C O N T E N T S. Corporate Information 1. Corporate Structure 2. Notice Of Annual General Meeting 3

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2 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 4 Profile Of The Directors 5 Chairman s Statement 8 Statement On Corporate Governance 9 Audit Committee Report 13 Statement On Risk Management And Internal Control 16 Statement On Directors Responsibility 18 Additional Compliance Requirements 18 Financial Statements Directors Report 19 Statement By Directors 22 Statutory Declaration 22 Independent Auditors Report 23 Consolidated Statement Of Financial Position 25 Statement Of Financial Position 26 Consolidated Statement Of Comprehensive Income 27 Statement Of Comprehensive Income 28 Statements Of Changes In Equity 29 Statements Of Cash Flows 30 Notes To The Financial Statements 32 List Of Properties 67 Appendix 1 68 Analysis Of Shareholdings 69 Proxy Form Attached

3 CORPORATE INFOATION BOARD OF DIRECTORS AUDIT COMMITTEE NOMINATION COMMITTEE REMUNERATION COMMITTEE EXECUTIVE COMMITTEE Datuk Hj. Amir Bin Junus (Independent Non-Executive Chairman) Wong Liew Liew Fat Lin (Managing Director) Wong Mee Yow Liew Mee Yow Cheen (Executive Director) Tai Shzee Yuan (Executive Director) Liew Huat Kwang (Executive Director) Loi Kim Fah (Independent Non-Executive Director) See Thiam Chya (Independent Non-Executive Director) Chok Kim Sin (Executive Director) Ir. Dr. Ting Lai Choon (Executive Director) Loi Kim Fah (Chairman) Datuk Hj. Amir Bin Junus See Thiam Chya Loi Kim Fah (Chairman) Datuk Hj. Amir Bin Junus Datuk Hj. Amir Bin Junus (Chairman) Loi Kim Fah Wong Liew Liew Fat Lin (Chairman) Wong Mee Yow Liew Mee Yow Cheen Tai Shzee Yuan SECRETARIES Jauhari Bin Hassan (LS 03681) Lim Suat Ben (f) (MAICSA ) REGISTERED OFFICE CORPORATE OFFICE REGISTRAR Ground Floor, 8, Lorong Universiti B Section 16, Petaling Jaya Selangor Darul Ehsan Tel No: Fax No: , Jalan Kapal Kawasan Perindustrian Tongkang Pecah Batu Pahat Johor Darul Takzim Bina Management (M) Sdn Bhd Lot 10, The Highway Centre Jalan 51/205, Petaling Jaya Selangor Darul Ehsan Tel No: Fax No: AUDITORS Hasnan THL Wong & Partners (AF No: 0942) Chartered Accountants SOLICITORS PRINCIPAL BANKERS STOCK EXCHANGE T K Lim & Co. OCBC Bank (Malaysia) Berhad Malayan Banking Berhad RHB Bank Berhad United Overseas Bank (Malaysia) Bhd Hong Leong Bank Berhad Main Market of the Bursa Malaysia Securities Berhad 1 YONG TAI BERHAD ( T)

4 CORPORATE STRUCTURE 2 ANNUAL REPORT 2013

5 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of the Company will be held at 2nd Floor, 3, Jalan Kapal, Kawasan Perindustrian Tongkang Pecah, Batu Pahat, Johor Darul Takzim on Tuesday, 17 December 2013 at 2.00 p.m. to transact the following: AGENDA As Ordinary Business 1. To receive the Directors' Report and Audited Financial Statements for the year ended 30 June 2013 together with the Auditors' Report thereon. 2. To approve the payment of Directors' Fees amounting to 64, in respect of the year ended 30 June Resolution 1 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: i. Tai Shzee Yuan Resolution 2 ii. Liew Huat Kwang Resolution 3 4. To re-elect the following Directors who shall retire by rotation in accordance with Article 86 of the Company's Articles of Association and being eligible, offer themselves for re-election:- i. Chok Kim Sin Resolution 4 ii Ir. Dr. Ting Lai Choon Resolution 5 5. To re-appoint the following Director who shall retire in accordance with Section 129 of the Companies Act, 1965 by virtue of being over seventy years of age:- i. Datuk Hj. Amir Bin Junus 6. To accept the retirement of Messrs Hasnan THL Wong & Partners as Auditors of the Company and in place thereof, to appoint Messrs Ecovis AHL as Auditors of the Company for the financial year ending 30 June 2014 until the conclusion of the next Annual General Meeting and to authorise the Board of Directors to fix their remuneration. Resolution 6 Resolution 7 Notice of Nomination pursuant to Section 172 (11) of the Companies Act, 1965, as set out in Appendix I on page 68 of the Annual Report 2013 has been received by the Company for the nomination of Messrs Ecovis AHL for the appointment as Auditors in place of the retiring Auditors, Messrs Hasnan THL Wong & Partners. 7. 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 ) Company Secretaries Selangor Darul Ehsan 25 November 2013 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, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or any adjournment thereof. 3 YONG TAI BERHAD ( T)

6 STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING 1. The Directors who are standing for re-election at the Nineteenth Annual General Meeting in accordance with Articles 81 and 86 of the Company's Articles of Association are as follows:- i. Mr. Tai Shzee Yuan retires pursuant to Article 81 ii. Mr. Liew Huat Kwang retires pursuant to Article 81 iii. Mr. Chok Kim Sin retires pursuant to Article 86 iv. Ir. Dr. Ting Lai Choon retires pursuant to Article The Director who is standing for re-appointment at the Nineteenth Annual General Meeting in accordance with Section 129 of the Companies Act, 1965 is as follow:- i. Datuk Hj. Amir Bin Junus 3. The details of the Directors standing for re-election and re-appointment are set out in Profile of The Directors on pages 5 to 7 of the Annual Report. 4 ANNUAL REPORT 2013

7 PROFILE OF THE DIRECTORS Datuk Hj. Amir Bin Junus, age 70, a Malaysian, was appointed to the Board as an Independent Non-Executive Chairman on 10 July Datuk Amir holds a Diploma Sains Kepolisian from Universiti Kebangsaan Malaysia and Certificate of 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 the rank of Deputy Commissioner of Police before retiring in November In the force for 29 years, Datuk Amir had served in various 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 Diraja Malaysia Berhad (KPD). As a member of KPD, Datuk Amir represented KPD's interest in number of its investment interests in a few public listed companies. Datuk Amir was a director of Prime Utilities Berhad from 1999 to 2004 and was a director of TSM Global Berhad [formerly known as Juan Kuang (M) Industrial Berhad] until October 2008, both companies are listed on Bursa 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. Besides representing the interests of KPD, Datuk Amir is also a Council Member of the Maktab Koperasi Malaysia under the purview of the Ministry of Domestic Trade, Cooperative and Consumerism and a director of Eshia & Associates Sdn. Bhd. Datuk Amir also 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 family relationship with any Director and/or major shareholder of the Company. 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. Wong Liew Liew Fat Lin, aged 67, a Malaysian, was appointed to the Board on 2 October 1997 and as the Managing Director on 8 November 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 and has been in charge of the overall operation since its inception guiding it to its present level of success. Currently, Mr. Liew also holds other directorships in the Yong Tai 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 Liew Mee Yow Cheen and Mr. Liew Huat Kwang. 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. Wong Mee Yow Liew Mee Yow Cheen, aged 60, a Malaysian, was appointed to the Board on 2 October 1997 and as the Executive Director on 8 November Innovative and enterprising, he is responsible for the production, research and market development of Yong Tai and has been actively involved in the establishment of its manufacturing operations. Currently, Mr. Liew also holds other directorships in the Yong Tai 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 Liew Fat Lin and Mr. Liew Huat Kwang. 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 60, a Malaysian, is an Executive Director and was appointed as First Director on 12 August He started his career in the as a General Manager of Yong Tai Brothers Trading Sdn. Bhd., a subsidiary of Yong Tai Berhad in 1 January He is responsible for the overall financial planning and management of Yong Tai. Mr. Tai is a member of the Executive Committee. He also holds other directorships in the Yong Tai of Companies. Mr. Tai does not have any family relationship with any Director and/or major shareholder of the Company. 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. 5 YONG TAI BERHAD ( T)

8 PROFILE OF THE DIRECTORS Liew Huat Kwang, aged 49, a Malaysian, is an Executive Director and was appointed to the Board on 2 October He has more than ten (10) years of experience in the garment retailing business and is in charge of the sourcing of suitable retail outlet sites and to oversee their setting up. Currently, Mr. Liew also holds other directorships in the Yong Tai of Companies and several other private limited companies involve investment holdings and manufacturing. Mr. Liew is the brother of Mr. Wong Liew Liew Fat Lin and Mr. Wong Mee Yow Liew Mee Yow Cheen. 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. Loi Kim Fah, aged 47, a Malaysian, is an Independent Non-Executive Director and was appointed to the Board on 18 December He holds a Bachelor of Accounting from the University of Malaya. He is a member of the Malaysian Institute of Certified Public Accountants, Malaysian Institute of Accountants and the Malaysian Institute of Taxation respectively. He is currently 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 practice in 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 any Director and/or major shareholder of the Company. 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. See Thiam Chya, aged 50, a Malaysian, is an Independent Non-Executive Director and was appointed to the Board on 2 March Mr. See has over 23 years of experience in the banking and finance sector. He has served in various capacities with Financial institutions such as OCBC Bank (M) Bhd, MBf Finance Bhd, and Affin-ACF Finance Bhd, and has been employed at a managerial level since being promoted to Branch Manager at MBf Finance Bhd in 1994 until his resignation in Subsequently he joined OSK Securities as Head of Operations till He was previously the General Manager of Amshore, subsidiary of a listed company, Bio Osmo Berhad, in charge of the operations of the manufacturing division till Currently Mr See is a consultant at Vykon Technology Sdn. Bhd. In this role, he is involved in advising the company in realizing the sustainability strategies. Mr. See is a member of the Audit Committee. He does not have any family relationship with any Director and/or major shareholder of the Company. 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. Chok Kim Sin, aged 52, a Malaysian, is an Executive Director and was appointed to the Board on 28 November Mr. Chok holds a Diploma in Philosophy & Education of Christian in Singapore Bible College. Mr. Chok has more than 20 years of combined experience in building construction industry and township planning development. He involves in property consultation management, real estate investment, strategy development, project planning, project finance, tax structuring development implementation, property and asset management and undertakes housing and commercial industrial projects. Currently, Mr. Chok also holds other directorships in the Yong Tai of Companies and several other private limited companies involve property development and construction projects. Mr. Chok does not have any family relationship with any Director and/or major shareholder of the Company. 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. 6 ANNUAL REPORT 2013

9 PROFILE OF THE DIRECTORS Ir. Dr.Ting Lai Choon, aged 52, a Malaysian, is an Executive Director and was appointed to the Board on 2 September Ir. Dr. Ting obtained his Bachelor's degree in Civil Engineering from National University of Singapore (NUS) in After a short working period in Singapore, he went back to NUS and furthered his post graduate studies in the same field and subsequently obtained his Master and Doctorate Degrees during which he has published numerous research papers in international journals. He is also a Professional Engineer registered with the Board of Engineers Malaysia and a member of the Institution of Engineers Malaysia. Ir Dr. Ting has since worked in the engineering and construction industry for the last 25 years and has handled numerous projects both in Singapore and Malaysia. He brings along extensive experience in the field of technical and project management in the construction industry. Projects handled by Ir. Dr. Ting includes high rise buildings, factories, bridges and specialist steel structures. Currently, Ir. Dr. Ting holds other directorships in the Yong Tai of Companies and several other private limited companies involve property development and construction projects. Ir. Dr. Ting does not have any family relationship with any Director and/or major shareholder of the Company. 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. 7 YONG TAI BERHAD ( T)

10 CHAIAN S STATEMENT On behalf of the Board of Directors, I am pleased to present the Annual Report of Yong Tai Berhad and its subsidiary companies ( the ) for the financial year ended 30 June Financial Highlights The 's revenue declined from million to million for the financial year ended 30 June Nevertheless, the registered a lower loss before taxation of million for the financial year ended 30 June 2013 as compared to loss before taxation of in previous financial year. Review of Operations During the financial year under review, the achieved a consolidated revenue of million for its retailing and trading of textile and garment products, a drop of 17.24% over the previous financial year's revenue of million. The consolidated results of this segment reported loss before taxation of million for the financial year ended 30 June The chain of Emilio Valentino boutiques contributed a turnover of million and loss before taxation of million within the retailing and trading of textile and garment segment for the financial year under review. On the other hand, the chain of Effu boutiques contributed a turnover of million for the financial year ended 30 June The will continues to reinforce and rejuvenate its Brand name and awareness amongst young group of customers with mid-end price products, and to explore new market and respond actively to changes in trends, preferences and retails spending patterns of the consumers. The also is constantly on the lookout for new growth areas to open more profitable outlets. The garment manufacturing segment recorded a turnover of million for the financial year ended 30 June 2013, as compared with the previous financial year of million with a loss before taxation of million. The continues to focus on cost control and production efficiency. The manufacturing, dyeing and finishing of fabrics segment registered a turnover of million, with profit before taxation of million for the financial year ended 30 June Future Prospects The Board of Directors expects 2014 to be another very challenging year for the and remain cautious about the strength of global economic growth in the year ahead. In this environment, we will continue exercise greater financial prudence to sustain our cash reserves. Our strategy remain cautiously optimistic and will continue to formulate plans and measures to respond to all challenges and changing consumer demands such as strategies to improve merchandising, sales floor management, productivity, capacity, utilization of resources and cost control. Beside continues to place high priority on the 's operational efficiency improvement, we shall also continue to invest resources on the lookout for new business with an aim to grow our business and increase the contribution to the 's performance. 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 for their support, dedication and commitment throughout the year. We would also like to express our heartfelt gratitude and appreciation to our valued shareholders, customers, business associates, bankers and various government authorities for their continuous support given to the. Datuk Hj. Amir Bin Junus Chairman 8 November ANNUAL REPORT 2013

11 STATEMENT ON CORPORATE GOVERNANCE The Board of Directors of Yong Tai Berhad recognizes the importance of the Principles and Recommendations of Malaysian Code on Corporate Governance 2012 ( the Code ) and is committed in ensuring that the Company and its subsidiaries ( the ) practise the highest standards of corporate governance. This Statement describes the manner in which the has applied the Code's Principles and the extent of compliance with the Code's Recommendations. BOARD OF DIRECTORS The Board Composition and Balance The Board assumes the overall responsibility for corporate governance, strategic direction, financial matters and overseeing the businesses, investments and operations of the. It is the ultimate body in decision making for outlining and implementation of corporate vision, directions, objectives and policies of the as a whole. The Board currently consists of nine (9) members, comprising a Managing Director, five (5) Executive Directors and three (3) Independent Non-Executive Directors (including the Chairman). The Company complies with the Bursa Malaysia Securities Berhad ( Bursa Securities ) Main Market Listing Requirements that requires at least two (2) or one-third (1/3) of the Board 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 functions of 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 for the day-to-day operations and business activities of the. 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 governance in discharging its duties and take into account of the interests, not only of the, 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 when necessary. During the financial year ended 30 June 2013, 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. Amir Bin Junus 5/5 Wong Liew Liew Fat Lin 5/5 Wong Mee Yow Liew Mee Yow Cheen 5/5 Tai Shzee Yuan 5/5 Liew Huat Kwang 5/5 Loi Kim Fah 5/5 See Thiam Chya 5/5 Chok Kim Sin (appointed on 28 November 2012) 2/2* Ir. Dr. Ting Lai Choon (appointed on 2 September 2013) 0/0* Note: * Reflects the number of meetings held during the tenure of the respective Director. 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, 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 and is entitled to the advice and services of the Company Secretaries and may obtain independent professional advice at the Company's expense, where necessary. 9 YONG TAI BERHAD ( T)

12 STATEMENT ON CORPORATE GOVERNANCE BOARD OF DIRECTORS (Cont d) Appointments to the Board The Nomination Committee comprises exclusively of Independent Non-Executive Directors as follows:- Loi Kim Fah Datuk Hj. Amir Bin Junus Chairman/Independent Non-Executive Director Member/Independent Non-Executive Chairman The Nomination Committee is established with the responsibility of identifying, proposing and recommending the right candidates to the Board and Board Committees by taking into account the individual's skill, knowledge, expertise, experience, professionalism and integrity as well as his other commitments, resources and time. In addition, the Nomination Committee also has the following duties and 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 nonexecutive 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 the Nomination Committee. The Board will examine its size with a view to determining the impact of the number upon its effectiveness. With the current composition, the Board feels that its members have the necessary knowledge, experience, requisite range of skills and competence to enable them to discharge their duties and responsibilities effectively. All Directors on the Board have gained extensive experience with their many years of experience on company Boards and/or also as professionals in their respective fields of expertise. 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 rotation at 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 except for Ir. Dr. Ting Lai Choon who was appointed on 2 September All the Directors are provided with the opportunity to continually undergo other relevant training programmes to further enhance their skills and knowledge and to enable them to discharge their respective duties effectively. Those programmes attended by the Directors included The 15th Malaysia Strategic Outlook Conference 2013, Budget, Seminar Percukaian Kebangsaan 2012 and National Tax Conference DIRECTORS' REMUNERATION The Remuneration Committee comprises wholly of Independent Non-Executive Directors as follows:- Datuk Hj. Amir Bin Junus Loi Kim Fah Chairman/Independent Non-Executive Chairman Member/Independent Non-Executive Director The Remuneration Committee is responsible for recommending to the Board the remuneration packages of Executive Directors. The Board as a whole determines the remuneration of Non-Executive Directors. The individual concerned will abstain from the discussion of 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 successfully and effectively. In the case of Executive Directors, their remunerations are structured 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. 10 ANNUAL REPORT 2013

13 STATEMENT ON CORPORATE GOVERNANCE DIRECTORS' REMUNERATION (Cont d) The aggregate remuneration of Directors during the financial year under review are as follows: Directors Remuneration Executive Non-Executive () () Fees - 64,000 Salaries/Allowances 985,383 - Bonuses 10,000 - Benefit In Kind 5,550 - Total 1,000,933 64,000 The number of Directors of the Company whose total remuneration falls within the following bands for the financial year under review are:- Number of Directors Range of remuneration Executive Non-Executive Below 50, , , , , , , , , Above 250, 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 been accorded 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 and the Terms of Reference of the Committee are set out in Audit Committee Report on pages 13 and 14 of the Annual Report. The Audit Committee's meeting is mostly held before the Board's meeting to ensure that all critical issues highlighted can be brought to their attention on a timely basis. It reviews issues of accounting policies and presentation for external financial reporting and ensures an objective 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 major routine 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 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 's performance and operations. The Company has set up its own website which provides more information about the Company and the. 11 YONG TAI BERHAD ( T)

14 STATEMENT ON CORPORATE GOVERNANCE The Annual General Meeting ( AGM ) The AGM remains the principal forum of dialogue and a mean of communication with shareholders. Shareholders are encouraged to attend and participate at the AGM and are allowed to appoint proxies to attend and vote on their behalf. Members of the Board as well as the Auditors of the Company are present to answer questions raised during the meeting. ACCOUNTABILITY AND AUDIT Financial Reporting The Company's financial statements are prepared in accordance with the requirements of applicable approved accounting standards in Malaysia issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, The Directors take responsibility in ensuring that the annual financial statements and the quarterly results announcements are presented to convey a balanced and understandable assessment of the 's financial performance and position. The Audit Committee assists the Board by 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 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 Audit Committee review the effectiveness of the 's system of internal controls periodically and such review covers the financial, operational and compliance controls as well as risk management. The Statement on Risk Management and Internal Control which provides an overview of the state of the internal control within the is set out on page 16 and 17 of the Annual Report. Relationship with Auditors The 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 acknowledges and integrates the Corporate Social Responsibility ( CSR ) into its operations and decision making based on ethical values and respect for the environment, community, marketplace and employees' welfare. In our daily operations, the encourage the employees to be environmental friendly by adopting cost and energy saving method to minimize the environmental impact and risks. Employees were sent to attend the seminar on awareness, prevention and control of the environmental impact on the air emission from the industry. The believes that it is the employees who have significantly contributed to its continued success and growth and we strive to motivate and retain the employees with the Long Service Award in recognizance of their loyalty and services towards the Company. The 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, such as air pollution training, understanding on Labor Acts, emergency preparedness and response plan and etc. The strives to forge a safe working environment and promotes healthy work practices for all levels of employee. Improvements are ongoing at the factory premises to ensure the entire production process is truly professional and systematic. Safety programmes have been conducted to create the awareness of the safety environment and practices. The is committed to play its role as a caring corporate citizen and continues to contribute to the charitable, social and welfare programs and authorities on ad hoc basis. 12 ANNUAL REPORT 2013

15 AUDIT COMMITTEE REPORT COMPOSITION AND MEMBERSHIP The Audit Committee comprises three (3) directors and the composition is as follows: Loi Kim Fah Datuk Hj. Amir Bin Junus See Thiam Chya Chairman/Independent Non-Executive Director Member/Independent Non-Executive Chairman Member/Independent Non-Executive Director TES OF REFERENCE The Audit Committee carried out its duties as set out in the Terms of Reference. The Board of Directors reviews the Terms of Reference 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 fiduciary responsibilities 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 following requirements: 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; or b. 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; or c. 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 shall be 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. Other Board members and/or employees may attend any particular meeting upon invitation of the Audit Committee. The external auditor 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 of the Audit Committee and the Board of Directors. The Chairman of the Audit Committee shall report to the Board of Directors on each meeting. 13 YONG TAI BERHAD ( T)

16 AUDIT COMMITTEE REPORT TES 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 ; 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; and vi. 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 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; and j. whether there is reason (supported by grounds) to believe that the Company's external auditor is not suitable for reappointment. 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 the Chairman, 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 six (6) meetings during the financial year ended 30 June 2013 and the attendance of each Audit Committee member are as follows: Members No. of meetings attended Loi Kim Fah 6/6 Datuk Hj. Amir Bin Junus 6/6 See Thiam Chya 6/6 14 ANNUAL REPORT 2013

17 AUDIT COMMITTEE REPORT 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; and vi. review the recurrent related party transactions. INTERNAL AUDIT FUNCTION The internal audit function of the is performed by in-house Internal Audit Department. For the financial year ended 30 June 2013, the cost incurred for internal audit function was 32, The internal auditor reports to the Audit Committee and carried out the audit reviews in accordance with the internal audit plan. The audit findings and recommendations will be forwarded to the management concerned for attention and necessary action. The Audit Committee reviews and deliberates the internal audit reports and 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 's operating units; ii. identify and highlight any deficiency and findings in the risk management and internal controls of the ; iii. propose practical and cost effective recommendations and corrective action plans to the relevant management; and iv. 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 weakness has resulted in any material losses or uncertainties that would require disclosure in this Annual Report. During the financial year under review, the Company has engaged AlphaOne Governance Sdn. Bhd. to develop the key risk profile for Yong Tai Brothers Trading Sdn. Bhd. 15 YONG TAI BERHAD ( T)

18 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Introduction The Board is committed to maintaining a sound risk management framework and internal controls system in the as recommended in the Malaysian Code on Corporate Governance 2012 to safeguard shareholders' investment and the 's assets. The Board of Directors of Yong Tai Berhad is pleased to present the Statement on Risk Management and Internal Control for the financial year ended 30 June 2013 made pursuant to Paragraph 15.26(b) of Bursa Malaysia Securities Berhad Main Market Listing Requirements and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. Board Responsibility The Board of Directors recognizes its responsibility for the 's risk management and internal control system, which covers financial, organizational, operational and compliance control as well as reviewing its adequacy and effectiveness from time to time. A review on the adequacy and effectiveness of the risk management and internal control system has been undertaken and the Board is satisfied that the risk management and internal control system in place is adequate and effective. 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 's business operations by the Board. On a daily basis, the Heads of Departments are responsible for managing the risks of their respective departments. The key risks relating to the 's operations and business plans are addressed at the periodic Board and Audit Committee meetings. During the financial year under review, the Company has engaged AlphaOne Governance Sdn. Bhd. to develop the key risk profile for its subsidiary, Yong Tai Brothers Trading Sdn. Bhd. The 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 's business objectives. System of Internal Control The following key processes have been established in reviewing the adequacy and integrity of the 's system of internal control:- 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 ; The 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 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. The Audit Committee The Audit Committee comprises non-executive directors all of whom bring with them a wide variety of experience. The Audit Committee has full and unimpeded access to both the internal as well as external auditors. The Audit Committee operating within its Terms of Reference and ensuring that there are effective risk monitoring and compliance procedures to provide the level of assurance required by the Board. The Audit Committee, on behalf on the Board, regularly reviews and holds discussions with Management on the actions taken on internal risk management and control issues identified in reports prepared by the internal auditors, the external auditors and the Management. Internal Audit Function The internal audit function of the 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. 16 ANNUAL REPORT 2013

19 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Adequacy And Effectiveness Of The 's Risk Management And Internal Control System The Board has received assurance from the Chief Financial Officer that the 's risk management and internal control is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the and its subsidiaries for the financial year ended 30 June The continues to take necessary measures to strengthen and further enhance the system of risk management and internal control is in place and functions effectively. This statement is made in accordance with the resolution of the Board of Directors on 29 October YONG TAI BERHAD ( T)

20 STATEMENT ON DIRECTORS' RESPONSIBILITY The Directors are required by the Companies Act, 1965 ( the Act ) to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the at the end of the financial year and of the results and cash flows of the Company and the for the financial year. The financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia issued by the Malaysian Accounting Standards Board, 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 2013, the Company and the has applied appropriate accounting policies on a consistent basis and supported with reasonable and prudent judgements and estimates. The Directors have responsibility for ensuring that the Company and the keep proper accounting records to enable them to ensure that the financial statements comply with the Act. The Directors have overall responsibility for taking such steps as are reasonably open to them to safeguard the assets of the and to prevent and detect fraud and other irregularities. This Statement is made in accordance with a resolution of the Board of Directors dated 29 October ADDITIONAL COMPLIANCE REQUIREMENTS Share buybacks There was no share buyback by the Company during the financial year under review. Options, warrants or convertible securities The 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) programme The Company did not sponsor any ADR or GDR programme during the financial year under review. Sanctions/penalties There 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 fees There was no non-audit fees paid to the external auditors during the financial year under review. Variation in results The Company's results for the financial year under review did not differ by more than 10% from unaudited results previously released. The Company did not make any profit estimate, forecast or projection for that period. Profit guarantee No profit guarantee was given by the Company during the financial year under review. Material contracts There was no material contract entered into by the Company and/or its subsidiaries during the financial year under review which involves the interests of Directors and major shareholders. Revaluation of landed properties The Company's revaluation policy is disclosed in Note 2(g) of the Notes to the Financial Statements. Recurrent related party transactions of a revenue nature Details of transactions with related parties undertaken by the during the financial year under review are disclosed in Note 31 of the Notes to the Financial Statements. 18 ANNUAL REPORT 2013