FA YOONG ONN.pdf 3/11/10 9:44:57 AM · 85,185 86,808 2009 2008 2007 2006 PROFIT BEFORE TAX...
Transcript of FA YOONG ONN.pdf 3/11/10 9:44:57 AM · 85,185 86,808 2009 2008 2007 2006 PROFIT BEFORE TAX...
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FA YOONG ONN.pdf 3/11/10 9:44:57 AM
02 Corporate Information
04 Corporate Structure
06 Corporate Profile
08 Financial Highlights
10 Our Listing
11 Press Release
12 Board of Directors
13 Profile of Directors
16 Chairman’s Statement
20 Managing Director’s Review
22 Audit Committee Report
27 Corporate Governance Statement
33 Statement on Internal Control
34 Statement on Directors’ Responsibility in Relation
to the Audited Financial Statements
35 Financial Statements
87 Additional Compliance Information
90 Analysis of Shareholdings
92 List of Group Properties
93 Notice of the Third Annual General Meeting
97 Statement Accompanying
Notice of Annual General Meeting
Form of Proxy
Contents
2 YOONG ONN CORPORATION BERHAD (814138-K)
Corporate Information
BOARD OF DIRECTORS
Datuk Kamaludin Bin Yusoff
Independent Non-Executive Chairman
Chew Hon FoongManaging Director and
Group Chief Executive Officer
Chew Hon KeongExecutive Director and
Group Chief Operating Officer
Datuk Hairuddin Bin Mohamed
Independent Non-Executive Director
Yeoh Chong Keng
Independent Non-Executive Director
Lee Kim Seng
Independent Non-Executive Director
AUDIT COMMITTEE
Lee Kim Seng Chairman
Yeoh Chong Keng
Datuk Hairuddin Bin Mohamed
NOMINATION COMMITTEE
Yeoh Chong Keng Chairman
Datuk Hairuddin Bin Mohamed
Lee Kim Seng
REMUNERATION COMMITTEE
Yeoh Chong Keng Chairman
Datuk Kamaludin Bin Yusoff
Chew Hon Foong
COMPANY SECRETARIES
Dato’ Tang Swee Guan (MIA 5393)
Cheong Sin Yee (f) (MAICSA 7052271)
REGISTERED OFFICE
Suite 13A.01(A) Level 13A
Wisma Goldhill
67 Jalan Raja Chulan
50200 Kuala Lumpur
Tel (603) 2032 2895
Fax (603) 2032 2893
HEAD OFFICE
Lot No. PT 16690-16692
Jalan Permata 2
Arab-Malaysian Industrial Park
71800 Nilai
Negeri Sembilan Darul Khusus
Tel (606) 799 6012
Fax (606) 799 7015
Website www.yoongonn.com
SHARE REGISTRAR
Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya, Selangor
Tel (603) 7841 8000
Fax (603) 7841 8008
PRINCIPAL BANKERS
AmBank (M) Berhad
Hong Leong Bank Berhad
Standard Chartered Bank Malaysia Berhad
United Overseas Bank (Malaysia) Bhd
AUDITORS
Crowe Horwath (AF 1018)
(Formerly known as Horwath)
SOLICITORS
Iza Ng Yeoh & Kit
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia
Securities Berhad
Sector : Consumer Products
Stock Name: YOCB
Stock Code: 5159
INVESTORS RELATIONS
AND ENQUIRIES
Jon Tan Peng
Email [email protected]
Tel (603) 9172 5012
3ANNUAL REPORT 2010
Global
Acclaimed quality products reaching the masses
and affluent customers around the globe.
100%
SLEEP FOCUS SDN BHD
401252-V
Design / Manufacturingand Trading
100%
SYARIKATYOONG ONN
SDN BHD171966-W
Distribution /Trading and
Institutional Supply
100%
ELEGANTTOTAL HOME
SDN BHD268537-K
Distributionand
Trading
100%
MONSIEUR (M) SDN BHD
121889-W
Retailing
YOONG ONN CORPORATION BERHAD(814138-K)
Corporate Structure
A dynamic and exceptional place to work where
exceptional people come together and part with
exceptional ideas and products.
People with passion to
YOONG ONN CORPORATION BERHAD (814138-K)4
5ANNUAL REPORT 2010
A multitude of Brands andProducts, you're never short of inspiration to create yourhome the way you want it.
Corporate Profile
Yoong Onn Corporation Berhad (“YOCB”) was incorporated in Malaysia as a public limited company on
17 April 2008 under the Companies Act, 1965.
The principal activities of YOCB are that of investment holding company and provision of management services
whilst our wholly-owned subsidiaries are principally involved in design, manufacturing, distribution, retailing and
trading of home linen, homeware and bedding accessories.
Since our inception in 1960s, we have established our reputation in the home linen industry and have since
become one of the major companies involved in the design, manufacture and specialised retailing of home linen
and homeware in Malaysia.
Our Group is primarily an integrated manufacturer and distributor of our own brands of home linen. Our
manufacturing activities are focused on bed and bath linen, bedding accessories and curtains.
We undertake our own in-house design, which is supplemented by purchases from international independent
design houses to provide a variety of designs and help address diverse trends especially in overseas countries.
Our Group is also a supplier of homeware, which complements our own manufactured home linen and bedding
accessories. The homeware are externally sourced products which include:
(a) Bed and bath linen;
(b) Bed, bath, living room and kitchen accessories;
(c) Rugs, carpets and floor mats; and
(d) Other homeware.
6 YOONG ONN CORPORATION BERHAD (814138-K)
corporate profilecontinued
7ANNUAL REPORT 2010
Our Group’s core revenue streams are derived from:
(a) Design, manufacturing and distribution of home linen and bedding accessories;
(b) Retailing of home linen and homeware; and
(c) Trading of home linen and homeware.
Our integrated design and manufacturing facilities enable us to be a one-stop supply centre for home linen and
bedding accessories particularly for our trade customers.
Our Group markets all our home linen under fourteen (14) brand names namely, Diana, Novelle, Jean Perry, Louis
Casa, Genova, Firenze, RedDanielle, BedTalk, Cotonsoft, Niki Cains, Oasis, Ann Taylor, Sarah Miller and Season.
Our Group’s target markets are:
(a) Retailers (including departmental stores, hypermarkets, supermarkets and specialty stores);
(b) Mass end-consumer market (through our fully owned retail outlets);
(c) Institutions (including hotels, resorts, hostels, hospitals, royal customs and military accommodations, and
cruise ships); and
(d) Intermediaries (including distributors and importers).
As at 30 June 2010, we have thirteen (13) fully owned retail outlets and one (1) retail outlet that is fully owned
and managed by an appointed dealer under the “Home’s Harmony” brand name. Our Group’s in-house
manufactured home linen and bedding accessories are available in another seventy eight (78) consignment
counters with departmental stores, hypermarkets, supermarkets and specialty stores in Malaysia. We also supply
to hotels, clubs, resorts, hospitals etc via our authorized agents.
Our Group’s in-house manufactured home linen and bedding accessories are also available in more than fifty
(50) third party retail locations in overseas countries like Singapore, Taiwan and Vietnam. We also currently export
our products to many overseas countries and for the Financial Year Ended 30 June 2010, our products were
sold in eleven (11) overseas countries namely Australia, Brunei, Dubai, Fiji, Japan, Papua New Guinea, New
Caledonia, Singapore, Taiwan, Turkey and Vietnam.
On 23 December 2009, Yoong Onn Corporation Berhad was listed on the Main Market of the Bursa Malaysia
Securities Berhad.
REVENUE(RM’000)
0
30
60
90
120
150
2010
127,541 130,084
102,200
85,185 86,808
2009 2008 2007 2006
PROFITBEFORE TAX(RM’000)
0
5
10
15
20
25
2010
21,66318,645
13,704
10,4348,468
2009 2008 2007 2006
PROFIT AFTER TAX(RM’000)
0
5
10
15
20
2010
15,528
13,881
10,706
7,249
6,136
2009 2008 2007 2006
TOTAL SHARE-HOLDERS’ EQUITY(RM’000)
0
20
40
60
80
100
2010
91,771
60,973
39,31733,612
28,822
2009 2008 2007 2006
Financial Highlights 2010
Pro-forma
30 June 06 30 June 07 30 June 08 30 June 09 30 June 10
Revenue (RM’000) 86,808 85,185 102,200 130,084 127,541
Profit before tax (RM’000) 8,468 10,434 13,704 18,645 21,663
Profit after tax (RM’000) 6,136 7,249 10,706 13,881 15,528
Total shareholders’ equity (RM’000) 28,822 33,612 39,317 60,973 91,771
YOONG ONN CORPORATION BERHAD (814138-K)8
9ANNUAL REPORT 2010
Focus on
Dedicated to quality and excellence,
ensuring consumers receive the
products they rightfully deserve.
Our Listing
10 YOONG ONN CORPORATION BERHAD (814138-K)
11ANNUAL REPORT 2010
Press Release
12 YOONG ONN CORPORATION BERHAD (814138-K)
Board of Directors
BOARD OF DIRECTORS (from right to left)
1. Datuk Kamaludin Bin Yusoff
Independent Non-Executive Chairman
2. Chew Hon FoongManaging Director and
Group Chief Executive Officer
3. Chew Hon KeongExecutive Director and
Group Chief Operating Officer
4 Datuk Hairuddin Bin MohamedIndependent Non-Executive Director
5. Yeoh Chong KengIndependent Non-Executive Director
6. Lee Kim Seng
Independent Non-Executive Director
3. 2. 1.
6.5. 4.
13ANNUAL REPORT 2010
Profile of Directors
DATUK KAMALUDIN BIN YUSOFF (Independent Non-Executive Chairman / Malaysian)
Datuk Kamaludin Bin Yusoff, aged 62, was appointed to the Board of Yoong Onn Corporation Berhad on
28 September 2009. He is also a member of the Remuneration Committee of the Company.
He holds a BA (Honours) from University Malaya in 1974. Datuk Kamaludin started his career in 1974 as an
Administrative and Diplomatic Officer in the public sector and subsequently, he held various distinguished
positions in the Ministry of Finance, Ministry of Defence, Road Transport Department and Ministry of
Entrepreneur Development. In appreciation to his services, Datuk Kamaludin has been awarded with various
accolades. In 2000, he was awarded the Bintang Panglima Gemilang Darjah Kinabalu (P.G.D.K) which carries
the title “Datuk”.
Datuk Kamaludin also sits on several boards in the corporate sector. From 2004 to 2007, he was the Chief
Operating Officer of Fomema Sdn Bhd. He is currently the Chairman of Johore Tin Berhad, Executive Vice
Chairman of Loh & Loh Constructions Sdn Bhd (a subsidiary company of Loh & Loh Corporation Berhad),
Executive Director of Supremme Systems Sdn Bhd and also holds directorship in other private limited companies.
CHEW HON FOONG (Managing Director and Group Chief Executive Officer / Malaysian)
Chew Hon Foong, aged 51, was appointed to the Board of Yoong Onn Corporation Berhad on 17 April 2008.
He is also a member of the Remuneration Committee of the Company.
As the co-founder, he has more than thirty (30) years of experience in the home linen industry. He has been
instrumental in the development, growth and success of the Yoong Onn Corporation Berhad Group during his
tenure with the Group.
He started his career in 1979 when he joined Yoon On, a partnership company, which is involved in trading
and retailing of textiles and home linen. With his strong business acumen, he was involved in developing and
creating own brands of bed linen which was marketed under the names Diana and Novelle in 1982.
In 1988, together with his brother, Chew Hon Keong, he established Syarikat Yoong Onn Sdn Bhd and took
over the entire business of the partnership company, Yoon On. His main intention is to expand the business to
include international trades. Besides overseeing the Group activities, he is actively involved in creating fabric
designs for both the mass and niche markets. He has extensive experience in the development and creation
of home linen designs and he is currently heading the Group’s in-house design team. He is mainly responsible
for the overall operations of the Group with emphasis on strategic business planning and promoting brand
equity of products.
He does not have any other directorships of public companies.
CHEW HON KEONG (Executive Director and Group Chief Operating Officer / Malaysian)
Chew Hon Keong, aged 50, is the co-founder and was appointed to the Board of Yoong Onn Corporation
Berhad on 17 April 2008.
He has more than thirty (30) years of experience in the home linen industry. His career started in 1979 when he
joined Yoon On, a partnership, which is involved in trading and retailing of textiles and home linen. He also
assisted in establishing Syarikat Yoong Onn Sdn Bhd in 1988.
profile of directorscontinued
14 YOONG ONN CORPORATION BERHAD (814138-K)
CHEW HON KEONG continued
As the other partner of Yoon On, he was also involved in many aspects of the business in textiles and home
linen, which includes technical specification in fabrics. His capability has enabled the Company to develop new
range of product to cater for different markets and industries.
With an in-depth knowledge in the production processes, he together with his brother, Chew Hon Foong were
involved in the establishment of Sleep Focus Sdn Bhd in 1996 and the construction of Nilai manufacturing plant
for the Group’s manufacturing operations. He is primarily responsible in overseeing the overall management
and strategic business development of the Group with emphasis on product development and product
research.
He does not have any other directorships of public companies.
DATUK HAIRUDDIN BIN MOHAMED (Independent Non-Executive Director / Malaysian)
Datuk Hairuddin Bin Mohamed, aged 60, was appointed to the Board of Yoong Onn Corporation Berhad on
28 September 2009. He is also a member of the Audit Committee and Nomination Committee of the Company.
Datuk Hairuddin obtained his Bachelor in Social Science (Honours) from Universiti Sains Malaysia in 1980. He
joined the Royal Malaysian Police Force in 1970. He was since promoted to various senior positions. He was
appointed the Director of Commercial Crime Department in Royal Malaysia Police in 2005, a position he held
until his retirement in 2006. During his tenure as Head of Commercial Crime Department, he was appointed to
be a member of the High Powered Corporate Governance Committee to oversee all government-linked
companies in the country. He has wide experience in fraud detection and commercial crime investigation.
He currently serves as an Independent Director on the board of BIMB Holdings Berhad, Formis Resources
Berhad, Triumphal Associates Bhd, ISS Consulting Solutions Berhad and several other private companies.
YEOH CHONG KENG (Independent Non-Executive Director / Malaysian)
Yeoh Chong Keng, aged 58, who is a lawyer by profession and was appointed to the Board of Yoong Onn
Corporation Berhad on 28 September 2009. He also serves as the Chairman of the Nomination Committee
and Remuneration Committee and a member of the Audit Committee of the Company.
He obtained his Barrister-at-law from Lincoln’s Inn, England in 1980. He was a senior police officer in the Royal
Malaysian Police Force before proceeding to study law at Lincoln’s Inn, England. He was called to the English
Bar and Malaysian Bar in 1980 and 1981 respectively and is the Managing Partner of a legal firm in Kuala
Lumpur. He has also acted as counsel for the Government of Hong Kong. He is an experienced lawyer
specialising in corporate and banking law.
He has, in the past served as an Independent Director in several public listed companies. Since 14 February
2000, he is an Independent Director of The Store Corporation Berhad. He is also the Chairman of the
Nomination Committee and serves as a member in the Audit Committee and Remuneration Committee of The
Store Corporation Berhad.
He is also currently an Independent Director of Tokio Marine Life Insurance Bhd. He has held this position since
2002 and is the Chairman of the Risk Management and Nomination Committee as well as member of the
Audit Committee.
profile of directorscontinued
15ANNUAL REPORT 2010
LEE KIM SENG (Independent Non-Executive Director / Malaysian)
Lee Kim Seng, aged 64, was appointed to the Board of Yoong Onn Corporation Berhad on 28 September
2009. He also serves as the Chairman of the Audit Committee and a member of the Nominee Committee of
the Company.
He is a member of the Malaysian Institute of Accountants, Malaysian Institute of Taxation and The Institute of
Internal Auditors, Malaysia. He was previously a member of the Institute of Chartered Accountants in England
and Wales.
He has more than thirty (30) years of relevant working experience in the various services encompassing
upstream and downstream industries. He joined Harrisons & Crosfield (Sabah) Sdn. Bhd. in 1976 as a Senior
Accountant. He was subsequently transferred to Harrisons & Crosfield (Malaysia) Sdn. Bhd. in 1980 and after
a year, he was promoted to Chief Accountant. Thereafter, he was promoted to Associate Director (Finance) in
1986.
In 1987, he joined SP Holdings Ltd. in Papua New Guinea. Thereafter, in 1990, he joined a plantation group
Raja Garuda Mas (“RGM”) based in Medan, Indonesia. In 1993, he was promoted to Group Financial Controller
of the Forestry Division of the RGM group. In 1996, he was transferred to a joint-venture oil palm plantation
group, jointly owned by the RGM and the SALIM group. In 1997 after completing his assignment, he was then
transferred to a public listed subsidiary of RGM group as Senior Financial Controller.
In 2004, he joined Sinar Mas Group (“SMG”) as Vice-President of Internal Audit of a forestry group operating in
Riau, Sumatera. He was then transferred to the position of Vice-President Business Control in 2005. After a
year, he was transferred to the head office of SMG, Jakarta, as an adviser to Managing Director-Finance,
Forestry Division until his retirement in 2008.
He does not have any other directorships of public listed companies.
Currently, he is involved in engineering and construction as well as in the mining business.
Notes to Profile of Directors :
1. Chew Hon Keong is the brother of Chew Hon
Foong.
Save as disclosed, none of the directors has any
family relationship with any director of the
Company.
2. Save for Chew Hon Foong, Chew Hon Keong
and Yeoh Chong Keng, who have interest in
recurrent related party transactions as disclosed
in item 12 under additional compliance
information in this Annual Report, none of the
directors has any conflict of interest with the
Company.
3. None of the directors has been convicted of any
offences within the past ten (10) years other than
traffic offences, if any.
4. Please refer to the analysis of shareholdings of
this Annual Report for details of the directors’
shareholdings in the Company.
5. All directors attended all the two (2) Board
meetings of the Company held during the financial
year ended 30 June 2010 since its official listing
on Bursa Malaysia Securities Berhad on 23
December 2009.
Chairman’s
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present the maiden
Annual Report of Yoong Onn Corporation Berhad (“YOCB” or “the Group”)
for the financial year ended 30 June 2010 as a public listed company.
16 YOONG ONN CORPORATION BERHAD (814138-K)
REVIEW OF FINANCIAL PERFORMANCE
Despite the adverse economic situation around the globe, I am delighted to report that the
Group made an impressive profit before tax of RM21.7 million from a turnover of 127.5
million. This compares favourably with the pro-forma profit of RM18.6 million from a turnover
of RM130.1 million.
The results elevated the net profit attribute to shareholders to RM15.5 million from the
pro-forma figure of RM13.9 million.
STATUS OF UTILISATION OF INITIAL PUBLIC OFFERING (“IPO”) PROCEEDS
YOCB was successfully listed on the Main Market of Bursa Malaysia Securities Berhad on
23 December 2009 with over-subscription rates of 12.6 times.
The Group’s IPO raised a total of RM22.15 million from the public issue of 25,170,740
ordinary shares at 88 sen each. The status of utilisation as at 30 June 2010 is as follows:
Balance
Approved Actual pending
Utilisation Utilisation utilisation
RM’000 RM’000 RM’000
Repayment of bank borrowings 9,000 9,000 -
Local and overseas expansion 6,000 150 5,850
Working capital 3,650 3,650 -
Defray estimated listing expenses ^ 3,500 3,500 -
22,150 16,300 5,850
^ Unutilized estimated listing expenses of approximately RM1.0 million were used for working capital
17ANNUAL REPORT 2010
18 YOONG ONN CORPORATION BERHAD (814138-K)
chairman’s statementcontinued
OPERATION REVIEW
Presently, the Group’s products are sold in over 10 countries through various channels and trading partnerships.
Customers from other countries such as Australia, Dubai, Fiji, Japan, Papua New Guinea, and New Caledonia
have increased their orders and extended current purchase contracts into the next few years. Loyal customers
from Singapore, Brunei and Taiwan remained committed to the Group, and have put in orders for new and
innovative products.
The Group have also established a good trading partner in Vietnam, who share the same vision and aspiration
of the Group. They are operating through Departmental stores, hypermarkets, and retail chain, similar to the
marketing network of the Group. It is certain that contribution from the Vietnam customer will increase
significantly over the next two to three years, as the country itself is seeing a boom in economic prospects.
A strategic part of our expansion program is the development of innovative and ground breaking products
catering to the affluent market and customers. With this objective, the Advertising and Promotion Department
have been upgraded and strengthened to propel this market segment that will surely grow significantly in line
with the Government’s vision to transform our country to a high income nation.
DIVIDEND
In tandem with the Group’s commitment to increase shareholders returns, the Board is pleased to recommend a
final single tier tax exempt dividend of 2.0 sen per ordinary share (“Final dividend”) for this financial year ended 30
June 2010 for shareholders’ approval in the forthcoming Annual General Meeting. This makes a total dividend of
7.0 sen, in addition to the interim dividend paid earlier on 05 April 2010 (3.0 sen), and on 08 July 2010 (2.0 sen).
All in, since listing of the Group on 23 December 2009, the Group’s 7.0 sen dividend will total to RM8.4 million,
representing approximately 54% of the Group’s net profit for the financial year ended 30 June 2010.
In this respect, the Group will continue to enhance returns to shareholders whilst seeing that appropriate funds
are set aside for other purposes such as capital expenditure and for working capital.
19ANNUAL REPORT 2010
chairman’s statementcontinued
OUTLOOK AND PROSPECTS
Irrespective of the Group’s prudent approach and planned strategies, the global forces driving the world
economies cannot be undermined. In a period where economic uncertainties prevail, we are fortunate to possess
strong fundamentals that not only allowed us to withstand adverse trading conditions but have also enabled us
to seize several timely opportunities.
With a committed global pursuit, amidst stochastic and unexpected turn of global events, we have formulated
contingent plans that have so far proved resilient and effective. With a dynamic team of leaders and capable
staff, I am certain the Group will move on to be a recognized name internationally and locally alike.
ACKNOWLEDGEMENT
On behalf of the Board, I extend my heartfelt thanks to our shareholders, customers, business associates,
trading partners, suppliers, bankers and government authorities for the trust and confidence in Yoong Onn
Corporation Berhad.
I would also like to thank my fellow board members, the management team and staff for their dedication,
invaluable contribution and commitment to achieve where we are today.
Datuk Kamaludin Bin Yusoff
Chairman
Managing Director’s Review
OPERATIONS
This has been an exciting yet daunting year for me as a Managing Director and Group Chief Executive Officer
of the Group. I am happy to note the Group has progressed in many ways, notwithstanding the many challenges
facing the local industry and the incessant global economic instability.
Apart from the splendid financial results, we have also made advancements in
market penetration and in products development. These are important
features in a highly competitive industry like ours. It is my belief that these
new developments will pave the way for future growth in a market that
perhaps is rife with too many similar products.
Another notable achievement is the establishment of a trading partner in
Vietnam. In the humble beginning of our first trade with them, we stressed
that business in Vietnam is viable and has multitude platforms for expansion.
Convincingly, our customer finally opened out their business and took our
branding formulas to enter departmental stores, hypermarkets and planned to
start retail boutiques soon. I find this positive tenacity of our Vietnamese trading
partner very encouraging. Similarly, I expect contribution from this country to
grow significantly in the coming years. Above all, the success of this partnership
will provide the impetus for my team to move into other South East Asia nations.
Dear Shareholders,
I am pleased to present the first
review of operations of Yoong
Onn Corporation Berhad
(“ YOCB” or “the Group”)
as a public listed company.
20 YOONG ONN CORPORATION BERHAD (814138-K)
21ANNUAL REPORT 2010
FUTURE OUTLOOK AND DEVELOPMENTDuring the year we took an ambitious stride to bring in higher margin products for the upper echelon customers.The feedback is reassuring with double digit growth in this category. Reinforcing our confidence we stepped upproduct development, which include reinforcing the Advertising and Promotion team. Our aim to cater for thehigh end customers is quite timely as this vision falls in line with the government’s objective to transform Malaysiato a high income nation. Another positive element is the government’s initiatives to make Malaysia a shoppingdestination. The recent budget announcement has seen some very attractive enticements like lowering of salestax and duties on luxury goods. All these augurs well with the Group’s plan and vision.
Foreign customers are also looking for innovative products. Perhaps global markets are moving in tandem withsimilar changes and customers’ expectation. This is certainly a positive aspect as we can take advantage offavorable price negotiation for our raw materials, which remains unstable throughout the year.
Complementing products development, we also need to improve on skill development among the severalhundreds of employees. Marketing staff are now trained in technical areas on product issues that are necessaryto educate customers as well as making a convincing sell. Production and operation staff are sent for coursesto upgrade their skill and to learn quality cognition methods in products. Technical staff are similarly sent abroadto bring back new ideas and techniques.
Although there are early signs of an economic upturn, yet we leave nothing to chance as forces of nature canvery well wreck any likelihood of a full recovery without forewarn signals. Our previous experiences have preparedus to face such eventualities as we did the last couple of years. We have been resilient to many adverse situationslike soaring cotton prices of late, caused by the forces of nature. The Group recent financial results are testamentof our strong management acumen backed by strong fundamentals that are quintessential to a wavering marketexpectations and demands.
APPRECIATIONOn behalf of the Board of Directors, I wish to thank our shareholders, customers, business associates, suppliers,bankers and government authorities for their co-operation, continued support and confidence in YOCB.
I’ve enjoyed working with my team of fellow directors, management and operational staff. May I thank you allfor your support and I certainly look towards a more fruitful year ahead with all of you.
Chew Hon FoongManaging Director and Group Chief Executive Officer
Audit Committee Report
22 YOONG ONN CORPORATION BERHAD (814138-K)
The Audit Committee of Yoong Onn Corporation Berhad is pleased to present the Audit Committee Report for
the financial year ended 30 June 2010.
COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee was established on 28 September 2009 and the members of the Audit Committee consist
of the following members:
Name Designation Directorship
Mr. Lee Kim Seng Chairman Independent Non-Executive Director
Datuk Hairuddin Bin Mohamed Member Independent Non-Executive Director
Mr. Yeoh Chong Keng Member Independent Non-Executive Director
TERMS OF REFERENCE OF AUDIT COMMITTEE
(a) Terms of Membership
The Audit Committee shall be appointed by the Board of Directors amongst its members and consist of at
least three (3) members, of whom all must be Non-Executive Directors with a majority of them being
Independent Directors. The Chairman, who shall be elected by the Audit Committee, must be an
Independent Director.
The Committee shall include one member who is a member of the Malaysian Institute of Accountants
(“MIA”); or if he is not a member of the MIA, he must have at least three (3) years’ working experience and
he must have passed the examinations specified in Part 1 of the First Schedule of the Accountants Act
1967; or he must be a member of one of the associations of accountants specified in Part II of the First
Schedule of the Accountants Act 1967; or he must hold a degree/master/doctorate in accounting or finance
and have at least 3 years’ post qualification experience in accounting or finance; or he must have at least
7 years’ experience being a chief financial officer of a corporation or having the function of being primarily
responsible for the management of the financial affairs of a corporation or fulfills such other requirements
as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).
In the event of any vacancy in the Audit Committee resulting in the non-compliance with the Listing
Requirements of Bursa Securities, the Board shall appoint a new member within three (3) months.
23ANNUAL REPORT 2010
audit committee reportcontinued
TERMS OF REFERENCE OF AUDIT COMMITTEE continued
(a) Terms of Membership continued
The Board of Directors shall review the term of office and the performance of an Audit Committee and each
of its members at least once in every three (3) years.
No alternate Director shall be appointed as a member of the Audit Committee.
(b) Meetings and Quorum of the Audit Committee
In order to form a quorum in respect of a meeting of the Audit Committee, the majority of the members
present must be Independent Directors. The Company Secretary shall act as secretary of the Audit
Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and
circulating it prior to each meeting.
The Audit Committee met two (2) times during the financial year ended 30 June 2010. The details of the
attendance of the meetings are disclosed under the heading “Attendance of the Audit Committee Meetings”
on page 25 of this Annual Report.
The Audit Committee may require the attendance of any management staff from Finance/Accounts
Department or other departments deemed necessary together with a representative or representatives from
the external auditors and/or internal auditors.
In all two (2) meetings, the Chief Financial Officer was present to report on the results of the Group as well
as to answer questions posed by the Audit Committee in relation to the results to be announced. During
these Audit Committee meetings, representatives from the internal auditors had also been present to provide
updates on the progress of internal audit work that have been conducted to date, and to also provide
comments and recommendations, where applicable to improve the risk management framework supporting
the activities of the Group.
In any event, should the external auditors request, the Chairman of the Audit Committee shall convene a
meeting of the committee to consider any matter the external auditors believe should be brought to the
attention of the Directors or shareholders.
24 YOONG ONN CORPORATION BERHAD (814138-K)
audit committee reportcontinued
TERMS OF REFERENCE OF AUDIT COMMITTEE continued
(c) Functions of the Audit Committee
The duties and responsibilities of the Audit Committee include the following :-
1. to consider the appointment of the external auditor, the audit fee and any questions of resignation or
dismissal;
2. to discuss with the external auditor before the audit commences, the nature and scope of the audit,
and ensure co-ordination where more than one audit firm is involved;
3. to discuss with the external auditor on the evaluation of the system of internal controls and the
assistance given by the employees to the external auditors;
4. to review and report to the Board if there is reason (supported by grounds) to believe that the external
auditor is not suitable for reappointment;
5. to review the quarterly and year-end financial statements of the Company and Group prior to the
approval of the Board, focusing particularly on :
a. changes in or implementation of major accounting policies and practices;
b. significant adjustments arising from the audit;
c. the going concern assumption; and
d. compliance with accounting standards and other legal requirements.
6. to discuss problems and reservations arising from the interim and final audit, and any matter the
auditors may wish to discuss (in the absence of the management where necessary);
7. to review the external auditor’s management letter and management’s response;
8. to do the following in relation to the internal audit functions:-
a. review the adequacy of the scope, functions, competency and resources of the internal audit
function, and that it has the necessary authority to carry out its work;
b. review the internal audit programme and the results of the internal audit processes or investigation
undertaken and where necessary to ensure the appropriate action is taken on the
recommendations of the internal audit function;
c. review any appraisal or assessment of the performance of the internal audit function;
d. approve any appointment or termination of the internal auditor ;
e. inform itself of resignations of internal auditor and provide the resigning internal auditor an
opportunity to submit his reasons for resigning.
9. to review any related party transactions and conflict of interest situation that may arise within the
Company or the Group;
10. to consider the major findings of internal investigations and the management’s response; and
11. to consider any other functions or duties as may be agreed by the Committee and the Board.
25ANNUAL REPORT 2010
audit committee reportcontinued
TERMS OF REFERENCE OF AUDIT COMMITTEE continued
(d) Rights of the Audit Committee
The Audit Committee has ensured that it shall, wherever necessary and reasonable for the performance of
its duties and in accordance with a procedure determined by the Board :-
1. have authority to investigate any matter within its terms of reference;
2. have the resources which are required to perform its duties;
3. have full and unrestricted access to any information pertaining to the Company and Group;
4. have direct communication channels with the external auditors and person(s) carrying out the internal
audit function or activity (if any);
5. be able to obtain independent professional or other advice when needed; and
6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the
attendance of other directors and employees of the Group, whenever deemed necessary.
(e) Procedure of Audit Committee
The Audit Committee regulates its own procedures by :-
1. the calling of meetings;
2. the notice to be given of such meetings;
3. the voting and proceedings of such meetings;
4. the keeping of minutes; and
5. the custody, protection and inspection of such minutes.
(f) Review of the Audit Committee
The Board of Directors shall ensure that the term of office and performance of the Audit Committee and
each of its members are being reviewed at least once in every three years to determine whether such an
Audit Committee and members have carried out their duties in accordance with their terms of reference.
(g) Attendance of the Audit Committee Meetings
The details of attendance of each Audit Committee member in the Audit Committee meetings held during
the financial year ended 30 June 2010 are as follows :-
Meeting attended by the
Directors/Total Number of
Meeting held during the
financial year ended % of
Name 30 June 2010 Attendance
Mr. Lee Kim Seng 2/2 100%
Datuk Hairuddin Bin Mohamed 2/2 100%
Mr. Yeoh Chong Keng 2/2 100%
YOONG ONN CORPORATION BERHAD (814138-K)26
audit committee reportcontinued
TERMS OF REFERENCE OF AUDIT COMMITTEE continued
(h) Summaries of Activities of the Audit Committee
During the financial year up to the date of this Report, the Audit Committee carried out the following activities
in discharging their duties and responsibilities:
1. Control
evaluated the overall effectiveness of the system of internal control through the review of the results of
work performed by the internal and external auditors and discussions with the key management.
2. Financial Results
reviewed quarterly results and audited annual financial statements of the Group and Company before
recommending to the Board for release to Bursa Securities. The review should focus primarily on :
a) major judgmental areas, significant and unusual events;
b) significant adjustments resulting from audit;
c) the going concern assumptions;
d) compliance with applicable approved accounting standards in Malaysia; and
e) compliance with Listing Requirements of Bursa Securities and other regulatory requirements.
3. External Audit
a) reviewed with the external auditors, their audit plan for the financial year ended 30 June 2010 to
ensure that their scope of work adequately covers the activities of the Group;
b) reviewed the results and issues arising from their audit of the annual financial statements and their
resolution of such issues as highlighted in their report to the Committee; and
c) reviewed their performance and independence before recommending to the Board their
reappointment and remuneration.
4. Internal Audit
a) reviewed with the internal auditors, their audit plan for the financial year ended 30 June 2010
ensuring that principal risk areas were adequately identified and covered the plan;
b) reviewed the recommendations by internal audit, representations made and corrective actions
taken by the management in addressing and resolving issues as well as ensuring that all issues
were adequately addressed on a timely basis;
c) reviewed the competencies of the internal auditors to execute the plan, the audit programs used
in the execution of the internal audit work and results of their work; and
d) reviewed the adequacy of the terms of reference of internal audit.
27ANNUAL REPORT 2010
Corporate Governance Statement
The Board of Directors (“the Board”) of Yoong Onn Corporation Berhad (“the Company” or “YOCB”) is fully
committed to promote and achieve the highest standard of corporate governance and to ensure that the
principles and best practices in corporate governance as detailed in the Malaysian Code on Corporate
Governance (“the Code”) are practised and adopted in YOCB and its subsidiaries (“the Group”).
The Board continuously evaluates the Group’s corporate governance practices and procedures with a view to
adopt and implement the principles and best practices as recommended by the Code, wherever applicable, as
a fundamental part of discharging its duties and responsibilities to protect and enhance shareholders’ value.
The Board believes that good corporate governance results in creation of long term value and benefits for all
shareholders.
SECTION 1 : THE BOARD OF DIRECTORS
The Board takes full responsibilities for the performance of the Group and guides the Group towards achieving
its short and long term objectives, setting corporate strategies for growth and new business development while
providing advice and direction to the management to enable the Group to achieve its corporate goal and
objectives.
(a) Composition of the Board and Board Balance
The Board members are professionals from diverse disciplines, tapping their respective qualifications
and experiences in business, commercial and financial aspects. Together, they bring a wide range of
competencies, experience and expertise which are vital towards the effective discharge of the Board’s
responsibilities for the successful direction and growth of the Group. A brief profile of each Directors is
presented on the Profile of the Directors in this Annual Report.
The Board currently consists of six (6) members, comprising of two (2) Executive Directors and four (4)
Independent Non-Executive Directors. This is in line with the Main Market Listing Requirements of Bursa
Malaysia Securities Berhad (“Bursa Securities”), which require that at least two (2) or one-third (1/3) of the
Board members, whichever is the higher, to be Independent Directors.
The Independent Directors also have the necessary skill and experience to bring an independent judgment
to bear the issues of strategy, performance, resources including key appointments and standard of
conducts.
The Independent Directors are independent of management and majority shareholders. They provide
independent views and judgment and at the same time, safeguard the interests of parties such as minority
shareholders. No individual or group of individuals dominates the Board’s decision making and the number
of directors fairly reflects the investment of the shareholders.
The roles of the Chairman and the Managing Director are distinguished and separated. The Chairman is
responsible to ensure that the Board functions properly with good corporate governance practices and
procedures, whilst the Managing Director is responsible for the day-to-day operations and business activities
of the Group in accordance with the standard practices set out in the Board Charter. This is to ensure a
balance of power and authority.
The Board does not consider it necessary to nominate a Senior Independent Non-Executive Director to
whom concerns may be conveyed. All members of the Board have demonstrated that they are always
available to members and stakeholders. All issues can be openly discussed during Board meetings. The
Company is not marred with conflicts and controversies and also has not received any notice of matters of
concern from stakeholders since its listing.
All Directors have given their undertaking to comply with the Main Market Listing Requirements of Bursa
Securities and the Independent Directors have confirmed their independence in writing.
28 YOONG ONN CORPORATION BERHAD (814138-K)
corporate governance statementcontinued
SECTION 1 : THE BOARD OF DIRECTORS continued
(b) Board Responsibilities
Having recognised the importance of an effective and dynamic Board, the Board members are guided by
the area of responsibilities as outlined :-
• reviewing and adopting strategic plan for the Group;
• overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being
properly managed;
• identifying the principal risks and key performance indicators of the Group’s businesses and ensuring
that appropriate systems are implemented and/or steps are taken to manage these risks;
• developing and implementing an investors relations programme or shareholder communication policy
for the Group; and
• reviewing the adequacy and the integrity of the Group’s internal control systems and management
information systems, including systems for compliance with applicable laws, regulations, rules,
directives and guidelines.
(c) Re-Election of Directors
In accordance with the Company’s Article of Associations, all Directors including the Managing Director
shall retire from the office at least once every three (3) years, but shall be eligible for re-election. Directors
who are appointed by the Board during the financial year are subject to re-election by shareholders at the
Annual General Meeting following their appointment.
(d) Directors’ Training
The Group acknowledges the fact that continuous education is vital for the Board members to gain insight
into the state of economy, technological advances in the core business, latest regulatory updates, and
management strategies. In compliance with the Main Market Listing Requirements and the relevant Practice
Note issued by Bursa Securities, all Directors have attended and successfully completed their Mandatory
Accreditation Programme within the stipulated time frame as prescribed by Bursa Securities.
During the financial year ended 30 June 2010, the Directors have attended the following trainings:-
Name Title of Training Date
Datuk Kamaludin Bin Yusoff 2010 Budget & Tax Planning Seminar 29 October 2009
Mr. Chew Hon Foong Mandatory Accreditation Programme 14 & 15 April 2010
Mr. Chew Hon Keong Mandatory Accreditation Programme 17 & 18 March 2010
Mr. Lee Kim Seng Mandatory Accreditation Programme 17 & 18 March 2010
Datuk Hairuddin Bin Mohamed Legal & Shariah Issues In Islamic 10 May to
Banking Products 12 May 2010
Datuk Hairuddin Bin Mohamed The Regional Cambridge International 22 June to
Symposium on Economic Crime 2010 24 June 2010
Mr. Yeoh Chong Keng had not attended any training during the financial year due to his busy schedule and
he will attend the relevant training in 2011.
The Directors are also aware of their duty to undergo appropriate training from time to time to ensure that
they are equipped to carry out their duties effectively. The Board is mindful therefore of the need to keep
abreast of changes in both the regulatory and business environments as well as with new developments
within the industry in which the Group operates. Whenever the need arises, the Company provides briefings
of new recruits to the Board, to ensure they have a comprehensive understanding on the operations of the
Group and the Company.
29ANNUAL REPORT 2010
corporate governance statementcontinued
SECTION 1 : THE BOARD OF DIRECTORS continued
(e) Supply of information
The Board has a formal schedule of matters for decision-making to ensure that the direction and control of
the Group is firmly in its hands.
Prior to each Board meeting, a full agenda together with relevant reports and comprehensive Board papers
would be distributed to all Directors in a timely basis to enable the Directors to consider the matters to be
deliberated and where necessary, obtain further information.
Proceedings of Board meetings are duly recorded and signed by the Chairman of the meeting.
Every Directors has full and timely access to all Group information, records, documents and property to
enable them in discharge their duties and responsibilities effectively. The Directors, whether collectively or
individually, may seek independent professional advice in furtherance of their duties at the Company’s
expenses, if required.
(f) Board Meetings
The Board meets on a quarterly basis with additional meetings held whenever necessary. There were two
(2) Board meetings held during the financial year ended 30 June 2010 and the details of attendance are as
follows :-
Meetings attended by the
Directors/Total Number of
Meeting held during the
Financial Year Ended
Name of Director 30 June 2010 % of Attendance
Executive Directors
Mr. Chew Hon Foong 2/2 100%
Mr. Chew Hon Keong 2/2 100%
Non-Executive Directors
Datuk Kamaludin Bin Yusoff 2/2 100%
Datuk Hairuddin Bin Mohamed 2/2 100%
Mr. Yeoh Chong Keng 2/2 100%
Mr. Lee Kim Seng 2/2 100%
During the financial year ended 30 June 2010, two (2) Board meetings were convened on 23 February 2010
and 27 May 2010 since its official listing on Bursa Securities on 23 December 2009.
(g) Board Committees
The Board has established the following Committees to assists the Board in discharging its duties and
responsibilities effectively :
• Audit Committee
• Nomination Committee
• Remuneration Committee
The terms of reference of each Board Committee are set out in Board Charter and have been approved by the
Board. These Committees have the authority to examine particular issues and report to the Board with their
recommendations. However, the ultimate responsibility for the final decision on all matters lies with the Board.
30 YOONG ONN CORPORATION BERHAD (814138-K)
corporate governance statementcontinued
SECTION 1 : THE BOARD OF DIRECTORS continued
(h) Audit Committee
The report of the Audit Committee is set out in the Audit Committee Report in of this Annual Report.
(i) Nomination Committee
Our Nomination Committee was established on 28 September 2009 and the members of the Nomination
Committee consist of the following members:
Name Designation Directorship
Mr. Yeoh Chong Keng Chairman Independent Non-Executive Director
Datuk Hairuddin Bin Mohamed Member Independent Non-Executive Director
Mr. Lee Kim Seng Member Independent Non-Executive Director
The summary of the terms of reference of the Nomination Committee are as follows:
(i) review the Board structure, size and composition;
(ii) nominate candidates to the Board to fill Board vacancies when they arise;
(iii) recommend Directors who are retiring by rotation to be put forward for re-election; and
(iv) ensure that all Board appointees undergo an appropriate introduction and training programme.
The Board annually reviews the required mix of skills, experience and other qualities of the Directors to
ensure that the Board is functioning effectively and efficiently.
(j) Remuneration Committee
Our Remuneration Committee was established on 28 September 2009 and the members of the
Remuneration Committee consist of the following members:
Name Designation Directorship
Mr. Yeoh Chong Keng Chairman Independent Non-Executive Director
Datuk Kamaludin Bin Yusoff Member Independent Non-Executive Chairman
Mr. Chew Hon Foong Member Managing Director and
Group Chief Executive Officer
The summary of the terms of reference of the Remuneration Committee are as follows:
(i) recommend to the Board the remuneration of the Directors;
(ii) assist the Board in assessing the responsibility and commitment undertaken by the Board membership;
and
(iii) assist the Board in ensuring the remuneration of the Directors commensurate with the responsibility
and commitment of the Directors concerned.
SECTION 2 : DIRECTORS’ REMUNERATION
(a) Remuneration Procedure
The remuneration of directors is formulated to be competitive and realistic, emphasis being placed on
performance and calibre, with aims to attract, motivate and retain Directors with the relevant experience,
expertise and quality needed to assist in managing the Group effectively.
31ANNUAL REPORT 2010
corporate governance statementcontinued
SECTION 2 : DIRECTORS’ REMUNERATION continued
(a) Remuneration Procedure continued
For Executive Directors, the remuneration packages link rewards to corporate and individual performance
whilst for the Non-Executive Directors, the level of remuneration is linked to their experience and level of
responsibilities undertaken.
The level of remuneration for the Executive Directors is determined by the Remuneration Committee after
giving due consideration to the compensation levels for comparable positions among other similar Malaysian
public listed companies. The determination of the remuneration package of Non-Executive Directors,
including Non-Executive Chairman should be a matter for the Board as a whole. The individuals concerned
should abstain from discussing their own remuneration.
(b) Remuneration Package
The details of the remuneration of the Directors of the Company are as follows:-
Executive Non-Executive
Directors Directors
(RM’000) (RM’000)
Emoluments 1,022 4
Directors’ fee 72 91
The number of Directors whose remuneration falls into the following bands is as follows:-
Executive Non-Executive
Range of Remuneration Directors Directors
Below RM50,000 - 4
RM500,001 - RM550,000 1 -
RM550,001 - RM600,000 1 -
SECTION 3 : SHAREHOLDERS
(a) Dialogue between Company and Investors
The Board maintains an effective communications policy that enables both the Board and the management
to communicate effectively with its shareholders, stakeholders and the public. The policy effectively interprets
the operations of the Group to the shareholders and accommodates feedback from shareholders, which
are factored into the Group’s business decision.
The Board communicates information on the operations, activities and performance of the Group to the
shareholders, stakeholders and the public through the following :-
i. the Annual Report, which contains the financial and operational review of the Group’s business,
corporate information, financial statements and information on Audit Committee and Board of Directors;
ii. various announcements made to the Bursa Securities, which include announcements on quarterly
results;
iii. the Company website at http://www.yoongonn.com;
iv. meetings with research analysts and fund managers to give them a better understanding of the
business conducted by the Group in particular, and of the industry in which the Group’s business
operates, in general; and
v. participation in surveys and research conducted by professional organisations as and when such
requests arise.
corporate governance statementcontinued
32 YOONG ONN CORPORATION BERHAD (814138-K)
SECTION 3 : SHAREHOLDERS continued
(b) The Annual General Meeting
The Annual General Meeting serves as an important means for shareholders communication. Notice of the
Annual General Meeting and Annual Reports are sent to shareholders twenty one days prior to the meeting.
At each Annual General Meeting, the Board presents the progress and performance of the Group’s business
and encourages attendance and participation of shareholders during questions and answers sessions. The
Chairman and the Board will respond to all questions raised by the shareholders during the Annual General
Meeting.
SECTION 4 : ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s
financial performance and prospects through the quarterly announcement of results to the Bursa Securities
as well as the Chairman’s Statement, review of operations and annual financial statements in the Annual
Report. The Audit Committee assists the Board in ensuring accuracy and adequacy of information by
overseeing and reviewing the financial statements and quarterly announcements prior to the submission to
Bursa Securities.
(b) Statement on Directors’ Responsibility in relation to the Audited Financial Statements
The Directors are responsible to ensure that the annual financial statements are drawn up in accordance
with the applicable approved accounting standards in Malaysia and Companies, Act 1965. A Statement by
the Directors of their responsibilities in preparing the financial statements is set out separately on page 34
of this Annual Report.
(c) Internal Control and Risk Management
The Board acknowledges their responsibilities for the internal control system of the Group, covering not
only financial controls but also controls relating to operations, compliance and risk management. Information
of the Group’s internal control and risk management is presented in the Statement of Internal Control of
this Annual Report.
(d) Relationship with the Auditors
The Board has established a formal and transparent professional relationship with the Group’s Auditors,
both internal and external. Whenever the need arises, the Auditors would highlight to the Audit Committee
and the Board from time to time on matters that require the Board’s attention. The role of the Audit
Committee in relation to the auditors, both internal and external is set out in the Audit Committee Report
of this Annual Report.
This corporate governance statement is made in accordance with the resolution of the Board dated 19 October 2010.
33ANNUAL REPORT 2010
Statement on Internal Control
INTRODUCTION
The Board of Yoong Onn Corporation Berhad is pleased to provide the Statement of Internal Control (“SIC”)
pursuant to Paragraph 15.26(b) of Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa
Securities”). This statement has been prepared in accordance with the Malaysian Code on Corporate Governance
which outlines the processes the Board is to adopt in reviewing the adequacy and integrity of the system of internal
control of the Group.
BOARD OF DIRECTORS’ RESPONSIBILITIES
The Board acknowledges the responsibility for the Group’s system of internal control, which is designed to
safeguard the shareholders’ investment and the Group’s assets. The Board also affirms its commitment in
recognizing the importance of an effective and sound system of internal control. However, the system of control is
designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide
reasonable and not absolute assurance against material misstatement, fraud or loss.
The Board also acknowledges the need to establish an ongoing process for identifying, evaluating and managing
significant risks faced by the Group and to regularly review this process with the Statement on Internal Control.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
The Board has established an enterprise-wide approach to risk management and has established a Risk
Management Framework to continually identify and update the various risk factors that could have a potentially
significant impact on the Group’s business objectives. The Board through the Audit Committee which is assisted
by the internal auditors, regularly reviews this process.
INTERNAL CONTROL AND THE INTERNAL AUDIT FUNCTION
The Board has outsourced the internal audit function of the Group to an independent external party, IBDC (Malaysia)
Sdn Bhd for the year ended 30 June 2010 at a cost of RM45,000 per annum. The internal auditors conduct reviews
of the key functions of the Group on a risk based approach and submit quarterly reports for the review of the
Board. A three (3) year audit plan has been adopted by the Audit Committee to continuously review the
effectiveness of the Group’s system of internal control and mitigate risk areas of financial risk, operational controls
and risk management compliance.
The Group’s system of internal control comprises but not limited to the following activities:-
• The Audit Committee comprises solely of Independent Non-Executive Directors with full access to both the
internal and external auditors. Audit Committee meetings are held separately from Board meetings;
• Delegation of responsibilities are clearly defined to the Audit Committee and the management to ensure that
appropriate risk management and internal control procedures are in place;
• Periodic internal audits are conducted by the internal auditors to monitor compliance with operating
procedures and corporate governance with significant risks highlighted for the management and Board’s
attention;
• The Audit Committee oversees risk management issues of the Group and reviews the risk register which
identifies new risks and develops the risk mitigating strategies and the related internal control measures;
• The Audit Committee reviews the internal audit issues identified, and together with the management and with
the assistance of the internal auditors devises action plans to rectify the weaknesses. Follow-up reviews are
also conducted to ensure that the recommendations have been implemented accordingly.
REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS
The external auditors has reviewed this SIC for the inclusion in the Annual Report for the financial year ended 30
June 2010. Based on the review, the external auditors believe that nothing has come to their attention to cause
them to believe that the SIC is inconsistent with their understanding of the process which the Directors of the Board
of the Company have adopted in the review of the adequacy and integrity of the internal control of the Group.
This Statement of Internal Control is made in accordance with the resolution of the Board dated 19 October 2010.
Statement on Directors’ Responsibility in relation to the Audited Financial Statements
34 YOONG ONN CORPORATION BERHAD (814138-K)
The Directors are responsible for the preparation of financial statements which give a true and fair view of the
state of affairs of Yoong Onn Corporation Berhad (“YOCB”) and its subsidiary companies (“the Group”) as
at the end of the financial year, and of the results and cash flows for the financial year ended.
Therefore, in preparing the financial statements of YOCB for the year ended 30 June 2010, the Directors have :
• adopted appropriate accounting policies and applied them on a consistent basis;
• made judgments and estimates that are prudent and reasonable;
• ensured applicable approved accounting standards have been followed and any material departures have
been disclosed and explained in the financial statements; and
• ensured the financial statements have been prepared on a going concern basis.
The Directors are responsible for ensuring that the Group and the Company keep proper accounting and other
records which disclose with reasonable accuracy the financial position of the Group and the Company, and
ensuring that the financial statements comply with the provisions of the Companies Act 1965. The Directors
have overall responsibilities for taking such steps to safeguard the assets of the Group, and to prevent and
detect fraud and other irregularities.
This above statement is made in accordance with the resolution passed at the Board of Directors’ meeting held
on 19 October 2010.
36 Directors’ Report
41 Statement by Directors
41 Statutory Declaration
42 Independent Auditors’ Report
44 Balance Sheets
46 Income Statements
47 Statements of Changes In Equity
49 Cash Flow Statements
51 Notes to the Financial Statements
Financial Statements
36 YOONG ONN CORPORATION BERHAD (814138-K)
Directors’ Report
The directors hereby submit their report and the audited financial statements of the Group and of the Company
for the financial year ended 30 June 2010.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding and the provision of management
services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There have
been no significant changes in the nature of these activities during the financial year.
RESULTS
The Group The Company
RM’000 RM’000
Profit after taxation attributable to equity holders
of the Company 15,528 8,617
DIVIDENDS
The amount of dividends declared or paid since the end of the previous financial year was as follows:
RM’000
Paid:-
First interim dividend of 3.0 sen per ordinary share comprising
approximately 0.436 sen tax exempt dividend per ordinary share and
approximately 2.564 sen single tier dividend per ordinary share for the
current financial year 3,600
Declared:-
Second interim single tier dividend of 2 sen per ordinary share for the
current financial year 2,400
6,000
The directors recommend the payment of a final single tier dividend of 2 sen per ordinary share amounting to
RM2,400,000 to be approved by the shareholders at the forthcoming Annual General Meeting. The dividend
will be accounted for as a liability in the period when it is approved by the shareholders.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the financial
statements.
37ANNUAL REPORT 2010
directors’ reportcontinued
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) the Company increased its authorised share capital from RM100,000 comprising 200,000 ordinary shares
of RM0.50 each to RM100,000,000 comprising 200,000,000 ordinary shares of RM0.50 each by the
creation of 199,800,000 new ordinary shares of RM0.50 each;
(b) the Company increased its issued and paid-up share capital from RM2 to RM60,000,000 as part of its
flotation scheme on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The issued
and paid-up share capital was increased in the following manner:-
(i) Acquisition of Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”)
Acquisition of the entire issued and paid-up share capital of SYOSB comprising 2,000,000 ordinary
shares of RM1.00 each for a total purchase consideration of RM36,528,771 satisfied by the issuance
of 73,057,542 new ordinary shares of RM0.50 each in the Company at par.
(ii) Acquisition of Sleep Focus Sdn. Bhd. (“SFSB”)
Acquisition of the entire issued and paid-up share capital of SFSB comprising 500,000 ordinary shares
of RM1.00 each for a total purchase consideration of RM7,249,379 satisfied by the issuance of
14,498,758 new ordinary shares of RM0.50 each in the Company at par.
(iii) Acquisition of Elegant Total Home Sdn. Bhd. (“ETHSB”)
Acquisition of the entire issued and paid-up share capital of ETHSB comprising 200,000 ordinary shares
of RM1.00 each for a total purchase consideration of RM2,891,643 satisfied by the issuance of
5,783,286 new ordinary shares of RM0.50 each in the Company at par.
(iv) Acquisition of Monsieur (M) Sdn. Bhd. (“MSB”)
Acquisition of the entire issued and paid-up share capital of MSB comprising 350,000 ordinary shares
of RM1.00 each for a total purchase consideration of RM744,835 satisfied by the issuance of 1,489,670
new ordinary shares of RM0.50 each in the Company at par.
(v) Initial Public Offering
The public issue of 25,170,740 new ordinary shares of RM0.50 each at an issue price of RM0.88 per
ordinary share pursuant to the initial public offering; and
(c) there were no issues of debentures by the Company.
OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any unissued
shares in the Company.
38 YOONG ONN CORPORATION BERHAD (814138-K)
directors’ reportcontinued
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts, and satisfied themselves that all known bad debts have been written off and that
adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would require the further writing
off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of
the Company.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary
course of business, including their value as shown in the accounting records of the Group and of the Company,
have been written down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values
attributed to the current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
The contingent liabilities are disclosed in Note 38 to the financial statements. At the date of this report, there
does not exist:
(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial
year which secures the liabilities of any other person; or
(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial
year.
No contingent or other liability of the Group and of the Company has become enforceable or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the
directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations
when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or the financial statements of the Group and of the Company which would render any amount stated in the
financial statements misleading.
39ANNUAL REPORT 2010
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the financial year were not, in the opinion
of the directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially
the results of the operations of the Group and of the Company for the financial year.
HOLDING COMPANY
The holding company is Casatex Cosmo Sdn. Bhd., a company incorporated in Malaysia.
DIRECTORS
The directors who served since the date of the last report are as follows:-
Chew Hon Foong
Chew Hon Keong
Datuk Kamaludin Bin Yusoff (Appointed on 28.9.2009)
Datuk Hairuddin Bin Mohamed (Appointed on 28.9.2009)
Yeoh Chong Keng (Appointed on 28.9.2009)
Lee Kim Seng (Appointed on 28.9.2009)
DIRECTORS’ INTERESTS
In accordance with the register of directors’ shareholdings, the interests of directors in office at the end of the
financial year in shares in the Company and its related corporations during the financial year are as follows:
Number Of Ordinary Shares Of RM0.50 Each
At At
1.7.2009 Bought/Allotted Sold 30.6.2010
Direct Interests
Chew Hon Foong 2 24,426,645 (24,426,647) -
Chew Hon Keong 2 24,426,498 (24,426,500) -
Datuk Kamaludin Bin Yusoff - 1,000,000 (900,000) 100,000
Yeoh Chong Keng - 100,000 - 100,000
Lee Kim Seng - 100,000 - 100,000
Indirect Interests
Chew Hon Foong - 63,000,000 * - 63,000,000 *
Chew Hon Keong - 63,000,000 * - 63,000,000 *
* - By virtue of their shareholdings in the holding company, Chew Hon Foong and Chew Hon Keong are deemed to have interests
in shares in the Company and its related corporations to the extent of the holding company’s interests, in accordance with
Section 6A of the Companies Act, 1965.
The other director holding office at the end of the financial year had no interest in shares in the Company or its
related corporations during the financial year.
directors’ reportcontinued
40 YOONG ONN CORPORATION BERHAD (814138-K)
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors
as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a
contract made by the Company or a related corporation with the director or with a firm of which the director is
a member, or with a company in which the director has a substantial financial interest except for any benefits
which may be deemed to arise from transactions entered into in the ordinary course of business with companies
in which certain directors have substantial financial interests as disclosed in Note 36 to the financial statements.
Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements
whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
The significant events during the financial year of the Group and of the Company are disclosed in Note 39 to
the financial statements.
AUDITORS
The auditors, Messrs. Crowe Horwath (formerly known as Messrs. Horwath), have expressed their willingness
to continue in office.
Signed in accordance with a resolution of the directors
Dated 19 October 2010
Chew Hon Foong
Chew Hon Keong
directors’ reportcontinued
41ANNUAL REPORT 2010
We, Chew Hon Foong and Chew Hon Keong, being two of the directors of Yoong Onn Corporation
Berhad, state that, in the opinion of the directors, the financial statements set out on pages 44 to 86 are drawn
up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a
true and fair view of the state of affairs of the Group and of the Company at 30 June 2010 and of their results
and cash flows for the financial year ended on that date.
Signed in accordance with a resolution of the directors
Dated 19 October 2010
Chew Hon Foong Chew Hon Keong
Statement by Directors
I, Chew Hon Foong, I/C. No. 590205-10-5731, being the director primarily responsible for the financial
management of Yoong Onn Corporation Berhad, do solemnly and sincerely declare that the financial
statements set out on pages 44 to 86 are, to the best of my knowledge and belief, correct, and I make this
solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory
Declarations Act, 1960.
Subscribed and solemnly declared by
Chew Hon Foong, I/C. No. 590205-10-5731,
at Kuala Lumpur in the Federal Territory
on this 19 October 2010
Chew Hon Foong
Before me,
Datin Hajah Raihela Wanchik
No. W-275
Commissioner for Oaths
Statutory Declaration
42 YOONG ONN CORPORATION BERHAD (814138-K)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Yoong Onn Corporation Berhad., which comprise the balance
sheets as at 30 June 2010 of the Group and of the Company, and the income statements, statements of
changes in equity and cash flow statements of the Group and of the Company for the financial year then ended,
and a summary of significant accounting policies and other explanatory notes, as set out on pages 44 to 86.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial
statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This
responsibility includes designing, implementing and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error,
selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable
in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgement, including the assessment of risks
of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting
Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position
of the Group and of the Company as of 30 June 2010 and of their financial performance and cash flows for the
financial year then ended.
Independent Auditors’ Report to the Members of Yoong Onn Corporation Berhad(Incorporated in Malaysia) Company No: 814138-K
43ANNUAL REPORT 2010
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the
Company’s financial statements are in form and content appropriate and proper for the purposes of the
preparation of the financial statements of the Group and we have received satisfactory information and
explanations required by us for those purposes.
(c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any
adverse comment made under Section 174(3) of the Act.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person
for the content of this report.
Crowe Horwath Onn Kien Hoe
Firm No: AF 1018 Approval No: 1772/11/10 (J/PH)
Chartered Accountants Chartered Accountant
Kuala Lumpur
19 October 2010
independent auditors’ report to the Members of Yoong Onn Corporation Berhad continued
(Incorporated in Malaysia) Company No: 814138-K
44 YOONG ONN CORPORATION BERHAD (814138-K)
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
ASSETS
NON-CURRENT ASSETS
Investments in subsidiaries 7 - - 47,415 -
Property, plant and equipment 8 30,371 30,853 8 -
Goodwill 9 637 637 - -
31,008 31,490 47,423 -
CURRENT ASSETS
Inventories 10 32,882 30,442 - -
Trade receivables 11 21,746 16,639 - -
Other receivables, deposits
and prepayments 12 4,828 3,214 16 917
Tax refundable 8 43 925 -
Amount owing by subsidiaries 13 - - 14,587 -
Deposits with financial institutions 14 13,847 6,029 11,600 -
Cash and bank balances 15 10,660 5,857 193 *
83,971 62,224 27,321 917
TOTAL ASSETS 114,979 93,714 74,744 917
The annexed notes form an integral part of these financial statements.
Balance Sheetsat 30 June 2010
45ANNUAL REPORT 2010
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
EQUITY
Share capital 16 60,000 47,415 60,000 *
Share premium 17 8,685 - 8,685 -
Merger deficit 18 (44,365) (44,365) - -
Revaluation reserve 19 7,501 7,501 - -
Retained profits/
(Accumulated losses) 20 59,950 50,422 2,610 (7)
TOTAL EQUITY 91,771 60,973 71,295 (7)
NON-CURRENT LIABILITIES
Deferred tax liabilities 21 1,716 1,429 917 -
Hire purchase payables 22 9 775 - -
Term loans 23 - 2,637 - -
1,725 4,841 917 -
CURRENT LIABILITIES
Trade payables 24 1,500 5,136 - -
Other payables and accruals 4,252 6,159 132 147
Dividend payable 25 2,400 - 2,400 -
Provision for taxation 1,597 1,314 - -
Amount owing to a subsidiary 13 - - - 777
Short-term borrowings 26 11,734 15,291 - -
21,483 27,900 2,532 924
TOTAL LIABILITIES 23,208 32,741 3,449 924
TOTAL EQUITY AND LIABILITIES 114,979 93,714 74,744 917
* - RM2
The annexed notes form an integral part of these financial statements.
balance sheetsat 30 June 2010 continued
46 YOONG ONN CORPORATION BERHAD (814138-K)
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
REVENUE 27 127,541 130,084 14,023 -
COST OF SALES (73,624) (83,683) - -
GROSS PROFIT 53,917 46,401 14,023 -
OTHER INCOME 272 711 227 -
54,189 47,112 14,250 -
SELLING AND DISTRIBUTION
EXPENSES (6,915) (5,286) (3) -
ADMINISTRATIVE AND OPERATING
EXPENSES (25,147) (22,080) (2,283) (2)
FINANCE COSTS (464) (1,101) - -
PROFIT/(LOSS) BEFORE TAXATION 28 21,663 18,645 11,964 (2)
INCOME TAX EXPENSE 29 (6,135) (4,764) (3,347) -
PROFIT/(LOSS) AFTER TAXATION 15,528 13,881 8,617 (2)
ATTRIBUTABLE TO:-
Equity holders of the Company 15,528 13,881 8,617 (2)
BASIC EARNINGS
PER SHARE (SEN) 30 14 15 N/A N/A
DILUTED EARNINGS
PER SHARE (SEN) 30 N/A N/A N/A N/A
N/A - Not applicable
Income Statementsfor the financial year ended 30 June 2010
The annexed notes form an integral part of these financial statements.
47ANNUAL REPORT 2010
Statements of Changes in Equityfor the financial year ended 30 June 2010
Att
rib
uta
ble
To
Eq
uit
y H
old
ers
Of T
he
Co
mp
an
y
No
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are
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M’0
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RM
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TH
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1.7
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47
,41
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6,5
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1
Surp
lus a
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g f
rom
revalu
atio
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pert
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--
9,0
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6
Reco
gnis
ed
as d
efe
rred
tax lia
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ty-
--
(1,5
35
)-
(1,5
35
)
Pro
fit
aft
er
taxatio
n f
or
the f
inancia
l year
--
--
13
,88
11
3,8
81
Bala
nce a
t 3
0.6
.20
09
/1.7
.20
09
47
,41
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(44
,36
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7,5
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50
,42
26
0,9
73
Pub
lic issue
12
,58
59
,56
5-
--
22
,15
0
Lis
ting
exp
enses
-(8
80
)^-
--
(88
0)^
Pro
fit
aft
er
taxatio
n f
or
the f
inancia
l year
--
--
15
,52
81
5,5
28
Div
idend
s
31
--
--
(6,0
00
)(6
,00
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Bala
nce a
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,00
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,68
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,50
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,77
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Rep
resents
exp
enses n
ot
reco
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ed
in t
he inco
me s
tate
ment.
The a
nnexed
no
tes f
orm
an inte
gra
l p
art
of
these f
inancia
l sta
tem
ents
.
48 YOONG ONN CORPORATION BERHAD (814138-K)
Distributable
Non-Distributable (Accumulated
Share Share Losses)/
Capital Premium Retained Profits Total
Note RM’000 RM’000 RM’000 RM’000
THE COMPANY
At 1.7.2008 * - (5) (5)
Loss for the financial year - - (2) (2)
At 30.6.2009/1.7.2009 - - (7) (7)
Shares issued pursuant to the
listing scheme:
- acquisition of subsidiaries 47,415 - - 47,415
- public issue 12,585 9,565 - 22,150
Listing expenses - (880)^ - (880)^
Profit after taxation for the
financial year - - 8,617 8,617
Dividends 31 - - (6,000) (6,000)
Balance at 30.6.2010 60,000 8,685 2,610 71,295
* - RM2
^ - Represents expenses not recognised in the income statement.
statements of changes in equityfor the financial year ended 30 June 2010 continued
The annexed notes form an integral part of these financial statements.
49ANNUAL REPORT 2010
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM/(FOR)
OPERATING ACTIVITIES
Profit/(Loss) before taxation 21,663 18,645 11,964 (2)
Adjustments for:-
Allowance for doubtful debts 115 69 - -
Depreciation of property,
plant and equipment 2,419 2,437 1 -
Allowance for slow-moving inventories 555 462 - -
Interest expense 388 1,005 - -
Plant and equipment written off 34 202 - -
Listing expenses written off 1,614 - 1,614 -
Loss on disposal of plant and equipment 2 3 - -
Dividend income - - (13,824) -
Interest income (253) (45) (227) -
Writeback of allowance for
doubtful debts (13) (10) - -
Operating profit/(loss) before
working capital changes 26,524 22,768 (472) (2)
Increase in inventories (2,995) (3,625) - -
(Increase)/Decrease in trade
and other receivables (7,612) 4,626 111 -
(Decrease)/Increase in trade
and other payables (5,543) 3,882 (15) 145
Increase in amount owing by subsidiaries - - (99) -
CASH FLOWS FROM/(FOR)
OPERATING ACTIVITIES 10,374 27,651 (475) 143
Income tax paid (5,530) (5,327) (30) -
Interest paid (388) (1,005) - -
NET CASH FROM/(FOR)
OPERATING ACTIVITIES
CARRIED FORWARD 4,456 21,319 (505) 143
Cash Flow Statementsfor the financial year ended 30 June 2010
The annexed notes form an integral part of these financial statements.
50 YOONG ONN CORPORATION BERHAD (814138-K)
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
NET CASH FROM/(FOR)
OPERATING ACTIVITIES
BROUGHT FORWARD 4,456 21,319 (505) 143
CASH FLOWS (FOR)/FROM
INVESTING ACTIVITIES
Interest received 253 45 227 -
Dividend received - - 7,749 -
Purchase of plant and equipment 32 (1,989) (1,793) (9) -
Proceeds from disposal of
plant and equipment 16 5 - -
NET CASH (FOR)/FROM
INVESTING ACTIVITIES (1,720) (1,743) 7,967 -
CASH FLOWS FROM/(FOR)
FINANCING ACTIVITIES
Proceeds from issuance of shares 22,150 - 22,150 -
Share issuance expenses paid (1,705) (789) (1,705) (789)
Advances (to)/from subsidiaries - - (12,514) 646
Repayment to a director - (5) - -
Net repayment of bankers’ acceptances (625) (9,368) - -
Repayment of hire purchase obligations (981) (187) - -
Repayment of term loans (5,354) (2,604) - -
Dividends paid (3,600) - (3,600) -
NET CASH FROM/(FOR)
FINANCING ACTIVITIES 9,885 (12,953) 4,331 (143)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 12,621 6,623 11,793 -
CASH AND CASH
EQUIVALENTS AT BEGINNING
OF THE FINANCIAL YEAR 11,886 5,263 * *
CASH AND CASH
EQUIVALENTS AT END
OF THE FINANCIAL YEAR 33 24,507 11,886 11,793 *
* - RM2
cash flow statementsfor the financial year ended 30 June 2010 continued
The annexed notes form an integral part of these financial statements.
51ANNUAL REPORT 2010
1. GENERAL INFORMATION
The Company is incorporated as a public company limited by shares under the Companies Act 1965 in
Malaysia.
The registered office is located at Suite 13A.01(A), Level 13A, Wisma Goldhill, 67, Jalan Raja Chulan, 50200
Kuala Lumpur.
The principal place of business is located at Lot No. PT 16690 - 16692 , Jalan Permata 2, Arab-Malaysian
Industrial Park, 71800 Nilai, Negeri Sembilan.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution
of the directors dated 19 October 2010.
2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding and the provision of management
services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There
have been no significant changes in the nature of these activities during the financial year.
3. HOLDING COMPANY
The holding company is Casatex Cosmo Sdn. Bhd., a company incorporated in Malaysia.
4. FINANCIAL RISK MANAGEMENT POLICIES
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available
for the development of the Group’s business whilst managing its market, credit, liquidity and cash flow risks.
The policies in respect of the major areas of treasury activity are as follows:
(a) Market Risk
(i) Foreign Currency Risk
The Group is exposed to foreign exchange risk on sales and purchases that are denominated in
foreign currencies. The currencies giving rise to this risk are disclosed in their respective notes to
the financial statements. Foreign currency risk is monitored closely and managed to an acceptable
level.
The Group entered into forward foreign exchange contracts mainly for foreign currencies such as
United States Dollar and Singapore Dollar to hedge against its foreign exchange risk resulting from
anticipated sale and purchase transactions denominated in these two currencies.
(ii) Interest Rate Risk
The Group’s exposure to interest rate risk arises mainly from bank borrowings. Its policy is to obtain
the most favourable interest rates available.
Surplus funds are placed with licensed financial institutions at the most favourable interest rates.
(iii) Price Risk
The Group does not have any quoted investments and hence is not exposed to price risk.
Notes to Financial Statementsfor the financial year ended 30 June 2010
52 YOONG ONN CORPORATION BERHAD (814138-K)
4. FINANCIAL RISK MANAGEMENT POLICIES continued
(b) Credit Risk
Credit risks, or the risk of counterparties defaulting arise mainly from receivables. Credit risks are
minimised by monitoring receivables regularly and by mostly trading with reputable and creditworthy
customers.
The carrying amounts of the trade and other receivables represent the Group’s maximum exposure to
credit risk in relation to financial assets. No other financial assets carry a significant exposure to credit
risks.
The Group’s concentration of credit risk relates to the amounts owing by two customers which
constituted approximately 51% of the total trade receivables as at the balance sheet date.
The Group manages its exposure to credit risk by the application of credit approvals, limits and
monitoring procedures.
(c) Liquidity and Cash Flow Risks
The Group’s exposure to liquidity and cash flow risks arises mainly from general finding and business
activities.
It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability
of funding through certain committed credit facilities.
5. BASIS OF PREPARATION
The financial statements of the Group and of the Company are prepared under the historical cost convention
and modified to include other bases of valuation as disclosed in other sections under significant accounting
policies, and in compliance with Financial Reporting Standards (“FRSs”) and the Companies Act 1965 in
Malaysia.
The Group has adopted FRS 8, Operating Segment that has been issued and effective from 1 July 2009.
FRS 8 replaces FRS 1142004 Segment Reporting and requires an entity to report financial and descriptive
information about its operating segments. Under FRS 8, the disclosure on operating segments is based on
the internal reporting segments adopted by the entity and Group for purpose of evaluation of performances
and allocation of resources. The adoption of this standard only impacts the form and content of disclosures
presented in the financial statements of the Group.
The Group has not adopted in advance the following accounting standards, amendments and
interpretations that have been issued by the Malaysian Accounting Standard Board (MASB) but are not yet
effective for the current financial year.
FRSs and IC Interpretations (including the Consequential Amendments) Effective date
Revised FRS 1 (2010) First-time Adoption of Financial Reporting Standards 1 July 2010
Revised FRS 3 (2010) Business Combinations 1 July 2010
FRS 4 Insurance Contracts 1 January 2010
notes to financial statementsfor the financial year ended 30 June 2010 continued
53ANNUAL REPORT 2010
5. BASIS OF PREPARATION continued
FRSs and IC Interpretations (including the Consequential Amendments) Effective date
FRS 7 Financial Instruments: Disclosures 1 January 2010
Revised FRS 101 (2009) Presentation of Financial Statements 1 January 2010
Revised FRS 123 (2009) Borrowing Costs 1 January 2010
Revised FRS 127 (2010) Consolidated and Separate Financial Statements 1 July 2010
Revised FRS 139 (2010) Financial Instruments: Recognition and Measurement 1 January 2010
Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, 1 January 2010
Jointly Controlled Entity or Associate
Amendments to FRS 1: Limited Exemption from Comparative FRS 7 1 January 2011
Disclosures for First-time Adopters
Amendments to FRS 2: Vesting Conditions and Cancellations 1 January 2010
Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 (2010) 1 July 2010
Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010
Amendments to FRS 7, FRS 139 and IC Interpretation 9 1 January 2010
Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011
Amendments to FRS 101 and FRS 132: Puttable Financial Instruments 1 January 2010
and Obligations Arising on Liquidation
Amendments to FRS 132: Classification of Rights Issues and the 1 January 2010
Transitional Provision in Relation to Compound Instruments /1 March 2010
Amendments to FRS 138: Consequential Amendments Arising from 1 July 2010
Revised FRS 3 (2010)
IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010
IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions 1 January 2010
IC Interpretation 12 Service Concession Arrangements 1 July 2010
IC Interpretation 13 Customer Loyalty Programmes 1 January 2010
IC Interpretation 14: FRS 119 - The Limit on a Defined Benefit Asset, 1 January 2010
Minimum Funding Requirements and their Interaction
IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010
IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010
Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and 1 July 2010
Revised FRS 3 (2010)
Annual Improvements to FRSs (2009) 1 January 2010
notes to financial statementsfor the financial year ended 30 June 2010 continued
54 YOONG ONN CORPORATION BERHAD (814138-K)
5. BASIS OF PREPARATION continued
The above accounting standards and interpretations (including the consequential amendments) are not
relevant to the Group’s operations except as follows:
The revised FRS 3 (2010) introduces significant changes to the accounting for business combinations, both
at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction
costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be
applied prospectively and therefore there will not have any financial impact on the financial statements of
the Group for the current financial year but may impact the accounting for future transactions or
arrangements.
The Group considers financial guarantee contracts entered into to be insurance arrangements and accounts
for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until
such a time as it becomes probable that the Group will be required to make a payment under the guarantee.
The adoption of FRS 4 is expected to have no material impact on the financial statements of the Group.
The possible impacts of FRS 7 (including the subsequent amendments) and the revised FRS 139 (2010)
on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given
in these standards.
The revised FRS 101 (2009) has introduced terminology changes (including revised titles for the financial
statements) and changes in the format and content of the financial statements. In addition, a statement of
financial position is required at the beginning of the earliest comparative period following a change in
accounting policy, the correction of an error or the reclassification of items in the financial statements. The
adoption of this revised standard will only impact the form and content of the presentation of the Group’s
financial statements in the next financial year.
The revised FRS 123 (2009) removes the option of immediately recognising as an expense borrowing costs
that are directly attributable to the acquisition, construction or production of a qualifying asset. In accordance
with the transitional provisions, the Group will apply this revised standard to borrowing costs related to
qualifying assets for which the commencement date of capitalisation is on or after 1 January 2010. This
change in accounting policy will not have any financial impact on the financial statements for the current
financial year but may impact the accounting for future transactions or arrangements.
The revised FRS 127 (2010) requires accounting for changes in ownership interests by the group in a
subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses
control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the
gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the
minority interest to be absorbed by the minority interest instead of by the parent. The Group will apply the
major changes of the revised FRS 127 (2010) prospectively and therefore there will not have any financial
impact on the financial statements of the Group for the current financial year but may impact the accounting
for future transactions or arrangements.
Amendments to FRS 1 and FRS 127 remove the definition of “cost method” currently set out in FRS 127,
and instead require an investor to recognise all dividend from subsidiaries, jointly controlled entities or
associates as income in its separate financial statements. In addition, FRS 127 has also been amended to
deal with situations where a parent reorganises its group by establishing a new entity as its new parent.
Under this circumstance, the new parent shall measure the cost of its investment in the original parent at
the carrying amount of its share of the equity items shown in the separate financial statements of the original
parent at the reorganisation date. The amendments will be applied prospectively and therefore there will
not have any financial impact on the financial statements of the Company for the current financial year but
may impact the accounting for future transactions or arrangements.
notes to financial statementsfor the financial year ended 30 June 2010 continued
55ANNUAL REPORT 2010
5. BASIS OF PREPARATION continued
Amendments to FRS 101 and FRS 132 require puttable financial instruments that would normally be
classified as liabilities to be classified as equity if and only if they meet certain conditions, with retrospective
application. These amendments are expected to have no material impact on the financial statements of the
Group upon their initial application.
Amendments to FRS 138 clarify the requirements under the revised FRS 3 (2010) regarding accounting for
intangible assets acquired in a business combination. These amendments are expected to have no material
impact on the financial statements of the Group upon their initial application.
IC Interpretation 9 requires embedded derivatives to be separated from the host contract and accounted
for as a derivative on the basis of the conditions that existed at the later of the date the entity first became
a party to the contract. The possible impacts of IC Interpretation 9 on the financial statements upon its
initial application are not disclosed by virtue of the exemptions given under the revised FRS 139 (2010).
IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments
in equity instruments and financial assets carried at cost to be reversed at a subsequent balance sheet
date. This interpretation is expected to have no material impact on the financial statements of the Group
upon its initial application.
Amendments to IC Interpretation 9 are a consequential amendment from the revised FRS 3 (2010). These
amendments are expected to have no material impact on the financial statements of the Group upon its
initial application.
Annual Improvements to FRSs (2009) contain amendments to 21 accounting standards that result in
accounting changes for presentation, recognition or measurement purposes and terminology or editorial
amendments. These amendments are expected to have no material impact on the financial statements of
the Group upon their initial application.
6. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates And Judgements
Estimates and judgements are continually evaluated by the directors and management and are based
on historical experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. The estimates and judgements that affect the application of
the Group’s accounting policies and disclosures, and have a significant risk of causing a material
adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-
(i) Depreciation of Property, Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for the property,
plant and equipment are based on commercial and production factors which could change
significantly as a result of technical innovations and competitors’ actions in response to the market
conditions.
The Group anticipates that the residual values of its property, plant and equipment will be significant
and have been taken into consideration for the computation of the depreciable amount.
Changes in the expected level of usage and technological development could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could
be revised.
notes to financial statementsfor the financial year ended 30 June 2010 continued
56 YOONG ONN CORPORATION BERHAD (814138-K)
6. SIGNIFICANT ACCOUNTING POLICIES continued
(a) Critical Accounting Estimates And Judgements continued
(ii) Income Taxes
There are certain transactions and computations for which the ultimate tax determination may be
different from the initial estimate. The Group recognised tax liabilities based on its understanding
of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course
of business. Where the final outcome of these matters is different from the amounts that were
initially recognised, such difference will impact the income tax and deferred tax provisions in the
period in which such determination is made.
(iii) Impairment of Assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-
use of the cash-generating unit to which the asset is allocated, the Group is required to make an
estimate of the expected future cash flows from the cash-generating unit and also to apply a
suitable discount rate in order to determine the present value of those cash flows.
(iv) Allowance for Doubtful Debts of Receivables
The Group makes allowance for doubtful debts based on an assessment of the recoverability of
receivables. Allowances are applied to receivables where events or changes in circumstances
indicate that the carrying amounts may not be recoverable. Management specifically analyses
historical bad debt, customer concentrations, customer creditworthiness, current economic trends
and changes in customer payment terms when making a judgement to evaluate the adequacy of
the allowance for doubtful debts of receivables. Where the expectation is different from the original
estimate, such difference will impact the carrying value of receivables.
(v) Allowance for Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving
inventories. These reviews require judgement and estimates. Possible changes in these estimates
could result in revisions to the valuation of inventories.
(vi) Fair Value Estimates for Certain Financial Assets and Liabilities
The Group carries certain financial assets and liabilities at fair value, which requires extensive use
of accounting estimates and judgement. While significant components of fair value measurement
were determined using verifiable objective evidence, the amount of changes in fair value would
differ if the Group uses different valuation methodologies. Any changes in fair value of these assets
and liabilities would affect profit and equity.
(b) Financial Instruments
(i) Financial Instruments Recognised in the Balance Sheet
Financial instruments are recognised in the balance sheet when the Group has become a party to
the contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument
classified as a liability, are reported as an expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity.
notes to financial statementsfor the financial year ended 30 June 2010 continued
57ANNUAL REPORT 2010
6. SIGNIFICANT ACCOUNTING POLICIES continued
(b) Financial Instruments continued
(i) Financial Instruments Recognised in the Balance Sheet continued
Financial instruments are offset when the Group has a legally enforceable right to offset and intends
to settle either on a net basis or to realise the asset and settle the liability simultaneously.
Financial instruments recognised in the balance sheet are disclosed in the individual policy
statement associated with each item.
(ii) Financial Instruments Not Recognised in the Balance Sheet
The Group is a party to financial instruments such as foreign currency forward contracts. These
instruments are not recognised in the financial statements on inception.
The Group enters into forward contracts to protect the Group from the movements in exchange
rate by establishing the rate at which a foreign currency asset or liability will be settled.
Exchange gains and losses arising from contracts entered into as hedges of anticipated future
transactions are deferred until the date of such transactions, at which time they are included in
the measurement of such transactions.
(iii) Fair Value Estimation for Disclosure Purpose
The fair value of the forward contract is determined using foreign exchange rates at the balance
sheet date.
(c) Functional and Foreign Currencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are presented in the currency of the
primary economic environment in which the entity operates, which is the functional currency. The
consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s
functional and presentation currency.
(ii) Transactions and Balances
Transactions in foreign currencies are converted into the respective functional currencies on initial
recognition, using the exchange rates approximating those ruling at the transaction dates.
Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of
that date. Non-monetary assets and liabilities are translated using exchange rates that existed
when the values were determined. All exchange differences are taken to the income statement.
(d) Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and all its
subsidiaries made up to 30 June 2010.
A subsidiary is defined as a company in which the parent company has the power, directly or indirectly,
to exercise control over its financial and operating policies so as to obtain benefits from its activities.
notes to financial statementsfor the financial year ended 30 June 2010 continued
58 YOONG ONN CORPORATION BERHAD (814138-K)
6. SIGNIFICANT ACCOUNTING POLICIES continued
(d) Basis of Consolidation continued
The acquisitions described under Note 7 to the financial statements resulted in a business combination
involving common control entities, and accordingly the accounting treatment is outside the scope of
FRS 3. The merger accounting is used by the Group to account for such common control business
combinations.
(i) Merger accounting for common control business combinations
A business combination involving entities under common control is a business combination in
which all the combining entities or subsidiaries are ultimately controlled by the same party and
parties both before and after the business combination, and that control is not transitory.
Subsidiaries acquired which have met the criteria for pooling of interest are accounted for using
merger accounting principles. Under the merger method of accounting, the results of the
subsidiaries are presented as if the merger had been effected throughout the current financial year.
The assets and liabilities combined are accounted for based on the carrying amounts from the
perspective of the common control shareholder at the date of transfer. No amount is recognised
in respect of goodwill and excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets and liabilities and contingent liabilities over cost at the time of the common
control business combination to the extent of the continuation of the controlling party and parties’
interests.
When the merger method is used, the cost of investment in the Company’s books is recorded at
the nominal value of shares issued. The difference between the carrying value of the investment and
the nominal value of the shares of the subsidiaries is treated as a merger deficit or merger reserve
as applicable. The results of the subsidiaries being merged are included for the full financial year.
(ii) Purchase method of accounting for non-common control business combinations
Under the purchase method, the results of the subsidiaries acquired or disposed of are included
from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values
of the subsidiaries’ net assets are determined and these values are reflected in the consolidated
financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued
by the Group in exchange for control of the acquiree, plus any costs directly attributable to the
business combination.
Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses
are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the
financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.
Minority interests in the consolidated balance sheets consist of the minorities’ share of fair values of
the identifiable assets and liabilities of the acquiree as at the date of acquisition and the minorities’
share of movements in the acquiree’s equity.
Minority interests are presented in the consolidated balance sheet of the Group within equity, separately
from the Company’s equity holders, and are separately disclosed in the consolidated income statement
of the Group.
The gain or loss on the disposal of a subsidiary is the difference between the net proceeds and the
group’s share of its net assets.
notes to financial statementsfor the financial year ended 30 June 2010 continued
59ANNUAL REPORT 2010
6. SIGNIFICANT ACCOUNTING POLICIES continued
(e) Goodwill
Goodwill represents the excess of the fair value of the purchase consideration over the Group’s share
of the fair values of the identifiable net assets at the date of acquisition.
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill
is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the
consolidated income statement. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the
subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in
the consolidated income statement.
(f) Investments in Subsidiaries
Investments in subsidiaries are stated at cost in the balance sheet of the Company and are reviewed
for impairment at the end of the financial year if events or changes in circumstances indicate that their
carrying values may not be recoverable.
On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds
and the carrying amount of the investments is taken to the income statement.
(g) Property, Plant and Equipment
Property, plant and equipment, other than freehold land are stated at cost or revalued amount less
accumulated depreciation and impairment losses, if any. Freehold land is stated at revalued amount
less impairment losses, if any and is not depreciated.
Depreciation is calculated on the straight-line method to write off the depreciable amount of the assets
over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes
idle or is retired from active use unless the asset is fully depreciated. The principal annual rates of
depreciation and residual values are as follows:
Depreciation Rate Residual Value
Buildings 3% -
Plant and machinery 10% -
Motor vehicles 20% 5% - 20%
Office equipment 10% - 25% -
Electrical appliances 20% -
Furniture and fittings 10% -
Renovation 20% -
Factory and warehouse equipment 10% -15% -
Freehold land and buildings are revalued periodically, at least once in every five years. Surpluses arising
from the revaluation of the properties, net of deferred taxation, where applicable, are credited to a
revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported by
any previous revaluation surpluses, are charged to the income statement. In the year of disposal of the
revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve
account to retained profits.
notes to financial statementsfor the financial year ended 30 June 2010 continued
60 YOONG ONN CORPORATION BERHAD (814138-K)
6. SIGNIFICANT ACCOUNTING POLICIES continued
(g) Property, Plant and Equipment continued
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at
each balance sheet date to ensure that the amount, method and period of depreciation are consistent
with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of the property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included
in the income statement in the year the asset is derecognised.
(h) Impairment of Assets
The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not
apply, are reviewed at each balance sheet date for impairment when there is an indication that the
assets might be impaired. Impairment is measured by comparing the carrying values of the assets with
their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ net selling
price and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is charged to the income statement immediately unless the asset is carried at its
revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the
extent of a previously recognised revaluation surplus for the same asset.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine
the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a
reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and depreciation) had no impairment loss
been recognised. The reversal is recognised in the income statement immediately, unless the asset is
carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly
to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset
was previously recognised as an expense in the income statement, a reversal of that impairment loss
is recognised as income in the income statement.
(i) Assets under Hire Purchase
Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in
accordance with the policy set out in Note 6(g) above. Each hire purchase payment is allocated
between the liability and finance charges so as to achieve a constant rate on the finance balance
outstanding. Finance charges are allocated to the income statement over the periods of the respective
hire purchase agreements.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-
first-out basis, and comprises the purchase price and incidentals incurred in bringing the inventories
to their present location and condition. Cost of finished goods and work-in-progress include the cost
of materials, labour and an appropriate proportion of production overheads.
Net realisable value represents the estimated selling price less the estimated costs of completion and
the estimated costs necessary to make the sale.
Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.
notes to financial statementsfor the financial year ended 30 June 2010 continued
61ANNUAL REPORT 2010
6. SIGNIFICANT ACCOUNTING POLICIES continued
(k) Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which
they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts
at the balance sheet date.
(l) Payables
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods
and services received.
(m) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation as a result of past events, when
it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at each
balance sheet date and adjusted to reflect the current best estimate. Where effect of the time value of
money is material, the provision is the present value of the estimated expenditure required to settle the
obligation.
A contingent liability is a possible obligation that arises from past events and whose existence will only
be confirmed by the occurrence of one or more uncertain future events not wholly within the control of
the Group. It can also be a present obligation arising from past events that is not recognised because
it is not probable that an outflow of economic resources will be required or the amount of obligation
cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When
a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised
as a provision.
A contingent asset is a probable asset that arises from past events and whose existence will be
confirmed only by occurrence or non-occurrence of one or more uncertain events not wholly within
the control of the Group.
(n) Income Taxes
Income taxes for the period comprise current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the
period and is measured using the tax rates that have been enacted or substantively enacted at the
balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise
from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets,
liabilities and contingent liabilities over the business combination costs or from the initial recognition of
an asset or liability in a transaction which is not a business combination and at the time of the
transaction, affects neither accounting profit nor taxable profits.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and
unused tax credits to the extent that it is probable that future taxable profits will be available against
which the deductible temporary differences, unused tax losses and unused tax credits can be utilitised.
notes to financial statementsfor the financial year ended 30 June 2010 continued
62 YOONG ONN CORPORATION BERHAD (814138-K)
6. SIGNIFICANT ACCOUNTING POLICIES continued
(n) Income Taxes continued
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realised or the liability is settled, based on the tax rates that have been enacted or
substantively enacted at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is
recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity,
or when it arises from a business combination that is an acquisition, in which case the deferred tax is
included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying
amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient future taxable profits will be available to allow all or part of
the deferred tax assets to be utilised.
(o) Interest-bearing Borrowings
Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.
All borrowing costs are charged to the income statement as expenses in the period in which they are
incurred.
(p) Equity Instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(q) Segmental Information
Segment information is presented in respect of the Group’s business segments, which is based on the
Group’s management and internal reporting structure.
Segment results, assets and liabilities include item directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and
related income, loans and borrowings and related expenses, corporate assets (primarily the Company’s
headquarters) and head office expenses, and tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and
equipment, and intangible assets other than goodwill.
Segment revenue, expenses and results include transfers between segments. The prices charged on
inter-segment transactions are based on normal commercial terms. These transfers are eliminated on
consolidation.
(r) Cash and Cash Equivalents
Cash and cash equivalents comprise cash and bank balances, fixed and other deposits pledged with
banks and financial institutions, and short-term highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of change in value.
notes to financial statementsfor the financial year ended 30 June 2010 continued
63ANNUAL REPORT 2010
6. SIGNIFICANT ACCOUNTING POLICIES continued
(s) Employee Benefits
(i) Short-term Benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period
in which the associated services are rendered by employees of the Group.
(ii) Defined Contribution Plans
The Group’s contributions to defined contribution plans are charged to the income statement in
the period to which they relate. Once the contributions have been paid, the Group has no further
liability in respect of the defined contribution plans.
(t) Related Parties
A party is related to an entity if:-
(i) directly, or indirectly through one or more intermediaries, the party:-
- controls, is controlled by, or is under common control with, the entity (this includes parents,
subsidiaries and fellow subsidiaries);
- has an interest in the entity that gives it significant influence over the entity; or
- has joint control over the entity;
(ii) the party is an associate of the entity;
(iii) the party is a joint venture in which the entity is a venturer;
(iv) the party is a member of the key management personnel of the entity or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which
significant voting power in such entity resides with, directly or indirectly, any individual referred to
in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any
entity that is a related party of the entity.
Close members of the family of an individual are those family members who may be expected to
influence, or be influenced by, that individual in their dealings with the entity.
(u) Revenue Recognition
(i) Sale of Goods
Revenue is recognised upon delivery of goods and customers’ acceptance, and where applicable,
net of returns and trade discounts.
(ii) Interest Income
Interest income is recognised on an accrual basis.
(iii) Dividend Income
Dividends from subsidiaries are recognised when the shareholders’ right to receive is established.
(iv) Management Fee
Management fees from subsidiaries are recognised on an accrual basis.
notes to financial statementsfor the financial year ended 30 June 2010 continued
64 YOONG ONN CORPORATION BERHAD (814138-K)
7. INVESTMENTS IN SUBSIDIARIES
The Company
2010 2009
RM’000 RM’000
Unquoted shares, at cost 47,415 -
Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:-
Effective
Equity Interest
Name Of The Companies 2010 Principal Activities
Monsieur (M) Sdn. Bhd. 100% Retailing of home linen and homeware.
Syarikat Yoong Onn Sdn. Bhd. 100% Distribution and trading of home linen
and homeware.
Elegant Total Home Sdn. Bhd. 100% Distribution and trading of home linen
and homeware.
Sleep Focus Sdn. Bhd. 100% Design and manufacture of home linen and bedding
accessories and trading of home linen.
8. PROPERTY, PLANT AND EQUIPMENT
Written
At Off/ Depreciation At
1.7.2009 Additions Disposals Charge 30.6.2010
THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000
Net Book Value
Freehold land 6,662 - - - 6,662
Buildings 16,941 - - (693) 16,248
Plant and machinery 1,707 189 (32) (479) 1,385
Factory and warehouse
equipment 338 180 - (76) 442
Motor vehicles 2,181 600 (18) (309) 2,454
Office equipment 1,036 444 (1) (278) 1,201
Electrical appliances 216 89 - (96) 209
Renovation 819 239 - (325) 733
Furniture and fittings 953 248 (1) (163) 1,037
Total 30,853 1,989 (52) (2,419) 30,371
notes to financial statementsfor the financial year ended 30 June 2010 continued
65ANNUAL REPORT 2010
8. PROPERTY, PLANT AND EQUIPMENT continued
Written
At Off/ Depreciation At
1.7.2008 Additions Disposals Charge 30.6.2009
THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000
Net Book Value
Freehold land 6,662 - - - 6,662
Buildings 17,638 - - (697) 16,941
Plant and machinery 2,013 165 - (471) 1,707
Factory and warehouse
equipment 179 208 - (49) 338
Motor vehicles 1,817 618 (8) (246) 2,181
Office equipment 749 563 (106) (170) 1,036
Electrical appliances 276 38 (11) (87) 216
Renovation 1,187 241 (27) (582) 819
Furniture and fittings 886 260 (58) (135) 953
Total 31,407 2,093 (210) (2,437) 30,853
At At Accumulated Net Book
Cost Valuation Depreciation Value
THE GROUP RM’000 RM’000 RM’000 RM’000
At 30 June 2010
Freehold land - 6,662 - 6,662
Buildings - 17,638 (1,390) 16,248
Plant and machinery 5,421 - (4,036) 1,385
Factory and warehouse equipment 767 - (325) 442
Motor vehicles 4,063 - (1,609) 2,454
Office equipment 1,923 - (722) 1,201
Electrical appliances 552 - (343) 209
Renovation 3,919 - (3,186) 733
Furniture and fittings 2,225 - (1,188) 1,037
18,870 24,300 (12,799) 30,371
At 30 June 2009
Freehold land - 6,662 - 6,662
Buildings - 17,638 (697) 16,941
Plant and machinery 5,267 - (3,560) 1,707
Factory and warehouse equipment 587 - (249) 338
Motor vehicles 3,526 - (1,345) 2,181
Office equipment 1,481 - (445) 1,036
Electrical appliances 463 - (247) 216
Renovation 3,680 - (2,861) 819
Furniture and fittings 1,979 - (1,026) 953
16,983 24,300 (10,430) 30,853
notes to financial statementsfor the financial year ended 30 June 2010 continued
66 YOONG ONN CORPORATION BERHAD (814138-K)
8. PROPERTY, PLANT AND EQUIPMENT continued
At Depreciation At
1.7.2009 Additions Charge 30.6.2010
THE COMPANY RM’000 RM’000 RM’000 RM’000
Net Book Value
Office equipment - 9 (1) 8
At Accumulated Net Book
Cost Depreciation Value
RM’000 RM’000 RM’000
At 30 June 2010
Office equipment 9 (1) 8
The freehold land and buildings have been revalued by a firm of independent professionally qualified valuers
in September 2008, using the open market value based on its existing use.
Had the revalued assets been stated at cost less accumulated depreciation, the carrying amount would
have been as follows:
Accumulated Net Book
Cost Depreciation Value
THE GROUP RM’000 RM’000 RM’000
At 30.6.2010
Freehold land 3,768 - 3,768
Buildings 12,782 (2,186) 10,596
16,550 (2,186) 14,364
AT 30.6.2009
Freehold land 3,768 - 3,768
Buildings 12,782 (1,737) 11,045
16,550 (1,737) 14,813
The freehold land and buildings of the Group have been pledged to a bank as security for banking facilities
granted to the Group as disclosed in Note 26 to the financial statements.
Included in the property, plant and equipment of the Group are motor vehicles with a total net book value
of RM39,492 (2009 - RM1,289,734) acquired under hire purchase terms.
notes to financial statementsfor the financial year ended 30 June 2010 continued
67ANNUAL REPORT 2010
9. GOODWILL
During the financial year, the Group assessed the recoverable amount of the purchased goodwill, and
determined that goodwill is not impaired.
The recoverable amount of a cash-generating unit is determined based on the value-in-use calculation
using cash flow projections based on financial budgets approved by management. The management has
projected cash flows for a period of one year. The key assumptions used for value-in-use calculations are:-
(a) Budgeted revenue Sales growth rate of 12% is used based on the expected demand of home
furnishing products to be derived from both existing and future boutiques
in the budgeted period.
(b) Budgeted gross margin Budgeted gross profit margin of 43% is determined based on the historical
track record and after considering domestic economic conditions.
(c) Discount rate The discount rate used is pre-tax and reflect specific risks relating to
the industry.
10. INVENTORIES
The Group
2010 2009
RM’000 RM’000
At cost :-
Raw materials 10,243 7,625
Work in progress 2,270 2,483
Finished goods 17,971 18,793
30,484 28,901
At net realisable value:-
Raw materials 778 664
Finished goods 1,620 877
2,398 1,541
Total inventories 32,882 30,442
notes to financial statementsfor the financial year ended 30 June 2010 continued
68 YOONG ONN CORPORATION BERHAD (814138-K)
11. TRADE RECEIVABLES
The Group
2010 2009
RM’000 RM’000
Trade receivables 21,898 16,744
Allowance for doubtful debts (152) (105)
21,746 16,639
Allowance for doubtful debts:
At 1 July 2009/2008 (105) (1,623)
Addition during the financial year (115) (69)
Written off during the financial year 55 1,577
Writeback during the financial year 13 10
(152) (105)
The Group’s normal credit terms of trade receivables range from 30 to 90 days. Other credit terms are
assessed and approved on a case-by-case basis.
The foreign currency exposure profile of the trade receivables is as follows:
The Group
2010 2009
RM’000 RM’000
Singapore Dollar 5,803 1,556
United States Dollar 1,596 1,504
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Other receivables, deposits
and prepayments 4,828 3,693 16 917
Allowance for doubtful debts - (479) - -
At 30 June 4,828 3,214 16 917
Allowance for doubtful debts:
At 1 July 2009/2008 (479) (571) - -
Written off during the financial year 479 92 - -
At 30 June - (479) - -
Included in other receivables, deposits and prepayments of the Group is an amount of RM3,438,415 (2009
- RM387,832), being advances made to suppliers for future supply of materials and finished goods.
These advances shall be recovered by way of set-off against the supply of materials and finished goods.
notes to financial statementsfor the financial year ended 30 June 2010 continued
69ANNUAL REPORT 2010
13. AMOUNT OWING BY/(TO) SUBSIDIARIES
The amount owing by subsidiaries is non-trade in nature, unsecured, interest-free and repayable on demand,
except for an amount of RM11,647,952 which bore interest at the rates ranging from 2.25% to 2.50% per
annum in accordance with the commercial bank’s 1 month fixed deposit rate. The amounts are to be settled
in cash.
The amount owing to a subsidiary in the previous financial year was non-trade in nature, unsecured, interest
free and repayable on demand.
14. DEPOSITS WITH FINANCIAL INSTITUTIONS
Included in deposits with financial institutions is an amount of RM1,347,279 (2009 - RM1,327,952) pledged
to licensed banks for credit facilities granted to the Group.
The effective interest rates of the deposits with financial institutions at the balance sheet date ranged from
2.05% to 2.50% (2009 - 1% to 2%) per annum. The deposits have maturity periods ranging from 1 to 30
days (2009 - 3 to 30 days).
15. CASH AND BANK BALANCES
The foreign currency exposure profile of the cash and bank balances is as follows:-
The Group
2010 2009
RM’000 RM’000
Singapore Dollar 2,717 19
United States Dollar 1,432 371
Euro 345 300
16. SHARE CAPITAL
The Company
2010 2009
Number Number
Par Of Share Par Of Share
Value ‘000 RM’000 Value ’000 RM’000
Authorised:
At 1 July 2009/2008 0.50 200 100 1.00 100 100
Subdivision of the par value
of ordinary shares of RM1.00
each into RM0.50 each. - - - 0.50 100 -
Created during the financial year 0.50 199,800 99,900 - - -
At 30 June 0.50 200,000 100,000 0.50 200 100
notes to financial statementsfor the financial year ended 30 June 2010 continued
70 YOONG ONN CORPORATION BERHAD (814138-K)
16. SHARE CAPITAL continued
The Company
2010 2009
Number Number
Par Of Share Par Of Share
Value ‘000 RM’000 Value ’000 RM’000
Issued and Fully Paid-Up:
At 1 July 2009/2008 0.50 # * 1.00 ^ *
Subdivision of the par value of
ordinary share of RM1.00
each into RM0.50 each - - - 0.50 ^ -
Allotment of shares pursuant
to the listing scheme:
- acquisition of subsidiaries 0.50 94,829 47,415 - - -
- public issue 0.50 25,171 12,585 - - -
At 30 June 0.50 120,000 60,000 0.50 # *
* - RM2
# - 4 ordinary shares
^ - 2 ordinary shares
17. SHARE PREMIUM
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Premium arising from public issue 9,565 - 9,565 -
Listing expenses (880) - (880) -
At 30 June 8,685 - 8,685 -
The share premium is not distributable by way of cash dividends and may be utilised in the manner set out
in Section 60(3) of the Companies Act 1965.
18. MERGER DEFICIT
The merger deficit relates to the subsidiaries which were consolidated under the merger method of
accounting.
The merger deficit arose from the difference between the nominal value of shares issued for the acquisition
of the subsidiaries amounting to RM47,414,628 and the nominal value of the shares acquired of
RM3,050,000.
notes to financial statementsfor the financial year ended 30 June 2010 continued
71ANNUAL REPORT 2010
19. REVALUATION RESERVE
The revaluation reserve represents the surplus arising from the revaluation of the freehold land and buildings
and are not distributable by way of cash dividends.
20. RETAINED PROFITS
The Company has elected for the irrevocable option for the single tier tax system. Therefore, at the balance
sheet date, the Company will be able to distribute dividends out of its entire retained profits under the single
tier tax system.
21. DEFERRED TAX LIABILITIES
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
At 1 July 2009/2008 1,429 277 - -
Recognised in income statements (Note 29) 287 (383) 917 -
Recognised in equity - 1,535 - -
At 30 June 1,716 1,429 917 -
The deferred tax liabilities are attributable to the following:-
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Surplus on revaluation of properties 1,413 1,473 - -
Accelerated capital allowances
on qualifying costs of property,
plant and equipment 1,077 968 - -
Other temporary differences (774) (1,012) 917 -
1,716 1,429 917 -
22. HIRE PURCHASE PAYABLES
The Group
2010 2009
RM’000 RM’000
Minimum hire purchase payments:
- not later than one year 25 280
- later than one year but not later than five years 10 838
35 1,118
Future finance charges (4) (106)
Present value of hire purchase payables 31 1,012
notes to financial statementsfor the financial year ended 30 June 2010 continued
72 YOONG ONN CORPORATION BERHAD (814138-K)
22. HIRE PURCHASE PAYABLES continued
The net hire purchase payables are repayable as follows:-
The Group
2010 2009
RM’000 RM’000
Current (Note 26) : - not later than one year 22 237
Non-current :- later than one year but not later than five years 9 775
31 1,012
The hire purchase payables at the balance sheet date bore a weighted average effective interest rate of5.46% (2009 - 3.78% to 5.60%) per annum.
23. TERM LOANS
The Group
2010 2009
RM’000 RM’000
Current (Note 26) : - not later than one year - 2,717
Non-current :- later than one year but not later than five years - 2,637
- 5,354
Details of the repayment terms were as follows:-
Number of Date of
Monthly Monthly Commencement
Instalment Instalment of Repayment
RM’000
Term loan 1 36 148 August 2007Term loan 2 60 92 November 2007
The term loans in the previous financial year bore an effective interest rate of 4.10% per annum and weresecured by the pledge of fixed deposits belonging to a related party.
24. TRADE PAYABLES
The normal trade credit terms granted to the Group range from 30 to 120 days.
The foreign currency exposure profile of trade payables is as follows:-
The Group
2010 2009
RM’000 RM’000
Euro - 32United States Dollar 353 3,339
notes to financial statementsfor the financial year ended 30 June 2010 continued
73ANNUAL REPORT 2010
25. DIVIDEND PAYABLE
The dividend payable relates to the second interim single tier dividend of 2 sen per ordinary share declared
during the current financial year and which has not been paid at the balance sheet date.
26. SHORT-TERM BORROWINGS
The Group
2010 2009
RM’000 RM’000
Bankers’ acceptances 11,712 12,337
Hire purchase payables (Note 22) 22 237
Term loans (Note 23) - 2,717
11,734 15,291
The bankers’ acceptances at the balance sheet date bore interest at rates ranging from 2.91% to 4.05%
(2009 - 2.88% to 5.05%) per annum and are secured by:-
(i) a pledge of fixed deposits of the Group and a related party;
(ii) a legal charge of the freehold land and buildings of the Group;
(iii) a joint and several guarantee of certain directors of the Company, a third party and its subsidiaries;
(iv) a negative pledge over certain assets of the Group; and
(v) a pledge of properties of a related party.
27. REVENUE
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Sale of goods 127,541 130,084 - -
Management fee - - 199 -
Dividend income - - 13,824 -
127,541 130,084 14,023 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
74 YOONG ONN CORPORATION BERHAD (814138-K)
28. PROFIT/(LOSS) BEFORE TAXATION
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profit/(Loss) before taxation is
arrived at after charging/(crediting):
Allowance for slow-moving inventories 555 462 - -
Allowance for doubtful debts 115 69 - -
Audit fee:
- for the financial year 100 78 20 1
- under/(over)provision in the
previous financial year 4 (1) - -
Directors’ remuneration:
- non-fee emoluments 879 440 4 -
- fee 163 292 91 -
- defined contribution plans 105 53 - -
- estimated non-monetary
benefits-in-kind 42 42 - -
Depreciation of property,
plant and equipment 2,419 2,437 1 -
Interest expense:
- term loans 95 278 - -
- bankers’ acceptances 260 596 - -
- hire purchase 33 30 - -
- advances from related party - 101 - -
Plant and equipment written off 34 202 - -
Rental of premises 3,424 2,954 - -
Staff costs:
- short-term benefits 16,533 17,763 179 -
- defined contribution plans 1,171 1,031 21 -
- estimated non-monetary
benefits-in-kind 56 20 - -
Loss/(Gain) on foreign exchange:
- realised 225 (632) - -
- unrealised 122 - - -
Loss on disposal of plant
and equipment 2 3 - -
Listing expenses written off 1,614 - 1,614 -
Interest income (253) (45) (227) -
Dividend income - - (13,824) -
Rental income (17) (12) - -
Writeback of allowance
for doubtful debts (13) (10) - -
notes to financial statementsfor the financial year ended 30 June 2010 continued
75ANNUAL REPORT 2010
29. INCOME TAX EXPENSE
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Current tax expense:
- for the financial year 6,716 5,894 2,430 -
- overprovision in the
previous financial year (868) (747) - -
5,848 5,147 2,430 -
Deferred tax expense (Note 21):
- relating to reversal and origination
of temporary differences (364) (695) 917 -
- underprovision in the previous
financial year 651 312 - -
287 (383) 917 -
6,135 4,764 3,347 -
As gazetted in the Finance Act 2009, certain subsidiaries of the Company will no longer enjoy the preferential
tax rate of 20% on their chargeable income of up to RM500,000 effective from year of assessment 2009.
Therefore, the corporate tax rate applicable to these subsidiaries for the current financial year is 25%.
In the previous financial year, the corporate tax rate of certain subsidiaries of the Company on the first
RM500,000 of chargeable income was 20%. The tax rate applied to the balance of the chargeable income
was 25%.
During the current financial year, the statutory tax rate remained at 25%.
A reconciliation of income tax expense applicable to the profit/(loss) before taxation at the statutory tax rate
to income tax expense at the effective tax rate of the Group and the Company are as follows:-
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profit/(Loss) before taxation 21,663 18,645 11,964 (2)
Tax at the statutory tax rate of 25% 5,416 4,661 2,991 (1)
Tax effects of:-
Non-taxable gain - - (131) -
Non-deductible expenses 944 645 487 1
Double deduction (8) (7) - -
Under/(over)provision in the
previous financial year:
- current tax (868) (747) - -
- deferred tax 651 312 - -
Differential in tax rates - (100) - -
Tax for the financial year 6,135 4,764 3,347 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
76 YOONG ONN CORPORATION BERHAD (814138-K)
30. EARNINGS PER SHARE
The basic earnings per share is calculated by dividing the Group’s profit attributable to equity holders of
the Company of RM15,527,473 (2009 - RM13,880,991) by the weighted average number of ordinary shares
in issue during the financial year of 107,931,837 (2009 - 94,829,260).
The diluted earnings by shares is not presented as there were no potential dilutive ordinary shares
outstanding at the balance sheet date.
31. DIVIDENDS
The Group/The Company
2010 2009
RM’000 RM’000
Recognised as distribution to ordinary equity holders:-
First interim dividend of 3.0 sen per ordinary share comprising
approximately 0.436 sen of tax exempt dividend per ordinary
share and approximately 2.564 sen of single tier dividend per
ordinary share for the current financial year 3,600 -
Second interim single tier dividend of 2 sen per ordinary share
for the current financial year 2,400 -
6,000 -
Net dividend per share (sen) 5 -
The directors recommend the payment of a final single tier dividend of 2 sen per ordinary share amounting
to RM2,400,000 to be approved by the shareholders at the forthcoming Annual General Meeting. The
dividend will be accounted for as a liability in the period when it is approved by the shareholders.
32. PURCHASE OF PLANT AND EQUIPMENT
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cost of plant and equipment purchased 1,989 2,093 9 -
Amount financed through hire purchase - (300) - -
Cash disbursed for purchase
of plant and equipment 1,989 1,793 9 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
77ANNUAL REPORT 2010
33. CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 10,660 5,857 193 *
Deposits with financial
institutions (Note 14) 13,847 6,029 11,600 -
24,507 11,886 11,793 *
* - RM2
34. ACQUISITION OF SUBSIDIARIES
During the financial year, the Company acquired the entire issued and paid-up share capital of Syarikat
Yoong Onn Sdn. Bhd., Sleep Focus Sdn. Bhd., Elegant Total Home Sdn. Bhd. and Monsieur (M) Sdn. Bhd.
for a total purchase consideration of RM36,528,771, RM7,249,379, RM2,891,643 and RM744,835
respectively. The total purchase consideration which amounted to RM47,414,628 was discharged by the
issuance of 94,829,256 new ordinary shares of RM0.50 each in the Company at par.
The details of the assets and liabilities of the subsidiaries accounted for under the merger method of
accounting at the date of merger are as follows:-.
RM’000
Non-current assets 31,494
Current assets 73,650
Non-current liabilities (4,841)
Current liabilities (39,323)
Fair value of net assets acquired 60,980
35. DIRECTORS’ REMUNERATION
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Executive:
- non-fee emoluments 875 440 - -
- fee 72 292 - -
- defined contribution plan 105 53 - -
- estimated non-monetary benefits-in-kind 42 42 - -
1,094 827 - -
Non Executive:
- non-fee emoluments 4 - 4 -
- fee 91 - 91 -
95 - 95 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
78 YOONG ONN CORPORATION BERHAD (814138-K)
35. DIRECTORS’ REMUNERATION continued
The aggregate amount of emoluments received and receivable by the directors of the Company during the
financial year in bands of RM50,000 to RM600,000 are as follows:-
Directors’
Number of Directors’ Other
Directors Fee Emoluments Total
THE GROUP RM’000 RM’000 RM’000
2010
- Below RM50,000 4 91 4 95
- Between RM500,001 and RM550,000 1 36 480 516
- Between RM550,001 and RM600,000 1 36 542 578
6 163 1,026 1,189
2009
- Between RM400,001 and RM450,000 2 292 535 827
THE COMPANY
2010
- Below RM50,000 4 91 4 95
36. RELATED PARTY DISCLOSURES
(a) For the purpose of the financial statements, the Group has related party relationships with:
(i) its subsidiaries;
(ii) the directors and officers who are the key management personnel; and
(iii) entities controlled by the key management personnel/directors/substantial shareholders.
(b) In addition to the information disclosed elsewhere in the financial statements, the Company carried
out the following transactions with the related parties during the financial year:-
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Subsidiaries:
- Management fees receivable - - 199 -
- Interest income receivable - - 89 -
- Dividend income receivable - - 13,824 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
79ANNUAL REPORT 2010
36. RELATED PARTY DISCLOSURES continued
(b) In addition to the information disclosed elsewhere in the financial statements, the Company carried
out the following transactions with the related parties during the financial year:-
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Related parties:
- Management fee payable to
TanLee Management Services * 113 96 - -
- Interest expenses payable to
Yoon Fah Realty Sdn. Bhd. - 101 - -
- Rental of premises from
Yoon Fah Realty Sdn. Bhd. ** 466 466 - -
- Sale of goods to The Store
Corporation Berhad *** 4,375 3,916 - -
* - TanLee Management Services is a sole proprietor and is wholly owned by a key management personnel.
** - This company is an entity deemed to be controlled by certain directors of the Company.
*** - The company is deemed to be related by virtue of the common directorship of a director.
(c) Key management personnel
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Short-term employee benefits 2,313 1,874 60 -
Defined contribution plans 269 179 7 -
Estimated non-monetary
benefits-in-kind 98 62 - -
2,680 2,115 67 -
Included in the short-term employee benefits is an amount of RM1,094,500 (2009 - RM827,300) in
respect of the remuneration payable to executive directors as disclosed in Note 35 to the financial
statements.
37. SEGMENTAL INFORMATION
The Group has three reportable segments, as described below, which are the Group’s strategic business
units. The strategic business units offer different products and services, and are managed separately. The
following summary describes the operations in each of the Group’s reportable segments:
• Manufacturing - design and manufacturing of home linen and bedding accessories.
• Distribution and trading - distribution and trading of home linen and homeware.
• Retailing - retailing of home linen and homeware.
Transfer prices between operating segments are based on normal commercial terms.
notes to financial statementsfor the financial year ended 30 June 2010 continued
80 YOONG ONN CORPORATION BERHAD (814138-K)
37. SEGMENTAL INFORMATION continued
Distribution The
Manufacturing & Trading Retailing Elimination Group
2010 RM’000 RM’000 RM’000 RM’000 RM’000
Inter-segment revenue 29,756 45,561 - (75,317) -
Segment revenue 22,381 84,796 20,364 - 127,541
Total revenue 52,137 130,357 20,364 (75,317) 127,541
Segment results 5,265 16,783 2,227 24,275
Unallocated expenses (2,148)
Operating profits 22,127
Finance costs (346) (117) (1) (464)
Profit before taxation 21,663
Income tax expense (6,135)
Profit after taxation 15,528
Other information
Segment assets 55,326 43,977 3,851 103,154
Unallocated assets 11,825
114,979
Segment liabilities 13,545 3,279 539 17,363
Unallocated liabilities 5,845
23,208
notes to financial statementsfor the financial year ended 30 June 2010 continued
81ANNUAL REPORT 2010
37. SEGMENTAL INFORMATION continued
Distribution The
Manufacturing & Trading Retailing Elimination Group
2009 RM’000 RM’000 RM’000 RM’000 RM’000
Inter-segment revenue 29,038 45,312 - (74,350) -
Segment revenue 25,142 86,355 18,587 - 130,084
Total revenue 54,180 131,667 18,587 (74,350) 130,084
Segment results 3,954 15,481 313 19,748
Unallocated expenses (2)
Operating profits 19,746
Finance costs (638) (461) (2) (1,101)
Profit before taxation 18,645
Income tax expense (4,764)
Profit after taxation 13,881
Other information
Segment assets 45,608 43,291 3,855 92,754
Unallocated assets 960
93,714
Segment liabilities 16,601 12,491 759 29,851
Unallocated liabilities 2,890
32,741
notes to financial statementsfor the financial year ended 30 June 2010 continued
82 YOONG ONN CORPORATION BERHAD (814138-K)
37. SEGMENTAL INFORMATION continued
Distribution The
Manufacturing & Trading Retailing Group
2010 RM’000 RM’000 RM’000 RM’000
Capital expenditure 304 1,510 166 1,980
Unallocated capital expenditure 9
1,989
Depreciation 1,060 1,067 291 2,418
Unallocated depreciation 1
2,419
Allowance for slow-moving inventories 20 535 - 555
Interest income 20 95 - 115
Unallocated interest income 138
253
Interest expense 283 105 - 388
Distribution The
Manufacturing & Trading Retailing Group
2009 RM’000 RM’000 RM’000 RM’000
Capital expenditure 752 1,069 272 2,093
Depreciation 968 961 508 2,437
Allowance for slow-moving inventories 240 222 - 462
Interest income 6 39 - 45
Interest expense 560 445 - 1,005
Major customers
The following are major customers with revenue equal to or more than 10% of the Group’s revenue:
Revenue Segment
2010 2009
RM’000 RM’000
A local departmental store 31,361 31,131 Distribution and trading.
An overseas importer/distributor 19,389 18,486 Manufacturing,
distribution and trading.
The Group operates wholly in Malaysia.
notes to financial statementsfor the financial year ended 30 June 2010 continued
83ANNUAL REPORT 2010
38. CONTINGENT LIABILITIES
The directors are of the opinion that provisions are not required in respect of the following corporate
guarantees, as it is not probable that a future outflow of economic benefits will arise:-
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
Unsecured:-
Corporate guarantee given
to licensed banks
for credit facilities
granted to its
subsidiaries - - 17,000 -
Guarantee issued
in favour of third
parties 454 444 - -
Material litigation (a) -- - - -
(a) Material litigation
On 13 August 1998, Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”), a wholly owned subsidiary of Yoong
Onn Corporation Berhad and Yoon Fah Realty Sdn. Bhd. (“YFRSB”), filed a suit at the High Court of
Malaysia in Kuala Lumpur against Agenda Istimewa Sdn. Bhd. (“the Defendant”) for the refund of the
deposit in the sum of RM520,150 together with the interest at the rate of 12% per annum, general
damages and a declaration that the sale and purchase agreements entered into between SYOSB and
the Defendant and between YFRSB and the Defendant for the purchase of four (4) industrial lots by
SYOSB and one (1) industrial lot by YFRSB from the Defendant were lawfully terminated and/or
rescinded.
The trial of the suit was completed on 4 August 2009 and the Court delivered its judgment on 27
October 2009. The Court dismissed the suit by SYOSB and YFRSB (“the Plaintiffs”) with costs and
allowed the Defendant’s counter-claim for a declaration that the sale and purchase agreements were
lawfully terminated and/or rescinded by the Defendant and awarded in favour of the Defendant special
damages of RM520,150, general damages for breach of contract, and 8% interest per annum on the
sum due and payable to the Defendant.
On 28 October 2009, SYOSB and YFRSB had given instructions to their solicitors to file an appeal
and an application for stay of execution against the High Court Judge’s judgment dated 27 October
2009. The Notice of Appeal was filed at the Court of Appeal on 10 November 2009 against the
judgment of the High Court. The application for stay of execution was dismissed with costs on 26
March 2010. To date, the Court of Appeal has not fixed a date for the hearing of the appeal.
The directors are of the opinion that the Company has a reasonable prospect of success in the appeal.
notes to financial statementsfor the financial year ended 30 June 2010 continued
84 YOONG ONN CORPORATION BERHAD (814138-K)
39. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) On 11 August 2009, the Company:-
(i) increased its authorised share capital from RM100,000 to RM100,000,000 divided into
200,000,000 ordinary shares of RM0.50 each by the creation of 199,800,000 new ordinary shares
of RM0.50 each;
(ii) increased its issued and paid-up share capital from RM2 to RM47,414,630 as part of its flotation
scheme on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The issued
and paid-up share capital was increased in the following manner:-
• Acquisition of Syarikat Yoong Onn Sdn. Bhd. (“SYOSB”)
Acquisition of the entire issued and paid-up share capital of SYOSB comprising 2,000,000
ordinary shares of RM1.00 each for a total purchase consideration of RM36,528,771 satisfied
by the issuance of 73,057,542 new ordinary shares of RM0.50 each in the Company at par.
• Acquisition of Sleep Focus Sdn. Bhd. (“SFSB”)
Acquisition of the entire issued and paid-up share capital of SFSB comprising 500,000
ordinary shares of RM1.00 each for a total purchase consideration of RM7,249,379 satisfied
by the issuance of 14,498,758 new ordinary shares of RM0.50 each in the Company at par.
• Acquisition of Elegant Total Home Sdn. Bhd. (“ETHSB”)
Acquisition of the entire issued and paid-up share capital of ETHSB comprising 200,000
ordinary shares of RM1.00 each for a total purchase consideration of RM2,891,643 satisfied
by the issuance of 5,783,286 new ordinary shares of RM0.50 each in the Company at par.
• Acquisition of Monsieur (M) Sdn. Bhd. (“MSB”)
Acquisition of the entire issued and paid-up share capital of MSB comprising 350,000 ordinary
shares of RM1.00 each for a total purchase consideration of RM744,835 satisfied by the
issuance of 1,489,670 new ordinary shares of RM0.50 each in the Company at par.
(b) The Company increased its issued and paid-up share capital from RM47,414,630 to RM60,000,000
by the public issue of 25,170,740 new ordinary shares of RM0.50 each at an issue price of RM0.88
per ordinary share pursuant to the initial public offering; and
(c) On 23 December 2009, the Company’s shares were listed on the Main Market of Bursa Securities.
40. FOREIGN EXCHANGE RATES
The principal closing foreign exchange rates used (expressed on the basis of one unit of foreign currency
to RM equivalent) for the translation of the foreign currency balances at the balance sheet date are as
follows:-
2010 2009
RM RM
United States Dollar 3.24 3.45
Singapore Dollar 2.30 2.39
Euro 3.95 4.96
notes to financial statementsfor the financial year ended 30 June 2010 continued
85ANNUAL REPORT 2010
41. FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair values is defined as the amount at which the financial instrument could be exchanged in a current
transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced
sale or liquidation.
The following methods and assumptions are used to estimate the fair value of each class of financial
instruments of the Group :-
(a) Hire Purchase Payables
The carrying amounts approximated the fair values of these instruments. The fair values of the hire
purchase payables are determined by discounting the relevant cash flows using current interest rates
for similar types of instruments at the balance sheet date.
(b) Cash and Bank Balances, Other Short-Term Receivables/Payables
The carrying amounts approximated their fair values due to the relatively short-term maturity of these
instruments.
(c) Contingent Liabilities
The nominal amount and fair value of financial instruments not recognised in the balance sheets of the
Group and of the Company were as follows:-
Nominal
Amount Fair Value
RM’000 RM’000
THE GROUP
At 30 June 2010
Guarantee issued in favour of third parties 454 #
Material litigation - *
At 30 June 2009
Guarantee issued in favour of third parties 444 #
THE COMPANY
At 30 June 2010
Corporate guarantee 17,000 #
At 30 June 2009
Corporate guarantee - -
# The fair values of the contingent liabilities are expected to be minimal as the subsidiaries are expected to fulfill their
obligations.
* It is not practicable to estimate fair value reliably due to uncertainties relating to timing, the costs and the eventual
outcome.
notes to financial statementsfor the financial year ended 30 June 2010 continued
86 YOONG ONN CORPORATION BERHAD (814138-K)
41. FAIR VALUES OF FINANCIAL INSTRUMENTS continued
(d) Forward Foreign Exchange Contracts
The net fair values of the forward foreign exchange contracts are the amounts that would be payable
or receivable on the termination of the outstanding position arising and are determined by reference to
the difference between the contracted rate and forward exchange rate as at the balance sheet date
applied to a contract of similar quantum and maturity period.
Nominal Net
Amount Fair Value
RM’000 RM’000
THE GROUP
At 30 June 2010
Forward foreign exchange contracts 1,304 (8)
At 30 June 2009
Forward foreign exchange contracts - -
42. COMPARATIVE FIGURES
The comparative figures of the Group were presented based on the financial statements of the subsidiaries’
accounted for using the merger method of accounting, as those subsidiaries were under common control
by the same parties both before and after the acquisitions by the Company, and that control is not transitory.
The following comparative figures of the Company have been reclassified to conform with the presentation
of the current financial year:-
As
As Previously
Restated Reported
THE COMPANY RM’000 RM’000
Balance Sheet (Extract):-
Amount owing to a related party - 777
Amount owing to a subsidiary 777 -
Cash Flow Statement (Extract):-
Cash flow for operating activities
Increase in prepayments - (789)
Share issuance expenses paid (789) -
Cash flow for financing activities
Advances from a related party - 646
Advances from subsidiary 646 -
notes to financial statementsfor the financial year ended 30 June 2010 continued
87ANNUAL REPORT 2010
1) Utilisation of Initial Public Offerings (“IPO”) Proceeds
As at 30 June 2010, the total gross IPO proceeds of RM 22.15 million arising from the Public Issue have
been utilised as follow :
Intended
Timeframe for
Proposed Utilised Balance to utilisation
Details of the proposed Utilisation To date be utilised (from date
utilisation of proceeds RM’000 RM’000 RM’000 of listing)
Repayment of bank borrowings 9,000 9,000 - Within 6 months
Local and overseas expansion 6,000 150 5,850 Within 24 months
Working capital 3,650 3,650 - Within 24 months
Estimated listing expenses # 3,500 3,500 - Within 6 months
22,150 16,300 5,850
# - Unutilised estimated listing expenses of approximately RM1.0 million were used for working capital
2) Share Buy-Backs
There was no share buy-backs by the Company during the financial year ended 30 June 2010.
3) Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities issued by the Company during the financial year
ended 30 June 2010.
4) American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme
The Company did not sponsor any ADR or GDR programme during the financial year ended 30 June 2010.
5) Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or
management by the relevant regulatory bodies during the financial year.
6) Non-Audit Fees
The amount of non-audit fees incurred for sevices rendered by the external auditors to the Group for the
financial year ended 30 June 2010 amounted to RM38,000.
7) Variation in Results
There were no variations of 10% or more between the audited results of the Group for the financial year
ended 30 June 2010 and the unaudited results announced on 26 August 2010.
8) Material Contracts with Related Parties
(a) On 9 January 2009, Yoong Onn Corporation Berhad entered into a Share Sale Agreement with the
vendors of Elegant Total Home Sdn Bhd (“ETHSB”), Monsieur (M) Sdn Bhd (“MSB”), Sleep Focus Sdn
Bhd (“SFSB”) and Syarikat Yoong Onn Sdn Bhd (“SYOSB”), namely Chew Hon Foong, Chew Hon
Keong, Chew Hon Yoong, Chew Hon Yoon, Chew Fui Ngee, Chow Siew Sen, Dang Chee Wai and
Loo Lai Yoke in relation to the acquisitions of ETHSB, MSB, SFSB and SYOSB for a total consideration
of RM47,414,628.
Additional Compliance Information
88 YOONG ONN CORPORATION BERHAD (814138-K)
8) Material Contracts with Related Parties continued
(b) On 4 November 2009, Yoong Onn Corporation Berhad and Chew Hon Foong, Chew Hon Keong,
Chew Hon Yoong, Chew Hon Yoon, Chew Fui Ngee, Chow Siew Sen, Dang Chee Wai and Loo Lai
Yoke, collectively entered into a conditional underwriting agreement with Public Investment Bank
Berhad (20027-W), JF Apex Securities Berhad (47680-X) and Mercury Securities Sdn Bhd (113193-
W) collectively to underwrite 11,300,000 Public Issue Shares available for application by the Malaysian
Public, the eligible employees and other persons who have contributed to the success of the Group
and 220,000 Offer Shares pursuant to Section 3.5.3(iv) of the Prospectus dated 3 December 2009
for an underwriting commission of 2.0% of the IPO Price multiplied by the number of Public Issue
Shares and Offer Shares underwritten by each of the respective Underwriters.
9) Corporate Social Responsibility
The Group recognizes its role as a responsible corporate citizen and no company can exist by maximizing
shareholders value alone. In this regards, the needs and interests of other stakeholders are also taken into
consideration.
a) Environment
The Group has always complied with the relevant environmental legislation and promoting
environmental awareness as part of its commitment to protect the environment and contribute towards
sustainable development.
b) Safety and Health
The Group is committed to provide a safe and healthy working environment for all employees under
the requirements of Health, Safety and Environment (“HSE”). We constantly ensure a safe and healthy
working environment and keep ourselves updated with the latest HSE requirements and regulations
through various training programmes.
c) Donations to Charitable Organisations
We have made donations to several charitable organisations including Tabung Thalassaemia Malaysia,
Pertubuhan Orang Cacat Penglihatan Malaysia and Kuala Lumpur Lions Foundation.
d) Employees
The Group places strong emphasis on personal development and provides various training courses
for its employees to enhance and upgrade their work skills for better opportunities of career
advancements.
10) Profit Forecast/Profit Guarantee
The Company did not provide any profit forecast/guarantee in any public documents during the financial
year ended 30 June 2010.
11) Revaluation Policy of Landed Properties
The Group’s revaluation policy in respect of its freehold land and buildings is to revalue periodically, at
least once in every five years. Surpluses arising from the revaluation of the properties, net of deferred
taxation, where applicable, are credited to a revaluation reserve. Deficits arising from the revaluation, to
the extent that they are not supported by any previous revaluation surpluses, are charged to the income
statement.
The revaluation policy for landed properties is detailed in Note 6(g) - property, plant and equipment of the
Financial Statements in this Annual Report.
additional compliance informationcontinued
89ANNUAL REPORT 2010
additional compliance informationcontinued
12) Recurrent Related Parties Transactions
The breakdown of the aggregate value of transactions conducted during the financial year ended 30 June
2010 is as follows:
Transacting
Companies Related Amount of
within the Transacting Nature of Transaction
Group Parties Transaction (RM’000)
Syarikat Yoong Yoon Fah Realty Rental of property which 370
Onn Sdn Bhd Sdn Bhd is currently used as SYOSB’s
(“SYOSB”) office cum warehouse
Monsieur (M) Yoon Fah Realty Rental of property which 96
Sdn Bhd Sdn Bhd is currently used as MSB’s
(“MSB”) retail shop
Syarikat Yoong The Store Supply of home 4,257
Onn Sdn Bhd Corporation linen products
Berhad
Elegant Total The Store Supply of home 118
Home Sdn Bhd Corporation linen products
Berhad
At the forthcoming Annual General Meeting to be held on 10 December 2010, the Company intends to
seek its shareholders’ approval for the proposed shareholders’ ratification and proposed shareholders’
mandate for recurrent related party transactions of a revenue or trading nature, which are necessary for
its day-to-day operations and in the ordinary course of business, with related parties. The details of the
proposed shareholders’ ratification and proposed shareholders’ mandate to be sought is set out in the
Circular to Shareholders dated 15 November 2010.
Authorised share capital : RM100,000,000
Issued and fully paid-up capital : RM60,000,000
Class of shares : Ordinary shares of RM0.50 each
Voting rights : One vote per ordinary share
ANALYSIS BY SIZE OF SHAREHOLDINGS
No. Of % Of No. Of % Of Issued
Size Of Holdings Shareholders Shareholders Shareholdings Capital
Less than 100 2 0.19 100 *
100 to 1,000 610 59.34 212,000 0.18
1,001 to 10,000 253 24.61 1,265,000 1.05
10,001 to 100,000 110 10.70 3,991,000 3.33
100,001 to 5,999,999 ** 52 5.06 51,531,900 42.94
6,000,000 and above *** 1 0.10 63,000,000 52.50
TOTAL 1,028 100.00 120,000,000 100.00
* - negligible
** - less than 5% of issued shares
*** - 5% and above of issued shares
SUBSTANTIAL SHAREHOLDERS
Direct Interest Indirect Interest
No. Of No. Of
Name Of Shareholder Shares % Shares %
Casatex Cosmo Sdn Bhd 63,000,000 52.50 - -
Chew Hon Foong - - 63,000,000 52.50(a)
Chew Hon Keong - - 63,000,000 52.50(a)
Chew Hon Yoong - - 63,000,000 52.50(a)
Chew Hon Yoon - - 63,000,000 52.50(a)
(a) Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of Companies Act, 1965.
DIRECTORS’ SHAREHOLDINGS
Direct Interest Indirect Interest
No. Of No. Of
Name Of Shareholder Shares % Shares %
1. Datuk Kamaludin Bin Yusoff 100,000 0.08 - -
2. Chew Hon Foong - - 63,000,000 52.50^
3. Chew Hon Keong - - 63,000,000 52.50^
4. Datuk Hairuddin Bin Mohamed - - - -
5. Yeoh Chong Keng 100,000 0.08 - -
6. Lee Kim Seng 100,000# 0.08 - -
# held through Public Nominees (Tempatan) Sdn Bhd
^ Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of Companies Act, 1965.
90 YOONG ONN CORPORATION BERHAD (814138-K)
Analysis of Shareholdingsas at 18 October 2010
91ANNUAL REPORT 2010
THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS
No. Of % Of Issued
No. Name Shares Shares
1. Casatex Cosmo Sdn Bhd 63,000,000 52.50
2. Lembaga Tabung Haji 5,880,000 4.90
3. Chow Siew Sen 5,500,000 4.58
4. HSBC Nominees (Asing) Sdn Bhd 5,430,000 4.53
Exempt AN for Credit Suisse
5. HLB Nominees (Asing) Sdn Bhd 4,400,000 3.67
Wang ShouHu
6. EB Nominees (Tempatan) Sdn Bhd 4,000,000 3.33
Pledged Securities Account for Chan Keng Meng
7. Tan Sri Abu Sahid Bin Mohamed 3,000,000 2.50
8. AMSEC Nominees (Tempatan) Sdn Bhd 2,796,000 2.33
Amtrustee Berhad for Pacific Pearl Fund
9. Tengku Zaitun Binti Tengku Mahadi 2,580,000 2.15
10. Kok Foong Meng 1,075,900 0.90
11. Chuah Seng Hooi 1,048,600 0.87
12. Dato’ Lim Ah Lai 1,000,000 0.83
13. Ng Yoong Sang 1,000,000 0.83
14. Chuah Ling Ling 984,500 0.82
15. Lee Chai Hua 900,000 0.75
16. Public Nominees (Tempatan) Sdn Bhd 850,000 0.71
Pledged Securities Account for Chuah Seng Boon
17. Lee Meng Yong 806,900 0.67
18. Kee Choon Heng 708,200 0.59
19. Loo Lai Yoke 630,000 0.53
20. Lee Chai Hua 520,000 0.43
21. Chuah Seng Hoon 517,000 0.43
22. Kee Chun Keat 506,300 0.42
23. Chan Yoke Kwan 500,000 0.42
24. Public Nominees (Tempatan) Sdn Bhd 500,000 0.42
Pledged Securities Account for Tang Choon Ee
25. Dang Chee Wai 400,000 0.33
26. Sun Kien Keong 333,000 0.28
27. Choong Kien Yeong 300,000 0.25
28. Tan Peng 300,000 0.25
29. Master Box Manufacturing Sdn Bhd 300,000 0.25
30. Wan DongMing 300,000 0.25
Total 110,066,400 91.72
analysis of shareholdingsas at 18 October 2010 continued
92 YOONG ONN CORPORATION BERHAD (814138-K)
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List of Group Properties
93ANNUAL REPORT 2010
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Third Annual General Meeting of the Company will be held at Putra 1
Room, Nilai Springs Golf & Country Club, PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul
Khusus on Friday, 10 December 2010 at 10.00 a.m. for the following purposes:-
AGENDA
AS ORDINARY BUSINESS:
1. To receive the Audited Financial Statements for the financial year ended 30 June 2010
together with the Reports of the Directors and Auditors thereon.
2. To approve the payment of Directors’ fee of RM91,000 for the financial year ended
30 June 2010.
3. To declare a final single tier dividend of 2 sen per share in respect of the financial year
ended 30 June 2010.
4. To re-elect Chew Hon Keong who is retiring in accordance with Article 129 of the
Company’s Articles of Association.
5. To re-elect the following Directors who are retiring in accordance with Article 134 of the
Company’s Articles of Association:
(a) Datuk Kamaludin Bin Yusoff
(b) Datuk Hairuddin Bin Mohamed
(c) Lee Kim Seng
(d) Yeoh Chong Keng
6. To re-appoint Messrs. Crowe Horwath as Auditors of the Company for the ensuing year
and to authorise the Directors to fix their remuneration.
As Special Business :
To consider and if thought fit, to pass the following Ordinary Resolutions:-
7. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965.
“That pursuant to Section 132D of the Companies Act, 1965, the Articles of Association
of the Company and subject to the approvals of the relevant governmental and/or
regulatory authorities, the Directors be and are hereby empowered to issue shares in
the Company, at any time to such persons and upon such terms and conditions and for
such purposes as the Directors may, in their absolute discretion, deem fit, provided that
the aggregate number of shares to be issued does not exceed ten percent (10%) of the
issued share capital of the Company for the time being AND THAT the Directors be and
are also empowered to obtain the approval for the listing of and quotation for the
additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”)
AND THAT such authority shall continue to be in force until the conclusion of the next
Annual General Meeting of the Company.”
(Resolution 1)
(Resolution 2)
(Resolution 3)
(Resolution 4)
(Resolution 5)
(Resolution 6)
(Resolution 7)
(Resolution 8)
(Resolution 9)
(Resolution 10)
94 YOONG ONN CORPORATION BERHAD (814138-K)
notice of annual general meetingcontinued
8. Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for
Recurrent Related Party Transactions of a Revenue or Trading Nature
“That all the recurrent related party transactions of a revenue or trading nature entered
into by the Company and its subsidiaries (“YOCB Group”) from 23 December 2009, the
listing date until the date of this Annual General Meeting as set out in Section 2.4 of the
Circular to Shareholders dated 15 November 2010, which are necessary for its day-to-
day operations, be and is hereby approved and ratified on the basis that such
transactions are entered into on terms which are not more favourable to the related
parties involved than generally available to the public and are not detrimental to the
minority shareholders of the Company (hereinafter referred to as the “Proposed
Shareholders’ Ratification”);
“That approval be and is hereby given to the Company and its subsidiaries to enter into
recurrent related party transactions of a revenue or trading nature with those related
parties as set out in Section 2.4 of the Circular to Shareholders of the Company dated
15 November 2010, which are necessary for its day-to-day operations, to be entered
into by the YOCB Group on the basis that such transactions are entered into on terms
which are not more favourable to the related parties involved than generally available to
the public and are not detrimental to the minority shareholders of the Company
(hereinafter referred to as the “Proposed Shareholders’ Mandate”);
That the Proposed Shareholders’ Mandate is subject to annual renewal and shall only
continue to be in force until:
(a) the conclusion of the next Annual General Meeting of the Company; or
(b) the expiration of the period within which the next Annual General Meeting of the
Company after the date it is required to be held pursuant to Section 143(1) of the
Companies Act, 1965 (but shall not extend to such extensions as may be allowed
pursuant to Section 143(2) of the Companies Act, 1965); or
(c) revoked or varied by resolution passed by the shareholders in general meeting;
whichever is the earlier.
AND FURTHER THAT the Directors of the Company be authorised to complete and do
all acts and things (including executing all such documents as may be required) as they
may consider expedient or necessary to give effect to the Proposed Shareholders’
Ratification and Proposed Shareholders’ Mandate.”
9. To transact any other business for which due notice shall have been given.
(Resolution 11)
95ANNUAL REPORT 2010
NOTICE OF DIVIDEND ENTITLEMENT
NOTICE IS ALSO HEREBY GIVEN that a final single tier dividend of 2 sen per share for the financial year
ended 30 June 2010, if approved at the Third Annual General Meeting, will be paid on Tuesday, 18 January
2011 to Depositors whose names appear in the Record of Depositors on Friday, 7 January 2011.
A Depositor shall qualify for entitlement to the dividend only in respect of:
(a) Shares transferred to the Depositor’s Securities Account before 4.00 p.m. on Friday, 7 January 2011 in
respect of ordinary transfers; and
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to Rules of the
Bursa Malaysia Securities Berhad.
By Order of the Board
Dato’ Tang Swee Guan (MIA 5393)
Cheong Sin Yee (MAICSA 7052271)
Secretaries
Kuala Lumpur
15 November 2010
Notes:
(i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies
who need not be a member/members of the Company, an advocate, an approved Company auditor, or a
person approved by the Registrar to attend and vote in his/her stead.
(ii) A member may appoint not more than two (2) proxies to attend the same meeting. Where a member
appoints two proxies, the proxies shall not be valid unless the member specifies the proportion of his
shareholding to be represented by each proxy. Where a member of the Company is an authorised nominee
as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy
in respect of each securities account.
(iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney
duly authorised in writing, or if the appointor is a corporation, either under its common seal or the hand of
its officer or its duly authorised attorney.
(iv) The instrument appointing a proxy shall be deposited at the Registered Office of the Company at Suite
13A.01(A), Level 13A, Wisma Goldhill, 67 Jalan Raja Chulan, 50200 Kuala Lumpur not less than forty-
eight (48) hours before the time for holding the meeting or at any adjournment thereof.
notice of annual general meetingcontinued
96 YOONG ONN CORPORATION BERHAD (814138-K)
Explanatory Note on Special Business
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
The proposed Ordinary Resolution 10, if passed, will grant a general mandate and empower the Directors to
issue shares up to an aggregate amount not exceeding 10% of the issued and paid-up share capital of the
Company for the time being, for such purposes as the Directors consider would be in the best interest of the
Company without having to convene separate general meetings. This authority, unless revoked or varied at a
general meeting, will expire at the conclusion of the next Annual General Meeting.
This general mandate is new and will provide flexibility to the Company for any possible fund raising activities,
including but not limited to further placement of shares for purpose of funding future investment, working capital
and/or acquisitions.
Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature
The proposed Ordinary Resolution 11, if passed, will enable the Company and its subsidiaries to enter into
recurrent related party transactions of a revenue or trading nature from 23 December 2009, the listing date
until the date of this Annual General Meeting and which are necessary for its day-to-day operations and with
those related parties as set out in Section 2.4 (Proposed Shareholders’ Ratification and Proposed Shareholders’
Mandate) of the Circular to Shareholders of the Company dated 15 November 2010 provided that such
transactions are entered into on terms which are not more favourable to the related parties involved than
generally available to the public and are not detrimental to the minority shareholders of the Company.
Please refer to the Section 2 of the Circular to Shareholders dated 15 November 2010 which is circulated
together with this Annual Report.
notice of annual general meetingcontinued
97ANNUAL REPORT 2010
Details of Directors Standing for Re-Election
Directors who are standing for re-election at the Third Annual General Meeting of Yoong Onn Corporation
Berhad:-
(i) The Director retiring pursuant to Article 129 of the Company’s Articles of Association: -
(a) Chew Hon Keong
(ii) The Directors retiring pursuant to Article 134 of the Company’s Articles of Association: -
(a) Datuk Kamaludin Bin Yusoff
(b) Datuk Hairuddin Bin Mohamed
(c) Lee Kim Seng
(d) Yeoh Chong Keng
Further details of the above Directors are set out in the Directors’ Profile of this Annual Report.
Statement AccompanyingNotice of Annual General Meeting
98 YOONG ONN CORPORATION BERHAD (814138-K)
This page has been intentionally left blank
I/We of
being a member(s) of Yoong Onn Corporation Berhad hereby appoint
of
or failing him/her,
of
or failing him/her, *the Chairman of the Meeting as my/our proxy(ies), to vote for me/us on my/our behalf at the
Third Annual General Meeting of the Company to be held at Putra 1 Room, Nilai Springs Golf & Country Club,
PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul Khusus on Friday, 10 December 2010 at
10.00 a.m. and at any adjournment thereof.
My/our proxy/proxies is/are to vote as indicated below:
No. Resolutions For Against
1. To receive the Audited Financial Statements
2. To approve the payment of Directors’ fee
3. To declare a final single tier dividend of 2 sen per share
4. To re-elect Chew Hon Keong as Director
5. To re-elect Datuk Kamaludin Bin Yusoff as Director
6. To re-elect Datuk Hairuddin Bin Mohamed as Director
7. To re-elect Lee Kim Seng as Director
8. To re-elect Yeoh Chong Keng as Director
9. To re-appoint Crowe Horwath as Auditors of the Company
Special business
10. Authority to issue shares pursuant to Section 132D of the
Companies Act, 1965
11. To approve the Proposed Shareholders’ Ratification and
Proposed Shareholders’ Mandate
(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. If no specific
direction as to voting is given, the proxy will vote or abstain at his discretion.)
Signed this _________ day of ______________, 2010
_______________________________
Signature of Shareholder
* Strike out whichever not applicable
Form of Proxy
For appointment of two proxies, the
shareholdings to be represented by
the proxies:
Proxies % of shares
Proxy 1
Proxy 2
Total 100%
No. of Shares held
The Company Secretary
Yoong Onn Corporation Berhad
Suite 13 A.01 (A),
Level 13A Wisma Goldhill
67 Jalan Raja Chulan
50200 Kuala Lumpur
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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.
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FA YOONG ONN.pdf 3/11/10 9:44:57 AM