q xceptional - Yoong Onn67 Jalan Raja Chulan 50200 Kuala Lumpur Tel: (603) 2032 2895 Fax: (603) 2032...

www.yoongonn.com

home linenfor homes across

the world.Yoong O

nn Corporation Berhad (814138-K

)Annual R

eport 2012

Exc

eptio

nal -

qua

lity

Annual Report2012

Head O�ce & FactoryLot No. PT 16690 - 16692,Jalan Permata 2,Arab-Malaysian Industrial Park,71800 Nilai,Negeri Sembilan, Malaysia

Tel : 606 - 799 6012Fax : 606 - 799 7015Email : [email protected]

MarketingNo. 27-35,Jalan 11/118B,Desa Tun Razak, Cheras56000 Kuala Lumpur,Malaysia


JapanTaiwan

VietnamPhilippine

Thailand

FijiNew CaledoniaAustralia

Indonesia

Singapore

Mozambique

Turkey

Dubai

BruneiPapua New Guinea

4 CorporateInformation

6 CorporateStructure

8 FinancialHighlights

10 CorporateHighlightsandEvents

12 ProfileofDirectors

16 Chairman’sStatement

22 AuditCommitteeReport

28 CorporateGovernanceStatement

35 StatementonInternalControl

37 StatementonDirectors’ResponsibilityinRelationtotheAuditedFinancialStatements

38 FinancialStatements

98 AdditionalComplianceInformation

101 AnalysisofShareholdings

103 ListofGroupProperties

104 NoticeoftheFifthAnnualGeneralMeeting

108 StatementAccompanyingNoticeofAnnualGeneralMeeting

FormofProxy

Contents

4 Yoong Onn Corporation Berhad | Annual Report 2012

Corporate InformatIon

BOARDOFDIRECTORSDatukKamaludinBinYusoffIndependent Non-Executive Chairman

ChewHonFoongManaging Director and Group Chief Executive Officer

ChewHonKeongExecutive Director and Group Chief Operating Officer

DatukHairuddinBinMohamedIndependent Non-Executive Director

YeohChongKengIndependent Non-Executive Director

LeeKimSengIndependent Non-Executive Director

AUDITCOMMITTEELeeKimSeng(Chairman)YeohChongKengDatukHairuddinBinMohamed

NOMINATIONCOMMITTEEYeohChongKeng(Chairman)DatukHairuddinBinMohamedLeeKimSeng

REMUNERATIONCOMMITTEEYeohChongKeng(Chairman)DatukKamaludinBinYusoffChewHonFoong

COMPANYSECRETARYDato’TangSweeGuan(MIA5393)

REGISTEREDOFFICESuite13A.01(A)Level13AWismaGoldhill67JalanRajaChulan50200KualaLumpurTel:(603)20322895Fax:(603)20322893


HEADOFFICELotNo.PT16690-16692JalanPermata2Arab-MalaysianIndustrialPark71800NilaiNegeriSembilanDarulKhususTel:(606)7996012Fax:(606)7997015Website:www.yoongonn.com

SHAREREGISTRARSymphonyShareRegistrarsSdnBhdLevel6,SymphonyHousePusatDaganganDana1JalanPJU1A/4647301PetalingJaya,SelangorTel:(603)78418000Fax:(603)78418151

PRINCIPALBANKERSAmBank(M)BerhadHongLeongBankBerhadStandardCharteredBankMalaysiaBerhadUnitedOverseasBank(Malaysia)Bhd

AUDITORSCroweHorwath(AF1018)

SOLICITORSIzaNgYeoh&Kit

STOCKEXCHANGELISTINGMainMarketofBursaMalaysiaSecuritiesBerhadSector:ConsumerProductsStockName:YOCBStockCode:5159

[email protected]:(603)91725012


YOONG ONN CORPORATION BERHAD(814138-K)

Design / Manufacturingand Trading

Distribution /Trading and

Institutional Supply

Distributionand

Trading Retailing

SLEEP FOCUS SDN BHD

401252-V

SYARIKATYOONG ONN

SDN BHD171966-W

ELEGANTTOTAL HOME

SDN BHD268537-K

MONSIEUR (M) SDN BHD

121889-W

100% 100% 100% 100%

Corporate struCture


YOONG ONN CORPORATION BERHAD(814138-K)

Design / Manufacturingand Trading

Distribution /Trading and

Institutional Supply

Distributionand

Trading Retailing

SLEEP FOCUS SDN BHD

401252-V

SYARIKATYOONG ONN

SDN BHD171966-W

ELEGANTTOTAL HOME

SDN BHD268537-K

MONSIEUR (M) SDN BHD

121889-W

100% 100% 100% 100%


fInanCIaL HIGHLIGHts

Pro-forma Audited

30 June 2008 30 June 2009 30 June 2010 30 June 2011

Revenue (RM’000) 102,200 130,084 127,541 141,002

13,704 18,645 21,663 25,309

Minority Interests (RM’000)

Profit Before Tax (RM’000)

Profit After Tax and 10,706 13,881 15,528 18,302

Total Shareholders’ Equity (RM’000) 39,317 60,973 91,771 110,409

30 June 2012

153,913

23,482

17,277

124,486

PROFIT AFTER TAXRM’000

TOTAL SHAREHOLDERS’ EQUITYRM’000

PROFIT BEFORE TAX RM’000

REVENUERM’000

0

5,000

10,000

15,000

20,000

25,000

30,000

0

20,000

40,000

60,000

80,000

100,000

140,000

120,000

2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

2008 2009 2010 2011 20122008 2009 2010 2011 2012

0

20,000

18,000

20,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

0

12

7,5

41

13

0,0

84

102

,200

153,91

3

14

1,0

02

25

,30

9

21

,66

3

18

,64

5

23,482

13

,70

4

11

0,4

09

91

,77

1

60

,97

3

124,48

6

39

,31

7

18

,30

2

15

,52

8

13,

881

17,277

10

,70

6


Pro-forma Audited

30 June 2008 30 June 2009 30 June 2010 30 June 2011

Revenue (RM’000) 102,200 130,084 127,541 141,002

13,704 18,645 21,663 25,309

Minority Interests (RM’000)

Profit Before Tax (RM’000)

Profit After Tax and 10,706 13,881 15,528 18,302

Total Shareholders’ Equity (RM’000) 39,317 60,973 91,771 110,409

30 June 2012

153,913

23,482

17,277

124,486

PROFIT AFTER TAXRM’000

TOTAL SHAREHOLDERS’ EQUITYRM’000

PROFIT BEFORE TAX RM’000

REVENUERM’000

0

5,000

10,000

15,000

20,000

25,000

30,000

0

20,000

40,000

60,000

80,000

100,000

140,000

120,000

2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

2008 2009 2010 2011 20122008 2009 2010 2011 2012

0

20,000

18,000

20,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

0

12

7,5

41

13

0,0

84

102

,200

153,91

3

14

1,0

02

25

,30

9

21

,66

3

18

,64

5

23,482

13

,70

4

11

0,4

09

91

,77

1

60

,97

3

124,48

6

39

,31

7

18

,30

2

15

,52

8

13,

881

17,277

10

,70

6


Corporate HIGHLIGHts and events

■ AnnualGeneralMeetingandAwardsPresentation


■ New5StoreysWarehouseatNilaiFactory

■ OverseaEXPOandTradeFair


Corporate Highlights and events (cont’d)


■ CompanyDinner,PartyandFiesta

■ Home’sHarmony’sNewBoutiqueShops


DatukKamaludinBinYusoffIndependentNon-Executive

Chairman

profILe of dIreCtors

DATUKKAMALUDINBINYUSOFFIndependentNon-ExecutiveChairmanMalaysian

DatukKamaludinBinYusoff,aged64,wasappointedtotheBoardofYoongOnnCorporationBerhadon28September2009.HeisalsoamemberoftheRemunerationCommitteeoftheCompany.

He holds BA (Honours) from University Malaya in 1974. DatukKamaludin started his career in 1974 as an Administrative andDiplomaticOfficer in thepublic sector and subsequently,heheldvariousdistinguishedpositionsin theMinistryofFinance,MinistryofDefence,RoadTransportDepartmentandMinistryofEntrepreneurDevelopment.Inappreciationtohisservices,DatukKamaludinhasbeen awarded with various accolades. In 2000, he was awardedthe Bintang PanglimaGemilangDarjah Kinabalu (P.G.D.K)whichcarriesthetitle“Datuk”.

DatukKamaludinalsositsonseveralboardsinthecorporatesector.From2004to2007,hewastheChiefOperatingOfficerofFomemaSdn Bhd. He is currently the Chairman of Johore Tin Berhad,Executive Vice Chairman of Loh& LohConstructions Sdn Bhd (asubsidiarycompanyofLoh&LohCorporationBerhad),ManagingDirectorofGlobalMarqueAutoSdnBhdandalsoholdsdirectorshipinotherprivatelimitedcompanies.

CHEWHONFOONGManagingDirectorandGroupChiefExecutiveOfficerMalaysian

ChewHonFoong,aged53,wasappointed to theBoardofYoongOnnCorporationBerhadon17April2008.HeisalsoamemberoftheRemunerationCommitteeoftheCompany.

Astheco-founder,hehasmorethanthirty(30)yearsofexperiencein the home linen industry. He has been instrumental in thedevelopment, growth and success of the YoongOnn CorporationBerhadGroupduringhistenurewiththeGroup.

Hestartedhiscareerin1979whenhejoinedYoonOn,apartnershipcompany,whichisinvolvedintradingandretailingoftextilesandhome linen. With his strong business acumen, he was involvedin developing and creating own brands of bed linen which wasmarketedunderthenamesDianaandNovellein1982.

In1988,togetherwithhisbrother,ChewHonKeong,heestablishedSyarikatYoongOnnSdnBhdand tookover theentirebusinessofthepartnershipcompany,YoonOn.Hismainintentionistoexpandthebusinesstoincludeinternationaltrades.BesidesoverseeingtheGroupactivities,heisactivelyinvolvedincreatingfabricdesignsforboththemassandnichemarkets.HehasextensiveexperienceinthedevelopmentandcreationofhomelinendesignsandheiscurrentlyheadingtheGroup’sin-housedesignteam.Heismainlyresponsiblefor theoveralloperationsof theGroupwithemphasisonstrategicbusinessplanningandpromotingbrandequityofproducts.

Hedoesnothaveanyotherdirectorshipsofpubliccompanies.

ChewHonFoongManagingDirectorand

GroupChiefExecutiveOfficer


CHEWHONKEONGExecutiveDirectorandGroupChiefOperatingOfficerMalaysian

ChewHonKeong,aged52,istheco-founderandwasappointedtotheBoardofYoongOnnCorporationBerhadon17April2008.

Hehasmorethanthirty(30)yearsofexperienceinthehomelinenindustry.Hiscareerstartedin1979whenhejoinedYoonOn,apartnership,whichisinvolvedintradingandretailingoftextilesandhomelinen.HealsoassistedinestablishingSyarikatYoongOnnSdnBhdin1988.

AstheotherpartnerofYoonOn,hewasalsoinvolvedinmanyaspectsofthebusiness in textilesandhomelinen,which includes technicalspecificationinfabrics.HiscapabilityhasenabledtheCompanytodevelopnewrangeofproducttocaterfordifferentmarketsandindustries.

Withanin-depthknowledgeintheproductionprocesses,hetogetherwithhisbrother,ChewHonFoongwereinvolvedintheestablishmentofSleepFocusSdnBhd in1996and theconstructionofNilaimanufacturingplant for theGroup’smanufacturingoperations.Heisprimarilyresponsibleinoverseeingthe overallmanagement and strategic business development of theGroupwithemphasisonproductdevelopmentandproductresearch.

Hedoesnothaveanyotherdirectorshipsofpubliccompanies.

ChewHonKeongExecutiveDirectorandGroupChiefOperating

Officer

profile of directors (cont’d)

DatukHairuddinBinMohamedIndependentNon-Executive

Director

DATUKHAIRUDDINBINMOHAMEDIndependentNon-ExecutiveDirectorMalaysian

Datuk Hairuddin BinMohamed, aged 62, was appointed to the Board ofYoongOnnCorporationBerhadon28September2009.HeisalsoamemberoftheAuditCommitteeandNominationCommitteeoftheCompany.

Datuk Hairuddin obtained his Bachelor in Social Science (Honours) fromUniversiti Sains Malaysia in 1980. He joined the Royal Malaysian PoliceForcein1970.Hewassincepromotedtovariousseniorpositions.HewasappointedtheDirectorofCommercialCrimeDepartmentinRoyalMalaysiaPolice in2005,apositionhehelduntilhis retirement in2006.DuringhistenureasHeadofCommercialCrimeDepartment,hewasappointedtobeamemberoftheHighPoweredCorporateGovernanceCommitteetooverseeallgovernment-linkedcompaniesinthecountry.Hehaswideexperienceinfrauddetectionandcommercialcrimeinvestigation.

Hedoesnothaveanyotherdirectorshipofpubliccompanies.




YeohChongKengIndependentNon-Executive

Director

YEOHCHONGKENGIndependentNon-ExecutiveDirectorMalaysian

YeohChongKeng,aged60,whoisalawyerbyprofessionandwasappointedto theBoardofYoongOnnCorporationBerhadon28September2009.HealsoservesastheChairmanoftheNominationCommitteeandRemunerationCommitteeandamemberoftheAuditCommitteeoftheCompany.

HeobtainedhisBarrister-at-lawfromLincoln’sInn,Englandin1980.HewasaseniorpoliceofficerintheRoyalMalaysianPoliceForcebeforeproceedingtostudylawatLincoln’sInn,England.HewascalledtotheEnglishBarandMalaysianBarin1980and1981respectivelyandistheManagingPartnerofalegalfirminKualaLumpur.HehasalsoactedascounselfortheGovernmentof Hong Kong. He is an experienced lawyer specialising in corporate andbankinglaw.

He has, in the past served as an Independent Director in several publiclistedcompanies.Since14February2000,heisanIndependentDirectorofThe StoreCorporationBerhad.He is also theChairmanof theNominationCommitteeandservesasamemberintheAuditCommitteeandRemunerationCommitteeofTheStoreCorporationBerhad.

HeisalsocurrentlyanIndependentDirectorofTokioMarineLifeInsuranceBhd.Hehasheld thisposition since2002and is theChairmanof theRiskManagement and Nomination Committee as well as member of the AuditCommittee.


LEEKIMSENGIndependentNon-ExecutiveDirectorMalaysian

LeeKimSeng,aged67,wasappointedtotheBoardofYoongOnnCorporationBerhadon28September2009.HealsoservesastheChairmanoftheAuditCommitteeandamemberoftheNomineeCommitteeoftheCompany.

HeisamemberoftheMalaysianInstituteofAccountants,MalaysianInstituteofTaxationandTheInstituteofInternalAuditors,Malaysia.HewaspreviouslyamemberoftheInstituteofCharteredAccountantsinEnglandandWales.

Hehasmorethanthirty(30)yearsofrelevantworkingexperienceinthevariousservices encompassing upstream and downstream industries. He joinedHarrisons&Crosfield(Sabah)Sdn.Bhd.in1976asaSeniorAccountant.HewassubsequentlytransferredtoHarrisons&Crosfield(Malaysia)Sdn.Bhd.in1980andafterayear,hewaspromotedtoChiefAccountant.Thereafter,hewaspromotedtoAssociateDirector(Finance)in1986.

In 1987, he joined SPHoldings Ltd. in PapuaNewGuinea. Thereafter, in1990, he joined a plantation group Raja Garuda Mas (“RGM”) based inMedan,Indonesia.In1993,hewaspromotedtoGroupFinancialControlleroftheForestryDivisionoftheRGMgroup.In1996,hewastransferredtoajoint-ventureoilpalmplantationgroup,jointlyownedbytheRGMandtheSALIMgroup.In1997aftercompletinghisassignment,hewasthentransferredtoapubliclistedsubsidiaryofRGMgroupasSeniorFinancialController.

In 2004, he joined SinarMasGroup (“SMG”) as Vice-President of InternalAuditofaforestrygroupoperatinginRiau,Sumatera.Hewasthentransferredto thepositionofVice-PresidentBusinessControl in2005.After a year,hewastransferredtotheheadofficeofSMG,Jakarta,asanadvisertoManagingDirector-Finance,ForestryDivisionuntilhisretirementin2008.

Hedoesnothaveanyotherdirectorshipsofpubliclistedcompanies.

Currently, he is involved in engineering and construction aswell as in theminingbusiness.

LeeKimSengIndependentNon-Executive

Director

NotestoProfileofDirectors:

1. ChewHonKeongisthebrotherofChewHonFoong

Saveasdisclosed,noneofthedirectorshasanyfamilyrelationshipwithanydirectoroftheCompany.

2. SaveforChewHonFoong,ChewHonKeongandYeohChongKeng,whohaveinterestinrecurrentrelated party transactions as disclosed in item 12 under additional compliance information in thisAnnualReport,noneofthedirectorshasanyconflictofinterestwiththeCompany.

3. Noneof thedirectorshasbeenconvictedof anyoffenceswithin thepast ten (10) yearsother thantrafficoffences,ifany.

4. Please refer to the analysis of shareholdings of this Annual Report for details of the directors’shareholdingsintheCompany.

5. Alldirectorsattendedallthefive(5)BoardmeetingsoftheCompanyheldduringthefinancialyearended30June2012.


CHaIrman’s statement

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report of Yoong Onn Corporation

Berhad (“YOCB” or “the Group”) for the financial year ended 30 June 2012 .



Chairman’s statement (cont’d)


REVIEWOFFINANCIALPERFORMANCE

YOCB’srevenuegrewbyRM12.91millionor9.16%toreachRM153.91millionforthefinancialyear2012.Revenuegrowthwasmainlyattributedtoimproveddomesticsalesandaswellashigherexports.

Forthefinancialyear2012,theGrouprecordedalowerprofitbeforetaxofRM23.48million,adecreaseofRM1.83millionor7.23%,ascomparedtoRM25.31millionfromtheprecedingyear.Thelowerprofitbeforetaxwaslargelyduetohigheroperatingexpenses

OPERATIONREVIEW

TheGroup’sdomesticoperationshadcontinuedtobethemaindriverofitsrevenuesandprofits,contributedmainlybybedlinen,bathlinenandbeddingaccessorieswhichmadeupthebulkoftheGroup’srevenue.Domesticoperationsaccountedfor79.1%orRM121.70millionoftheGroup’sconsolidatedrevenuesoranincreaseofRM11.44millionor10.38%ascomparedtoRM110.26millionintheprecedingyear.

In the domesticmarket, our products are sold under our fourteen (14) home grown brands through oursixteen(16)fullyownedboutiqueshops,morethan100countersatthepremierdepartmentstores,specialtystores,hypermarketsandintermediaries.Thehigherretailsaleswasmainlyattributedbytheten(10)newconsignmentcounters,launchingofnewproductlikesofabedandotherfurniturerelatedproducts,morethantwenty(20)AnnTaylorNewBeddingConceptstoresandfour(4)recentlyopenedfullyownedretailboutiqueshopsoperatesunderthe“Home’sHarmony”brandnamestrategicallylocatedinKLFestivalMall,ParadigmMall,SetiaCityMallandPublikaShoppingGallery.

Fortheyearunderreview,theGroupreceivedseveralappreciationawardsfromitstradingpartnersfortherecognitionofitsoutstandingsalesperformanceincludingtop10PerformingCompany,OutstandingAnnualSaleandCommendableSaleGrowthAwards.

ExportsincreasebyRM1.47millionor4.78%toRM32.21millionfromRM30.74millioninprecedingyear.Inmarketsabroad,theproductsaresoldmostlythroughdistributorsandimporters.Asattoday,ourproductsaresoldinmorethan15countriesaroundtheworldwhichincludeAustralia,Brunei,Dubai,Fiji,Indonesia,Japan,Mozambique,PapuaNewGuinea,NewCaledonia,Singapore,Turkey,Thailand,Taiwan,PhilippinesandVietnam.Higherexport salesascompared toprecedingyeardemonstratedacontinuingdemand forourproducts.

In linewith theGroup’s business expansion plan, a new 5 storeyswarehousewas constructed inNilaifactory, which provide an additional storage space of approximately 65,000 sq ft. which caters to theplannedincreaseintheGroup’sproductionandtradinginventory.


BONUSISSUE

On19October2011,thecompanyundertookabonusissueof40,000,000newordinarysharesofRM0.50eachonthebasisofone(1)bonusshareforeverythree(3)existingsharesheldandafterthecompletionof the exercise, the issued and paid-up share capital of the Company increased fromRM60,000,000 toRM80,000,000 by the capitalisation of share premium and retained earnings. The newordinary sharesissuedrankparipassuinallrespectswiththeexistingordinarysharesoftheCompany,andgrantedlistingandquotationontheMainMarketofBursaMalaysiaSecuritiesBerhadonthesameday.

OUTLOOKANDPROSPECTS

TheglobaleconomicoutlookwasfurtherdampenedbythepooreconomicdataintheUSAandreneweddebtcrisisinEurope.However,theMalaysianeconomyisexpectedtoexperienceasteadypaceofgrowthfor2013inviewoftheimplementationofthe10thMalaysianPlan,EconomicTransformationProgrammeandthe2013Budget.

Basedonthe2013Budgetwhichisfamilyfriendlyandinvestmentoriented,itisexpectedthattheadditionalbonus for civil servants, affordable housing, tax deductions, additional pensions and other goodieswillimproveMalaysian’squalityof lifeandsustainconsumerspendingandeconomicgrowthforMalaysiain2013.Thiswillhaveapositiveimpactonourfuturegrowthandrevenueaswehadestablishedmoreoutletsduring this financial year. Asean countries, India and China are also expected to sustain andmaintaintheireconomicgrowthdespite theweaknesses inEuropeandtheuncertainties insomesectorsof theUSeconomy.

TheGroupexpectstobeabletosustainitsperformanceinthefinancialyearending30June2013basedonitsstrong fundamentalsandbusinessstrategies thatwillallowit towithstandanyunexpectedadversetrading conditions. TheGroup shall continue to seize all opportunities presented and at the same time,reachouttoitsconsumersandcreateagreatermarketbothinandoutofMalaysia.Withateamofdynamicleadersandcapablestaff,IamcertaintheGroupwillgrowtobeanametobeacknowledgedbothlocallyandinternationally.






DIVIDEND

TheBoardofDirectorsispleasedtorecommendafinalsingletiertaxexemptdividendof3%or1.5 senperordinary share amounting toRM2.40millioninrespectofthefinancialyearended30June2012forshareholders’ approval in the forthcomingAnnualGeneralMeeting.Coupledwiththeinterimdividendof4%or2senperordinaryshareamounted toRM3.20millionpaidon9 January2012, thismakes atotaldividendpayoutof7%or3.5senperordinaryshareamountingtoRM5.60millionrepresentingapproximately32.41%oftheGroups’sprofitaftertaxofRM17.28millionforthisfinancialyear2012.

TheGroupwill continue to enhance returns to shareholderswhilst seeing that appropriate funds are setasideforotherpurposessuchascapitalexpenditureandforworkingcapital.


ACKNOWLEDGEMENT

OnbehalfoftheBoard,IextendmyappreciationandthankstomyfellowBoardmembers,themanagementteamandstaffatalllevelandpositionsfortheircontributions,dedication,hardworkandservicetothisGroup.

Ialsothankourshareholdersforthetrustandconfidenceinmeandmyteamoffellowdirectorsandteamleaders, and to all business associates, bankers, advisors, customers, suppliers and trading partners,mysincerethanksforyourunfailingsupport.

DatukKamaludinBinYusoffChairman





TheAuditCommitteeofYoongOnnCorporationBerhad ispleased topresenttheAuditCommitteeReportforthefinancialyearended30June2012.

COMPOSITIONOFTHEAUDITCOMMITTEE

ThepresentmemberoftheAuditCommitteeare:

Name Designation Directorship Mr.LeeKimSeng Chairman IndependentNon-ExecutiveDirectorDatukHairuddinBinMohamed Member IndependentNon-ExecutiveDirectorMr.YeohChongKeng Member IndependentNon-ExecutiveDirector

TERMSOFREFERENCEOFAUDITCOMMITTEE

(a) TermsofMembership

TheAuditCommitteeshallbeappointedbytheBoardofDirectorsamongstitsmembersandconsistofat least three(3)members,ofwhomallmustbeNon-ExecutiveDirectorswithamajorityof thembeingIndependentDirectors.TheChairman,whoshallbeelectedbytheAuditCommittee,mustbeanIndependentDirector.

TheCommitteeshallincludeonememberwhoisamemberoftheMalaysianInstituteofAccountants(“MIA”);orifheisnotamemberoftheMIA,hemusthaveatleastthree(3)years’workingexperienceandhemusthavepassedtheexaminationsspecifiedinPart1oftheFirstScheduleoftheAccountantsAct1967;orhemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstScheduleoftheAccountantsAct1967;orhemustholdadegree/master/doctorateinaccountingor finance and have at least 3 years’ post qualification experience in accounting or finance; or hemusthaveat least7years’experiencebeingachief financialofficerofacorporationorhaving thefunctionofbeingprimarilyresponsibleforthemanagementofthefinancialaffairsofacorporationorfulfillssuchotherrequirementsasprescribedorapprovedbyBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)

IntheeventofanyvacancyintheAuditCommitteeresultinginthenon-compliancewiththeListingRequirementsofBursaSecurities,theBoardshallappointanewmemberwithinthree(3)months.

TheBoardofDirectorsshallreviewthetermofofficeandtheperformanceofanAuditCommitteeandeachofitsmembersatleastonceineverythree(3)years.

NoalternateDirectorshallbeappointedasamemberoftheAuditCommittee.

(b) MeetingsandQuorumoftheAuditCommittee

InordertoformaquoruminrespectofameetingoftheAuditCommittee,themajorityofthememberspresentmust be IndependentDirectors. The Company Secretary shall act as secretary of the AuditCommitteeandshallberesponsible,inconjunctionwiththeChairman,fordrawinguptheagendaandcirculatingitpriortoeachmeeting.

TheAuditCommitteemetfive(5)timesduringthefinancialyearended30June2012.Thedetailsoftheattendanceofthemeetingsaredisclosedundertheheading“AttendanceoftheAuditCommitteeMeetings”onpage25ofthisAnnualReport.

audIt CommIttee report


audit Committee report (cont’d)

TERMSOFREFERENCEOFAUDITCOMMITTEE(cont’d)

(b) MeetingsandQuorumoftheAuditCommittee(cont’d)

The Audit Committeemay require the attendance of anymanagement staff from Finance/AccountsDepartmentorotherdepartmentsdeemednecessarytogetherwitharepresentativeorrepresentativesfromtheexternalauditorsand/orinternalauditors.

Inallfive(5)meetings,theChiefFinancialOfficerwaspresenttoreportontheresultsoftheGroupaswellastoanswerquestionsposedbytheAuditCommitteeinrelationtotheresultstobeannounced.During these Audit Committee meetings, representatives from the internal auditors had also beenpresenttoprovideupdatesontheprogressofinternalauditworkthathavebeenconductedtodate,andtoalsoprovidecommentsandrecommendations,whereapplicabletoimprovetheriskmanagementframeworksupportingtheactivitiesoftheGroup.

Inanyevent,shouldtheexternalauditorsrequest,theChairmanoftheAuditCommitteeshallconveneameetingofthecommitteetoconsideranymattertheexternalauditorsbelieveshouldbebroughttotheattentionoftheDirectorsorshareholders.

(c) FunctionsoftheAuditCommittee

ThedutiesandresponsibilitiesoftheAuditCommitteeincludethefollowing:-

1. toconsidertheappointmentoftheexternalauditor,theauditfeeandanyquestionsofresignationordismissal;

2. todiscusswiththeexternalauditorbeforetheauditcommences,thenatureandscopeoftheaudit,andensureco-ordinationwheremorethanoneauditfirmisinvolved;

3. todiscusswiththeexternalauditorontheevaluationofthesystemofinternalcontrolsandtheassistancegivenbytheemployeestotheexternalauditors;

4. to reviewand report to theBoard if there is reason (supportedby grounds) tobelieve that theexternalauditorisnotsuitableforreappointment;

5. toreviewthequarterlyandyear-endfinancialstatementsoftheCompanyandGrouppriortotheapprovaloftheBoard,focusingparticularlyon:

a. changesinorimplementationofmajoraccountingpoliciesandpractices;

b. significantadjustmentsarisingfromtheaudit;

c. thegoingconcernassumption;and

d. compliancewithaccountingstandardsandotherlegalrequirements.

6. todiscussproblemsandreservationsarisingfromtheinterimandfinalaudit,andanymattertheauditorsmaywishtodiscuss(intheabsenceofthemanagementwherenecessary);

7. toreviewtheexternalauditor’smanagementletterandmanagement’sresponse;

8. todothefollowinginrelationtotheinternalauditfunctions:-

a. reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunction,andthatithasthenecessaryauthoritytocarryoutitswork;



(c) FunctionsoftheAuditCommittee(cont’d)

b. review the internal audit programme and the results of the internal audit processes orinvestigationundertakenandwherenecessarytoensuretheappropriateactionistakenontherecommendationsoftheinternalauditfunction;

c. reviewanyappraisalorassessmentoftheperformanceoftheinternalauditfunction;

d. approveanyappointmentorterminationoftheinternalauditor;

e. informitselfofresignationsofinternalauditorandprovidetheresigninginternalauditoranopportunitytosubmithisreasonsforresigning.

9. toreviewanyrelatedpartytransactionsandconflictofinterestsituationthatmayarisewithintheCompanyortheGroup;

10. toconsiderthemajorfindingsofinternalinvestigationsandthemanagement’sresponse;and

11. toconsideranyotherfunctionsordutiesasmaybeagreedbytheCommitteeandtheBoard.

(d) RightsoftheAuditCommittee

TheAuditCommitteehasensuredthatitshall,wherevernecessaryandreasonablefortheperformanceofitsdutiesandinaccordancewithaproceduredeterminedbytheBoard:-

1. haveauthoritytoinvestigateanymatterwithinitstermsofreference;

2. havetheresourceswhicharerequiredtoperformitsduties;

3. havefullandunrestrictedaccesstoanyinformationpertainingtotheCompanyandGroup;

4. have direct communication channelswith the external auditors and person(s) carrying out theinternalauditfunctionoractivity(ifany);

5. beabletoobtainindependentprofessionalorotheradvicewhenneeded;and

6. beabletoconvenemeetingswiththeexternalauditors,theinternalauditorsorboth,excludingtheattendanceofotherdirectorsandemployeesoftheGroup,wheneverdeemednecessary.

(e) ProcedureofAuditCommittee

TheAuditCommitteeregulatesitsownproceduresby:-

1. thecallingofmeetings;

2. thenoticetobegivenofsuchmeetings;

3. thevotingandproceedingsofsuchmeetings;

4. thekeepingofminutes;and

5. thecustody,protectionandinspectionofsuchminutes.





(f) ReviewoftheAuditCommittee

TheBoardofDirectorsshallensure that the termofofficeandperformanceof theAuditCommitteeandeachofitsmembersarebeingreviewedatleastonceineverythreeyearstodeterminewhethersuchanAuditCommitteeandmembershavecarriedouttheirdutiesinaccordancewiththeirtermsofreference.

(g) AttendanceoftheAuditCommitteeMeetings

Thedetails of attendanceof eachAuditCommitteemember in theAuditCommitteemeetings heldduringthefinancialyearended30June2012areasfollows:-

Meetingattendedbythe Directors/TotalNumberofMeeting heldduringthefinancialyearended Name 30June2012 %ofAttendance

Mr.LeeKimSeng 5/5 100% DatukHairuddinBinMohamed 5/5 100% Mr.YeohChongKeng 5/5 100%

(h) SummariesofActivitiesoftheAuditCommittee

DuringthefinancialyearuptothedateofthisReport,theAuditCommitteecarriedoutthefollowingactivitiesindischargingtheirdutiesandresponsibilities:

1. Control

Evaluated the overall effectiveness of the system of internal control through the review of theresults of work performed by the internal and external auditors and discussions with the keymanagement.

2. FinancialResults

Reviewedquarterlyresultsandauditedannual financialstatementsof theGroupandCompanybefore recommending to the Board for release to Bursa Securities. The review should focusprimarilyon:

a) majorjudgmentalareas,significantandunusualevents;

b) significantadjustmentsresultingfromaudit;

c) thegoingconcernassumptions;

d) compliance with applicable approved accounting standards inMalaysia;and

e) compliancewithListingRequirementsofBursaSecuritiesandotherregulatoryrequirements.



(h) SummariesofActivitiesoftheAuditCommittee(cont’d)

3. ExternalAudit

a) reviewedwith the external auditors, their audit plan for the financial year ended30 June2012toensurethattheirscopeofworkadequatelycoverstheactivitiesoftheGroup;

b) reviewedtheresultsandissuesarisingfromtheirauditoftheannualfinancialstatementsandtheirresolutionofsuchissuesashighlightedintheirreporttotheCommittee;and

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

4. InternalAudit

a) reviewedwiththeinternalauditors,theirauditplanforthefinancialyearended30June2012ensuringthatprincipalriskareaswereadequatelyidentifiedandcoveredtheplan;

b) reviewed the recommendations by internal audit, representations made and correctiveactionstakenbythemanagementinaddressingandresolvingissuesaswellasensuringthatallissueswereadequatelyaddressedonatimelybasis;

c) reviewedthecompetenciesoftheinternalauditorstoexecutetheplan,theauditprogramsusedintheexecutionoftheinternalauditworkandresultsoftheirwork;and

d) reviewedtheadequacyofthetermsofreferenceofinternalaudit.




TheBoard ofDirectors (“theBoard”) of YoongOnnCorporationBerhad (“theCompany” or “YOCB”) isfullycommittedtopromoteandachievethehigheststandardofcorporategovernanceandtoensurethattheprinciplesandbestpracticesincorporategovernanceasdetailedintheMalaysianCodeonCorporateGovernance(“theCode”)arepractisedandadoptedinYOCBanditssubsidiaries(“theGroup”).

TheBoardcontinuouslyevaluatestheGroup’scorporategovernancepracticesandprocedureswithaviewtoadoptandimplementtheprinciplesandbestpracticesas recommended by the Code, wherever applicable, as a fundamental part ofdischarging itsdutiesand responsibilities toprotect andenhance shareholders’value.TheBoardbelieves thatgoodcorporategovernance results increationoflongtermvalueandbenefitsforallshareholders.

SECTION1:THEBOARDOFDIRECTORS

TheBoardtakesfullresponsibilitiesfortheperformanceoftheGroupandguidestheGrouptowardsachievingitsshortandlongtermobjectives,settingcorporatestrategiesforgrowthandnewbusinessdevelopmentwhileprovidingadviceanddirectiontothemanagementtoenabletheGrouptoachieveitscorporategoalandobjectives.

(a) CompositionoftheBoardandBoardBalance

TheBoardmembersareprofessionalsfromdiversedisciplines,tappingtheirrespectivequalificationsandexperiencesinbusiness,commercialandfinancialaspects.Together,theybringawiderangeofcompetencies,experienceandexpertisewhicharevitaltowardstheeffectivedischargeoftheBoard’sresponsibilitiesforthesuccessfuldirectionandgrowthoftheGroup.AbriefprofileofeachDirectorsispresentedontheProfileoftheDirectorsinthisAnnualReport.

TheBoardcurrentlyconsistsof six (6)members,comprisingof two (2)ExecutiveDirectorsand four(4)IndependentNon-ExecutiveDirectors.ThisisinlinewiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”),whichrequirethatatleasttwo(2)orone-third(1/3)oftheBoardmembers,whicheveristhehigher,tobeIndependentDirectors.

The Independent Directors also have the necessary skill and experience to bring an independentjudgment to bear the issues of strategy, performance, resources including key appointments andstandardofconducts.

TheIndependentDirectorsareindependentofmanagementandmajorityshareholders.Theyprovideindependent views and judgment and at the same time, safeguard the interests of parties such asminorityshareholders.NoindividualorgroupofindividualsdominatestheBoard’sdecisionmakingprocessandthenumberofdirectorsfairlyreflectstheinvestmentoftheshareholders.

TherolesoftheChairmanandtheManagingDirectoraredistinguishedandseparated.TheChairmanisresponsibletoensurethat theBoardfunctionsproperlywithgoodcorporategovernancepracticesandprocedures,whilsttheManagingDirectorisresponsiblefortheday-to-dayoperationsandbusinessactivitiesoftheGroupinaccordancewiththestandardpracticessetoutintheBoardCharter.Thisistoensureabalanceofpowerandauthority.

TheBoarddoesnotconsideritnecessarytonominateaSeniorIndependentNon-ExecutiveDirectortowhomconcernsmaybeconveyed.AllmembersoftheBoardhavedemonstratedthattheyarealwaysavailabletomembersandstakeholders.AllissuescanbeopenlydiscussedduringBoardmeetings.TheCompanyisnotmarredwithconflictsandcontroversiesandalsohasnotreceivedanynoticeofmattersofconcernfromstakeholderssinceitslisting.

AllDirectorshavegiven theirundertaking tocomplywith theMainMarketListingRequirementsofBursaSecuritiesandtheIndependentDirectorshaveconfirmedtheirindependenceinwriting.

Corporate GovernanCe statement


SECTION1:THEBOARDOFDIRECTORS(cont’d)

(b) BoardResponsibilities

HavingrecognisedtheimportanceofaneffectiveanddynamicBoard,theBoardmembersareguidedbytheareaofresponsibilitiesasoutlined:-

∙ reviewingandadoptingstrategicplanfortheGroup;

∙ overseeing theconductof theGroup’sbusinesses toevaluatewhether thebusinessesarebeingproperlymanaged;

∙ identifying the principal risks and key performance indicators of the Group’s businesses andensuringthatappropriatesystemsareimplementedand/orstepsaretakentomanagetheserisks;

∙ developingand implementingan investors relationsprogrammeorshareholdercommunicationpolicyfortheGroup;and

∙ reviewingtheadequacyandtheintegrityoftheGroup’sinternalcontrolsystemsandmanagementinformationsystems, includingsystems forcompliancewithapplicable laws, regulations, rules,directivesandguidelines.

(c) Re-ElectionofDirectors

In accordance with the Company’s Article of Associations, all Directors including the ManagingDirector shall retire from the office at least once every three (3) years, but shall be eligible for re-election.DirectorswhoareappointedbytheBoardduringthefinancialyeararesubjecttore-electionbyshareholdersattheAnnualGeneralMeetingfollowingtheirappointment.

(d) Directors’Training

TheGroupacknowledges the fact thatcontinuouseducation isvital for theBoardmembers togaininsightintothestateofeconomy,technologicaladvancesinthecorebusiness,latestregulatoryupdates,andmanagementstrategies.IncompliancewiththeMainMarketListingRequirementsandtherelevantPracticeNoteissuedbyBursaSecurities,allDirectorshaveattendedandsuccessfullycompletedtheirMandatoryAccreditationProgrammewithinthestipulatedtimeframeasprescribedbyBursaSecurities.

Duringthefinancialyearended30June2012,theDirectorshaveattendedthefollowingtrainings:-

Name TitleofTraining Date

DatukKamaludinBinYusoff InvestorRelations& 9April2012 FinancialCommunications

Mr.ChewHonFoong InvestorRelations& 9April2012 FinancialCommunications

Mr.ChewHonKeong InvestorRelations& 9April2012 FinancialCommunications

Mr.YeohChongKeng InvestorRelations& 9April2012 FinancialCommunications

Mr.LeeKimSeng EffectiveOperational& 11May2012 RiskManagement

DatukHairuddinBinMohamed InvestorRelations& 9April2012 FinancialCommunications

Corporate Governance statement (cont’d)




(d) Directors’Training(cont’d)

TheDirectorsarealsoawareoftheirdutytoundergoappropriatetrainingfromtimetotimetoensurethattheyareequippedtocarryouttheirdutieseffectively.TheBoardismindfulthereforeoftheneedto keep abreast of changes in both the regulatory and business environments as well as with newdevelopmentswithintheindustryinwhichtheGroupoperates.Whenevertheneedarises,theCompanywillprovidebriefingstonewrecruitstotheBoard,toensuretheyhaveacomprehensiveunderstandingontheoperationsoftheGroupandtheCompany.

(e) Supplyofinformation

TheBoardhasaformalscheduleofmattersfordecision-makingtoensurethatthedirectionandcontroloftheGroupisfirmlyinitshands.

Prior toeachBoardmeeting,a fullagenda togetherwith relevant reportsandcomprehensiveBoardpapersaredistributedtoallDirectorsinatimelymannertoenabletheDirectorstoconsiderthematterstobedeliberatedandwherenecessary,obtainfurtherinformation.

ProceedingsofBoardmeetingsaredulyrecordedandsignedbytheChairmanofthemeeting.

EveryDirectorhasfullandtimelyaccesstoallGroupinformation,records,documentsandpropertyto enable them to discharge their duties and responsibilities effectively. The Directors, whethercollectivelyorindividually,mayseekindependentprofessionaladviceinfurtheranceoftheirdutiesattheCompany’sexpenses,ifrequired.

(f) BoardMeetings

TheBoardmeetsonaquarterlybasiswithadditionalmeetingstobeheldwhenevernecessary.Therewere five (5)Boardmeetingsheldduring the financialyearended30 June2012and thedetailsofattendanceareasfollows:-

Meetingsattendedby theDirectors/TotalNumberofMeeting heldduringtheFinancialYearEnded NameofDirector 30June2012 %ofAttendance

ExecutiveDirectors Mr.ChewHonFoong 5/5 100% Mr.ChewHonKeong 5/5 100% Non-ExecutiveDirectors DatukKamaludinBinYusoff 5/5 100% DatukHairuddinBinMohamed 5/5 100% Mr.YeohChongKeng 5/5 100% Mr.LeeKimSeng 5/5 100%

Duringthefinancialyearended30June2012,five(5)Boardmeetingswereconvenedon26August2011,17October2011,29November2011,24February2012and24May2012.




(g) BoardCommittees

TheBoardhasestablishedthefollowingCommitteestoassiststheBoardindischargingitsdutiesandresponsibilitieseffectively:

∙ AuditCommittee

∙ NominationCommittee

∙ RemunerationCommittee

ThetermsofreferenceofeachBoardCommitteearesetoutinBoardCharterandhavebeenapprovedbytheBoard.TheseCommitteeshavetheauthoritytoexamineparticularissuesandreporttotheBoardwiththeirrecommendations.However,theultimateresponsibilityforthefinaldecisiononallmatterslieswiththeBoard.

(h) AuditCommittee

ThereportoftheAuditCommitteeissetoutintheAuditCommitteeReportinofthisAnnualReport.

(i) NominationCommittee

OurNominationCommitteewasestablishedon28September2009andthemembersoftheNominationCommitteeconsistofthefollowingmembers:

Name Designation Directorship Mr.YeohChongKeng Chairman IndependentNon-ExecutiveDirector

DatukHairuddinBinMohamed Member IndependentNon-ExecutiveDirector

Mr.LeeKimSeng Member IndependentNon-ExecutiveDirector

ThesummaryofthetermsofreferenceoftheNominationCommitteeareasfollows:

(i) reviewtheBoardstructure,sizeandcomposition;

(ii) nominatecandidatestotheBoardtofillBoardvacancieswhentheyarise;

(iii) recommendDirectorswhoare retiringby rotation tobeput forward forre-election;and

(iv) ensurethatallBoardappointeesundergoanappropriateintroductionandtrainingprogramme.

TheBoardannuallyreviewstherequiredmixofskills,experienceandotherqualitiesoftheDirectorstoensurethattheBoardisfunctioningeffectivelyandefficiently.




(j) RemunerationCommittee

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

Name Designation Directorship Mr.YeohChongKeng Chairman IndependentNon-ExecutiveDirector

DatukKamaludinBinYusoff Member IndependentNon-ExecutiveChairman

Mr.ChewHonFoong Member Managing Director and Group Chief ExecutiveOfficer

Duringthefinancialyearended30June2012,RemunerationCommitteemeetingwereconvenedon5January2012.

ThesummaryofthetermsofreferenceoftheRemunerationCommitteeareasfollows:

(i) recommendtotheBoardtheremunerationoftheDirectors;

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

(iii) assisttheBoardinensuringtheremunerationoftheDirectorscommensuratewiththeresponsibilityandcommitmentoftheDirectorsconcerned.

SECTION2:DIRECTORS’REMUNERATION

(a) RemunerationProcedure

The remunerationof directors is formulated to be competitive and realistic, emphasis beingplacedon performance and calibre, with aims to attract, motivate and retain Directors with the relevantexperience,expertiseandqualityneededtoassistinmanagingtheGroupeffectively.

ForExecutiveDirectors,theremunerationpackageslinkrewardstocorporateandindividualperformancewhilstfortheNon-ExecutiveDirectors,thelevelofremunerationislinkedtotheirexperienceandlevelofresponsibilitiesundertaken.

ThelevelofremunerationfortheExecutiveDirectorsisdeterminedbytheRemunerationCommitteeafter giving due consideration to the compensation levels for comparable positions amongothersimilarMalaysianpublic listedcompanies.Thedeterminationofthe remuneration package of Non-Executive Directors,includingNon-ExecutiveChairmanshouldbeamatterfortheBoardasawhole.Theindividualsconcernedshouldabstainfromdiscussingtheirownremuneration.



SECTION2:DIRECTORS’REMUNERATION(cont’d)

(b) RemunerationPackage

ThedetailsoftheremunerationoftheDirectorsoftheCompanyareasfollows:-

Executive Non-Executive Directors Directors

(RM’000) (RM’000) Emoluments 1,279 22 Directors’fees - 156

ThenumberofDirectorswhoseremunerationfallsintothefollowingbandsisasfollows:- RangeofRemuneration ExecutiveDirectors Non-ExecutiveDirectors BelowRM50,000 - 3 RM50,001–RM100,000 - 1 RM550,001–RM600,000 1 - RM650,001–RM700,000 1 -

SECTION3:SHAREHOLDERS

(a) DialoguebetweenCompanyandInvestors

The Board maintains an effective communications policy that enables both the Board and themanagementtocommunicateeffectivelywithitsshareholders,stakeholdersandthepublic.ThepolicyeffectivelyinterpretstheoperationsoftheGrouptotheshareholdersandaccommodatesfeedbackfromshareholders,whicharefactoredintotheGroup’sbusinessdecision.

TheBoardcommunicatesinformationontheoperations,activitiesandperformanceoftheGrouptotheshareholders,stakeholdersandthepublicthroughthefollowing:-

i. theAnnualReport,whichcontainsthefinancialandoperationalreviewoftheGroup’sbusiness,corporate information, financial statements and informationonAuditCommittee andBoardofDirectors;

ii. variousannouncementsmadetotheBursaSecurities,whichincludeannouncementsonquarterlyresults;

iii. theCompanywebsiteathttp://www.yoongonn.com

iv. meetingswith researchanalysts and fundmanagers togive themabetterunderstandingof thebusinessconductedbytheGroupinparticular,andoftheindustryinwhichtheGroup’sbusinessoperates,ingeneral;and

v. participationinsurveysandresearchconductedbyprofessionalorganisationsasandwhensuchrequestsarise.



SECTION3:SHAREHOLDERS(cont’d)

(b) TheAnnualGeneralMeeting

TheAnnualGeneralMeetingservesasanimportantmeansforshareholderscommunication.NoticeoftheAnnualGeneralMeetingandAnnualReportsaresenttoshareholderstwentyonedayspriortothemeeting.

At eachAnnualGeneralMeeting, the Board presents the progress and performance of theGroup’sbusinessandencouragesattendanceandparticipationofshareholdersduringquestionsandanswerssessions.TheChairmanandtheBoardwillrespondtoallquestionsraisedbytheshareholdersduringtheAnnualGeneralMeeting.

SECTION4:ACCOUNTABILITYANDAUDIT

(a) FinancialReporting

TheBoardaimstoprovideandpresentaclear,balancedandcomprehensiveassessmentoftheGroup’sfinancial performance and prospects through the quarterly announcement of results to the BursaSecuritiesaswellastheChairman’sStatement,reviewofoperationsandannualfinancialstatementsin theAnnualReport.TheAuditCommitteeassists theBoard inensuringaccuracyandadequacyofinformationbyoverseeingandreviewingthefinancialstatementsandquarterlyannouncementspriortothesubmissiontoBursaSecurities.

(b) StatementonDirectors’ResponsibilityinrelationtotheAuditedFinancialStatements

TheDirectorsareresponsibletoensurethattheannualfinancialstatementsaredrawnupinaccordancewiththeapplicableapprovedaccountingstandardsinMalaysiaandCompanies,Act1965.AStatementbytheDirectorsoftheirresponsibilitiesinpreparingthefinancialstatementsissetoutseparatelyonpage37ofthisAnnualReport.

(c) InternalControlandRiskManagement

TheBoardacknowledgestheirresponsibilities for theinternalcontrolsystemof theGroup,coveringnotonlyfinancialcontrolsbutalsocontrolsrelatingtooperations,complianceandriskmanagement.Information of the Group’s internal control and risk management is presented in the Statement ofInternalControlofthisAnnualReport.

(d) RelationshipwiththeAuditors

TheBoardhasestablishedaformalandtransparentprofessionalrelationshipwiththeGroup’sAuditors,bothinternalandexternal.Wheneverthe need arises, the Auditors would highlight to the AuditCommitteeand theBoard fromtime to timeonmatters thatrequiretheBoard’sattention.TheroleoftheAuditCommitteeinrelationtotheauditors,bothinternalandexternalissetoutintheAuditCommitteeReportofthisAnnualReport.

ThiscorporategovernancestatementismadeinaccordancewiththeresolutionoftheBoarddated18October2012


statement on InternaL ControL

Introduction

TheBoardofYoongOnnCorporationBerhadispleasedtoprovidetheStatementofInternalControl(“SIC”)pursuanttoParagraph15.26(b)ofMainMarketListingRequirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). Thisstatement has been prepared in accordance with the Malaysian Code onCorporateGovernancewhichoutlines theprocesses theBoard is toadopt inreviewing theadequacyand integrityof the systemof internalcontrolof theGroup.

BoardofDirectors’Responsibilities

TheBoardacknowledgestheresponsibilityfortheGroup’ssystemofinternalcontrol,whichisdesignedtosafeguardtheshareholders’investmentandtheGroup’sassets.TheBoardalsoaffirmsitscommitmentinrecognizingtheimportanceofaneffectiveandsoundsystemofinternalcontrol.However,thesystemofcontrolisdesignedtomanagerather thaneliminatetheriskof failuretoachievebusinessobjectivesandcanonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatement,fraudorloss.

EnterpriseRiskManagementFramework

The Board has established an Enterprise Risk Management Framework which consists of a structuredapproachcoveringtheidentificationofrisks,assessmentofrisksandreviewingandimplementingstrategiestomitigatethoserisks.

TheBoardhasestablishedanExecutiveCommitteecomprisingofExecutiveDirectorsandSeniorManagementtooverseetheriskmanagementinitiativesoftheGroup.

TheBoard and theAuditCommittee regularly reviews this process to ensure the effectiveness of its riskmanagement.

InternalControlandtheInternalAuditFunction

TheBoardhasoutsourcedtheinternalauditfunctionoftheGrouptoanindependentexternalparty,IBDC(Malaysia)SdnBhdfortheyearended30June2012atacostofRM53,000perannum.

The audit planning memorandum presented annually by the Internal Auditors is adopted by the AuditCommitteetoreviewtheeffectivenessoftheGroup’ssystemofinternalcontrol.

TheGroup’ssystemofinternalcontrolcomprisesbutnotlimitedtothefollowingactivities:-

∙ TheAuditCommitteecomprisessolelyofIndependentNon-ExecutiveDirectorswithfullaccesstoboththeinternalandexternalauditors.AuditCommitteemeetingsareheldseparatelyfromBoardmeetings;

∙ Periodicinternalauditsareconductedbytheinternalauditors tomonitorcompliancetoestablishedprocedures and to review internal controlmeasures. The internal audit reportswouldhighlight anysignificantrisks,noncompliancesandareasforimprovements.

∙ EachcorebusinessprocessfunctionisauditedonarotationalbasisandtheAuditCommitteereviewstheinternalauditissuesidentified,andtogetherwiththeManagementrecommendsimprovementstotheBoard;

∙ Follow-upreviewsareconductedonpreviousauditissueshighlightedtoensurethattherecommendationshighlightedhadbeenaddressedbyManagement.


ReviewoftheStatementbytheExternalAuditors

TheexternalauditorshavereviewedthisSICfortheinclusionintheAnnualReport for thefinancialyearended 30 June 2012. Based on the review, the external auditors believe that nothing has come to theirattentiontocausethemtobelievethattheSICisinconsistentwiththeirunderstandingoftheprocesswhichtheDirectorsoftheBoardoftheCompanyhaveadoptedinthereviewoftheadequacyandintegrityoftheinternalcontroloftheGroup.

ThisStatementofInternalControlismadeinaccordancewiththeresolutionoftheBoarddated18October2012.

statement on Internal Control (cont’d)



TheDirectorsareresponsibleforthepreparationoffinancialstatementswhichgiveatrueandfairviewofthestateofaffairsofYoongOnnCorporationBerhad(“YOCB”)anditssubsidiarycompanies(“theGroup”)asattheendofthefinancialyear,andoftheresultsandcashflowsforthefinancialyearended.

Therefore, inpreparing the financial statementsofYOCBfor theyearended30 June2012, theDirectorshave:

∙ adoptedappropriateaccountingpoliciesandappliedthemonaconsistentbasis;

∙ madejudgmentsandestimatesthatareprudentandreasonable;

∙ ensuredapplicableapprovedaccountingstandardshavebeen followedandanymaterialdepartureshavebeendisclosedandexplainedinthefinancialstatements;and

∙ ensuredthefinancialstatementshavebeenpreparedonagoingconcernbasis.

TheDirectorsareresponsibleforensuringthattheGroupandtheCompanykeepproperaccountingandotherrecordswhichdisclosewithreasonableaccuracythefinancialpositionoftheGroupandtheCompany,andensuringthatthefinancialstatementscomplywiththeprovisionsoftheCompaniesAct,1965.TheDirectorshaveoverallresponsibilitiesfortakingsuchstepstosafeguardtheassetsoftheGroup,andtopreventanddetectfraudandotherirregularities.

ThisabovestatementismadeinaccordancewiththeresolutionpassedattheBoardofDirectors’meetingheldon18October2012.

statement on dIreCtors’ responsIbILIty in relation to the audited financial statements


39 Directors’Report

43 StatementbyDirectors

43 StatutoryDeclaration

44 IndependentAuditors’Report

46 StatementsofFinancialPosition

48 StatementsofProfitorLoss

49 StatementsofComprehensiveIncome

50 StatementsofChangesinEquity

52 StatementsofCashFlows

54 NotestotheFinancialStatements

fInanCIaL statements


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 2012.

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 6 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 owners of the Company 17,277 7,192

DIVIDENDS

The amounts of dividends paid since the end of the previous financial year was as follows:

RM’000

In respect of the financial year ended 30 June 2012:-

Interim single tier dividend of 2.0 sen per ordinary share 3,200

At the forthcoming Annual General Meeting, a final single tier dividend of 1.5 sen per ordinary share amounting to RM2,400,000 in respect of the current financial year will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the financial year ending 30 June 2013.

RESERVES AND PROVISIONS

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

ISSUES OF SHARES AND DEBENTURES During the financial year,

(a) there were no changes in the authorised share capital of the Company;

(b) On 19 October 2011, the Company undertook a bonus issue of 40,000,000 new ordinary shares of RM0.50 each on the basis of one (1) bonus share for every three (3) existing shares held and after the completion of the exercise, the issued and paid-up share capital of the Company increased from RM60,000,000 to RM80,000,000 by the capitalisation of share premium and retained earnings. The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the Company; and

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

DIRECTORS’ REPORT


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 impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

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 impairment losses on receivables 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 33 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.

Directors’ Report (cont’d)


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 FoongChew Hon KeongDatuk Kamaludin Bin YusoffDatuk Hairuddin Bin Mohamed Yeoh Chong KengLee Kim Seng

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 Bought/ At 1.7.2011 Bonus Sold 30.6.2012

Direct Interests Datuk Kamaludin Bin Yusoff 100,000 83,333 - 183,333Yeoh Chong Keng 100,000 44,000 - 144,000Lee Kim Seng 100,000 59,999 - 159,999

Indirect InterestsChew Hon Foong 63,000,000 * 21,000,231 - 84,000,231*Chew Hon Keong 63,000,000 * 21,000,231 - 84,000,231*

* - 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 31 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.

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

DATED 23 OCTOBER 2012

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 46 to 96 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 2012 and of their results and cash flows for the financial year ended on that date.

The supplementary information set out in Note 37, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

DATED 23 OCTOBER 2012

Chew Hon Foong Chew Hon Keong

STATUTORY DECLARATION

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 46 to 96 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 byChew Hon Foong, I/C. No. 590205-10-5731,at Kuala Lumpur in the Federal Territory on this 23 October 2012

Before me Chew Hon FoongDatin Hajah Raihela WanchikNo. W-275Commissioner for Oaths

STATEMENT BY DIRECTORS


Report on the Financial Statements

We have audited the financial statements of Yoong Onn Corporation Berhad, which comprise the statements of financial position as at 30 June 2012 of the Group and of the Company, the statements of profit or loss, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 46 to 96.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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 about 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 of financial statements that give a true and fair view 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 2012 and of their financial performance and cash flows for the financial year then ended.

INDEPENDENT AUDITORS’ REPORTTo 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.

The supplementary information set out in Note 37 on page 97 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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 Ooi Song WanFirm No: AF 1018 Approval No: 2901/10/14 (J)Chartered Accountants Chartered Accountant

23 October 2012

Kuala Lumpur

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


The Group The Company 2012 2011 2012 2011 Note RM’000 RM’000 RM’000 RM’000

ASSETSNON-CURRENT ASSETSInvestments in subsidiaries 6 - - 54,915 54,915Property, plant and equipment 7 39,520 32,712 6 6Goodwill 8 461 637 - -

39,981 33,349 54,921 54,921

CURRENT ASSETS Inventories 9 53,334 39,890 - -Trade receivables 10 28,527 27,060 - -Other receivables, deposits and prepayments 11 4,833 3,451 30 22Tax refundable 197 10 - 10Amount owing by subsidiaries 12 - - 14,597 9,862Short-term investment 13 7,000 6,000 7,000 6,000Deposits with financial institutions 14 16,950 14,490 8,600 9,400Cash and bank balances 5,956 7,521 150 1,138

116,797 98,422 30,377 26,432

TOTAL ASSETS 156,778 131,771 85,298 81,353

STATEMENTS OF FINANCIAL POSITIONAT 30 JUNE 2012

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



EQUITY AND LIABILITIES EQUITYShare capital 15 80,000 60,000 80,000 60,000Share premium 16 - 8,685 - 8,685Merger deficit 17 (44,365) (44,365) - -Revaluation reserve 18 10,237 10,237 - -Retained profits 19 78,614 75,852 5,132 12,455

TOTAL EQUITY 124,486 110,409 85,132 81,140

NON-CURRENT LIABILITIESDeferred tax liabilities 20 1,874 1,898 - -Provision 145 - - -

2,019 1,898 - -

CURRENT LIABILITIESTrade payables 22 1,857 3,220 - -Other payables and accruals 7,227 4,781 152 213Provision for taxation 376 764 14 -Short-term borrowings 23 20,813 10,699 - -

30,273 19,464 166 213

TOTAL LIABILITIES 32,292 21,362 166 213

TOTAL EQUITY AND LIABILITIES 156,778 131,771 85,298 81,353

Statements of Financial PositionAt 30 June 2012 (cont’d)




REVENUE 24 153,913 141,002 9,443 16,749

COST OF SALES (92,393) (81,886) - -

GROSS PROFIT 61,520 59,116 9,443 16,749

OTHER INCOME 1,367 536 813 654

62,887 59,652 10,256 17,403

SELLING AND DISTRIBUTION EXPENSES (9,499) (7,898) (9) (10) ADMINISTRATIVE AND OPERATING EXPENSES (29,066) (25,977) (915) (1,021)

FINANCE COSTS (840) (468) - -

PROFIT BEFORE TAXATION 25 23,482 25,309 9,332 16,372

INCOME TAX EXPENSE 26 (6,205) (7,007) (2,140) (4,127)

PROFIT AFTER TAXATION 17,277 18,302 7,192 12,245

PROFIT AFTER TAXATION ATTRIBUTABLE TO:- Owners of the Company 17,277 18,302 7,192 12,245

EARNINGS PER SHARE (SEN) 27 - Basic 11 11- Diluted N/A N/A

N/A - Not applicable

STATEMENTS OF PROFIT OR LOSSFOR ThE FINANCIAL YEAR ENDED 30 JUNE 2012



The Group The Company 2012 2011 2012 2011 RM’000 RM’000 RM’000 RM’000

PROFIT AFTER TAXATION 17,277 18,302 7,192 12,245

OTHER COMPREHENSIVE INCOME, NET OF TAXSurplus on revaluation of property - 2,736 - -

TOTAL COMPRHENSIVE INCOME FOR THE FINANCIAL YEAR 17,277 21,038 7,192 12,245 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:- Owners of the Company 17,277 21,038 7,192 12,245

STATEMENTS OF COMPREhENSIVE INCOMEFOR ThE FINANCIAL YEAR ENDED 30 JUNE 2012



STATEMENTS OF ChANGES IN EQUITYFOR ThE FINANCIAL YEAR ENDED 30 JUNE 2012

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Non-Distributable Distributable Share Share Retained Total Capital Premium Profits Equity Note RM’000 RM’000 RM’000 RM’000

THE COMPANY

At 1.7.2010 60,000 8,685 2,610 71,295

Profit after taxation / Total comprehensive income for the financial year - - 12,245 12,245

Contributions by and distributions to owners of the Company:- Dividends 28 - - (2,400) (2,400)

At 30.6.2011/1.7.2011 60,000 8,685 12,455 81,140 Profit after taxation / Total comprehensive income for the financial year - - 7,192 7,192 Contributions by and distributions to owners of the Company:- Bonus issue 20,000 (8,685) (11,315) -- Dividends 28 - - (3,200) (3,200)

Balance at 30.6.2012 80,000 - 5,132 85,132

Statements of Changes in EquityFor the Financial Year Ended 30 June 2012 (cont’d)




CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

Profit before taxation 23,482 25,309 9,332 16,372

Adjustments for:- (Writeback)/Allowance for impairment losses on receivables (68) 64 - -Depreciation of property, plant and equipment 2,652 2,504 3 2Writeback of inventories (51) (11) - -Interest expense 840 468 - -Plant and equipment written off 94 15 - -Impairment loss on goodwill 176 - - -Gain on disposal of plant and equipment (9) (14) - -Dividend income - - (8,962) (16,284)Interest income (521) (368) (813) (654)Unrealised gain on foreign exchange (163) (38) - -

Operating profit/(loss) before working capital changes 26,432 27,929 (440) (564)Increase in inventories (13,393) (6,997) - -Increase in trade and other receivables (2,618) (3,969) (7) (6)Increase/(Decrease) in trade and other payables 1,218 2,254 (61) 82Decrease in amount owing by subsidiaries - - 12 29

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES 11,639 19,217 (496) (459)Income tax paid (6,804) (7,909) (126) (59)Interest paid (830) (468) - -

NET CASH FROM/(FOR) OPERATING ACTIVITIES CARRIED FORWARD 4,005 10,840 (622) (518)

STATEMENTS OF CASh FLOWSFOR ThE FINANCIAL YEAR ENDED 30 JUNE 2012




NET CASH FROM/(FOR) OPERATING ACTIVITIES BROUGHT FORWARD 4,005 10,840 (622) (518)

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Interest received 521 368 813 654Dividend received - - 6,971 14,963Additional investment in subsidiaries - - - (7,500)Purchase of plant and equipment (9,572) (2,012) (3) -Proceeds from disposal of plant and equipment 27 151 - -

NET CASH (FOR)/FROM INVESTING ACTIVITIES (9,024) (1,493) 7,781 8,117

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES Drawdown/(Repayment) of bankers’ acceptances 10,171 (1,070) - -(Advances to)/ Repayment from subsidiaries - - (4,747) 1,946Repayment of hire purchase obligation (8) (22) - -Dividends paid (3,200) (4,800) (3,200) (4,800)

NET CASH FROM/(FOR) FINANCING ACTIVITIES 6,963 (5,892) (7,947) (2,854)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,944 3,455 (788) 4,745

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 27,962 24,507 16,538 11,793

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 29 29,906 27,962 15,750 16,538


Statements of Cash FlowsFor the Financial Year Ended 30 June 2012 (cont’d)


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 23 October 2012.

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 6 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. BASIS OF PREPARATION

The financial statements of the Group 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 (“FRS”) and the Companies Act 1965 in Malaysia.

(a) During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments) :-

FRSs and IC Interpretations (including the Consequential Amendments)

Amendments to FRS 1 (Revised): Limited Exemption from Comparative FRS 7 Disclosures for First- time Adopters

Amendments to FRS 1 (Revised): Additional Exemptions for First-time Adopters

Amendments to FRS 2: Group Cash-settled Share-based Payment Transactions

Amendments to FRS 7: Improving Disclosure about Financial Instruments

IC Interpretation 4: Determining Whether An Arrangement Contains a Lease IC Interpretation 18: Transfers of Assets from Customers IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments

Amendments to IC Interpretation 14: Prepayments of a Minimum Funding Requirement Annual Improvement to FRSs (2010)

NOTES TO ThE FINANCIAL STATEMENTSFOR ThE FINANCIAL YEAR ENDED 30 JUNE 2012


Notes to The Financial StatementsFor the Financial Year Ended 30 June 2012 (cont’d)

4. BASIS OF PREPARATION (CONT’D)

(a) During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments) :- (cont’d)

The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Group’s financial statements, other than those that would impact on the form and content of disclosures required in the financial statements.

(i) Amendments to FRS 7 expand the disclosure requirements in respect of fair value measurements

and liquidity risk. In particular, the amendments require additional disclosure of fair value measurements by level of a fair value measurement hierarchy, as shown in the Note 36(e) to the financial statements. Comparatives are not presented by virtue of the exemption given in the amendments.

(ii) Annual Improvements to FRSs (2010) contain amendments to 11 accounting standards that result in accounting changes for presentation, recognition or measurement purposes. These amendments have no material impact on the financial statements of the Group upon their initial application.

Furthermore, the amendments to FRS 101 (Revised) also clarify that an entity may choose to present the analysis of the items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. The Group has chosen to present the items of other comprehensive income in the statement of changes in equity.

(b) The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:-

FRSs and IC Interpretations (including the Consequential Amendments) Effective date FRS 9 Financial Instruments 1 January 2015 FRS 10 Consolidated Financial Statements 1 January 2013 FRS 11 Joint Arrangements 1 January 2013 FRS 12 Disclosure of Interests in Other Entities 1 January 2013 FRS 13 Fair Value Measurement 1 January 2013 FRS 119 (Revised) Employee Benefits 1 January 2013 FRS 124 (Revised) Related Party Disclosures 1 January 2012 FRS 127 (2011) Separate Financial Statements 1 January 2013 FRS 128 (2011) Investments in Associates and Joint Ventures 1 January 2013 Amendments to FRS 1 (Revised): Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2012

Amendments to FRS 1 (Revised): Government Loans 1 January 2013 Amendments to FRS 7: Disclosures – Transfers of Financial Assets 1 January 2012 Amendments to FRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013



4. BASIS OF PREPARATION (CONT’D)

(b) The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:- (cont’d)

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

Amendments to FRS 9: Mandatory Effective Date of FRS 9 and Transition Disclosures 1 January 2015 Amendments to FRS 10, FRS 11 and FRS 12: Transition Guidance 1 January 2013

Amendments to FRS 101 (Revised): Presentation of Items of Other Comprehensive Income 1 July 2012 Amendments to FRS 112: Recovery of Underlying Assets 1 January 2012 Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014 IC Interpretation 15 Agreements for the Construction of Real Estate Withdrawn on 19 November 2011 IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013 Annual improvement 2012 1 January 2013

The Group’s next set of financial statements for the annual period beginning on 1 July 2012 will be prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”) issued by the MASB that will also comply with International Financial Reporting Standards (“IFRSs”). As a result, the Group will not be adopting the above accounting standards and interpretations (including the consequential amendments).

(c) The adoption of MFRSs in the next financial year is expected to have no material impact on the financial statements of the Group upon their initial application.

5. 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.



5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Critical Accounting Estimates And Judgements (Cont’d)

(i) Depreciation of Property, Plant and Equipment (cont’d)

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.

(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 Non-financial 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 management 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) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(v) Writedown of 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) Revaluation of Properties

Certain properties of the Group are reported at valuation which is based on valuations performed by independent professional valuers.

The independent professional valuers have exercised judgement in determining factors used in the valuation process. Also, judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates.




(a) Critical Accounting Estimates And Judgements (Cont’d)

(vii) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill.

(viii) 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/or equity.

(b) Financial Instruments Financial instruments are recognised in the statements of financial position 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.

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.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(i) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

∙ Financial Assets at Fair Value Through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.




(b) Financial Instruments (cont’d)

(i) Financial Assets (con’t’d)

∙ Financial Assets at Fair Value Through Profit or Loss (cont’d)

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Company’s right to receive payment is established.

∙ Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with revenue recognised on an effective yield basis.

∙ Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

∙ Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

(ii) Financial Liabilities

All financial liabilities are initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.




(b) Financial Instruments (cont’d)

(ii) Financial Liabilities (cont’d)

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

(iii) 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.

(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 statement of comprehensive income 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 recognised in profit or loss.

(d) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to end of the reporting period.

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.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Acquisition of businesses are accounted for using the acquisition method other than those resulted in a business combination involving common control entities is outside the scope of FRS 3. The merger accounting is used by the Group to account for such common control business combinations.




(d) Basis of Consolidation (cont’d)

(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) Acquisition method of accounting for non-common control business combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Intragroup transactions, balances, income and expenses are eliminated. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.




(d) Basis of Consolidation (Cont’d)

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the Company’s shareholders’ equity, and are separately disclosed in the consolidated statement of comprehensive income. Transactions with non-controlling interests are accounted for as transactions with owners and are recognised directly in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity and attributed to owners of the parent.

Upon loss of control of a subsidiary, the profit or loss on disposal is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

(e) Goodwill

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 statements of profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, goodwill represents the excess of the fair value of the purchase consideration over the Group’s share of the fair values of the identifiable assets, liabilities and contingent liabilities at the date of acquisition.

If, after reassessment, the Group’s interest in the fair values of the identifiable net assets exceeds the cost of the business combinations, the excess is recognised as income immediately to profit or loss.

(f) Investments in Subsidiaries

Investments in subsidiaries are stated at cost in the statement of financial position of the Company and are reviewed for impairment at the end of the reporting period 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 recognised in profit or loss.




(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. The revaluation of properties is made with sufficient regularity to ensure that the carrying amount does not differ materially from which would be determined using fair value at the end of the reporting period.

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 statement of comprehensive income. In the year of disposal of the revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve account to retained profits.

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of the reporting period to ensure that the amounts, method and periods 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.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

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 statements in the year the asset is derecognised.




(h) Impairment

(i) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity to profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

(ii) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period 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’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss 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.




(h) Impairment (cont’d)

(ii) Impairment of Non-Financial Assets (cont’d)

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 profit or loss immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited to other comprehensive income. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the statements of profit or loss, a reversal of that impairment loss is recognised as income in the statements of profit or loss.

(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 5(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 recognised in profit or loss 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) 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 the end of each reporting period and adjusted to reflect the current best estimate. Where the 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.




(k) Provisions, Contingent Liabilities and Contingent Assets (cont’d)

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.

(l) 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 end of the reporting period.

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.

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 end of the reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination 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.

(m) Borrowing Costs

Borrowing costs directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.




(n) Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

(o) 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.

(p) 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 recognised in profit or loss 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.

(q) 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 venture;(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.




(r) 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, based on effective yield on the investments.

(iii) Dividend Income

Dividends from subsidiaries are recognised when the shareholders’ right to receive is established.

(iv) Management Fees and Rental Income

Management fees and rental income are recognised on an accrual basis.

6. INVESTMENTS IN SUBSIDIARIES

The Company 2012 2011 RM’000 RM’000

Unquoted shares, at cost 54,915 54,915

Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:-

Effective Equity Interest Name of the Companies 2012 2011 Principal Activities

Monsieur (M) Sdn. Bhd. 100% 100% Retailing of home linen and homeware.

Syarikat Yoong Onn Sdn. Bhd. 100% 100% Distribution and trading of home linen and homeware. Elegant Total Home Sdn. Bhd. 100% 100% Distribution and trading of home linen and homeware. Sleep Focus Sdn. Bhd. 100% 100% Design and manufacture of home linen and bedding accessories and trading of home linen.



7. PROPERTY, PLANT AND EQUIPMENT

At Written Off/ Depreciation At 1.7.2011 Additions Disposals Charge 30.6.2012 THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Freehold land 8,650 - - - 8,650 Buildings 16,550 4,561 - (740) 20,371 Plant and machinery 1,142 100 - (279) 963 Factory and warehouse equipment 518 1,434 - (119) 1,833 Motor vehicles 2,718 396 (18) (374) 2,722 Office equipment 1,261 718 (6) (424) 1,549 Electrical appliances 176 500 (8) (115) 553 Renovation 690 819 (27) (395) 1,087 Furniture and fittings 1,007 1,044 (53) (206) 1,792

Total 32,712 9,572 (112) (2,652) 39,520

Additions/ At Revaluation Written Off/ Depreciation At 1.7.2010 Surplus* Disposals Charge 30.6.2011 RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Freehold land 6,662 1,988* - - 8,650 Buildings 16,248 997* - (695) 16,550 Plant and machinery 1,385 226 - (469) 1,142 Factory and warehouse equipment 442 165 (22) (67) 518 Motor vehicles 2,454 646 (45) (337) 2,718 Office equipment 1,201 439 (13) (366) 1,261 Electrical appliances 209 66 (11) (88) 176 Renovation 733 308 (37) (314) 690 Furniture and fittings 1,037 162 (24) (168) 1,007

Total 30,371 4,997 (152) (2,504) 32,712



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

Accumulated Net Book At Cost At Valuation Depreciation Value THE GROUP RM’000 RM’000 RM’000 RM’000

At 30 June 2012

Freehold land - 8,650 - 8,650 Buildings 4,561 18,635 (2,825) 20,371 Plant and machinery 5,748 - (4,785) 963 Factory and warehouse equipment 2,325 - (492) 1,833 Motor vehicles 4,792 - (2,070) 2,722 Office equipment 3,017 - (1,468) 1,549 Electrical appliances 1,070 - (517) 553 Renovation 3,530 - (2,443) 1,087 Furniture and fittings 2,703 - (911) 1,792

27,746 27,285 (15,511) 39,520

At 30 June 2011

Freehold land - 8,650 - 8,650 Buildings - 18,635 (2,085) 16,550 Plant and machinery 5,648 - (4,506) 1,142 Factory and warehouse equipment 891 - (373) 518 Motor vehicles 4,486 - (1,768) 2,718 Office equipment 2,317 - (1,056) 1,261 Electrical appliances 597 - (421) 176 Renovation 4,118 - (3,428) 690 Furniture and fittings 2,351 - (1,344) 1,007

20,408 27,285 (14,981) 32,712




At Depreciation At 1.7.2011 Addition Charge 30.6.2012 THE COMPANY RM’000 RM’000 RM’000 RM’000

Net Book Value Office equipment 6 3 (3) 6

At Depreciation At 1.7.2010 Addition Charge 30.6.2011 RM’000 RM’000 RM’000 RM’000

Net Book Value

Office equipment 8 - (2) 6

At Accumulated Net Book Cost Depreciation Value THE COMPANY RM’000 RM’000 RM’000

At 30 June 2012

Office equipment 12 (6) 6

At Accumulated Net Book Cost Depreciation Value RM’000 RM’000 RM’000

At 30 June 2011

Office equipment 9 (3) 6




The freehold land and buildings have been revalued by a firm of independent professionally qualified valuers in 2011, 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 30.6.2012

Freehold land 3,768 - 3,768 Buildings 17,343 (3,084) 14,259

21,111 (3,084) 18,027

AT 30.6.2011 Freehold land 3,768 - 3,768 Buildings 12,782 (2,635) 10,147

16,550 (2,635) 13,915

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 23 to the financial statements.

8. GOODWILL

The goodwill relates to the retailing segment. The Group reviews goodwill for impairment annually in accordance with its accounting policy.

The Group has assessed the recoverable amount of goodwill using the value-in-use approach and is based on the 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 as follows:-

(a) Budgeted revenue Sales growth rate of 34% 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 50% 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.

Based on the value-in-use calculation, the Group has recognised an impairment loss of approximately RM176,000 at the end of the reporting period.



9. INVENTORIES

The Group 2012 2011 RM’000 RM’000

At cost :- Raw materials 12,857 6,923 Work in progress 2,820 2,124 Finished goods 34,206 26,253 Stock in transit 1,136 2,027

51,019 37,327 At net realisable value:- Raw materials 1,174 1,201 Finished goods 1,141 1,362

2,315 2,563

Total inventories 53,334 39,890

10. TRADE RECEIVABLES

The Group 2012 2011 RM’000 RM’000

Trade receivables 28,540 27,239 Allowance for impairment losses (13) (179)

28,527 27,060

Allowance for impairment losses: At 1 July 2011/2010 (179) (152) Addition during the financial year - (64) Written off during the financial year 98 37 Writeback during the financial year 68 -

(13) (179)

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.



11. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Included in other receivables, deposits and prepayments of the Group is an amount of RM2,831,524 (2011 - RM1,885,690), being deposits made to suppliers for future supply of materials and finished goods.

These deposits shall be recovered by way of set-off against the supply of materials and finished goods.

12. AMOUNT OWING BY SUBSIDIARIES

The amount owing by subsidiaries is non-trade in nature, unsecured, interest-free and repayable on demand, except for an amount of RM14,500,000 (2011 - RM9,783,000) which bore an interest rates of 3.00% (2011 - 2.50% to 3.00%) per annum in accordance with the commercial bank’s 1 month fixed deposit rate. The amounts are to be settled in cash.

13. SHORT-TERM INVESTMENT


Fixed income trust fund, at fair value 7,000 6,000 7,000 6,000

At market value 7,000 6,000 7,000 6,000

The investment in fixed income trust fund represents investment in highly liquid money market, which is readily convertible to a known amount of cash. The effective interest rate is approximately 2.78% (2011 – 2.76%) per annum. The short-term investment is designated as fair value through profit or loss and is measured at fair value.

14. DEPOSITS WITH FINANCIAL INSTITUTIONS

Included in deposits with financial institutions is an amount of RM3,450,219 (2011 – RM3,389,660) pledged to licensed banks for credit facilities granted to the Group.

The effective interest rates of the deposits with financial institutions at the end of the reporting period ranged from 2.20% to 3.06% (2011 - 2.35% to 3.05%) per annum. The deposits have maturity periods ranging from 1 to 30 days (2011 - 1 to 30 days).



15. SHARE CAPITAL

The Company 2012 2011 Number Number Par of Share of Share Value ’000 RM’000 ’000 RM’000

Authorised:

At 30 June 2012/2011 0.50 200,000 100,000 200,000 100,000

The Company 2012 2011 Number Number Par of Share of Share Value ’000 RM’000 ’000 RM’000

Issued and Fully Paid-Up:

At 1 July 2011/2010 0.50 120,000 60,000 120,000 60,000 Bonus issue 0.50 40,000 20,000 - -

At 30 June 2012/2011 0.50 160,000 80,000 120,000 60,000

16. SHARE PREMIUM


At 1 July 2011/2010 8,685 8,685 8,685 8,685 Bonus issue (8,685) - (8,685) -

At 30 June 2012/2011 - 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.

17. 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.



18. 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.

19. RETAINED PROFITS

The Company has elected for the irrevocable option for the single tier tax system. Therefore, at the end of the reporting period, the Company will be able to distribute dividends out of its entire retained profits under the single tier tax system.

20. DEFERRED TAX LIABILITIES


At 1 July 2011/2010 1,898 1,716 - 917 Recognised in statement of comprehensive income: - Profit or loss (Note 26) (24) (67) - (917) - Other comprehensive income - 249 - -

At 30 June 2012/2011 1,874 1,898 - -

The deferred tax liabilities are attributable to the following:-


Surpluses on revaluation of properties 1,528 1,601 - - Accelerated capital allowances on qualifying costs of property, plant and equipment 1,208 1,068 - - Other temporary differences (862) (771) - -

1,874 1,898 - -



21. HIRE PURCHASE PAYABLES

The Group 2012 2011 RM’000 RM’000

Minimum hire purchase payments: - not later than one year - 9 Future finance charges - (1)

Present value of hire purchase payables - 8

The net hire purchase payables repayable in the previous financial year were as follows:-

The Group 2012 2011 RM’000 RM’000

Current (Note 23) : - not later than one year - 8

The hire purchase payables in the previous financial year bore a weighted average effective interest rate of 5.01% per anum.

22. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 120 days.

23. SHORT-TERM BORROWINGS

The Group 2012 2011 RM’000 RM’000

Bankers’ acceptances 20,813 10,642 Hire purchase payables (Note 21) - 8 Bank overdraft - 49

20,813 10,699

The bankers’ acceptances at the end of the reporting period bore interest rates ranging from 4.13% to 4.86% (2011 – 3.86% to 4.56%, bank overdraft at 7.85%) per annum and are secured by:-

(i) a pledge of fixed deposits of the Group; and

(ii) a legal charge of the freehold land and buildings of the Group;



24. REVENUE


Sale of goods 153,913 141,002 - - Management fee - - 481 465 Dividend income - - 8,962 16,284

153,913 141,002 9,443 16,749

25. PROFIT BEFORE TAXATION


Profit before taxation is arrived at after charging/(crediting):

Writeback of inventories (51) (11) - - (Writeback)/Allowance for impairment losses on receivables (68) 64 - - Audit fee: - for the financial year 116 114 27 29 - under provision in the previous financial year 2 1 - 5 Directors’ remuneration: - non-fee emoluments 1,126 989 22 14 - fee 156 168 156 156 - defined contribution plans 133 117 - - - estimated non-monetary benefits-in-kind 42 42 - - Depreciation of property, plant and equipment 2,652 2,504 3 2 Interest expense: - bankers’ acceptances 829 465 - - - hire purchase 1 3 - - - others 10 - - - Plant and equipment written off 94 15 - - Impairment loss on goodwill 176 - - - Rental of premises 4,263 3,617 - - Staff costs: - short-term benefits 21,887 19,388 292 408 - defined contribution plans 1,649 1,573 36 54 - estimated non-monetary benefits-in-kind 68 67 7 7 Gain on foreign exchange: - realised (572) (70) - - - unrealised (163) (38) - - Gain on disposal of plant and equipment (9) (14) - - Interest income (521) (368) (813) (654) Dividend income - - (8,962) (16,284) Rental income (12) (12) - -



26. INCOME TAX EXPENSE


Current tax expense: - for the financial year 6,118 6,633 2,107 5,053 - under/(over) provision in the previous financial year 111 441 33 (9)

6,229 7,074 2,140 5,044

Deferred tax expense (Note 20): - relating to reversal and origination of temporary differences - - - (917) - under provision in the previous financial year (24) (67) - -

(24) (67) - (917)

6,205 7,007 2,140 4,127

During the current financial year, the statutory tax rate remained at 25%.

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


Profit before taxation 23,482 25,309 9,332 16,372

Tax at the statutory tax rate of 25% 5,871 6,327 2,333 4,093

Tax effects of:- Non-taxable gain (372) (16) (298) (8) Non-deductible expenses 632 458 72 51 Double deduction (37) (136) - - Under/(over) provision in the previous financial year: - current tax 111 441 33 (9) - deferred tax - (67) - -

Tax for the financial year 6,205 7,007 2,140 4,127



27. EARNINGS PER SHARE

The basic earnings per share is calculated by dividing the Group’s profit after taxation attributable to owners of the Company of RM17,276,988 (2011 - RM18,302,040) by the weighted average number of ordinary shares in issue during the financial year of 160,000,000 (2011 - 160,000,000).

The diluted earnings per share is not presented as there were no potential dilutive ordinary shares outstanding at the end of the reporting period.

28. DIVIDENDS

The Group/The Company 2012 2011 RM’000 RM’000

Recognised as distribution to owners:- - Interim single tier dividend of 2 sen per ordinary share for the financial year ended 30 June 2012 3,200 - - Final single tier dividend of 2 sen per ordinary share for the financial year ended 30 June 2010 - 2,400

3,200 2,400

Net dividend per share (sen) 2 2

29. CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-


Cash and bank balances 5,956 7,521 150 1,138 Deposits with financial institutions (Note 14) 16,950 14,490 8,600 9,400 Short-term investment 7,000 6,000 7,000 6,000

29,906 28,011 15,750 16,538 Bank overdraft - (49) - -

29,906 27,962 15,750 16,538



30. DIRECTORS’ REMUNERATION


Executive: - non-fee emoluments 1,104 975 - - - fee - 12 - - - defined contribution plan 133 117 - - - estimated non-monetary benefits-in-kind 42 42 - -

1,279 1,146 - -

Non Executive: - non-fee emoluments 22 14 22 14 - fee 156 156 156 156

178 170 178 170

The aggregate amount of emoluments received and receivable by the directors of the Company during the financial year in bands of RM50,000 are as follows:-

Directors’ Number of Directors’ Other Directors Fee Emoluments Total THE GROUP RM’000 RM’000 RM’000

2012

- Below RM50,000 3 108 16 124 - Between RM50,001 and RM100,000 1 48 6 54 - Between RM550,001 and RM600,000 1 - 592 592 - Between RM650,001 and RM700,000 1 - 687 687

6 156 1,301 1,457

2011

- Below RM50,000 3 108 10 118 - Between RM50,001 and RM100,000 1 48 4 52 - Between RM500,001 and RM550,000 1 6 525 531 - Between RM600,001 and RM650,000 1 6 609 615

6 168 1,148 1,316



30. DIRECTORS’ REMUNERATION (CONT’D)

Directors’ Number of Directors’ Other Directors Fee Emoluments Total THE COMPANY RM’000 RM’000 RM’000

2012

- Below RM50,000 3 108 16 124 - Between RM50,001 and RM100,000 1 48 6 54

4 156 22 178

2011 - Below RM50,000 3 108 10 118 - Between RM50,001 and RM100,000 1 48 4 52

4 156 14 170

31. 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.



31. RELATED PARTY DISCLOSURES (CONT’D)

(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:-


Subsidiaries: - Management fees receivable - - 481 465 - Interest income receivable - - 440 400 - Dividend income receivable - - 8,962 16,284 Related parties: - Management fee payable to TanLee Management Services * 120 120 - - - Rental of premises from Yoon Fah Realty Sdn. Bhd. ** 370 450 - - - Sale of goods to The Store Corporation Berhad*** 4,848 4,363 - -

* - 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


Short-term employee benefits 2,733 2,497 174 225 Defined contribution plans 326 298 19 27 Estimated non-monetary benefits-in-kind 111 109 7 7

3,170 2,904 200 259

Included in the short-term employee benefits of the Group is an amount of RM1,278,644 (2011 - RM1,146,500) in respect of the remuneration payable to executive directors as disclosed in Note 30 to the financial statements.



32. OPERATING SEGMENTS

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.

Distribution & The Manufacturing Trading Retailing Elimination Group 2012 RM’000 RM’000 RM’000 RM’000 RM’000

Inter-segment revenue 33,340 14,137 6 (47,483) - External revenue 27,839 103,048 23,026 - 153,913

Total revenue 61,179 117,185 23,032 (47,483) 153,913

Segment results 6,081 17,741 1,051 - 24,873 Unallocated expenses (551)

Operating profits 24,322

Finance costs (518) (313) (9) - (840)

Profit before taxation 23,482 Income tax expense (6,205)

Profit after taxation 17,277

Other information Segment assets 65,835 65,760 9,200 - 140,795

Unallocated assets 15,983

156,778

Segment liabilities 13,501 14,686 1,703 - 29,890 Unallocated liabilities 2,402

32,292



32. OPERATING SEGMENTS (CONT’D)

Distribution & The Manufacturing Trading Retailing Elimination Group 2011 RM’000 RM’000 RM’000 RM’000 RM’000

Inter-segment revenue 28,617 17,726 - (46,343) - External revenue 26,116 93,595 21,291 - 141,002

Total revenue 54,733 111,321 21,291 (46,343) 141,002

Segment results 5,541 18,628 2,385 - 26,554 Unallocated expenses (777)

Operating profits 25,777 Finance costs (374) (94) - - (468)

Profit before taxation 25,309 Income tax expense (7,007)

Profit after taxation 18,302

Other information Segment assets 59,831 50,199 5,165 - 115,195 Unallocated assets 16,576

131,771

Segment liabilities 12,023 5,968 496 - 18,487 Unallocated liabilities 2,875

21,362




Distribution & The Manufacturing Trading Retailing Group RM’000 RM’000 RM’000 RM’000

2012

Capital expenditure 305 6,704 2,560 9,569 Unallocated capital expenditure 3

9,572

Depreciation 1,118 1,057 474 2,649 Unallocated depreciation 3

2,652

Writedown/(Writeback) of inventories (38) (58) 45 (51)

Interest income 72 74 2 148 Unallocated interest income 373

521

Interest expense 518 312 10 840

2011

Capital expenditure 498 1,144 370 2,012

Depreciation 1,062 1,194 246 2,502 Unallocated depreciation 2

2,504

Writedown/(Writeback) of inventories 176 (295) 108 (11)

Interest income 61 52 1 114 Unallocated interest income 254

368

Interest expense 374 94 - 468




GEOGRAPHICAL INFORMATION

No financial information based on geographical location has been presented for non-current assets as these assets are located wholly in Malaysia.

Revenue information based on the geographical location of customers respectively are as follows:

Revenue 2012 2011 RM’000 RM’000

Malaysia 121,696 110,258 Singapore 24,396 23,858 Others 7,821 6,886

153,913 141,002

Major customers

The following are major customers with revenue equal to or more than 10% of the Group’s revenue:

Revenue Segment 2012 2011 RM’000 RM’000

A local departmental store 38,683 31,252 Distribution and trading. An overseas distributor 24,396 23,724 Manufacturing, distribution and trading.

33. 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:-


Unsecured:- Corporate guarantee given to licensed banks for credit facilities granted to its subsidiaries - - 57,070 41,170 Guarantee issued in favour of third parties 799 579 - - Material litigation (a) - - - -



33. CONTINGENT LIABILITIES (CONT’D)

(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”), filled 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 8% 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 Dedandant were lawfully terminated and/or rescinded.

The trial of the suit was completed on 4 August 2009 and the Court delivered its judgement 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 (“Judgement Sum”).

On 28 October 2009, the Plaintiffs had given instructions to their solicitors to file an appeal and an application for stay of execution against the High Court Judge’s judgement dated 27 October 2009. The Notice of Appeal was filed at the Court of Appeal on 10 November 2009 against the judgement of the High Court. The application for stay of execution was dismissed with costs on 26 March 2010. The Court of Appeal has fixed for the hearing of the appeal on 31 October 2011.

On 31 October 2011, the Court of Appeal dismissed the Plaintiff’s appeal with costs to be paid to the Defendant fixed at RM15,000. The said costs of RM15,000 was paid to the Defendant’s solicitors on 2 February 2012. The directors of the Plaintiffs decided not to lodge any appeal against the judgement of the Court of Appeal to the Federal Court.

34. 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 end of the reporting period are as follows:-

2012 2011 RM RM

United States Dollar 3.18 2.99 Singapore Dollar 2.50 2.43 Euro 4.00 4.33

35. CAPITAL COMMITMENTS


Approved and contracted for purchase of property and equipment :- - Retail outlet renovation and display 435 - - -



36. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Financial Risk Management Policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Market Risk

(i) Foreign Currency Risk The Group is exposed to foreign currency risk on transactions and balances that are

denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar and Singapore Dollar. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. On occasion, the Group enters into forward foreign currency contracts to hedge against its foreign currency risk.

The Group’s exposure to foreign currency as compared to its functional currency is as follows:-

United States Singapore Dollar Euro Dollar Total THE GROUP RM’000 RM’000 RM’000 RM’000

2012

Financial assets Trade receivables 2,422 - 5,440 7,862 Cash and bank balances 798 7 219 1,024

3,220 7 5,659 8,886

Financial liabilities Trade payables 259 1 - 260

Currency exposure Net financial assets 2,961 6 5,659 8,626



36. FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management Policies (Cont’d)

(i) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

United States Singapore Dollar Euro Dollar Total THE GROUP RM’000 RM’000 RM’000 RM’000

2011 Financial assets Trade receivables 1,583 - 7,665 9,248 Other receivables and deposits 997 - - 997 Cash and bank balances 799 229 1,561 2,589

3,379 229 9,226 12,834

Financial liabilities Trade payables 1,341 - - 1,341

Currency exposure Net financial assets 2,038 229 9,226 11,493

Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies as at the end of the reporting period, with all other variables held constant:-

The Group The Group 2012 2011 Increase/ Increase/ (Decrease) (Decrease) RM’000 RM’000

Effects on profit after taxation and equity United States Dollar:- - strengthened by 5% 111 76 - weakened by 5% (111) (76)

Singapore Dollar:- - strengthened by 5% 212 346 - weakened by 5% (212) (346)



36. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d)

(i) Market Risk (Cont’d)

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.

Information relating to the Group’s exposure to the interest rate risk of the financial liabilities is disclosed in 36(a)(iii) to the financial statements.

Interest rate risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the interest rates as at the end of the reporting period, with all other variables held constant:-

The Group The Group 2012 2011 Increase/ Increase/ (Decrease) (Decrease) RM’000 RM’000

Effects on profit after taxation and equity

Increase of 100 basis points (bp) 24 73 Decrease of 100 bp (24) (73)

(iii) Equity Price Risk

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

(ii) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment.



36. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d)

(ii) Credit Risk (Cont’d)

Credit risk concentration profile

The Group’s major concentration of credit risk relates to the amounts owing by two (2) customers which constituted approximately 40% of its trade receivables as at the end of the reporting period.

Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period.

The exposure of credit risk for trade receivables by geographical region is as follows:-


Malaysia 20,665 17,812 - - Singapore 5,440 7,665 - - Others 2,422 1,583 - -

28,527 27,060 - -

Ageing analysis

The ageing analysis of the Group’s trade receivables as at end of the reporting period is as follows:-

Gross Individual Carrying Amount Impairment Value THE GROUP RM’000 RM’000 RM’000

2012 Not past due 25,347 - 25,347

Past due: - less than 3 months 2,724 - 2,724 - 3 to 6 months 443 - 443 - over 6 months 26 (13) 13

28,540 (13) 28,527





(ii) Credit Risk (Cont’d)

Ageing analysis (Cont’d)

Gross Individual Carrying Amount Impairment Value THE GROUP RM’000 RM’000 RM’000

2011 Not past due 26,165 (1) 26,164 Past due: - less than 3 months 904 (55) 849 - 3 to 6 months 44 (5) 39 - over 6 months 126 (118) 8 27,239 (179) 27,060

At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

Trade receivables that are past due but not impaired

The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.

Trade receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 180 days, which are deemed to have higher credit risk, are monitored individually.

(iii) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.





(iii) Liquidity Risk (Cont’d)

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

Weighted Average Contractual Effective Carrying Undiscounted Within 1 – 5 Rate Amount Cash Flows 1 Year Years THE GROUP % RM’000 RM’000 RM’000 RM,000

2012 Trade payables - 1,857 1,857 1,857 - Other payables and accruals - 7,372 7,372 7,227 145 Bankers’ acceptances 4.13- 4.86 20,813 20,813 20,813 -

30,042 30,042 29,897 145

2011 Hire purchase payables 5.01 8 9 9 - Trade payables - 3,220 3,220 3,220 - Other payables and accruals - 4,781 4,781 4,781 - Bank overdraft payable 7.85 49 49 49 - Bankers’ acceptances 3.86 - 4.56 10,642 10,642 10,642 -

18,700 18,701 18,701 -

Weighted Average Contractual Effective Carrying Undiscounted Within Rate Amount Cash Flows 1 Year THE COMPANY % RM’000 RM’000 RM’000

2012

Other payables and accruals - 152 152 152

2011 Other payables and accruals - 213 213 213




(b) Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders’ value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.

The Group has insignificant net debt. The debt-to-equity ratio is not presented as it does not provide a meaningful indicator of the risk of borrowings.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity (total equity attributable to owners of the Company) equal to or not less than the 25% of the issued and paid-up share capital and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

(c) Classification Of Financial Instruments


Financial assets

Fair value through profit and loss Short-term investment 7,000 6,000 7,000 6,000

Loans and receivables financial assets Trade receivables 28,527 27,060 - - Other receivables and deposits 1,470 1,201 21 22 Amount owing by subsidiaries - - 14,597 9,862 Deposits with financial institutions 16,950 14,490 8,600 9,400 Cash and bank balances 5,956 7,521 150 1,138

52,903 50,272 23,368 20,422

Financial liabilities

Other financial liabilities Hire purchase payables - 8 - - Bankers’ acceptances 20,813 10,642 - - Trade payables 1,857 3,220 - - Other payables and accruals 7,372 4,781 152 213 Bank overdraft - 49 - -

30,042 18,700 152 213




(d) Fair Values Of Financial Instruments The carrying amounts of the financial assets and financial liabilities reported in the financial

statements approximated their fair values:-

The following summarises the methods used to determine the fair values of the financial instruments:-

(i) The financial assets and financial liabilities maturing within the next 12 months approximated their fair values due to the relatively short-term maturity of the financial instruments.

(ii) The nominal amount and fair value of financial instruments not recognised in the statements of financial position of the Group and of the Company were as follows:-

Nominal Amount Fair Value RM’000 RM’000

THE GROUP At 30 June 2011 Material litigation - *

* It is not practicable to estimate fair value reliably due to uncertainties relating to timing, the costs and the eventual outcome.

(e) Fair Values Hierarchy

The fair values of the financial assets and liabilities are analysed into level 1 to 3 as follows:-

Level 1: Fair value measurements derive from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Fair value measurements derive from inputs other than quoted prices included within level 1 that are observable for the assets or liability, either directly or indirectly.

Level 3: Fair value measurements derive from valuation techniques that include inputs for the asset and liability that are not based on observable market data (unobservable inputs).

The Group has carried its short-term investment that is classified as fair value through profit or loss

at its fair value. This financial asset belongs to Level 2 of the fair value hierarchy.



37. SUPPLEMENTARY INFORMATION – DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES

The breakdown of the retained profits of the Group and of the Company as at the end of the reporting period into realised and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-


Total retained profits - realised 93,516 89,626 5,132 12,455 - unrealised (314) (169) - -

93,202 89,457 5,132 12,455 Less : Consolidated adjustments (14,588) (13,605) - -

At 30 June 78,614 75,852 5,132 12,455


1) Utilisation of Initial Public Offerings (“IPO”) Proceeds

The utilisation of IPO proceed of RM22.15 million was revised vide an announcement on 24 February 2011. As at 30 June 2012, the status of the revised utilisation of the proceeds is as follows :-

Details of the Revised Utilised Balance to Intended timeframe proposed utilisation utilisation to date be utilised for utilisation of proceeds RM’000 RM’000 RM’000 (from the date of Listing) Repayment of 9,000 9,000 - Within 6 months bank borrowing

Local and overseas expansion 1,000 1,000 - Within 24 months

Finance the construction costs of a new warehouse on an existing piece of land owned by the Group 5,000 4,406 594 Within 36 months

Working capital 4,656 4,656 - Within 24 months

Defray listing expenses 2,494 2,494 - Within 6 months

Total 22,150 21,556 594

2) Share Buy-Backs

There was no share buy-backs by the Company during the financial year ended 30 June 2012.

3) Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued during the financial year ended 30 June 2012.

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 2012.

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 services rendered by the External Auditors, Messrs. Crowe Horwath to the Group for the financial year ended 30 June 2012 amounted to RM 30,000.

ADDITIONAL COMPLIANCE INFORMATION


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 2012 and the unaudited results announced on 30 August 2012.

8) Material Contracts with Related Parties

There were no material contracts entered into by the Company and its subsidiaries involving directors’ and major shareholders’ interest which were still subsisting as at the end of the financial year under review or which were entered into since the end of the previous financial year except as disclosed in note 31 of page 82 of the Financial Statements.

9) Corporate Social Responsibility

The Group recognises 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) Charity Works and Donations to Charitable Organisations

The Company has made cash donations to several charitable organisations including Persatuan Kebajikan HOPE worldwide Kuala Lumpur, Montfort Youth Centre, Pertubuhan Orang Cacat Penglihatan Malaysia, Shelter Christian Fellowship For Aid and Welfare Selangor, Yayasan Jantung Malaysia and St. Nicholas’ Home Penang.

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 2012.

Additional Compliance Information (cont’d)


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 statements of profit or loss.

The revaluation policy for landed properties is detailed in Note 5(g) – property, plant and equipment of the Financial Statements in this Annual Report.

12) Recurrent Related Party Transactions

The breakdown of the aggregate value of transactions conducted during the financial year ended 30 June 2012 is as follows:

Transacting Related Amount of Companies Transacting Nature of Transaction within the Group Parties Transaction (RM’000)

Syarikat Yoong Onn Yoon Fah Realty Rental of property 370 Sdn Bhd (“SYOSB”) Sdn Bhd which is currently used as SYOSB’s office cum warehouse Syarikat Yoong Onn The Store Supply of home linen 4,662 Sdn Bhd Corporation products Berhad Elegant Total Home The Store Supply of home linen 186 Sdn Bhd Corporation products Berhad

At the forthcoming Annual General Meeting to be held on 18 December 2012, the Company intends to seek its shareholders’ approval for the 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’ mandate to be sought is set out in the Circular to Shareholders dated 16 November 2012.

Additional Compliance Information (cont’d)


Authorised share capital : RM100,000,000Issued and fully paid-up capital : RM80,000,000Class of shares : Ordinary shares of RM0.50 eachVoting rights : One vote per ordinary share

ANALYSIS BY SIZE OF SHAREHOLDINGS

No. of % of No. of % ofSize of Holdings Shareholders Shareholders Shareholdings Issued Capital

Less than 100 10 1.04 339 *100 to 1,000 442 45.99 128,684 0.08 1,001 to 10,000 291 30.28 1,122,941 0.70 10,001 to 100,000 152 15.82 4,402,827 2.75 100,001 to less than 5% of issued shares 65 6.76 70,344,978 43.97 5% and above of issued shares 1 0.11 84,000,231 52.50

TOTAL 961 100.00 160,000,000 100.00

Note :*- negligible

SUBSTANTIAL SHAREHOLDERS

Name of Shareholder Direct Interest Indirect Interest No. of Shares % No. of Shares % Casatex Cosmo Sdn Bhd 84,000,231 52.50 - -Chew Hon Foong - - 84,000,231 52.50 (a)Chew Hon Keong - - 84,000,231 52.50 (a)Chew Hon Yoong - - 84,000,231 52.50 (a)Chew Hon Yoon - - 84,000,231 52.50 (a)

Note :(a) - Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of

Companies Act, 1965.

DIRECTORS’ SHAREHOLDINGS

No. Directors Direct Interest % Indirect Interest % 1. Datuk Kamaludin Bin Yusoff 183,333 0.11 - -2. Chew Hon Foong - - 84,000,231 52.50 ^3. Chew Hon Keong - - 84,000,231 52.50 ^4. Datuk Hairuddin Bin Mohamed - - - -5. Yeoh Chong Keng 144,000 0.09 - -6. Lee Kim Seng 159,999 0.10 - -

Note :^ - 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 2012


THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS

No. of % of IssuedNo. Name Shares Shares

1. Casatex Cosmo Sdn Bhd 84,000,231 52.50%2. HLB Nominees (Asing) Sdn Bhd 7,866,666 4.92% Wang Shouhu (CUST.SIN91144-4) 3. LembagaTabung Haji 7,840,000 4.90%4. HSBC Nominees (Asing) Sdn Bhd 6,997,700 4.37% Exempt AN for Credit Suisse (SG BR-TST-ASING) 5. Chow Siew Sen 6,198,633 3.87%6. Chan Fook Hong 5,333,333 3.33%7. JF APEX Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Sri Abu Sahid Bin Mohamed (Margin) 3,333,333 2.08% 8. AMSEC Nominees (Tempatan) Sdn Bhd 3,225,066 2.02% Amtrustee Berhad for Pacific Pearl Fund (UT-PM-PPF) 9. Chuah Seng Boon 2,400,000 1.50%10. Chew Swee Tee @ Chew Swee Lee 2,071,431 1.29%11. Chuah Ling Ling 1,440,533 0.90%12. Kok Foong Meng 1,434,533 0.90%13. Chuah Seng Hooi 1,418,133 0.89%14. Ng Yoong Sang 1,333,333 0.83%15. Low Ngan Thai 1,233,333 0.77%16. Lee Chai Hua 1,200,000 0.75%17. CIMSEC Nominees (Tempatan) Sdn Bhd 1,200,000 0.75% CIMB Bank for Chuah Seng Boon (M78029)18. Lim Yan Pok 1,100,000 0.69%19. Lee Meng Yong 1,075,866 0.67%20. Loo Lai Yoke 840,000 0.53%21. Lee Chai Hua 693,333 0.43%22 Chan Yoke Kwan 666,666 0.42%23. CIMSEC Nominees (Tempatan) Sdn Bhd 666,666 0.42% CIMB Bank for Tang Choon Ee (M78030)24. HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Sri Abu Sahid Bin Mohamed 666,666 0.42%25. Dang Chee Wai 533,333 0.33%26. BTS Land Capital Sdn Bhd 500,000 0.31%27. Sun Kien Keong 444,000 0.28%28. Choong Kien Yeong 400,000 0.25%29. Tan Peng 400,000 0.25%30. Master Box Manufacturing Sdn Bhd 400,000 0.25% Total 146,912,788 91.82%

Analysis of ShareholdingsAs at 18 October 2012 (cont’d)


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LIST OF GROUP PROPERTIES


NOTICE IS HEREBY GIVEN THAT the Fifth Annual General Meeting of the Company will be held at Spring 1 Room, Nilai Springs Golf & Country Club, PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul Khusus on Tuesday, 18 December 2012 at 10.00 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS:

NOTICE OF ANNUAL GENERAL MEETING

1. To receive the Audited Financial Statements for the financial year ended 30 June 2012 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fee of RM156,000.00 for the financial year ended 30 June 2012.

3. To re-elect the following Directors who are retiring in accordance with Article 129 of the Company’s Articles of Association:

(a) Chew Hon Keong (b) Lee Kim Seng

4. To declare single tier final dividend 1.5 sen per ordinary share in respect of the financial year ended 30 June 2012.

5. 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:-

6 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.”

7. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“That the mandate granted by the shareholders of the Company on 9 December 2011 pursuant to Paragraph 10.09 of the Main Market Listing Requirements of Bursa Securities Berhad (“Listing Requirements”), authorising the Company and its subsidiaries (“the YOCB Group”) to enter into the recurrent related party transactions of a revenue or trading nature which are necessary for the YOCB Group’s day-to-day operations as set out in Section 2.5 of the Circular to Shareholders dated 16 November 2012 with the related parties mentioned therein , be and is hereby renewed (hereinafter referred to as the “Proposed Shareholders’ Mandate”);

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)


That the Proposed Shareholders’ Mandate is subject to the following:-

(a) the transaction are in the ordinary course of business and are on terms which are not more favourable to the related parties involved than generally available to the public and on terms not to detriment of the minority shareholders of the Company;

(b) disclosure is made in the Annual Report of the aggregate value of transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year where aggregate value is equal to or exceeds the applicable prescribed threshold under the Listing Requirements and/or the relevant Practice Notes; and

(c) annual renewal and such approval shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is 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), whichever is earlier.

AND THAT the Directors of the Company be and are 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’ Mandate.”

8. Proposed Authority for the Company to Purchase Its Own Shares of Up to Ten Percent (10%) of the Issued and Paid-Up Share Capital of the Company (“Proposed Share Buy-Back Authority”)

“THAT, subject to the provisions of Section 67A of the Companies Act, 1965, the Memorandum and Articles of Association of the Company, Part IIIA of the Companies Regulation 1966 and Chapter 12 of the Main Market Listing Requirements of Bursa Securities, the Company be and is hereby authorised to purchase such number of ordinary shares of RM0.50 each in the Company (“Proposed Share Buy-Back Authority”) as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:

(i) the maximum aggregate number of ordinary shares purchased and/or held by the Company as treasury shares shall not exceed ten percent (10%) of the issued and paid up ordinary share capital of the Company at any point in time;

(ii) the maximun funds allocated by the Company for the purpose of purchasing its shares shall not exceed the total retained profits or share premium of the Company. The audited retained profits and share premium of the Company stood at RM5,132,000 and RM nil respectively as at 30 June 2012.

(iii) the Proposed Share Buy-Back once approved by the shareholders of our Company, shall effective from the date of the passing of the ordinary resolution pertaining to the proposed share buy-back at our forthcoming Annual General Meeting (AGM) and shall remain in force until:

(a) the conclusion of the next AGM following the general meeting at which the ordinary resolution pertaining to the Proposed Share Buy-Back was passed, at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or

Notice of Annual General Meeting (cont’d)

(Resolution 9)


(b) the expiration of the period within which the next AGM after that date is required by law to be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of our Company in a general meeting,

whichever occurs first.

AND THAT the Directors of the Company be and are hereby authorised to deal with the shares purchased at their absolute discretion, either partially or fully, in the following manner:

(i) cancelled; or

(ii) retained as treasury shares for distribution as dividends and/or resold on Bursa Securities and/or cancellation subsequently; or

(iii) partly retained and partly cancelled.

In the event the Purchased Shares are held as treasury shares, the rights attached to them as to voting, dividends and participation in other distribution and otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of share in our Company for any purposes including, without limiting the generality of Section 67A of the Act, the provisions of any law or requirements of the Articles or the Listing Requirements on substantial shareholdings, takeover, notice, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting.

AND THAT the Directors of the Company be and are hereby authorised to give effect to the Proposed Share Buy-Back Authority with full power to assent to any modifications and/or amendments as may be required by the relevant authorities.

9. To transact any other business for which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that a final single tier dividend of 1.5 sen per share for the financial year ended 30 June 2012, if approved at the Fifth Annual General Meeting, will be paid on 25 January 2013 to Depositors whose names appear in the Record of Depositors on 9 January 2013.

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Share transferred to the Depositor’s Securities Account before 4.00 p.m. on 9 January 2013 in respect of ordinary transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on the cum entitlement basis according to Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

Dato’ Tang Swee Guan (MIA 5393)Secretary

Kuala Lumpur 16 November 2012



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 7, 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 Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

The proposed Ordinary Resolution 8, if passed, will enable the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature which are necessary for its day-to-day operations and will eliminate the need to convene separate general meeting from time to time to seek shareholders’ approval. This will substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the YOCB Group or adversely affecting the business opportunities available to the YOCB Group.

The detailed information on recurrent related party transactions is set out in the Circular to Shareholders dated 16 November 2012 which is despatched together with this Annual Report.

Proposed Authority for the Company to Purchase Its Own Shares Up to Ten Percent (10%) of the Issued and Paid-Up Share Capital of the Company (“Proposed Share Buy-Back Authority”)

The proposed Ordinary Resolution 9, if passed, will empower the Directors to purchase the Company’s shares of up to 10% of the issued and paid-up share capital of the Company at any point in time, by utilising the funds allocated which shall not exceed the total retains profits and share premium of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting.

Please refer to the Circular to Shareholders dated 16 November 2012 for further information.



Details of Directors Standing for Re-Election

Directors who are standing for re-election at the Fifth 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 (b) Lee Kim Seng

Further details of the above Directors are set out in the Directors’ Profile on page 12 of this Annual Report.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

FORM OF PROXY

Number of Shares Held

For appointment of two proxies, the shareholdings to be represented by the proxies: Proxies % of sharesProxy 1 Proxy 2 Total 100%

No. For Against

1. To receive the Audited Financial Statements

2. To approve the payment of Directors’ fees

3. To re-elect Chew Hon Keong as Director

4. To re-elect Lee Kim Seng as Director5. To declare single tier final dividend 1.5 sen per ordinary share in respect of the financial

year ended 30 June 2012

6. To re-appoint Crowe Horwath as Auditors of the Company

Special business

7. Companies Act, 1965

8. To approve the Proposed Renewal of Existing Shareholders’ Mandate 9. To approve authority for the Company to purchase its own shares

Signed this day of , 2012

Signature of Shareholder

*Strike out whichever not applicable

I/We of

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 FifthAnnual General Meeting of the Company to be held at Spring 1 Room, Nilai Springs Golf & Country Club, PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul Khusus on Tuesday, 18 December 2012 at 10.00 a.m. and at any adjournment thereof.

My/our proxy/proxies is/are to vote as indicated below:

Yoong Onn Corporation Berhad

The Company Secretary

Suite 13 A.01 (A),Level 13A Wisma Goldhill

67 Jalan Raja Chulan50200 Kuala Lumpur

please fold here

please fold here

Affix Stamp

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 repre-sented 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.

www.yoongonn.com

home linenfor homes across

the world.

Yoong Onn C

orporation Berhad (814138-K)

Annual Report 2012

Exc

eptio

nal -

qua

lity

Annual Report2012

Head O�ce & FactoryLot No. PT 16690 - 16692,Jalan Permata 2,Arab-Malaysian Industrial Park,71800 Nilai,Negeri Sembilan, Malaysia


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