4 CorporateInformation 6 CorporateStructure 8 FinancialHighlights 10 CorporateHighlightsandEvents 12 BoardofDirectors&
ProfileofDirectors
16 Chairman’sStatement 22 AuditCommitteeReport 28 CorporateGovernanceStatement 35 StatementonRiskManagement
andInternalControl
Contents
37 StatementonDirectors’ResponsibilityinRelationtotheAuditedFinancialStatements
38 FinancialStatements
96 AdditionalComplianceInformation
99 AnalysisofShareholdings 101 ListofGroupProperties 102 NoticeoftheSixthAnnualGeneralMeeting
106 StatementAccompanyingNoticeofAnnualGeneralMeeting
FormofProxy
4 Yoong Onn Corporation BerhadAnnual Report 2013
Corporate InformatIon
BOARD OF DIRECTORSDatuk Kamaludin Bin YusoffIndependent Non-Executive Chairman
Chew Hon FoongManaging Director and Group Chief Executive Officer
Chew Hon KeongExecutive Director and Group Chief Operating Officer
Datuk Hairuddin Bin MohamedIndependent Non-Executive Director
Yeoh Chong KengIndependent Non-Executive Director
Lee Kim SengIndependent Non-Executive Director
AUDIT COMMITTEELee Kim Seng(Chairman)Yeoh Chong KengDatuk Hairuddin Bin Mohamed
NOMINATION COMMITTEEYeoh Chong Keng(Chairman)Datuk Hairuddin Bin MohamedLee Kim Seng
REMUNERATION COMMITTEEYeoh Chong Keng(Chairman)Datuk Kamaludin Bin YusoffChew Hon Foong
COMPANY SECRETARYDato’ Tang Swee Guan(MIA5393)
REGISTERED OFFICESuite13A.01(A)Level13AWismaGoldhill67JalanRajaChulan50200KualaLumpurTel: (603)20322895Fax: (603)20322893
HEAD OFFICELotNo.PT16690-16692JalanPermata2Arab-MalaysianIndustrialPark71800Nilai,NegeriSembilanDarulKhususTel: (606)7996012Fax: (606)7997015Website:www.yoongonn.com
SHARE REGISTRARSymphonyShareRegistrarsSdnBhdLevel6,SymphonyHousePusatDaganganDana1JalanPJU1A/4647301PetalingJaya,SelangorTel: (603)78418000Fax: (603)78418151
PRINCIPAL BANKERSAmBank(M)BerhadHongLeongBankBerhadUnitedOverseasBank(Malaysia)Bhd
AUDITORSCroweHorwath(AF1018)
SOLICITORSIzaNgYeoh&Kit
STOCK EXCHANGE LISTINGMainMarketofBursaMalaysiaSecuritiesBerhadSector:ConsumerProductsStock Name:YOCBStock Code:5159
INVESTOR RELATIONS AND ENQUIRIESJon Tan [email protected]: (603)91725012
6 Yoong Onn Corporation BerhadAnnual Report 2013
Corporate struCture
YOONG ONN CORPORATION BERHAD(814138-K)
Distribution /Trading andInstitutional
Supply
Distributionand
TradingRetailing
Design /Manufacturing
and Trading
SLEEP FOCUSSDN BHD
401252-V
SYARIKATYOONG ONN
SDN BHD171966-W
ELEGANTTOTAL HOME
SDN BHD268537-K
MONSIEUR (M)SDN BHD
121889-W
100% 100% 100% 100%
6 Yoong Onn Corporation BerhadAnnual Report 2013
8 Yoong Onn Corporation BerhadAnnual Report 2013
fInanCIaL HIGHLIGHts
PROFIT AFTER TAXRM’000
TOTAL SHAREHOLDERS’ EQUITYRM’000
PROFIT BEFORE TAX RM’000
REVENUERM’000
0
5,000
10,000
15,000
20,000
25,000
30,000
0
20,000
40,000
60,000
80,000
100,000
140,000
120,000
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
2009 2010 2011 2012 20132009 2010 2011 2012 2013
0
20,000
18,000
20,000
22,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
0
127,541
130,084
178,607
141,002
25,309
21,663
18,645
27,680
110,627
91,771
60,973
139,339
18,302
15,528
13,881
20,453
23,482
124,486
17,277
153,913
Audited
30 June 2009 30 June 2010 30 June 2011
Revenue (RM’000) 130,084 127,541 141,002
18,645 21,663 25,309
Minority Interests (RM’000)
Profit Before Tax (RM’000)
Profit After Tax and 13,881 15,528 18,302
Total Shareholders’ Equity (RM’000) 60,973 91,771 110,627
30 June 2013
178,607
27,680
20,453
139,339
30 June 2012
153,913
23,482
17,277
124,486
Pro-forma
10 Yoong Onn Corporation BerhadAnnual Report 2013
Corporate HIGHLIGHts and events
Annual General Meeting & Awards Presentation
Oversea EXPO and Trade Fair Licence Manufacturing Signing Agreement
11Yoong Onn Corporation BerhadAnnual Report 2013
Staff Training
Company Dinner, Party & Fiesta
Corporate Highlights and events (cont’d)
Company Trip and Convention
12 Yoong Onn Corporation BerhadAnnual Report 2013
CHEW HON FOONG Managing Director and Group Chief Executive Officer
Malaysian
ChewHonFoong,aged54,wasappointedtotheBoardofYoongOnnCorporationBerhadon17April2008.HeisalsoamemberoftheRemunerationCommitteeoftheCompany.
As the co-founder, he hasmore than thirty (30) yearsof experience in thehome linen industry.Hehasbeeninstrumentalinthedevelopment,growthandsuccessoftheYoong Onn Corporation Berhad Group during histenurewiththeGroup.
Hestartedhiscareerin1979whenhejoinedYoonOn,a partnership company, which is involved in tradingandretailingoftextilesandhomelinen.Withhisstrongbusiness acumen, he was involved in developing andcreatingownbrandsofbed linenwhichwasmarketedunderthenamesDianaandNovellein1982.
In1988,togetherwithhisbrother,ChewHonKeong,heestablishedSyarikatYoongOnnSdnBhdandtookovertheentirebusinessofthepartnershipcompany,YoonOn.Hismainintentionistoexpandthebusinesstoincludeinternational trades. Besides overseeing the Groupactivities, he is actively involved in creating fabricdesigns for both the mass and niche markets. He hasextensive experience in the development and creationof home linen designs and he is currently heading theGroup’sin-housedesignteam.HeismainlyresponsiblefortheoveralloperationsoftheGroupwithemphasisonstrategicbusinessplanningandpromotingbrandequityofproducts.
He does not have any other directorships of publiccompanies.
profILe of dIreCtors
DATUK KAMALUDIN BIN YUSOFF Independent Non-Executive Chairman
Malaysian
DatukKamaludinBinYusoff, aged 65,was appointedto the Board of Yoong Onn Corporation Berhadon 28 September 2009. He is also a member of theRemunerationCommitteeoftheCompany.
He holds BA (Honours) from University Malaya in1974. Datuk Kamaludin started his career in 1974 asanAdministrativeandDiplomaticOfficerinthepublicsector and subsequently, he held various distinguishedpositions in the Ministry of Finance, Ministry ofDefence, Road Transport Department and Ministryof Entrepreneur Development. In appreciation to hisservices, Datuk Kamaludin has been awarded withvariousaccolades.In2000,hewasawardedtheBintangPanglimaGemilangDarjahKinabalu (P.G.D.K)whichcarriesthetitle“Datuk”.
Datuk Kamaludin also sits on several boards in thecorporatesector.From2004to2007,hewastheChiefOperatingOfficerofFomemaSdnBhd.Heiscurrentlythe Chairman of Johore Tin Berhad, Executive ViceChairman of Loh & Loh Constructions Sdn Bhd (asubsidiarycompanyofLoh&LohCorporationBerhad)Executive Director of Supremme Systems Sdn Bhdand also holds directorship in other private limitedcompanies.
13Yoong Onn Corporation BerhadAnnual Report 2013
profile of directors (cont’d)
DATUK HAIRUDDIN BIN MOHAMEDIndependent Non-Executive Director
Malaysian
Datuk Hairuddin Bin Mohamed, aged 63, wasappointed to the Board of Yoong Onn CorporationBerhad on 28 September 2009. He is also amemberoftheAuditCommitteeandNominationCommitteeoftheCompany.
Datuk Hairuddin obtained his Bachelor in SocialScience (Honours) fromUniversiti SainsMalaysia in1980. He joined the Royal Malaysian Police Forcein 1970. He was since promoted to various seniorpositions.HewasappointedtheDirectorofCommercialCrimeDepartment inRoyalMalaysiaPolice in2005,apositionhehelduntilhisretirementin2006.DuringhistenureasHeadofCommercialCrimeDepartment,hewasappointedtobeamemberoftheHighPoweredCorporate Governance Committee to oversee allgovernment-linked companies in the country. He haswide experience in fraud detection and commercialcrimeinvestigation.
He does not have any other directorship of publiccompanies.
CHEW HON KEONGExecutive Director and Group Chief Operating Officer
Malaysian
ChewHonKeong,aged53, is theco-founderandwasappointed to the Board of Yoong Onn CorporationBerhadon17April2008.
Hehasmorethanthirty(30)yearsofexperienceinthehome linen industry. His career started in 1979 whenhejoinedYoonOn,apartnership,whichisinvolvedintradingandretailingoftextilesandhomelinen.HealsoassistedinestablishingSyarikatYoongOnnSdnBhdin1988.
AstheotherpartnerofYoonOn,hewasalsoinvolvedin many aspects of the business in textiles and homelinen,whichincludestechnicalspecificationinfabrics.His capability has enabled the Company to developnewrangeofproducttocaterfordifferentmarketsandindustries.
Withanin-depthknowledgeintheproductionprocesses,he together with his brother, Chew Hon Foong wereinvolved in theestablishmentofSleepFocusSdnBhdin 1996 and the construction of Nilai manufacturingplant for the Group’s manufacturing operations. Heis primarily responsible in overseeing the overallmanagement and strategic business development oftheGroupwith emphasis onproduct development andproductresearch.
He does not have any other directorships of publiccompanies.
14 Yoong Onn Corporation BerhadAnnual Report 2013
profile of directors (cont’d)
YEOH CHONG KENGIndependent Non-Executive Director
Malaysian
Yeoh Chong Keng, aged 61, who is a lawyer byprofession andwas appointed to the Board ofYoongOnnCorporationBerhadon28September2009.Healsoservesas theChairmanof theNominationCommitteeand Remuneration Committee and a member of theAuditCommitteeoftheCompany.
He obtained his Barrister-at-law from Lincoln’s Inn,Englandin1980.HewasaseniorpoliceofficerintheRoyal Malaysian Police Force before proceeding tostudylawatLincoln’sInn,England.HewascalledtotheEnglishBarandMalaysianBar in1980and1981respectively and is the Managing Partner of a legalfirminKualaLumpur.HehasalsoactedascounselfortheGovernmentofHongKong.He is anexperiencedlawyerspecialisingincorporateandbankinglaw.
Hehas, in thepastservedasanIndependentDirectorinseveralpublic listedcompanies.Since14February2000, he is an Independent Director of The StoreCorporation Berhad. He is also the Chairman of theNominationCommitteeandservesasamemberintheAuditCommitteeandRemunerationCommitteeofTheStoreCorporationBerhad.
HeisalsocurrentlyanIndependentDirectorofTokioMarineLife InsuranceBhd.Hehasheld thispositionsince2002andistheChairmanoftheRiskManagementandNominationCommitteeaswell asmemberof theAuditCommittee.
15Yoong Onn Corporation BerhadAnnual Report 2013
LEE KIM SENG Independent Non-Executive Director
Malaysian
Lee Kim Seng, aged 68, was appointed to the Board of Yoong OnnCorporationBerhadon28September2009.HealsoservesastheChairmanoftheAuditCommitteeandamemberoftheNomineeCommitteeoftheCompany.
He is a member of the Malaysian Institute of Accountants, MalaysianInstituteofTaxationandTheInstituteofInternalAuditors,Malaysia.Hewaspreviouslyamemberof the InstituteofCharteredAccountants inEnglandandWales.
He hasmore than thirty (30) years of relevantworking experience in thevariousservicesencompassingupstreamanddownstreamindustries.HejoinedHarrisons&Crosfield(Sabah)Sdn.Bhd.in1976asaSeniorAccountant.HewassubsequentlytransferredtoHarrisons&Crosfield(Malaysia)Sdn.Bhd.in1980andafterayear,hewaspromotedtoChiefAccountant.Thereafter,hewaspromotedtoAssociateDirector(Finance)in1986.
In1987,he joinedSPHoldingsLtd. inPapuaNewGuinea.Thereafter, in1990, he joined a plantation group Raja Garuda Mas (“RGM”) based inMedan,Indonesia.In1993,hewaspromotedtoGroupFinancialControlleroftheForestryDivisionoftheRGMgroup.In1996,hewastransferredtoa joint-venture oil palmplantation group, jointly owned by theRGMandthe SALIM group. In 1997 after completing his assignment, hewas thentransferredtoapublic listedsubsidiaryofRGMgroupasSeniorFinancialController.
In2004,hejoinedSinarMasGroup(“SMG”)asVice-PresidentofInternalAuditofaforestrygroupoperatinginRiau,Sumatera.HewasthentransferredtothepositionofVice-PresidentBusinessControlin2005.Afterayear,hewastransferredtotheheadofficeofSMG,Jakarta,asanadvisertoManagingDirector-Finance,ForestryDivisionuntilhisretirementin2008.
He does not have any other directorships of public listed companies.Currently,he is involved inengineeringandconstructionaswellas in theminingbusiness.
Notes to Profile of Directors:
1. ChewHonKeong is the brother ofChewHonFoong
Save as disclosed, none of thedirectorshasanyfamilyrelationshipwithanydirectoroftheCompany.
2. Save for Chew Hon Foong, ChewHon Keong and Yeoh ChongKeng, who have interest inrecurrent relatedparty transactionsas disclosed in item 11 underadditional compliance informationin thisAnnualReport, none of thedirectorshasanyconflictofinterestwiththeCompany.
3. None of the directors has beenconvictedofanyoffenceswithinthepastten(10)yearsotherthantrafficoffences,ifany.
4. Please refer to the analysis ofshareholdings of this AnnualReport for details of the directors’shareholdingsintheCompany.
5. Save for Chew Hon Keong, whoattended 4 Board meetings, alldirectors attended all the five (5)Board meetings of the Companyheldduringthefinancialyearended30June2013.
profile of directors (cont’d)
16 Yoong Onn Corporation BerhadAnnual Report 2013
CHaIrman’s statement
Dear Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statement of Yoong Onn Corporation Berhad and its Group of Companies (“The Group”) for the financial year ended 30 June 2013.
17Yoong Onn Corporation BerhadAnnual Report 2013
Chairman’s statement (cont’d)
REVIEW OF FINANCIAL PERFORMANCE
For thefinancialyearended30June2013, theGroupachievedsales revenueofRM178.61million,agrowthof16.05%orRM24.70millionfromRM153.91millioninthepreviousfinancialyear2012.ThegrowthwasmainlyattributedfromtheGroup’sdomesticsales.
TheGroupreportedahigherprofitbeforetaxofRM27.68millionforthefinancialyear2013,whichis17.89%orRM4.20millionhigherthantheprofitbeforetaxofRM23.48millionreportedinthepreviousyear2012.Higherprofitbeforetaxwasattributabletohighersalesgeneratedandoperationefficiency.
Shareholders’ fundshas increasedby11.93%orRM14.85million toRM139.34millioncompared toRM124.49millionpreviously.TheGrouphasahealthycashbalanceofRM41.36millionandbankborrowingsofRM24.12million,whencomparedtocashbalanceofRM29.91millionandbankborrowingsofRM20.81millionlastyear.
18 Yoong Onn Corporation BerhadAnnual Report 2013
OPERATION REVIEW
The Group’s domestic operations had continued to be the maindriver of its revenues and profits, and bed linen and beddingaccessories made up the bulk of the Group’s revenue. Domesticoperations accounted for 81.85% or RM146.20 million of thegroup’s consolidated revenues or an increase ofRM24.50millionor20.13%ascomparedtoRM121.70millionintheprecedingyear.
Inthedomesticmarket,ourproductsaresoldunderourhomegrownbrandsthroughoursixteen(16)fullyownedboutiquesshops,morethan180countersatthepremierdepartmentstores,specialtystores,hypermarketsandintermediaries.
Fortheyearunderreview,theGroupreceivedseveralappreciationawardsfromitstradingpartnersfortherecognitionofitsoutstandingsales performance including top 10 Performing Company,OutstandingAnnualSales,CommendableSalesGrowthAwardsandPreferredBusinessPartnerAwards.
In line with the Group’s business expansion plan, the Group hasstrategicallysignedupwithrelevantpartiestolaunchnewbeddingand bath products under Santa Barbara Polo and Pororo brands,opened additional counters, launched new products includingfurniture related products, refurbished several Home’s HarmonyBoutique shops, setting up Home’s Harmony online tradingdepartment and identifying more export business partners anddistributors.
FUTURE PROSPECTS
Despitethechallengingglobaleconomy,theMalaysianeconomyremainresilientanddomesticdemandcontinuestoaddimpetustoMalaysia’sgrowthwith the implementationof theGovernment’s10thMalaysiaPlanandtheEconomicTransformationProgrammetoboostnationalproductivity,percapitaincomeandconsumption.
The Group’s efficient business model and operations, financialstability and wide distribution network are the underlyingfundamental strengths of the company. We are optimistic ourbusinesswill remain strong for the rest of theyear and in2014,despite a less robust global economic outlookwhichmay affectour domestic performance and our exportmarkets in the region.TheGroupaimstogrowfromstrengthtostrengthovertheyearsandtoachievesustainablegrowthinsalesandprofitseveryyear.
The Group expects to be able to sustain its performance in thefinancial year ending 2014 based on its fundamentals andbusinessstrategiesthatwillallowit towithstandanyunexpectedadverse tradingconditions.TheGroupshallcontinue toseizeallopportunities presented and to reach out to our consumers andcreateawidermarketsegmentinMalaysiaandintheregion.Withateamofdynamicleadersandcapablestaff,IamcertaintheGroupwillbecomeahome-grownnametobeacknowledgedbothlocallyandinternationally.
Chairman’s statement (cont’d)
19Yoong Onn Corporation BerhadAnnual Report 2013
Chairman’s statement (cont’d)
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Group recognises that acting responsibly and sustainably create values for the company’s employees,customers,communities,shareholders,andsocietyasawhole.
TheGroup initiated severalCSR activities during the year by presenting donations to several charities andorganisations.Inadditiontothis,theGroupprovidesasafeandhealthyworkingenvironmentforallemployeesunder the requirements of Health, Safety and Environment through various in-house and external trainingprogrammes.
TheGrouphasalsocompliedwiththerelevantenvironmentallegislationandpromotesenvironmentalawarenessaspartofitscommitmenttoprotecttheenvironmentandcontributetowardssustainabledevelopment.
20 Yoong Onn Corporation BerhadAnnual Report 2013
DIVIDEND
TheBoardofDirectorsispleasedtorecommendafinalsingletiertaxexemptdividendof4%or2.0senperordinaryshareamountingtoRM3.20millioninrespectofthefinancialyearended30June2013forshareholders’approvalintheforthcomingAnnualGeneralMeeting.
Coupledwith the interimdividendof 4%or 2 senper ordinary share amounting toRM3.20millionpaidon29July2013,thismakesatotaldividendpayoutof8%or4.0senperordinaryshareamountingtoRM6.40millionor31.29%oftheprofitaftertaxofRM20.45millionforthisfinancialyear2013.
TheGroupwillcontinuetoenhancereturnstoshareholderswhilstseeingthatappropriatefundsaresetasideforbusinessexpansionandotherpurposessuchascapitalexpenditureandforworkingcapital.
ACKNOWLEDGEMENT
OnbehalfoftheBoard,ItakethisopportunitytothankmyfellowBoardmembers,themanagementteamandstafffortheircontributions,commitment,hardworkandservicetotheGroup.
IalsothankourshareholdersforthetrustandconfidenceinmeandmyteamoffellowDirectorsandteamleaders,andtoallourbusinessassociates,governmentagencies,bankers,advisors,customers,suppliersandtradingpartners,foryourunfailingsupporttotheGroup.
Datuk Kamaludin Bin YusoffChairman
Chairman’s statement (cont’d)
22 Yoong Onn Corporation BerhadAnnual Report 2013
TheAuditCommitteeofYoongOnnCorporationBerhadispleasedtopresenttheAuditCommitteeReportforthefinancialyearended30June2013.
COMPOSITION OF THE AUDIT COMMITTEE
ThepresentmemberoftheAuditCommitteeare:
Name Designation Directorship Mr.LeeKimSeng Chairman IndependentNon-ExecutiveDirectorDatukHairuddinBinMohamed Member IndependentNon-ExecutiveDirectorMr.YeohChongKeng Member IndependentNon-ExecutiveDirector
TERMS OF REFERENCE OF AUDIT COMMITTEE
(a) Terms of Membership
TheAuditCommitteeshallbeappointedbytheBoardofDirectorsamongstitsmembersandconsistofatleastthree(3)members,ofwhomallmustbeNon-ExecutiveDirectorswithamajorityofthembeingIndependentDirectors.TheChairman,whoshallbeelectedbytheAuditCommittee,mustbeanIndependentDirector.
TheCommitteeshallincludeonememberwhoisamemberoftheMalaysianInstituteofAccountants(“MIA”);orifheisnotamemberoftheMIA,hemusthaveatleastthree(3)years’workingexperienceandhemusthavepassedtheexaminationsspecifiedinPart1oftheFirstScheduleoftheAccountantsAct1967;orhemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstScheduleoftheAccountantsAct1967;orhemustholdadegree/master/doctorateinaccountingorfinanceandhaveatleast3years’postqualificationexperienceinaccountingorfinance;orhemusthaveatleast7years’experiencebeingachieffinancialofficerofacorporationorhaving the functionofbeingprimarily responsible for themanagementofthefinancialaffairsofacorporationorfulfillssuchotherrequirementsasprescribedorapprovedbyBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)
In the event of any vacancy in the Audit Committee resulting in the non-compliance with the ListingRequirementsofBursaSecurities,theBoardshallappointanewmemberwithinthree(3)months.
TheBoardofDirectorsshallreviewthetermofofficeandtheperformanceofanAuditCommitteeandeachofitsmembersatleastonceineverythree(3)years.
NoalternateDirectorshallbeappointedasamemberoftheAuditCommittee.
audIt CommIttee report
23Yoong Onn Corporation BerhadAnnual Report 2013
audit Committee report (cont’d)
TERMS OF REFERENCE OF AUDIT COMMITTEE (cont’d)
(b) Meetings and Quorum of the Audit Committee
InordertoformaquoruminrespectofameetingoftheAuditCommittee,themajorityofthememberspresentmustbeIndependentDirectors.TheCompanySecretaryshallactassecretaryoftheAuditCommitteeandshallberesponsible,inconjunctionwiththeChairman,fordrawinguptheagendaandcirculatingitpriortoeachmeeting.
TheAuditCommitteemet five (5) times during the financial year ended 30 June 2013.The details of theattendanceofthemeetingsaredisclosedundertheheading“AttendanceoftheAuditCommitteeMeetings”onpage25ofthisAnnualReport.
TheAuditCommitteemayrequiretheattendanceofanymanagementstafffromFinance/AccountsDepartmentor other departments deemed necessary togetherwith a representative or representatives from the externalauditorsand/orinternalauditors.
Inallfive(five)meetings,theChiefFinancialOfficerwaspresenttoreportontheresultsoftheGroupaswellastoanswerquestionsposedbytheAuditCommitteeinrelationtotheresultstobeannounced.DuringtheseAuditCommitteemeetings,representativesfromtheinternalauditorshadalsobeenpresenttoprovideupdatesontheprogressof internalauditworkthathavebeenconductedtodate,andtoalsoprovidecommentsandrecommendations,whereapplicabletoimprovetheriskmanagementframeworksupportingtheactivitiesoftheGroup.
In any event, should the external auditors request, the Chairman of theAudit Committee shall convene ameetingofthecommitteetoconsideranymattertheexternalauditorsbelieveshouldbebroughttotheattentionoftheDirectorsorshareholders.
(c) Functions of the Audit Committee
ThedutiesandresponsibilitiesoftheAuditCommitteeincludethefollowing:-
1. to consider the appointment of the external auditor, the audit fee and anyquestionsof resignationordismissal;
2. todiscusswiththeexternalauditorbeforetheauditcommences,thenatureandscopeoftheaudit,andensureco-ordinationwheremorethanoneauditfirmisinvolved;
3. todiscusswiththeexternalauditorontheevaluationofthesystemofinternalcontrolsandtheassistancegivenbytheemployeestotheexternalauditors;
4. toreviewandreporttotheBoardifthereisreason(supportedbygrounds)tobelievethattheexternalauditorisnotsuitableforreappointment;
5. to review the quarterly and year-end financial statements of theCompanyandGroupprior to the approval of theBoard, focusingparticularlyon:
a. changes in or implementation ofmajor accounting policiesandpractices;
b. significantadjustmentsarisingfromtheaudit;
c. thegoingconcernassumption;and
d. compliancewithaccountingstandardsandotherlegalrequirements.
24 Yoong Onn Corporation BerhadAnnual Report 2013
TERMS OF REFERENCE OF AUDIT COMMITTEE (cont’d)
(c) Functions of the Audit Committee (cont’d)
6. to discuss problems and reservations arising from the interim andfinalaudit,andanymattertheauditorsmaywishtodiscuss(intheabsenceofthemanagementwherenecessary);
7. to review the external auditor’s management letter andmanagement’sresponse;
8. todothefollowinginrelationtotheinternalauditfunctions:-
a. review the adequacy of the scope, functions, competencyand resources of the internal audit function, and that it has thenecessaryauthoritytocarryoutitswork;
b. review the internal audit programmeand the results of the internal auditprocessesorinvestigationundertakenandwherenecessarytoensuretheappropriateactionistakenontherecommendationsoftheinternalauditfunction;
c. reviewanyappraisalorassessmentoftheperformanceoftheinternalauditfunction;
d. approveanyappointmentorterminationoftheinternalauditor;
e. inform itself of resignations of internal auditor and provide the resigning internal auditor anopportunitytosubmithisreasonsforresigning.
9. to review any related party transactions and conflict of interest situation that may arise within theCompanyortheGroup;
10. toconsiderthemajorfindingsofinternalinvestigationsandthemanagement’sresponse;and
11. toconsideranyotherfunctionsordutiesasmaybeagreedbytheCommitteeandtheBoard.
(d) Rights of the Audit Committee
TheAuditCommitteehasensuredthatitshall,wherevernecessaryandreasonablefortheperformanceofitsdutiesandinaccordancewithaproceduredeterminedbytheBoard:-
1. haveauthoritytoinvestigateanymatterwithinitstermsofreference;
2. havetheresourceswhicharerequiredtoperformitsduties;
3. havefullandunrestrictedaccesstoanyinformationpertainingtotheCompanyandGroup;
4. havedirectcommunicationchannelswith theexternalauditorsandperson(s)carryingout the internalauditfunctionoractivity(ifany);
5. beabletoobtainindependentprofessionalorotheradvicewhenneeded;and
6. be able to convene meetings with the external auditors, the internal auditors or both, excluding theattendanceofotherdirectorsandemployeesoftheGroup,wheneverdeemednecessary.
audit Committee report (cont’d)
25Yoong Onn Corporation BerhadAnnual Report 2013
audit Committee report (cont’d)
TERMS OF REFERENCE OF AUDIT COMMITTEE (cont’d)
(e) Procedure of Audit Committee
TheAuditCommitteeregulatesitsownproceduresby:-
1. thecallingofmeetings;
2. thenoticetobegivenofsuchmeetings;
3. thevotingandproceedingsofsuchmeetings;
4. thekeepingofminutes;and
5. thecustody,protectionandinspectionofsuchminutes.
(f) Review of the Audit Committee
TheBoardofDirectorsshallensurethatthetermofofficeandperformanceoftheAuditCommitteeandeachof itsmembers are being reviewed at least once in every three years to determinewhether such anAuditCommitteeandmembershavecarriedouttheirdutiesinaccordancewiththeirtermsofreference.
(g) Attendance of the Audit Committee Meetings
ThedetailsofattendanceofeachAuditCommitteememberintheAuditCommitteemeetingsheldduringthefinancialyearended30June2013areasfollows:-
Meeting attended by the Directors/Total Number of Meeting held during the financial year ended Name 30 June 2013 % of Attendance
Mr.LeeKimSeng 5/5 100% DatukHairuddinBinMohamed 5/5 100% Mr.YeohChongKeng 5/5 100%
26 Yoong Onn Corporation BerhadAnnual Report 2013
TERMS OF REFERENCE OF AUDIT COMMITTEE (cont’d)
(h) Summaries of Activities of the Audit Committee
DuringthefinancialyearuptothedateofthisReport,theAuditCommitteecarriedoutthefollowingactivitiesindischargingtheirdutiesandresponsibilities:
1. Control
Evaluatedtheoveralleffectivenessofthesystemofinternalcontrolthroughthereviewoftheresultsofworkperformedbytheinternalandexternalauditorsanddiscussionswiththekeymanagement.
2. Financial Results
ReviewedquarterlyresultsandauditedannualfinancialstatementsoftheGroupandCompanybeforerecommendingtotheBoardfor release to Bursa Securities. The review should focusprimarilyon:
a) major judgmental areas, significant and unusualevents;
b) significantadjustmentsresultingfromaudit;
c) thegoingconcernassumptions;
d) compliance with applicable approved accountingstandardsinMalaysia;and
e) compliancewithListingRequirementsofBursaSecuritiesandotherregulatoryrequirements.
3. External Audit
a) reviewedwiththeexternalauditors,theirauditplanforthefinancialyearended30June2013toensurethattheirscopeofworkadequatelycoverstheactivitiesoftheGroup;
b) reviewedtheresultsandissuesarisingfromtheirauditoftheannualfinancialstatementsandtheirresolutionofsuchissuesashighlightedintheirreporttotheCommittee;and
c) reviewedtheirperformanceandindependencebeforerecommendingtotheBoardtheirreappointmentandremuneration.
4. Internal Audit
a) reviewed with the internal auditors, their audit plan for the financial year ended 30 June 2013ensuringthatprincipalriskareaswereadequatelyidentifiedandcoveredtheplan;
b) reviewedtherecommendationsbyinternalaudit,representationsmadeandcorrectiveactionstakenby themanagement in addressing and resolving issues as well as ensuring that all issues wereadequatelyaddressedonatimelybasis;
c) reviewedthecompetenciesoftheinternalauditorstoexecutetheplan,theauditprogramsusedintheexecutionoftheinternalauditworkandresultsoftheirwork;and
d) reviewedtheadequacyofthetermsofreferenceofinternalaudit.
audit Committee report (cont’d)
28 Yoong Onn Corporation BerhadAnnual Report 2013
TheBoardofDirectors (“theBoard”) ofYoongOnnCorporationBerhad (“theCompany”or “YOCB”) is fullycommittedtopromoteandachievethehigheststandardofcorporategovernanceandtoensurethattheprinciplesandbestpracticesincorporategovernanceasdetailedintheMalaysianCodeonCorporateGovernance(“theCode”)arepractisedandadoptedinYOCBanditssubsidiaries(“theGroup”).
TheBoardcontinuouslyevaluatestheGroup’scorporategovernancepracticesandprocedureswithaviewtoadoptandimplementtheprinciplesandbestpracticesasrecommendedbytheCode,whereverapplicable,asafundamentalpartofdischargingitsdutiesandresponsibilitiestoprotectandenhanceshareholders’value.TheBoardbelievesthatgoodcorporategovernanceresultsincreationoflongtermvalueandbenefitsforallshareholders.
SECTION 1 : THE BOARD OF DIRECTORS
TheBoard takes full responsibilities for theperformanceof theGroupandguides theGroup towards achievingits short and long term objectives, setting corporate strategies for growth and new business developmentwhileprovidingadviceanddirectiontothemanagementtoenabletheGrouptoachieveitscorporategoalandobjectives.
(a) Composition of the Board and Board Balance
The Boardmembers are professionals from diverse disciplines, tapping their respective qualifications andexperiencesinbusiness,commercialandfinancialaspects.Together,theybringawiderangeofcompetencies,experienceandexpertisewhicharevitaltowardstheeffectivedischargeoftheBoard’sresponsibilitiesforthesuccessfuldirectionandgrowthoftheGroup.AbriefprofileofeachDirectorsispresentedontheProfileoftheDirectorsinthisAnnualReport.
TheBoard currently consists of six (6)members, comprising of two (2) ExecutiveDirectors and four (4)IndependentNon-ExecutiveDirectors.This is in linewith theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”),whichrequirethatatleasttwo(2)orone-third(1/3)oftheBoardmembers,whicheveristhehigher,tobeIndependentDirectors.
TheIndependentDirectorsalsohavethenecessaryskillandexperiencetobringanindependentjudgmenttobeartheissuesofstrategy,performance,resourcesincludingkeyappointmentsandstandardofconducts.
The Independent Directors are independent of management and majority shareholders. They provideindependent views and judgment and at the same time, safeguard the interests of parties such asminorityshareholders.NoindividualorgroupofindividualsdominatestheBoard’sdecisionmakingprocessandthenumberofdirectorsfairlyreflectstheinvestmentoftheshareholders.
The roles of the Chairman and theManaging Director are distinguished and separated. The Chairman isresponsible to ensure that the Board functions properly with good corporate governance practices andprocedures,whilsttheManagingDirectorisresponsiblefortheday-to-dayoperationsandbusinessactivitiesoftheGroupinaccordancewiththestandardpracticessetoutintheBoardCharter.Thisistoensureabalanceofpowerandauthority.
TheBoard does not consider it necessary to nominate a Senior IndependentNon-Executive Director to whom concerns may be conveyed. All membersof the Board have demonstrated that they are always available to membersand stakeholders.All issuescanbeopenlydiscussedduringBoardmeetings.TheCompanyisnotmarredwithconflictsandcontroversiesandalsohasnotreceivedanynoticeofmattersofconcernfromstakeholderssinceitslisting.
AllDirectors have given their undertaking to complywith theMainMarketListingRequirementsofBursaSecuritiesandtheIndependentDirectorshaveconfirmedtheirindependenceinwriting.
Corporate GovernanCe statement
29Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 1 : THE BOARD OF DIRECTORS (cont’d)
(b) Board Responsibilities
Having recognised the importance of an effective and dynamic Board, theBoardmembersareguidedbytheareaofresponsibilitiesasoutlined:-
• reviewingandadoptingstrategicplanfortheGroup;
• overseeing the conduct of theGroup’s businesses to evaluatewhether thebusinessesarebeingproperlymanaged;
• identifying theprincipal risksandkeyperformance indicatorsof theGroup’sbusinessesandensuringthatappropriatesystemsareimplementedand/orstepsaretakentomanagetheserisks;
• developingandimplementinganinvestorsrelationsprogrammeorshareholdercommunicationpolicyfortheGroup;and
• reviewing the adequacy and the integrity of the Group’s internal control systems and managementinformationsystems,includingsystemsforcompliancewithapplicablelaws,regulations,rules,directivesandguidelines.
(c) Re-Election of Directors
InaccordancewiththeCompany’sArticleofAssociations,allDirectorsincludingtheManagingDirectorshallretirefromtheofficeat leastonceeverythree(3)years,butshallbeeligibleforre-election.DirectorswhoareappointedbytheBoardduringthefinancialyeararesubjecttore-electionbyshareholdersattheAnnualGeneralMeetingfollowingtheirappointment.
(d) Directors’ Training
TheGroupacknowledgesthefactthatcontinuouseducationisvitalfortheBoardmemberstogaininsightintothestateofeconomy,technologicaladvancesinthecorebusiness,latestregulatoryupdates,andmanagementstrategies.IncompliancewiththeMainMarketListingRequirementsandtherelevantPracticeNoteissuedbyBursaSecurities, allDirectorshaveattendedand successfully completed theirMandatoryAccreditationProgrammewithinthestipulatedtimeframeasprescribedbyBursaSecurities.
Duringthefinancialyearended30June2013,theDirectorshaveattendedthefollowingtrainings:-
Name Title of Training Date
DatukKamaludinBinYusoff BoardOversightResponsibilities 29May2013 forMerger&Acquisition
Mr.ChewHonFoong BoardOversightResponsibilities 29May2013 forMerger&Acquisition
Mr.ChewHonKeong BoardOversightResponsibilities 29May2013 forMerger&Acquisition
Mr.YeohChongKeng BoardOversightResponsibilities 29May2013 forMerger&Acquisition
Mr.LeeKimSeng BoardOversightResponsibilities 29May2013 forMerger&Acquisition
DatukHairuddinBinMohamed BoardOversightResponsibilities 29May2013 forMerger&Acquisition
Corporate Governance statement (cont’d)
30 Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 1 : THE BOARD OF DIRECTORS (cont’d)
(d) Directors’ Training (cont’d)
TheDirectorsarealsoawareoftheirdutytoundergoappropriatetrainingfromtimetotimetoensurethattheyareequippedtocarryouttheirdutieseffectively.TheBoardismindfulthereforeoftheneedtokeepabreastof changes inboth the regulatoryandbusinessenvironmentsaswell aswithnewdevelopmentswithin theindustryinwhichtheGroupoperates.Whenevertheneedarises,theCompanywillprovidebriefingstonewrecruitstotheBoard,toensuretheyhaveacomprehensiveunderstandingontheoperationsoftheGroupandtheCompany.
(e) Supply of information
TheBoardhasaformalscheduleofmattersfordecision-makingtoensurethatthedirectionandcontroloftheGroupisfirmlyinitshands.
PriortoeachBoardmeeting,afullagendatogetherwithrelevantreportsandcomprehensiveBoardpapersaredistributedtoallDirectorsinatimelymannertoenabletheDirectorstoconsiderthematterstobedeliberatedandwherenecessary,obtainfurtherinformation.
ProceedingsofBoardmeetingsaredulyrecordedandsignedbytheChairmanofthemeeting.
Every Director has full and timely access to all Group information, records, documents and property toenable them to discharge their duties and responsibilities effectively. The Directors, whether collectivelyor individually,may seek independent professional advice in furtherance of their duties at theCompany’sexpenses,ifrequired.
(f) Board Meetings
TheBoardmeetsonaquarterlybasiswithadditionalmeetings tobeheldwhenevernecessary.Therewerefive(5)Boardmeetingsheldduringthefinancialyearended30June2013andthedetailsofattendanceareasfollows:-
Meetings attended by the Directors/Total Number of Meeting held during the Financial Year Ended Name of Director 30 June 2013 % of Attendance
Executive Directors Mr.ChewHonFoong 5/5 100% Mr.ChewHonKeong 4/5 80% Non-Executive Directors DatukKamaludinBinYusoff 5/5 100% DatukHairuddinBinMohamed 5/5 100% Mr.YeohChongKeng 5/5 100% Mr.LeeKimSeng 5/5 100%
During the financial year ended 30 June 2013, five (5) Boardmeetingswereconvenedon30August2012,18October2012,29November2012,27February2013and29May2013.
Corporate Governance statement (cont’d)
31Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 1 : THE BOARD OF DIRECTORS (cont’d)
(g) Board Committees
TheBoardhasestablishedthefollowingCommittees toassists theBoard indischargingitsdutiesandresponsibilitieseffectively:
• AuditCommittee• NominationCommittee• RemunerationCommittee
ThetermsofreferenceofeachBoardCommitteearesetoutinBoardCharterandhavebeenapprovedby theBoard.TheseCommitteeshave the authority to examineparticular issues and reportto theBoardwith their recommendations.However, theultimate responsibility for thefinaldecisiononallmatterslieswiththeBoard.
(h) Audit Committee
ThereportoftheAuditCommitteeissetoutintheAuditCommitteeReportinofthisAnnualReport.
(i) Nomination Committee
Our Nomination Committee was established on 28 September 2009 and the members of the NominationCommitteeconsistofthefollowingmembers:
Name Designation Directorship Mr.YeohChongKeng Chairman IndependentNon-ExecutiveDirector
DatukHairuddinBinMohamed Member IndependentNon-ExecutiveDirector
Mr.LeeKimSeng Member IndependentNon-ExecutiveDirector
ThesummaryofthetermsofreferenceoftheNominationCommitteeareasfollows:
(i) reviewtheBoardstructure,sizeandcomposition;
(ii) nominatecandidatestotheBoardtofillBoardvacancieswhentheyarise;
(iii) recommendDirectorswhoareretiringbyrotationtobeputforwardforre-election;and
(iv) ensurethatallBoardappointeesundergoanappropriateintroductionandtrainingprogramme.
TheBoardannuallyreviewstherequiredmixofskills,experienceandotherqualitiesof theDirectors toensure that theBoard is functioningeffectivelyandefficiently.
Corporate Governance statement (cont’d)
32 Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 1 : THE BOARD OF DIRECTORS (cont’d)
(j) Remuneration Committee
OurRemunerationCommitteewasestablishedon28September2009andthemembersoftheRemunerationCommitteeconsistofthefollowingmembers:
Name Designation Directorship Mr.YeohChongKeng Chairman IndependentNon-ExecutiveDirector
DatukKamaludinBinYusoff Member IndependentNon-ExecutiveChairman
Mr.ChewHonFoong Member Managing Director and Group Chief ExecutiveOfficer
Duringthefinancialyearended30June2013,RemunerationCommitteemeetingwereconvenedon30January2013.
ThesummaryofthetermsofreferenceoftheRemunerationCommitteeareasfollows:
(i) recommendtotheBoardtheremunerationoftheDirectors;
(ii) assisttheBoardinassessingtheresponsibilityandcommitmentundertakenbytheBoardmembership;and
(iii) assisttheBoardinensuringtheremunerationoftheDirectorscommensuratewiththeresponsibilityandcommitmentoftheDirectorsconcerned.
SECTION 2 : DIRECTORS’ REMUNERATION
(a) Remuneration Procedure
The remuneration of directors is formulated to be competitive and realistic, emphasis being placed onperformance and calibre, with aims to attract,motivate and retainDirectors with the relevant experience,expertiseandqualityneededtoassistinmanagingtheGroupeffectively.
For Executive Directors, the remuneration packages link rewards tocorporate and individual performance whilst for the Non-ExecutiveDirectors,thelevelofremunerationislinkedtotheirexperienceandlevelofresponsibilitiesundertaken.
The level of remuneration for the Executive Directors isdetermined by the Remuneration Committee after giving dueconsideration to the compensation levels for comparablepositions among other similar Malaysian public listedcompanies.Thedeterminationof theremunerationpackageofNon-Executive Directors, including Non-Executive Chairmanshould be amatter for the Board as a whole. The individualsconcernedshouldabstainfromdiscussingtheirownremuneration.
Corporate Governance statement (cont’d)
33Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 2 : DIRECTORS’ REMUNERATION (cont’d)
(b) Remuneration Package
ThedetailsoftheremunerationoftheDirectorsoftheCompanyareasfollows:-
Executive Non-Executive Directors Directors
(RM’000) (RM’000) Emoluments 1,265 18 Directors’fees - 156
ThenumberofDirectorswhoseremunerationfallsintothefollowingbandsisasfollows:- Range of Remuneration Executive Directors Non-Executive Directors BelowRM50,000 - 3 RM50,001–RM100,000 - 1 RM550,001–RM600,000 1 - RM650,001–RM700,000 1 -
SECTION 3 : SHAREHOLDERS
(a) Dialogue between Company and Investors
TheBoardmaintainsaneffectivecommunicationspolicythatenablesboththeBoardandthemanagementtocommunicateeffectivelywithitsshareholders,stakeholdersandthepublic.Thepolicyeffectivelyinterpretstheoperationsof theGroup to the shareholders and accommodates feedback from shareholders,which arefactoredintotheGroup’sbusinessdecision.
The Board communicates information on the operations, activities and performance of the Group to theshareholders,stakeholdersandthepublicthroughthefollowing:-
i. the Annual Report, which contains the financial andoperational review of the Group’s business, corporateinformation,financial statementsand informationonAuditCommitteeandBoardofDirectors;
ii. variousannouncementsmadetotheBursaSecurities,whichincludeannouncementsonquarterlyresults;
iii. theCompanywebsiteathttp://www.yoongonn.com;
iv. meetingswithresearchanalystsandfundmanagers togivethemabetterunderstandingofthebusinessconductedbytheGroupinparticular,andoftheindustryinwhichtheGroup’sbusinessoperates,ingeneral;and
v. participation in surveys and research conducted byprofessionalorganisationsasandwhensuchrequestsarise.
Corporate Governance statement (cont’d)
34 Yoong Onn Corporation BerhadAnnual Report 2013
SECTION 3 : SHAREHOLDERS (cont’d)
(b) The Annual General Meeting
TheAnnualGeneralMeeting servesasan importantmeans for shareholderscommunication.Noticeof theAnnualGeneralMeetingandAnnualReportsaresenttoshareholderstwentyonedayspriortothemeeting.
AteachAnnualGeneralMeeting,theBoardpresentstheprogressandperformanceoftheGroup’sbusinessandencouragesattendanceandparticipationofshareholdersduringquestionsandanswerssessions.TheChairmanandtheBoardwillrespondtoallquestionsraisedbytheshareholdersduringtheAnnualGeneralMeeting.
SECTION 4 : ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
TheBoardaimstoprovideandpresentaclear,balancedandcomprehensiveassessmentoftheGroup’sfinancialperformanceandprospectsthroughthequarterlyannouncementofresultstotheBursaSecuritiesaswellastheChairman’sStatement,reviewofoperationsandannualfinancialstatementsintheAnnualReport.TheAuditCommitteeassiststheBoardinensuringaccuracyandadequacyofinformationbyoverseeingandreviewingthefinancialstatementsandquarterlyannouncementspriortothesubmissiontoBursaSecurities.
(b) Statement on Directors’ Responsibility in relation to the Audited Financial Statements
TheDirectorsareresponsibletoensurethattheannualfinancialstatementsaredrawnupinaccordancewiththe applicable approved accounting standards inMalaysia and Companies, Act 1965. A Statement by theDirectorsoftheirresponsibilitiesinpreparingthefinancialstatementsissetoutseparatelyonpage37ofthisAnnualReport.
(c) Internal Control and Risk Management
TheBoardacknowledgestheirresponsibilitiesfortheinternalcontrolsystemoftheGroup,coveringnotonlyfinancialcontrolsbutalsocontrolsrelatingtooperations,complianceandriskmanagement.InformationoftheGroup’sinternalcontrolandriskmanagementispresentedintheStatementonRiskManagementandInternalControlofthisAnnualReport.
(d) Relationship with the Auditors
TheBoardhasestablishedaformalandtransparentprofessionalrelationshipwith theGroup’sAuditors,bothinternalandexternal.Whenevertheneedarises,theAuditorswouldhighlighttotheAuditCommitteeandtheBoardfromtimetotimeonmattersthatrequiretheBoard’sattention.TheroleoftheAuditCommitteeinrelationtotheauditors,bothinternalandexternalissetoutintheAuditCommitteeReportofthisAnnualReport.
ThiscorporategovernancestatementismadeinaccordancewiththeresolutionoftheBoarddated10October2013.
Corporate Governance statement (cont’d)
35Yoong Onn Corporation BerhadAnnual Report 2013
statement on rIsk manaGement and InternaL ControL
INTRODUCTION
The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of riskmanagementandinternalcontroltosafeguardtheshareholders’investmentsandtheGroup’sassets.TheBoardofYoongOnnCorporationBerhadiscommittedtomaintainasoundsystemofriskmanagementandinternalcontrolintheGroup.SetoutbelowistheBoardofDirectors’“StatementonRiskManagementandInternalControl”whichhas been prepared in accordancewith theGuidance forDirectors ofPublicListedCompanies on theStatementonRiskManagementandInternalControlwhichoutlinestheframeworksandprocessestheBoardis toadoptinmaintainingtheadequacyandintegrityofriskmanagementandthesystemofinternalcontroloftheGroup.
RESPONSIBILITY OF THE BOARD
TheBoardofDirectors(“Board”)isresponsiblefortheadequacyandeffectivenessoftheYoongOnnCorporationBerhad(“theGroup”)riskmanagementandinternalcontrolsystem.TheBoardensuresthatthesystemmanagestheGroup’skeyareasofriskwithinanacceptableriskprofiletoincreasethelikelihoodthattheGroup’spoliciesandbusinessobjectiveswillbeachieved.TheBoardcontinuallyreviewsthesystemtoensureitprovidesareasonablebutnotabsoluteassuranceagainstmaterialmisstatementofmanagementandfinancialinformationandrecordsoragainstfinanciallossesorfraud.
TheBoardhasestablishedanongoingprocessforidentifying,evaluatingandmanagingthesignificantrisksfacedby theGroupand thisprocess includesenhancing theriskmanagementand internalcontrolsystemasandwhenthere are changes to the business environment or regulatory guidelines. Management assists the Board in theimplementationoftheBoard’spoliciesandproceduresonriskmanagementandinternalcontrolbyidentifyingandassessingtherisksfaced,andinthedesign,operationandmonitoringofsuitableinternalcontrolstomitigateandcontroltheserisks.
TheBoardisoftheviewthattheriskmanagementandinternalcontrolsysteminplacefortheyearunderreviewanduptothedateofissuanceofthefinancialstatementsisadequateandeffectivetosafeguardtheshareholders’investment,theinterestsofcustomers,regulatorsandemployees,andtheGroup’sassets.
36 Yoong Onn Corporation BerhadAnnual Report 2013
RISK MANAGEMENT FRAMEWORK
TheBoardisawarethatasoundsystemofinternalcontrolshouldbeembeddedintheoperationsoftheGroupandformpartofitsculture.ThissystemshouldbecapableofrespondingquicklytoevolvingriskstothebusinessarisingfromfactorswithintheGroupandchangesinthebusinessenvironment.Itshouldincludeproceduresforreportingimmediatelytoappropriatelevelsofmanagementanysignificantcontrolfailingsorweaknessesthatareidentifiedtogetherwithdetailsofcorrectiveactionbeingtaken.TheBoardhasestablishedaRiskManagementFrameworkwhichconsistsofastructuredapproachcoveringtheidentificationofrisks,assessmentofrisksandreviewingandimplementingstrategiestomitigatethoserisks.TheBoardhasestablishedanExecutiveCommitteecomprisingofExecutiveDirectorsandSeniorManagementtooverseetheriskmanagementinitiativesoftheGroup.TheBoardandtheAuditCommitteeregularlyreviewsthisprocesstoensuretheeffectivenessofitsriskmanagement.
INTERNAL CONTROL AND INTERNAL AUDIT FUNCTION
The Board has outsourced the internal audit function of the Group to an independent professional firm, IBDC(Malaysia)SdnBhdfortheyearended30June2013.TheauditplanningmemorandumpresentedannuallybytheInternalAuditorsisadoptedbytheAuditCommitteetoreviewtheeffectivenessoftheGroup’ssystemofinternalcontrol.
TheGroup’ssystemofinternalcontrolcomprisesbutnotlimitedtothefollowingactivities:-● TheAuditCommitteecomprisessolelyofIndependentNon-ExecutiveDirectorswithfullaccesstoboththe
internalandexternalauditors.AuditCommitteemeetingsareheldseparatelyfromBoardmeetings;● Periodicinternalauditsareconductedbytheinternalauditorstomonitorcompliancetoestablishedprocedures
andtoreviewinternalcontrolmeasures.Theinternalauditreportswouldhighlightanysignificantrisks,noncompliancesandareasforimprovements;
● Each core business process function is audited on a rotational basis and theAuditCommittee reviews theinternalauditissuesidentified,andtogetherwiththeManagementrecommendsimprovementstotheBoard;
● Followup reviews are conductedonprevious audit issues highlighted to ensure that the recommendationshighlightedhadbeenaddressedbyManagement.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
TheexternalauditorshavereviewedthisStatementonRiskManagementandInternalControlpursuanttothescopesetoutinRecommendedPracticeGuide(“RPG”)5issuedbytheMalaysianInstituteofAccountant(“MIA”)forinclusionintheannualreportfortheyearended30June2013andreportedtotheBoardthatnothinghascometotheirattentionthatcausesthemtobelievethatthestatementisinconsistentwiththeirunderstandingoftheprocessadopted by theBoard in reviewing the adequacy and effectiveness of the riskmanagement and internal controlsystem.
CONCLUSION
During thefinancialyearunder review, theBoard issatisfied thatnomaterial losses,deficienciesorerrorswerearising fromany inadequacyor failureof theGroup’s internal control system thatwill requiredisclosure in theAnnualReport. TheChief ExecutiveOfficer andChief FinancialOfficer have provided assurance to theBoardthattheGroup’sriskmanagementandinternalcontrolsystem,inallmaterialaspectsisoperatingadequatelyandeffectively.
TheBoardwillcontinuetotakemeasurestostrengthenthesystemofinternalcontrolmaintainedbytheGroupandensureshareholders’investmentandtheGroup’sassetsareconsistentlysafeguarded.
ThisstatementonriskmanagementandinternalcontrolismadeinaccordancewiththeresolutionoftheBoardofDirectors’meetingheldon10October2013.
statement on risk management and Internal Control (cont’d)
37Yoong Onn Corporation BerhadAnnual Report 2013
TheDirectorsareresponsibleforthepreparationoffinancialstatementswhichgiveatrueandfairviewofthestateofaffairsofYoongOnnCorporationBerhad(“YOCB”)anditssubsidiarycompanies(“theGroup”)asattheendofthefinancialyear,andoftheresultsandcashflowsforthefinancialyearended.
Therefore,inpreparingthefinancialstatementsofYOCBfortheyearended30June2013,theDirectorshave:
∙ adoptedappropriateaccountingpoliciesandappliedthemonaconsistentbasis;
∙ madejudgmentsandestimatesthatareprudentandreasonable;
∙ ensuredapplicableapprovedaccountingstandardshavebeenfollowedandanymaterialdepartureshavebeendisclosedandexplainedinthefinancialstatements;and
∙ ensuredthefinancialstatementshavebeenpreparedonagoingconcernbasis.
TheDirectors are responsible for ensuring that theGroup and the Company keep proper accounting and otherrecordswhichdisclosewithreasonableaccuracythefinancialpositionoftheGroupandtheCompany,andensuringthatthefinancialstatementscomplywiththeprovisionsoftheCompaniesAct,1965.TheDirectorshaveoverallresponsibilitiesfortakingsuchstepstosafeguardtheassetsoftheGroup,andtopreventanddetectfraudandotherirregularities.
ThisabovestatementismadeinaccordancewiththeresolutionpassedattheBoardofDirectors’meetingheldon10October2013.
statement on dIreCtors’ responsIbILIty in relation to the audited financial statements
38 Yoong Onn Corporation BerhadAnnual Report 2013
39 Directors’Report
43 StatementbyDirectors
43 StatutoryDeclaration
44 IndependentAuditors’Report
46 StatementsofFinancialPosition
48 StatementsofProfitorLossandOtherComprehensiveIncome
49 StatementsofChangesinEquity
51 StatementsofCashFlows
53 NotestotheFinancialStatements
39Yoong Onn Corporation BerhadAnnual Report 2013
DIRECTORS’ REPORT
ThedirectorsherebysubmittheirreportandtheauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30June2013.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding and the provision of managementservices.TheprincipalactivitiesofthesubsidiariesaresetoutinNote6tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringthefinancialyear.
RESULTS
The Group The Company RM’000 RM’000
ProfitaftertaxationattributabletoownersoftheCompany 20,453 4,319
DIVIDENDS
Sincetheendofthepreviousfinancialyear,theCompanypaidafinalsingletierdividendof1.5senperordinaryshareamountingtoRM2,400,000inrespectofthefinancialyearended30June2012.
TheCompanydeclaredaninterimsingletierdividendof2.0senperordinaryshareamountingtoRM3,200,000inrespectofthefinancialyearended30June2013.
AttheforthcomingAnnualGeneralMeeting,afinalsingletierdividendof2.0senperordinaryshareamountingtoRM3,200,000inrespectofthecurrentfinancialyearwillbeproposedforshareholders’approval.Thefinancialstatementsfor thecurrentfinancialyeardonotreflect thisproposeddividend.Suchdividend, ifapprovedbytheshareholders,willbeaccountedforinthefinancialyearending30June2014.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the financialstatements.
ISSUES OF SHARES AND DEBENTURESDuringthefinancialyear,
(a) therewerenochangesintheauthorisedandissuedandpaid-upsharecapitaloftheCompany;and
(b) therewerenoissuesofdebenturesbytheCompany.
OPTIONS GRANTED OVER UNISSUED SHARES
Duringthefinancialyear,nooptionsweregrantedbytheCompanytoanypersontotakeupanyunissuedsharesintheCompany.
40 Yoong Onn Corporation BerhadAnnual Report 2013
BAD AND DOUBTFUL DEBTS
BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowanceforimpairmentlossesonreceivables,andsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateallowancehadbeenmadeforimpairmentlossesonreceivables.
Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrequirethefurtherwritingoffofbaddebts,ortheadditionalallowanceforimpairmentlossesonreceivablesinthefinancialstatementsoftheGroupandoftheCompany.
CURRENT ASSETS
Before thefinancial statements of theGroup andof theCompanyweremadeout, the directors took reasonablestepstoascertainthatanycurrentassetsotherthandebts,whichwereunlikelytoberealisedintheordinarycourseofbusiness,includingtheirvalueasshownintheaccountingrecordsoftheGroupandoftheCompany,havebeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.
Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which renderadherencetotheexistingmethodsofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.
CONTINGENT AND OTHER LIABILITIES
ThecontingentliabilitiesaredisclosedinNote31tothefinancialstatements.Atthedateofthisreport,theredoesnotexist:
(i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or
(ii) anycontingentliabilityoftheGroupandoftheCompanywhichhasarisensincetheendofthefinancialyear.
NocontingentorotherliabilityoftheGroupandoftheCompanyhasbecomeenforceableorislikelytobecomeenforceablewithin the period of twelvemonths after the end of the financial yearwhich, in the opinion of thedirectors,willormaysubstantiallyaffect theabilityof theGroupandof theCompany tomeet theirobligationswhentheyfalldue.
CHANGE OF CIRCUMSTANCES
Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
Directors’ Report (cont’d)
41Yoong Onn Corporation BerhadAnnual Report 2013
ITEMS OF AN UNUSUAL NATURE
TheresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.
Therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikely,intheopinionofthedirectors,toaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyear.
HOLDING COMPANY
TheholdingcompanyisCasatexCosmoSdn.Bhd.,acompanyincorporatedinMalaysia.
DIRECTORS
Thedirectorswhoservedsincethedateofthelastreportareasfollows:-
ChewHonFoongChewHonKeongDatukKamaludinBinYusoffDatukHairuddinBinMohamedYeohChongKengLeeKimSeng
DIRECTORS’ INTERESTS
In accordancewith the register of directors’ shareholdings, the interests of directors in office at the end of thefinancialyearinsharesintheCompanyanditsrelatedcorporationsduringthefinancialyearareasfollows:
Number Of Ordinary Shares Of RM0.50 Each At At 1.7.2012 Bought Sold 30.6.2013
Direct Interests DatukKamaludinBinYusoff 183,333 20,000 - 203,333YeohChongKeng 144,000 - - 144,000LeeKimSeng 159,999 - - 159,999
Indirect InterestsChewHonFoong 84,000,231* - - 84,000,231*ChewHonKeong 84,000,231* - - 84,000,231*
*- By virtue of their shareholdings in the holding company, Chew Hon Foong and Chew Hon Keong are deemed to have interests in shares in the Company and its related corporations to the extent of the holding company’s interests, in accordance with Section 6A of the Companies Act, 1965.
Theotherdirectorholdingofficeat theendof thefinancialyearhadno interest inshares in theCompanyor itsrelatedcorporationsduringthefinancialyear.
Directors’ Report (cont’d)
42 Yoong Onn Corporation BerhadAnnual Report 2013
DIRECTORS’ BENEFITS
Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveanybenefit(otherthanabenefitincludedintheaggregateamountofemolumentsreceivedordueandreceivablebydirectorsasshowninthefinancialstatements,orthefixedsalaryofafull-timeemployeeoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterestexceptforanybenefitswhichmaybedeemedtoarisefromtransactionsenteredintointheordinarycourseofbusinesswithcompaniesinwhichcertaindirectorshavesubstantialfinancialinterestsasdisclosedinNote29tothefinancialstatements.
NeitherduringnorattheendofthefinancialyearwastheGrouportheCompanyapartytoanyarrangementswhoseobject is toenable thedirectors toacquirebenefitsbymeansof theacquisitionofshares inordebenturesof theCompanyoranyotherbodycorporate.
AUDITORS
Theauditors,Messrs.CroweHorwath,haveexpressedtheirwillingnesstocontinueinoffice.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED10OCTOBER2013
Chew Hon Foong
Chew Hon Keong
Directors’ Report (cont’d)
43Yoong Onn Corporation BerhadAnnual Report 2013
We,ChewHonFoongandChewHonKeong,beingtwoofthedirectorsofYoongOnnCorporationBerhad,statethat,intheopinionofthedirectors,thefinancialstatementssetoutonpages46to94aredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysiasoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyat30June2013andoftheirresultsandcashflowsforthefinancialyearendedonthatdate.
ThesupplementaryinformationsetoutinNote36,whichisnotpartofthefinancialstatements,ispreparedinallmaterialrespects,inaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountantsandthedirectiveofBursaMalaysiaSecuritiesBerhad.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED10OCTOBER2013
Chew Hon Foong Chew Hon Keong
STATUTORY DECLARATION
I,ChewHonFoong,I/C.No.590205-10-5731,beingthedirectorprimarilyresponsibleforthefinancialmanagementofYoongOnnCorporationBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages46to94are,tothebestofmyknowledgeandbelief,correct,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.
SubscribedandsolemnlydeclaredbyChewHonFoong,I/C.No.590205-10-5731,atKualaLumpurintheFederalTerritoryonthis10October2013.
Beforeme Chew Hon FoongYap Lee ChinNo. W-591CommissionerforOaths
STATEMENT BY DIRECTORS
44 Yoong Onn Corporation BerhadAnnual Report 2013
Report on the Financial Statements
Wehave audited thefinancial statements ofYoongOnnCorporationBerhad,which comprise the statements offinancialpositionasat30June2013oftheGroupandoftheCompany,thestatementsofprofitorlossandothercomprehensive income, statements of changes in equity and statements of cash flows of the Group and of theCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages46to94.
Directors’ Responsibility for the Financial Statements
ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.Thedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditors’ Responsibility
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements. The procedures selected depend on our judgement, including the assessment of risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Opinion
Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasof30June2013andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.
INDEPENDENT AUDITORS’ REPORTTo the Members of Yoong Onn Corporation Berhad (Incorporated in Malaysia) Company No: 814138 - K
45Yoong Onn Corporation BerhadAnnual Report 2013
Report on Other Legal and Regulatory Requirements
InaccordancewiththerequirementsoftheCompaniesAct1965inMalaysia,wealsoreportthefollowing:-
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by theCompanyanditssubsidiarieshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
(b) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationofthefinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.
(c) OurauditreportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection174(3)oftheAct.
ThesupplementaryinformationsetoutinNote36onpage95isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadand isnotpartof thefinancialstatements.Thedirectorsareresponsiblefor thepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.
Other Matters
(1) As stated in the Note 4.1 to the financial statements, YoongOnn Corporation Berhad adoptedMalaysianFinancialReportingStandardson1 July2012with a transitiondateof 1 July2011.These standardswereapplied retrospectivelybydirectors to the comparative information in thesefinancial statements, includingthestatementsoffinancialpositionasat30June2012and1July2011,and thestatementofprofitor lossandothercomprehensiveincome,statementofchangesinequityandstatementofcashflowsforthefinancialyearended30June2012andrelateddisclosures.Wewerenotengagedtoreportontherestatedcomparativeinformationanditisunaudited.OurresponsibilitiesaspartofourauditofthefinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30June2013have,inthesecircumstances,includedobtainingsufficientappropriateauditevidencethattheopeningbalancesasat1July2012donotcontainmisstatementsthatmateriallyaffectthefinancialpositionasof30June2013andfinancialperformanceandcashflowsforthefinancialyearthenended.
(2) ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct 1965 inMalaysia and for no other purpose.Wedo not assume responsibility to any otherpersonforthecontentofthisreport.
Crowe Horwath James Chan Kuan CheeFirmNo:AF1018 ApprovalNo:2271/10/13(J)CharteredAccountants CharteredAccountant10October2013
KualaLumpur
Independent Auditors’ Report (cont’d)To the Members of Yoong Onn Corporation Berhad (Incorporated in Malaysia) Company No: 814138 - K
46 Yoong Onn Corporation BerhadAnnual Report 2013
STATEMENTS OF FINANCIAL POSITIONAt 30 June 2013
The
Gro
up
The
Com
pany
30.6
.201
3 30
.6.2
012
1.7.
2011
30
.6.2
013
30.6
.201
2 1.
7.20
11
Not
e R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
ASS
ETS
NON-CURREN
TASS
ETS
Investmentsinsubsidiaries
6-
--
57,565
54,915
54,915
Property,plantandequipment
738,884
39,520
32,712
36
6Goodw
ill
8461
461
637
--
-
39,345
39,981
33,349
57,568
54,921
54,921
CURREN
TASS
ETS
Inventories
957,223
53,334
39,890
--
-Tradereceivables
10
34,649
28,527
27,060
--
-Otherreceivables,depositsandprepaym
ents
11
6,259
4,833
3,451
48
30
22Taxrefundable
-197
10
--
10Amountowingbysubsidiaries
12
--
-4,018
14,597
9,862
Short-terminvestment
13
10,000
7,000
6,000
10,000
7,000
6,000
Depositswithfinancialinstitutions
14
27,234
16,950
14,490
15,430
8,600
9,400
Cashandbankbalances
4,126
5,956
7,521
91
150
1,138
139,491
116,797
98,422
29,587
30,377
26,432
TOTA
LASS
ETS
178,836
156,778
131,771
87,155
85,298
81,353
The
anne
xed
note
s fo
rm a
n in
tegr
al p
art o
f the
se fi
nanc
ial s
tate
men
ts.
47Yoong Onn Corporation BerhadAnnual Report 2013
The
Gro
up
The
Com
pany
30.6
.201
3 30
.6.2
012
1.7.
2011
30
.6.2
013
30.6
.201
2 1.
7.20
11
Not
e R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
EQUITYANDLIABILITIES
EQ
UITY
Sharecapital
15
80,000
80,000
60,000
80,000
80,000
60,000
Shareprem
ium
16
--
8,685
--
8,685
Mergerd
eficit
17
(44,365)
(44,365)
(44,365)
--
-
Retainedprofits
18
103,704
88,851
86,089
3,851
5,132
12,455
TOTA
LEQ
UITY
139,339
124,486
110,409
83,851
85,132
81,140
NON-CURREN
TLIABILITIES
Deferredtaxliabilities
19
2,062
1,874
1,898
--
-Provision
169
145
--
--
2,231
2,019
1,898
--
-
CURREN
TLIABILITIES
Tradepayables
20
2,734
1,857
3,220
--
-Otherpayablesandaccruals
6,502
7,227
4,781
81
152
213
Dividendpayable
3,200
--
3,200
--
Provisionfortaxation
706
376
764
23
14
-
Short-termborrowings
21
24,124
20,813
10,699
--
-
37,266
30,273
19,464
3,304
166
213
TOTA
LLIABILITIES
39,497
32,292
21,362
3,304
166
213
TOTA
LEQ
UITYANDLIABILITIES
178,836
156,778
131,771
87,155
85,298
81,353
Statements of Financial PositionAt 30 June 2013 (cont’d)
The
anne
xed
note
s fo
rm a
n in
tegr
al p
art o
f the
se fi
nanc
ial s
tate
men
ts.
48 Yoong Onn Corporation BerhadAnnual Report 2013
STATEMENTS OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME
For The Financial Year Ended 30 June 2013
The Group The Company 2013 2012 2013 2012 Note RM’000 RM’000 RM’000 RM’000
REVENUE 22 178,607 153,913 4,638 9,443 COSTOFSALES (103,311) (92,393) - -
GROSSPROFIT 75,296 61,520 4,638 9,443 OTHERINCOME 722 1,367 839 813
76,018 62,887 5,477 10,256 SELLINGANDDISTRIBUTIONEXPENSES (11,637) (9,499) (1) (9) ADMINISTRATIVEAND OPERATINGEXPENSES (35,848) (29,066) (695) (915)
FINANCECOSTS (853) (840) - -
PROFITBEFORETAXATION 23 27,680 23,482 4,781 9,332 INCOMETAXEXPENSE 24 (7,227) (6,205) (462) (2,140)
PROFITAFTERTAXATION 20,453 17,277 4,319 7,192
OTHERCOMPREHENSIVEINCOME,NETOFTAX - - - -
TOTALCOMPREHENSIVEINCOMEFORTHEFINANCIALYEAR 20,453 17,277 4,319 7,192
TOTALCOMPREHENSIVEINCOMEATTRIBUTABLETO:-OwnersoftheCompany 20,453 17,277 4,319 7,192
PROFITAFTERTAXATION ATTRIBUTABLETO:- OwnersoftheCompany 20,453 17,277 4,319 7,192
EARNINGSPERSHARE(SEN) 25-Basic 13 11 -Diluted N/A N/A
N/A - Not applicable
The annexed notes form an integral part of these financial statements.
49Yoong Onn Corporation BerhadAnnual Report 2013
STATEMENTS OF CHANGES IN EQUITYFor The Financial Year Ended 30 June 2013
Attr
ibut
able
To
Ow
ners
Of T
he C
ompa
ny
Non
-Dis
trib
utab
le
D
istr
ibut
able
Sh
are
Shar
e M
erge
r R
etai
ned
Tot
al
Cap
ital
Prem
ium
D
efici
t Pr
ofits
E
quity
Not
e R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
THEGROUP
Balanceat1.7.2011
60,000
8,685
(44,365)
86,089
110,409
Profitaftertaxation/To
talcom
prehensiveincomeforthefinancialyear
-
--
17,277
17,277
Contributionsbyanddistrib
utionstoownersoftheCom
pany:
-B
onusissue
20,000
(8,685)
-(11,315)
--D
ividends
26
-
--
(3,200)
(3,200)
Balanceat30.6.2012/1.7.2012
80,000
-(44,365)
88,851
124,486
Profitaftertaxation/To
talcom
prehensiveincomeforthefinancialyear
-
--
20,453
20,453
DistributionstoownersoftheCom
pany:
-Dividends
26
--
-(5,600)
(5,600)
Balanceat30.6.2013
80,000
-(44,365)
103,704
139,339
The
anne
xed
note
s fo
rm a
n in
tegr
al p
art o
f the
se fi
nanc
ial s
tate
men
ts.
50 Yoong Onn Corporation BerhadAnnual Report 2013
Statements Of Changes In EquityFor The Financial Year Ended 30 June 2013 (cont’d)
Non-Distributable Distributable Share Share Retained Total Capital Premium Profits Equity Note RM’000 RM’000 RM’000 RM’000
THECOMPANY At1.7.2011 60,000 8,685 12,455 81,140 Profitaftertaxation/Totalcomprehensive - - 7,192 7,192incomeforthefinancialyear
Contributionsbyanddistributions toownersoftheCompany: -Bonus 20,000 (8,685) (11,315) --Dividends 26 - - (3,200) (3,200) At30.6.2012/1.7.2012 80,000 - 5,132 85,132
Profitaftertaxation/Totalcomprehensiveincomeforthefinancialyear - - 4,319 4,319
DistributionstoownersoftheCompany: -Dividends 26 - - (5,600) (5,600)
Balanceat30.6.2013 80,000 - 3,851 83,851
The annexed notes form an integral part of these financial statements.
51Yoong Onn Corporation BerhadAnnual Report 2013
STATEMENTS OF CASH FLOWSFor The Financial Year Ended 30 June 2013
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
CASHFLOWSFROM/(FOR)OPERATINGACTIVITIES Profitbeforetaxation 27,680 23,482 4,781 9,332
Adjustmentsfor:- Depreciationofproperty,plantandequipment 3,115 2,652 3 3Allowancefor/(Writebackof)slowmovinginventories 237 (51) - -Interestexpense 853 840 - -Plantandequipmentwrittenoff 192 94 - -Impairmentlossongoodwill - 176 - -Gainondisposalofplantandequipment (9) (9) - -Dividendincome - - (4,190) (8,962)Interestincome (627) (521) (839) (813)Allowancefor/(Writebackof)impairmentlossesontradereceivables 33 (68) - -Writeoffoftradereceivables 20 - - -Unrealisedgainonforeignexchange (18) (163) - -
Operatingprofit/(loss)beforeworkingcapitalchanges 31,476 26,432 (245) (440)Increaseininventories (4,126) (13,393) - -Increaseintradeandotherreceivables (7,583) (2,618) (18) (7)Increase/(Decrease)intradeandotherpayables 166 1,218 (70) (61)Decreaseinamountowingbysubsidiaries - - 59 12
CASHFLOWSFROM/(FOR)OPERATINGACTIVITIES 19,933 11,639 (274) (496)Incometaxpaid (6,512) (6,804) (156) (126)Interestpaid (843) (830) - -
NETCASHFROM/(FOR)OPERATINGACTIVITIESCARRIEDFORWARD 12,578 4,005 (430) (622)
The annexed notes form an integral part of these financial statements.
52 Yoong Onn Corporation BerhadAnnual Report 2013
Statements Of Cash FlowsFor The Financial Year Ended 30 June 2013 (cont’d)
The Group The Company 2013 2012 2013 2012 Note RM’000 RM’000 RM’000 RM’000
NETCASHFROM/(FOR)OPERATINGACTIVITIESBROUGHTFORWARD 12,578 4,005 (430) (622) CASHFLOWS(FOR)/FROM INVESTINGACTIVITIES Interestreceived 627 521 839 813Dividendreceived - - 3,892 6,971Additionalinvestmentinsubsidiaries - - (2,650) -Purchaseofplantandequipment (2,712) (9,572) - (3)Proceedsfromdisposalofplantandequipment 50 27 - -
NETCASH(FOR)/FROM (2,035) (9,024) 2,081 7,781INVESTINGACTIVITIES
CASHFLOWSFROM/(FOR)FINANCINGACTIVITIES Drawdownofbankers’acceptances 3,311 10,171 - -Repaymentfrom/(Advancesto)subsidiaries - - 10,520 (4,747)Repaymentofhirepurchaseobligation - (8) - -Dividendspaid (2,400) (3,200) (2,400) (3,200)
NETCASHFROM/(FOR)FINANCINGACTIVITIES 911 6,963 8,120 (7,947)
NETINCREASE/(DECREASE)INCASHANDCASHEQUIVALENTS 11,454 1,944 9,771 (788) CASHANDCASHEQUIVALENTSATBEGINNINGOFTHEFINANCIALYEAR 29,906 27,962 15,750 16,538
CASHANDCASHEQUIVALENTSAT ENDOFTHEFINANCIALYEAR 27 41,360 29,906 25,521 15,750
The annexed notes form an integral part of these financial statements.
53Yoong Onn Corporation BerhadAnnual Report 2013
1. GENERAL INFORMATION
The Company is incorporated as a public company limited by shares under the Companies Act 1965 inMalaysia.
TheregisteredofficeislocatedatSuite13A.01(A),Level13A,WismaGoldhill,67,JalanRajaChulan,50200KualaLumpur.
Theprincipal placeofbusiness is located atLotNo.PT16690 - 16692, JalanPermata2,Arab-MalaysianIndustrialPark,71800Nilai,NegeriSembilan.
ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionofthedirectorsdated10October2013.
2. PRINCIPAL ACTIVITIES
TheCompanyisprincipallyengagedinthebusinessofinvestmentholdingandtheprovisionofmanagementservices.TheprincipalactivitiesofthesubsidiariesaresetoutinNote6tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringthefinancialyear.
3. HOLDING COMPANY
TheholdingcompanyisCasatexCosmoSdn.Bhd.,acompanyincorporatedinMalaysia.
4. BASIS OF PREPARATION
ThefinancialstatementsoftheGrouparepreparedunderthehistoricalcostconventionandmodifiedtoincludeotherbasesofvaluationasdisclosedinothersectionsundersignificantaccountingpolicies,andincompliancewithMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.
4.1 Theseare theGroup’sfirstsetoffinancialstatementsprepared inaccordancewithMFRSs,whicharealsoinlinewithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard.
Inthepreviousfinancialyear, thefinancialstatementsoftheGroupwerepreparedinaccordancewithFinancialReportingStandards(“FRSs”).
ThefinancialimpactontransitiontoMFRSsaredisclosedinNote35.
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 30 June 2013
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
54 Yoong Onn Corporation BerhadAnnual Report 2013
4. BASIS OF PREPARATION (CONT’D)
4.2 TheGrouphasnotappliedinadvancethefollowingaccountingstandardsandinterpretations(includingthe consequential amendments, that have been issued by theMalaysianAccounting StandardsBoard(“MASB”),butarenotyeteffectiveforthecurrentfinancialyear:-
MFRSs and IC Interpretations (Including The Consequential Amendments) Effective Date MFRS9FinancialInstruments 1January2015 MFRS10ConsolidatedFinancialStatements 1January2013 MFRS11JointArrangements 1January2013 MFRS12DisclosureofInterestsinOtherEntities 1January2013 MFRS13FairValueMeasurement 1January2013 MFRS119EmployeeBenefits 1January2013 MFRS127SeparateFinancialStatements 1January2013 MFRS128InvestmentsinAssociatesandJointVentures 1January2013 AmendmentstoMFRS7:Disclosures–OffsettingFinancialAssetsand FinancialLiabilities 1January2013 AmendmentstoMFRS9andMFRS7:MandatoryEffectiveDateof MFRS9andTransitionDisclosures 1January2015 AmendmentstoMFRS10,MFRS11andMFRS12:TransitionGuidance 1January2013 AmendmentstoMFRS10,MFRS12andMFRS127:InvestmentEntities 1January2014 AmendmentstoMFRS132:OffsettingFinancialAssetsandFinancialLiabilities 1January2014 ICInterpretation20StrippingCostsintheProductionPhaseofaSurfaceMine 1January2013 AnnualImprovementstoMFRSs2009–2011Cycle 1January2013
Theaboveaccountingstandardsand interpretations (including theconsequentialamendments)arenotrelevanttotheGroup’soperationsexceptasfollows:-
(i) MFRS 9 replaces the parts of MFRS 139 that relate to the classification and measurement offinancial instruments.MFRS9 divides all financial assets into 2 categories – thosemeasured atamortisedcostandthosemeasuredatfairvalue,basedontheentity’sbusinessmodelformanagingitsfinancialassetsandthecontractualcashflowcharacteristicsof the instruments. Forfinancialliabilities,thestandardretainsmostoftheMFRS139requirement.Anentitychoosingtomeasureafinancialliabilityatfairvaluewillpresenttheportionofthechangeinitsfairvalueduetochangesintheentity’sowncreditriskinothercomprehensiveincomeratherthanwithinprofitorloss.ThewillbenofinancialimpactsonthefinancialstatementsoftheGroupuponitsinitialapplicationbutmayimpactitsfuturedisclosures.
(ii) MFRS10replacestheconsolidationguidanceinMFRS127andICInterpretation112.UnderMFRS10,thereisonlyonebasisforconsolidation,whichiscontrol.Extensiveguidancehasbeenprovidedinthestandardtoassist inthedeterminationofcontrol.Therewillbenofinancial impactonthefinancialstatementsoftheGroupuponitsinitialapplicationbutmayimpactitsfuturedisclosures.
(iii) MFRS12isapplicabletoentitiesthathaveinterestsinsubsidiaries,jointarrangements,associatesand/or unconsolidated structured entities.MFRS 12 is a disclosure standard and the disclosurerequirementsinthisstandardaremoreextensivethanthoseinthecurrentstandards.Accordingly,therewillbenofinancialimpactonthefinancialstatementsoftheGroupuponitsinitialapplicationbutmayimpactitsfuturedisclosures.
(iv) MFRS 13 defines fair value, provides guidance on how to determine fair value and requiresdisclosures about fair valuemeasurements. The scope ofMFRS 13 is broad; it applies to bothfinancial instrument itemsandnon-financial instrument items forwhichotherMFRSs requireorpermitfairvaluemeasurementsanddisclosuresaboutfairvaluemeasurements,exceptinspecifiedcircumstances.Ingeneral,thedisclosurerequirementsinMFRS13aremoreextensivethanthoserequired in thecurrent standardsand therefore therewillbenofinancial impacton thefinancialstatementsoftheGroupuponitsinitialapplicationbutmayimpactitsfuturedisclosures.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
55Yoong Onn Corporation BerhadAnnual Report 2013
4. BASIS OF PREPARATION (CONT’D)
4.2 Theaboveaccountingstandardsand interpretations (including theconsequentialamendments)arenotrelevanttotheGroup’soperationsexceptasfollows(Cont’d):-
(v) TheamendmentstoMFRS7(Disclosures–OffsettingFinancialAssetsandFinancialLiabilities)requiredisclosuresthatwillenableusersofanentity’sfinancialstatementstoevaluatetheeffectorpotentialeffectofnettingarrangements,includingrightsofset-offassociatedwiththeentity’srecognisedfinancial assets and recognisedfinancial liabilities, on the entity’s financial position.TherewillbenofinancialimpactonthefinancialstatementsoftheGroupuponitsinitialapplicationbutmayimpactitsfuturedisclosures.
(vi) Theamendments toMFRS10,MFRS12andMFRS127 require investment entities tomeasureparticular subsidiaries at fair value through profit or loss instead of consolidating them. TheCompanyisaninvestmententitywhosebusinesspurposeistoinvestfundssolelyforreturnsfromcapital appreciation, investment income or both. Accordingly, theGroupwill deconsolidate itssubsidiariesupontheinitialapplicationoftheseamendmentsandtofairvaluetheinvestmentsinaccordancewithMFRS139. Therewillbenofinancial impact to thefinancialstatementsof theGroupuponitsinitialapplication.
(vii) TheamendmentstoMFRS101retaintheoptiontopresentprofitorlossandothercomprehensiveincome in either a single statement or in two separate but consecutive statements. In addition,itemspresentedinothercomprehensiveincomesectionaretobegroupedbasedonwhethertheyarepotentiallyre-classifiabletoprofitorlosssubsequentlyi.e.thosethatmightbereclassifiedandthosethatwillnotbereclassified.Incometaxonitemsofothercomprehensiveincomeisrequiredtobeallocatedonthesamebasis.TherewillbenofinancialimpactonthefinancialstatementsoftheGroupuponitsinitialapplicationotherthanthepresentationformatofthestatementofprofitorlossandothercomprehensiveincome.
(viii)The amendments toMFRS 132 provide the application guidance for criteria to offset financialassetsandfinancialliabilities.TherewillbenomaterialimpacttothefinancialstatementsoftheGroupuponitsinitialapplication.
(ix) TheAnnualImprovementstoMFRSs2009–2011CyclecontainamendmentstoMFRS1,MFRS101,MFRS116,MFRS132andMFRS134.TheseamendmentsareexpectedtohavenomaterialimpactonthefinancialstatementsoftheGroupupontheirinitialapplication.
5. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates And Judgements
Estimates and judgements are continually evaluated by the directors andmanagement and are basedonhistoricalexperienceandother factors, includingexpectationsof futureevents thatarebelieved tobereasonableunderthecircumstances.TheestimatesandjudgementsthataffecttheapplicationoftheGroup’saccountingpoliciesanddisclosures,andhaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassets,liabilities,incomeandexpensesarediscussedbelow:-
(i) Depreciation of Property, Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for theproperty,plantandequipmentarebasedoncommercialandproductionfactorswhichcouldchangesignificantlyasaresultoftechnicalinnovationsandcompetitors’actionsinresponsetothemarketconditions.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
56 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Critical Accounting Estimates And Judgements (Cont’d)
(i) Depreciation of Property, Plant and Equipment (Cont’d)
TheGroupanticipatesthattheresidualvaluesofitsproperty,plantandequipmentwillbesignificantandhavebeentakenintoconsiderationforthecomputationofthedepreciableamount.
Changesintheexpectedlevelofusageandtechnologicaldevelopmentcouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.
(ii) Income Taxes
Therearecertaintransactionsandcomputationsforwhichtheultimatetaxdeterminationmaybedifferentfromtheinitialestimate.TheGrouprecognisedtaxliabilitiesbasedonitsunderstandingoftheprevailingtaxlawsandestimatesofwhethersuchtaxeswillbedueintheordinarycourseofbusiness.Wherethefinaloutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecognised,suchdifferencewillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.
(iii) Impairment of Non-financial Assets
Whentherecoverableamountofanassetisdeterminedbasedontheestimateofthevalue-in-useofthecash-generatingunittowhichtheassetisallocated,themanagementisrequiredtomakeanestimateoftheexpectedfuturecashflowsfromthecash-generatingunitandalsotoapplyasuitablediscountrateinordertodeterminethepresentvalueofthosecashflows.
(iv) Impairment of Trade and Other Receivables
Animpairmentlossisrecognisedwhenthereisobjectiveevidencethatafinancialassetisimpaired.Managementspecificallyreviewsitsloansandreceivablesfinancialassetsandanalyseshistoricalbad debts, customer concentrations, customer creditworthiness, current economic trends andchangesinthecustomerpaymenttermswhenmakingajudgmenttoevaluatetheadequacyoftheallowanceforimpairmentlosses.Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.Iftheexpectationisdifferentfromtheestimation,suchdifferencewillimpactthecarryingvalueofreceivables.
(v) Allowance for Slow-moving Inventories
Reviewsaremadeperiodicallybymanagementondamaged,obsoleteandslow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothevaluationofinventories.
(vi) Revaluation of Properties
CertainpropertiesoftheGrouparereportedatvaluationwhichisbasedonvaluationsperformedbyindependentprofessionalvaluers.
Theindependentprofessionalvaluershaveexercisedjudgementindeterminingfactorsusedinthevaluationprocess.Also,judgementhasbeenappliedinestimatingpricesforlessreadilyobservableexternalparameters.Otherfactorssuchasmodelassumptions,marketdislocationsandunexpectedcorrelationscanalsomateriallyaffecttheseestimatesandtheresultingvaluationestimates.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
57Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Critical Accounting Estimates And Judgements (Cont’d)
(vii) Impairment of Goodwill
Goodwill is tested for impairment annually and at other timeswhen such indicators exist. Thisrequires management to estimate the expected future cash flows of the cash-generating unit towhichgoodwillisallocatedandtoapplyasuitablediscountrateinordertodeterminethepresentvalue of those cash flows. The future cash flows aremost sensitive to budgeted grossmargins,growthratesestimatedanddiscountrateused.Iftheexpectationisdifferentfromtheestimation,suchdifferencewillimpactthecarryingvalueofgoodwill.
(viii) Fair Value Estimates for Certain Financial Assets and Liabilities
TheGroupcarriescertainfinancialassetsandliabilitiesatfairvalue,whichrequiresextensiveuseofaccountingestimatesandjudgement.Whilesignificantcomponentsoffairvaluemeasurementweredeterminedusingverifiableobjective evidence, the amountof changes in fair valuewoulddifferiftheGroupusesdifferentvaluationmethodologies.Anychangesinfairvalueoftheseassetsandliabilitieswouldaffectprofitand/orequity.
(b) Financial Instruments FinancialinstrumentsarerecognisedinthestatementsoffinancialpositionwhentheGrouphasbecome
apartytothecontractualprovisionsoftheinstruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of thecontractualarrangement.Interest,dividends,gainsandlossesrelatingtoafinancialinstrumentclassifiedas a liability, are reported as an expense or income.Distributions to holders of financial instrumentsclassifiedasequityarechargeddirectlytoequity.
FinancialinstrumentsareoffsetwhentheGrouphasalegallyenforceablerighttooffsetandintendstosettleeitheronanetbasisortorealisetheassetandsettletheliabilitysimultaneously.
Afinancialinstrumentisrecognisedinitially,atitsfairvalueplus,inthecaseofafinancialinstrumentnotatfairvaluethroughprofitorloss,transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialinstrument.
Financial instrumentsrecognisedinthestatementsoffinancialpositionaredisclosedintheindividualpolicystatementassociatedwitheachitem.
(i) Financial Assets
Oninitialrecognition,financialassetsareclassifiedaseitherfinancialassetsatfairvaluethroughprofitorloss,held-to-maturityinvestments,loansandreceivablesfinancialassets,oravailable-for-salefinancialassets,asappropriate.
• Financial Assets at Fair Value Through Profit or Loss
Financialassetsareclassifiedasfinancialassetsatfairvaluethroughprofitorlosswhenthefinancialasset iseitherheldfor tradingor isdesignatedtoeliminateorsignificantlyreduceameasurementorrecognitioninconsistencythatwouldotherwisearise.Derivativesarealsoclassifiedasheldfortradingunlesstheyaredesignatedashedges.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
58 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Financial Instruments (Cont’d)
(i) Financial Assets (Cont’d)
• Financial Assets at Fair Value Through Profit or Loss (Cont’d)
Financial assets at fair value through profit or loss are stated at fair value,with any gainsor lossesarisingon remeasurement recognised inprofitor loss.Dividend incomefromthiscategoryoffinancialassetsisrecognisedinprofitorlosswhentheCompany’srighttoreceivepaymentisestablished.
• Held-to-maturity Investments
Held-to-maturity investmentsarenon-derivative financialassetswith fixedordeterminablepayments and fixed maturities that the management has the positive intention and abilitytohold tomaturity.Held-to-maturity investmentsaremeasuredat amortisedcostusing theeffectiveinterestmethodlessanyimpairmentloss,withrevenuerecognisedonaneffectiveyieldbasis.
• Loans and Receivables Financial Assets
Tradereceivablesandotherreceivablesthathavefixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivablesfinancialassets.Loansandreceivablesfinancialassetsaremeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairmentloss.Interestincomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.
• Available-for-sale Financial Assets
Available-for-sale financial assets arenon-derivative financial assets that aredesignated inthiscategoryorarenotclassifiedinanyoftheothercategories.
Afterinitialrecognition,available-for-salefinancialassetsareremeasuredtotheirfairvaluesat theendofeachreportingperiod.Gainsandlossesarisingfromchanges infairvaluearerecognised inother comprehensive incomeand accumulated in the fair value reserve,withtheexceptionofimpairmentlosses.Onderecognition,thecumulativegainorlosspreviouslyaccumulatedinthefairvaluereserveisreclassifiedfromequityintoprofitorloss.
Dividendsonavailable-for-saleequityinstrumentsarerecognisedinprofitorlosswhentheGroup’srighttoreceivepaymentsisestablished.
Investmentsinequityinstrumentswhosefairvaluecannotbereliablymeasuredaremeasuredatcostlessaccumulatedimpairmentlosses,ifany.
(ii) Financial Liabilities
All financial liabilities are initially at fair value plus directly attributable transaction costs andsubsequently measured at amortised cost using the effective interest method other than thosecategorisedasfairvaluethroughprofitorloss.
Fair value through profit or loss category comprises financial liabilities that are either held fortrading or are designated to eliminate or significantly reduce a measurement or recognitioninconsistencythatwouldotherwisearise.Derivativesarealsoclassifiedasheldfortradingunlesstheyaredesignatedashedges.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
59Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Financial Instruments (Cont’d)
(iii) Equity Instruments
Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromproceeds.
Dividendsonordinarysharesarerecognisedasliabilitieswhenapprovedforappropriation.
(c) Functional and Foreign Currencies
(i) Functional and Presentation Currency
TheindividualfinancialstatementsofeachentityintheGrouparepresentedinthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates,whichisthefunctionalcurrency.
TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia,whichistheCompany’sfunctionalandpresentationcurrency.
(ii) Transactions and Balances
Transactionsinforeigncurrenciesareconvertedintotherespectivefunctionalcurrenciesoninitialrecognition,usingtheexchangeratesapproximatingthoserulingatthetransactiondates.Monetaryassetsandliabilitiesat theendofthereportingperiodaretranslatedat theratesrulingasofthatdate.Non-monetaryassetsandliabilitiesaretranslatedusingexchangeratesthatexistedwhenthevaluesweredetermined.Allexchangedifferencesarerecognisedinprofitorloss.
(d) Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and all itssubsidiariesmadeupto30June2013.
Asubsidiaryisdefinedasacompanyinwhichtheparentcompanyhasthepower,directlyorindirectly,toexercisecontroloveritsfinancialandoperatingpoliciessoastoobtainbenefitsfromitsactivities.
SubsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroupuptotheeffectivedateonwhichcontrolceases,asappropriate.
Acquisitionofbusinessesareaccountedforusingtheacquisitionmethodotherthanthoseresultedinabusinesscombination involvingcommoncontrolentities isoutside thescopeofMFRS3.ThemergeraccountingisusedbytheGrouptoaccountforsuchcommoncontrolbusinesscombinations.
(i) Merger accounting for common control business combinations
A business combination involving entities under common control is a business combination inwhich all the combining entities or subsidiaries are ultimately controlled by the sameparty andpartiesbothbeforeandafterthebusinesscombination,andthatcontrolisnottransitory.
Subsidiariesacquiredwhichhavemet thecriteria forpoolingof interestareaccountedforusingmergeraccountingprinciples.Underthemergermethodofaccounting,theresultsofthesubsidiariesarepresentedasifthemergerhadbeeneffectedthroughoutthecurrentfinancialyear.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
60 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(d) Basis of Consolidation (Cont’d)
(i) Merger accounting for common control business combinations (Cont’d)
The assets and liabilities combined are accounted for based on the carrying amounts from theperspectiveof the commoncontrol shareholder at thedate of transfer.No amount is recognisedinrespectofgoodwillandexcessof theacquirer’s interest inthenetfairvalueof theacquiree’sidentifiable assets and liabilities and contingent liabilities over cost at the time of the commoncontrolbusinesscombinationtotheextentofthecontinuationofthecontrollingpartyandparties’interests.
Whenthemergermethodisused,thecostofinvestmentintheCompany’sbooksisrecordedatthenominalvalueofsharesissued.Thedifferencebetweenthecarryingvalueoftheinvestmentandthenominalvalueofthesharesofthesubsidiariesistreatedasamergerdeficitormergerreserveasapplicable.Theresultsofthesubsidiariesbeingmergedareincludedforthefullfinancialyear.
Acquisitionsofbusinessesareaccountedforusingtheacquisitionmethod.Undertheacquisitionmethod,theconsiderationtransferredforacquisitionofasubsidiaryisthefairvalueoftheassetstransferred, liabilities incurred and the equity interests issued by the Group at the acquisitiondate.Theconsiderationtransferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Acquisition-relatedcosts,otherthanthecoststoissuedebtorequitysecurities,arerecognisedinprofitorlosswhenincurred.
(ii) Acquisition method of accounting for non-common control business combinations
Inabusinesscombinationachievedinstages,previouslyheldequityinterestsintheacquireeareremeasuredtofairvalueattheacquisitiondateandanycorrespondinggainorlossisrecognisedinprofitorloss.
Intragrouptransactions,balances,incomeandexpensesareeliminated.Wherenecessary,adjustmentsaremadetothefinancialstatementsofsubsidiariestoensureconsistencyofaccountingpolicieswiththoseoftheGroup.
Non-controlling interests in the acquireemaybe initiallymeasured either at fair valueor at thenon-controllinginterests’proportionateshareofthefairvalueoftheacquiree’sidentifiablenetassetsatthedateofacquisition.Thechoiceofmeasurementbasisismadeonatransaction-by-transactionbasis.
Non-controllinginterestsarepresentedwithinequityintheconsolidatedstatementoffinancialposition,separately from theCompany’s shareholders’ equity, and are separatelydisclosed in the consolidatedstatement of comprehensive income. Transactionswith non-controlling interests are accounted for astransactionswithownersandarerecogniseddirectlyinequity.Profitorlossandeachcomponentofothercomprehensive incomeare attributed to theownersof theparent and to thenon-controlling interests.Total comprehensive income is attributed to non-controlling interests even if this results in the non-controllinginterestshavingadeficitbalance.
At theendofeachreportingperiod, thecarryingamountofnon-controllinginterests is theamountofthose interestsat initial recognitionplus thenon-controlling interests’ shareofsubsequentchanges inequity.
Allchangesintheparent’sownershipinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.Anydifferencebetweentheamountbywhichthenon-controllinginterestisadjustedandthefairvalueofconsiderationpaidorreceivedisrecogniseddirectlyinequityandattributedtoownersoftheparent.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
61Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(d) Basis of Consolidation (Cont’d)
Uponlossofcontrolofasubsidiary,theprofitorlossondisposaliscalculatedasthedifferencebetween:-
(i) the aggregate of the fair value of the consideration received and the fair value of any retainedinterestintheformersubsidiary;and
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the formersubsidiaryandanynon-controllinginterests.
(e) Goodwill
Goodwillismeasuredatcostlessaccumulatedimpairmentlosses,ifany.Thecarryingvalueofgoodwillis reviewed for impairmentannually.The impairmentvalueofgoodwill is recognised immediately inprofitorloss.Animpairmentlossrecognisedforgoodwillisnotreversedinasubsequentperiod.
Undertheacquisitionmethod,anyexcessofthesumofthefairvalueoftheconsiderationtransferredinthebusinesscombination, theamountofnon-controlling interests recognisedandthefairvalueof theGroup’spreviouslyheldequityinterestintheacquiree(ifany),overthenetfairvalueoftheacquiree’sidentifiableassetsandliabilitiesatthedateofacquisitionisrecordedasgoodwill.
Wherethelatteramountexceedstheformer,afterreassessment,theexcessrepresentsabargainpurchasegainandisrecognisedasagaininprofitorloss.
(f) Investments in Subsidiaries
InvestmentsinsubsidiariesarestatedatcostinthestatementoffinancialpositionoftheCompanyandarereviewedforimpairmentattheendofthereportingperiodifeventsorchangesincircumstancesindicatethattheircarryingvaluesmaynotberecoverable.
Onthedisposaloftheinvestmentsinsubsidiaries,thedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheinvestmentsisrecognisedinprofitorloss.
(g) Property, Plant and Equipment
Property,plantandequipment,otherthanfreeholdland,arestatedatcostlessaccumulateddepreciationandimpairment losses, ifany.Freeholdlandisstatedatcost less impairment losses, ifanyandisnotdepreciated.
Depreciationiscalculatedonthestraight-linemethodtowriteoffthedepreciableamountoftheassetsovertheirestimatedusefullives.Depreciationofanassetdoesnotceasewhentheassetbecomesidleorisretiredfromactiveuseunlesstheassetisfullydepreciated.Theprincipalannualratesofdepreciationandresidualvaluesareasfollows:
Depreciation Rate Residual Value
Buildings 3% - Plantandmachinery 10% - Motorvehicles 20% 5%-20% Officeequipment 10%-25% - Electricalappliances 20% - Furnitureandfittings 10% - Renovation 20% - Factoryandwarehouseequipment 10%-15% -
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
62 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(g) Property, Plant and Equipment (Cont’d)
The depreciationmethod, useful lives and residual values are reviewed, and adjusted if appropriate,at theendof the reportingperiod toensure that theamounts,methodandperiodsofdepreciationareconsistent with previous estimates and the expected pattern of consumption of the future economicbenefitsembodiedintheitemsoftheproperty,plantandequipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate,onlywhenthecostisincurredanditisprobablethatthefutureeconomicbenefitsassociatedwith theassetwillflowto theGroupandthecostof theassetcanbemeasuredreliably.Thecarryingamountofpartsthatarereplacedisderecognised.Thecostsoftheday-to-dayservicingofproperty,plantandequipmentare recognised inprofitor lossas incurred.Costalsocomprises the initial estimateofdismantlingandremovingtheassetandrestoringthesiteonwhichitislocatedforwhichtheGroupisobligatedtoincurwhentheassetisacquired,ifapplicable.
An itemofproperty,plantandequipment isderecognisedupondisposalorwhenno futureeconomicbenefitsareexpectedfromitsuse.Anygainorlossarisingfromderecognitionoftheassetisincludedintheincomestatementsintheyeartheassetisderecognised.
(h) Impairment
(i) Impairment of Financial Assets
Allfinancialassets(otherthanthosecategorisedatfairvaluethroughprofitorloss),areassessedattheendofeachreportingperiodwhetherthereisanyobjectiveevidenceofimpairmentasaresultofoneormoreeventshavinganimpactontheestimatedfuturecashflowsoftheasset.Foranequityinstrument,asignificantorprolongeddecline in thefairvaluebelowitscost isconsidered tobeobjectiveevidenceofimpairment.
Animpairmentlossinrespectofheld-to-maturityinvestmentsandloansandreceivablesfinancialassetsisrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’scarryingamount and the present value of estimated future cash flows, discounted at the financial asset’soriginaleffectiveinterestrate.
Animpairmentlossinrespectofavailable-for-salefinancialassetsisrecognisedinprofitorlossandismeasuredasthedifferencebetweenitscost(netofanyprincipalpaymentandamortisation)anditscurrentfairvalue,lessanyimpairmentlosspreviouslyrecognisedinthefairvaluereserve.Inaddition,thecumulativelossrecognisedinothercomprehensiveincomeandaccumulatedinequityunderfairvaluereserve,isreclassifiedfromequitytoprofitorloss.
Withtheexceptionofavailable-for-saleequityinstruments,if,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedthroughprofitor loss to theextent that thecarryingamountof the investmentat thedate the impairmentis reversed does not exceed what the amortised cost would have been had the impairment notbeenrecognised.Inrespectofavailable-for-saleequityinstruments,impairmentlossespreviouslyrecognised in profit or loss are not reversed through profit or loss. Any increase in fair valuesubsequenttoanimpairmentlossmadeisrecognisedinothercomprehensiveincome.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
63Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(h) Impairment (Cont’d)
(ii) Impairment of Non-Financial Assets
Thecarryingvaluesofassets,otherthanthosetowhichMFRS136-ImpairmentofAssetsdoesnotapply,arereviewedattheendofeachreportingperiodforimpairmentwhenthereisanindicationthat the assetsmight be impaired. Impairment ismeasured by comparing the carrying values oftheassetswith their recoverableamounts.The recoverableamountof theassets is thehigheroftheassets’ fairvalue lesscosts to selland theirvalue inuse,which ismeasuredby reference todiscountedfuturecashflow.
An impairment loss is recognised in profit or loss immediately unless the asset is carried at itsrevaluedamount.Anyimpairmentlossofarevaluedassetistreatedasarevaluationdecreasetotheextentofapreviouslyrecognisedrevaluationsurplusforthesameasset.
Inrespectofassetsotherthangoodwill,andwhenthereisachangeintheestimatesusedtodeterminetherecoverableamount,asubsequentincreaseintherecoverableamountofanassetistreatedasareversalofthepreviousimpairmentlossandisrecognisedtotheextentofthecarryingamountoftheassetthatwouldhavebeendetermined(netofamortisationanddepreciation)hadnoimpairmentlossbeenrecognised.Thereversal isrecognisedinprofitor lossimmediately,unlesstheasset iscarriedatitsrevaluedamount.Areversalofanimpairmentlossonarevaluedassetiscreditedtoothercomprehensiveincome.However,totheextentthatanimpairmentlossonthesamerevaluedassetwaspreviouslyrecognisedasanexpenseinthestatementofprofitorloss,areversalofthatimpairmentlossisrecognisedasincomeinthestatementofprofitorloss.
(i) Inventories
Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Costisdeterminedonthefirst-in-first-outbasis,andcomprisesthepurchasepriceandincidentalsincurredinbringingtheinventoriestotheirpresentlocationandcondition.Costoffinishedgoodsandwork-in-progressincludethecostofmaterials,labourandanappropriateproportionofproductionoverheads.
Netrealisablevaluerepresentstheestimatedsellingpricelesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.
Wherenecessary,dueallowanceismadeforalldamaged,obsoleteandslow-movingitems.
(j) Provisions, Contingent Liabilities and Contingent Assets
ProvisionsarerecognisedwhentheCompanyhasapresentobligationasaresultofpastevents,whenit isprobable thatanoutflowof resourcesembodyingeconomicbenefitswillbe required to settle theobligation,andwhenareliableestimateoftheamountcanbemade.Provisionsarereviewedattheendofeachreportingperiodandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,theprovisionisthepresentvalueoftheestimatedexpenditurerequiredtosettletheobligation.
AcontingentliabilityisapossibleobligationthatarisesfrompasteventsandwhoseexistencewillonlybeconfirmedbytheoccurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheGroup.Itcanalsobeapresentobligationarisingfrompasteventsthatisnotrecognisedbecauseitisnotprobablethatanoutflowofeconomicresourceswillberequiredortheamountofobligationcannotbemeasuredreliably.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
64 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(j) Provisions, Contingent Liabilities and Contingent Assets (Cont’d)
Acontingentliabilityisnotrecognisedbutisdisclosedinthenotestothefinancialstatements.Whenachangeintheprobabilityofanoutflowoccurssothattheoutflowisprobable,itwillthenberecognisedasaprovision.
Acontingentassetisaprobableassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybyoccurrenceornon-occurrenceofoneormoreuncertaineventsnotwhollywithinthecontroloftheGroup.
(k) Income Taxes Incometaxfortheyearcomprisescurrentanddeferredtax.
Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearand ismeasuredusing the tax rates thathavebeenenactedor substantively enactedat the endof thereportingperiod.
Deferredtaxisprovidedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.
Deferred tax liabilitiesare recognisedforall taxable temporarydifferencesother than those thatarise
fromgoodwillorexcessoftheacquirer’sinterestinthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthebusinesscombinationcostsorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.
Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilitised.Thecarryingamountsofdeferredtaxassetsarereviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficientfuturetaxableprofitswillbeavailabletoallowallorpartofthedeferredtaxassetstobeutilised.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhen the asset is realised or the liability is settled, based on the tax rates that have been enacted orsubstantivelyenactedattheendofthereportingperiod.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredincometaxesrelatetothesametaxationauthority.
Deferredtaxrelatingtoitemsrecognisedoutsideprofitorlossisrecognisedoutsideprofitorloss.Deferredtax items are recognised in correlation to the underlying transactions either in other comprehensiveincome or directly in equity and deferred tax arising from a business combination is included in theresultinggoodwillorexcessoftheacquirer’sinterestinthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthebusinesscombinationcosts.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
65Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(l) Borrowing Costs
Borrowingcostsdirectlyattributabletotheacquisitionandconstructionofproperty,plantandequipmentarecapitalisedaspartofthecostofthoseassets,untilsuchtimeastheassetsarereadyfortheirintendeduse or sale. Capitalisation of borrowing costs is suspended during extended periods in which activedevelopmentisinterrupted.
Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.
(m) Operating Segments
AnoperatingsegmentisacomponentoftheGroupthatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,includingrevenuesandexpensesthatrelatetotransactionswithanyoftheGroup’sothercomponents.Anoperatingsegment’soperatingresultsarereviewedregularlybythechiefoperatingdecisionmakertomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformance,andforwhichdiscretefinancialinformationisavailable.
(n) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledgedwith financial institutions, bank overdrafts and short-term, highly liquid investments that are readilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.
(o) Employee Benefits
(i) Short-term Benefits
Wages,salaries,paidannualleave,bonusesandnon-monetarybenefitsareaccruedintheperiodinwhichtheassociatedservicesarerenderedbyemployeesoftheGroup.
(ii) Defined Contribution Plans
TheGroup’scontributionstodefinedcontributionplansarerecognisedinprofitorlossintheperiodtowhichtheyrelate.Oncethecontributionshavebeenpaid,theGrouphasnofurtherliabilityinrespectofthedefinedcontributionplans.
(p) Related Parties
Apartyisrelatedtoanentity(referredtoasthe“reportingentity”)if:-
(a) Apersonoraclosememberofthatperson’sfamilyisrelatedtoareportingentityifthatperson:-
(i) hascontrolorjointcontroloverthereportingentity;(ii) hassignificantinfluenceoverthereportingentity;or(iii) is amemberof thekeymanagementpersonnelof the reportingentityorofaparentof the
reportingentity.
(b) Anentityisrelatedtoareportingentityifanyofthefollowingconditionsapplies:-
(i) Theentityand thereportingentityaremembersof thesamegroup(whichmeans thateachparent,subsidiaryandfellowsubsidiaryisrelatedtotheothers).
(ii) Oneentityisanassociateorjointventureoftheotherentity(oranassociateorjointventureofamemberofagroupofwhichtheotherentityisamember).
(iii) Bothentitiesarejointventuresofthesamethirdparty.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
66 Yoong Onn Corporation BerhadAnnual Report 2013
5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(p) Related Parties (Cont’d)
(b) Anentityisrelatedtoareportingentityifanyofthefollowingconditionsapplies(cont’d):-
(iv) Oneentityisajointventureofathirdentityandtheotherentityisanassociateofthethirdentity.
(v) Theentityisapost-employmentbenefitplanforthebenefitofemployeesofeitherthereportingentityoranentityrelatedtothereportingentity.Ifthereportingentityisitselfsuchaplan,thesponsoringemployersarealsorelatedtothereportingentity.
(vi) Theentityiscontrolledorjointlycontrolledbyapersonidentifiedin(a)above.(vii)Apersonidentifiedin(a)(i)abovehassignificantinfluenceovertheentityorisamemberof
thekeymanagementpersonneloftheentity(orofaparentoftheentity).
Close members of the family of a person are those family members who may be expected toinfluence,orbeinfluencedby,thatpersonintheirdealingswiththeentity.
(q) Revenue Recognition
(i) Sale of Goods
Revenueisrecognisedupondeliveryofgoodsandcustomers’acceptance,andwhereapplicable,netofreturnsandtradediscounts.
(ii) Interest Income
Interestincomeisrecognisedonanaccrualbasis,basedoneffectiveyieldontheinvestments.
(iii) Dividend Income
Dividendsfromsubsidiariesarerecognisedwhentheshareholders’righttoreceiveisestablished.
(iv) Management Fees and Rental Income
Managementfeesandrentalincomearerecognisedonanaccrualbasis.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
67Yoong Onn Corporation BerhadAnnual Report 2013
6. INVESTMENTS IN SUBSIDIARIES
The Company 2013 2012 RM’000 RM’000
Unquotedshares,atcost 57,565 54,915
Detailsofthesubsidiaries,whichareallincorporatedinMalaysia,areasfollows:-
Effective Equity Interest Name of the Companies 2013 2012 Principal Activities
Monsieur(M)Sdn.Bhd. 100% 100% Retailingofhomelinenandhomeware.
SyarikatYoongOnnSdn.Bhd. 100% 100% Distributionandtradingofhomelinenand homeware. ElegantTotalHomeSdn.Bhd. 100% 100% Distributionandtradingofhomelinenand homeware. SleepFocusSdn.Bhd. 100% 100% Designandmanufactureofhomelinenand beddingaccessoriesandtradingofhome linen.
7. PROPERTY, PLANT AND EQUIPMENT
At Written Off/ Depreciation At 1.7.2012 Additions Disposals Charge 30.6.2013 THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000
NetBookValue
Freeholdland 8,650 - - - 8,650 Buildings 20,371 24 (31) (390) 19,974 Plantandmachinery 963 364 - (258) 1,069 Factoryandwarehouseequipment 1,833 70 - (300) 1,603 Motorvehicles 2,722 - (38) (690) 1,994 Officeequipment 1,549 889 (25) (605) 1,808 Electricalappliances 553 323 (4) (192) 680 Renovation 1,087 500 (27) (388) 1,172 Furnitureandfittings 1,792 542 (108) (292) 1,934
Total 39,520 2,712 (233) (3,115) 38,884
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
68 Yoong Onn Corporation BerhadAnnual Report 2013
7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
At Written Off/ Depreciation At 1.7.2011 Additions Disposals Charge 30.6.2012 THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000
NetBookValue
Freeholdland 8,650 - - - 8,650 Buildings 16,550 4,561 - (740) 20,371 Plantandmachinery 1,142 100 - (279) 963 Factoryandwarehouseequipment 518 1,434 - (119) 1,833 Motorvehicles 2,718 396 (18) (374) 2,722 Officeequipment 1,261 718 (6) (424) 1,549 Electricalappliances 176 500 (8) (115) 553 Renovation 690 819 (27) (395) 1,087 Furnitureandfittings 1,007 1,044 (53) (206) 1,792
Total 32,712 9,572 (112) (2,652) 39,520
Accumulated Net Book At Cost Depreciation Value THE GROUP RM’000 RM’000 RM’000
At30June2013 Freeholdland 8,650 - 8,650 Buildings 21,104 (1,130) 19,974 Plantandmachinery 6,112 (5,043) 1,069 Factoryandwarehouseequipment 2,390 (787) 1,603 Motorvehicles 4,718 (2,724) 1,994 Officeequipment 3,839 (2,031) 1,808 Electricalappliances 1,375 (695) 680 Renovation 3,728 (2,556) 1,172 Furnitureandfittings 3,024 (1,090) 1,934
54,940 (16,056) 38,884
At30June2012
Freeholdland 8,650 - 8,650 Buildings 21,111 (740) 20,371 Plantandmachinery 5,748 (4,785) 963 Factoryandwarehouseequipment 2,325 (492) 1,833 Motorvehicles 4,792 (2,070) 2,722 Officeequipment 3,017 (1,468) 1,549 Electricalappliances 1,070 (517) 553 Renovation 3,530 (2,443) 1,087 Furnitureandfittings 2,703 (911) 1,792
52,946 (13,426) 39,520
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
69Yoong Onn Corporation BerhadAnnual Report 2013
7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
At Depreciation At 1.7.2012 Addition Charge 30.6.2013 THE COMPANY RM’000 RM’000 RM’000 RM’000
NetBookValue Officeequipment 6 - (3) 3
At Depreciation At 1.7.2011 Addition Charge 30.6.2012 RM’000 RM’000 RM’000 RM’000
NetBookValue
Officeequipment 6 3 (3) 6
At Accumulated Net Book Cost Depreciation Value THE COMPANY RM’000 RM’000 RM’000
At30June2013
Officeequipment 12 (9) 3
At Accumulated Net Book Cost Depreciation Value RM’000 RM’000 RM’000
At30June2012
Officeequipment 12 (6) 6
Inthepreviousfinancialyear,thefreeholdlandandbuildingsoftheGrouphavebeenpledgedtoabankassecurityforbankingfacilitiesgrantedtotheGroupasdisclosedinNote21tothefinancialstatements.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
70 Yoong Onn Corporation BerhadAnnual Report 2013
8. GOODWILL
The goodwill relates to the retailing segment. The Group reviews goodwill for impairment annually inaccordancewithitsaccountingpolicy.
TheGrouphasassessedtherecoverableamountofgoodwillusingthevalue-in-useapproachandisbasedonthefinancialbudgetsapprovedbymanagement.Themanagementhasprojectedcashflowsforaperiodofoneyear.Thekeyassumptionsusedforvalue-in-usecalculationsareasfollows:-
(a) Budgetedrevenue Sales growth rate of 14% is used based on the expected demand of homefurnishingproductstobederivedfrombothexistingandfutureboutiquesinthebudgetedperiod.
(b) Budgetedgrossmargin Budgetedgrossprofitmarginof53% is determinedbasedon thehistoricaltrackrecordandafterconsideringdomesticeconomicconditions.
(c) Discountrate The discount rate used is pre-tax and reflect specific risks relating to theindustry.
9. INVENTORIES
The Group 2013 2012 RM’000 RM’000
Atcost:- Rawmaterials 12,315 12,857 Workinprogress 2,890 2,820 Finishedgoods 36,471 34,206 Stock-in-transit 2,647 1,136
54,323 51,019 Atnetrealisablevalue:- Rawmaterials 1,526 1,174 Finishedgoods 1,374 1,141 2,900 2,315 Totalinventories 57,223 53,334
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
71Yoong Onn Corporation BerhadAnnual Report 2013
10. TRADE RECEIVABLES
The Group 2013 2012 RM’000 RM’000
Tradereceivables 34,694 28,540 Allowanceforimpairmentlosses (45) (13)
34,649 28,527
Allowanceforimpairmentlosses: At1July2012/2011 (13) (179) Additionduringthefinancialyear (33) - Writtenoffduringthefinancialyear 1 98 Writebackduringthefinancialyear - 68
(45) (13)
TheGroup’snormalcredittermsoftradereceivablesrangefrom30to90days.Othercredittermsareassessedandapprovedonacase-by-casebasis.
11. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Includedinotherreceivables,depositsandprepaymentsoftheGroupisanamountofRM4,126,678(2012-RM2,831,524),beingdepositsmadetosuppliersforfuturesupplyofmaterialsandfinishedgoods.
Thesedepositsshallberecoveredbywayofset-offagainstthesupplyofmaterialsandfinishedgoods.
12. AMOUNT OWING BY SUBSIDIARIES
Theamountowingbysubsidiariesisnon-tradeinnature,unsecured,interest-freeandrepayableondemand,exceptforanamountofRM4,000,000(2012-RM14,500,000)whichboreaninterestrateof3.00%(2012-3.00%)perannuminaccordancewiththecommercialbank’s1monthfixeddepositrate.Theamountsaretobesettledincash.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
72 Yoong Onn Corporation BerhadAnnual Report 2013
13. SHORT-TERM INVESTMENT
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Fixedincometrustfund,atfairvalue 10,000 7,000 10,000 7,000
Atmarketvalue 10,000 7,000 10,000 7,000
The investment in fixed income trust fund represents investment in highly liquidmoneymarket,which isreadily convertible to aknownamountof cash.Theeffective interest rate is approximately2.74% (2012 -2.78%)perannum.Theshort-terminvestmentisdesignatedasfairvaluethroughprofitorlossandismeasuredatfairvalue.
14. DEPOSITS WITH FINANCIAL INSTITUTIONS
IncludedindepositswithfinancialinstitutionsinthepreviousfinancialyearwasanamountofRM3,450,219whichwaspledgedtolicensedbanksforcreditfacilitiesgrantedtotheGroup.
Theeffectiveinterestratesofthedepositswithfinancialinstitutionsattheendofthereportingperiodrangedfrom2.35%to3.25%(2012-2.20%to3.06%)perannum.Thedepositshavematurityperiodsrangingfrom1to90days(2012-1to30days).
15. SHARE CAPITAL
The Company 2013 2012 Number Number Par of Share of Share Value ’000 RM’000 ’000 RM’000
Authorised:
At30June2013/2012 0.50 200,000 100,000 200,000 100,000
IssuedandFullyPaid-Up:
At1July2012/2011 0.50 160,000 80,000 120,000 60,000 Bonusissue 0.50 - - 40,000 20,000
At30June2013/2012 0.50 160,000 80,000 160,000 80,000
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
73Yoong Onn Corporation BerhadAnnual Report 2013
16. SHARE PREMIUM
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
At1July2012/2011 - 8,685 - 8,685 Bonusissue - (8,685) - (8,685)
At30June2013/2012 - - - -
ThesharepremiumisnotdistributablebywayofcashdividendsandmaybeutilisedinthemannersetoutinSection60(3)oftheCompaniesAct1965.
17. MERGER DEFICIT
Themergerdeficitrelatestothesubsidiarieswhichwereconsolidatedunderthemergermethodofaccounting.
ThemergerdeficitarosefromthedifferencebetweenthenominalvalueofsharesissuedfortheacquisitionofthesubsidiariesamountingtoRM47,414,628andthenominalvalueofthesharesacquiredofRM3,050,000.
18. RETAINED PROFITS
TheCompanyhaselectedfortheirrevocableoptionforthesingletiertaxsystem.Therefore,attheendofthereportingperiod,theCompanywillbeabletodistributedividendsoutofitsentireretainedprofitsunderthesingletiertaxsystem.
19. DEFERRED TAX LIABILITIES
The Group 2013 2012 RM’000 RM’000
At1July2012/2011 1,874 1,898 Recognisedinprofitorloss(Note24) 188 (24)
At30June2013/2012 2,062 1,874
Thedeferredtaxliabilitiesareattributabletothefollowing:-
The Group 2013 2012 RM’000 RM’000
Surplusesonrevaluationofproperties 1,505 1,528 Acceleratedcapitalallowancesonqualifyingcostsofproperty,plantand 1,338 1,208 equipment Othertemporarydifferences (781) (862)
2,062 1,874
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
74 Yoong Onn Corporation BerhadAnnual Report 2013
20. TRADE PAYABLES
ThenormaltradecredittermsgrantedtotheGrouprangefrom30to120days.
21. SHORT-TERM BORROWINGS
The Group 2013 2012 RM’000 RM’000
Bankers’acceptances 24,124 20,813
Thebankers’acceptancesattheendofthereportingperiodboreinterestratesrangingfrom4.22%to5.19%(2012-4.13%to4.86%).
Inthepreviousfinancialyearbankers’acceptanceweresecuredby:-
(i) apledgeoffixeddepositsoftheGroup;and
(ii) alegalchargeofthefreeholdlandandbuildingsoftheGroup.
22. REVENUE
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Saleofgoods 178,607 153,913 - - Managementfee - - 448 481 Dividendincome - - 4,190 8,962
178,607 153,913 4,638 9,443
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
75Yoong Onn Corporation BerhadAnnual Report 2013
23. PROFIT BEFORE TAXATION
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Profitbeforetaxationisarrivedatafter charging/(crediting):
Allowancefor/(Writebackof)slow-moving 237 (51) - - inventories Allowancefor/(Writebackof)impairmentloss 33 (68) - - ontradereceivables Writeoffoftradereceivables 20 - - - Auditfee: -forthefinancialyear 115 116 27 27 -(over)/underprovisionintheprevious financialyear (2) 2 (2) - Directors’remuneration: -non-feeemoluments 1,105 1,126 18 22 -fee 156 156 156 156 -definedcontributionplans 130 133 - - -estimatednon-monetarybenefits-in-kind 48 42 - - Depreciationofproperty,plantandequipment 3,115 2,652 3 3 Interestexpense: -bankers’acceptances 842 829 - - -hirepurchase - 1 - - -others 11 10 - - Plantandequipmentwrittenoff 192 94 - - Impairmentlossongoodwill - 176 - - Rentalofpremises 4,904 4,263 - - Staffcosts: -short-termbenefits 27,206 21,887 253 292 -definedcontributionplans 2,221 1,649 29 36 -estimatednon-monetarybenefits-in-kind 69 68 - 7 Loss/(Gain)onforeignexchange: -realised 46 (572) - - -unrealised (18) (163) - - Gainondisposalofplantandequipment (9) (9) - - Interestincome (627) (521) (839) (813) Dividendincome - - (4,190) (8,962) Rentalincome (12) (12) - -
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
76 Yoong Onn Corporation BerhadAnnual Report 2013
24. INCOME TAX EXPENSE
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Currenttaxexpense: -forthefinancialyear 7,009 6,118 461 2,107 -underprovisioninthepreviousfinancialyear 30 111 1 33
7,039 6,229 462 2,140
Deferredtaxexpense(Note19): -relatingtoreversalandoriginationof 163 - - - temporarydifferences -Under/(over)provisionintheprevious financialyear 25 (24) - -
188 (24) - -
7,227 6,205 462 2,140
Duringthecurrentfinancialyear,thestatutorytaxrateremainedat25%.
A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate toincometaxexpenseattheeffectivetaxrateoftheGroupandoftheCompanyareasfollows:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Profitbeforetaxation 27,680 23,482 4,781 9,332 Taxatthestatutorytaxrateof25% 6,920 5,871 1,195 2,333 Taxeffectsof:- Non-taxablegain (805) (372) (804) (298) Non-deductibleexpenses 1,120 632 71 72 Doublededuction (63) (37) - - Underprovisionintheprevious financialyear: -currenttax 30 111 - 33 -deferredtax 25 - - -
Taxforthefinancialyear 7,227 6,205 462 2,140
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
77Yoong Onn Corporation BerhadAnnual Report 2013
25. EARNINGS PER SHARE
ThebasicearningspershareiscalculatedbydividingtheGroup’sprofitaftertaxationattributabletoownersoftheCompanyofRM20,453,803(2012-RM17,276,988)bytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearof160,000,000(2012-160,000,000).
Thedilutedearningspershareisnotpresentedastherewerenopotentialdilutiveordinarysharesoutstandingattheendofthereportingperiod.
26. DIVIDENDS
The Group/The Company 2013 2012 RM’000 RM’000
Recognisedasdistributiontoowners:- -Interimsingletierdividendof2.0senperordinaryshareforthefinancial - 3,200 yearended30June2012 -Finalsingletierdividendof1.5senperordinaryshareforthefinancial 2,400 - yearended30June2012 -Interimsingletierdividendof2.0senperordinaryshareforthefinancial 3,200 - yearended30June2013
5,600 3,200
Netdividendpershare(sen) 3.5 2.0
27. CASH AND CASH EQUIVALENTS
Forthepurposeofthestatementsofcashflows,cashandcashequivalentscomprisethefollowing:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Cashandbankbalances 4,126 5,956 91 150 Depositswithfinancialinstitutions(Note14) 27,234 16,950 15,430 8,600 Shortterminvestment(Note13) 10,000 7,000 10,000 7,000
41,360 29,906 25,521 15,750
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
78 Yoong Onn Corporation BerhadAnnual Report 2013
28. DIRECTORS’ REMUNERATION
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Executive: -non-feeemoluments 1,087 1,104 - - -definedcontributionplan 130 133 - - -estimatednon-monetarybenefits-in-kind 48 42 - -
1,265 1,279 - -
NonExecutive: -non-feeemoluments 18 22 18 22 -fee 156 156 156 156
174 178 174 178
The aggregate amount of emoluments received and receivable by thedirectors of theCompanyduring thefinancialyearinbandsofRM50,000areasfollows:-
Directors’ Number of Directors’ Other Directors Fee Emoluments Total THE GROUP RM’000 RM’000 RM’000
2013 -BelowRM50,000 3 108 14 122 -BetweenRM50,001andRM100,000 1 48 4 52 -BetweenRM550,001andRM600,000 1 - 586 586 -BetweenRM650,001andRM700,000 1 - 679 679
6 156 1,283 1,439
2012
-BelowRM50,000 3 108 16 124 -BetweenRM50,001andRM100,000 1 48 6 54 -BetweenRM550,001andRM600,000 1 - 592 592 -BetweenRM650,001andRM700,000 1 - 687 687
6 156 1,301 1,457
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
79Yoong Onn Corporation BerhadAnnual Report 2013
28. DIRECTORS’ REMUNERATION (CONT’D)
Directors’ Number of Directors’ Other Directors Fee Emoluments Total THE COMPANY RM’000 RM’000 RM’000
2013 -BelowRM50,000 3 108 14 122 -BetweenRM50,001andRM100,000 1 48 4 52
4 156 18 174
2012
-BelowRM50,000 3 108 16 124 -BetweenRM50,001andRM100,000 1 48 6 54
4 156 22 178
29. RELATED PARTY DISCLOSURES
(a) Forthepurposeofthefinancialstatements,theGrouphasrelatedpartyrelationshipswith:
(i) itssubsidiaries;
(ii) thedirectorsandofficerswhoarethekeymanagementpersonnel;and
(iii) entitiescontrolledbythekeymanagementpersonnel/directors/substantialshareholders.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
80 Yoong Onn Corporation BerhadAnnual Report 2013
29. RELATED PARTY DISCLOSURES (CONT’D)
(b) Inadditiontotheinformationdisclosedelsewhereinthefinancialstatements,theCompanycarriedoutthefollowingtransactionswiththerelatedpartiesduringthefinancialyear:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Subsidiaries: -Managementfeesreceivable - - 448 481 -Interestincomereceivable - - 369 440 -Dividendincomereceivable - - 4,190 8,962 Relatedparties: -Managementfeepayableto TanLeeManagementServices* 120 120 - - -RentalofpremisesfromYoonFah RealtySdn.Bhd.** 370 370 - - -SaleofgoodstoTheStore CorporationBerhad*** 5,802 4,848 - -
*-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) Keymanagementpersonnel
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Short-termemployeebenefits 2,798 2,733 - 174 Definedcontributionplans 335 326 - 19 Estimatednon-monetarybenefits-in-kind 117 111 - 7
3,250 3,170 - 200
Included in the short-term employee benefits of the Group is an amount of RM1,265,096 (2012 -RM1,278,644)inrespectoftheremunerationpayabletoexecutivedirectorsasdisclosedinNote28tothefinancialstatements.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
81Yoong Onn Corporation BerhadAnnual Report 2013
30. OPERATING SEGMENTS
TheGrouphasthreereportablesegments,asdescribedbelow,whicharetheGroup’sstrategicbusinessunits.Thestrategicbusinessunitsofferdifferentproductsandservices,andaremanagedseparately.ThefollowingsummarydescribestheoperationsineachoftheGroup’sreportablesegments:
• Manufacturing - designandmanufacturingofhomelinenandbeddingaccessories.
• Distributionandtrading - distributionandtradingofhomelinenandhomeware.
• Retailing - retailingofhomelinenandhomeware.
Distribution & The Manufacturing Trading Retailing Elimination Group 2013 RM’000 RM’000 RM’000 RM’000 RM’000
Inter-segmentrevenue 35,334 9,656 96 (45,086) - Externalrevenue 28,969 122,721 26,917 - 178,607
Totalrevenue 64,303 132,377 27,013 (45,086) 178,607
Segmentresults 6,856 19,155 2,748 - 28,759 Unallocatedexpenses (226)
Operatingprofits 28,533 Financecosts (481) (361) (11) - (853)
Profitbeforetaxation 27,680 Incometaxexpense (7,227)
Profitaftertaxation 20,453
Otherinformation Segmentassets 63,822 75,389 14,052 - 153,263 Unallocatedassets 25,573
178,836
Segmentliabilities 19,332 12,684 1,431 - 33,447 Unallocatedliabilities 6,050
39,497
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
82 Yoong Onn Corporation BerhadAnnual Report 2013
30. OPERATING SEGMENTS (CONT’D)
Distribution & The Manufacturing Trading Retailing Elimination Group 2012 RM’000 RM’000 RM’000 RM’000 RM’000
Inter-segmentrevenue 33,340 14,137 6 (47,483) - Externalrevenue 27,839 103,048 23,026 - 153,913
Totalrevenue 61,179 117,185 23,032 (47,483) 153,913
Segmentresults 6,081 17,741 1,051 - 24,873 Unallocatedexpenses (551)
Operatingprofits 24,322
Financecosts (518) (313) (9) - (840)
Profitbeforetaxation 23,482 Incometaxexpense (6,205)
Profitaftertaxation 17,277
Otherinformation Segmentassets 65,835 65,760 9,200 - 140,795
Unallocatedassets 15,983
156,778
Segmentliabilities 13,501 14,686 1,703 - 29,890 Unallocatedliabilities 2,402
32,292
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
83Yoong Onn Corporation BerhadAnnual Report 2013
30. OPERATING SEGMENTS (CONT’D)
Distribution & The Manufacturing Trading Retailing Group RM’000 RM’000 RM’000 RM’000
2013
Capitalexpenditure 653 866 1,193 2,712 Unallocatedcapitalexpenditure -
2,712
Depreciation 796 1,602 714 3,112 Unallocateddepreciation 3
3,115
Writedownofinventories 126 57 54 237
Interestincome (62) (87) (8) (157) Unallocatedinterestincome (470)
(627)
Interestexpense 481 361 11 853
2012
Capitalexpenditure 305 6,704 2,560 9,569 Unallocatedcapitalexpenditure 3
9,572
Depreciation 1,118 1,057 474 2,649 Unallocateddepreciation 3
2,652
Writedown/(Writeback)ofinventories (38) (58) 45 (51)
Interestincome 72 74 2 148 Unallocatedinterestincome 373
521
Interestexpense 518 312 10 840
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
84 Yoong Onn Corporation BerhadAnnual Report 2013
30. OPERATING SEGMENTS (CONT’D)
GEOGRAPHICAL INFORMATION
Nofinancial informationbasedongeographical locationhasbeenpresented fornon-currentassetsas theseassetsarelocatedwhollyinMalaysia.
Revenueinformationbasedonthegeographicallocationofcustomersrespectivelyareasfollows:
Revenue 2013 2012 RM’000 RM’000
Malaysia 146,198 121,696 Singapore 27,262 24,396 Others 5,147 7,821
178,607 153,913
Major customers
Thefollowingaremajorcustomerswithrevenueequaltoormorethan10%oftheGroup’srevenue:
Revenue Segment 2013 2012 RM’000 RM’000
Alocaldepartmentalstore 46,188 38,683 Distributionandtrading. Anoverseasdistributor 27,262 24,396 Manufacturing,distributionandtrading.
31. CONTINGENT LIABILITIES
Thedirectorsareoftheopinionthatprovisionsarenotrequiredinrespectofthefollowingcorporateguarantees,asitisnotprobablethatafutureoutflowofeconomicbenefitswillarise:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Unsecured:- Corporateguaranteegiventolicensed banksforcreditfacilitiesgrantedto itssubsidiaries - - 48,070 57,070 Guaranteeissuedinfavourofthirdparties 734 799 - -
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
85Yoong Onn Corporation BerhadAnnual Report 2013
32. FOREIGN EXCHANGE RATES
Theprincipalclosingforeignexchangeratesused(expressedonthebasisofoneunitofforeigncurrencytoRMequivalent)forthetranslationoftheforeigncurrencybalancesattheendofthereportingperiodareasfollows:-
2013 2012 RM RM
UnitedStatesDollar 3.17 3.18 SingaporeDollar 2.50 2.50 Euro 4.12 4.00
33. CAPITAL COMMITMENTS
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Approvedandcontractedforpurchase ofpropertyandequipment:- -Retailoutletrenovationanddisplay - 435 - -
34. FINANCIAL INSTRUMENTS
TheGroup’sactivitiesareexposedtoavarietyofmarketrisk(includingforeigncurrencyrisk,interestrateriskandequitypricerisk),creditriskandliquidityrisk.TheGroup’soverallfinancialriskmanagementpolicyfocuseson theunpredictabilityoffinancialmarkets and seeks tominimisepotential adverse effects on theGroup’sfinancialperformance.
(a) Financial Risk Management Policies
TheGroup’spoliciesinrespectofthemajorareasoftreasuryactivityareasfollows:-
(i) Market Risk
(i) Foreign Currency Risk TheGroupisexposedtoforeigncurrencyriskontransactionsandbalancesthataredenominated
incurrenciesotherthanRinggitMalaysia.ThecurrenciesgivingrisetothisriskareprimarilyUnitedStatesDollarandSingaporeDollar.Foreigncurrencyriskismonitoredcloselyonanongoingbasistoensurethatthenetexposureisatanacceptablelevel.Onoccasion,theGroupentersintoforwardforeigncurrencycontractstohedgeagainstitsforeigncurrencyrisk.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
86 Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(i) Foreign Currency Risk (Cont’d)
TheGroup’sexposuretoforeigncurrencyascomparedtoitsfunctionalcurrencyisasfollows:-
United States Singapore Dollar Euro Dollar Total THE GROUP RM’000 RM’000 RM’000 RM’000
2013 Financial assets Tradereceivables 4,060 - 8,648 12,708 Cashandbankbalances 175 2 128 305
4,235 2 8,776 13,013
Financial liabilities Tradepayables 1,247 - - 1,247
Currency exposure Netfinancialassets 2,988 2 8,776 11,766
2012
Financial assets Tradereceivables 2,422 - 5,440 7,862 Cashandbankbalances 798 7 219 1,024
3,220 7 5,659 8,886
Financial liabilities Tradepayables 259 1 - 260
Currency exposure Netfinancialassets 2,961 6 5,659 8,626
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
87Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(i) Foreign Currency Risk (Cont’d)
Foreigncurrencyrisksensitivityanalysis
The following table details the sensitivity analysis to a reasonably possible change in theforeigncurrenciesasattheendofthereportingperiod,withallothervariablesheldconstant:-
The Group The Group 2013 2012 Increase/ Increase/ (Decrease) (Decrease) RM’000 RM’000
Effects on profit after taxation and equity UnitedStatesDollar:- -strengthenedby5% 112 111 -weakenedby5% (112) (111)
SingaporeDollar:- -strengthenedby5% 329 212 -weakenedby5% (329) (212)
(ii) Interest Rate Risk
Interestrateriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchanges inmarket interest rates.TheGroup’sexposure to interest rateriskarisesmainlyfrominterest-bearingfinancialassetsandliabilities.TheGroup’spolicyistoobtainthemostfavourableinterestratesavailable.AnysurplusfundsoftheGroupwillbeplacedwithlicensedfinancialinstitutionstogenerateinterestincome.
InformationrelatingtotheGroup’sexposuretotheinterestrateriskofthefinancialliabilitiesisdisclosedinNote34(a)(iii)tothefinancialstatements.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
88 Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(ii) Interest Rate Risk (Cont’d)
Interestraterisksensitivityanalysis
The following table details the sensitivity analysis to a reasonably possible change in theinterestratesasattheendofthereportingperiod,withallothervariablesheldconstant:-
The Group The Group 2013 2012 Increase/ Increase/ (Decrease) (Decrease) RM’000 RM’000
Effects on profit after taxation and equity
Increaseof100basispoints(bp) 98 24 Decreaseof100bp (98) (24)
(iii) Equity Price Risk
TheGroupdoesnothaveanyquotedinvestmentsandhenceisnotexposedtoequitypricerisk.
(ii) Credit Risk
TheGroup’s exposure to credit risk,or the riskof counterpartiesdefaulting, arisesmainly fromtradeandother receivables.TheGroupmanages itsexposure tocredit riskby theapplicationofcreditapprovals,creditlimitsandmonitoringproceduresonanongoingbasis.Forotherfinancialassets(includingquotedinvestments,cashandbankbalancesandderivatives),theGroupminimisescreditriskbydealingexclusivelywithhighcreditratingcounterparties.
TheGroupestablishesanallowanceforimpairmentthatrepresentsitsestimateofincurredlossesinrespectofthetradeandotherreceivablesasappropriate.Themaincomponentsofthisallowanceare a specific loss component that relates to individually significant exposures, and a collectivelosscomponentestablishedforgroupsofsimilarassetsinrespectoflossesthathavebeenincurredbutnotyetidentified.Impairmentisestimatedbymanagementbasedonpriorexperienceandthecurrenteconomicenvironment.
Creditriskconcentrationprofile
TheGroup’smajorconcentrationofcreditriskrelatestotheamountsowingbythree(3)customerswhichconstitutedapproximately58%ofitstradereceivablesasattheendofthereportingperiod.
Exposuretocreditrisk
AstheGroupdoesnotholdanycollateral,themaximumexposuretocreditriskisrepresentedbythecarryingamountofthefinancialassetsasattheendofthereportingperiod.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
89Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(ii) Credit Risk (Cont’d)
Theexposureofcreditriskfortradereceivablesbygeographicalregionisasfollows:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Malaysia 21,941 20,665 - - Singapore 8,648 5,440 - - Others 4,060 2,422 - -
34,649 28,527 - -
Ageinganalysis
TheageinganalysisoftheGroup’stradereceivablesasatendofthereportingperiodisasfollows:-
Gross Individual Carrying Amount Impairment Value THE GROUP RM’000 RM’000 RM’000
2013 Notpastdue 30,339 - 30,339 Pastdue: -lessthan3months 2,761 - 2,761 -3to6months 820 (33) 787 -over6months 774 (12) 762 34,694 (45) 34,649
2012 Notpastdue 25,347 - 25,347
Pastdue: -lessthan3months 2,724 - 2,724 -3to6months 443 - 443 -over6months 26 (13) 13
28,540 (13) 28,527
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
90 Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(ii) Credit Risk (Cont’d)
At theendof thereportingperiod, tradereceivables thatare individuallyimpairedwerethoseinsignificantfinancialdifficultiesandhavedefaultedonpayments.Thesereceivablesarenotsecuredbyanycollateralorcreditenhancement.
Trade receivables that are past due but not impaired
TheGroupbelievesthatnoimpairmentallowanceisnecessaryinrespectofthesetradereceivables.Theyaresubstantiallycompanieswithgoodcollectiontrackrecordandnorecenthistoryofdefault.
Trade receivables that are neither past due nor impaired
Asignificantportionoftradereceivablesthatareneitherpastduenorimpairedareregularcustomersthathavebeentransactingwith theGroup.TheGroupusesageinganalysis tomonitor thecreditqualityofthetradereceivables.Anyreceivableshavingsignificantbalancespastdueormorethan180days,whicharedeemedtohavehighercreditrisk,aremonitoredindividually.
(iii) Liquidity Risk
Liquidity risk arises mainly from general funding and business activities. The Group practisesprudent riskmanagementbymaintainingsufficientcashbalancesand theavailabilityof fundingthroughcertaincommittedcreditfacilities.
Thefollowingtablesetsoutthematurityprofileofthefinancialliabilitiesasattheendofthereportingperiodbasedoncontractualundiscountedcashflows(includinginterestpaymentscomputedusingcontractualratesor,iffloating,basedontheratesattheendofthereportingperiod):-
Weighted Average Contractual Effective Carrying Undiscounted Within 1 – 5 Rate Amount Cash Flows 1 Year Years THE GROUP % RM’000 RM’000 RM’000 RM,000
2013 Tradepayables - 2,734 2,734 2,734 - Otherpayablesandaccruals - 6,671 6,671 6,502 169 Dividendpayable - 3,200 3,200 3,200 - Bankers’acceptances 4.22- 5.19 24,124 24,124 24,124 -
36,729 36,729 36,560 169
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
91Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(iii) Liquidity Risk (cont’d)
Weighted Average Contractual Effective Carrying Undiscounted Within 1 – 5 Rate Amount Cash Flows 1 Year Years THE GROUP % RM’000 RM’000 RM’000 RM,000
2012 Tradepayables - 1,857 1,857 1,857 - Otherpayablesandaccruals - 7,372 7,372 7,227 145 Bankers’acceptances 4.13- 4.86 20,813 20,813 20,813 -
30,042 30,042 29,897 145
Weighted Average Contractual Effective Carrying Undiscounted Within Rate Amount Cash Flows 1 Year THE COMPANY % RM’000 RM’000 RM’000
2013 Otherpayablesandaccruals - 81 81 81 Dividendpayable - 3,200 3,200 3,200
2012
Otherpayablesandaccruals - 152 152 152
(b) Capital Risk Management
TheGroupmanagesitscapitaltoensurethatentitieswithintheGroupwillbeabletomaintainanoptimalcapital structure so as to support their businesses andmaximise shareholders’ value. To achieve thisobjective, theGroupmaymake adjustments to the capital structure in view of changes in economicconditions, suchas adjusting theamountofdividendpayment, returningof capital to shareholdersorissuingnewshares.
TheGroupmanages its capital basedondebt-to-equity ratio.TheGroup’s strategieswereunchangedfromthepreviousfinancialyear.Thedebt-to-equityratioiscalculatedasnetdebtdividedbytotalequity.Netdebtiscalculatedasborrowingsplustradeandotherpayableslesscashandcashequivalents.
Thedebt-to-equityratiooftheGroupattheendofthereportingperiodisnotpresentedasitscashandcashequivalentsexceededthetotaldebts.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
92 Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(b) Capital Risk Management (Cont’d)
UndertherequirementofBursaMalaysiaPracticeNoteNo.17/2005,theCompanyisrequiredtomaintainaconsolidatedshareholders’equity(totalequityattributabletoownersoftheCompany)equaltoornotlessthanthe25%oftheissuedandpaid-upsharecapitalandsuchshareholders’equityisnotlessthanRM40million.TheCompanyhascompliedwiththisrequirement.
(c) Classification Of Financial Instruments
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Financial assets
Fairvaluethroughprofitandloss Short-terminvestment 10,000 7,000 10,000 7,000
Loansandreceivablesfinancialassets Tradereceivables 34,649 28,527 - - Otherreceivablesanddeposits 1,629 1,470 39 21 Amountowingbysubsidiaries - - 4,018 14,597 Depositswithfinancialinstitutions 27,234 16,950 15,430 8,600 Cashandbankbalances 4,126 5,956 91 150
67,638 52,903 19,578 23,368
Financial liabilities
Otherfinancialliabilities Bankers’acceptances 24,124 20,813 - - Tradepayables 2,734 1,857 - - Otherpayablesandaccruals 6,671 7,372 81 152 Dividendpayable 3,200 - 3,200 -
36,729 30,042 3,281 152
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
93Yoong Onn Corporation BerhadAnnual Report 2013
34. FINANCIAL INSTRUMENTS (CONT’D)
(d) Fair Values Of Financial Instruments Thecarryingamountsofthefinancialassetsandfinancialliabilitiesreportedinthefinancialstatements
approximatedtheirfairvalues:-
Thefollowingsummarisesthemethodsusedtodeterminethefairvaluesofthefinancialinstruments:-
(i) Thefinancialassetsandfinancialliabilitiesmaturingwithinthenext12monthsapproximatedtheirfairvaluesduetotherelativelyshort-termmaturityofthefinancialinstruments.
(e) Fair Values Hierarchy
Thefairvaluesofthefinancialassetsandliabilitiesareanalysedintolevel1to3asfollows:-
Level1: Fairvaluemeasurementsderivefromquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.
Level2: Fairvaluemeasurementsderivefrominputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetsorliability,eitherdirectlyorindirectly.
Level3: Fairvaluemeasurementsderivefromvaluationtechniquesthatincludeinputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).
TheGrouphascarrieditsshort-terminvestmentthatisclassifiedasfairvaluethroughprofitorlossatits
fairvalue.ThisfinancialassetbelongstoLevel2ofthefairvaluehierarchy.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
94 Yoong Onn Corporation BerhadAnnual Report 2013
35. TRANSITION TO THE MFRS FRAMEWORK AsstatedinNote4.1tothefinancialstatements,thesearethefirstfinancialstatementsoftheGroupprepared
inaccordancewithMFRSs.TheaccountingpoliciesinNote5tothefinancialstatementshavebeenappliedtoallfinancialinformationcoveredunderthissetoffinancialstatements.
InpreparingtheopeningMFRSstatementsoffinancialpositionat1July2011(dateoftransition),theGrouphas adjusted amounts reported previously in financial statements prepared in accordance with FRSs. Thefinancialimpactsonthetransitionareasbelow:-
Reconciliationofequityasat1July2011
01/07/2011 FRS Transition effects MFRS RM’000 RM’000 RM’000
Equity:- Revaluationreserve (10,237) 10,237 - Retainedearnings (75,852) (10,237) (86,089)
Reconciliationofequityasat30June2012
30/06/2012 FRS Transition effects MFRS RM’000 RM’000 RM’000
Equity:- Revaluationreserve (10,237) 10,237 - Retainedearnings (78,614) (10,237) (88,851)
(a) PropertyandEquipment–Fairvalueasdeemedcosts
UnderFRSs, theGroupmeasured its freehold landandbuildingsat revaluedamount less impairmentlosses, if any. The revalued amount less impairment losses is deemed as fair value at the end of thereportingperiod.Thelastvaluationwascarriedin2011.UpontransitiontoMFRSs,theGroupelectedtousethefairvalueasdeemedcostunderMFRSs.Therewasnoimpacttothecarryingamountofthisasset.However,therevaluationreservesat1July2011and30June2012weretransferredtoretainedprofits.
Theaggregatefairvalueofthelandat3August2011wasdeterminedtobeapproximatelyRM25,200,000comparedtothecarryingamountofapproximatelyRM13,915,000underFRSs.
Notes to The Financial StatementsFor the Financial Year Ended 30 June 2013 (cont’d)
95Yoong Onn Corporation BerhadAnnual Report 2013
36. SUPPLEMENTARY INFORMATION – DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES
ThebreakdownoftheretainedprofitsoftheGroupandoftheCompanyasattheendofthereportingperiodinto realised and unrealised profits/(losses) are presented in accordancewith the directive issued byBursaMalaysiaSecuritiesBerhadandpreparedinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants,asfollows:-
The Group The Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000
Totalretainedprofits -realised 96,568 82,667 3,851 5,132 -unrealised 10,610 10,535 - -
107,178 93,202 3,851 5,132 Less:Consolidatedadjustments (3,474) (4,351) - -
At30June 103,704 88,851 3,851 5,132
96 Yoong Onn Corporation BerhadAnnual Report 2013
1) Share Buy-Backs
Therewasnosharebuy-backsbytheCompanyduringthefinancialyearended30June2013.
2) Options, Warrants or Convertible Securities
Therewerenooptions,warrantsorconvertiblesecuritiesissuedduringthefinancialyearended30June2013.
3) American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme
TheCompanydidnotsponsoranyADRorGDRprogrammeduringthefinancialyearended30June2013.
4) Sanctions and/or Penalties
Therewerenosanctionsand/orpenaltiesimposedontheCompanyanditssubsidiaries,Directorsormanagementbytherelevantregulatorybodiesduringthefinancialyear.
5) Non-Audit Fees
Therewerenonon-auditfeespaidtotheExternalAuditors,Messrs.CroweHorwathbytheGroupduringthefinancialyearunderreview.
6) Variation in Results
Therewerenovariationsof10%ormorebetweentheauditedresultsoftheGroupforthefinancialyearended30June2013andtheunauditedresultsannouncedon30August2013.
7) Material Contracts with Related Parties
TherewerenomaterialcontractsenteredintobytheCompanyanditssubsidiaries involvingdirectors’andmajor shareholders’ interestwhichwere still subsisting as at the endof thefinancial yearunder revieworwhichwereenteredintosincetheendofthepreviousfinancialyearexceptasdisclosedinnote29ofpage79oftheFinancialStatements.
8) Corporate Social Responsibility
TheGroup recognises its role as a responsible corporate citizen andno companycan exist bymaximizingshareholders value alone. In this regards, the needs and interests of other stakeholders are also taken intoconsideration.
a) Environment
TheGrouphasalwayscompliedwiththerelevantenvironmentallegislationandpromotingenvironmentalawareness as part of its commitment to protect the environment and contribute towards sustainabledevelopment.
ADDITIONAL COMPLIANCE INFORMATION
97Yoong Onn Corporation BerhadAnnual Report 2013
8) Corporate Social Responsibility (cont’d)
b) Safety and Health
TheGroup is committed to provide a safe andhealthyworking environment for all employeesundertherequirementsofHealth,SafetyandEnvironment(“HSE”).Weconstantlyensureasafeandhealthyworking environment and keep ourselves updated with the latest HSE requirements and regulationsthroughvarioustrainingprogrammes.
c) Charity Works and Donations to Charitable Organisations
The Company has made cash donations to Persatuan Kebajikan HOPE worldwide Kuala Lumpur,St. Nicholas’ Home Penang, Shelter Christian Fellowship For Aid and Welfare Selangor, MalaysiaAssociationforTheBlind,YayasanJantungMalaysiaandGraceCommunityServices.
d) Employees
TheGroupplacesstrongemphasisonpersonaldevelopmentandprovidesvarioustrainingcoursesforitsemployeestoenhanceandupgradetheirworkskillsforbetteropportunitiesofcareeradvancements.
9) Profit Forecast/Profit Guarantee
TheCompanydidnotprovideanyprofitforecast/guaranteeinanypublicdocumentsduringthefinancialyearended30June2013.
10) Revaluation Policy of Landed Properties
TheGroup’srevaluationpolicyinrespectofitsfreeholdlandandbuildingsistorevalueperiodically,atleastonce in every three tofiveyears. Surpluses arising from the revaluationof theproperties, net ofdeferredtaxation,whereapplicable,arecreditedtoarevaluationreserve.Deficitsarisingfromtherevaluation,totheextentthattheyarenotsupportedbyanypreviousrevaluationsurpluses,arechargedtothestatementsofprofitorlossandothercomprehensiveincome.
Additional Compliance Information (cont’d)
98 Yoong Onn Corporation BerhadAnnual Report 2013
11) Recurrent Related Parties Transactions
Thebreakdownoftheaggregatevalueoftransactionsconductedduringthefinancialyearended30June2013isasfollows:
Transacting Related Amount of Companies Transacting Nature of Transaction within the Group Parties Transaction (RM’000)
SyarikatYoongOnn YoonFahRealty Rentalofproperty 370 SdnBhd(“SYOSB”) SdnBhd whichiscurrentlyused asSYOSB’soffice cumwarehouse SyarikatYoongOnn TheStore Supplyofhomelinen 5,609 SdnBhd Corporation products Berhad ElegantTotalHome TheStore Supplyofhomelinen 193 SdnBhd Corporation products Berhad
AttheforthcomingAnnualGeneralMeetingtobeheldon11December2013,theCompanyintendstoseekits shareholders’ approval for the proposed shareholders’ ratification and proposed shareholders’ mandateforrecurrentrelatedpartytransactionsofarevenueortradingnature,whicharenecessaryforitsday-to-dayoperationsandintheordinarycourseofbusiness,withrelatedparties.Thedetailsoftheproposedshareholders’ratificationandproposedshareholders’mandatetobesoughtissetoutintheCirculartoShareholdersdated18November2013.
Additional Compliance Information (cont’d)
99Yoong Onn Corporation BerhadAnnual Report 2013
Authorisedsharecapital : RM100,000,000Issuedandfullypaid-upcapital : RM80,000,000Classofshares : OrdinarysharesofRM0.50eachVotingrights : Onevoteperordinaryshare
ANALYSIS BY SIZE OF SHAREHOLDINGS
No.of %of No.of %ofSizeofHoldings Shareholders Shareholders Shareholdings IssuedCapital
Lessthan100 24 1.94 864 *100to1,000 460 37.25 143,266 0.091,001to10,000 403 32.63 2,014,122 1.2610,001to100,000 269 21.78 8,745,136 5.47100,001tolessthan5% 78 6.32 65,096,381 40.68ofissuedshares 5%andaboveofissuedshares 1 0.08 84,000,231 52.50
TOTAL 1,235 100.00 160,000,000 100.00
Note :*- negligible
SUBSTANTIAL SHAREHOLDERS
NameofShareholderDirectInterestIndirectInterest No.ofShares % No.ofShares % CasatexCosmoSdnBhd 84,000,231 52.50 - -ChewHonFoong - - 84,000,231 52.50(a)ChewHonKeong - - 84,000,231 52.50(a)ChewHonYoong - - 84,000,231 52.50(a)ChewHonYoon - - 84,000,231 52.50(a)
Note :(a) - Deemed interest by virtue of his direct interest in Casatex Cosmo Sdn Bhd pursuant to Section 6A of
CompaniesAct,1965.
DIRECTORS’ SHAREHOLDINGS
No. Directors DirectInterest % IndirectInterest % 1. DatukKamaludinBinYusoff 203,333 0.13 - -2. ChewHonFoong - - 84,000,231 52.50^3. ChewHonKeong - - 84,000,231 52.50^4. DatukHairuddinBinMohamed - - - -5. YeohChongKeng 144,000 0.09 - -6. LeeKimSeng 159,999 0.10 - -
Note :^-DeemedinterestbyvirtueofhisdirectinterestinCasatexCosmoSdnBhdpursuanttoSection6AofCompaniesAct,1965.
ANALYSIS OF SHAREHOLDINGSAs at 25 October 2013
100 Yoong Onn Corporation BerhadAnnual Report 2013
THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS
No. of % of IssuedNo. Name Shares Shares
1. CasatexCosmoSdnBhd 84,000,231 52.50%2. HLBNominees(Asing)SdnBhd 7,866,666 4.92% WangShouhu(CUST.SIN91144-4)3. LembagaTabungHaji 7,840,000 4.90%4. HSBCNominees(Asing)SdnBhd 6,997,700 4.37% ExemptANforCreditSuisse(SGBR-TST-ASING)5. ChanFookHong 5,333,333 3.33%6. JFAPEXNominees(Tempatan)SdnBhd 3,333,333 2.08% PledgedSecuritiesAccountforTanSriAbuSahidBinMohamed7. ChuahSengBoon 2,400,000 1.50%8. ChewSweeTee@ChewSweeLee 2,280,031 1.43%9. AMSECNominees(Tempatan)SdnBhd 1,751,566 1.09% AmtrusteeBerhadforPacificPearlFund(UT-PM-PPF) 10. ChowSiewSen 1,490,000 0.93%11. CheongSiewPark 1,473,000 0.92%12. KokFoongMeng 1,434,533 0.90%13. ChuahLingLing 1,433,533 0.90%14. ChuahSengHooi 1,418,133 0.89%15. NgYoongSang 1,333,333 0.83%16. LeeChaiHua 1,200,000 0.75%17. LeeMengYong 1,075,866 0.67%18. LeeChaiHua 693,333 0.43%19 ChanYokeKwan 666,666 0.42%20. HLBNominees(Tempatan)SdnBhd 666,666 0.42% PledgedSecuritiesAccountforTanSriAbuSahidBinMohamed21. DangCheeWai 533,333 0.33%22. AllianceGroupNominees(Tempatan)SdnBhd 528,100 0.33% PledgedSecuritiesAccountforLeeKongSim23. HSBCNominees(Asing)SdnBhd 500,000 0.31% ExemptANforCreditSuisseSecurities(Europe)Limited(CLTACN-TREATY)24 TanMingKian 500,000 0.31%25 LooLaiYoke 450,000 0.28%26. SunKienKeong 444,000 0.28%27 TehBeeGaik 430,000 0.27%28. ChoongKienYeong 400,000 0.25%29. MasterBoxManufacturingSdnBhd 400,000 0.25%30. TanPeng 400,000 0.25% Total 139,273,356 87.05%
Analysis of ShareholdingsAs at 25 October 2013 (cont’d)
101Yoong Onn Corporation BerhadAnnual Report 2013
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LIST OF GROUP PROPERTIES
102 Yoong Onn Corporation BerhadAnnual Report 2013
NOTICEISHEREBYGIVENTHATtheSixthAnnualGeneralMeetingof theCompanywillbeheldatSpring1Room,NilaiSpringsGolf&CountryClub,PT4770,NilaiSprings,71800PutraNilai,NegeriSembilanDarulKhususonWednesday,11December2013at10.00a.m.forthefollowingpurposes:-
AGENDA
AS ORDINARY BUSINESS:
NOTICE OF ANNUAL GENERAL MEETING
1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended30June2013togetherwiththeReportsoftheDirectorsandAuditorsthereon.
2. ToapprovethepaymentofDirectors’feeofRM156,000.00forthefinancialyearended30June2013.
3. Tore-electthefollowingDirectorswhoareretiringinaccordancewithArticle129oftheCompany’sArticlesofAssociation:
(a) DatukKamaludinBinYusoff (b) DatukHairuddinBinMohamed
4. To declare a final single tier dividend of 2.0 sen per ordinary share in respect of thefinancialyearended30June2013.
5. Tore-appointMessrs.CroweHorwathasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.
As Special Business :
Toconsiderandifthoughtfit,topassthefollowingOrdinaryResolutions:-
6 Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965.
“ThatpursuanttoSection132DoftheCompaniesAct,1965,theArticlesofAssociationof the Company and subject to the approvals of the relevant governmental and/orregulatoryauthorities,theDirectorsbeandareherebyempoweredtoissuesharesintheCompany,atanytimetosuchpersonsanduponsuchtermsandconditionsandforsuchpurposesas theDirectorsmay, in theirabsolutediscretion,deemfit,providedthat theaggregatenumberofsharestobeissueddoesnotexceedtenpercent(10%)oftheissuedsharecapitaloftheCompanyforthetimebeingANDTHATtheDirectorsbeandarealsoempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharessoissuedonBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)ANDTHATsuch authority shall continue to be in force until the conclusion of the next AnnualGeneralMeetingoftheCompany.”
7. Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
“That the mandate granted by the shareholders of the Company on 18 December2012pursuant toParagraph10.09of theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”),authorisingtheCompanyanditssubsidiaries(“theYOCBGroup”)toenterintotherecurrentrelatedpartytransactionsofa revenueor tradingnaturewhicharenecessaryfor theYOCBGroup’sday-to-dayoperationsassetoutinSection2.5oftheCirculartoShareholdersdated18November2013withtherelatedpartiesmentionedtherein,beandisherebyrenewed(hereinafterreferredtoasthe“ProposedShareholders’Mandate”);
(Resolution 1)
(Resolution 2)
(Resolution 3)(Resolution 4)
(Resolution 5)
(Resolution 6)
(Resolution 7)
(Resolution 8)
103Yoong Onn Corporation BerhadAnnual Report 2013
ThattheProposedShareholders’Mandateissubjecttothefollowing:-
(a) thetransactionareintheordinarycourseofbusinessandareontermswhicharenotmorefavourabletotherelatedpartiesinvolvedthangenerallyavailabletothepublicandontermsnottodetrimentoftheminorityshareholdersoftheCompany;
(b) disclosure is made in the Annual Report of the aggregate value of transactionsconductedpursuanttotheProposedShareholders’Mandateduringthefinancialyearwhereaggregatevalue isequal toorexceeds theapplicableprescribed thresholdundertheListingRequirementsand/ortherelevantPracticeNotes;and
(c) annualrenewalandsuchapprovalshall,unlessrevokedorvariedbytheCompanyin a generalmeeting, continue in force until the conclusionof the nextAnnualGeneral Meeting of the Company or the expiration of the period within whichthenextAnnualGeneralMeeting is tobeheldpursuant toSection143(1)of theCompaniesAct,1965(butshallnotextendtosuchextensionsasmaybeallowedpursuanttoSection143(2)oftheCompaniesAct,1965),whicheverisearlier.
ANDTHATtheDirectorsoftheCompanybeandareauthorisedtocompleteanddoallactsandthings(includingexecutingallsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttotheProposedShareholders’Mandate.”
8. Proposed Renewal Authority for the Company to Purchase Its Own Shares of Up to Ten Percent (10%) of the Issued and Paid-Up Share Capital of the Company (“Proposed Share Buy-Back Authority”)
“THAT, subject to the provisions of Section 67A of the Companies Act, 1965, theMemorandumandArticlesofAssociationoftheCompany,PartIIIAoftheCompaniesRegulation 1966 and Chapter 12 of theMainMarket Listing Requirements of BursaSecurities,theCompanybeandisherebyauthorisedtopurchasesuchnumberofordinaryshares of RM0.50 each in the Company (“Proposed Share Buy-Back Authority”) asmaybedeterminedbytheDirectorsof theCompanyfromtimetotimethroughBursaSecuritiesuponsuchtermsandconditionsastheDirectorsmaydeemfitandexpedientintheinterestoftheCompanyprovidedthat:
(i) themaximumaggregatenumberofordinarysharespurchasedand/orheldby theCompanyastreasurysharesshallnotexceedtenpercent(10%)oftheissuedandpaidupordinarysharecapitaloftheCompanyatanypointintime;
(ii) the funds allocated by the Company for the purpose of purchasing its sharesshall not exceed the total retained profits and/or share premium account of theCompany.TheauditedretainedprofitsandsharepremiumoftheCompanystoodatRM3,851,000andRMnilrespectivelyasat30June2013;
(iii) theauthorityconferredbythisresolutionshallcontinuetobeinforceuntil:
(a) theconclusionofthenextAGMoftheCompanyfollowingtheforthcomingAGM, at which time the said authority will lapse, unless the authority isrenewedatthatmeeting,eitherunconditionallyorsubjecttoconditions;or
(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyisrequired tobeheldpursuant toSection143(1)of theCompaniesAct,1965(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheCompaniesAct,1965);or
(c) revoked or varied by ordinary resolution passed by the shareholders in ageneralmeeting,
Notice of Annual General Meeting (cont’d)
(Resolution 9)
104 Yoong Onn Corporation BerhadAnnual Report 2013
whicheveroccursfirst.
THATtheDirectorsoftheCompanybeandareherebyauthorisedtodealwiththesharespurchasedattheirabsolutediscretion,eitherpartiallyorfully,inthefollowingmanner:
(i) cancelallthesharessopurchased;
(ii) retainthesharessopurchasedastreasuryshares;
(iii) distributethetreasurysharesassharedividendstoshareholders;
(iv) resellthetreasurysharesonBursaSecuritiesinaccordancetotheMainMarketListingRequirementsofBursaSecurities;and
(v) anycombinationof(i),(ii),(iii)and(iv)above.
ANDTHATtheDirectorsoftheCompanybeandareherebyauthorisedtogiveeffecttotheProposedShareBuy-BackAuthoritywithfullpowertoassenttoanymodificationsand/oramendmentsasmayberequiredbytherelevantauthorities.”
9. Totransactanyotherbusinessforwhichduenoticeshallhavebeengiven.
NOTICE OF DIVIDEND ENTITLEMENT
NOTICE IS ALSO HEREBY GIVENthatafinalsingletierdividendof2.0senpershareforthefinancialyearended30June2013,ifapprovedintheSixthAnnualGeneralMeeting,willbepaidon23January2014toDepositorswhosenamesappearintheRecordofDepositorson6January2014.
ADepositorshallqualifyforentitlementtothedividendonlyinrespectof:
(a) Share transferred to theDepositor’s SecuritiesAccount before 5.00 p.m. on 6 January 2014 in respect ofordinarytransfers;and
(b) SharesboughtonBursaMalaysiaSecuritiesBerhadonthecumentitlementbasisaccordingtoRulesoftheBursaMalaysiaSecuritiesBerhad.
ByOrderoftheBoard
Dato’TangSweeGuan(MIA5393)Secretary
KualaLumpur18November2013
Notice of Annual General Meeting (cont’d)
105Yoong Onn Corporation BerhadAnnual Report 2013
Notes:
(i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies who need not be a member/members of the Company, an advocate, an approved Company auditor, or a person approved by the Registrar to attend and vote in his/her stead.
(ii) A member may appoint not more than two (2) proxies to attend the same meeting. Where a member appoints two proxies, the proxies shall not be valid unless the member specifies the proportion of his shareholding to be represented by each proxy. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account.
(iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or the hand of its officer or its duly authorised attorney.
(iv) The instrument appointing a proxy shall be deposited at the Registered Office of the Company at Suite 13A.01(A), Level 13A, Wisma Goldhill, 67 Jalan Raja Chulan, 50200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.
Explanatory Note on Special Business
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
TheproposedOrdinaryResolution7,ifpassed,willgrantageneralmandateandempowertheDirectorstoissuesharesuptoanaggregateamountnotexceeding10%oftheissuedandpaid-upsharecapitaloftheCompanyforthetimebeing,forsuchpurposesastheDirectorsconsiderwouldbeinthebestinterestoftheCompanywithouthavingtoconveneseparategeneralmeetings.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeeting.
ThisgeneralmandateisnewandwillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnotlimitedtofurtherplacementofsharesforpurposeoffundingfutureinvestment,workingcapitaland/oracquisitions.
Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
TheproposedOrdinaryResolution8,ifpassed,willenabletheCompanyanditssubsidiariestoenterintorecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryforitsday-to-dayoperationsandwilleliminate the need to convene separate generalmeeting from time to time to seek shareholders’ approval. Thiswillsubstantiallyreduceadministrative time, inconvenienceandexpensesassociatedwith theconveningofsuchmeetings,withoutcompromisingthecorporateobjectivesoftheYOCBGrouporadverselyaffectingthebusinessopportunitiesavailabletotheYOCBGroup.
The detailed information on recurrent related party transactions is set out in theCircular to Shareholders dated18November2013whichisdespatchedtogetherwiththisAnnualReport.
Proposed Renewal of Authority for the Company to Purchase Its Own Shares Up to Ten Percent (10%) of the Issued and Paid-Up Share Capital of the Company (“Proposed Share Buy-Back Authority”)
TheproposedOrdinaryResolution9,ifpassed,willempowertheDirectorstopurchasetheCompany’ssharesofupto10%oftheissuedandpaid-upsharecapitaloftheCompanyatanypointintime,byutilisingthefundsallocatedwhichshallnotexceedthetotalretainsprofitsandsharepremiumoftheCompany.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeeting.
PleaserefertotheCirculartoShareholdersdated18November2013forfurtherinformation.
Notice of Annual General Meeting (cont’d)
106 Yoong Onn Corporation BerhadAnnual Report 2013
DetailsofDirectorsStandingforRe-Election
Directorswhoarestandingforre-electionattheSixthAnnualGeneralMeetingofYoongOnnCorporationBerhad:-
(i) TheDirectorretiringpursuanttoArticle129oftheCompany’sArticlesofAssociation:-
(a) DatukKamaludinBinYusoff (b) DatukHairuddinBinMohamed
FurtherdetailsoftheaboveDirectorsaresetoutintheDirectors’Profileonpage12and13ofthisAnnualReport.
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
FORM OF PROXY
Number of Shares Held
Proxies % of sharesProxy 1 Proxy 2 Total 100%
No. Resolutions For Against1. To receive the Audited Financial Statements2. To approve the payment of Directors’ fees3. To re-elect Datuk Kamaludin Bin Yusoff as Director4. To re-elect Datuk Hairuddin Bin Mohamed as Director5. To declare a final single tier dividend of 2.0 sen per ordinary share in respect of the
financial year ended 30 June 20136. To re-appoint Crowe Horwath as Auditors of the Company
Authority to issue shares pursuant to Section 132D of the Companies Act, 1965
Special business 7. 8. To approve the Proposed Renewal of Existing Shareholders’ Mandate for recurrent
related party transactions of a revenue or trading nature
9. To approve the Renewal of Authority for the purchase by the Company of up to Ten Percent (10%) to its own issued and paid-up capital
Signed this day of , 2013
Signature of Shareholder
*Strike out whichever not applicable
I/We of
of
or failing him/her,
of
My/our proxy/proxies is/are to vote as indicated below:
being a member(s) of Yoong Onn Corporation Berhad hereby
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 Sixth Annual General Meeting of the Company to be held at Spring 1 Room, Nilai Springs Golf & Country Club, PT 4770, Nilai Springs, 71800 Putra Nilai, Negeri Sembilan Darul Khusus on Wednesday, 11 December 2013 at 10.00 a.m. and at any adjournment thereof.
(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.)
For appointment of two proxies, the shareholdings to be represented by the proxies
Yoong Onn Corporation Berhad
The Company Secretary
Suite 13A.01 (A),Level 13A Wisma Goldhill
67 Jalan Raja Chulan50200 Kuala Lumpur
please fold here
please fold here
Affix Stamp
Notes:
(i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies who need not be a member/members of the Company, an advocate, an approved Company auditor, or a person approved by the Registrar to attend and vote in his/her stead.
(ii) A member may appoint not more than two (2) proxies to attend the same meeting. Where a member appoints two proxies, the proxies shall not be valid unless the member specifies the proportion of his shareholding to be 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.