recognised the importance of an effective and dynamic Board, the Board members are guided by

the area of responsibilities as outlined :-

• reviewing and adopting strategic plan for the Group;

• overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being

properly managed;

• identifying the principal risks and key performance indicators of the Group’s businesses and ensuring

that appropriate systems are implemented and/or steps are taken to manage these risks;

• developing and implementing an investors relations programme or shareholder communication policy

for the Group; and

• reviewing the adequacy and the integrity of the Group’s internal control systems and management

information systems, including systems for compliance with applicable laws, regulations, rules,

directives and guidelines.

(c) Re-Election of Directors

In accordance with the Company’s Article of Associations, all Directors including the Managing Director

shall retire from the office at least once every three (3) years, but shall be eligible for re-election. Directors

who are appointed by the Board during the financial year are subject to re-election by shareholders at the

Annual General Meeting following their appointment.

(d) Directors’ Training

The Group acknowledges the fact that continuous education is vital for the Board members to gain insight

into the state of economy, technological advances in the core business, latest regulatory updates, and

management strategies. In compliance with the Main Market Listing Requirements and the relevant Practice

Note issued by Bursa Securities, all Directors have attended and successfully completed their Mandatory

Accreditation Programme within the stipulated time frame as prescribed by Bursa Securities.

During the financial year ended 30 June 2010, the Directors have attended the following trainings:-

Name Title of Training Date

Datuk Kamaludin Bin Yusoff 2010 Budget & Tax Planning Seminar 29 October 2009

Mr. Chew Hon Foong Mandatory Accreditation Programme 14 & 15 April 2010

Mr. Chew Hon Keong Mandatory Accreditation Programme 17 & 18 March 2010

Mr. Lee Kim Seng Mandatory Accreditation Programme 17 & 18 March 2010

Datuk Hairuddin Bin Mohamed Legal & Shariah Issues In Islamic 10 May to

Banking Products 12 May 2010

Datuk Hairuddin Bin Mohamed The Regional Cambridge International 22 June to

Symposium on Economic Crime 2010 24 June 2010

Mr. Yeoh Chong Keng had not attended any training during the financial year due to his busy schedule and

he will attend the relevant training in 2011.

The Directors are also aware of their duty to undergo appropriate training from time to time to ensure that

they are equipped to carry out their duties effectively. The Board is mindful therefore of the need to keep

abreast of changes in both the regulatory and business environments as well as with new developments

within the industry in which the Group operates. Whenever the need arises, the Company provides briefings

of new recruits to the Board, to ensure they have a comprehensive understanding on the operations of the

Group and the Company.




(e) Supply of information

The Board has a formal schedule of matters for decision-making to ensure that the direction and control of

the Group is firmly in its hands.

Prior to each Board meeting, a full agenda together with relevant reports and comprehensive Board papers

would be distributed to all Directors in a timely basis to enable the Directors to consider the matters to be

deliberated and where necessary, obtain further information.

Proceedings of Board meetings are duly recorded and signed by the Chairman of the meeting.

Every Directors has full and timely access to all Group information, records, documents and property to

enable them in discharge their duties and responsibilities effectively. The Directors, whether collectively or

individually, may seek independent professional advice in furtherance of their duties at the Company’s

expenses, if required.

(f) Board Meetings

The Board meets on a quarterly basis with additional meetings held whenever necessary. There were two

(2) Board meetings held during the financial year ended 30 June 2010 and the details of attendance are as

follows :-

Meetings attended by the

Directors/Total Number of

Meeting held during the

Financial Year Ended

Name of Director 30 June 2010 % of Attendance

Executive Directors

Mr. Chew Hon Foong 2/2 100%

Mr. Chew Hon Keong 2/2 100%

Non-Executive Directors

Datuk Kamaludin Bin Yusoff 2/2 100%

Datuk Hairuddin Bin Mohamed 2/2 100%

Mr. Yeoh Chong Keng 2/2 100%

Mr. Lee Kim Seng 2/2 100%

During the financial year ended 30 June 2010, two (2) Board meetings were convened on 23 February 2010

and 27 May 2010 since its official listing on Bursa Securities on 23 December 2009.

(g) Board Committees

The Board has established the following Committees to assists the Board in discharging its duties and

responsibilities effectively :

• Audit Committee

• Nomination Committee

• Remuneration Committee

The terms of reference of each Board Committee are set out in Board Charter and have been approved by the

Board. These Committees have the authority to examine particular issues and report to the Board with their

recommendations. However, the ultimate responsibility for the final decision on all matters lies with the Board.




(h) Audit Committee

The report of the Audit Committee is set out in the Audit Committee Report in of this Annual Report.

(i) Nomination Committee

Our Nomination Committee was established on 28 September 2009 and the members of the Nomination

Committee consist of the following members:


Mr. Yeoh Chong Keng Chairman Independent Non-Executive Director

Datuk Hairuddin Bin Mohamed Member Independent Non-Executive Director

Mr. Lee Kim Seng Member Independent Non-Executive Director

The summary of the terms of reference of the Nomination Committee are as follows:

(i) review the Board structure, size and composition;

(ii) nominate candidates to the Board to fill Board vacancies when they arise;

(iii) recommend Directors who are retiring by rotation to be put forward for re-election; and

(iv) ensure that all Board appointees undergo an appropriate introduction and training programme.

The Board annually reviews the required mix of skills, experience and other qualities of the Directors to

ensure that the Board is functioning effectively and efficiently.

(j) Remuneration Committee

Our Remuneration Committee was established on 28 September 2009 and the members of the

Remuneration Committee consist of the following members:


Mr. Yeoh Chong Keng Chairman Independent Non-Executive Director

Datuk Kamaludin Bin Yusoff Member Independent Non-Executive Chairman

Mr. Chew Hon Foong Member Managing Director and


The summary of the terms of reference of the Remuneration Committee are as follows:

(i) recommend to the Board the remuneration of the Directors;

(ii) assist the Board in assessing the responsibility and commitment undertaken by the Board membership;

and

(iii) assist the Board in ensuring the remuneration of the Directors commensurate with the responsibility

and commitment of the Directors concerned.

SECTION 2 : DIRECTORS’ REMUNERATION

(a) Remuneration Procedure

The remuneration of directors is formulated to be competitive and realistic, emphasis being placed on

performance and calibre, with aims to attract, motivate and retain Directors with the relevant experience,

expertise and quality needed to assist in managing the Group effectively.



SECTION 2 : DIRECTORS’ REMUNERATION continued

(a) Remuneration Procedure continued

For Executive Directors, the remuneration packages link rewards to corporate and individual performance

whilst for the Non-Executive Directors, the level of remuneration is linked to their experience and level of

responsibilities undertaken.

The level of remuneration for the Executive Directors is determined by the Remuneration Committee after

giving due consideration to the compensation levels for comparable positions among other similar Malaysian

public listed companies. The determination of the remuneration package of Non-Executive Directors,

including Non-Executive Chairman should be a matter for the Board as a whole. The individuals concerned

should abstain from discussing their own remuneration.

(b) Remuneration Package

The details of the remuneration of the Directors of the Company are as follows:-

Executive Non-Executive

Directors Directors

(RM’000) (RM’000)

Emoluments 1,022 4

Directors’ fee 72 91

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

Executive Non-Executive

Range of Remuneration Directors Directors

Below RM50,000 - 4

RM500,001 - RM550,000 1 -

RM550,001 - RM600,000 1 -

SECTION 3 : SHAREHOLDERS

(a) Dialogue between Company and Investors

The Board maintains an effective communications policy that enables both the Board and the management

to communicate effectively with its shareholders, stakeholders and the public. The policy effectively interprets

the operations of the Group to the shareholders and accommodates feedback from shareholders, which

are factored into the Group’s business decision.

The Board communicates information on the operations, activities and performance of the Group to the

shareholders, stakeholders and the public through the following :-

i. the Annual Report, which contains the financial and operational review of the Group’s business,

corporate information, financial statements and information on Audit Committee and Board of Directors;

ii. various announcements made to the Bursa Securities, which include announcements on quarterly

results;

iii. the Company website at http://www.yoongonn.com;

iv. meetings with research analysts and fund managers to give them a better understanding of the

business conducted by the Group in particular, and of the industry in which the Group’s business

operates, in general; and

v. participation in surveys and research conducted by professional organisations as and when such

requests arise.



SECTION 3 : SHAREHOLDERS continued

(b) The Annual General Meeting

The Annual General Meeting serves as an important means for shareholders communication. Notice of the

Annual General Meeting and Annual Reports are sent to shareholders twenty one days prior to the meeting.

At each Annual General Meeting, the Board presents the progress and performance of the Group’s business

and encourages attendance and participation of shareholders during questions and answers sessions. The

Chairman and the Board will respond to all questions raised by the shareholders during the Annual General

Meeting.

SECTION 4 : ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s

financial performance and prospects through the quarterly announcement of results to the Bursa Securities

as well as the Chairman’s Statement, review of operations and annual financial statements in the Annual

Report. The Audit Committee assists the Board in ensuring accuracy and adequacy of information by

overseeing and reviewing the financial statements and quarterly announcements prior to the submission to

Bursa Securities.

(b) Statement on Directors’ Responsibility in relation to the Audited Financial Statements

The Directors are responsible to ensure that the annual financial statements are drawn up in accordance

with the applicable approved accounting standards in Malaysia and Companies, Act 1965. A Statement by

the Directors of their responsibilities in preparing the financial statements is set out separately on page 34

of this Annual Report.

(c) Internal Control and Risk Management

The Board acknowledges their responsibilities for the internal control system of the Group, covering not

only financial controls but also controls relating to operations, compliance and risk management. Information

of the Group’s internal control and risk management is presented in the Statement of Internal Control of

this Annual Report.

(d) Relationship with the Auditors

The Board has established a formal and transparent professional relationship with the Group’s Auditors,

both internal and external. Whenever the need arises, the Auditors would highlight to the Audit Committee

and the Board from time to time on matters that require the Board’s attention. The role of the Audit

Committee in relation to the auditors, both internal and external is set out in the Audit Committee Report

of this Annual Report.

This corporate governance statement is made in accordance with the resolution of the Board dated 19 October 2010.


Statement on Internal Control

INTRODUCTION

The Board of Yoong Onn Corporation Berhad is pleased to provide the Statement of Internal Control (“SIC”)

pursuant to Paragraph 15.26(b) of Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa

Securities”). This statement has been prepared in accordance with the Malaysian Code on Corporate Governance

which outlines the processes the Board is to adopt in reviewing the adequacy and integrity of the system of internal

control of the Group.

BOARD OF DIRECTORS’ RESPONSIBILITIES

The Board acknowledges the responsibility for the Group’s system of internal control, which is designed to

safeguard the shareholders’ investment and the Group’s assets. The Board also affirms its commitment in

recognizing the importance of an effective and sound system of internal control. However, the system of control is

designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide

reasonable and not absolute assurance against material misstatement, fraud or loss.

The Board also acknowledges the need to establish an ongoing process for identifying, evaluating and managing

significant risks faced by the Group and to regularly review this process with the Statement on Internal Control.

ENTERPRISE RISK MANAGEMENT FRAMEWORK

The Board has established an enterprise-wide approach to risk management and has established a Risk

Management Framework to continually identify and update the various risk factors that could have a potentially

significant impact on the Group’s business objectives. The Board through the Audit Committee which is assisted

by the internal auditors, regularly reviews this process.

INTERNAL CONTROL AND THE INTERNAL AUDIT FUNCTION

The Board has outsourced the internal audit function of the Group to an independent external party, IBDC (Malaysia)

Sdn Bhd for the year ended 30 June 2010 at a cost of RM45,000 per annum. The internal auditors conduct reviews

of the key functions of the Group on a risk based approach and submit quarterly reports for the review of the

Board. A three (3) year audit plan has been adopted by the Audit Committee to continuously review the

effectiveness of the Group’s system of internal control and mitigate risk areas of financial risk, operational controls

and risk management compliance.

The Group’s system of internal control comprises but not limited to the following activities:-

• The Audit Committee comprises solely of Independent Non-Executive Directors with full access to both the

internal and external auditors. Audit Committee meetings are held separately from Board meetings;

• Delegation of responsibilities are clearly defined to the Audit Committee and the management to ensure that

appropriate risk management and internal control procedures are in place;

• Periodic internal audits are conducted by the internal auditors to monitor compliance with operating

procedures and corporate governance with significant risks highlighted for the management and Board’s

attention;

• The Audit Committee oversees risk management issues of the Group and reviews the risk register which

identifies new risks and develops the risk mitigating strategies and the related internal control measures;

• The Audit Committee reviews the internal audit issues identified, and together with the management and with

the assistance of the internal auditors devises action plans to rectify the weaknesses. Follow-up reviews are

also conducted to ensure that the recommendations have been implemented accordingly.

REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS

The external auditors has reviewed this SIC for the inclusion in the Annual Report for the financial year ended 30

June 2010. Based on the review, the external auditors believe that nothing has come to their attention to cause

them to believe that the SIC is inconsistent with their understanding of the process which the Directors of the Board

of the Company have adopted in the review of the adequacy and integrity of the internal control of the Group.

This Statement of Internal Control is made in accordance with the resolution of the Board dated 19 October 2010.

Statement on Directors’ Responsibility in relation to the Audited Financial Statements


The Directors are responsible for the preparation of financial statements which give a true and fair view of the

state of affairs of Yoong Onn Corporation Berhad (“YOCB”) and its subsidiary companies (“the Group”) as

at the end of the financial year, and of the results and cash flows for the financial year ended.

Therefore, in preparing the financial statements of YOCB for the year ended 30 June 2010, the Directors have :

• adopted appropriate accounting policies and applied them on a consistent basis;

• made judgments and estimates that are prudent and reasonable;

• ensured applicable approved accounting standards have been followed and any material departures have

been disclosed and explained in the financial statements; and

• ensured the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep proper accounting and other

records which disclose with reasonable accuracy the financial position of the Group and the Company, and

ensuring that the financial statements comply with the provisions of the Companies Act 1965. The Directors

have overall responsibilities for taking such steps to safeguard the assets of the Group, and to prevent and

detect fraud and other irregularities.

This above statement is made in accordance with the resolution passed at the Board of Directors’ meeting held

on 19 October 2010.

36 Directors’ Report

41 Statement by Directors

41 Statutory Declaration

42 Independent Auditors’ Report

44 Balance Sheets

46 Income Statements

47 Statements of Changes In Equity

49 Cash Flow Statements

51 Notes to the Financial Statements

Financial Statements


Directors’ Report

The directors hereby submit their report and the audited financial statements of the Group and of the Company

for the financial year ended 30 June 2010.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management

services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There have

been no significant changes in the nature of these activities during the financial year.

RESULTS

The Group The Company

RM’000 RM’000

Profit after taxation attributable to equity holders

of the Company 15,528 8,617

DIVIDENDS

The amount of dividends declared or paid since the end of the previous financial year was as follows:

RM’000

Paid:-

First interim dividend of 3.0 sen per ordinary share comprising

approximately 0.436 sen tax exempt dividend per ordinary share and

approximately 2.564 sen single tier dividend per ordinary share for the

current financial year 3,600

Declared:-

Second interim single tier dividend of 2 sen per ordinary share for the

current financial year 2,400

6,000

The directors recommend the payment of a final single tier dividend of 2 sen per ordinary share amounting to

RM2,400,000 to be approved by the shareholders at the forthcoming Annual General Meeting. The dividend

will be accounted for as a liability in the period when it is approved by the shareholders.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial

statements.


directors’ reportcontinued

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) the Company increased its authorised share capital from RM100,000 comprising 200,000 ordinary shares

of RM0.50 each to RM100,000,000 comprising 200,000,000 ordinary shares of RM0.50 each by the

creation of 199,800,000 new ordinary shares of RM0.50 each;

(b) the Company increased its issued and paid-up share capital from RM2 to RM60,000,000 as part of its

flotation scheme on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The issued

and paid-up share capital was increased in the following manner:-

(i) Acquisition of Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”)

Acquisition of the entire issued and paid-up share capital of SYOSB comprising 2,000,000 ordinary

shares of RM1.00 each for a total purchase consideration of RM36,528,771 satisfied by the issuance

of 73,057,542 new ordinary shares of RM0.50 each in the Company at par.

(ii) Acquisition of Sleep Focus Sdn. Bhd. (“SFSB”)

Acquisition of the entire issued and paid-up share capital of SFSB comprising 500,000 ordinary shares

of RM1.00 each for a total purchase consideration of RM7,249,379 satisfied by the issuance of

14,498,758 new ordinary shares of RM0.50 each in the Company at par.

(iii) Acquisition of Elegant Total Home Sdn. Bhd. (“ETHSB”)

Acquisition of the entire issued and paid-up share capital of ETHSB comprising 200,000 ordinary shares

of RM1.00 each for a total purchase consideration of RM2,891,643 satisfied by the issuance of

5,783,286 new ordinary shares of RM0.50 each in the Company at par.

(iv) Acquisition of Monsieur (M) Sdn. Bhd. (“MSB”)

Acquisition of the entire issued and paid-up share capital of MSB comprising 350,000 ordinary shares

of RM1.00 each for a total purchase consideration of RM744,835 satisfied by the issuance of 1,489,670

new ordinary shares of RM0.50 each in the Company at par.

(v) Initial Public Offering

The public issue of 25,170,740 new ordinary shares of RM0.50 each at an issue price of RM0.88 per

ordinary share pursuant to the initial public offering; and

(c) there were no issues of debentures by the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued

shares in the Company.



BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable

steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of

allowance for doubtful debts, and satisfied themselves that all known bad debts have been written off and that

adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would require the further writing

off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of

the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable

steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary

course of business, including their value as shown in the accounting records of the Group and of the Company,

have been written down to an amount which they might be expected so to realise.

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

attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render

adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company

misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities are disclosed in Note 38 to the financial statements. At the date of this report, there

does not exist:

(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial

year which secures the liabilities of any other person; or

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

year.

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become

enforceable within the period of twelve months after the end of the financial year which, in the opinion of the

directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations

when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report

or the financial statements of the Group and of the Company which would render any amount stated in the

financial statements misleading.


ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion

of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item,

transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially

the results of the operations of the Group and of the Company for the financial year.

HOLDING COMPANY

The holding company is Casatex Cosmo Sdn. Bhd., a company incorporated in Malaysia.

DIRECTORS

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

Chew Hon Foong

Chew Hon Keong

Datuk Kamaludin Bin Yusoff (Appointed on 28.9.2009)

Datuk Hairuddin Bin Mohamed (Appointed on 28.9.2009)

Yeoh Chong Keng (Appointed on 28.9.2009)

Lee Kim Seng (Appointed on 28.9.2009)

DIRECTORS’ INTERESTS

In accordance with the register of directors’ shareholdings, the interests of directors in office at the end of the

financial year in shares in the Company and its related corporations during the financial year are as follows:

Number Of Ordinary Shares Of RM0.50 Each

At At

1.7.2009 Bought/Allotted Sold 30.6.2010

Direct Interests

Chew Hon Foong 2 24,426,645 (24,426,647) -

Chew Hon Keong 2 24,426,498 (24,426,500) -

Datuk Kamaludin Bin Yusoff - 1,000,000 (900,000) 100,000

Yeoh Chong Keng - 100,000 - 100,000

Lee Kim Seng - 100,000 - 100,000

Indirect Interests

Chew Hon Foong - 63,000,000 * - 63,000,000 *

Chew Hon Keong - 63,000,000 * - 63,000,000 *

* - By virtue of their shareholdings in the holding company, Chew Hon Foong and Chew Hon Keong are deemed to have interests

in shares in the Company and its related corporations to the extent of the holding company’s interests, in accordance with

Section 6A of the Companies Act, 1965.

The other director holding office at the end of the financial year had no interest in shares in the Company or its

related corporations during the financial year.



DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit

(other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors

as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a

contract made by the Company or a related corporation with the director or with a firm of which the director is

a member, or with a company in which the director has a substantial financial interest except for any benefits

which may be deemed to arise from transactions entered into in the ordinary course of business with companies

in which certain directors have substantial financial interests as disclosed in Note 36 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements

whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures

of the Company or any other body corporate.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year of the Group and of the Company are disclosed in Note 39 to

the financial statements.

AUDITORS

The auditors, Messrs. Crowe Horwath (formerly known as Messrs. Horwath), have expressed their willingness

to continue in office.

Signed in accordance with a resolution of the directors

Dated 19 October 2010

Chew Hon Foong

Chew Hon Keong



We, Chew Hon Foong and Chew Hon Keong, being two of the directors of Yoong Onn Corporation

Berhad, state that, in the opinion of the directors, the financial statements set out on pages 44 to 86 are drawn

up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a

true and fair view of the state of affairs of the Group and of the Company at 30 June 2010 and of their results

and cash flows for the financial year ended on that date.

Signed in accordance with a resolution of the directors

Dated 19 October 2010

Chew Hon Foong Chew Hon Keong

Statement by Directors

I, Chew Hon Foong, I/C. No. 590205-10-5731, being the director primarily responsible for the financial

management of Yoong Onn Corporation Berhad, do solemnly and sincerely declare that the financial

statements set out on pages 44 to 86 are, to the best of my knowledge and belief, correct, and I make this

solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory

Declarations Act, 1960.

Subscribed and solemnly declared by

Chew Hon Foong, I/C. No. 590205-10-5731,

at Kuala Lumpur in the Federal Territory

on this 19 October 2010

Chew Hon Foong

Before me,

Datin Hajah Raihela Wanchik

No. W-275

Commissioner for Oaths

Statutory Declaration


REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Yoong Onn Corporation Berhad., which comprise the balance

sheets as at 30 June 2010 of the Group and of the Company, and the income statements, statements of

changes in equity and cash flow statements of the Group and of the Company for the financial year then ended,

and a summary of significant accounting policies and other explanatory notes, as set out on pages 44 to 86.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these financial

statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This

responsibility includes designing, implementing and maintaining internal control relevant to the preparation and

fair presentation of financial statements that are free from material misstatement, whether due to fraud or error,

selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable

in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply

with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on our judgement, including the assessment of risks

of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also

includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting

Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position

of the Group and of the Company as of 30 June 2010 and of their financial performance and cash flows for the

financial year then ended.

Independent Auditors’ Report to the Members of Yoong Onn Corporation Berhad(Incorporated in Malaysia) Company No: 814138-K


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the

Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the

Company’s financial statements are in form and content appropriate and proper for the purposes of the

preparation of the financial statements of the Group and we have received satisfactory information and

explanations required by us for those purposes.

(c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any

adverse comment made under Section 174(3) of the Act.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the

Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person

for the content of this report.

Crowe Horwath Onn Kien Hoe

Firm No: AF 1018 Approval No: 1772/11/10 (J/PH)

Chartered Accountants Chartered Accountant

Kuala Lumpur

19 October 2010

independent auditors’ report to the Members of Yoong Onn Corporation Berhad continued

(Incorporated in Malaysia) Company No: 814138-K



2010 2009 2010 2009

Note RM’000 RM’000 RM’000 RM’000

ASSETS

NON-CURRENT ASSETS

Investments in subsidiaries 7 - - 47,415 -

Property, plant and equipment 8 30,371 30,853 8 -

Goodwill 9 637 637 - -

31,008 31,490 47,423 -

CURRENT ASSETS

Inventories 10 32,882 30,442 - -

Trade receivables 11 21,746 16,639 - -

Other receivables, deposits

and prepayments 12 4,828 3,214 16 917

Tax refundable 8 43 925 -

Amount owing by subsidiaries 13 - - 14,587 -

Deposits with financial institutions 14 13,847 6,029 11,600 -

Cash and bank balances 15 10,660 5,857 193 *

83,971 62,224 27,321 917

TOTAL ASSETS 114,979 93,714 74,744 917

The annexed notes form an integral part of these financial statements.

Balance Sheetsat 30 June 2010



2010 2009 2010 2009

Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

EQUITY

Share capital 16 60,000 47,415 60,000 *

Share premium 17 8,685 - 8,685 -

Merger deficit 18 (44,365) (44,365) - -

Revaluation reserve 19 7,501 7,501 - -

Retained profits/

(Accumulated losses) 20 59,950 50,422 2,610 (7)

TOTAL EQUITY 91,771 60,973 71,295 (7)

NON-CURRENT LIABILITIES

Deferred tax liabilities 21 1,716 1,429 917 -

Hire purchase payables 22 9 775 - -

Term loans 23 - 2,637 - -

1,725 4,841 917 -

CURRENT LIABILITIES

Trade payables 24 1,500 5,136 - -

Other payables and accruals 4,252 6,159 132 147

Dividend payable 25 2,400 - 2,400 -

Provision for taxation 1,597 1,314 - -

Amount owing to a subsidiary 13 - - - 777

Short-term borrowings 26 11,734 15,291 - -

21,483 27,900 2,532 924

TOTAL LIABILITIES 23,208 32,741 3,449 924

TOTAL EQUITY AND LIABILITIES 114,979 93,714 74,744 917

* - RM2


balance sheetsat 30 June 2010 continued



2010 2009 2010 2009

Note RM’000 RM’000 RM’000 RM’000

REVENUE 27 127,541 130,084 14,023 -

COST OF SALES (73,624) (83,683) - -

GROSS PROFIT 53,917 46,401 14,023 -

OTHER INCOME 272 711 227 -

54,189 47,112 14,250 -

SELLING AND DISTRIBUTION

EXPENSES (6,915) (5,286) (3) -

ADMINISTRATIVE AND OPERATING

EXPENSES (25,147) (22,080) (2,283) (2)

FINANCE COSTS (464) (1,101) - -

PROFIT/(LOSS) BEFORE TAXATION 28 21,663 18,645 11,964 (2)

INCOME TAX EXPENSE 29 (6,135) (4,764) (3,347) -

PROFIT/(LOSS) AFTER TAXATION 15,528 13,881 8,617 (2)

ATTRIBUTABLE TO:-

Equity holders of the Company 15,528 13,881 8,617 (2)

BASIC EARNINGS

PER SHARE (SEN) 30 14 15 N/A N/A

DILUTED EARNINGS

PER SHARE (SEN) 30 N/A N/A N/A N/A

N/A - Not applicable

Income Statementsfor the financial year ended 30 June 2010



Statements of Changes in Equityfor the financial year ended 30 June 2010

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Distributable

Non-Distributable (Accumulated

Share Share Losses)/

Capital Premium Retained Profits Total

Note RM’000 RM’000 RM’000 RM’000

THE COMPANY

At 1.7.2008 * - (5) (5)

Loss for the financial year - - (2) (2)

At 30.6.2009/1.7.2009 - - (7) (7)

Shares issued pursuant to the

listing scheme:

- acquisition of subsidiaries 47,415 - - 47,415

- public issue 12,585 9,565 - 22,150

Listing expenses - (880)^ - (880)^

Profit after taxation for the

financial year - - 8,617 8,617

Dividends 31 - - (6,000) (6,000)

Balance at 30.6.2010 60,000 8,685 2,610 71,295

* - RM2

^ - Represents expenses not recognised in the income statement.

statements of changes in equityfor the financial year ended 30 June 2010 continued




2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(FOR)

OPERATING ACTIVITIES

Profit/(Loss) before taxation 21,663 18,645 11,964 (2)

Adjustments for:-

Allowance for doubtful debts 115 69 - -

Depreciation of property,

plant and equipment 2,419 2,437 1 -

Allowance for slow-moving inventories 555 462 - -

Interest expense 388 1,005 - -

Plant and equipment written off 34 202 - -

Listing expenses written off 1,614 - 1,614 -

Loss on disposal of plant and equipment 2 3 - -

Dividend income - - (13,824) -

Interest income (253) (45) (227) -

Writeback of allowance for

doubtful debts (13) (10) - -

Operating profit/(loss) before

working capital changes 26,524 22,768 (472) (2)

Increase in inventories (2,995) (3,625) - -

(Increase)/Decrease in trade

and other receivables (7,612) 4,626 111 -

(Decrease)/Increase in trade

and other payables (5,543) 3,882 (15) 145

Increase in amount owing by subsidiaries - - (99) -


OPERATING ACTIVITIES 10,374 27,651 (475) 143

Income tax paid (5,530) (5,327) (30) -

Interest paid (388) (1,005) - -

NET CASH FROM/(FOR)


CARRIED FORWARD 4,456 21,319 (505) 143

Cash Flow Statementsfor the financial year ended 30 June 2010




2010 2009 2010 2009

Note RM’000 RM’000 RM’000 RM’000

NET CASH FROM/(FOR)


BROUGHT FORWARD 4,456 21,319 (505) 143

CASH FLOWS (FOR)/FROM

INVESTING ACTIVITIES

Interest received 253 45 227 -

Dividend received - - 7,749 -

Purchase of plant and equipment 32 (1,989) (1,793) (9) -

Proceeds from disposal of

plant and equipment 16 5 - -

NET CASH (FOR)/FROM

INVESTING ACTIVITIES (1,720) (1,743) 7,967 -


FINANCING ACTIVITIES

Proceeds from issuance of shares 22,150 - 22,150 -

Share issuance expenses paid (1,705) (789) (1,705) (789)

Advances (to)/from subsidiaries - - (12,514) 646

Repayment to a director - (5) - -

Net repayment of bankers’ acceptances (625) (9,368) - -

Repayment of hire purchase obligations (981) (187) - -

Repayment of term loans (5,354) (2,604) - -

Dividends paid (3,600) - (3,600) -

NET CASH FROM/(FOR)

FINANCING ACTIVITIES 9,885 (12,953) 4,331 (143)

NET INCREASE IN CASH AND

CASH EQUIVALENTS 12,621 6,623 11,793 -

CASH AND CASH

EQUIVALENTS AT BEGINNING

OF THE FINANCIAL YEAR 11,886 5,263 * *

CASH AND CASH

EQUIVALENTS AT END

OF THE FINANCIAL YEAR 33 24,507 11,886 11,793 *

* - RM2

cash flow statementsfor the financial year ended 30 June 2010 continued



1. GENERAL INFORMATION

The Company is incorporated as a public company limited by shares under the Companies Act 1965 in

Malaysia.

The registered office is located at Suite 13A.01(A), Level 13A, Wisma Goldhill, 67, Jalan Raja Chulan, 50200

Kuala Lumpur.

The principal place of business is located at Lot No. PT 16690 - 16692 , Jalan Permata 2, Arab-Malaysian

Industrial Park, 71800 Nilai, Negeri Sembilan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution

of the directors dated 19 October 2010.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management

services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There

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

3. HOLDING COMPANY

The holding company is Casatex Cosmo Sdn. Bhd., a company incorporated in Malaysia.

4. FINANCIAL RISK MANAGEMENT POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available

for the development of the Group’s business whilst managing its market, credit, liquidity and cash flow risks.

The policies in respect of the major areas of treasury activity are as follows:

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign exchange risk on sales and purchases that are denominated in

foreign currencies. The currencies giving rise to this risk are disclosed in their respective notes to

the financial statements. Foreign currency risk is monitored closely and managed to an acceptable

level.

The Group entered into forward foreign exchange contracts mainly for foreign currencies such as

United States Dollar and Singapore Dollar to hedge against its foreign exchange risk resulting from

anticipated sale and purchase transactions denominated in these two currencies.

(ii) Interest Rate Risk

The Group’s exposure to interest rate risk arises mainly from bank borrowings. Its policy is to obtain

the most favourable interest rates available.

Surplus funds are placed with licensed financial institutions at the most favourable interest rates.

(iii) Price Risk

The Group does not have any quoted investments and hence is not exposed to price risk.

Notes to Financial Statementsfor the financial year ended 30 June 2010


4. FINANCIAL RISK MANAGEMENT POLICIES continued

(b) Credit Risk

Credit risks, or the risk of counterparties defaulting arise mainly from receivables. Credit risks are

minimised by monitoring receivables regularly and by mostly trading with reputable and creditworthy

customers.

The carrying amounts of the trade and other receivables represent the Group’s maximum exposure to

credit risk in relation to financial assets. No other financial assets carry a significant exposure to credit

risks.

The Group’s concentration of credit risk relates to the amounts owing by two customers which

constituted approximately 51% of the total trade receivables as at the balance sheet date.

The Group manages its exposure to credit risk by the application of credit approvals, limits and

monitoring procedures.

(c) Liquidity and Cash Flow Risks

The Group’s exposure to liquidity and cash flow risks arises mainly from general finding and business

activities.

It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability

of funding through certain committed credit facilities.

5. BASIS OF PREPARATION

The financial statements of the Group and of the Company are prepared under the historical cost convention

and modified to include other bases of valuation as disclosed in other sections under significant accounting

policies, and in compliance with Financial Reporting Standards (“FRSs”) and the Companies Act 1965 in

Malaysia.

The Group has adopted FRS 8, Operating Segment that has been issued and effective from 1 July 2009.

FRS 8 replaces FRS 1142004 Segment Reporting and requires an entity to report financial and descriptive

information about its operating segments. Under FRS 8, the disclosure on operating segments is based on

the internal reporting segments adopted by the entity and Group for purpose of evaluation of performances

and allocation of resources. The adoption of this standard only impacts the form and content of disclosures

presented in the financial statements of the Group.

The Group has not adopted in advance the following accounting standards, amendments and

interpretations that have been issued by the Malaysian Accounting Standard Board (MASB) but are not yet

effective for the current financial year.

FRSs and IC Interpretations (including the Consequential Amendments) Effective date

Revised FRS 1 (2010) First-time Adoption of Financial Reporting Standards 1 July 2010

Revised FRS 3 (2010) Business Combinations 1 July 2010

FRS 4 Insurance Contracts 1 January 2010

notes to financial statementsfor the financial year ended 30 June 2010 continued


5. BASIS OF PREPARATION continued

FRSs and IC Interpretations (including the Consequential Amendments) Effective date

FRS 7 Financial Instruments: Disclosures 1 January 2010

Revised FRS 101 (2009) Presentation of Financial Statements 1 January 2010

Revised FRS 123 (2009) Borrowing Costs 1 January 2010

Revised FRS 127 (2010) Consolidated and Separate Financial Statements 1 July 2010

Revised FRS 139 (2010) Financial Instruments: Recognition and Measurement 1 January 2010

Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, 1 January 2010

Jointly Controlled Entity or Associate

Amendments to FRS 1: Limited Exemption from Comparative FRS 7 1 January 2011

Disclosures for First-time Adopters

Amendments to FRS 2: Vesting Conditions and Cancellations 1 January 2010

Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 (2010) 1 July 2010

Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010

Amendments to FRS 7, FRS 139 and IC Interpretation 9 1 January 2010

Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011

Amendments to FRS 101 and FRS 132: Puttable Financial Instruments 1 January 2010

and Obligations Arising on Liquidation

Amendments to FRS 132: Classification of Rights Issues and the 1 January 2010

Transitional Provision in Relation to Compound Instruments /1 March 2010

Amendments to FRS 138: Consequential Amendments Arising from 1 July 2010

Revised FRS 3 (2010)

IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010

IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010

IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions 1 January 2010

IC Interpretation 12 Service Concession Arrangements 1 July 2010

IC Interpretation 13 Customer Loyalty Programmes 1 January 2010

IC Interpretation 14: FRS 119 - The Limit on a Defined Benefit Asset, 1 January 2010

Minimum Funding Requirements and their Interaction

IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012

IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010

IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010

Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and 1 July 2010

Revised FRS 3 (2010)

Annual Improvements to FRSs (2009) 1 January 2010




The above accounting standards and interpretations (including the consequential amendments) are not

relevant to the Group’s operations except as follows:

The revised FRS 3 (2010) introduces significant changes to the accounting for business combinations, both

at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction

costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be

applied prospectively and therefore there will not have any financial impact on the financial statements of

the Group for the current financial year but may impact the accounting for future transactions or

arrangements.

The Group considers financial guarantee contracts entered into to be insurance arrangements and accounts

for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until

such a time as it becomes probable that the Group will be required to make a payment under the guarantee.

The adoption of FRS 4 is expected to have no material impact on the financial statements of the Group.

The possible impacts of FRS 7 (including the subsequent amendments) and the revised FRS 139 (2010)

on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given

in these standards.

The revised FRS 101 (2009) has introduced terminology changes (including revised titles for the financial

statements) and changes in the format and content of the financial statements. In addition, a statement of

financial position is required at the beginning of the earliest comparative period following a change in

accounting policy, the correction of an error or the reclassification of items in the financial statements. The

adoption of this revised standard will only impact the form and content of the presentation of the Group’s

financial statements in the next financial year.

The revised FRS 123 (2009) removes the option of immediately recognising as an expense borrowing costs

that are directly attributable to the acquisition, construction or production of a qualifying asset. In accordance

with the transitional provisions, the Group will apply this revised standard to borrowing costs related to

qualifying assets for which the commencement date of capitalisation is on or after 1 January 2010. This

change in accounting policy will not have any financial impact on the financial statements for the current

financial year but may impact the accounting for future transactions or arrangements.

The revised FRS 127 (2010) requires accounting for changes in ownership interests by the group in a

subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses

control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the

gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the

minority interest to be absorbed by the minority interest instead of by the parent. The Group will apply the

major changes of the revised FRS 127 (2010) prospectively and therefore there will not have any financial

impact on the financial statements of the Group for the current financial year but may impact the accounting

for future transactions or arrangements.

Amendments to FRS 1 and FRS 127 remove the definition of “cost method” currently set out in FRS 127,

and instead require an investor to recognise all dividend from subsidiaries, jointly controlled entities or

associates as income in its separate financial statements. In addition, FRS 127 has also been amended to

deal with situations where a parent reorganises its group by establishing a new entity as its new parent.

Under this circumstance, the new parent shall measure the cost of its investment in the original parent at

the carrying amount of its share of the equity items shown in the separate financial statements of the original

parent at the reorganisation date. The amendments will be applied prospectively and therefore there will

not have any financial impact on the financial statements of the Company for the current financial year but

may impact the accounting for future transactions or arrangements.




Amendments to FRS 101 and FRS 132 require puttable financial instruments that would normally be

classified as liabilities to be classified as equity if and only if they meet certain conditions, with retrospective

application. These amendments are expected to have no material impact on the financial statements of the

Group upon their initial application.

Amendments to FRS 138 clarify the requirements under the revised FRS 3 (2010) regarding accounting for

intangible assets acquired in a business combination. These amendments are expected to have no material

impact on the financial statements of the Group upon their initial application.

IC Interpretation 9 requires embedded derivatives to be separated from the host contract and accounted

for as a derivative on the basis of the conditions that existed at the later of the date the entity first became

a party to the contract. The possible impacts of IC Interpretation 9 on the financial statements upon its

initial application are not disclosed by virtue of the exemptions given under the revised FRS 139 (2010).

IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments

in equity instruments and financial assets carried at cost to be reversed at a subsequent balance sheet

date. This interpretation is expected to have no material impact on the financial statements of the Group

upon its initial application.

Amendments to IC Interpretation 9 are a consequential amendment from the revised FRS 3 (2010). These

amendments are expected to have no material impact on the financial statements of the Group upon its

initial application.

Annual Improvements to FRSs (2009) contain amendments to 21 accounting standards that result in

accounting changes for presentation, recognition or measurement purposes and terminology or editorial

amendments. These amendments are expected to have no material impact on the financial statements of

the Group upon their initial application.

6. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated by the directors and management and are based

on historical experience and other factors, including expectations of future events that are believed to

be reasonable under the circumstances. The estimates and judgements that affect the application of

the Group’s accounting policies and disclosures, and have a significant risk of causing a material

adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property,

plant and equipment are based on commercial and production factors which could change

significantly as a result of technical innovations and competitors’ actions in response to the market

conditions.

The Group anticipates that the residual values of its property, plant and equipment will be significant

and have been taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic

useful lives and the residual values of these assets, therefore future depreciation charges could

be revised.



6. SIGNIFICANT ACCOUNTING POLICIES continued

(a) Critical Accounting Estimates And Judgements continued

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be

different from the initial estimate. The Group recognised tax liabilities based on its understanding

of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course

of business. Where the final outcome of these matters is different from the amounts that were

initially recognised, such difference will impact the income tax and deferred tax provisions in the

period in which such determination is made.

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-

use of the cash-generating unit to which the asset is allocated, the Group is required to make an

estimate of the expected future cash flows from the cash-generating unit and also to apply a

suitable discount rate in order to determine the present value of those cash flows.

(iv) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of the recoverability of

receivables. Allowances are applied to receivables where events or changes in circumstances

indicate that the carrying amounts may not be recoverable. Management specifically analyses

historical bad debt, customer concentrations, customer creditworthiness, current economic trends

and changes in customer payment terms when making a judgement to evaluate the adequacy of

the allowance for doubtful debts of receivables. Where the expectation is different from the original

estimate, such difference will impact the carrying value of receivables.

(v) Allowance for Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving

inventories. These reviews require judgement and estimates. Possible changes in these estimates

could result in revisions to the valuation of inventories.

(vi) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain financial assets and liabilities at fair value, which requires extensive use

of accounting estimates and judgement. While significant components of fair value measurement

were determined using verifiable objective evidence, the amount of changes in fair value would

differ if the Group uses different valuation methodologies. Any changes in fair value of these assets

and liabilities would affect profit and equity.

(b) Financial Instruments

(i) Financial Instruments Recognised in the Balance Sheet

Financial instruments are recognised in the balance sheet when the Group has become a party to

the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the

contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument

classified as a liability, are reported as an expense or income. Distributions to holders of financial

instruments classified as equity are charged directly to equity.




(b) Financial Instruments continued

(i) Financial Instruments Recognised in the Balance Sheet continued

Financial instruments are offset when the Group has a legally enforceable right to offset and intends

to settle either on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheet are disclosed in the individual policy

statement associated with each item.

(ii) Financial Instruments Not Recognised in the Balance Sheet

The Group is a party to financial instruments such as foreign currency forward contracts. These

instruments are not recognised in the financial statements on inception.

The Group enters into forward contracts to protect the Group from the movements in exchange

rate by establishing the rate at which a foreign currency asset or liability will be settled.

Exchange gains and losses arising from contracts entered into as hedges of anticipated future

transactions are deferred until the date of such transactions, at which time they are included in

the measurement of such transactions.

(iii) Fair Value Estimation for Disclosure Purpose

The fair value of the forward contract is determined using foreign exchange rates at the balance

sheet date.

(c) Functional and Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the

primary economic environment in which the entity operates, which is the functional currency. The

consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s

functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial

recognition, using the exchange rates approximating those ruling at the transaction dates.

Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of

that date. Non-monetary assets and liabilities are translated using exchange rates that existed

when the values were determined. All exchange differences are taken to the income statement.

(d) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its

subsidiaries made up to 30 June 2010.

A subsidiary is defined as a company in which the parent company has the power, directly or indirectly,

to exercise control over its financial and operating policies so as to obtain benefits from its activities.




(d) Basis of Consolidation continued

The acquisitions described under Note 7 to the financial statements resulted in a business combination

involving common control entities, and accordingly the accounting treatment is outside the scope of

FRS 3. The merger accounting is used by the Group to account for such common control business

combinations.

(i) Merger accounting for common control business combinations

A business combination involving entities under common control is a business combination in

which all the combining entities or subsidiaries are ultimately controlled by the same party and

parties both before and after the business combination, and that control is not transitory.

Subsidiaries acquired which have met the criteria for pooling of interest are accounted for using

merger accounting principles. Under the merger method of accounting, the results of the

subsidiaries are presented as if the merger had been effected throughout the current financial year.

The assets and liabilities combined are accounted for based on the carrying amounts from the

perspective of the common control shareholder at the date of transfer. No amount is recognised

in respect of goodwill and excess of the acquirer’s interest in the net fair value of the acquiree’s

identifiable assets and liabilities and contingent liabilities over cost at the time of the common

control business combination to the extent of the continuation of the controlling party and parties’

interests.

When the merger method is used, the cost of investment in the Company’s books is recorded at

the nominal value of shares issued. The difference between the carrying value of the investment and

the nominal value of the shares of the subsidiaries is treated as a merger deficit or merger reserve

as applicable. The results of the subsidiaries being merged are included for the full financial year.

(ii) Purchase method of accounting for non-common control business combinations

Under the purchase method, the results of the subsidiaries acquired or disposed of are included

from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values

of the subsidiaries’ net assets are determined and these values are reflected in the consolidated

financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the

date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued

by the Group in exchange for control of the acquiree, plus any costs directly attributable to the

business combination.

Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses

are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the

financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

Minority interests in the consolidated balance sheets consist of the minorities’ share of fair values of

the identifiable assets and liabilities of the acquiree as at the date of acquisition and the minorities’

share of movements in the acquiree’s equity.

Minority interests are presented in the consolidated balance sheet of the Group within equity, separately

from the Company’s equity holders, and are separately disclosed in the consolidated income statement

of the Group.

The gain or loss on the disposal of a subsidiary is the difference between the net proceeds and the

group’s share of its net assets.




(e) Goodwill

Goodwill represents the excess of the fair value of the purchase consideration over the Group’s share

of the fair values of the identifiable net assets at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill

is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the

consolidated income statement. An impairment loss recognised for goodwill is not reversed in a

subsequent period.

If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the

subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in

the consolidated income statement.

(f) Investments in Subsidiaries

Investments in subsidiaries are stated at cost in the balance sheet of the Company and are reviewed

for impairment at the end of the financial year if events or changes in circumstances indicate that their

carrying values may not be recoverable.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds

and the carrying amount of the investments is taken to the income statement.

(g) Property, Plant and Equipment

Property, plant and equipment, other than freehold land are stated at cost or revalued amount less

accumulated depreciation and impairment losses, if any. Freehold land is stated at revalued amount

less impairment losses, if any and is not depreciated.

Depreciation is calculated on the straight-line method to write off the depreciable amount of the assets

over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes

idle or is retired from active use unless the asset is fully depreciated. The principal annual rates of

depreciation and residual values are as follows:

Depreciation Rate Residual Value

Buildings 3% -

Plant and machinery 10% -

Motor vehicles 20% 5% - 20%

Office equipment 10% - 25% -

Electrical appliances 20% -

Furniture and fittings 10% -

Renovation 20% -

Factory and warehouse equipment 10% -15% -

Freehold land and buildings are revalued periodically, at least once in every five years. Surpluses arising

from the revaluation of the properties, net of deferred taxation, where applicable, are credited to a

revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported by

any previous revaluation surpluses, are charged to the income statement. In the year of disposal of the

revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve

account to retained profits.




(g) Property, Plant and Equipment continued

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at

each balance sheet date to ensure that the amount, method and period of depreciation are consistent

with previous estimates and the expected pattern of consumption of the future economic benefits

embodied in the items of the property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic

benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included

in the income statement in the year the asset is derecognised.

(h) Impairment of Assets

The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not

apply, are reviewed at each balance sheet date for impairment when there is an indication that the

assets might be impaired. Impairment is measured by comparing the carrying values of the assets with

their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ net selling

price and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is charged to the income statement immediately unless the asset is carried at its

revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the

extent of a previously recognised revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine

the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a

reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the

asset that would have been determined (net of amortisation and depreciation) had no impairment loss

been recognised. The reversal is recognised in the income statement immediately, unless the asset is

carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly

to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset

was previously recognised as an expense in the income statement, a reversal of that impairment loss

is recognised as income in the income statement.

(i) Assets under Hire Purchase

Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in

accordance with the policy set out in Note 6(g) above. Each hire purchase payment is allocated

between the liability and finance charges so as to achieve a constant rate on the finance balance

outstanding. Finance charges are allocated to the income statement over the periods of the respective

hire purchase agreements.

(j) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-

first-out basis, and comprises the purchase price and incidentals incurred in bringing the inventories

to their present location and condition. Cost of finished goods and work-in-progress include the cost

of materials, labour and an appropriate proportion of production overheads.

Net realisable value represents the estimated selling price less the estimated costs of completion and

the estimated costs necessary to make the sale.

Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.




(k) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which

they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts

at the balance sheet date.

(l) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods

and services received.

(m) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation as a result of past events, when

it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at each

balance sheet date and adjusted to reflect the current best estimate. Where effect of the time value of

money is material, the provision is the present value of the estimated expenditure required to settle the

obligation.

A contingent liability is a possible obligation that arises from past events and whose existence will only

be confirmed by the occurrence of one or more uncertain future events not wholly within the control of

the Group. It can also be a present obligation arising from past events that is not recognised because

it is not probable that an outflow of economic resources will be required or the amount of obligation

cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When

a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised

as a provision.

A contingent asset is a probable asset that arises from past events and whose existence will be

confirmed only by occurrence or non-occurrence of one or more uncertain events not wholly within

the control of the Group.

(n) Income Taxes

Income taxes for the period comprise current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the

period and is measured using the tax rates that have been enacted or substantively enacted at the

balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the

tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise

from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets,

liabilities and contingent liabilities over the business combination costs or from the initial recognition of

an asset or liability in a transaction which is not a business combination and at the time of the

transaction, affects neither accounting profit nor taxable profits.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and

unused tax credits to the extent that it is probable that future taxable profits will be available against

which the deductible temporary differences, unused tax losses and unused tax credits can be utilitised.




(n) Income Taxes continued

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period

when the asset is realised or the liability is settled, based on the tax rates that have been enacted or

substantively enacted at the balance sheet date.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is

recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity,

or when it arises from a business combination that is an acquisition, in which case the deferred tax is

included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s

identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying

amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient future taxable profits will be available to allow all or part of

the deferred tax assets to be utilised.

(o) Interest-bearing Borrowings

Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.

All borrowing costs are charged to the income statement as expenses in the period in which they are

incurred.

(p) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

shares or options are shown in equity as a deduction, net of tax from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(q) Segmental Information

Segment information is presented in respect of the Group’s business segments, which is based on the

Group’s management and internal reporting structure.

Segment results, assets and liabilities include item directly attributable to a segment as well as those

that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and

related income, loans and borrowings and related expenses, corporate assets (primarily the Company’s

headquarters) and head office expenses, and tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and

equipment, and intangible assets other than goodwill.

Segment revenue, expenses and results include transfers between segments. The prices charged on

inter-segment transactions are based on normal commercial terms. These transfers are eliminated on

consolidation.

(r) Cash and Cash Equivalents

Cash and cash equivalents comprise cash and bank balances, fixed and other deposits pledged with

banks and financial institutions, and short-term highly liquid investments that are readily convertible to

known amounts of cash and which are subject to an insignificant risk of change in value.




(s) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period

in which the associated services are rendered by employees of the Group.

(ii) Defined Contribution Plans

The Group’s contributions to defined contribution plans are charged to the income statement in

the period to which they relate. Once the contributions have been paid, the Group has no further

liability in respect of the defined contribution plans.

(t) Related Parties

A party is related to an entity if:-

(i) directly, or indirectly through one or more intermediaries, the party:-

- controls, is controlled by, or is under common control with, the entity (this includes parents,

subsidiaries and fellow subsidiaries);

- has an interest in the entity that gives it significant influence over the entity; or

- has joint control over the entity;

(ii) the party is an associate of the entity;

(iii) the party is a joint venture in which the entity is a venturer;

(iv) the party is a member of the key management personnel of the entity or its parent;

(v) the party is a close member of the family of any individual referred to in (i) or (iv);

(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which

significant voting power in such entity resides with, directly or indirectly, any individual referred to

in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any

entity that is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to

influence, or be influenced by, that individual in their dealings with the entity.

(u) Revenue Recognition

(i) Sale of Goods

Revenue is recognised upon delivery of goods and customers’ acceptance, and where applicable,

net of returns and trade discounts.

(ii) Interest Income

Interest income is recognised on an accrual basis.

(iii) Dividend Income

Dividends from subsidiaries are recognised when the shareholders’ right to receive is established.

(iv) Management Fee

Management fees from subsidiaries are recognised on an accrual basis.



7. INVESTMENTS IN SUBSIDIARIES

The Company

2010 2009

RM’000 RM’000

Unquoted shares, at cost 47,415 -

Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:-

Effective

Equity Interest

Name Of The Companies 2010 Principal Activities

Monsieur (M) Sdn. Bhd. 100% Retailing of home linen and homeware.

Syarikat Yoong Onn Sdn. Bhd. 100% Distribution and trading of home linen

and homeware.

Elegant Total Home Sdn. Bhd. 100% Distribution and trading of home linen

and homeware.

Sleep Focus Sdn. Bhd. 100% Design and manufacture of home linen and bedding

accessories and trading of home linen.

8. PROPERTY, PLANT AND EQUIPMENT

Written

At Off/ Depreciation At

1.7.2009 Additions Disposals Charge 30.6.2010

THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Freehold land 6,662 - - - 6,662

Buildings 16,941 - - (693) 16,248

Plant and machinery 1,707 189 (32) (479) 1,385

Factory and warehouse

equipment 338 180 - (76) 442

Motor vehicles 2,181 600 (18) (309) 2,454

Office equipment 1,036 444 (1) (278) 1,201

Electrical appliances 216 89 - (96) 209

Renovation 819 239 - (325) 733

Furniture and fittings 953 248 (1) (163) 1,037

Total 30,853 1,989 (52) (2,419) 30,371



8. PROPERTY, PLANT AND EQUIPMENT continued

Written

At Off/ Depreciation At

1.7.2008 Additions Disposals Charge 30.6.2009

THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Freehold land 6,662 - - - 6,662

Buildings 17,638 - - (697) 16,941

Plant and machinery 2,013 165 - (471) 1,707

Factory and warehouse

equipment 179 208 - (49) 338

Motor vehicles 1,817 618 (8) (246) 2,181

Office equipment 749 563 (106) (170) 1,036

Electrical appliances 276 38 (11) (87) 216

Renovation 1,187 241 (27) (582) 819

Furniture and fittings 886 260 (58) (135) 953

Total 31,407 2,093 (210) (2,437) 30,853

At At Accumulated Net Book

Cost Valuation Depreciation Value

THE GROUP RM’000 RM’000 RM’000 RM’000

At 30 June 2010

Freehold land - 6,662 - 6,662

Buildings - 17,638 (1,390) 16,248

Plant and machinery 5,421 - (4,036) 1,385

Factory and warehouse equipment 767 - (325) 442

Motor vehicles 4,063 - (1,609) 2,454

Office equipment 1,923 - (722) 1,201

Electrical appliances 552 - (343) 209

Renovation 3,919 - (3,186) 733

Furniture and fittings 2,225 - (1,188) 1,037

18,870 24,300 (12,799) 30,371

At 30 June 2009

Freehold land - 6,662 - 6,662

Buildings - 17,638 (697) 16,941

Plant and machinery 5,267 - (3,560) 1,707

Factory and warehouse equipment 587 - (249) 338

Motor vehicles 3,526 - (1,345) 2,181

Office equipment 1,481 - (445) 1,036

Electrical appliances 463 - (247) 216

Renovation 3,680 - (2,861) 819

Furniture and fittings 1,979 - (1,026) 953

16,983 24,300 (10,430) 30,853



8. PROPERTY, PLANT AND EQUIPMENT continued

At Depreciation At

1.7.2009 Additions Charge 30.6.2010

THE COMPANY RM’000 RM’000 RM’000 RM’000

Net Book Value

Office equipment - 9 (1) 8

At Accumulated Net Book

Cost Depreciation Value

RM’000 RM’000 RM’000

At 30 June 2010

Office equipment 9 (1) 8

The freehold land and buildings have been revalued by a firm of independent professionally qualified valuers

in September 2008, using the open market value based on its existing use.

Had the revalued assets been stated at cost less accumulated depreciation, the carrying amount would

have been as follows:

Accumulated Net Book

Cost Depreciation Value

THE GROUP RM’000 RM’000 RM’000

At 30.6.2010

Freehold land 3,768 - 3,768

Buildings 12,782 (2,186) 10,596

16,550 (2,186) 14,364

AT 30.6.2009

Freehold land 3,768 - 3,768

Buildings 12,782 (1,737) 11,045

16,550 (1,737) 14,813

The freehold land and buildings of the Group have been pledged to a bank as security for banking facilities

granted to the Group as disclosed in Note 26 to the financial statements.

Included in the property, plant and equipment of the Group are motor vehicles with a total net book value

of RM39,492 (2009 - RM1,289,734) acquired under hire purchase terms.



9. GOODWILL

During the financial year, the Group assessed the recoverable amount of the purchased goodwill, and

determined that goodwill is not impaired.

The recoverable amount of a cash-generating unit is determined based on the value-in-use calculation

using cash flow projections based on financial budgets approved by management. The management has

projected cash flows for a period of one year. The key assumptions used for value-in-use calculations are:-

(a) Budgeted revenue Sales growth rate of 12% is used based on the expected demand of home

furnishing products to be derived from both existing and future boutiques

in the budgeted period.

(b) Budgeted gross margin Budgeted gross profit margin of 43% is determined based on the historical

track record and after considering domestic economic conditions.

(c) Discount rate The discount rate used is pre-tax and reflect specific risks relating to

the industry.

10. INVENTORIES

The Group

2010 2009

RM’000 RM’000

At cost :-

Raw materials 10,243 7,625

Work in progress 2,270 2,483

Finished goods 17,971 18,793

30,484 28,901

At net realisable value:-

Raw materials 778 664

Finished goods 1,620 877

2,398 1,541

Total inventories 32,882 30,442



11. TRADE RECEIVABLES

The Group

2010 2009

RM’000 RM’000

Trade receivables 21,898 16,744

Allowance for doubtful debts (152) (105)

21,746 16,639

Allowance for doubtful debts:

At 1 July 2009/2008 (105) (1,623)

Addition during the financial year (115) (69)

Written off during the financial year 55 1,577

Writeback during the financial year 13 10

(152) (105)

The Group’s normal credit terms of trade receivables range from 30 to 90 days. Other credit terms are

assessed and approved on a case-by-case basis.

The foreign currency exposure profile of the trade receivables is as follows:

The Group

2010 2009

RM’000 RM’000

Singapore Dollar 5,803 1,556

United States Dollar 1,596 1,504

12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Other receivables, deposits

and prepayments 4,828 3,693 16 917

Allowance for doubtful debts - (479) - -

At 30 June 4,828 3,214 16 917

Allowance for doubtful debts:

At 1 July 2009/2008 (479) (571) - -

Written off during the financial year 479 92 - -

At 30 June - (479) - -

Included in other receivables, deposits and prepayments of the Group is an amount of RM3,438,415 (2009

- RM387,832), being advances made to suppliers for future supply of materials and finished goods.

These advances shall be recovered by way of set-off against the supply of materials and finished goods.



13. AMOUNT OWING BY/(TO) SUBSIDIARIES

The amount owing by subsidiaries is non-trade in nature, unsecured, interest-free and repayable on demand,

except for an amount of RM11,647,952 which bore interest at the rates ranging from 2.25% to 2.50% per

annum in accordance with the commercial bank’s 1 month fixed deposit rate. The amounts are to be settled

in cash.

The amount owing to a subsidiary in the previous financial year was non-trade in nature, unsecured, interest

free and repayable on demand.

14. DEPOSITS WITH FINANCIAL INSTITUTIONS

Included in deposits with financial institutions is an amount of RM1,347,279 (2009 - RM1,327,952) pledged

to licensed banks for credit facilities granted to the Group.

The effective interest rates of the deposits with financial institutions at the balance sheet date ranged from

2.05% to 2.50% (2009 - 1% to 2%) per annum. The deposits have maturity periods ranging from 1 to 30

days (2009 - 3 to 30 days).

15. CASH AND BANK BALANCES

The foreign currency exposure profile of the cash and bank balances is as follows:-

The Group

2010 2009

RM’000 RM’000

Singapore Dollar 2,717 19

United States Dollar 1,432 371

Euro 345 300

16. SHARE CAPITAL

The Company

2010 2009

Number Number

Par Of Share Par Of Share

Value ‘000 RM’000 Value ’000 RM’000

Authorised:

At 1 July 2009/2008 0.50 200 100 1.00 100 100

Subdivision of the par value

of ordinary shares of RM1.00

each into RM0.50 each. - - - 0.50 100 -

Created during the financial year 0.50 199,800 99,900 - - -

At 30 June 0.50 200,000 100,000 0.50 200 100



16. SHARE CAPITAL continued

The Company

2010 2009

Number Number

Par Of Share Par Of Share

Value ‘000 RM’000 Value ’000 RM’000

Issued and Fully Paid-Up:

At 1 July 2009/2008 0.50 # * 1.00 ^ *

Subdivision of the par value of

ordinary share of RM1.00

each into RM0.50 each - - - 0.50 ^ -

Allotment of shares pursuant

to the listing scheme:

- acquisition of subsidiaries 0.50 94,829 47,415 - - -

- public issue 0.50 25,171 12,585 - - -

At 30 June 0.50 120,000 60,000 0.50 # *

* - RM2

# - 4 ordinary shares

^ - 2 ordinary shares

17. SHARE PREMIUM


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Premium arising from public issue 9,565 - 9,565 -

Listing expenses (880) - (880) -

At 30 June 8,685 - 8,685 -

The share premium is not distributable by way of cash dividends and may be utilised in the manner set out

in Section 60(3) of the Companies Act 1965.

18. MERGER DEFICIT

The merger deficit relates to the subsidiaries which were consolidated under the merger method of

accounting.

The merger deficit arose from the difference between the nominal value of shares issued for the acquisition

of the subsidiaries amounting to RM47,414,628 and the nominal value of the shares acquired of

RM3,050,000.



19. REVALUATION RESERVE

The revaluation reserve represents the surplus arising from the revaluation of the freehold land and buildings

and are not distributable by way of cash dividends.

20. RETAINED PROFITS

The Company has elected for the irrevocable option for the single tier tax system. Therefore, at the balance

sheet date, the Company will be able to distribute dividends out of its entire retained profits under the single

tier tax system.

21. DEFERRED TAX LIABILITIES


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

At 1 July 2009/2008 1,429 277 - -

Recognised in income statements (Note 29) 287 (383) 917 -

Recognised in equity - 1,535 - -

At 30 June 1,716 1,429 917 -

The deferred tax liabilities are attributable to the following:-


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Surplus on revaluation of properties 1,413 1,473 - -

Accelerated capital allowances

on qualifying costs of property,

plant and equipment 1,077 968 - -

Other temporary differences (774) (1,012) 917 -

1,716 1,429 917 -

22. HIRE PURCHASE PAYABLES

The Group

2010 2009

RM’000 RM’000

Minimum hire purchase payments:

- not later than one year 25 280

- later than one year but not later than five years 10 838

35 1,118

Future finance charges (4) (106)

Present value of hire purchase payables 31 1,012



22. HIRE PURCHASE PAYABLES continued

The net hire purchase payables are repayable as follows:-

The Group

2010 2009

RM’000 RM’000

Current (Note 26) : - not later than one year 22 237

Non-current :- later than one year but not later than five years 9 775

31 1,012

The hire purchase payables at the balance sheet date bore a weighted average effective interest rate of5.46% (2009 - 3.78% to 5.60%) per annum.

23. TERM LOANS

The Group

2010 2009

RM’000 RM’000

Current (Note 26) : - not later than one year - 2,717

Non-current :- later than one year but not later than five years - 2,637

- 5,354

Details of the repayment terms were as follows:-

Number of Date of

Monthly Monthly Commencement

Instalment Instalment of Repayment

RM’000

Term loan 1 36 148 August 2007Term loan 2 60 92 November 2007

The term loans in the previous financial year bore an effective interest rate of 4.10% per annum and weresecured by the pledge of fixed deposits belonging to a related party.

24. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 120 days.

The foreign currency exposure profile of trade payables is as follows:-

The Group

2010 2009

RM’000 RM’000

Euro - 32United States Dollar 353 3,339



25. DIVIDEND PAYABLE

The dividend payable relates to the second interim single tier dividend of 2 sen per ordinary share declared

during the current financial year and which has not been paid at the balance sheet date.

26. SHORT-TERM BORROWINGS

The Group

2010 2009

RM’000 RM’000

Bankers’ acceptances 11,712 12,337

Hire purchase payables (Note 22) 22 237

Term loans (Note 23) - 2,717

11,734 15,291

The bankers’ acceptances at the balance sheet date bore interest at rates ranging from 2.91% to 4.05%

(2009 - 2.88% to 5.05%) per annum and are secured by:-

(i) a pledge of fixed deposits of the Group and a related party;

(ii) a legal charge of the freehold land and buildings of the Group;

(iii) a joint and several guarantee of certain directors of the Company, a third party and its subsidiaries;

(iv) a negative pledge over certain assets of the Group; and

(v) a pledge of properties of a related party.

27. REVENUE


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Sale of goods 127,541 130,084 - -

Management fee - - 199 -

Dividend income - - 13,824 -

127,541 130,084 14,023 -



28. PROFIT/(LOSS) BEFORE TAXATION


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Profit/(Loss) before taxation is

arrived at after charging/(crediting):

Allowance for slow-moving inventories 555 462 - -

Allowance for doubtful debts 115 69 - -

Audit fee:

- for the financial year 100 78 20 1

- under/(over)provision in the

previous financial year 4 (1) - -

Directors’ remuneration:

- non-fee emoluments 879 440 4 -

- fee 163 292 91 -

- defined contribution plans 105 53 - -

- estimated non-monetary

benefits-in-kind 42 42 - -

Depreciation of property,

plant and equipment 2,419 2,437 1 -

Interest expense:

- term loans 95 278 - -

- bankers’ acceptances 260 596 - -

- hire purchase 33 30 - -

- advances from related party - 101 - -

Plant and equipment written off 34 202 - -

Rental of premises 3,424 2,954 - -

Staff costs:

- short-term benefits 16,533 17,763 179 -

- defined contribution plans 1,171 1,031 21 -

- estimated non-monetary


Loss/(Gain) on foreign exchange:

- realised 225 (632) - -

- unrealised 122 - - -

Loss on disposal of plant

and equipment 2 3 - -

Listing expenses written off 1,614 - 1,614 -

Interest income (253) (45) (227) -

Dividend income - - (13,824) -

Rental income (17) (12) - -

Writeback of allowance

for doubtful debts (13) (10) - -



29. INCOME TAX EXPENSE


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Current tax expense:

- for the financial year 6,716 5,894 2,430 -

- overprovision in the

previous financial year (868) (747) - -

5,848 5,147 2,430 -

Deferred tax expense (Note 21):

- relating to reversal and origination

of temporary differences (364) (695) 917 -

- underprovision in the previous

financial year 651 312 - -

287 (383) 917 -

6,135 4,764 3,347 -

As gazetted in the Finance Act 2009, certain subsidiaries of the Company will no longer enjoy the preferential

tax rate of 20% on their chargeable income of up to RM500,000 effective from year of assessment 2009.

Therefore, the corporate tax rate applicable to these subsidiaries for the current financial year is 25%.

In the previous financial year, the corporate tax rate of certain subsidiaries of the Company on the first

RM500,000 of chargeable income was 20%. The tax rate applied to the balance of the chargeable income

was 25%.

During the current financial year, the statutory tax rate remained at 25%.

A reconciliation of income tax expense applicable to the profit/(loss) before taxation at the statutory tax rate

to income tax expense at the effective tax rate of the Group and the Company are as follows:-


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Profit/(Loss) before taxation 21,663 18,645 11,964 (2)

Tax at the statutory tax rate of 25% 5,416 4,661 2,991 (1)

Tax effects of:-

Non-taxable gain - - (131) -

Non-deductible expenses 944 645 487 1

Double deduction (8) (7) - -

Under/(over)provision in the

previous financial year:

- current tax (868) (747) - -

- deferred tax 651 312 - -

Differential in tax rates - (100) - -

Tax for the financial year 6,135 4,764 3,347 -



30. EARNINGS PER SHARE

The basic earnings per share is calculated by dividing the Group’s profit attributable to equity holders of

the Company of RM15,527,473 (2009 - RM13,880,991) by the weighted average number of ordinary shares

in issue during the financial year of 107,931,837 (2009 - 94,829,260).

The diluted earnings by shares is not presented as there were no potential dilutive ordinary shares

outstanding at the balance sheet date.

31. DIVIDENDS

The Group/The Company

2010 2009

RM’000 RM’000

Recognised as distribution to ordinary equity holders:-

First interim dividend of 3.0 sen per ordinary share comprising

approximately 0.436 sen of tax exempt dividend per ordinary

share and approximately 2.564 sen of single tier dividend per

ordinary share for the current financial year 3,600 -

Second interim single tier dividend of 2 sen per ordinary share

for the current financial year 2,400 -

6,000 -

Net dividend per share (sen) 5 -

The directors recommend the payment of a final single tier dividend of 2 sen per ordinary share amounting

to RM2,400,000 to be approved by the shareholders at the forthcoming Annual General Meeting. The

dividend will be accounted for as a liability in the period when it is approved by the shareholders.

32. PURCHASE OF PLANT AND EQUIPMENT


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cost of plant and equipment purchased 1,989 2,093 9 -

Amount financed through hire purchase - (300) - -

Cash disbursed for purchase

of plant and equipment 1,989 1,793 9 -



33. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 10,660 5,857 193 *

Deposits with financial

institutions (Note 14) 13,847 6,029 11,600 -

24,507 11,886 11,793 *

* - RM2

34. ACQUISITION OF SUBSIDIARIES

During the financial year, the Company acquired the entire issued and paid-up share capital of Syarikat

Yoong Onn Sdn. Bhd., Sleep Focus Sdn. Bhd., Elegant Total Home Sdn. Bhd. and Monsieur (M) Sdn. Bhd.

for a total purchase consideration of RM36,528,771, RM7,249,379, RM2,891,643 and RM744,835

respectively. The total purchase consideration which amounted to RM47,414,628 was discharged by the

issuance of 94,829,256 new ordinary shares of RM0.50 each in the Company at par.

The details of the assets and liabilities of the subsidiaries accounted for under the merger method of

accounting at the date of merger are as follows:-.

RM’000

Non-current assets 31,494

Current assets 73,650

Non-current liabilities (4,841)

Current liabilities (39,323)

Fair value of net assets acquired 60,980

35. DIRECTORS’ REMUNERATION


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Executive:

- non-fee emoluments 875 440 - -

- fee 72 292 - -

- defined contribution plan 105 53 - -

- estimated non-monetary benefits-in-kind 42 42 - -

1,094 827 - -

Non Executive:

- non-fee emoluments 4 - 4 -

- fee 91 - 91 -

95 - 95 -



35. DIRECTORS’ REMUNERATION continued

The aggregate amount of emoluments received and receivable by the directors of the Company during the

financial year in bands of RM50,000 to RM600,000 are as follows:-

Directors’

Number of Directors’ Other

Directors Fee Emoluments Total

THE GROUP RM’000 RM’000 RM’000

2010

- Below RM50,000 4 91 4 95

- Between RM500,001 and RM550,000 1 36 480 516

- Between RM550,001 and RM600,000 1 36 542 578

6 163 1,026 1,189

2009

- Between RM400,001 and RM450,000 2 292 535 827

THE COMPANY

2010

- Below RM50,000 4 91 4 95

36. RELATED PARTY DISCLOSURES

(a) For the purpose of the financial statements, the Group has related party relationships with:

(i) its subsidiaries;

(ii) the directors and officers who are the key management personnel; and

(iii) entities controlled by the key management personnel/directors/substantial shareholders.

(b) In addition to the information disclosed elsewhere in the financial statements, the Company carried

out the following transactions with the related parties during the financial year:-


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Subsidiaries:

- Management fees receivable - - 199 -

- Interest income receivable - - 89 -

- Dividend income receivable - - 13,824 -



36. RELATED PARTY DISCLOSURES continued

(b) In addition to the information disclosed elsewhere in the financial statements, the Company carried

out the following transactions with the related parties during the financial year:-


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Related parties:

- Management fee payable to

TanLee Management Services * 113 96 - -

- Interest expenses payable to

Yoon Fah Realty Sdn. Bhd. - 101 - -

- Rental of premises from

Yoon Fah Realty Sdn. Bhd. ** 466 466 - -

- Sale of goods to The Store

Corporation Berhad *** 4,375 3,916 - -

* - TanLee Management Services is a sole proprietor and is wholly owned by a key management personnel.

** - This company is an entity deemed to be controlled by certain directors of the Company.

*** - The company is deemed to be related by virtue of the common directorship of a director.

(c) Key management personnel


2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Short-term employee benefits 2,313 1,874 60 -

Defined contribution plans 269 179 7 -

Estimated non-monetary


2,680 2,115 67 -

Included in the short-term employee benefits is an amount of RM1,094,500 (2009 - RM827,300) in

respect of the remuneration payable to executive directors as disclosed in Note 35 to the financial

statements.

37. SEGMENTAL INFORMATION

The Group has three reportable segments, as described below, which are the Group’s strategic business

units. The strategic business units offer different products and services, and are managed separately. The

following summary describes the operations in each of the Group’s reportable segments:

• Manufacturing - design and manufacturing of home linen and bedding accessories.

• Distribution and trading - distribution and trading of home linen and homeware.

• Retailing - retailing of home linen and homeware.

Transfer prices between operating segments are based on normal commercial terms.



37. SEGMENTAL INFORMATION continued

Distribution The

Manufacturing & Trading Retailing Elimination Group

2010 RM’000 RM’000 RM’000 RM’000 RM’000

Inter-segment revenue 29,756 45,561 - (75,317) -

Segment revenue 22,381 84,796 20,364 - 127,541

Total revenue 52,137 130,357 20,364 (75,317) 127,541

Segment results 5,265 16,783 2,227 24,275

Unallocated expenses (2,148)

Operating profits 22,127

Finance costs (346) (117) (1) (464)

Profit before taxation 21,663

Income tax expense (6,135)

Profit after taxation 15,528

Other information

Segment assets 55,326 43,977 3,851 103,154

Unallocated assets 11,825

114,979

Segment liabilities 13,545 3,279 539 17,363

Unallocated liabilities 5,845

23,208




Distribution The

Manufacturing & Trading Retailing Elimination Group

2009 RM’000 RM’000 RM’000 RM’000 RM’000

Inter-segment revenue 29,038 45,312 - (74,350) -

Segment revenue 25,142 86,355 18,587 - 130,084

Total revenue 54,180 131,667 18,587 (74,350) 130,084

Segment results 3,954 15,481 313 19,748

Unallocated expenses (2)

Operating profits 19,746

Finance costs (638) (461) (2) (1,101)

Profit before taxation 18,645

Income tax expense (4,764)

Profit after taxation 13,881

Other information

Segment assets 45,608 43,291 3,855 92,754

Unallocated assets 960

93,714

Segment liabilities 16,601 12,491 759 29,851

Unallocated liabilities 2,890

32,741




Distribution The

Manufacturing & Trading Retailing Group

2010 RM’000 RM’000 RM’000 RM’000

Capital expenditure 304 1,510 166 1,980

Unallocated capital expenditure 9

1,989

Depreciation 1,060 1,067 291 2,418

Unallocated depreciation 1

2,419

Allowance for slow-moving inventories 20 535 - 555

Interest income 20 95 - 115

Unallocated interest income 138

253

Interest expense 283 105 - 388

Distribution The

Manufacturing & Trading Retailing Group

2009 RM’000 RM’000 RM’000 RM’000

Capital expenditure 752 1,069 272 2,093

Depreciation 968 961 508 2,437

Allowance for slow-moving inventories 240 222 - 462

Interest income 6 39 - 45

Interest expense 560 445 - 1,005

Major customers

The following are major customers with revenue equal to or more than 10% of the Group’s revenue:

Revenue Segment

2010 2009

RM’000 RM’000

A local departmental store 31,361 31,131 Distribution and trading.

An overseas importer/distributor 19,389 18,486 Manufacturing,

distribution and trading.

The Group operates wholly in Malaysia.



38. CONTINGENT LIABILITIES

The directors are of the opinion that provisions are not required in respect of the following corporate

guarantees, as it is not probable that a future outflow of economic benefits will arise:-


2010 2009 2010 2009

Note RM’000 RM’000 RM’000 RM’000

Unsecured:-

Corporate guarantee given

to licensed banks

for credit facilities

granted to its

subsidiaries - - 17,000 -

Guarantee issued

in favour of third

parties 454 444 - -

Material litigation (a) -- - - -

(a) Material litigation

On 13 August 1998, Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”), a wholly owned subsidiary of Yoong

Onn Corporation Berhad and Yoon Fah Realty Sdn. Bhd. (“YFRSB”), filed a suit at the High Court of

Malaysia in Kuala Lumpur against Agenda Istimewa Sdn. Bhd. (“the Defendant”) for the refund of the

deposit in the sum of RM520,150 together with the interest at the rate of 12% per annum, general

damages and a declaration that the sale and purchase agreements entered into between SYOSB and

the Defendant and between YFRSB and the Defendant for the purchase of four (4) industrial lots by

SYOSB and one (1) industrial lot by YFRSB from the Defendant were lawfully terminated and/or

rescinded.

The trial of the suit was completed on 4 August 2009 and the Court delivered its judgment on 27

October 2009. The Court dismissed the suit by SYOSB and YFRSB (“the Plaintiffs”) with costs and

allowed the Defendant’s counter-claim for a declaration that the sale and purchase agreements were

lawfully terminated and/or rescinded by the Defendant and awarded in favour of the Defendant special

damages of RM520,150, general damages for breach of contract, and 8% interest per annum on the

sum due and payable to the Defendant.

On 28 October 2009, SYOSB and YFRSB had given instructions to their solicitors to file an appeal

and an application for stay of execution against the High Court Judge’s judgment dated 27 October

2009. The Notice of Appeal was filed at the Court of Appeal on 10 November 2009 against the

judgment of the High Court. The application for stay of execution was dismissed with costs on 26

March 2010. To date, the Court of Appeal has not fixed a date for the hearing of the appeal.

The directors are of the opinion that the Company has a reasonable prospect of success in the appeal.



39. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 11 August 2009, the Company:-

(i) increased its authorised share capital from RM100,000 to RM100,000,000 divided into

200,000,000 ordinary shares of RM0.50 each by the creation of 199,800,000 new ordinary shares

of RM0.50 each;

(ii) increased its issued and paid-up share capital from RM2 to RM47,414,630 as part of its flotation

scheme on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The issued

and paid-up share capital was increased in the following manner:-

• Acquisition of Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”)

Acquisition of the entire issued and paid-up share capital of SYOSB comprising 2,000,000

ordinary shares of RM1.00 each for a total purchase consideration of RM36,528,771 satisfied

by the issuance of 73,057,542 new ordinary shares of RM0.50 each in the Company at par.

• Acquisition of Sleep Focus Sdn. Bhd. (“SFSB”)

Acquisition of the entire issued and paid-up share capital of SFSB comprising 500,000



• Acquisition of Elegant Total Home Sdn. Bhd. (“ETHSB”)

Acquisition of the entire issued and paid-up share capital of ETHSB comprising 200,000



• Acquisition of Monsieur (M) Sdn. Bhd. (“MSB”)

Acquisition of the entire issued and paid-up share capital of MSB comprising 350,000 ordinary

shares of RM1.00 each for a total purchase consideration of RM744,835 satisfied by the

issuance of 1,489,670 new ordinary shares of RM0.50 each in the Company at par.

(b) The Company increased its issued and paid-up share capital from RM47,414,630 to RM60,000,000

by the public issue of 25,170,740 new ordinary shares of RM0.50 each at an issue price of RM0.88

per ordinary share pursuant to the initial public offering; and

(c) On 23 December 2009, the Company’s shares were listed on the Main Market of Bursa Securities.

40. FOREIGN EXCHANGE RATES

The principal closing foreign exchange rates used (expressed on the basis of one unit of foreign currency

to RM equivalent) for the translation of the foreign currency balances at the balance sheet date are as

follows:-

2010 2009

RM RM

United States Dollar 3.24 3.45

Singapore Dollar 2.30 2.39

Euro 3.95 4.96



41. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair values is defined as the amount at which the financial instrument could be exchanged in a current

transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced

sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial

instruments of the Group :-

(a) Hire Purchase Payables

The carrying amounts approximated the fair values of these instruments. The fair values of the hire

purchase payables are determined by discounting the relevant cash flows using current interest rates

for similar types of instruments at the balance sheet date.

(b) Cash and Bank Balances, Other Short-Term Receivables/Payables

The carrying amounts approximated their fair values due to the relatively short-term maturity of these

instruments.

(c) Contingent Liabilities

The nominal amount and fair value of financial instruments not recognised in the balance sheets of the

Group and of the Company were as follows:-

Nominal

Amount Fair Value

RM’000 RM’000

THE GROUP

At 30 June 2010

Guarantee issued in favour of third parties 454 #

Material litigation - *

At 30 June 2009

Guarantee issued in favour of third parties 444 #

THE COMPANY

At 30 June 2010

Corporate guarantee 17,000 #

At 30 June 2009

Corporate guarantee - -

# The fair values of the contingent liabilities are expected to be minimal as the subsidiaries are expected to fulfill their

obligations.

* It is not practicable to estimate fair value reliably due to uncertainties relating to timing, the costs and the eventual

outcome.



41. FAIR VALUES OF FINANCIAL INSTRUMENTS continued

(d) Forward Foreign Exchange Contracts

The net fair values of the forward foreign exchange contracts are the amounts that would be payable

or receivable on the termination of the outstanding position arising and are determined by reference to

the difference between the contracted rate and forward exchange rate as at the balance sheet date

applied to a contract of similar quantum and maturity period.

Nominal Net

Amount Fair Value

RM’000 RM’000

THE GROUP

At 30 June 2010

Forward foreign exchange contracts 1,304 (8)

At 30 June 2009

Forward foreign exchange contracts - -

42. COMPARATIVE FIGURES

The comparative figures of the Group were presented based on the financial statements of the subsidiaries’

accounted for using the merger method of accounting, as those subsidiaries were under common control

by the same parties both before and after the acquisitions by the Company, and that control is not transitory.

The following comparative figures of the Company have been reclassified to conform with the presentation

of the current financial year:-

As

As Previously

Restated Reported

THE COMPANY RM’000 RM’000

Balance Sheet (Extract):-

Amount owing to a related party - 777

Amount owing to a subsidiary 777 -

Cash Flow Statement (Extract):-

Cash flow for operating activities

Increase in prepayments - (789)

Share issuance expenses paid (789) -

Cash flow for financing activities

Advances from a related party - 646

Advances from subsidiary 646 -



1) Utilisation of Initial Public Offerings (“IPO”) Proceeds

As at 30 June 2010, the total gross IPO proceeds of RM 22.15 million arising from the Public Issue have

been utilised as follow :

Intended

Timeframe for

Proposed Utilised Balance to utilisation

Details of the proposed Utilisation To date be utilised (from date

utilisation of proceeds RM’000 RM’000 RM’000 of listing)

Repayment of bank borrowings 9,000 9,000 - Within 6 months

Local and overseas expansion 6,000 150 5,850 Within 24 months

Working capital 3,650 3,650 - Within 24 months

Estimated listing expenses # 3,500 3,500 - Within 6 months

22,150 16,300 5,850

# - Unutilised estimated listing expenses of approximately RM1.0 million were used for working capital

2) Share Buy-Backs

There was no share buy-backs by the Company during the financial year ended 30 June 2010.

3) Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued by the Company during the financial year

ended 30 June 2010.

4) American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

The Company did not sponsor any ADR or GDR programme during the financial year ended 30 June 2010.

5) Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or

management by the relevant regulatory bodies during the financial year.

6) Non-Audit Fees

The amount of non-audit fees incurred for sevices rendered by the external auditors to the Group for the

financial year ended 30 June 2010 amounted to RM38,000.

7) Variation in Results

There were no variations of 10% or more between the audited results of the Group for the financial year

ended 30 June 2010 and the unaudited results announced on 26 August 2010.

8) Material Contracts with Related Parties

(a) On 9 January 2009, Yoong Onn Corporation Berhad entered into a Share Sale Agreement with the

vendors of Elegant Total Home Sdn Bhd (“ETHSB”), Monsieur (M) Sdn Bhd (“MSB”), Sleep Focus Sdn

Bhd (“SFSB”) and Syarikat Yoong Onn Sdn Bhd (“SYOSB”), namely Chew Hon Foong, Chew Hon

Keong, Chew Hon Yoong, Chew Hon Yoon, Chew Fui Ngee, Chow Siew Sen, Dang Chee Wai and

Loo Lai Yoke in relation to the acquisitions of ETHSB, MSB, SFSB and SYOSB for a total consideration

of RM47,414,628.

Additional Compliance Information


8) Material Contracts with Related Parties continued

(b) On 4 November 2009, Yoong Onn Corporation Berhad and Chew Hon Foong, Chew Hon Keong,

Chew Hon Yoong, Chew Hon Yoon, Chew Fui Ngee, Chow Siew Sen, Dang Chee Wai and Loo Lai

Yoke, collectively entered into a conditional underwriting agreement with Public Investment Bank

Berhad (20027-W), JF Apex Securities Berhad (47680-X) and Mercury Securities Sdn Bhd (113193-

W) collectively to underwrite 11,300,000 Public Issue Shares available for application by the Malaysian

Public, the eligible employees and other persons who have contributed to the success of the Group

and 220,000 Offer Shares pursuant to Section 3.5.3(iv) of the Prospectus dated 3 December 2009

for an underwriting commission of 2.0% of the IPO Price multiplied by the number of Public Issue

Shares and Offer Shares underwritten by each of the respective Underwriters.

9) Corporate Social Responsibility

The Group recognizes its role as a responsible corporate citizen and no company can exist by maximizing

shareholders value alone. In this regards, the needs and interests of other stakeholders are also taken into

consideration.

a) Environment

The Group has always complied with the relevant environmental legislation and promoting

environmental awareness as part of its commitment to protect the environment and contribute towards

sustainable development.

b) Safety and Health

The Group is committed to provide a safe and healthy working environment for all employees under

the requirements of Health, Safety and Environment (“HSE”). We constantly ensure a safe and healthy

working environment and keep ourselves updated with the latest HSE requirements and regulations

through various training programmes.

c) Donations to Charitable Organisations

We have made donations to several charitable organisations including Tabung Thalassaemia Malaysia,

Pertubuhan Orang Cacat Penglihatan Malaysia and Kuala Lumpur Lions Foundation.

d) Employees

The Group places strong emphasis on personal development and provides various training courses

for its employees to enhance and upgrade their work skills for better opportunities of career

advancements.

10) Profit Forecast/Profit Guarantee

The Company did not provide any profit forecast/guarantee in any public documents during the financial

year ended 30 June 2010.

11) Revaluation Policy of Landed Properties

The Group’s revaluation policy in respect of its freehold land and buildings is to revalue periodically, at

least once in every five years. Surpluses arising from the revaluation of the properties, net of deferred

taxation, where applicable, are credited to a revaluation reserve. Deficits arising from the revaluation, to

the extent that they are not supported by any previous revaluation surpluses, are charged to the income

statement.

The revaluation policy for landed properties is detailed in Note 6(g) - property, plant and equipment of the

Financial Statements in this Annual Report.

additional compliance informationcontinued


additional compliance informationcontinued

12) Recurrent Related Parties Transactions

The breakdown of the aggregate value of transactions conducted during the financial year ended 30 June

2010 is as follows:

Transacting

Companies Related Amount of

within the Transacting Nature of Transaction

Group Parties Transaction (RM’000)

Syarikat Yoong Yoon Fah Realty Rental of property which 370

Onn Sdn Bhd Sdn Bhd is currently used as SYOSB’s

(“SYOSB”) office cum warehouse

Monsieur (M) Yoon Fah Realty Rental of property which 96

Sdn Bhd Sdn Bhd is currently used as MSB’s

(“MSB”) retail shop

Syarikat Yoong The Store Supply of home 4,257

Onn Sdn Bhd Corporation linen products

Berhad

Elegant Total The Store Supply of home 118

Home Sdn Bhd Corporation linen products

Berhad

At the forthcoming Annual General Meeting to be held on 10 December 2010, the Company intends to

seek its shareholders’ approval for the proposed shareholders’ ratification and proposed shareholders’

mandate for recurrent related party transactions of a revenue or trading nature, which are necessary for

its day-to-day operations and in the ordinary course of business, with related parties. The details of the

proposed shareholders’ ratification and proposed shareholders’ mandate to be sought is set out in the

Circular to Shareholders dated 15 November 2010.

Authorised share capital : RM100,000,000

Issued and fully paid-up capital : RM60,000,000

Class of shares : Ordinary shares of RM0.50 each

Voting rights : One vote per ordinary share

ANALYSIS BY SIZE OF SHAREHOLDINGS

No. Of % Of No. Of % Of Issued

Size Of Holdings Shareholders Shareholders Shareholdings Capital

Less than 100 2 0.19 100 *

100 to 1,000 610 59.34 212,000 0.18

1,001 to 10,000 253 24.61 1,265,000 1.05

10,001 to 100,000 110 10.70 3,991,000 3.33

100,001 to 5,999,999 ** 52 5.06 51,531,900 42.94

6,000,000 and above *** 1 0.10 63,000,000 52.50

TOTAL 1,028 100.00 120,000,000 100.00

* - negligible

** - less than 5% of issued shares

*** - 5% and above of issued shares

SUBSTANTIAL SHAREHOLDERS

Direct Interest Indirect Interest

No. Of No. Of

Name Of Shareholder Shares % Shares %

Casatex Cosmo Sdn Bhd 63,000,000 52.50 - -

Chew Hon Foong - - 63,000,000 52.50(a)

Chew Hon Keong - - 63,000,000 52.50(a)

Chew Hon Yoong - - 63,000,000 52.50(a)

Chew Hon Yoon - - 63,000,000 52.50(a)

(a) Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of Companies Act, 1965.

DIRECTORS’ SHAREHOLDINGS

Direct Interest Indirect Interest

No. Of No. Of

Name Of Shareholder Shares % Shares %

1. Datuk Kamaludin Bin Yusoff 100,000 0.08 - -

2. Chew Hon Foong - - 63,000,000 52.50^

3. Chew Hon Keong - - 63,000,000 52.50^

4. Datuk Hairuddin Bin Mohamed - - - -

5. Yeoh Chong Keng 100,000 0.08 - -

6. Lee Kim Seng 100,000# 0.08 - -

# held through Public Nominees (Tempatan) Sdn Bhd

^ Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of Companies Act, 1965.


Analysis of Shareholdingsas at 18 October 2010


THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS

No. Of % Of Issued

No. Name Shares Shares

1. Casatex Cosmo Sdn Bhd 63,000,000 52.50

2. Lembaga Tabung Haji 5,880,000 4.90

3. Chow Siew Sen 5,500,000 4.58

4. HSBC Nominees (Asing) Sdn Bhd 5,430,000 4.53

Exempt AN for Credit Suisse

5. HLB Nominees (Asing) Sdn Bhd 4,400,000 3.67

Wang ShouHu

6. EB Nominees (Tempatan) Sdn Bhd 4,000,000 3.33

Pledged Securities Account for Chan Keng Meng

7. Tan Sri Abu Sahid Bin Mohamed 3,000,000 2.50

8. AMSEC Nominees (Tempatan) Sdn Bhd 2,796,000 2.33

Amtrustee Berhad for Pacific Pearl Fund

9. Tengku Zaitun Binti Tengku Mahadi 2,580,000 2.15

10. Kok Foong Meng 1,075,900 0.90

11. Chuah Seng Hooi 1,048,600 0.87

12. Dato’ Lim Ah Lai 1,000,000 0.83

13. Ng Yoong Sang 1,000,000 0.83

14. Chuah Ling Ling 984,500 0.82

15. Lee Chai Hua 900,000 0.75

16. Public Nominees (Tempatan) Sdn Bhd 850,000 0.71

Pledged Securities Account for Chuah Seng Boon

17. Lee Meng Yong 806,900 0.67

18. Kee Choon Heng 708,200 0.59

19. Loo Lai Yoke 630,000 0.53

20. Lee Chai Hua 520,000 0.43

21. Chuah Seng Hoon 517,000 0.43

22. Kee Chun Keat 506,300 0.42

23. Chan Yoke Kwan 500,000 0.42

24. Public Nominees (Tempatan) Sdn Bhd 500,000 0.42

Pledged Securities Account for Tang Choon Ee

25. Dang Chee Wai 400,000 0.33

26. Sun Kien Keong 333,000 0.28

27. Choong Kien Yeong 300,000 0.25

28. Tan Peng 300,000 0.25

29. Master Box Manufacturing Sdn Bhd 300,000 0.25

30. Wan DongMing 300,000 0.25

Total 110,066,400 91.72

analysis of shareholdingsas at 18 October 2010 continued


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List of Group Properties


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Third Annual General Meeting of the Company will be held at Putra 1

Room, Nilai Springs Golf & Country Club, PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul

Khusus on Friday, 10 December 2010 at 10.00 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS:

1. To receive the Audited Financial Statements for the financial year ended 30 June 2010

together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fee of RM91,000 for the financial year ended

30 June 2010.

3. To declare a final single tier dividend of 2 sen per share in respect of the financial year

ended 30 June 2010.

4. To re-elect Chew Hon Keong who is retiring in accordance with Article 129 of the

Company’s Articles of Association.

5. To re-elect the following Directors who are retiring in accordance with Article 134 of the

Company’s Articles of Association:

(a) Datuk Kamaludin Bin Yusoff

(b) Datuk Hairuddin Bin Mohamed

(c) Lee Kim Seng

(d) Yeoh Chong Keng

6. To re-appoint Messrs. Crowe Horwath as Auditors of the Company for the ensuing year

and to authorise the Directors to fix their remuneration.

As Special Business :

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

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

“That pursuant to Section 132D of the Companies Act, 1965, the Articles of Association

of the Company and subject to the approvals of the relevant governmental and/or

regulatory authorities, the Directors be and are hereby empowered to issue shares in

the Company, at any time to such persons and upon such terms and conditions and for

such purposes as the Directors may, in their absolute discretion, deem fit, provided that

the aggregate number of shares to be issued does not exceed ten percent (10%) of the

issued share capital of the Company for the time being AND THAT the Directors be and

are also empowered to obtain the approval for the listing of and quotation for the

additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”)

AND THAT such authority shall continue to be in force until the conclusion of the next

Annual General Meeting of the Company.”

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)

(Resolution 10)


notice of annual general meetingcontinued

8. Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for

Recurrent Related Party Transactions of a Revenue or Trading Nature

“That all the recurrent related party transactions of a revenue or trading nature entered

into by the Company and its subsidiaries (“YOCB Group”) from 23 December 2009, the

listing date until the date of this Annual General Meeting as set out in Section 2.4 of the

Circular to Shareholders dated 15 November 2010, which are necessary for its day-to-

day operations, be and is hereby approved and ratified on the basis that such

transactions are entered into on terms which are not more favourable to the related

parties involved than generally available to the public and are not detrimental to the

minority shareholders of the Company (hereinafter referred to as the “Proposed

Shareholders’ Ratification”);

“That approval be and is hereby given to the Company and its subsidiaries to enter into

recurrent related party transactions of a revenue or trading nature with those related

parties as set out in Section 2.4 of the Circular to Shareholders of the Company dated

15 November 2010, which are necessary for its day-to-day operations, to be entered

into by the YOCB Group on the basis that such transactions are entered into on terms

which are not more favourable to the related parties involved than generally available to

the public and are not detrimental to the minority shareholders of the Company

(hereinafter referred to as the “Proposed Shareholders’ Mandate”);

That the Proposed Shareholders’ Mandate is subject to annual renewal and shall only

continue to be in force until:

(a) the conclusion of the next Annual General Meeting of the Company; or

(b) the expiration of the period within which the next Annual General Meeting of the

Company after the date it is required to be held pursuant to Section 143(1) of the

Companies Act, 1965 (but shall not extend to such extensions as may be allowed

pursuant to Section 143(2) of the Companies Act, 1965); or

(c) revoked or varied by resolution passed by the shareholders in general meeting;

whichever is the earlier.

AND FURTHER THAT the Directors of the Company be authorised to complete and do

all acts and things (including executing all such documents as may be required) as they

may consider expedient or necessary to give effect to the Proposed Shareholders’

Ratification and Proposed Shareholders’ Mandate.”

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

(Resolution 11)


NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that a final single tier dividend of 2 sen per share for the financial year

ended 30 June 2010, if approved at the Third Annual General Meeting, will be paid on Tuesday, 18 January

2011 to Depositors whose names appear in the Record of Depositors on Friday, 7 January 2011.

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

(a) Shares transferred to the Depositor’s Securities Account before 4.00 p.m. on Friday, 7 January 2011 in

respect of ordinary transfers; and

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

Bursa Malaysia Securities Berhad.

By Order of the Board

Dato’ Tang Swee Guan (MIA 5393)

Cheong Sin Yee (MAICSA 7052271)

Secretaries

Kuala Lumpur

15 November 2010

Notes:

(i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies

who need not be a member/members of the Company, an advocate, an approved Company auditor, or a

person approved by the Registrar to attend and vote in his/her stead.

(ii) A member may appoint not more than two (2) proxies to attend the same meeting. Where a member

appoints two proxies, the proxies shall not be valid unless the member specifies the proportion of his

shareholding to be represented by each proxy. Where a member of the Company is an authorised nominee

as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy

in respect of each securities account.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney

duly authorised in writing, or if the appointor is a corporation, either under its common seal or the hand of

its officer or its duly authorised attorney.

(iv) The instrument appointing a proxy shall be deposited at the Registered Office of the Company at Suite

13A.01(A), Level 13A, Wisma Goldhill, 67 Jalan Raja Chulan, 50200 Kuala Lumpur not less than forty-

eight (48) hours before the time for holding the meeting or at any adjournment thereof.



Explanatory Note on Special Business

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

The proposed Ordinary Resolution 10, if passed, will grant a general mandate and empower the Directors to

issue shares up to an aggregate amount not exceeding 10% of the issued and paid-up share capital of the

Company for the time being, for such purposes as the Directors consider would be in the best interest of the

Company without having to convene separate general meetings. This authority, unless revoked or varied at a

general meeting, will expire at the conclusion of the next Annual General Meeting.

This general mandate is new and will provide flexibility to the Company for any possible fund raising activities,

including but not limited to further placement of shares for purpose of funding future investment, working capital

and/or acquisitions.

Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature

The proposed Ordinary Resolution 11, if passed, will enable the Company and its subsidiaries to enter into

recurrent related party transactions of a revenue or trading nature from 23 December 2009, the listing date

until the date of this Annual General Meeting and which are necessary for its day-to-day operations and with

those related parties as set out in Section 2.4 (Proposed Shareholders’ Ratification and Proposed Shareholders’

Mandate) of the Circular to Shareholders of the Company dated 15 November 2010 provided that such

transactions are entered into on terms which are not more favourable to the related parties involved than

generally available to the public and are not detrimental to the minority shareholders of the Company.

Please refer to the Section 2 of the Circular to Shareholders dated 15 November 2010 which is circulated

together with this Annual Report.



Details of Directors Standing for Re-Election

Directors who are standing for re-election at the Third Annual General Meeting of Yoong Onn Corporation

Berhad:-

(i) The Director retiring pursuant to Article 129 of the Company’s Articles of Association: -

(a) Chew Hon Keong

(ii) The Directors retiring pursuant to Article 134 of the Company’s Articles of Association: -

(a) Datuk Kamaludin Bin Yusoff

(b) Datuk Hairuddin Bin Mohamed

(c) Lee Kim Seng

(d) Yeoh Chong Keng

Further details of the above Directors are set out in the Directors’ Profile of this Annual Report.

Statement AccompanyingNotice of Annual General Meeting


This page has been intentionally left blank

I/We of

being a member(s) of Yoong Onn Corporation Berhad hereby appoint

of

or failing him/her,

of

or failing him/her, *the Chairman of the Meeting as my/our proxy(ies), to vote for me/us on my/our behalf at the

Third Annual General Meeting of the Company to be held at Putra 1 Room, Nilai Springs Golf & Country Club,

PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul Khusus on Friday, 10 December 2010 at

10.00 a.m. and at any adjournment thereof.

My/our proxy/proxies is/are to vote as indicated below:

No. Resolutions For Against

1. To receive the Audited Financial Statements

2. To approve the payment of Directors’ fee

3. To declare a final single tier dividend of 2 sen per share

4. To re-elect Chew Hon Keong as Director

5. To re-elect Datuk Kamaludin Bin Yusoff as Director

6. To re-elect Datuk Hairuddin Bin Mohamed as Director

7. To re-elect Lee Kim Seng as Director

8. To re-elect Yeoh Chong Keng as Director

9. To re-appoint Crowe Horwath as Auditors of the Company

Special business

10. Authority to issue shares pursuant to Section 132D of the

Companies Act, 1965

11. To approve the Proposed Shareholders’ Ratification and

Proposed Shareholders’ Mandate

(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. If no specific

direction as to voting is given, the proxy will vote or abstain at his discretion.)

Signed this _________ day of ______________, 2010

_______________________________

Signature of Shareholder

* Strike out whichever not applicable

Form of Proxy

For appointment of two proxies, the

shareholdings to be represented by

the proxies:

Proxies % of shares

Proxy 1

Proxy 2

Total 100%

No. of Shares held

The Company Secretary

Yoong Onn Corporation Berhad

Suite 13 A.01 (A),

Level 13A Wisma Goldhill

67 Jalan Raja Chulan

50200 Kuala Lumpur

Affix Stamp

please fold here

please fold here

Notes:

(i) A member entitled to attend and vote at the Annual General

Meeting is entitled to appoint a proxy/proxies who need not

be a member/members of the Company, an advocate, an

approved Company auditor, or a person approved by the

Registrar to attend and vote in his/her stead.

(ii) A member may appoint not more than two (2) proxies to

attend the same meeting. Where a member appoints two

proxies, the proxies shall not be valid unless the member

specifies the proportion of his shareholding to be represented

by each proxy. Where a member of the Company is an

authorised nominee as defined under the Securities Industry

(Central Depositories) Act, 1991, it may appoint at least one

proxy in respect of each securities account.

(iii) The instrument appointing a proxy shall be in writing under

the hand of the appointor or of his attorney duly authorised in

writing, or if the appointor is a corporation, either under its

common seal or the hand of its officer or its duly authorised

attorney.

(iv) The instrument appointing a proxy shall be deposited at the

Registered Office of the Company at Suite 13A.01(A), Level

13A, Wisma Goldhill, 67 Jalan Raja Chulan, 50200 Kuala

Lumpur not less than forty-eight (48) hours before the time for

holding the meeting or at any adjournment thereof.

C

M

Y

CM

MY

CY

CMY

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FA YOONG ONN.pdf 3/11/10 9:44:57 AM

FA YOONG ONN.pdf 3/11/10 9:44:57 AM · 85,185 86,808 2009 2008 2007 2006 PROFIT BEFORE TAX...

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