YONGTAI-AnnualReport2011 (968KB)

C O N T E N T S

Corporate Information 1

Corporate Structure 2

Notice Of Annual General Meeting 3

Statement Accompanying The Notice Of Annual General Meeting 3

Profile Of The Directors 4

Chairman’s Statement 6

Statement On Corporate Governance 8

Audit Committee Report 12

Statement On Internal Control 15

Statement On Directors’ Responsibility 16

Additional Compliance Requirements 16

Financial Statements

Directors’ Report 17

Statement By Directors 21

Statutory Declaration 21

Independent Auditors’ Report 22

Statements Of Financial Position 24

Statements Of Comprehensive Income 25

Statements Of Changes In Equity 26

Statements Of Cash Flow 27

Notes To The Financial Statements 28

List Of Properties 60

Analysis Of Shareholdings 61

Proxy Form

BOARD OF DIRECTORS Datuk Hj. Amil @ Amir Bin Junus (Independent Non-Executive Chairman)Wong Liew Lin @ Liew Fat Lin (Managing Director)Wong Mee Yow Cheen @ Liew Mee Yow Cheen (Executive Director)Tai Shzee Yuan (Executive Director)Liew Huat Kwang (Executive Director)Tan Kau Ngee @ Tan Seong Tin (Independent Non-Executive Director)Loi Kim Fah (Independent Non-Executive Director)

AUDIT COMMITTEE Loi Kim Fah (Chairman) Datuk Hj. Amil @ Amir Bin Junus Tan Kau Ngee @ Tan Seong Tin

NOMINATION COMMITTEE Loi Kim Fah (Chairman) Tan Kau Ngee @ Tan Seong Tin

REMUNERATION COMMITTEE Datuk Hj. Amil @ Amir Bin Junus (Chairman)Tan Kau Ngee @ Tan Seong Tin

EXECUTIVE COMMITTEE Wong Liew Lin @ Liew Fat Lin (Chairman)Wong Mee Yow Cheen @ Liew Mee Yow CheenTai Shzee Yuan

SECRETARIES Jauhari Bin Hassan (LS 03681)Lim Suat Ben (f) (MAICSA 082022)

REGISTERED OFFICE Ground Floor, 8, Lorong Universiti BSection 16, 46350 Petaling JayaSelangor Darul EhsanTel No: 03-7956 5889Fax No: 03-7958 7889

CORPORATE OFFICE 3, Jalan KapalKawasan Perindustrian Tongkang Pecah83010 Batu PahatJohor Darul Takzim

REGISTRAR Bina Management (M) Sdn BhdLot 10, The Highway CentreJalan 51/205, 46050 Petaling JayaSelangor Darul EhsanTel No: 03-7784 3922Fax No: 03-7784 1988

AUDITORS Hasnan THL Wong & Partners (f.k.a. THL Wong & Co.) (AF No: 0942)Chartered Accountants

SOLICITORS T K Lim & Co.

PRINCIPAL BANKERS OCBC Bank (Malaysia) BerhadMalayan Banking BerhadRHB Bank BerhadUnited Overseas Bank (Malaysia) BhdEON Bank Berhad

STOCK EXCHANGE Main Market of the Bursa Malaysia Securities Berhad

CORPORATE INFORMATION

1

YONG TAI BERHAD (311186-T)

100% Yong Tai Brothers Trading Sdn. Bhd.(71696-P)

100% Syarikat Koon Fuat Industries Sdn. Bhd.(16860-A)

100%

100%

100%

100%

Yuta Realty Sdn. Bhd. (63224-D)

60%

65%

100%

Yong Tai Samchem Sdn. Bhd.(647458 V)

Golden Vertex Sdn. Bhd.(266464-K)

The Image Outlet Sdn. Bhd.(562452-T)

Phoenix Step Sdn. Bhd.(813113-M)

Yong Tai Samchem (HK) Co. Ltd(909031)

Shanghai Sino-Malaysian International Trading Co. Ltd(76559261-8)

CORPORATE STRUCTURE

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ANNUAL REPORT 2011

NOTICE OF ANNUAL GENERAL MEETING

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NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at 2nd Floor, 3, Jalan Kapal,Kawasan Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim on Wednesday, 21 December 2011 at 2.00 p.m. totransact the following:

AGENDA

As Ordinary Business

1. To receive the Directors' Report and Audited Financial Statements for the year ended 30 June 2011 together with the Auditors' Report thereon.

2. To approve the payment of Directors' Fees amounting to RM64,000.00 in respect of the year ended 30 June 2011.

3. To re-elect the following Directors who shall retire by rotation in accordance with Article 81 of the Company's Articles of Association and being eligible, offer themselves for re-election:

a. Loh Kim Fah

b. Datuk Haji Amil @ Amir Junus

4. To re-appoint Messrs. Hasnan THL Wong & Partners (f.k.a. THL Wong & Co.) as Auditors of the Company and to authorise the Directors to fix their remuneration.

5. To transact any other business for which due notice has been given.

By Order of the Board

JAUHARI BIN HASSAN (LS 03681)LIM SUAT BEN (f) (MAICSA 082022)Company Secretaries

Selangor Darul Ehsan

29 November 2011

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Notes:

1. A member of the Company entitled to attend and vote at the Meeting may appoint more than one (1) proxy to attend and vote at the Meeting and the provision of Section 149(1)(c) of the Companies Act, 1965 shall not apply to the Company.

2. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.3. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented

by each proxy.4. The Proxy Form 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 under the hand of an officer or attorney duly authorised.5. The Proxy Form and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority must be

deposited at the Registered Office of the Company at Ground Floor, 8, Lorong Universiti B, Section 16, 46350 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or any adjournment thereof.

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING

1. The Directors who are standing for re-election at the Seventeenth Annual General Meeting in accordance with Article 81 of the Company's Articles of Association are as follows:

a. Loh Kim Fahb. Datuk Haji Amil @ Amir Junus

2. The details of the Directors standing for re-election and re-appointment are set out in Profile of The Directors on pages 4 and 5 of the Annual Report.

Datuk Hj. Amil @ Amir Bin Junus, age 68, a Malaysian, was appointed to the Board as an Independent Non-ExecutiveChairman on 10 July 2008. Datuk Amir holds a Diploma Sains Kepolisian from Universiti Kebangsaan Malaysia and Certificateof Telecommunication from City & Guilds of London Institute.

Datuk Amir was a former member of the Royal Malaysian Police and last served as Commissioner of Police Sabah with therank of Deputy Commissioner of Police before retiring in November 1998. In the force for 29 years, Datuk Amir had served invarious positions with the Royal Malaysian Police, including, among others, Deputy Director of the Special Branch.

Upon retiring from active duty in November 1998, Datuk Amir was appointed as a board member of Koperasi Polis DirajaMalaysia Berhad (KPD). As a member of KPD, Datuk Amir represented KPD's interest in number of its investment interests ina few public listed companies. Datuk Amir was a director of Prime Utilities Berhad from 1999 to 2004 and was a director ofTSM Global Berhad [formerly known as Juan Kuang (M) Industrial Berhad] until October 2008, both companies are listed onBursa Malaysia Securities Berhad. Since 1999 until 2005, Datuk Amir was the Chairman of KOP Securities Services Sdn. Bhd.,a subsidiary of KPD and was the Executive Chairman and Chief Executive Officer of KOP Educators & Consultants Sdn. Bhd.(also known as Kolej Unikop), another subsidiary of KPD. Currently, Datuk Amir is still a board member of the college. Besidesrepresenting the interests of KPD, Datuk Amir is also a Council Member of the Maktab Koperasi Malaysia under the purviewof the Ministry of Domestic Trade, Cooperative and Consumerism and a director of Eshia & Associates Sdn. Bhd. Datuk Amiralso holds Chairman post and directorships in few private limited companies.

Datuk Amir is the Chairman of the Remuneration Committee and member of Audit Committee. He does not have any familyrelationship with any Director and/or major shareholder of the Company. He has not entered into any transaction which has aconflict of interest with the Company and has not been convicted of any offences within the past ten years.

Wong Liew Lin @ Liew Fat Lin, aged 65, a Malaysian, was appointed to the Board on 2 October 1997 and as the ManagingDirector on 8 November 1997. He is a businessman and an entrepreneur with more than 30 years experience in various business sectors primarily in the fields of property development, wholesaling and retailing of garments and apparels, manufacturing and pharmaceutical. He founded Yong Tai Group and has been in charge of the overall operation since itsinception guiding it to its present level of success. Currently, Mr. Liew also holds other directorships in the Yong Tai Group of Companies and several other private limited companies involve investment holdings and manufacturing.

Mr. Liew is the Chairman of the Executive Committee. He is the brother of Mr. Wong Mee Yow Cheen @ Liew Mee Yow Cheenand Mr. Liew Huat Kwang. He has not entered into any transaction which has a conflict of interest with the Company and hasnot been convicted of any offences within the past ten years.

Wong Mee Yow Cheen @ Liew Mee Yow Cheen, aged 58, a Malaysian, was appointed to the Board on 2 October 1997 andas the Executive Director on 8 November 1997. Innovative and enterprising, he is responsible for the production, researchand market development of Yong Tai Group and has been actively involved in the establishment of its manufacturing operations. Currently, Mr. Liew also holds other directorships in the Yong Tai Group of Companies and several other private limited companies involve investment holdings and manufacturing.

Mr. Liew is a member of the Executive Committee. He is the brother of Mr. Wong Liew Lin @ Liew Fat Lin and Mr. Liew HuatKwang. He has not entered into any transaction which has a conflict of interest with the Company and has not been convicted of any offences within the past ten years.

Tai Shzee Yuan, aged 58, a Malaysian, is an Executive Director and was appointed as First Director on 12 August 1994. Hestarted his career in the Group as a General Manager of Yong Tai Brothers Trading Sdn. Bhd., a subsidiary of Yong Tai Berhadin 1 January 1991. He is responsible for the overall financial planning and management of Yong Tai Group. Mr. Tai is a member of the Executive Committee. He also holds other directorships in the Yong Tai Group of Companies.

Mr. Tai does not have any family relationship with any Director and/or major shareholder of the Company. He has not enteredinto any transaction which has a conflict of interest with the Company and has not been convicted of any offences within thepast ten years.

PROFILE OF THE DIRECTORS

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ANNUAL REPORT 2011

Liew Huat Kwang, aged 47, a Malaysian, is an Executive Director and was appointed to the Board on 2 October 1997. Hehas more than ten (10) years of experience in the garment retailing business and is in charge of the sourcing of suitable retailoutlet sites and to oversee their setting up. Currently, Mr. Liew also holds other directorships in the Yong Tai Group ofCompanies and several other private limited companies involve investment holdings and manufacturing.

Mr. Liew is the brother of Mr. Wong Liew Lin @ Liew Fat Lin and Mr. Wong Mee Yow Cheen @ Liew Mee Yow Cheen. He hasnot entered into any transaction which has a conflict of interest with the Company and has not been convicted of any offenceswithin the past ten years.

Loi Kim Fah, aged 45, a Malaysian, is an Independent Non-Executive Director and was appointed to the Board on 18December 2007. He holds a Bachelor of Accounting from the University of Malaya. He is a member of the Malaysian Instituteof Certified Public Accountants, Malaysian Institute of Accountants and the Malaysian Institute of Taxation respectively. He iscurrently the principal of Loi & Co, an audit firm, and also an Independent Non-Executive Director of K-One Technology Bhd.,a company listed on ACE Market of Bursa Malaysia Securities Berhad.

Mr. Loi has been in public practice since 1991, engaged with international accounting firms prior to starting his own practicein 1996. Over the years, he has been involved in the audit of companies in various industries which include securities, banking, finance, construction, aquaculture and manufacturing. He has also been engaged in business advisory assignments in the like of merger and acquisition, internal control review, accounting system consultation, feasibility study, listing exercise and business planning.

Mr. Loi is the Chairman of the Audit Committee and Nomination Committee. He does not have any family relationship with anyDirector and/or major shareholder of the Company. He has not entered into any transaction which has a conflict of interestwith the Company and has not been convicted of any offences within the past ten years.

Tan Kau Ngee @ Tan Seong Tin, aged 71, a Malaysian, is an Independent Non-Executive Director and was appointed to theBoard on 23 November 2006. He worked as an accounts manager before retiring in 2001. Presently, he is the managing partner of a public transport services firm and is also the unit sales manager of Great Eastern Life Assurance (Malaysia) Berhad.

Mr. Tan is a member of the Nomination Committee, the Remuneration Committee and the Audit Committee. He does not haveany family relationship with any Director and/or major shareholder of the Company. He has not entered into any transactionwhich has a conflict of interest with the Company and has not been convicted of any offences within the past ten years.

PROFILE OF THE DIRECTORS

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On behalf of the Board of Directors, I am pleased to present the Annual Report of Yong Tai Berhad and its subsidiary companies (“the Group”) for the financial year ended 30 June 2011.

Financial Highlights

For the financial year under review, the Group achieved a revenue of RM204.035 million, which is 21.2% higher compared toprevious financial year (F/Y 2010: RM168.362 million). The Group registered a profit before taxation of RM1.12 million for thefinancial year ended 30 June 2011, a significant improved performance as compared to loss before taxation of RM2.321 million in the previous financial year.

As at 30 June 2011, the Group's total equity was RM46.214 million with a net asset per share of RM1.15.

Review of Operations

During the financial year under review, the Group achieved a better result for its retailing and trading of textile and garmentproducts despite the difficult and challenging retail business environment. The textile and garment business has achieved asegmental profit before finance costs and taxation of RM0.378 million in 2011, a growth of 135.9% as compared to RM0.16million in the previous financial year. Revenue, however, declined slightly by about 4.5% to RM33.777 million as comparedwith preceding year.

The chain of Emilio Valentino boutiques contributed a turnover of RM5.917 million within the retailing and trading of textile andgarment segment for the financial year under review, a decrease as compared to the previous financial year of RM6.808 million. Nevertheless, the chain managed to increase its profit before taxation marginally from RM0.054 million in the previous financial year to RM0.061 million.

The growth in retail business was contributed by the new branding concept and image whereby we targeted middle incomeand young group of customers with mid-end price products. The Group continues to expand its network locally with the planto open more consignment counter in near future. In order to enable our retail business to sustain its competitive position, wewill continue to explore new market and respond actively to changes in trends, preferences and retails spending patterns ofthe consumers.

The garment manufacturing segment recorded a turnover of RM20.190 million for the financial year ended 30 June 2011, anincrease of 38.8% from the previous financial year of RM14.549 million with a profit before taxation of RM0.241 million as compared to loss before taxation of RM3.106 million in the previous year. Since the year 2010, we have become one of theglobal famous brand i.e. Nike's certified factory directly through Haddad-Nike and this has increased our sales order for thecurrent financial year. This segment also has expanded its market to new areas such as South Africa and Canada with the business partner Design Resource Inc.

The manufacturing, dyeing and finishing of fabrics segment registered a turnover of RM10.532 million with profit beforefinance costs and taxation of RM0.25 million for the financial year ended 30 June 2011 (F/Y 2010: turnover of RM9.191 million with loss before finance costs and taxation of RM0.796 million).

On the other hand, the petrol-chemical trading segment operating under Shanghai Sino-Malaysian International Trading Co.,Ltd. (“SSMIT”) (100%-owned by YongTai Samchem (HK) Company Limited, which in turn 65%-owned by Yong Tai SamchemSdn. Bhd., which in turn 60%-owned by the Company) recorded a revenue of RM139.535 million during the financial year endunder review and contributed a net profit before finance costs and taxation of RM2.495 million (F/Y 2010: RM109.256 millionand RM3.329 million respectively). In year 2011, China government has decided to clamp down the overheated economyespecially in the property and financial sectors. The tightening of the loans and stringent credit control from the banks havegiven a strong impact to the market and SSMIT was immediately affected like many other business in China as furniture, gloveand other related industries related to chemical business are slowing down. In the first half year of 2011, there was a dropboth in turnover and margins as the financial cost has increased and many customers are short of funds to run their business. The financial chain was broken as the banks are not giving any credits especially the small medium enterprises.

Despite the challenging operating environment, SSMIT is performing in line with market conditions will continue to exploreinto new areas, especially the specialty chemicals sector to broaden the business portfolio and capturing bigger market shareto further increase its sales.

CHAIRMAN’S STATEMENT

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ANNUAL REPORT 2011

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Future Prospects

Despite increasingly challenging global economic conditions in the latter part of 2011 and which is expected to remain so in2012, the Malaysian economy is expected to grow between 5% to 5.5% in 2011, and the anticipation is for an overall growthrate of between 5% to 6% in 2012.

The Board of Directors expects 2012 to be another very challenging year for the Group. In this environment, our strategyremain cautiously optimistic and will continue focus on strategies to improve merchandising, sales floor management, productivity, capacity, utilization of resources and cost control.

Acknowledgement and Appreciation

On behalf of the Board of Directors, I would like to take this opportunity to thank the Management and staff of the Group fortheir support, dedication and commitment throughout the year. We would also like to express our heartfelt gratitude andappreciation to our valued shareholders, customers, business associates, bankers and various government authorities fortheir continuous support given to the Group.

Datuk Hj. Amil @ Amir Bin JunusChairman

8 November 2011

CHAIRMAN’S STATEMENT

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ANNUAL REPORT 2011

The Board of Directors of Yong Tai Berhad recognizes the importance of the Principles and Best Practices of Malaysian Codeon Corporate Governance (“the Code”) and is committed in ensuring that the Company and its subsidiaries (“the Group”)practise the highest standards of corporate governance.

This Statement describes the manner in which the Group has applied the Code's Principles and the extent of compliance withthe Code's Best Practices.

BOARD OF DIRECTORS

The Board Composition and Balance

The Board assumes the overall responsibility for corporate governance, strategic direction, financial matters and overseeingthe businesses, investments and operations of the Group. It is the ultimate body in decision making for outlining and implementation of corporate vision, directions, objectives and policies of the Group as a whole.

The Board currently consists of seven (7) members, comprising a Managing Director, three (3) Executive Directors and three(3) Independent Non-Executive Directors (including the Chairman). The Company complies with the Bursa MalaysiaSecurities Berhad (“Bursa Securities”) Main Market Listing Requirements that requires at least two (2) or one-third (1/3) of theBoard to be independent Directors.

The Board practices a clear division of responsibility to ensure a balance of power and authority between the Chairman,Managing Director and Non-Executive Directors. The Chairman is primarily responsible for the orderly conduct and functionsof the Board whilst the Managing Director is responsible for the overall operations of the business and direction on policy formation and decision making. The Managing Director is ably assisted by the Executive Directors who are responsible forthe day-to-day operations and business activities of the Group. The roles of Independent Non-Executive Directors are to provide unbiased and independent views, advice and judgement, and to ensure that the Board practices good governancein discharging its duties and take into account of the interests, not only of the Group, but also of the shareholders, employees and customers.

Board Meetings and Supply of Information

The Board meets at least four (4) times a year at quarterly intervals with additional meetings to be convened as and whennecessary. During the financial year ended 30 June 2011, the Board convened five (5) meetings, with details on the attendance of Directors are as follows:-

Name of Directors No. of meetings attended

Datuk Hj. Amil @ Amir Bin Junus 5/5

Wong Liew Lin @ Liew Fat Lin 5/5

Wong Mee Yow Cheen @ Liew Mee Yow Cheen 4/5

Tai Shzee Yuan 5/5

Liew Huat Kwang 3/5

Tan Kau Ngee @ Tan Seong Tin 4/5

Loi Kim Fah 5/5

Prior to the Board meetings, all Directors are provided with the agenda together with reports and papers containing information relevant to the business of the meetings, such as information on major financial, operational and corporate matters as well as activities and performance of the Group, to enable the Directors to peruse and contemplate the issues to be deliberated at the Board meetings.

The Directors have full access to all information within the Group and is entitled to the advice and services of the CompanySecretaries and may obtain independent professional advice at the Company's expense, where necessary.

Appointments to the Board

The Nomination Committee comprises exclusively of Independent Non-Executive Directors as follows:-

Loi Kim Fah Chairman/Independent Non-Executive DirectorTan Kau Ngee @ Tan Seong Tin Member/ Independent Non-Executive Director

STATEMENT ON CORPORATE GOVERNANCE

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Appointments to the Board (Cont’d)

The Nomination Committee is established with the responsibility of identifying, proposing and recommending the right candidates tothe Board and Board Committees by taking into account the individual's skill, knowledge, expertise, experience, professionalism andintegrity as well as his other commitments, resources and time. In addition, the Nomination Committee also has the following dutiesand functions:-

1. to evaluate the ability to discharge such responsibilities/functions as expected from individual non-executive Directors.2. to annually review the required mix of skills, experience and other qualities include core competencies, which non-executive

Directors should bring to the Board.3. to annually assess the effectiveness of the Board as a whole, the Board Committees and assess contribution of each Director.

The decision as to who shall be appointed shall be the responsibility of the full Board after considering the recommendations of theNomination Committee. The Board will examine its size with a view to determining the impact of the number upon its effectiveness.

Re-election of Directors

The Articles of Association of the Company provide that at least one-third (1/3) of the Directors are subject to retirement by rotationat each Annual General Meeting (“AGM”) but shall be eligible for re-election and that all Directors (including the Managing Director)shall retire at least once in every three (3) years. The Company's Articles of Association also provide that a Director who is appointed during the year shall hold office only until the next AGM and shall then be eligible for re-election.

Directors' Training

All the Directors have completed the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors have alsobeen regularly updated on developments in corporate governance, relevant laws, regulations and business practices as a continuing effort to train and equip themselves to effectively discharge their duties. In addition, all the Directors are provided with theopportunity to continually undergo other relevant training programmes to further enhance their skills and knowledge and to enablethem to discharge their respective duties effectively. Those programmes included National Tax Conference 2010, 2011 Budget Seminar and Seminar Percukaian Kebangsaan 2010.

DIRECTORS' REMUNERATION

The Remuneration Committee comprises wholly of Independent Non-Executive Directors as follows:-

Datuk Hj. Amil @ Amir Bin Junus Chairman/Independent Non-Executive ChairmanTan Kau Ngee @ Tan Seong Tin Member/ Independent Non-Executive Director

The Remuneration Committee is responsible for recommending to the Board the remuneration packages of Executive Directors. TheBoard as a whole determines the remuneration of Non-Executive Directors. The individual concerned will abstain from the discussionof their own remuneration.

The remuneration of Directors is determined at levels which enable the Company to attract and retain Directors with the relevant experience and expertise to run the Group successfully and effectively. In the case of Executive Directors, their remunerations arestructured to link rewards to corporate and individual performance. For Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by them.

The aggregate remuneration of Directors during the financial year under review are as follows:

Directors

Remuneration Executive Non-Executive(RM) (RM)

Fees - 64,000

Salaries/Allowances 997,494 -

Bonuses 20,000 -

Benefit In Kind 25,575 -

Total 1,043,069 64,000


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ANNUAL REPORT 2011

DIRECTORS' REMUNERATION (Cont’d)

The number of Directors of the Company whose total remuneration falls within the following bands for the financial year under revieware:-

Number of Directors

Range of remuneration Executive Non-Executive

Below RM50,000 - 3

RM50,001 - RM100,000 - -

RM100,001 - RM150,000 - -

RM150,001 - RM200,000 - -

RM200,001 - RM250,000 2 -

Above RM250,000 2 -

OTHER BOARD COMMITTEES

Other than the Nomination Committee and Remuneration Committee, the Board has also established other Board Committees, namely Audit Committee and Executive Committee, which operates within defined terms of reference. These committees have beenaccorded the necessary authority to analyse the relevant issues and report to the Board with recommendations and deliberations for the Board's approval.

Audit Committee

The members of the Audit Committee comprises exclusively of three (3) Independent Non-Executive Directors. The Composition andthe Terms of Reference of the Committee are set out in Audit Committee Report on pages 12 and 13 of the Annual Report. The AuditCommittee's meeting is mostly held before the Board's meeting to ensure that all critical issues highlighted can be brought to theirattention on a timely basis. It reviews issues of accounting policies and presentation for external financial reporting and ensures anobjective and professional relationship is maintained with the external auditors.

Executive Committee (Exco)

The Exco comprises the Managing Director and two (2) Executive Directors. The Exco is the main approving authority on the majorroutine matters and meets regularly to review and approve major strategic, operational and financial matters, investments and funding decisions.

SHAREHOLDERS

Dialogue between Company and Investors

The Company acknowledges the importance of timely dissemination of material information affecting the Group to the shareholders,investors and the public. The release of annual reports, announcements and financial results on a quarterly basis provides the shareholders and the investing public with an overview of the Group's performance and operations. The Company has set up its own website which provides more information about the Company and the Group.

The Annual General Meeting (“AGM”)

The AGM remains the principal forum of dialogue and a mean of communication with shareholders. Shareholders are encouraged toattend and participate at the AGM and are allowed to appoint proxies to attend and vote on their behalf. Members of the Board aswell as the Auditors of the Company are present to answer questions raised during the meeting.


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ACCOUNTABILITY AND AUDIT

Financial Reporting

The Company's financial statements are prepared in accordance with the requirements of applicable approved accounting standardsin Malaysia issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965. The Directors takeresponsibility in ensuring that the annual financial statements and the quarterly results announcements are presented to convey abalanced and understandable assessment of the Group's financial performance and position. The Audit Committee assists the Boardby reviewing and scrutinizing the information to be disclosed to ensure accuracy and adequacy.

Internal Control

The Board has overall responsibility for the development of sound internal control system for the Group to achieve its objectives within the acceptable risk profile as well as to safeguard shareholder's investment and the Company's assets. The Board and AuditCommittee review the effectiveness of the Group's system of internal controls periodically and such review covers the financial, operational and compliance controls as well as risk management. The Statement on Internal Control which provides an overview of the state of the internal control within the Group is set out on page 14 of the Annual Report.

Relationship with Auditors

The Group has established a transparent relationship with the External Auditors and seeks their professional advice in ensuring compliance with applicable standards and statutory requirements. The External Auditors are invited to attend the Audit Committee's meeting at least twice a year to discuss the audit plan, audit findings and their review.

CORPORATE SOCIAL RESPONSIBILITY

The Group acknowledges the importance of Corporate Social Responsibility (“CSR”) towards the well-being of its employees, community and environment, and strives to balance its social responsibility to the society with its business objectives and shareholders' expectations.

In our daily operations, the Group continues to be committed on recycling and undertaking measures to reduce wastages, pollutionand harmful emissions. We encourage our employees to be environmental friendly by adopting cost and energy saving method to minimize the environmental impact and risks.

The Group believes that it is the employees who have significantly contributed to its continued success and growth and we strive tomotivate and retain the employees with the Long Service Award in recognizance of their loyalty and services towards the Company.The Group also continuously promotes human capital development by encouraging and sponsoring the participation of the employees in training programmes and seminars to enhance their knowledge, skills and competences. The training programmes andseminars include National Seminar Tax, Human Capital Seminar, Practical Business English, Textile Training and The Operation of Industrial Effluent Treatment System and etc.

The Group strives to forge a safe working environment and promotes healthy work practices for all levels of employee. Improvementsare ongoing at the factory premises to ensure the entire production process is truly professional and systematic. Safety programmessuch as Fire Awareness and Prevention, Emergency Responses Plan & Evacuation Techniques and etc have been conducted to create the awareness of the safety environment and practices.

The Group is committed to play its role as a caring corporate citizen and has taken initiative in making contributions towards the localcommunity from time to time.

We understand that CSR will be an ongoing commitment and we will devise and implement additional CSR practices in other areasof its businesses and operations in future.


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ANNUAL REPORT 2011

COMPOSITION AND MEMBERSHIP

The Audit Committee comprises three (3) directors and the composition is as follows:

Loi Kim Fah Chairman/Independent Non-Executive DirectorDatuk Hj. Amil @ Amir Bin Junus Member/Independent Non-Executive ChairmanTan Kau Ngee @ Tan Seong Tin Member/Independent Non-Executive Director

TERMS OF REFERENCE

The Audit Committee carried out its duties as set out in the Terms of Reference. The Board of Directors reviews the Terms ofReference from time to time to ensure continuous compliance with Bursa Malaysia Securities Berhad (“Bursa Securities”)Main Market Listing Requirements.

Objective

The primary objective of the Audit Committee is to assist the Board of Directors in the effective discharge of its fiduciaryresponsibilities as to corporate governance, financial reporting, auditing and internal control.

Composition

The Audit Committee shall be appointed by the Board of Directors from amongst its members which fulfils the followingrequirements:

1. the Audit Committee must be composed of no fewer than three (3) members;

2. all the Audit Committee members must be non-executive directors, with a majority of them being independent directors;

3. at least one (1) member of the Audit Committee:-

i. must be a member of the Malaysian Institute of Accountants; or

ii. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years' working experience; and

a. he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; orb. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the

Accountants Act 1967; orc. fulfils such other requirements as prescribed or approved by Bursa Securities.

4. no alternate director is appointed as a member of the Audit Committee.

Chairman

The members of the Audit Committee must elect a Chairman among themselves who is an independent director.

Secretary

The Company Secretary of the Company shall be the Secretary of the Audit Committee.

Meetings and Minutes

The Audit Committee shall meet at least four (4) times a year or more frequently as they consider necessary. A quorum shallbe two (2) members present, a majority of whom must be independent directors.

The Audit Committee may invite the Head of Finance, the internal auditor and external auditor to attend the meeting. OtherBoard members and/or employees may attend any particular meeting upon invitation of the Audit Committee. The externalauditor may request for a meeting if they consider necessary.

The minutes of Audit Committee meeting shall be signed by the Chairman of the meeting and distributed to each member ofthe Audit Committee and the Board of Directors. The Chairman of the Audit Committee shall report to the Board of Directorson each meeting.

AUDIT COMMITTEE REPORT

13


TERMS OF REFERENCE (Cont’d)

Authority

The Audit Committee shall in accordance with a procedure determined by the Board of Directors:

i. have authority to investigate any matter within its terms of reference;ii. have the resources which are required to perform its duties;iii. have full and unrestricted access to any information pertaining to the Company and the Group;iv. have direct communication channels with the internal and external auditors and with senior management of the

Company;v. be able to obtain independent professional or other advice; andvi. be able to convene meeting with external auditor, internal auditor or both, excluding the attendance of other Directors

and employees of the Company, whenever deemed necessary.

Functions and Duties

The functions and duties of the Audit Committee are:-

1. to review the following and report the same to the Board of Directors of the Company:a. with the external auditor, the audit plan;b. with the external auditor, his evaluation of the system of internal controls;c. with the external auditor, his audit report;d. the assistance given by the employees of the Company to the external auditor;e. the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the

necessary authority to carry out its work;f. the internal audit programme, processes, the results of the internal audit programme, processes or investigation

undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;g. the quarterly results and year end financial statements, prior to the approval by the board of directors, focusing

particularly on- changes in or implementation of major accounting policy changes;- significant and unusual events; and- compliance with accounting standards and other legal requirements;

h. any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

i. any letter of resignation from the external auditors of the Company; andj. whether there is reason (supported by grounds) to believe that the Company's external auditor is not suitable for re-

appointment.

2. to recommend the nomination of a person or persons as external auditors.

3. to carry out such other functions as may be agreed to by the Audit Committee and the Board of Directors.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as theChairman, the Managing Director, the Head of Finance, the Head of Internal Audit and external auditors in order to be kept informed of matters affecting the Company.

MEETINGS

The Audit Committee held five (5) meetings during the financial year ended 30 June 2011 and the attendance of each AuditCommittee member are as follows:

Members No. of meetings attended

Loi Kim Fah 5/5

Datuk Hj. Amil @ Amir Bin Junus 5/5

Tan Kau Ngee @ Tan Seong Tin 4/5


14

ANNUAL REPORT 2011

SUMMARY OF ACTIVITIES

During the financial year under review, the activities of the Audit Committee included:

i. review internal audit's reports and memorandums;ii. review quarterly financial result prior to submission to the Board of Directors for their consideration and approval;iii. review the external auditors' reports in relation to audit and accounting issues arising from audit, and updates of new

developments on accounting standards issued by the Malaysian Accounting Standards Board;iv. review the Company's compliance with revamped Bursa Securities Main Market Listing Requirements; v. review audit strategy and plan of the external auditors; andvi. review the recurrent related party transactions.

INTERNAL AUDIT FUNCTION

The internal audit function of the Group is performed by in-house Internal Audit Department. For the financial year ended 30 June2011, the cost incurred for internal audit function was RM35,473.30. The internal auditor reports to the Audit Committee and carriedout the audit reviews in accordance with the internal audit plan. The audit findings and recommendations will be forwarded to themanagement concerned for attention and necessary action. The Audit Committee reviews and deliberates the internal audit reportsand relevant issued presented during the regular Audit Committee meetings.

During the financial year under review, our Internal Audit Department had carried out the following activities:-

i. conduct independent reviews on internal control of the key activities within the Group's operating units;ii. identify and highlight any deficiency and findings in the risk management and internal controls of the Group;iii. propose practical and cost effective recommendations and corrective action plans to the relevant management; andiv. perform follow-up audits to ensure the recommendations and corrective action plan have been taken and implemented

accordingly.

A number of minor internal control weaknesses were identified, all of which have been or being addressed. None of the weaknesshas resulted in any material losses or uncertainties that would require disclosure in this Annual Report.


15


Introduction

The Malaysian Code on Corporate Governance stipulated that a listed company shall maintain a sound system of internalcontrol to safeguard shareholders' investment and the Company's assets.

The Board of Directors of Yong Tai Berhad is pleased to present the Statement on Internal Control for the financial year ended30 June 2011 made pursuant to Paragraph 15.26(b) of Bursa Malaysia Securities Berhad Main Market Listing Requirements.

Board Responsibility

The Board of Directors recognizes its responsibility for the Group's system of internal control, which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity on a regular basis. The Group's system of internal control had been designed with the objective of safeguarding shareholders'investment and its assets. However, due to the limitations that are inherent in any system of internal control, it can only provide reasonable but not absolute assurance against material misstatement, operational failures or loss.

Risk Management

Risk management is seen as an integral part of the Group's business operations by the Board. On a daily basis, the Headsof Departments are responsible for managing the risks of their respective departments. The key risks relating to the Group'soperations and business plans are addressed at the periodic Board and Audit Committee meetings.

The Group continuous to take necessary measures to ensure that there is on going process for identifying, evaluating, managing and monitoring the significant risks affecting the achievement of the Group's business objectives.

Internal Audit Function

The internal audit function of the Group is performed by in-house Internal Audit Department. All audit findings are deliberated and resolved with the management and respective Head of Department. The Audit Committee reviews the internal audit reports on every quarterly meeting.

Other Key Elements of Internal Control

Other key elements of the Group's systems of internal control are:-

• Periodic Board of Directors' and Audit Committee meetings, and regular operational and management meetings are held to discuss and review the business operation, financial and operational performances of the Group;

• The Group has a defined organizational structure with clear lines of responsibility, segregation of duties and delegation of authority;

• The Executive Directors are closely involved in the running of day-to-day business and operations of the Group and they report to the Board of Director on significant changes in the business and external environment; and

• Quarterly financial results and reports that provides the Board of Directors and Audit Committee with comprehensive information on financial performances of the Group.

Conclusion

There were no material finding or loss incurred during the financial year as a result of weaknesses in internal control. TheBoard, together with the management, continues to take measures to strengthen and further enhance its system of internalcontrol.

This Statement is made in accordance with a resolution of the Board of Directors dated 25 October 2011.

STATEMENT ON INTERNAL CONTROL

16

ANNUAL REPORT 2011

The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each financial yearwhich give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year and of theresults and cash flows of the Company and the Group for the financial year. The financial statements have been prepared inaccordance with the applicable approved accounting standards in Malaysia issued by the Malaysian Accounting StandardsBoard, the requirements of the Act, the Bursa Malaysia Securities Berhad Main Market Listing Requirements and other statutory requirements.

The Directors have ensured that in preparing the financial statements for the year ended 30 June 2011, the Company andthe Group has applied appropriate accounting policies on a consistent basis and supported with reasonable and prudentjudgements and estimates. The Directors have responsibility for ensuring that the Company and the Group keep properaccounting records to enable them to ensure that the financial statements comply with the Act. The Directors have overallresponsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent anddetect fraud and other irregularities.

This Statement is made in accordance with a resolution of the Board of Directors dated 25 October 2011.

ADDITIONAL COMPLIANCE REQUIREMENTS

Share buybacksThere was no share buyback by the Company during the financial year under review.

Options, warrants or convertible securitiesThe Company has not issued any options, warrants or convertible securities during the financial year under review.

American Depository Receipt (ADR) or Global Depository Receipt (GDR) programmeThe Company did not sponsor any ADR or GDR programme during the financial year under review.

Sanctions/penaltiesThere was no sanction/penalty imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year under review.

Non-audit feesThere was no non-audit fees paid to the external auditors during the financial year under review.

Variation in resultsThe Company's results for the financial year under review did not differ by more than 10% from unaudited results previouslyreleased. The Company did not make any profit estimate, forecast or projection for that period.

Profit guaranteeNo profit guarantee was given by the Company during the financial year under review.

Material contractsThere was no material contract entered into by the Company and/or its subsidiaries during the financial year under reviewwhich involves the interests of Directors and major shareholders.

Revaluation of landed propertiesThe Company's revaluation policy is disclosed in Note 2(d) of the Notes to the Financial Statements.

Recurrent related party transactions of a revenue natureDetails of transactions with related parties undertaken by the Group during the financial year under review are disclosed inNote 33 of the Notes to the Financial Statements.

STATEMENT ON DIRECTORS' RESPONSIBILITY

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company forthe financial year ended 30th June 2011.

PRINCIPAL ACTIVITIES

The principal activity of the Company is that of investment holding. The principal activities of the subsidiary companies are described in Note 9 of the Notes to the Financial Statements.

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

FINANCIAL RESULTSGroup Company

RM RM

Profit/(loss) before taxation 1,119,819 (143,589)Taxation (246,140) -

Net profit/(loss) for the year 873,679 (143,589)

(Loss)/profit attributable to:Owners of the parent (328,959) (143,589)Non controlling interest 1,202,638 -

873,679 (143,589)

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year.

The Directors do not recommend any dividend for the year ended 30th June 2011.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in thefinancial statements.

ISSUE OF SHARES AND/OR DEBENTURES

No shares and/or debentures were issued during the financial year.

INFORMATION ON THE FINANCIAL STATEMENTS

Before the Statements of Comprehensive Income and Statements of Financial Position of the Group and Company were madeout, the Directors took reasonable steps :-

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their value as shown in the accounting records of the Group and Company have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:-

(a) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and Company inadequate to any substantial extent; or

DIRECTORS’ REPORT

17


INFORMATION ON THE FINANCIAL STATEMENTS (Cont’d)

(b) which would render the values attributed to the current assets in the financial statements of the Group and Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and Company misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve monthsafter the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Groupand Company to meet their obligations as and when they fall due.

At the date of this report, there does not exist:-

(a) any charge on the assets of the Group and Company which has arisen since the end of the financial year which secures the liability of any other person; or

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

OTHER STATUTORY INFORMATION

The Directors state that :-

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

In their opinion:-

(a) the results of the operations of the Group and Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and Company for the financial year in which this report is made.

DIRECTORS

The Directors in office since the date of the last report are:-

Datuk Hj Amil @ Amir Bin JunusWong Liew Lin @ Liew Fat LinWong Mee Yow Cheen @ Liew Mee Yow CheenTai Shzee YuanLiew Huat KwangLoi Kim FahTan Kau Ngee @ Tan Seong Tin

The shareholdings in the Company and its related corporations during the financial year of those who were Directors at theend of the financial year are as follows:-

No. of Ordinary Shares of RM 1 eachAt At

Interest in the Company 01.07.10 Bought Sold 30.06.11

Datuk Hj Amil @ Amir Bin Junus - direct 140,000 - - 140,000Wong Liew Lin @ Liew Fat Lin - direct 50,522 - - 50,522

- deemed 20,091,729 - - 20,091,729Wong Mee Yow Cheen @ Liew Mee Yow Cheen - direct 74,744 - - 74,744

- deemed 20,091,729 - - 20,091,729Liew Huat Kwang - direct 230,520 - - 230,520Tai Shzee Yuan - direct 28,001 - - 28,001Tan Kau Ngee @ Tan Seong Tin - direct 48,000 - - 48,000

DIRECTORS’ REPORT

18

ANNUAL REPORT 2011

DIRECTORS (Cont’d)

Other than as disclosed below, no other Directors in office at the end of the financial year held any interest in shares in, ordebentures of its related corporations during the year.

No. of Ordinary Shares of RM 1 eachInterest in holding company At AtLiew Fat Lin Holding Sdn. Bhd. 01.07.10 Bought Sold 30.06.11

Wong Liew Lin @ Liew Fat Lin - direct 9,294,579 - - 9,294,579Wong Mee Yow Cheen @ Liew Mee Yow Cheen - direct 6,239,511 - - 6,239,511Liew Huat Kwang - direct 3,644,249 - - 3,644,249

Wong Liew Lin @ Liew Fat Lin and Wong Mee Yow Cheen @ Liew Mee Yow Cheen have interest in the following related corporations:-

Yong Tai Brothers Trading Sdn. Bhd. - deemed 200,000 - - 200,000Golden Vertex Sdn. Bhd. - deemed 2,000,000 - - 2,000,000Syarikat Koon Fuat Industries Sdn. Bhd. - deemed 127,500 - - 127,500Yuta Realty Sdn. Bhd. - deemed 402,600 - - 402,600The Image Outlet Sdn. Bhd. - deemed 100,000 - - 100,000Yong Tai Samchem Sdn. Bhd. - deemed 1,200,000 - - 1,200,000Phoenix Step Sdn. Bhd. - deemed 2 - - 2

No. of Ordinary Shares of HK$ 1 eachAt At

01.07.10 Bought Sold 30.06.11

Yongtai Samchem (HK) Company Limited - deemed 1,010,750 - - 1,010,750

In US DollarAt At

01.07.10 Bought Sold 30.06.11Shanghai Sino-Malaysian International

Trading Co., Ltd. - deemed 200,000 - - 200,000

DIRECTORS' BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Group and Company or its subsidiary companies was a party with the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other thanas disclosed in the Notes to the Financial Statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member or with a company in which the Director has a substantial financial interest.

HOLDING COMPANY

The holding company is Liew Fat Lin Holding Sdn. Bhd., a company incorporated in Malaysia.

DIRECTORS’ REPORT

19


AUDITORS

Messrs Hasnan THL Wong & Partners, the retiring Auditors, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 28th October 2011.

___________________________________________ )DATUK HJ AMIL @ AMIR BIN JUNUS )

)))))) DIRECTORS))))

___________________________________________ )WONG LIEW LIN @ LIEW FAT LIN )

Batu Pahat, Johor

DIRECTORS’ REPORT

20

ANNUAL REPORT 2011

We, DATUK HJ AMIL @AMIR BIN JUNUS and WONG LIEW LIN @ LIEW FAT LIN, being two of the Directors of YONG TAIBERHAD, do hereby state, in the opinion of the Directors, the financial statements set out on pages 24 to 59 are drawn upso as to give a true and fair view of the state of affairs of the Group and Company as at 30th June 2011 and of the results oftheir operations, changes in equity and cash flows of the Group and Company for the financial year ended on that date inaccordance with the applicable approved Financial Reporting Standards issued by the Malaysian Accounting StandardsBoard and the provisions of the Companies Act, 1965 in Malaysia.

Signed on behalf of the Board in accordance with a resolution of the Directors

______________________________________ ____________________________________DATUK HJ AMIL @ AMIR BIN JUNUS WONG LIEW LIN @ LIEW FAT LIN

Batu Pahat, Johor28th October 2011

I, TAI SHZEE YUAN, I/C No. 530622-04-5093, the Director primarily responsible for the financial management of YONG TAIBERHAD, do solemnly and sincerely declare that the financial statements of the Group and Company set out on pages 24 to59 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing thesame to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )abovenamed TAI SHZEE YUAN, )I/C No. 530622-04-5093, )at Petaling Jaya )

)on 28th October 2011 ) ____________________________

TAI SHZEE YUAN

Before me:

N. Madhavan Nair(No. B 064)Commissioner for Oaths

STATEMENT BY DIRECTORS

21


STATUTORY DECLARATION

Report on the Financial Statements

We have audited the financial statements of Yong Tai Berhad, which comprise the statements of financial position as at 30thJune 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 24 to 59.

Directors' Responsibility for the Financial Statements

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

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards andthe Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of theCompany as of 30th June 2011 and of their financial performance and cash flows of the Group and of the Company for the financial year then ended.

Report on Other Legal and Regulatory Requirements

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

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and the auditors' reports of all the subsidiary and subsubsidiary companies of which we have not acted as auditors, which are indicated in Note 9 of the Notes to the Financial Statements.

c) We are satisfied that the accounts of the subsidiary companies that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

d) The audit reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Matters

The supplementary information set out in Note 40 of the Notes to the Financial Statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementaryinformation in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Lossesin the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the MalaysianInstitute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

INDEPENDENT AUDITORS' REPORTTO THE MEMBERS OF YONG TAI BERHAD

22

ANNUAL REPORT 2011

Other Matters (Cont’d)

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

HASNAN THL WONG & PARTNERS HASNAN BIN ABDULLAH(NO. AF 0942) CHARTERED ACCOUNTANT

CHARTERED ACCOUNTANTS (NO: 1666/12/12 (J))

Petaling Jaya28th October 2011

INDEPENDENT AUDITORS' REPORTTO THE MEMBERS OF YONG TAI BERHAD

23


Group CompanyAs at

Note 30.06.2011 30.06.2010 01.07.2009 30.06.2011 30.06.2010(Restated) (Restated)

RM RM RM RM RMASSETSNON-CURRENT ASSETS

Property, plant and equipment 6 24,801,947 24,932,219 25,093,328 - -Prepaid land leases 7 - - - - -Investment properties 8 6,421,000 6,283,000 11,133,000 - -Investment in subsidiary and sub-

subsidiary companies 9 - - - 33,901,810 33,901,810Deferred tax asset 10 15,700 37,200 58,800 - -

31,238,647 31,252,419 36,285,128 33,901,810 33,901,810

CURRENT ASSETSInventories 11 39,664,389 34,027,170 33,932,557 - -Trade receivables 12 38,512,356 34,291,611 38,791,836 - -Other receivables 13 4,461,924 14,375,060 5,026,477 1,000 1,000Amount due from subsidiary companies 14 - - - 5,514,983 5,803,416Tax in credit 957,833 956,205 831,929 48,260 48,260Fixed deposits 15 693,216 474,888 492,164 - -Cash and bank balances 16 24,346,529 8,729,422 8,979,590 120,160 6,319

108,636,247 92,854,356 88,054,553 5,684,403 5,858,995

TOTAL ASSETS 139,874,894 124,106,775 124,339,681 39,586,213 39,760,805

EQUITY AND LIABILITIESCURRENT LIABILITIES

Trade payables 17 42,851,478 26,119,309 15,283,805 - -Other payables 18 3,025,775 6,265,564 8,338,456 92,810 88,820Amount due to subsidiary companies 14 - - - 69,463 104,456Amount due to Directors 19 11,913,026 15,464,179 15,128,592 - -Bank overdraft 16 12,902,404 12,936,548 16,931,057 - -Borrowings 20 21,149,547 15,393,800 16,841,348 - -Tax payable 26,302 37,839 119,901 - -

91,868,532 76,217,239 72,643,159 162,273 193,276

NON-CURRENT LIABILITIESDeferred tax liability 10 1,007,204 939,133 1,078,575 - -Borrowings 20 784,873 1,333,869 1,461,806 - -

1,792,077 2,273,002 2,540,381 - -

TOTAL LIABILITIES 93,660,609 78,490,241 75,183,540 162,273 193,276

EQUITY ATTRIBUTABLE TO OWNERSOF THE PARENT

Share capital 21 40,115,000 40,115,000 40,115,000 40,115,000 40,115,000Reserves 22 (1,540,831) (1,334,128) 3,225,604 (691,060) (547,471)

38,574,169 38,780,872 43,340,604 39,423,940 39,567,529Non controlling interest 7,640,116 6,835,662 5,815,537 - -

TOTAL EQUITY 46,214,285 45,616,534 49,156,141 39,423,940 39,567,529

TOTAL EQUITY AND LIABILITIES 139,874,894 124,106,775 124,339,681 39,586,213 39,760,805

STATEMENTS OF FINANCIAL POSITION AS AT 30TH JUNE 2011

24

ANNUAL REPORT 2011

The above statements of financial position are to be read in conjunction with the notes to the financial statements set out on pages 28 to 59.

Group CompanyNote 2011 2010 2011 2010

RM RM RM RM

Revenue 23 204,035,311 168,361,944 - 262,311

Less: Cost of sales (180,373,883) (148,866,210) - -

Gross profit 23,661,428 19,495,734 - 262,311

Add: Other income 1,352,932 1,636,700 - -

25,014,360 21,132,434 - 262,311

Less: Sales and distribution costs (11,080,816) (10,417,211) - -Administrative expenses (4,900,850) (5,893,252) (143,589) (4,109,182)Other operating expenses (5,792,417) (5,081,991) - -Finance costs 24 (2,120,458) (2,061,082) - -

Profit/(loss) before taxation 25 1,119,819 (2,321,102) (143,589) (3,846,871)

Taxation 26 (246,140) (102,737) - (1,504)

Net profit/(loss) for the year 873,679 (2,423,839) (143,589) (3,848,375)

Other comprehensive income/(expense):Revaluation surplus arising during the year 349,655 - - -Reversal of deferred tax on revaluation surplus 48,481 40,442 - -Exchange difference arising from foreign subsidiary

companies (674,064) (1,156,210) - -

(275,928) (1,115,768) - -

Total comprehensive income/(expense) for the year 597,751 (3,539,607) (143,589) (3,848,375)

Total comprehensive income/(expense) attributable to:Owners of the parent (206,703) (4,559,732) (143,589) (3,848,375)Non controlling interest 804,454 1,020,125 - -

597,751 (3,539,607) (143,589) (3,848,375)

(Loss)/profit attributable to:Owners of the parent (328,959) (4,293,093) (143,589) (3,848,375)Non controlling interest 1,202,638 1,869,254 - -

873,679 (2,423,839) (143,589) (3,848,375)

Earnings per share attributable to owners of the parent:-Basic loss per share (sen) 27 (0.8) (10.7)

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2011

25


The above statements of comprehensive income are to be read in conjunction with the notes to the financial statements set out on pages 28 to 59.

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30TH JUNE 2011

26

ANNUAL REPORT 2011

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9.

Group CompanyNote 2011 2010 2011 2010

(restated)RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit/(loss) before taxation 1,119,819 (2,321,102) (143,589) (3,846,871)Adjustments for:-

Allowance for specific doubtful debts 874,545 2,338,619 - -Bad debts written off 1,372,731 244,020 - -Deposit forfeited 3,540 - - -Depreciation 1,649,936 1,900,709 - -Foreign currency exchange loss- unrealised 351,758 164,325 - -Impairment loss on investment in subsidiary companies - - - 3,962,604Interest expenses 24 2,120,458 2,061,083 - -Inventories written down - 95,323 - -Property, plant and equipment written off 463,430 32,844 - -Allowance for specific doubtful debts no longer required (1,746,721) (349,615) - -Fair value adjustment 8 (138,000) - - -Gain on disposal of investment properties - (200,000) - -Gain on disposal of property, plant and equipment (92,883) (35,671) - -Interest income (90,051) (89,177) - -Net dividend received - - - (262,311)

Operating profit/(loss) before working capital changes 5,888,562 3,841,358 (143,589) (146,578)Increase in inventories (5,904,412) (347,860) - -Decrease/(increase) in receivables 3,269,458 (8,463,860) - -Decrease/(increase) in amount due from subsidiary

companies - - 288,433 (275,000)Decrease in amount due to subsidiary companies - - (34,993) (5,000)Increase in payables 15,244,740 9,918,922 3,990 5,077(Decrease)/increase in amount due to Directors (3,520,530) 374,913 - -

Cash generated from/(absorbed by) operations 14,977,818 5,323,473 113,841 (421,501)Dividends paid - (410,289) - -Interest paid (2,120,458) (2,061,083) - -Net tax paid (235,135) (379,864) - -

Net cash from/(used in) operating activities 12,622,225 2,472,237 113,841 (421,501)

CASH FLOWS FROM INVESTING ACTIVITIESDividends received - - - 262,311Interest received 76,072 76,472 - -Proceeds from disposal ofproperty, plant and equipment 92,889 46,200 - -Proceeds from disposal of investment properties - 5,050,000 - -Purchase of property, plant and equipment 30 (973,828) (1,609,007) - -Withdrawal of fixed deposits - 29,981 - -

Net cash (used in)/from investing activities (804,867) 3,593,646 - 262,311

CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from/(repayment of) short term

borrowings 6,582,919 (2,158,194) - -Placement of fixed deposits (204,349) - - -Repayment of hire purchase creditors (366,665) (285,063) - -Net (repayment of)/proceeds from term loans (1,552,903) 692,772 - -

Net cash from/(used in) financing activities 4,459,002 (1,750,485) - -

NET INCREASE/(DECREASE) IN CASH AND CASHEQUIVALENTS 16,276,360 4,315,398 113,841 (159,190)

Effect of exchange rate changes (625,109) (571,057) - -

CASH & CASH EQUIVALENTS BROUGHT FORWARD (4,207,126) (7,951,467) 6,319 165,509

CASH & CASH EQUIVALENTS CARRIED FORWARD 16 11,444,125 (4,207,126) 120,160 6,319

STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30TH JUNE 2011

27


The above statements of cash flows are to be read in conjunction with the notes to the financial statements set out on pages 28 to 59.

1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The principal activity of the Company is that of investment holding. The principal activities of the subsidiary companies aredescribed in Note 9 of the Notes to the Financial Statements. There have been no significant changes in the nature of these activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia. The registered office of the Companyis located at Ground Floor, 8, Lorong Universiti B, Section 16, 46350 Petaling Jaya, Selangor Darul Ehsan. The principal placeof business of the Company is located at No. 3, Jalan Kapal, Kawasan Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors dated 28th October 2011.

2. SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been applied consistently in dealing with items that are considered material in relation to the financial statements.

a) Basis of preparation

The financial statements of the Group and Company have been prepared:-

i) in accordance with the applicable approved Financial Reporting Standards (FRS), the accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, 1965; and

ii) under the historical cost convention, unless otherwise indicated and as modified by the revaluation of certain property, plant and equipment, and investment properties, which have been measured at fair value.

The financial statements are presented in Ringgit Malaysia (RM), unless otherwise indicated.

b) Subsidiary companies and basis of consolidation

i) Subsidiary companies

Subsidiary companies are entities over which the Group or the Company has the ability to control the financial andoperating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights thatare currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company's separate financial statements, investments in subsidiary companies are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in statement of comprehensive income.

ii) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiary companiesas at the end of the financial year. The financial statements of the subsidiary companies are prepared for the same reporting date as the Company.

Subsidiary companies are consolidated from the date of acquisition, being the date on which the Group or theCompany obtains control, and continue to be consolidated until the date that such control ceases. In preparing theconsolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated infull. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.

Acquisitions of subsidiary companies are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of thefair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in statement of comprehensive income.

NOTES TO THE FINANCIAL STATEMENTS30TH JUNE 2011

28

ANNUAL REPORT 2011

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

b) Subsidiary companies and basis of consolidation (Cont’d)

ii) Basis of consolidation (Cont’d)

Non controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. Itis measured at the minorities' share of the fair value of the subsidiary companies' identifiable assets and liabilities at the acquisition date and the non controlling interest's share of changes in the subsidiary companies' equity since then.

c) Intangible assets

i) Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess for the cost of businesscombination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is notamortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstancesindicate that the carrying value may be impaired. Gains and losses on the disposal of an entitiy include the carrying amount of goodwill relating to the entity sold.

ii) Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assetsacquired in a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Theuseful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment wheneverthere is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently ifthe events or changes in circumstances indicate the carrying value may be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

iii) Research and development costs

Research and development costs are recognised as an expense when incurred.

d) Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. Thecarrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Freehold land and buildings are stated at revalued amount, which is the fair value at the date of the revaluation less anyaccumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers.

Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for thesame asset previously recognised in statement of comprehensive income, in which case the increase is recognised in statement of comprehensive income to the extent of the decrease previously recognised. A revaluation deficit is first offsetagainst unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafterrecognised in statement of comprehensive income. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property, plant and equipment is calculated on the straight line basis to write off the cost of each asset to its residual value over the estimated useful life.


29



d) Property, plant and equipment

The principal annual rates of depreciation used are as follows:-

Long-term leasehold land Over 30 to 32 yearsBuildings 33-41 yearsAir conditioners and air curtains 10%EDP/IT equipment 10%Electrical installation 10%Furniture, fittings and renovations 10%-50%Machinery and equipment 10%Models 10%Office equipment 10% - 18%Warehouse equipment 10%Motor vehicles 20%Counter set-up 20%-33 1/3%

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount,method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amountis recognised in profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

e) Investment properties

Investment properties are properties held for long term rental yield and/or for capital appreciation and is not occupied bythe Group or the Company. Such properties are measured initially at cost, including transaction costs. Subsequent to initialrecognition, investment property are stated at fair value. Fair value is arrived at by reference to market evidence for whichthe properties could be exchanged between knowledgeable, willing parties in an arm's length transaction and is performedby registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued.

Gains or losses arising from changes in the fair values of investment properties are recognised in statement of comprehensive income in the financial period in which they arise.

A property interest under an operating lease is classified and accounted for as an investment property when the Group holds it for long term rental yield and/or capital appreciation. Such property interest is carried at fair value.

Investment properties are derecognised when they have been disposed or when the investment property is permanentlywithdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal are recognised in statement of comprehensive income in the financial period of the retirement or disposal.

f) Investments

Non-current investments other than investments in subsidiary companies are stated at cost less impairment losses, if any.On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in statement of comprehensive income.

Marketable securities are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investment. Cost is derived using the weighted average basis. Market value is calculated by reference to stockexchange quoted selling prices at the close of business on the end of the financial year. Increases or decreases in the carrying amount of marketable securities are recognised in statement of comprehensive income. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in statement of comprehensive income.

g) Inventories

Inventories comprise of fabrics, dye stuffs, chemical products, packing materials, fuel and gas, various types of garmentsand other accessories which are valued at the lower of cost and net realisable value on the first-in, first-out method. Costconsist of direct materials, direct labour and other incidental cost of bringing the inventories to their present condition and location.

Net realisable value is the estimate of the selling price in the ordinary course of business, less the cost of completion andselling expenses.


30

ANNUAL REPORT 2011


h) Financial assets

Financial assets are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fairvalue through profit or loss, directly attributable transaction costs. The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include loans and receivables.

Loans and Receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method.Gains and losses are recognised in statement of comprehensive income when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the financial year which are classified as non-current.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in statement of comprehensive income.

i) Impairment of financial assets

The Group and the Company assess at each financial year end whether there is any objective evidence that a financial asset is impaired.

Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Groupand the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objectiveevidence of impairment for a portfolio of receivables could include the Group's and the Company's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset's carryingamount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The impairment loss is recognised in statement of comprehensive income.

j) Cash and cash equivalents

Cash comprises of cash at bank and cash in hand including bank overdraft and deposits. Cash equivalents comprises ofinvestments maturing within three months from the date of acquisition and which are readily convertible to known amount of cash which are subject to an insignificant risk of change in value.

k) Impairment of non-financial assets

The carrying values of assets (other than inventories, deferred tax assets and financial assets) are reviewed at the end ofeach financial year for impairment to determine whether there is an indication that the assets might be impaired. If any suchindication exists, the asset's recoverable amount is estimated to determine the amount of impairment loss. Impairment ismeasured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount is thehigher of an asset’s net selling price and its value in use, which is measured by reference to discounted futurecash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.Irrespective of whether there is any indication of impairment, goodwill and intangible asset with an indefinite useful life are tested for impairment annually.

An impairment loss is recognised in statement of comprehensive income in the period in which it arises, unless the assetis carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.


31



k) Impairment of non-financial assets (Cont’d)

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and isrecognised to the extent of the carrying amount of the asset that would have determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the statement of comprehensiveincome immediately, unless the asset is carried at revalued amount. A reversal of an impairment loss on a revalued assetis credited directly to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset waspreviously recognised as an expense in the statement of comprehensive income, a reversal of that impairment loss is recognised as income in the statement of comprehensive income. An impairment loss of goodwill is not reversed.

l) Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when, and only when,the Company become a party to the contractual provisions of the financial instrument. The Group's and the Company's financial liabilities are classified as other financial liabilities.

Other financial liabilities

The Group's and the Company's other financial liabilities include trade payables, other payables, loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measuredat amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of financial year.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability aresubstantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in statement of comprehensive income.

m) Finance lease and hire purchase arrangements

Assets held under finance lease and hire purchase contracts are assets where substantially all the risks and rewards ofownership of the assets have been passed to the Group or the Company. They are capitalised and depreciated over theirestimated useful lives according to the rates as set out in Note 2(d). Finance charges of the lease rental obligations andhire purchase instalments are charged to the statement of comprehensive income over the period of the respective agreements using the “Sum-of- Digits” method to give a constant periodical rate of interest on the remaining finance lease and hirepurchase liabilities.

n) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transactioncosts comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

o) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group or the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to thecustomer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.


32

ANNUAL REPORT 2011


o) Revenue recognition (Cont’d)

Interest income

Interest income is recognised on a time proportion basis, by reference to the principal outstanding and at the interest rate applicable.

Dividend income

Dividend income is recognised when the shareholder's right to receive payment is established.

Rental income

Rental income is recognised on an accrual basis in accordance with the substance of the relevant agreement.

p) Government grants

Government grants are recognised initially at their fair value in the balance sheet as deferred income where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Grants that compensate the Company for expenses incurred are recognised as income over the periods necessary to match the granton a systematic basis to the costs that it is intended to compensate. Grants that compensate the Company for the cost of an asset are recognised as income on a systematic basis over the useful life of the asset.

q) Borrowing costs

All interest and other costs incurred in connection with borrowings are recognised in statement of comprehensive income in the period they are incurred.

r) Taxation

Income tax on the statement of comprehensive income for the financial year comprises current and deferred tax. Currenttax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measuredusing the tax rates that have been enacted at the end of the financial year.

Deferred tax is provided in the financial statements, using the liability method, on temporary differences at the end of thefinancial year between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferredtax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductibletemporary differences, unused tax credits and losses. Deferred tax assets are recognised to the extent that it is probablethat taxable profit will be available against the temporary differences and unused tax credits and losses. Deferred tax is notrecognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset orliability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liabilityis settled, based on tax rates that have been enacted at the end of the financial year. Deferred tax is recognised in the statement of comprehensive income, except when it arises from a transaction which is recognised directly in equity, in whichcase the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is anacquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of theacquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the cost of the combination.

s) Foreign currencies

Transactions in foreign currencies are recorded in Ringgit Malaysia at rates of exchange ruling at the time of the transactions. Foreign currency monetary assets and liabilities are translated at exchange rates ruling at the end of the financial year.

Gains and losses from conversion of short term assets and liabilities, whether realised or unrealised are included in operating profit or loss as they arise.

The assets and liabilities of the foreign entities are translated at financial year end rates and operating results are translated at the average exchange rates for the year, which approximates the exchange rates at the dates of thetransactions. Gains and losses arising on translation are taken directly to the foreign exchange translation reserve.

All other foreign exchange differences are recognised in statement of comprehensive income in the financial period in which they arise.


33



s) Foreign currencies (Cont’d)

The principal closing rates used are as follows:-2011 2010

RM RM

1 Singapore Dollar 2.46 2.331 Euro 4.38 4.921 US Dollar 3.03 3.27100 Hong Kong Dollar 39.59 42.03100 China Renminbi 46.70 47.74

t) Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services whichare independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Group or the Company whoregularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 34, including the factors used to identify the reportable segments and the measurement basis of segment information.

u) Employee benefits

i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in whichthe associated services are rendered by employees. Short term accumulating compensated absences such as paidannual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

ii) Defined contribution plan

Defined contribution plans are post-employment benefit plans under which the Company or the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the statement of comprehensive income as incurred. As required by law, companies in Malaysia make such contributionsto the Employees Provident Fund ("EPF"). The Group's foreign subsidiary companies also make contributions to itsrespective country's statutory pension scheme.

v) Operating leases

Leases where substantially all the risks and rewards incidental to ownership of the assets remain with the lessor areaccounted for as operating leases. Operating lease rentals payable are recognised as an expense on a straight line basis over the lease term.

w) Related parties

Related parties are entities with common directors or shareholders wherein one party has the ability to control or exercise significant influence over the other parties in financial or operating policy decision.

x) Dividends

Dividends on ordinary shares, if approved by the shareholders will be accounted for in shareholders' equity as an appropriation of retained earnings in the financial year in which they are declared.

3. CHANGES IN ACCOUNTING POLICIES AND EFFECTS ARISING FROM ADOPTION OF NEW AND REVISED FRSs

The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards (FRSs), generally accepted accounting principles and the Companies Act, 1965 in Malaysia.

The Malaysian Accounting Standards Board (MASB) has issued the following new and amended FRS and IC Interpretations which are effective for annual period beginning on or after 1 January 2010.


34

ANNUAL REPORT 2011

3. CHANGES IN ACCOUNTING POLICIES AND EFFECTS ARISING FROM ADOPTION OF NEW AND REVISED FRSs (Cond’t)

FRS 1, First-time Adoption of Financial Reporting Standards (revised)Amendments to FRS 1, First-time Adoption of Financial Reporting Standards and FRS 127, Consolidated and Separate Financial

Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or AssociateAmendments to FRS 2, Share-based Payment Vesting Conditions and CancellationsAmendments to FRS 2, Share-based Payment (revised)FRS 3, Business Combinations (revised)FRS 4, Insurance ContractsAmendments to FRS 5, Non-current Assets Held for Sale and Discontinued OperationsFRS 7, Financial Instruments: DisclosuresAmendments to FRS 7, Financial Instruments: DisclosuresFRS 101, Presentation of Financial StatementsFRS 123, Borrowing CostsFRS 127, Consolidation and Separate Financial Statements (revised)Amendments to FRS 132, Financial Instruments: Presentation (revised)Amendments to FRS 138, Intangible AssetsFRS 139, Financial Instruments: Recognition and Measurement (revised)Improvements to FRSs (2009)IC Interpretation 9, Reassessment of Embedded DerivativesAmendments to IC Interpretation 9, Reassessment of Embedded DerivativesIC Interpretation 10, Interim Financial Reporting and ImpairmentIC Interpretation 11, FRS 2, Group and Treasury Share TransactionsIC Interpretation 12, Service Concession AgreementsIC Interpretation 13, Customer Loyalty ProgrammesIC Interpretation 14, FRS 119, The Limit on a Defined Benefit Asset, Minimum funding Requirements and their InteractionIC Interpretation 16, Hedges of a Net Investment in a Foreign OperationIC Interpretation 17, Distribution of Non-cash Assets to OwnersTR i-3, Presentation of Financial Statements of Islamic Financial Institutions

Amendments to FRS 2, Share-based Payment Vesting Conditions and Cancellations, Amendments to FRS 2, Share-basedPayment (revised), FRS 4, Insurance Contracts, Amendments to FRS 5, Non-current Assets Held for Sale and DiscontinuedOperations, Amendments to FRS 138, Intangible Assets, IC Interpretation 9, Reassessment of Embedded Derivatives,Amendments to IC Interpretation 9, Reassessment of Embedded Derivatives, IC Interpretation 11, FRS 2, Group and TreasuryShare Transactions, IC Interpretation 12, Service Concession Agreements, IC Interpretation 13, Customer Loyalty Programmes,IC Interpretation 14, FRS 119, The Limit on a Defined Benefit Asset, Minimum funding Requirements and their Interaction, ICInterpretation 16, Hedges of a Net Investment in a Foreign Operation, IC Interpretation 17, Distribution of Non-cash Assets toOwners and TR i-3, Presentation of Financial Statements of Islamic Financial Institutions are, however, not applicable to the Group and the Company.

Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except those discussed below:

FRS 3: Business Combinations and FRS 127: Consolidated and Separate Financial Statements (revised)

FRS 3 (revised) introduces a number of changes to the accounting for business combinations occurring on or after 1st July 2010.These include changes that affect the valuation of non-controlling interest, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combinations achieved in stages. Thesechanges will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs and future reported results.

FRS 127 (revised) requires that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as atransaction with owners in their capacity as owners and to be recorded in equity. Therefore, such transaction will no longer giverise to goodwill, nor will it give rise to a gain or loss. Furthermore, the amended Standard changes the accounting for lossesincurred by the subsidiary as well as loss of control of a subsidiary.

The changes by FRS 3 and FRS 127 (revised) have been applied prospectively and only affect future acquisition or loss of control of subsidiaries and transactions with non controlling interests.

FRS 7, Financial Instruments: Disclosures

Prior to 1 July 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132,Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financialinstruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financialinstruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the newdisclosures have not been applied to the comparatives. The new disclosures are included throughout the Company's financial statements for the year ended 30 June 2011.


35



FRS 101, Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions withowners, with all non-owner changes in equity presented as a single line. The Standard also introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Company have elected to present this statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements.

The revised FRS 101 was adopted retrospectively by the Group and the Company.

Amendments to FRS 117, Leases

Prior to 1 July 2010, for all leases of land and buildings, if title is not expected to pass to the lessee by the end of the lease term,the lessee normally does not receive substantially all of the risks and rewards incidental to ownership. Hence, all leasehold landheld for own use was classified by the Company as operating lease and where necessary, the minimum lease payments or up-front payments made were allocated between the land and the buildings elements in proportion to the relative fair values forleasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represented prepaid lease payments and were amortised on a straight-line basis over the lease term.

The amendments to FRS 117, Leases clarify that leases of land and buildings are classified as operating or finance lease in thesame way as leases of other assets. They also clarify that the present value of the residual value of the property in a lease witha term of several decades would be negligible and accounting for the land element as a finance lease in such circumstanceswould be consistent with the economic with the economic position of the lessee. Hence, the adoption of the amendments to FRS117 has resulted in certain unexpired land leases to be reclassified as finance leases. The company has applied this change inaccounting policy retrospectively and certain comparatives have been restated. The following are effects to the statement of financial positions as at 30 June 2010 arising from the above change in accounting policy:

RMIncrease/(decrease) in:

Property, plant and equipment 798,545Prepaid land leases (798,545)

The following comparatives have been restated:As

previously Asstated Adjustments related

Statements of financial position30 June 2010

Property, plant and equipment 24,133,674 798,545 24,932,219Prepaid land leases 798,545 (798,545) -

1 July 2009Property, plant and equipment 24,268,492 824,836 25,093,328Prepaid land leases 824,836 (824,836) -

FRS 139, Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buyand sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 July 2010 in accordancewith the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting theopening balance of retained earnings as at 1 July 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

Impairment of receivables

Prior to 1 July 2010, provision for doubtful debts was recognised when it was considered uncollectible. Upon the adoption ofFRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. Theamount of the loss is measured as the difference between the receivable's carrying amount and the present value of the estimated future cash flows discounted at the receivable's original effective interest rate. As at 1 July 2010, the Company hasremeasured the allowance for impairment losses as at that date in accordance with FRS 139 but no adjustments is required to be made to the opening balance of retained earnings as at that date.


36

ANNUAL REPORT 2011


The Malaysian Accounting Standards Board (MASB) has issued the following new FRSs and IC Interpretations that are yet to beeffective and have not been adopted by the Group and the Company in preparing these financial statements.

For financial periodsFRSs / Interpretations beginning on or afterAmendments to IC Interpretation 15, Agreements for the Construction of Real Estate 30 August 2010Amendments to FRS 1, First-time Adoption of Financial Reporting Standards- Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011- Additional Exemptions for First-time Adopters 1 January 2011Amendments to FRS 2, Group Cash-settled Share Based Payment Transactions 1 January 2011Amendments to FRS 7, Financial Instruments: Disclosures - Improving Disclosures about

Financial Instruments 1 January 2011IC Interpretation 4, Determining whether an Arrangement contains a Lease 1 January 2011IC Interpretation 18, Transfers of Assets from Customers 1 January 2011Improvements to FRSs (2010) 1 January 2011Amendments to IC Interpretation 13, Customer Loyalty Programmes 1 January 2011Amendments to IC Interpretation 14, Prepayments of a Minimum Funding Requirement 1 July 2011IC Interpretation 19, Extinguishing Financial Liabilities with Equity Instruments 1 July 2011FRS 124, Related Party Disclosures (revised) 1 January 2012IC Interpretation 15, Agreements for the Construction of Real Estate 1 January 2012

The new and revised FRSs and Interpretations above are expected to have no significant impact on the financial statements of the Group and the Company upon their initial application.

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgments are continually evaluated by the Directors and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances. The Group and theCompany makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results.

The estimates and assumptions that affect the application of the Group and the Company's accounting policies and disclosures,and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:

a) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial and production factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions.

The Group and the Company anticipate that the residual values of its plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

b) Allowance for Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates.

Possible changes in these estimates could result in revisions to the valuation of inventories.

c) Impairment on Loans and Receivables

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


37


4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont’d)

d) Impairment of Non-Financial Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

e) Impairment of investment in unquoted corporations

The Group and the Company follow the guidance of the applicable FRS in Malaysia in determining whether there is a decline other than temporary in the fair value of its investment in unquoted corporations. This determination requires significant judgement. In making this judgement, the Group and the Company evaluate the quantitative and qualitative factors affecting the market position of the investee including the regulatory support it receives and its longer term business outlook and financial standing. Appropriate considerations are given to the investee's financial gestation period, financialprojections, business prospects and the proprietary technology involved.

It is also recognised that investments in new start-up investee companies may result in an initial decline of the fair value of such investments, which is deemed temporary, due to development and operational losses in the initial years. The Board of Directors and Management of the Group and the Company are of the opinion that there is no indication of impairment in the Group's and the Company's investment in the unquoted corporations at this juncture.

f) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group and the Company carry certain financial assets and liabilities at fair value, which require extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group and the Company use different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and equity.

g) Recognition of deferred tax liability

Deferred tax liability is recognised for excess of property, plant and equipment's net carrying amount over its written down value. Significant management judgement is required to determine the amount of deferred tax liability that can be recognised, based upon the timing and level of future tax expense together with future tax planning strategies.

h) Income Taxes

There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

5. FINANCIAL RISK MANAGEMENT POLICIES

The Group's and Company’s financial risk management policy seeks to ensure that adequate financial resources are availablefor the development of the Group's and Company’s business whilst managing its risks. The Group's and Company’s activitiesexpose it to limited financial risk, principally market risk, credit risk, interest rate risk, liquidity and cash flow risk and foreign currency risk. The Board reviews and agrees policies in respect of the major areas of treasury activities which are as follows:-

a) Market risk

The Group has in place policies to manage its competitive risks from its competitors in providing better and more innovative products and services. The Group regularly takes part in exhibitions, advertise through the media and make face-to-face customer visits to promote its products and services.

b) Credit risk

The Group’s and the Company's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The maximum exposure to credit risk is represented by the total carrying amount of these financial assets in the statements of financial position reduced by the effects of any netting arrangements with counter parties.

The Group and the Company does not have any major concentration of credit risk related to any individual customer or counter party.

The Group and the Company manage its exposure to credit risk by investing its cash assets safely and profitably, and by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.


38

ANNUAL REPORT 2011

5. FINANCIAL RISK MANAGEMENT POLICIES (Cont’d)

c) Interest rate risk

The Group is exposed to interest rate risk in respect of its bank deposits, bank overdraft and borrowings which will fluctuate as a result of changes in market interest rates. The Group actively reviews its debt portfolio, taking into accountthe investment holding period and nature of its assets. As the Group has no significant interest-bearing financial assets theGroup's income and operating cash flows are substantially independent of changes in market interest rates. The Group isexpose to interest rate risk in respect of bank overdraft and borrowings which will fluctuate as a result of changes in market interest rates. The Group manages its interest rates exposure by maintaining a mix of fixed and floating rate borrowings. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes.

The maturity date and weighted average effective interest rate of the instruments at the end of the financial year are as follows:-

2011 2010Effective Effective

Maturity interest rates Maturity interest ratesmonths % months %

Fixed deposit 12 2.65 12 2.30Bank overdraft * 8.18 * 7.95

Bank borrowingsBanker acceptances 4 4.37 4 4.50Hire purchase 20-36 5.53 9-47 4.83Onshore foreign currency loan 1 1.93 - -Term loan 4-5 8.52 1-17 8.15Trust receipts 4 7.80 4 7.80

* Subject to the lending bank's periodic review

d) Liquidity and cash flow risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensurethat all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Groupmaintains sufficient levels of cash to meet its working capital requirements.

In addition, the Group’s objective is to maintain a balance of funding and flexibility through the use of credit facilities, shortand long term borrowings and a flexible cost effective borrowing structure. Shortterm flexibility is achieved through creditfacilities and short-term borrowings. This is to ensure that at the minimum, all projected net borrowing needs are coveredby committed facilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any one year is not beyond the Group’s means to repay and refinance.

e) Foreign currency risk

The Group operates internationally and is exposed to various currencies, as indicated in Note 2(s). Foreign exchange exposure in transactional currency other than functional currency of the Group is kept to an acceptable level.

The Group is exposed to transactional currency risk primarily through sales and purchases that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk areprimarily United States Dollar (USD), Singapore Dollar (SGD), Hong Kong Dollar (HKD) and China Renminbi (RMB). Foreignexchange exposure in transactional currencies are kept to an acceptable level. Material foreign currency transaction exposures are hedged with forward foreign exchange contracts.

The net financial assets/(liabilities) of the Group that are not denominated in their functional currencies are as follows:-

Group2011 2010

RM RMNon-functional currencies:USD 1,820,883 1,181,336SGD (12,163) (2,221)HKD 722,422 (1,911,404)RMB 21,614,552 39,438,808

24,145,694 38,706,519


39



40

ANNUAL REPORT 2011

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41


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42

ANNUAL REPORT 2011

6. PROPERTY, PLANT AND EQUIPMENT (Cont’d)NET CARRYING

AMOUNTAt At

2011 2010Group RM RM

At valuationFreehold land 4,940,000 4,940,000Long-term leasehold land 772,254 798,545Buildings 13,169,027 13,136,410

At costAir-conditioners and air curtains 85,961 85,103EDP/IT equipment 128,857 152,287Electrical installation 266,626 289,463Furniture, fittings and renovations 161,092 326,141Machinery and equipment 3,437,371 3,334,971Models 14,966 12,963Office equipment 211,084 237,861Warehouse equipment 3,350 5,675Motor vehicles 224,641 305,634Counter set-up 1,386,718 1,307,166

24,801,947 24,932,219

The freehold land and buildings of the Group were revalued based on opinion of value expressed by an independent firm ofexternal professional valuers, JS Valuers Property Consultant (Johore) Sdn. Bhd., using generally open market value basis on 17th June 2011. The previous revaluation was done in June 2009 by the same Firm.

The long-term leasehold land were revalued based on opinion of value expressed by an independent firm of external professional valuers, JS Valuers Property Consultant (Johore) Sdn. Bhd., using generally open market value basis in May 2006.

The land and buildings of the Group that have been charged to financial institutions for various credit facilities granted to the Group are as follows:-

Group2011 2010

Net carrying amount of assets pledged as security for bank borrowings RM RM

- freehold land 4,940,000 4,940,000- long-term leasehold land 772,254 798,545- buildings 13,169,027 13,136,410

18,881,281 18,874,955

Group2011 2010

RM RMNet carrying amount of revalued land and buildings, had these assets been carried at cost

less accumulated depreciation- freehold land 914,313 914,313- long-term leasehold land 117,729 121,544- buildings 3,950,169 4,066,520

4,982,211 5,102,377

Details of assets under finance lease and hire purchase:-Group

2011 2010RM RM

Motor vehicles- cost 292,419 606,800- net carrying amount at year end 164,152 294,851

Machinery and equipment- cost 1,730,502 1,251,100- net carrying amount at year end 1,401,064 1,094,713


43


6. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Details of assets under term loan financing:-Group

2011 2010RM RM

Machinery and equipment- cost 1,327,452 1,327,452- net carrying amount at year end 663,726 796,471

7. PREPAID LAND LEASESGroup

As at2011 2010 01.07.2009

(restated) (restated)RM RM RM

At valuationAt beginning/end of the year - 930,000 930,000

As previously reported - 930,000 930,000Effect of adopting the amendments to FRS 117 - (930,000) (930,000)

As restated at 30th June 2011/2010 - - -

Accumulated amortisationAt beginning of the year - 105,164 78,873Charge for the financial year - 26,291 26,291

At end of the year - 131,455 105,164

As previously reported - 131,455 105,164Effect of adopting the amendments to FRS 117 - (131,455) (105,164)

As restated at 30th June 2011/2010 - - -

Net carrying amount - - -

The Group has adopted the amendments made to FRS 117 Leases during the financial year. The Group has reassessed anddetermined that the long-term leasehold land of the Group is in substance a finance lease and has reclassified it as property,plant and equipment. This change in accounting policy has been made retrospectively in accordance with the transitional provisions of the amendments.

8. INVESTMENT PROPERTIESGroup

2011 2010RM RM

At fair valueAt beginning of the year 6,283,000 11,133,000Disposed during the year - (4,850,000)Fair value adjustment 138,000 -

At end of the year 6,421,000 6,283,000

The following investment properties are held under lease terms:-Group

2011 2010RM RM

Buildings 2,521,000 2,383,000

The investment properties have been charged to financial institutions for various credit facilities granted to the Group.

Group2011 2010

RM RMFair value of investment properties pledged as security for bank borrowings- freehold land 3,050,000 3,050,000- buildings 3,371,000 3,233,000

6,421,000 6,283,000


44

ANNUAL REPORT 2011

8. INVESTMENT PROPERTIES (Cont’d)

In the previous financial year, a wholly owned subsidiary company, Yong Tai Brothers Trading Sdn. Bhd., entered into severalconditional Sale and Purchase Agreements to dispose of the following. The Sale and Purchase Agreements have been completed in the previous financial year:-

a) A property held under Town Lease No. 107521479 containing an area of 3,000 sq ft more or less together with a two storey shophouse erected thereon and situated at TB 351, Lot 7, Block B, Bandar Sabindo in the District of Tawau in the State of Sabah for a total consideration of RM 1,300,000.

b) 3 properties held under Hakmilik Strata No. Berdaftar Geran 46325/M1/2/30, 46325/M1/2/31 and 46325/M1/2/32 containing areas of 733 sq ft,876 sq ft and 876 sq ft respectively, together with three units of shop units erected thereon and situated at Lot 135, Seksyen 20, No. Petak 30, 31 and 32 respectively dalam Tingkat No. 2, Bangunan no. M1 in the District of Bandar Kuala Lumpur in the State of Wilayah Persekutuan Kuala Lumpur for considerations of RM 1,106,138, RM 1,321,931 and RM 1,321,931 respectively.

9. INVESTMENT IN SUBSIDIARY COMPANIESCompany

2011 2010RM RM

In MalaysiaUnquoted shares, at cost 37,864,414 37,864,414Impairment losses (3,962,604) (3,962,604)

33,901,810 33,901,810

The details of the subsidiary companies are as follows:-

Country ofName incorporation Effective interest Principal activities

2011 2010

a) Yong Tai Brothers Trading Sdn. Bhd. Malaysia 100% 100% Trading and retailing of textile and garment products

b) Golden Vertex Sdn. Bhd. Malaysia 100% 100% Manufacturing of textile and garment products

c) Syarikat Koon Fuat Industries Sdn. Bhd. Malaysia 100% 100% Manufacturing and dyeing of all types of fabric and related products

d) Yuta Realty Sdn. Bhd. Malaysia 100% 100% Property development and investmentholding

e) The Image Outlet Sdn. Bhd. Malaysia 100% 100% Trading and retailing of textile and garment products and related fashion accessories

f) Phoenix Step Sdn. Bhd. Malaysia 100% 100% Dormant

g) Yong Tai Samchem Sdn. Bhd. Malaysia 60% 60% Investment holding

Subsidiary of Yong Tai Samchem Sdn. Bhd.:-

*Yong Tai Samchem (HK) Company Hong Kong 65%** 65%** Investment holding; and trading ofLimited chemical products

Subsidiary of Yong Tai Samchem (HK) Company Limited:-

*Shanghai Sino-Malaysian International China 100%*** 100%*** Trading of chemical productsTrading Co., Ltd.

* Subsidiaries not audited by THL Wong & Co.** Direct interest by Yong Tai Samchem Sdn. Bhd.*** Direct interest by Yong Tai Samchem (HK) Company Limited.


45


10. DEFERRED TAX (ASSET)/LIABILITYGroup

2011 2010RM RM

At beginning of the year 901,933 1,019,775Recognised in statements of comprehensive income (Note 26)- current year relating to temporary differences (20,400) (244,600)- current year relating to unused tax credits and losses 48,100 75,100- current year relating to unutilised capital allowances (9,700) 90,900

18,000 (78,600)Recognised in statements of comprehensive income (Note 26)- under provision in prior year relating to unused tax credits and losses - 1,700- over provision in prior year relating to temporary differences 3,500 (500)

3,500 1,200

Recognised in revaluation reserve- arising from revaluation surplus (Note 28) 116,552 -- transfer to revaluation reserve (Note 28) (48,481) (40,442)

68,071 (40,442)

At end of the year 991,504 901,933

Presented after appropriate offsetting as follows:-Group

2011 2010RM RM

Deferred tax asset (15,700) (37,200)Deferred tax liability 1,007,204 939,133

991,504 901,933

The components of deferred tax (asset)/liability as at the end of the financial year, prior to offsetting are as follows:-

Group2011 2010

RM RM

Tax effect of revaluation of leasehold land and buildings 1,277,204 1,209,133Tax effect of the excess of property, plant and equipment's net carrying amount over its tax

written down value 99,800 665,800Tax effect of unrealised foreign currency exchange loss - (41,100)Tax effect of allowance for doubtful debts (110,700) (110,700)Tax effect of unabsorbed tax losses (265,100) (313,200)Tax effect of unused capital allowances (9,700) (508,000)

Net deferred tax liability 991,504 901,933

As at 30th June 2011, the amount of deferred tax asset that has not been recognised in the statements of financial positions is as follows:-

Group2011 2010

RM RM

Tax effect of temporary differences in respect of the tax capital allowances (761,700) 2,600Tax effect of unrealised foreign currency exchange loss 140,400 -Tax effect of allowance for doubtful debts 720,300 800,000Tax effect of unutilised re-investment allowances 287,800 287,800Tax effect of unutilised capital allowances 1,712,600 1,221,400Tax effect of unabsorbed tax losses 6,694,500 6,794,100

8,793,900 9,105,900

Deferred tax asset has not been recognised in respect of the above items as it is not probable that sufficient taxable profit willbe available against which the items can be utilised.


46

ANNUAL REPORT 2011

11. INVENTORIES

Inventories comprise of the following:-Group

2011 2010RM RM

At costRaw materials 4,531,366 3,632,057Work-in-progress 3,930,830 3,109,130Finished goods 31,202,193 27,285,983

39,664,389 34,027,170

12. TRADE RECEIVABLESGroup

2011 2010RM RM

Trade receivables 45,725,255 41,003,955Less: Allowance for impairment (7,212,899) (6,712,344)

38,512,356 34,291,611

Included in the balance is an aggregated amount of RM 3,025 (2010: RM 17,549) due from companies where certain Directors have interest.

Trade receivables are non-interest bearing and are generally on 30 to 90 days (2010: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair value on initial recognition.

Aging analysis of trade receivables

The aging analysis of the Group's trade receivables is as follows:Group

2011 2010RM RM

Neither past due nor impaired 25,898,059 15,153,592Past due not impaired:-1 to 30 days 151,786 421,57331 to 60 days 36,078 454,23861 to 90 days 240,935 167,31091 to 120 days 99,382 86,718More than 121 days 12,086,116 18,008,180

38,512,356 34,291,611Impaired 7,212,899 6,712,344

45,725,255 41,003,955

Trade receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.More than 67% (2010: 44%) of the Group's trade receivables arise from customers with a few years of experience with the Group and losses have occurred infrequently.

Trade receivables that are past due but not impaired

The Group has trade receivables amounting to RM 12,614,297 (2010: RM 19,138,019) that are past due at the end of the financial year but not impaired.

The trade receivables that are past due but not impaired are unsecured in nature. The management is confident that the amounts are recoverable as these accounts are still active.


47


12. TRADE RECEIVABLES (Cont’d)

Trade receivables that are impaired

The Group's trade receivables that are impaired at the end of the financial year and the movement of the allowance accounts used to record the impairment are as follows:

Group2011 2010

RM RMIndividually impaired:-Trade receivables - nominal amounts 7,212,899 6,712,344Less: Allowance for impairment (7,212,899) (6,712,344)

- -

Group2011 2010

RM RMMovement in allowance accounts:-At 1 July 6,712,344 5,852,051Charge for the year 500,555 860,293

At 30 June 7,212,899 6,712,344

Trade receivables that are individually determined to be impaired at the end of the financial year relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

13. OTHER RECEIVABLESGroup Company

2011 2010 2011 2010RM RM RM RM

Analyse into:-Non-trade receivables 984,230 11,886,242 - -Deposits 1,838,946 1,824,453 1,000 1,000Prepayments 1,638,748 2,037,096 - -

4,461,924 15,747,791 1,000 1,000

Less: Allowance for specific doubtful debts - (1,372,731) - -

4,461,924 14,375,060 1,000 1,000

14. AMOUNT DUE FROM/(TO) SUBSIDIARY COMPANIES

Company

Amount due from/(to) subsidiary companies arose mainly from inter-company advances which bear no interest, unsecured, repayable on demand and are to be settled in cash.

15. FIXED DEPOSITSGroup

2011 2010RM RM

Fixed deposits with licensed commercial banks 693,216 474,888

The fixed deposits of RM 693,216 (2010: RM 474,888) of the subsidiary companies are pledged to licensed commercial banks for credit facilities granted to the subsidiary companies.


48

ANNUAL REPORT 2011

16. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statements of cash flows comprise the following amounts:-

Group Company2011 2010 2011 2010

RM RM RM RM

Cash and bank balances 24,346,529 8,729,422 120,160 6,319Bank overdraft (12,902,404) (12,936,548) - -

11,444,125 (4,207,126) 120,160 6,319

The bank overdraft is secured by way of:-

a) first party fixed charge over the Group's freehold land, long-term leasehold land, buildings and investment properties;b) fixed charge over assets of a subsidiary company;c) joint and several guarantee by certain Directors of the Group;d) legal charge over freehold land and buildings of certain Directors of the Group; ande) corporate guarantee by the Company.

The interest is charged at 1.5% to 2.0% above the bank's base lending rate. The weighted average effective interest rates are disclosed in Note 5 of the Notes to the Financial Statements.

17. TRADE PAYABLES

Included in the balance of the Group is an aggregated amount of RM 129,317 (2010: RM 172,139) due to companies where certain Directors have interest.

18. OTHER PAYABLESGroup Company

2011 2010 2011 2010RM RM RM RM

Analyse into:-Non-trade payables 1,282,691 5,060,119 19,910 15,920Accruals 1,654,004 1,102,435 72,900 72,900Deposit received 89,080 103,010 - -

3,025,775 6,265,564 92,810 88,820

Included in the balance of the Group is an amount of RM 222,333 (2010: RM 175,933) due to a company where certain Directors have interest.

19. AMOUNT DUE TO DIRECTORS

Group and Company

The amount due to Directors bear no interest, unsecured and no scheme of repayment has been arranged.


49


20. BORROWINGSGroup

2011 2010RM RM

CurrentSecuredBankers acceptances 11,747,000 11,464,000Term loans 688,470 1,661,397Hire purchase creditors 460,374 314,619Letters of credit and trust receipts 3,710,233 1,953,784Onshore foreign currency loan 4,543,470 -

21,149,547 15,393,800Non-current

SecuredTerm loans - 579,976Hire purchase creditors 784,873 753,893

784,873 1,333,869

Total borrowings 21,934,420 16,727,669

The short term borrowings (bankers acceptances, onshore foreign currency loan, letters of credit and trust receipts) amounting to RM 20,000,703 (2010: RM 13,417,784) are secured by way of:-

a) first party fixed charge over the Group's freehold land, long-term leasehold land, buildings and investment properties;b) fixed charge over assets of a subsidiary company;c) lien on fixed deposits of a subsidiary company as described in Note 15 of the Notes to the Financial Statements;d) joint and several guarantee by certain Directors of the Group;e) legal charges over freehold land and buildings belonging to certain Directors of the Group; andf) corporate guarantee by the Company.

The bankers acceptance interest is charged at a range of 1.0% to 1.5% above the Bank Negara Malaysia’s funding rate perannum and 5.12% per annum of the face value. The trust receipt is charged at 1.5% above the bank's base lending rate per annum.

The term loans amounting to RM 688,470 (2010: RM 2,241,373) is secured by way of:-

a) term loans agreement and specific debenture on machinery and equipment financed;b) first party second legal charge over the investment properties of the Group; andc) corporate guarantee by the Company.

The term loans interest is charged at a range of 1.25% to 1.75% above the bank’s base lending rate per annum.

Group2011 2010

Repayment terms RM RMBank borrowings and loans(excluding hire purchase creditors)- not later than 1 year 20,689,173 15,079,181- later than 1 year and not later than 2 years - 579,976

20,689,173 15,659,157Finance lease and hire purchase liabilitiesMinimum lease/instalment payments- not later than 1 year 519,427 357,622- later than 1 year and not later than 5 years 827,857 811,064

1,347,284 1,168,686Future finance charges on finance lease/hire purchase creditors (102,037) (100,174)

Present value of finance lease/hire purchase liabilities 1,245,247 1,068,512

Present value of finance lease/hire purchase creditors- not later than 1 year 460,374 314,619- later than 1 year and not later than 5 years 784,873 753,893

1,245,247 1,068,512


50

ANNUAL REPORT 2011

21. SHARE CAPITALGroup & Company

2011 2010RM RM

Authorised:-Ordinary shares of RM1 each 50,000,000 50,000,000

Issued and fully paid:-Ordinary shares of RM1 each 40,115,000 40,115,000

22. RESERVESGroup Company

2011 2010 2011 2010RM RM RM RM

Non-distributableShare premiumAt beginning/end of the year 1,626,071 1,626,071 1,626,071 1,626,071

Revaluation reserve (Note 28) 5,739,559 5,341,423 - -

Foreign exchange reserveExchange difference on translation ofoversea subsidiary companies (268,087) 7,793 - -

Surplus reserve (Note 29) 252,743 123,397 - -

7,350,286 7,098,684 1,626,071 1,626,071

DistributableAccumulated losses (8,891,117) (8,432,812) (2,317,131) (2,173,542)

(1,540,831) (1,334,128) (691,060) (547,471)

23. REVENUE RECOGNITIONGroup Company

2011 2010 2011 2010RM RM RM RM

Sales of textile and garment products 59,195,414 53,833,099 - -Manufacturing and dyeing of fabric and related products 10,550,664 9,219,003 - -Sales of chemical products 139,535,431 109,255,851 - -Dividend income - 262,311 - 262,311Investment property income 120,000 120,000 - -

209,401,509 172,690,264 - 262,311Less: Intra-group transactions (5,366,198) (4,328,320) - -

204,035,311 168,361,944 - 262,311

24. FINANCE COSTS

Finance costs have been determined after charging the following:-Group

2011 2010RM RM

Bank guarantee interest 325,626 98,788Bank overdraft interest 975,402 1,137,925Hire purchase interest 68,139 49,826Term loan interest 120,151 261,863Trust receipt and banker acceptance interest 631,140 512,681

2,120,458 2,061,083


51


25. PROFIT/(LOSS) BEFORE TAXATION

Profit/(loss) before taxation for the financial year is arrived at and has been determined after charging/(crediting) amongst other items the following:-

Group Company2011 2010 2011 2010

(restated)RM RM RM RM

Allowance for specific doubtful debts 874,545 2,338,619 - -Audit fees 80,615 76,437 8,000 8,000Bad debts written off 1,372,731 244,020 - -Depreciation 1,649,936 1,900,709 - -Directors' remuneration (Note 32)- fees 64,000 64,000 64,000 64,000- other emoluments 1,588,103 1,547,247 - -Fair value adjustment (Note 8) (138,000) - - -Impairment loss on investment in subsidiary companies - - - 3,962,604Inventories written off 107,848 - - -Inventories written down - 95,323 - -Land rental 1,600 4,800 - -Lease rental 241,460 343,249 - -Management fees 151,542 - - -Property, plant and equipment written off 463,430 32,844 - -Rental of booths 94,956 63,696 - -Rental of equipment 22,193 29,637 - -Rental of forklift 22,372 - - -Rental of staff accommodation 148,116 130,237 - -Rental of premises 2,925,840 3,132,911 - -Withholding tax 406,264 - - -Allowance for specific doubtful debts no longer required (1,746,721) (349,615) - -Dividend income - - - (262,311)Foreign currency exchange loss/ (gain) - unrealised 351,758 164,325 - -Foreign currency exchange gain- realised (254,688) (78,418) - -Gain on disposal of investment properties - (200,000) - -(Gain)/loss on disposal of property, plant and equipment (92,883) (35,671) - -Interest income (90,051) (89,177) - -Rental income (324,000) (472,000) - -Staff training grant1 (10,318) (26,388) - -

1 Staff training grant of RM 10,318 (2010: RM 26,388) was received in relation to staff training and is recognised as income in the period in which the training expenditure is being incurred by the Company. There are no unfulfilled conditions or contingencies attaching to this grant.

The estimated monetary value of benefits provided to the Directors of the Group during the financial year by way of usage of the Group’s assets amounted to RM 30,875 (2010: RM 32,200).

26. TAXATIONGroup Company

2011 2010 2011 2010RM RM RM RM

Current year tax expenses- Malaysian income tax 31,600 31,500 - -- Foreign tax 192,869 147,070 - -Deferred taxation (Note 10) 18,000 (78,600) - -

242,469 99,970 - -Under provision in prior years:Tax expenses- Malaysian income tax 171 1,567 - 1,504Deferred taxation (Note 10) 3,500 1,200 - -

3,671 2,767 - 1,504

246,140 102,737 - 1,504

The current year tax expense of the Company is in respect of dividend income from investments whereas the Group's current year tax is in respect of the normal business income of the subsidiary companies.


52

ANNUAL REPORT 2011

26. TAXATION (Cont’d)

Income tax of the Malaysian subsidiary companies is calculated at the rate of 25% on the estimated taxable profit. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

There is no current year tax expense for Hong Kong operations as its income was derived outside of Hong Kong.

China enterprise income tax has been provided in the financial statements at 24% (2010: 22%) on the profit for the year.

A reconciliation of average effective tax rate applicable to profit/(loss) before taxation to effective statutory tax rate is as follows:-

Group Company2011 2010 2011 2010

RM RM RM RM

Profit/(loss) before taxation 1,119,819 (2,321,102) (143,589) (3,846,871)

% % % %

Average effective tax rate for the year 22.0 ( 4.4) - 0.0Effect of different tax rate in foreign

subsidiary companies 0.5 (4.1) - -Tax effect of expenses not deductible for tax purpose (56.3) 35.6 25.0 26.7Tax effect of income not subject to tax 31.3 (24.1) - (1.7)Deferred tax asset not recognised 1.3 21.9 - -Utilisation of deferred tax asset not recognised in prior year 26.5 - - -Under provision in prior year (0.3) 0.1 - -

Effective statutory tax rate for the year 25.0 25.0 25.0 25.0

27. EARNINGS PER SHARE

The basic earnings per share is based on the profit attributable to equity holders of the Company divided by the weighted average number of ordinary shares in issue during the financial year.

Group2011 2010

RM RM

Loss attributable to equity holders of the Company (328,959) (4,293,093)

Ordinary shares of RM 1.00 each 40,115,000 40,115,000

Basic loss per share (sen) (0.8) (10.7)

28. REVALUATION RESERVEGroup

2011 2010RM RM

Revaluation surplus 6,550,556 6,550,556Add: Revaluation surplus arising during the year- freehold land and factory buildings (Note 6) 466,207 -

7,016,763 6,550,556Less:Deferred tax arising on revaluation surplus 1,209,133 1,249,575Addition due to additional revaluation surplus (Note 10) 116,552 -Transfer from deferred tax (Note 10) (48,481) (40,442)

1,277,204 1,209,133

5,739,559 5,341,423

Revaluation reserves arose from revaluation surplus on freehold land and factory buildings which were revalued based on opinion of value expressed by an independent firm of external professional valuers, JS Valuers Property Consultant (Johore) Sdn.Bhd., using generally open market value basis on 17th June 2011. The previous revaluation was done in June 2009 by the same firm.


53


29. SURPLUS RESERVE

Pursuant to the relevant laws and regulations for foreign investment enterprises established in the People's Republic of Chinaexcluding Hong Kong, a certain portion of the profit of the sub-subsidiary company, Shanghai Sino-Malaysian InternationalTrading Co. Ltd., is required to be transferred to surplus reserve which is non distributable. The transfer to this reserve is made out of the sub-subsidiary company's net profit.

30. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

During the financial year, the Group acquired property, plant and equipment as follows:-Group

2011 2010RM RM

Cash payment 973,828 1,609,007Hire purchase financing 543,400 175,000

1,517,228 1,784,007

31. HOLDING COMPANY

The holding company is Liew Fat Lin Holding Sdn. Bhd., a private limited company incorporated in Malaysia.

32. DIRECTORS' REMUNERATIONGroup Company

2011 2010 2011 2010RM RM RM RM

Directors of the Company

Executive:-Salaries and other emoluments (Notes 25 and 36) 1,017,494 995,242 - -Benefit-in-kind 25,575 26,900 - -

1,043,069 1,022,142 - -Non-executive (Note 25):-- fees 64,000 64,000 64,000 64,000

Other Directors

Executive:-Salaries and other emoluments (Notes 25 and 36) 570,609 552,005 - -Benefit-in-kind 5,300 5,300 - -

575,909 557,305 - -

Total 1,682,978 1,643,447 64,000 64,000

Analysis excluding benefit-in-kind

Total executive Directors' remuneration excluding benefitinkind (Notes 25 and 36) 1,588,103 1,547,247 - -

Total non-executive Directors' remuneration (Note 25)- fees 64,000 64,000 64,000 -

1,652,103 1,611,247 64,000 -

The number of Directors of the Group whose total remuneration during the financial year fall within the following bands are as follows:-

Number of Directors2011 2010

Executive DirectorsBelow RM 50,000 - -RM 50,001 - RM 100,000 2 2RM 100,001 - RM 150,000 1 1RM 150,001 - RM 200,000 - -RM 200,001 - RM 250,000 2 2RM 250,001 - RM 300,000 3 3


54

ANNUAL REPORT 2011

32. DIRECTORS' REMUNERATION (CONT’D)Number of Directors2011 2010

Non-executive DirectorsBelow RM 50,000 3 3

Executive Directors of the Company do not receive any remuneration from the Company during the financial year.

33. SIGNIFICANT RELATED PARTY TRANSACTIONSGroup Company

2011 2010 2011 2010RM RM RM RM

Gross dividend receivable from subsidiary companies - - - 262,311Sales to companies where certain Directors have interest 2,202 4,154 - -Purchases from companies where certain Directors have interest 110,706 36,845 - -Rental paid to companies where certain Directors have interest 62,400 60,600 - -

The Directors of the Group/Company are of the opinion that related party transactions are in the normal course of business andhave been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.

34. SEGMENT INFORMATION

a) Business Segments

The Group is basically engaged in the following business segments:-

i) Retailing and trading of textile and garment products

ii) Manufacturing of garments

iii) Manufacturing and dyeing of fabric and related products

iv) Property development and investment holding

v) Trading of chemical products

Inter-segment pricing is determined based on negotiated prices in the normal course of business. The Directors of theCompany are of the opinion that all inter-segment transactions have been entered into in the normal course of business andhave been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.


55


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56

ANNUAL REPORT 2011

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57


34. SEGMENT INFORMATION (Cont’d)

b) Geographical segments

The Group business segments are mainly managed in three geographical areas. Majority of the business activities are carried out in Malaysia, its home country and in China. The Group also export finished goods of manufactured garments to Europe. The garments and textile manufacturing activities are conducted in Malaysia, whereas the trading of chemical products are conducted in China.

Total revenue fromexternal customers Segment assets Capital expenditure2011 2010 2011 2010 2011 2010

RM RM RM RM RM RM

Malaysia 44,879,984 46,749,451 90,047,962 90,228,915 1,517,228 1,784,007Singapore 158,943 - 585,193 - - -China/Hong Kong 139,535,431 109,255,851 45,319,021 31,573,749 - -Europe 19,460,953 12,356,642 2,949,185 1,310,706 - -

Consolidated 204,035,311 168,361,944 138,901,361 123,113,370 1,517,228 1,784,007

35. CONTINGENT LIABILITIESCompany

2011 2010RM RM

CompanyCorporate guarantee given for credit facilities granted to subsidiary companies:-- Yong Tai Brothers Trading Sdn. Bhd. 13,833,000 12,815,000- Golden Vertex Sdn. Bhd. 6,950,000 8,300,000- Syarikat Koon Fuat Industries Sdn. Bhd. 11,576,000 11,576,000- Shanghai Sino-Malaysian International Trading Co. Ltd. 16,000,000 11,700,000- The Image Outlet Sdn. Bhd. 2,500,000 2,500,000

50,859,000 46,891,000

36. EMPLOYEES INFORMATIONGroup

2011 2010RM RM

Directors' other emoluments (Note 25 and 32) 1,588,103 1,547,247EPF 862,433 789,187Salaries, wages, bonus and allowance 13,376,096 11,496,528SOCSO 129,184 118,798Other personnel cost 351,137 305,994

16,306,953 14,257,754

The total number of employees of the Group (including the Directors) as at the end of the financial year were 769 (2010: 778).

There were no employees (other than the Directors) for the Company as at the end of the financial year.

37. BANK GUARANTEES AND BANKING FACILITIES

Standby credit facilities of USD 1,600,000 (2009: USD Nil) have been granted to the sub-subsidiary i.e. Shanghai Sino-Malaysian International Trading Co. Ltd. by a Malaysian local licensed commercial bank.

The above bank guarantees and banking facilities are supported by a corporate guarantee from the Company.


58

ANNUAL REPORT 2011

38. OPERATING LEASE COMMITMENTS

As at the end of the financial year, the Group has future aggregate minimum lease payments under non-cancellable operating leases as follows:-

Group2011 2010

RM RM

Within one year 99,966 43,608Later than 1 year, not more than 5 years 33,322 -

133,288 43,608

39. FINANCIAL INSTRUMENTS

Fair values of financial instruments

The carrying amounts and estimated fair values of the financial instruments of the Group and Company at the end of the financial year are as follows:-

Group CompanyCarrying Carrying

2011 amount Fair value amount Fair valueRM RM RM RM

Financial assetsTrade and other receivables 41,335,532 41,335,532 1,000 1,000Amount due from subsidiary company - - 5,514,983 5,514,983Deposits, cash and bank balances 25,039,745 25,039,745 120,160 120,160

Financial liabilitiesTrade and other payables 36,003,029 36,003,029 92,810 92,810Amount due to Directors 11,913,026 11,913,026 - -Amount due to subsidiary company - - 69,463 69,463Bank overdraft 12,902,404 12,902,404 - -Borrowings 21,934,420 21,934,420 - -Corporate guarantee - - 50,859,000 50,859,000

2010

Financial assetsTrade and other receivables 46,629,575 46,629,575 1,000 1,000Amount due from subsidiary company - - 5,803,416 5,803,416Deposits, cash and bank balances 9,204,310 9,204,310 6,319 6,319

Financial liabilitiesTrade and other payables 29,432,442 29,432,442 88,820 88,820Amount due to Directors 15,464,179 15,464,179 - -Amount due to subsidiary company - - 104,456 104,456Bank overdraft 12,936,548 12,936,548 - -Borrowings 16,727,669 16,727,669 - -Corporate guarantee - - 46,891,000 46,891,000

There is no fair value for financial instruments not recognised in the statement of financial position that is required to be disclosed.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:-

a) Deposits, cash and bank balances

The carrying amount of deposits, cash and bank balances approximates fair value due to the relatively short term maturity of these instruments.

b) Trade and other receivables and payables

The historical cost carrying amount of trade receivables and payables subject to normal trade credit terms approximates fair value.

The carrying amounts of other receivables and payables are reasonable estimates of fair value because of their short maturity.


59


39. FINANCIAL INSTRUMENTS (Cont’d)

c) Borrowings and bank overdrafts

The carrying amount of short term borrowings approximates fair value due to the short period to maturity of those instruments. The fair value of borrowings is estimated by discounting the expected future cash flows using the current interest rates for liabilities with the similar risk profiles.

d) Hire purchase creditors

The carrying amount of short term hire purchase creditors approximated fair value because of the short period to maturity of those instruments. The fair value of long term hire purchase creditors is estimated based on the current rates available for hire purchase creditors with the similar maturity profile.

40. SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED

The breakdown of the retained profits of the Group and of the Company as at 30th June 2011 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses inthe Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company2011 2010

RM RMTotal (accumulated losses)/retained profits of the Company and its subsidiaries- Realised (9,422,326) (2,317,131)- Unrealised 531,209 -

Accumulated losses as per financial statements (8,891,117) (2,317,131)

LIST OF PROPERTIES AS AT 30 JUNE 2011

60

ANNUAL REPORT 2011

LOCATION DESCRIPTION LAND AREA / TENURE AGE OF NET CARRYING DATE OF(BUILD UP BUILDING AMOUNT VALUATIONAREA) (Approximate) (RM'000)

No. 44, 45, 46 & 47, 4 units of 818.25 Sq.m. / Freehold 33 years 3,900# 17 June 2011Jalan Abu Bakar 4-storey (3103.85 Sq.m.) 83000 Batu Pahat shophouseJohor

LG14 & LG15 2 units of N/A / Freehold 29 years 6,760 17 June 2011Holiday Plaza commercial (192.1 Sq.m.)Jalan Dato' Sulaiman shopping lot80000 Johor Bahru

No. 76, Jalan Rugayah A single storey 695.54 Sq.m. / Freehold 22 years 2,137 30 June 200983000 Batu Pahat shop building (586.57 Sq.m.)Johor

A34, A35, A48B & A50 4 units of N/A / Leasehold 21 years 2,521# 24 January 2011Centre Point Sabah commercial (183.3 Sq.m.) - 99 years88000 Kota Kinabalu shopping lot expiring onSabah year 2082

No.3, Jalan Kapal 3-storey factory 4805.6 Sq.m. / Leasehold 21 years 1,951 30 June 2009Tongkang Pecah Ind. Estate building cum (4566.57 Sq.m.) - 60 years83010 Tongkang Pecah office expiring onBatu Pahat, Johor 21.10.2041

No.2, Jalan Kapal Single storey 2223.4 Sq.m. / Leasehold 24 years 885 30 June 2009Tongkang Pecah Ind. Estate factory building (1694.5 Sq.m.) - 60 years83010 Batu Pahat cum office expiring onJohor 22.10.2039

No. 18, Jalan Kilang 1 unit of 4-storey 3 arces / Freehold 14-20 years 7,184 30 June 2009Tongkang Pecah Ind Estate factory building (10,454.22 Sq.m.)83010 Batu Pahat cum office &Johor 4 units of

single storeyfactory building

# Investment properties stated at fair value.

Authorised Share Capital : RM50,000,000.00Issued & Fully Paid-up Share Capital : RM40,115,000.00Class of Shares : Ordinary Shares of RM1.00 eachNo. of Shareholders : 1,707Voting Right : One vote for each Ordinary Share

ANALYSIS BY SIZE OF SHAREHOLDINGS

Size of Holdings No. of Holders No. of Shares Percentage

Less than 100 6 99 0.00100 - 1,000 538 521,044 1.301,001 - 10,000 913 3,968,025 9.8910,001 - 100,000 220 6,326,432 15.77100,001 to less than 5% of issued shares 29 9,207,671 22.955% and above of issued shares 1 20,091,729 50.09

Total 1,707 40,115,000 100.00

LIST OF THIRTY LARGEST SHAREHOLDERS

No. Name Shareholdings %

1. Liew Fat Lin Holding Sdn. Bhd. 20,091,729 50.092. Ang Huat Keat 1,007,600 2.513. Teo Khay Sin 961,600 2.404. Lim Soong Leng 844,000 2.105. Tan Kim Heng 791,000 1.976. Wong Sim Peng 640,900 1.607. Ong Tek Chan 442,700 1.108. Liao Sey Chang 386,700 0.969. Siow Kim Kue 325,700 0.8110. Liew Fah Chin 304,007 0.7611. Yen Mee Foong 287,000 0.7212. Goh Thiam Hwa 283,000 0.7113. Liew Huat Kwang 230,520 0.5714. MERCSEC Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Siow Wong Yen @ Siow Kwang Hwa 214,300 0.5315. Liow Kwee Woon 211,400 0.5316. AMSEC Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Lim Soong Leng 207,900 0.5217. Hor Yim Peng 202,000 0.5018. Mayban Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Chang Poh Fook 185,700 0.4619. Chan Yin Chee 179,700 0.4520. Ng Weng Woy @ Ng Wing Wai 176,000 0.4421. Lee Kim Heng 170,800 0.4322. Lee Keh Hong @ Lee Ah Meng 159,000 0.4023. Tan Seng Chee 147,500 0.3724. Datuk Amil @ Amir Bin Junus 140,000 0.3525. Chan Teck Thiam 137,500 0.3426. Wong Fat Seng @ Liew Fat Seng, Deceased 118,744 0.3027. Teo Chin Leng 118,000 0.2928. Ong Kek Siong 113,400 0.2829. Liao Sey Pyng 111,000 0.2830. Lim Kim Chan 110,000 0.27

ANALYSIS OF SHAREHOLDING AS AT 8 NOVEMBER 2011

61


ANALYSIS OF SHAREHOLDING AS AT 8 NOVEMBER 2011

62

ANNUAL REPORT 2011

SUBSTANTIAL SHAREHOLDERS

Name of Shareholders Direct Interest Indirect Interest

No. % No. %

1. Liew Fat Lin Holding Sdn. Bhd. 20,091,729 50.09 - -

2. Wong Liew Lin @ Liew Fat Lin 50,522 0.13 20,091,729* 50.09

3. Wong Mee Yow Cheen @ Liew Mee Yow Cheen 74,744 0.19 20,091,729*

14,000+ 50.12

4. Wong Fat Seng @ Liew Fat Seng, Deceased 118,744 0.30 20,091,729*

11,000= 50.11

5. Liew Fah Chin 307,007 0.77 20,091,729*

24,000^ 50.15

6. Liew Huat Kwang 230,520 0.57 20,091,729*

57,000 # 50.23

* Deemed interested by virtue of their shareholdings in Liew Fat Lin Holding Sdn. Bhd.+ Deemed interested by virtue of his spouse, Tan Yoke Eng's direct shareholding= Deemed interested by virtue of his spouse, Yer Siew Wan's direct shareholding^ Deemed interested by virtue of his spouse, Tan Sew Kim's direct shareholding# Deemed interested by virtue of his spouse, Pang Saw Ken's direct shareholding

DIRECTORS’ SHAREHOLDINGS

Name Direct Interest Indirect Interest

No. % No. %

1. Datuk Hj. Amil @ Amir Bin Junus 140,000 0.35 - -

2. Wong Liew Lin @ Liew Fat Lin 50,522 0.13 20,091,729* 50.09

3. Wong Mee Yow Cheen @ Liew Mee Yow Cheen 74,744 0.19 20,091,729*

14,000+ 50.12

4. Tai Shzee Yuan 28,001 0.07 - -

5. Liew Huat Kwang 230,520 0.57 20,091,729*

57,000 # 50.23

6. Tan Kau Ngee @ Tan Seong Tin 5,000 0.014 - -

7. Loi Kim Fah - - - -

* Deemed interested by virtue of their shareholdings in Liew Fat Lin Holding Sdn. Bhd.+ Deemed interested by virtue of his spouse, Tan Yoke Eng's direct shareholding# Deemed interested by virtue of his spouse, Pang Saw Ken's direct shareholding

This page has been intentionally left blank.

ANNUAL REPORT 2011

PROXY FORM

I/We_____________________________________________________________________________________________________

of_______________________________________________________________________________________________________

being a member/members of YONG TAI BERHAD hereby appoint *the Chairman of the Meeting or

_______________________________________________________________________________________________________ of

_________________________________________________________________________________________ or failing him/her,

_______________________________________________________________________________________________________ of

*Delete the words “the Chairman of the Meeting” if you wish to appoint another person to be your proxy.

as my/our proxy/proxies to vote for me/us on my/our behalf at the Seventeenth Annual General Meeting of the Company

to be held at 2nd Floor, 3, Jalan Kapal, Kawasan Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim

on Wednesday, 21 December 2011 at 2.00 p.m. or at any adjournment thereof in the manner indicated below:

Resolutions For Against

1 Approval of payment of Directors' Fees

2 Re-election of Loh Kim Fah as Director

3 Re-election of Datuk Haji Amil @ Amir Junus as Director

4 Re-appointment of Hasnan THL Wong & Partners (f.k.a. T H Wong & Co)

as Auditors

Please indicate with an (X) in the spaces provided how you wish your vote to be cast. In the absence of specific

directions, your proxy may vote or abstain from voting at his/her discretion.

Signed this.............. day of ........................….2011

...........................................................................

Signature(s)

Notes:1. A member of the Company entitled to attend and vote at the Meeting may appoint more than one (1) proxy to attend and

vote at the Meeting and the provision of Section 149(1)(c) of the Companies Act, 1965 shall not apply to the Company. 2. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965

shall not apply to the Company.3. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he/she specifies the proportion

of his/her holdings to be represented by each proxy.4. The Proxy Form 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 under the hand of an officer or attorney duly authorised.5. The Proxy Form and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of

that power or authority must be deposited at the Registered Office of the Company at Ground Floor, 8, Lorong Universiti B, Section 16, 46350 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or any adjournment thereof.

6. Any alteration in this form must be initialed.

No. of shares held

YONG TAI BERHAD(Company No. 311186-T)(Incorporated in Malaysia)

THE SECRETARY

YONG TAI BERHAD(311186-T)

Ground Floor, 8, Lorong Universiti BSection 16, 46350 Petaling Jaya

Selangor Darul Ehsan

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Documents

YONGTAI-AnnualReport2011 (968KB)