OLDTOWN AR 31-03-2014a

ANNUAL

Looking forward to 2015...

REPORT2 0 1 4OLDTOWN BERHAD

(797771-M)

In the midst of our busy and hectic lives, some

long for the good old days that we grew up in.

When everything was simple and life was peaceful.

At OLDTOWN™ White Coffee, we strive to recreate

charming memories of good old days.

So come and rekindle unique memories of a

time worth remembering. Come and enjoy the

Aroma Of Good Times with OLDTOWN™

White Coffee.

“ The measure of intelligence is the ability to change.”

Albert Einstein

11

Annual Report 2014

11

Contents

2 Our Legacy – Vision & Mission Statement

4 Group Structure

5 Corporate Information

6 Board of Directors

7 Board of Directors Profile

10 Chairman’s Statement

14 Group Managing Director’s Review� of Operations

22 Financial Highlights

23 Sustainability & Corporate Responsibility

27 Corporate Responsibility

29 Corporate Governance Statement

37 Audit Committee Report

40 Statement On Risk Management & Internal Control

42 Additional Compliance Information

49 Financial Statements

135 List of Properties Ow�ned by Oldtow�n Group

140 Analysis of Shareholdings

143 Notice of Annual General Meeting

Proxy Form

22

Our Legacy

From the day our proprietary OLDTOWN™ White Coffee blend was formulated, it has been steadfastly carried down over the years to this day. Our white coffee are roasted and prepared according to the original method to ensure that every cup of OLDTOWN™ White Coffee imparts the same full-bodied taste, texture and aroma year after year. Our commitment to maintain the true essence of our heritage has helped us to create a one-of-its-kind brand that is renowned the world over.

To date, our white coffee products are exported to more than 13 countries worldwide. Our business also includes the OLDTOWN™ White Coffee chain of café outlets. Carrying the charm of a traditional Ipoh coffee shop, we serve a variety of Malaysian delicacies from white coffee to toasts, rice and noodles. To date, we have more than 200 café outlets through out Asia.

VisionTo be Asia Pacific’s Leading White Coffee Brand

Mission StatementOUR PEOPLE : We Believe That Our People Are Our Assets

We acknowledge and appreciate our people as those who grow with us and for their full dedication. We value them for their effort and what they are able to bring to the company, hence we constantly provide a platform and opportunities for career growth and enrichment of knowledge. We cultivate the passion of delighting our consumers into all our staffs to bring forth the best experience possible.

Community : We Nurture The Community

We are aware and committed to our community hence we operate our business in a manner that does not compromise the wellness of our future generations. We are passionate about our corporate responsibilities and do our best to provide for the community in different ways, from doing our part for the earth we live in to providing underprivileged children with better homes. We will not look lightly upon our social responsibilities as we believe in giving back to the community as part of the effort towards a better future.

Our Consumers : We Delight Our Consumers w�ith Our Products

We are consumer centric and are always focused on consumer needs. Hence we are dedicated to delighting our consumers with all our product offerings, by committing ourselves in sourcing the finest ingredients through ethical ways to provide them with the best quality products. We hold strongly to our origins in order to bring to consumers the authentic experience that they expect to enjoy.

MOTHER EARTH : We Do Our Part in Saving Mother Earth

We are attuned with the growing needs to nurture our mother earth and to do our part in caring for the environment. With this, we share and grow the passion and knowledge of caring for the environment with our partners and consumers for them to live this together with us as part of our corporate values.

INVESTORS : We Focus on Prospering Our Investors

We are dedicated to growing and maximising the financial rewards of our investors as we see it as a platform for our company to continue to provide to our consumers and the community.

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia)

33

Business OverviewThe business activities of Oldtown Group can be divided into three broad categories as follows:

Operation of Cafe Chain

• Own Cafe Outlets* • Franchised Outlets • Food Processing

Manufacturing of coffee and other beverages

• Instant Coffee Mix • Roasted Coffee Powder • Instant Milk Tea Mix • Instant Chocolate

Marketing and sales of coffee and other beverages

• Instant Coffee Mix • Roasted Coffee Powder • Instant Milk Tea Mix • Instant Chocolate • Ready-to-drink coffee

*Own cafe outlets include those that are fully and partially owned.

44

Group Structure

OldTownBerhad

100%White Cafe Sdn Bhd

100%Gongga Food Sdn Bhd

100%White Cafe Marketing Sdn Bhd

100%Emperor’s Kitchen Sdn Bhd

100%Dynasty Confectionery Sdn Bhd

100%Esquire Chef Sdn Bhd

100%Kopitiam Asia Pacific Sdn Bhd

100%Oldtown Singapore Pte Ltd

100%Old Town Kopitiam Butterworth Sdn Bhd

100%Old Town Kopitiam Kuala Lumpur Sdn Bhd

100%Old Town Kopitiam Cheras Sdn Bhd

100%Oldtown Logistics Sdn Bhd

100%Old Town (M) Sdn Bhd

100%Oldtown APP Sdn Bhd

80%Conneczone Sdn Bhd

50%Plus One Solution Sdn Bhd

40%OTK Eatery Sdn Bhd

100% Old Town Kopitiam Sdn Bhd

50%OTK Singapore Pte Ltd

100%Dynasty Kitchen Sdn Bhd

70%Advance City Limited

100%OTK (HK) Investment Limited


as at 31 March 2014

55

CorporateInformation

Board of Directors

Board Committees

Audit Committee Remuneration Committee Nomination Committee

Mark Wing KongIndependent Non-Executive Director

Tan Chon Ing @ Tan Chong LingIndependent Non-Executive Director

Dato’ Wong Guang SengIndependent Non-Executive Director

Datuk Dr. Ahmed TasirBin Lope PihiePJN, PMP, JSM, FASc

Independent Non-ExecutiveChairman

Lee Siew HengGroup Managing Director

Chuah Seong MengExecutive Director

Clarence D’Silva A/L Leon D’SilvaExecutive Director

Goh Ching MunExecutive Director

Tan Say YapExecutive Director

Tan Chon Ing @ Tan Chong LingChairman

Datuk Dr. Ahmed TasirBin Lope Pihie

Lee Siew Heng

Mark Wing Kong

Dato’ Wong Guang Seng

Goh Ching Mun

Mark Wing KongChairman

Datuk Dr. Ahmed TasirBin Lope Pihie

Tan Chon Ing @Tan Chong Ling


Company SecretariesChan Chee Kheong(MAICSA 0810287)

Wong Wai Foong(MAICSA 7001358)

Websitewww.oldtown.com.my

Head OfficeNo. 2, Jalan Portland,Kawasan Perindustrian Tasek,31400 Ipoh, Perak.Tel : (605) 541 5511Fax: (605) 541 2860

Stock Exchange ListingMain Market ofBursa Malaysia Securities Berhad(Listed since 13 July 2011)Stock Name: OLDTOWNStock Code: 5201

RegistrarsTricor Investor Services Sdn Bhd (118401-V)

Level 17, The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200 Kuala Lumpur.Tel: (603) 2264 3883Fax: (603) 2282 1886

Principal BankersCIMB Bank Berhad (13491-P)

HSBC Bank Malaysia Berhad (127776-V)

Registered OfficeLevel 18, The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200 Kuala Lumpur.Tel : (603) 2264 8888Fax: (603) 2282 2733

Statutory AuditorsMessrs. Deloitte (Formerly Known As Deloitte KassimChan) (AF0080)Chartered AccountantsNo. 87, Jalan Sultan Abdul Jalil30450 Ipoh, Perak Darul RidzuanTel: (605) 253 1358Fax: (605) 253 0090

Datuk Dr. Ahmed TasirBin Lope PihieChairman

Mark Wing Kong

Tan Chon Ing @ Tan Chong Ling



66

Board ofDirectors

Datuk Dr. Ahmed Tasir Bin Lope Pihie

Lee Siew Heng

Mark Wing Kong

Goh Ching Mun


Chuah Seong Meng

Clarence D’Silva A/L Leon D’Silva


Tan Say Yap

01

02

03

04

06

07

08

09

05

07 0901 02040608 0503

Notes:-

1. Family Relationship with Director and/or Major Shareholder

(i) Mr Lee Siew Heng is a deemed substantial shareholder of Oldtown Berhad.

(ii) Mr Lee Siew Heng is the brother of Mr Lee Siew Ming, a deemed substantial shareholder of Oldtown Berhad.

Save as disclosed herein, none of the Directors has any family relationship with any Director and/or major shareholder of Oldtown Group.

2. Conflict of Interest

Save for related party disclosures as disclosed under Note 25 to the Audited Financial Statements of this Annual Report and the Circular to Shareholders dated 19 August 2014, which is despatched together with this Annual Report, the Directors have no conflict of interest in any business arrangement with the Company and its subsidiaries.

3. Conviction of Offences

None of the Directors has been convicted of any offence within the past 10 years other than possible traffic offences.

4. Directors’ Shareholdings

The details of Directors’ interest in securities of the Company are set out in the Analysis of Shareholdings on page 140 of this Annual Report.

5. Attendance of Board Meetings

The details of attendance of Directors at the Board Meetings are set out in the Corporate Governance Statement on page 29.


77

Board ofDirectors’

Profile


Datuk Dr. Ahmed Tasir Bin Lope Pihie, a Malaysian, aged 63, is the Independent Non-Executive Chairman of Oldtown Berhad and was appointed to the Board on 10 November 2009. He is the Chairman of the Nomination Committee and a member of the Audit Committee and Remuneration Committee respectively. He holds a Doctor of Philosophy (PhD) in Science and Technology Policy from the University of Manchester, Master of Science in Seed Technology from the University of Edinburgh, Scotland and a Bachelor in Agriculture Science from the University of Malaya. He was with the Malaysian Agricultural Research and Development Institute (MARDI) from 1972 to 1992 and last held the post as a Director before he left the Institute. He was the Chief Executive Officer of the Malaysia Industry-Government Group for High Technology (MIGHT) from 1993 to 2008. He is presently the Chairman of Strand Aerospace Malaysia Sdn Bhd; President and Director of Inno Bio Ventures Sdn Bhd, Inno Biologics Sdn Bhd and Inno Bio Diagnostics Sdn Bhd and a director of several private companies including A7N Sdn Bhd and R7 Sdn Bhd.

Lee Siew� Heng, a Malaysian, aged 48, is the Group Managing Director of Oldtown Berhad and was appointed to the Board on 30 November 2007. He is also a member of the Remuneration Committee. He brings with him invaluable industry experience, having accumulated more than 22 years of experience in the manufacturing and retailing industries, of which more than 12 years is in the coffee beverage industry. He has been instrumental in the growth and development of the Oldtown Group of Companies and has been a key driving force in the expansion of the Group’s beverage manufacturing and cafe chain operation businesses. Upon completion of his secondary education in 1986, he started his career as a Production Manager of Chong Ngai Knitting Factory Sdn Bhd, a garment manufacturer and was later promoted to the position of a General Manager. He left the company in 1997 to become a Director of CN Supplies Sdn Bhd which was trading in hotel supplies. In 2001, he joined White Cafe Marketing Sdn Bhd, a company in the Oldtown Group as a Managing Director and was subsequently re-designated as the Group Managing Director of Oldtown Group in 2009. He holds directorships in several private companies and is currently the Chairman of Old Town International Sdn Bhd, the holding company of Oldtown Berhad.

Mark Wing Kong, a Malaysian, aged 55, is an Independent Non-Executive Director of Oldtown Berhad and was appointed to the Board on 10 November 2009. He is the Chairman of the Audit Committee and also a member of the Nomination Committee and Remuneration Committee. He is a member of the Malaysian Institute of Certified Public Accountants. His career started as an auditor with Kassim, Chan & Co in 1980. He joined Arab-Malaysian Securities Sdn Bhd as Operations Manager in 1986 and was transferred to Arab-Malaysian Merchant Bank Berhad (now known as AmInvestment Bank Berhad) in 1988 where he took up the post of Operations Manager in the Investment Department. In 1990, he was transferred to the Corporate Finance Department where his last held position was General Manager, Corporate Finance. In 1997, he joined LB Aluminium Berhad, a company principally engaged in the business of manufacturing, marketing and trading of aluminium extrusion, where he is currently the Chief Executive Officer. He is also an Independent Non-Executive Director of M3 Technologies (Asia) Berhad which is involved in the provision of mobile-internet messaging solutions and retailing of GPS navigators and other IT accessories. LB Aluminium Berhad and M3 Technologies (Asia) Berhad are listed on the Main Market and ACE Market of Bursa Malaysia Securities Berhad respectively. He is also a director of Calltime Technology Sdn Bhd.

88

Board ofDirectors’

Profile


Dato’ Wong Guang Seng, a Malaysian, aged 62 is an Independent Non-Executive Director of Oldtown Berhad and was appointed to the Board on 1 April 2014. Dato’ Wong is a Fellow of the Institute of Chartered Accountants (England & Wales) as well as a Chartered Management Accountant (UK). He is also a member of Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public Accountants (MICPA) and an Associate of Chartered Tax Institute of Malaysia (ACTIM).He holds a Master Degree in Business Administration (MBA) from the Cranfield Institute of Technology (UK). Dato’ Wong has served Deloitte for over 40 years, holding various positions including Head of Clients and Markets as well as Exco Member of Deloitte Malaysia. He is currently an Executive Director of AG Legal Tax Services Sdn. Bhd. Dato’ Wong also sits on the board of Unisem (M) Berhad as an Independent Non-Executive Director.

Chuah Seong Meng, a Malaysian, aged 39, is an Executive Director of Oldtown Berhad and was appointed to the Board on 10 November 2009. He graduated with a Bachelor of Business, majoring in Marketing from the University of Tasmania, Australia in 1997. He is also a certified marketer of the Chartered Institute of Marketing, United Kingdom. He has more than 16 years of extensive experience in Sales and Marketing. His career started in 1997 as a Sales Executive with Besta Computerized Dictionary Sdn Bhd, a distributor of computer dictionary products. He joined White Cafe Sdn Bhd in 1999 as Marketing Manager and was promoted to Senior Marketing Manager in 2003 and subsequently the Group Marketing General Manager of White Cafe Marketing Sdn Bhd in 2007. He currently assumes the role of Chief Operating Officer of the Fast Moving Consumer Group (FMCG) sector of the Group.He is responsible for the overall business strategy formulation, objectives setting and strategy implementation for all FMCG activities and businesses including sales and marketing, manufacturing and research and development functions. He is also heading the Group Marketing Communication Division.

Goh Ching Mun, a Malaysian, aged 43, is an Executive Director of Oldtown Berhad and was appointed to the Board on 30 November 2007. He is also a member of the Remuneration Committee. He completed his secondary education in 1988. As the co-founder of Oldtown Group of Companies, he has accumulated more than 22 years of experience in the coffee manufacturing industry. His career started in 1983 when he was involved in the family business of operating the Nam Heong Coffee Shop in Ipoh. Subsequently in 1999, he co-founded and established White Cafe Sdn Bhd where he was appointed Product Research and Development Director and was then responsible for the formulation of the blend of white coffee that is currently produced by the Group and the product research and development activities of the Group from 1999 to 2013. Mr Goh & Mr Tan Say Yap are currently assuming a co-advisory role to the Group Managing Director in matters relating to the FMCG segment in relation to the production of coffee mixtures.He is also the Chairman of the Corporate Social Responsibility (CSR) Committee that carries out the social responsibility functions of the Group via Oldtown Children Care Fund (OCAF) and Oldtown Earthcare activities. He is a director of several private companies which are involved in property investments and cafe and restaurant business.

99

Tan Chon Ing @ Tan Chong Ling, a Malaysian, aged 53, is an Independent Non-Executive Director of Oldtown Berhad and was appointed to the Board on 7 November 2012. He is the Chairman of the Remuneration Committee and is a member of the Audit Committee and Nomination Committee of Oldtown Berhad. He graduated with a honours degree in Bachelor of Civil Engineering from the National University of Singapore in 1985. He joined WTS Konsultant in Kuching from 1985 to 1990 as a Civil Engineer. He was the Managing Director of Uomo Donna Sarawak Sdn Bhd from 1991 to 1993 and was appointed Chief Executive Officer of PT Indoscala, Indonesia, a wholesaler and retailer of ladies apparel, from 1993 to 1996. He is a business entrepreneur with more than 17 years of experience in construction and property development which include a golf course township development. Mr Tan is the founder and Vice Chairman of Eduland China with 12 years of experience in the setting up, operation and franchise of a chain of Bilingual Early Childhood Education centres in Shanghai City, Suzhou and Zhejiang Provinces to provide quality early childhood care and education at purpose built kindergarten buildings located at premium township and residential area.

Clarence D’Silva A/L Leon D’Silva, a Malaysian, aged 53, is an Executive Director of Oldtown Berhad and was appointed to the Board on 10 November 2009. He has over a span of 31 years in the Food Service industry where he managed several International Brands and has done start up for new food business in Indonesia, Thailand, Philippines, Hong Kong and Malaysia and served in several senior positions with several Multi-National Companies.He graduated with a Bachelor of Business Administration from the California Technical College, United States in 1982. His career started in 1983 when he joined Kentucky Fried Chicken as a Management Trainee. In 1989, he took up employment with Carl’s Jr. Asia Development Corporation, part of the MBF Group of Companies and was eventually promoted to General Manager of the brand in Thailand. In 1998, he joined Sushi Kin Sdn Bhd as the General Manager/Chief Operating Officer and was appointed to the Board of Directors of the company in 2000. In 2003, he joined Yoshinoya Food Systems, part of the Wing Tai Asia Limited in Singapore as the Chief Operating Officer. In 2006, he took up the position of Chief Operating Officer with FB Food System (HK) Ltd, a subsidiary of Far East Consortium, Hong Kong. He joined Oldtown Group of Companies in 2009 and is currently the Chief Operating Officer of the Food and Beverage (F&B) Sector of the Oldtown Group. His main responsibilities include overseeing the domestic and international F&B operations, distribution and logistics as well as the development of the F&B franchise business of the Group.

Tan Say Yap, a Malaysian, aged 39, is an Executive Director of Oldtown Berhad and was appointed to the Board on 10 November 2009. He has more than 14 years of experience in the coffee manufacturing industry. As the co-founder of the Oldtown Group of Companies, he is instrumental in the formulation of the blend of white coffee, which started the beverage manufacturing business of the Group. He obtained a Diploma in Hotel Business Management from Syuen Hotel and Catering Management Institute, Ipoh in 1996. His career started in 1997 as Commis One at the Pangkor Laut Resort Hotel where he was mainly involved in the preparation of food for the hotel’s food and beverage outlets. In 1999, he co-founded and established White Cafe Sdn Bhd and was appointed Director of White Cafe Sdn Bhd. He was appointed Business Development Director of Kopitiam Asia Pacific Sdn Bhd and is responsible for the cafe outlet operations from 2005 to 2009 and held the position of Corporate Relations Director where he was responsible for fostering corporate relations with franchisees, landlords, business associates and business partners from 2009 to 2013. Mr Tan and Mr Goh are currently assuming a co-advisory role to the Group Managing Director in matters relating to the FMCG segment in relation to the production of coffee mixtures.

1010

Dear Shareholders,

On behalf of the Board of Directors, I am pleased

to present the Annual Report of Oldtow�n Berhad

(“the Company” or “the Group”) for the financial

year ended 31st March 2014 (“FY2014”).

Despite operating under a competitive business

environment, the Group turned in another year of

credible performance.

Strong Overall Financial Performance

The solid financial performance of FY2014(Note) was another

exemplary effort attributed to the dedicated commitment of the

Group’s management team and employees. For the FY2014, the

Group achieved a consolidated revenue and profit of RM382.172

million and RM50.33 million respectively.

Note: The Company had on 27th August 2012 changed its financial year end from

31st December to 31st March. The financial period ended 31st March 2013 was

made up of results for 15 months covering the period from 1st January 2012

to 31st March 2013. Thereafter, the fiscal financial year has restored back to

ordinary 12 months covering the period from 1st April 2013 to 31st March 2014.

Manufacturing of Beverages Took Lead as Revenue and Earnings Growth Driver

Both the café chain operation and manufacturing of beverages

contributed to the strong financial performance of the Group. The

operation of the café chain segment continued to be the main and

dominant revenue contributor to the Group, bringing in 54% of the

FY2014 revenue, whilst the remaining 46% was contributed by the

manufacturing of beverages segment.

The café chain operation registered a total revenue and profit

before tax of RM207.059 million and RM31.341 million

respectively. The Group’s manufacturing of beverages segment

reported revenue of RM175.113 million and profit before tax of

RM35.929 million in FY2014.

The Group’s FY2014 profit before tax included an amortisation of

intangible assets of RM3.53 million wherein RM1.19 million was

attributed to the amortisation of the acquired intangible asset of the

foreign subsidiary in Hong Kong, Advance City Limited.

Overall, the profit after taxation of the Group for FY2014 was

recorded at RM50.33 million. This was mainly attributed to the

double-digit growth in the business operations of manufacturing of

beverages segment.

Chairman’sStatement


1111

Datuk Dr. Ahmed TasirBin Lope PihiePJN, PMP, JSM, FAScIndependentNon-Executive Chairman

1212

Sustainable Earnings

The Group registered a net profit attributable to owners of the

Company of RM48.938 million in FY2014 against the net profit

attributable to owners of the Company of RM55.527 million

in FP2013 (15-month period ended 31st March 2013), which

translated into an earnings per share of RM0.11 for FY2014 (an

average of 2.75 sen per quarter) against FP2013 earnings per

share of RM0.13 (an average of 2.60 sen per quarter), based on

an enlarged share capital base of 453.597 million ordinary shares

at RM1.00 each after adjusting for a 1-for-4 bonus issue exercise

which was completed on 28 January 2014.

Strengthening Financial Position

As at 31st March 2014, the total shareholders’ fund increased to

RM329.290 million, an increase of RM24.439 million from FP2013.

This has also resulted in an improved gearing ratio (Net Debt to

Equity) of 0.07x from 0.11x in FP2013. The reduction in the gearing

ratio was due to the higher net profit generated and repayment of

term loans.

The fixed deposits, cash and bank balances as at 31st March 2014

amounted to RM99.884 million against a total debt of RM24.297

million. As a result, the Group was in a net cash position of

RM75.587 million as at 31st March 2014.

With a solid financial position, the Group is well-placed to leverage

on efficient financing options as well as flexibilities to expand its

business in the near future. The Group is in a strong position to deal

with any contingencies that may arise.

Healthy Financial Liquidity

During the FY2014, the Group generated a net increase in cash

flow of RM14.010 million (compared to RM0.4 million in FP2013)

on the back of the strong EBITDA of RM87.411 million achieved

and constant vigilance on working capital management strategies.

The net increase in cash flow was generated even after the cash

purchase of property, plant and equipment of RM17.366 million and

net cash used in the acquisition of subsidiaries of RM18.289 million

to support the growth momentum of our two businesses.

This clearly underlines the unique strength of the cash generative

nature of the Group’s core business for the past 3 reporting periods

since the Company first reported its audited financial statements

back in 2011.

The net cash outflow in respect of financing activities of

RM25.488 million was primarily due to the repayment of term

loans of RM13.263 million and dividend payment of RM10.890

million. As at 31st March 2014, the cash and cash equivalents

was RM99.095 million.

Enhancing Shareholders Value – Dividend

Delivering consistent positive growth for the Group has always

been a primary target of Oldtown in order to generate value for our

shareholders. This is important given the fact that since our listing,

we have a steadfast group of shareholders who have remained with

us and have enjoyed strong dividend yields coupled with significant

capital appreciation on their investments.

Towards this end, we have adopted a dividend policy to distribute

a minimum of 50% of the Group’s annual profit attributable to the

owners of the Company as a dividend.

Whilst retaining a sizable portion of profits and funds to finance

future growth, the Company also strives to reward its shareholders

with a reasonable level of dividend payout.

In respect of the financial year ended 31st March 2014, a first

interim single-tier dividend of 3.0 sen per share amounting to

RM13.589 million, based on an enlarged share capital of 453.597

million ordinary shares after completion of 1-for-4 bonus issue and

net of 0.611 million treasury shares held by the Company, was paid

on 17th April 2014.

The Board of Directors further recommended a final single-tier

dividend of 3.0 sen per share, based on an enlarged share capital of

453.597 million ordinary shares, net of treasury shares held by the

Company at the time of dividend payment, in respect of the financial

year ended 31st March 2014. The recommended final single-

tier dividend is subject to the approval of the shareholders at the

forthcoming Annual General Meeting.

Should the estimated final single-tier dividend of RM13.589 million

be approved by the shareholders at the forthcoming Annual General

Meeting, coupled with the RM13.589 million interim single-tier

dividend paid on 17th April 2014, this will translate into a dividend

payout ratio of 55.5% in respect of the financial year ended

31st March 2014. The cumulative total dividend payout would

be RM27.179 million against a net profit attributable to owners

of the Company of RM48.938 million in FY2014, if and after the

final single-tier dividend of RM13.589 million is approved by the

shareholders at the forthcoming Annual General Meeting.

Chairman’sStatement


1313

Recent Corporate Development

Bonus Issue Exercise

On 27th November 2013, the Company has proposed to undertake

a bonus issue exercise that entails an issuance of up to 90.75

million bonus shares on the basis of one (1) bonus share for every

four (4) existing ordinary shares held by the shareholders on the

entitlement date.

The bonus issue will increase the capital base of Oldtown to a level

that will better reflect the Group’s current scale of operations and

also serves to reward the existing shareholders of the Company

for their continuous support by enabling them to have greater

participation in the equity of the Company in terms of the number of

shares held whilst retaining their percentage of equity interest. The

bonus issue may also enhance the marketability, affordability and

liquidity of Company’s shares trading on Bursa Malaysia Securities

Berhad (“Bursa Securities”).

On 28th January 2014, a total of 90.597 million bonus shares

pursuant to the 1-for-4 bonus issue exercise were successfully

listed and quoted on the Main Market of Bursa Securities. The

newly issued 90.597 million ordinary shares represented an

increase of approximately 25% against the Company’s issue and

paid-up share capital of 363 million ordinary shares. The bonus

issue has subsequently increased the issued and paid-up share

capital of the Company from RM363.0 million to RM453.597

million at RM1.00 each.

Challenging Business Prospects Moving Forw�ard

The Malaysian economy is expected to remain on a steady growth

path in 2014, expanding by 4.5%-5.5% after a robust year-on-year

GDP growth rate of 4.7% in 2013 against 5.6% in 2012. The growth

momentum is expected to be supported by improved performance

in the external sector. Domestic demand will remain the key driver

of growth, albeit at a more moderate pace, in tandem with moderate

household spending, reflecting in part the impact of higher inflation.

Notwithstanding, the moderation in domestic demand, the underlying

fundamentals of the Malaysian economy remain strong. Growth

will be driven by the private sector across a diversified range of

economic activities whilst employment remains strong and incomes

are rising. The financial system is resilient with financial institutions

expected to provide continued support to investment activities. In

addition, the strength of Malaysia’s external position remains intact,

with international reserves at healthy levels and external debt within

prudent limits.

We expect that the business environment in the Asia Pacific region

will continue to be positively supported by the gradual improvement

in external demand. However, the degree of improvement in exports

could vary across the region. Nevertheless, we do look forward to

the future with confidence because of the fundamental strengths

of our businesses. We expect both our café chain outlets and

manufacturing of beverages to continue to generate growth by virtue

of its powerful brands, distribution strength and market position in

the regional markets on which we focus and which are delivering

such robust growth opportunities.

The Company will continue to scale new heights in the near future

based on the holistic business and corporate strategies formulated

and as described in detail in the Group Managing Director’s Review

of Operations of the Company in this Annual Report. I am optimistic

that all of these initiatives will be implemented by the current

management team with the primary aim to achieve good Group’s

performance in the ensuing year.

Acknow�ledgement

On behalf of the Board, I would like to thank and express my sincere

appreciation to our valued shareholders, bankers, customers,

business partners and regulatory authorities for their continued

support, guidance and assistance extended to the Group. The Board

would like to express its appreciation to the management and

employees of the Group for their hard work and dedication.

The Board would also like to take this opportunity to extend a warm

welcome to Dato’ Wong Guang Seng as an Independent Non-

Executive Director of the Company. Dato’ Wong is a professional

accountant by training and has served Deloitte Malaysia (“Deloitte”)

for over 40 years, holding various positions including Head of Clients

and Markets as well as Exco Member of the firm. His extensive

experience will benefit the Group in the future as Dato’ Wong will

bring to the Board his valuable wealth of knowledge and expertise

gathered from his career in a wide spectrum of business activities.

Datuk Dr. Ahmed Tasir bin Lope Pihie Chairman

1414

Overall Financial Review - Another Record Year, An Excellent Performance with Healthy Balance Sheet

The Group ended the financial year with a total revenue of

RM382.172 million, an increase of 10.9% from the previous year

based on 12-month comparative performance. In addition, we

were equally excited with the performance in the 3rd quarter of

FY2014 whereby we have achieved a notable breakthrough in

our business performance as the Group’s revenue for a single

quarter has breached the RM100 millionth mark for the first time

since the listing of our Company in Bursa Malaysia in 2011. The

record revenue was attributable to the continued resilience of

our mainstay café chain business and the sterling growth of our

beverage manufacturing segment.

The café chain business remains the key revenue contributor,

generating healthy sales with revenue reaching RM207.059 million

in FY2014, an increase of 1.2% against RM204.625 million in

the previous year (on 12-month comparison). On the other hand,

revenue from the manufacturing beverage business grew 25.1% to

RM175.113 million, compared to RM140.002 million the year before

(on 12-month comparison). The healthy growth of this segment was

underpinned by strengthening demand for our white coffee 3-in-1

products in existing and new markets, which is well supported by the

additional production capacity that came on stream during the year.

Our integrated business enables us to control most aspects of the

supply chain to ensure product quality, and mitigate price fluctuations

in raw materials as well as to retain as much of the profit as possible

within the Group. Amongst others, this allows us to be more cost-

effective to compete with other service providers as well as other

coffee beverage producers. As a result, the Group is able to maintain

its Profit Before Tax (“PBT”) and Profit After Tax (“PAT”) margin within

a narrow range of 16-18% and 12-14% respectively in each quarter

during the financial year. Despite operating in a highly competitive

environment, the Group is able to achieve a relatively stable and

respectable PAT margin of about 17.4 % and 17.8% for the FY2014

and FP2013 (15-month financial period ended 31st March 2013)

respectively through measures that drove effective cost management

and operational efficiency.

The Group’s café chain operation recorded PBT of RM31.341 million

for the FY2014 on the back of the revenue of RM207.059 million.

This represents a 7.2% drop in PBT as compared to RM33.779

million achieved in a 12-month period ended 31st March 2013

owing to higher operating costs mainly attributable to the minimum

wage ruling for foreign workers.

Oldtow�n Berhad (“the Company” or “the Group”)

is one of the largest café operators and beverage

players in Malaysia. Our integrated business

model, anchored by our tw�o complementary

grow�th engines, has proven to be an outstanding

success. This is clearly evident by the Group’s

robust performance during the 12-month financial

year ended 31st March 2014 (“FY2014”). The

Group has successfully sustained its business

expansion momentum to grow� its operation of

café chain and manufacturing of beverages.

Group ManagingDirector’s Review�

of Operations


1515

Lee Siew� HengGroup Managing Director

1616

Manufacturing of beverages segment recorded revenue of

RM175.113 million and PBT of RM35.929 million for the 12-month

period ended 31st March 2014. The revenue and PBT were

RM140.002 million and RM26.688 million respectively for the

12-month period ended 31st March 2013. The increase in PBT of

34.6% was attributable to the surge in revenue of 25.1% and eleven

(11) months’ profit contribution from the Hong Kong subsidiary

acquired during the financial year, of which the results were

consolidated from 1st May 2013.

2013/2014 OPERATIONS REVIEW

Café Chain Segment - Challenging Environment

The operation of the café chain segment continued to be the main

revenue contributor to the Group, attributing 54% of the consolidated

revenue for the FY2014 (60% of the consolidated revenue for the

15-month period, FP2013).

The café chain segment revenue has grown more than four (4) folds

from a low proforma consolidated revenue of RM47.889 million

achieved in FY2007 to RM207.059 million in FY2014 (Note 1). This

clearly demonstrated the Group’s ability to consistently expand the

scale of operation over the years.

The Oldtown Group spearheaded the development of the Asian café

chain in 2005 with our first outlet in Ipoh. As at 31st March 2014,

the Group has a total of 238 café outlets in Malaysia, Singapore,

Indonesia and China. Amongst the 238 café outlets, 89 are fully

owned café outlets, 20 partially owned outlets, 108 franchised and

21 licensed outlets.

Note (1): The restructuring exercise was completed on 16 May 2011 (“Completion

Date”) as disclosed in the Prospectus of the Company dated 22 June 2011.

The above comment on the Group’s financial performance refers to the audited

Statements of Comprehensive Income for FY2014 against FY2007 which was

prepared based on the combined results of Oldtown Berhad and its subsidiaries

(“the Group”), assuming the Group has existed on or before 1 January 2007.

Domestic Market – Vibrant and competitive

On the domestic front, we are adopting multipronged strategies to

penetrate into new market segments and strengthen our leading

market position as the largest Asian café chain operator in Malaysia.

Under the Group’s market development plans, we are planning to

add 12 to 15 new outlets in Malaysia in FY2015. Currently, our

OLDTOWN café outlets operate mostly in urban cities throughout

Malaysia and we shall progressively expand into the suburban and

rural markets over the next few years, whereby most of the second-

and third-tier cities and townships present vast opportunities for the

Group to reach a wider scope and range of customers.

Since the introduction of our first Generic Outlet back in 2005, we

have progressed upscale to create Signature Outlets in 2008 and

Basic Kiosk Outlets in 2012. The evolution and innovation continued,

with the roll-out of our first Grand Outlet in 2013.

Our Group’s main objective was always to provide our customers

with superior quality service and in-store experience. This means that

we put the customer at the centre of our activity, and consequently,

all our decisions and actions take into consideration the needs of our

customers. As a result, we introduced Generic, Basic, Signature and

Grand outlet concepts to position OLDTOWN café outlets to become

the favourite destinations for comprehensive customers’ experience

where all Malaysians can get together regardless of their social

status, disposable income and purchasing power.

We offer our customers a wide range of products through our well

thought-out and customer-friendly menus for breakfast, lunch, tea,

dinner and supper time for each outlet concept, making it easy for

each of them to make the right choice when it comes to ordering.

To complement the in-store experience, our outlets also provide

customers with free access to wireless internet.

International Market – Untapped Potential

For the international markets, we were able to penetrate deeper into

existing markets within Asia and further into new regions. As at 31st

March 2014, a total of 30 OLDTOWN café outlets were operating

in Singapore, Indonesia and China as compared to 23 outlets as at

31st March 2013.

As our operations continue to expand overseas, we face challenges

in new markets and cultures, each with different types of customers

demanding for unique and appealing products. We continuously

strive to offer our customers superior value and satisfaction, focusing

not only on product range, but also on the services we provide.

On a related note, we have recently completed the refurbishment

of our outlets with contemporary design and innovative concept for

OLDTOWN café outlets in Singapore. In addition, certain outlets were

relocated upon expiry of tenancy to mature developed areas such as

City Square Mall and Yew Tee Point in 2012 and 2013 respectively.

The sales performance post-refurbishment is fairly encouraging,

thereby making Singapore as the most profitable overseas market for

the Group. In line with our development plans in Singapore, two (2)


of Operations


1717

to three (3) new outlets are scheduled to be opened in FY2015 and

at the same time we are also exploring new licensing opportunities

within the same market.

For the Indonesian market, we plan to add another six (6) to eight

(8) new café outlets in FY2015. To accelerate the expansion plans

in Indonesia, we are shifting away from the business model of

company-owned and operated outlets to the sub-licensing model as

we plan to open more sub-licensed outlets in Indonesia in FY2015.

Just a recap, we managed to open seven (7) new café outlets in

FY2014 and currently we are operating a total of seventeen (17) café

outlets in Indonesia as at 31st March 2014.

Consistent with our aspirations to become Asia Pacific’s Leading

White Coffee Brand, we are continuing the planned expansion of

our international café outlets. Our determined efforts to expand

into new markets to fuel further growth will materialise soon as the

Group notched up a significant milestone on 19th May 2014 with

the appointment of OTK (Australia) Sdn Bhd as Master Licensee to

spearhead the Group’s expansion of OLDTOWN café outlets business

in Australia through the execution of a Master License Agreement.

The appointed Master Licensee is responsible for the setting up

of a network of OLDTOWN café outlets in Australia, as well as to

establish, build and operate a distribution centre and a central

kitchen to support the planned number of café outlets in the long

run. The Master Licensee is also allowed to appoint Sub-Licensees to

hasten the development of OLDTOWN café outlets upon fulfillment of

certain terms and conditions set by the Group.

The recent venture into the Australian market forms part of the

Group’s overall international expansion plans and is expected to lift

the Group’s operational performance and market position to greater

heights in order to become a more sustainable and competitive

business enterprise of tomorrow.

Manufacturing of Beverages Segment – Another Record Year w�ith Robust Grow�th

The Group’s manufacturing of beverages division continued to grow

from strength to strength in FY2014 with revenue of RM175.113

million, up from RM169.685 million in FP2013. This business

segment now accounted for 46% of the Group’s total revenue, up

from 40% in the preceding period.

The Group’s manufacturing of beverages division reported

record revenues and record profits in FY2014. Revenues grew

to RM175.113 million and profit before tax (“PBT”) grew to

RM35.929 million (the consolidated revenue and PBT derived

from the manufacturing of beverages segment in FP2013 was

RM169.685 million and RM33.765 million respectively) – year-

on-year increases of 3.2% and 6.4%. We believe that this record

performance marks a ringing endorsement of our products,

business model, and our strategies.

The higher quantum of revenue achieved in FY2014 compared to

FP2013, despite FY2014 only has a shorter financial period of 12

months against FP2013’s extended financial period of 15 months,

was mainly due to increase in both local and export sales for the

Group’s beverage products as well as rapid expansion of distribution

networks across various countries.

Despite the challenging business environment in FY2014, the

growth momentum of our manufacturing of beverages division

remained strong and we achieved another year of record financial

performance, both top-line and earnings. More significantly, our team

has delivered a multi-year growth. Over FY2007 (Note 1) – FY2014,

the division’s revenue Compounded Annual Growth Rate (“CAGR”)

translates to 33% per annum with an even more impressive PBT

CAGR of 35% per annum. The successful execution of holistic

strategy is the winning combination that has delivered record

revenues and record earnings.

Domestic Market – A Crow�ded Field

The local manufacturing of beverages industry is highly competitive.

The Group’s success in the white coffee segment has attracted

the attention of competitors. Major local and international brands

undertook strong advertising and promotional campaigns and we

had to match the competition with more aggressive marketing

campaigns as well as frequent promotional activities. Our

competitors may disrupt our market position with lower pricing and

products of different packaging. However, we are optimistic that we

can overcome these challenges with our unique brand identity and

high-quality products.

During FY2014, the domestic market remained as our single largest

market for our white coffee products and we maintained our leading

position in the white coffee segment in Malaysia. Our differentiated

brand marketing, leveraging on the origin of white coffee is reaping

rewards as the marketing data have revealed success in reaching

the targeted market segment. In essence, our domestic market will

be a potentially large coffee market, and we believe our strategy to

develop our coffee brands as premium labels will enable sustainable

long-term growth in this growing coffee segment in the future.

1818

We believe our investment in strengthening our brand will help us

to stay ahead of the competition and taken our market position in

the domestic market to newer heights. We will consistently invest

in advertising, promotional and marketing campaigns to promote

OLDTOWN’s branding and to enhance its brand equity value and

customer loyalty in the marketplace. We appreciate that a successful

brand strategy is critical to the growth of our business, especially in

influencing consumers’ purchasing decisions.

Our marketing and promotional campaigns are comprehensive

to ensure in-depth coverage of every customer group in the

demographics. These include print media, such as major stream

newspapers and magazines; the digital media world such as radio

and TV commercials; online media and social networks.

In addition, the Group had initiated a nationwide True White Coffee

media campaign by working closely with various mainstream print

media and online media to promote OLDTOWN’s branding directly

and indirectly via their platform since 2nd Quarter 2014 in Malaysia,

such as with an English daily The Star, Chinese daily Sin Chew Jit

Poh, Sin Chew “Life Online”, and Malay daily Harian Metro, as well as

with the borderless online media Says dot com and MSN dot com.

We are adopting an indirect yet innovative approach in pursuing our

goals instead of via ordinary conventional direct advertisement or

advertorial page. While we try to build awareness on the culture and

the heritage of the Ipoh Old Town, we strongly advocate Oldtown as

the original True White Coffee producer; to discover OLDTOWN White

Coffee’s unique ingredients and the process of producing the True

White Coffee; to explore creative ways of using of 3-in-1 OLDTOWN

White Coffee in making desserts as an alternative to enjoy the True

White Coffee, etc. The underlying message is to educate consumers

on our ability to produce a wide range of products to suit different

taste preferences and raise the awareness level that the wide range

of 3-in-1 OLDTOWN White Coffee are manufactured from the best

combination of three (3) types of premium coffee beans, i.e. Liberica,

Arabica and Robusta, according to our proprietary formula.

Leveraging on the runaway success of the local production “The

Journey” in early 2014, we responded swiftly to collaborate with the

lead actor and actress to produce a TV commercial with a storyline

to embed the True White Coffee’s message while connecting heritage

with family emotions within the advertisement. The TV commercials

were featured in different channels under local satellite TV station

– ASTRO, such as Wah Lai Toi, AEC, Hua Hee Dai, Shuang Xing,

TVB Xing He, TVB Classic, TVBS Asia, and TVB Entertainment News

programmes in 2nd Quarter 2014.

Besides the mainstream TV commercial and advertisement that

are targeted to expand the Group’s market share, we have also

organised various on-the-ground events such as consumer contests,

product testing and sampling, road shows, and participated in expos

and exhibitions. In the domestic market, we foresee growing demand

as the Group is actively participating in various joint marketing

programs organised by the local key retailers such as the launching

of Old Town White Coffee Chinese New Year Gift Pack, conducting

exclusive consumer contests via collaborations with Giant and AEON

and launching of the Modern Trade Display Contest. Our marketing

team has also initiated breakthrough efforts by participating in

“Jom Heboh” events at various locations in Malaysia to broaden

our brand presence in the Halal market segment. Similarly, our

recent participation in ASTRO GEMPAK, and the group marketing

campaigns, at Kuala Lumpur, Johor, and Kuala Terengganu is

targeted to raise OLDTOWN White Coffee brand awareness within

the Halal-market segment.

We believe, by continuing to invest in our brand, OLDTOWN will be

able to maintain its dominant presence in the domestic market. Our

Group has commanded a leading position in terms of market share

for the past 5 years within the instant white coffee mix category,

as a result of our continuous effort to engage consumers through

successful execution of all the above mentioned promotional

activities and marketing campaigns.

International Market – Grow�ing Rapidly

Currently, with an established presence in the Asia Pacific region

and an extensive distribution network, our products can be seen

in over fourteen (14) countries and contributed about 58% of the

revenue of the manufacturing of beverages division. The aggressive

branding and marketing campaigns coupled with the continued

customisation of products have contributed to the robust business

momentum in countries such as Singapore, Taiwan, Thailand, Hong

Kong and China.

This international business segment grew strongly in FY2014 with

higher sales for the Asia region, particularly in China, Taiwan and

Hong Kong, as well as increased demand from Southeast Asian

countries. The excellent growth in Asia is well supported by the

comprehensive distribution networks.

As Hong Kong is also one of the largest export markets for the

Group, we have intensified our advertising campaign by displaying

OLDTOWN advertisements at various MTR stations (underground

train system) in Hong Kong in November-December 2013 to create


of Operations


1919

greater awareness of our beverage products. Amongst the busiest

MTR stations with heavy daily human traffic flow that have displayed

OLDTOWN advertisement during the last year-end holiday season

were Mong Kok Station, Admiralty Station, Kowloon Tong Station,

and Shatin Station. Several key objectives we wish to achieve are to

create brand awareness through Hong Kong’s MTR stations and to

enhance brand value by advocating “True White Coffee” pioneered

by Oldtown. The acquisition of Advance City Limited (“ACL”) in

May 2013 had proven to be earnings accretive with an immediate

contribution to the Group’s profitability in FY2014. ACL, a distributor

of OLDTOWN beverage products, manages about 2,800 distribution

network points in Hong Kong and the Guangdong Province.

The Group is able to widen its market reach by leveraging on third-

party distributors, retailers and intermediary networks where they

will carry and distribute our beverage products in various distribution

points. Our product distribution points are no longer restricted

to conventional marketing networks, such as department stores,

hypermarkets, supermarkets, convenience stores and retail outlets,

located both locally and abroad, but also available under the online

platform or business-to-consumer e-commerce portal in China.

The Group embraces another effective and cost-efficient avenue to

promote its products in overseas market such as the social media

platform. In China, through the real-time micro blogging social

channel of Weibo, we are able to reach out to 500 million netizens

population which come from a diverse background ranging from

professionals, managers, and executives. The Group has developed

its own unique marketing and communication proposition in Weibo

China since October 2013. Weibo would act as a diverse and

dynamic platform for us to communicate and interact with our target

audiences through one of the most popular social media websites in

China today. The cost of customer acquisition and communicating

to the outside world is significantly lower than traditional advertising.

The feedback loop is making us better because of the insights we

are gaining through interactions with our customers.

For the Thailand market, the Group appointed a large and well

established regional distributor in 2013 which has a strong presence

in Thailand modern trade distribution channels, to distribute

OLDTOWN White Coffee products to more than 400 retail outlets. As

a result, our products now can be found in Tops Supermarket and a

few hypermarket chains such as Big C, Tesco and Makro.

Prior to FY2014, the Group had been constrained by its

production capacity, but had since addressed that issue when

production facilities were added in the year under review. The new

manufacturing facility located in Tasek Industrial Estate, Ipoh is

already fully operational since mid-2013 and able to increase the

production capacity by approximately 300% as compared to the

output capacity in the year 2012. With this increased production

capacity, the Group is expected to cope with the rising demand for

our products over the next five (5) years.

This fully commissioned and operational state-of-the-art integrated

manufacturing facility, houses the production facility, warehouse,

research and development laboratory, administrative and logistic

processing centre in a single location.

Sustaining Grow�th – Café Chain Operations and Manufacturing of Beverages

In a dynamic world, where more and more competitors are striving

to grow their market share to gain a strong position, and to attract

and maintain as many customers as possible; we need to continually

meet the ever-evolving needs of the market.

Under the current competitive environment, an effective brand

strategy is critical in winning customer loyalty and sustaining market

share. Our Company took a bold step in 2013 to introduce a new

brand tag line, “Aroma of Good Times”. The new tag line has been

well-received and the full impact of the rebranding exercise is

expected to be more pronounced in the near future. Strong brand

equity is a key ingredient in today’s extremely competitive food and

beverage industry where consumers want to associate themselves

with a successful brand that fits their lifestyle.

Café Chain

We shall continue to expand the café network via our franchise and

licensing programmes locally and internationally, in addition to the

establishment of our fully or partially owned outlets to fuel further

growth in our business.

Besides strengthening our position as one of the largest Asian café

chain operators and beverages manufacturer that specialises in

coffee-related products, we will also relentlessly focus on innovation

and improvement of our existing café chain operations in Malaysia,

Singapore, Indonesia and China.

We are making some modifications to our food and beverage items,

as well as in the set-up of our outlets to suit the individual market

consumers’ tastes profile and local needs. Essentially, we need to

customise our operations to local requirements and expectations,

at the same time establishing a differential advantage and then

sustaining it.

2020

Towards this end, we need to put our customers at the centre of all

our decision-making activities. The market can follow new trends in

the future, but in order to succeed, we need to adopt a customer-

oriented approach. Our primary objective is to be the leading Asian

café chain operator in each of our target markets by providing each

customer a unique dining experience. Superior customer service is

aimed at building a high degree of customer loyalty.

The Group has evolved from an initial domestic operated café

chain to become a regional player where we have undergone a

tremendous change by expanding into the other Asian regions over

the years since 2005. We marketed our products to Singapore in

2008, a proximate market that has an almost similar consumer

taste profile to Malaysia, and followed by Indonesia and China

in 2011. Nonetheless, we are actively exploring opportunities in

other countries within the Asian region to be consistent with our

international market expansion plans while strengthening our market

position within each individual existing market that we presently

operate in.

The Group plans to open more outlets in Malaysia in FY2015.

Realising most of the second- and third-tier cities and townships

will present vast opportunity for the Group to reach a wider range of

customers; we are aiming to penetrate into the suburban and rural

markets over the next few years.

New� Market - Australia

The appointment of a Master Licensee in Australia in May 2014

marks the Group’s first foray outside Asia for the café chain business

and the Master Licensee targets to open its first outlet, either in

Melbourne or Sydney, within the first half of 2015. The Australian

market is selected owing to the overwhelming demand and

acceptance of Asian cuisine, particularly Malaysian.

According to IBISWorld, the Australian restaurant industry performed

strongly during the 2013-2014 period and contributed AUD11.4

billion to the Australian economy (Note 2). In this respect, we are

fairly excited and optimistic that the Group’s recent expansion into

Australian markets would bring promising outcome and contribution

to the Group in the medium to longer term. It is important to note

that pursuant to the agreement with the Master Licensee, our Group

is granted an option to participate directly in the Australia operations

as a shareholder with up to 51% of equity stake after the fourth (4th)

year of operations. Through this strategic option, the Group is poised

to ride on the better business performance of the café operations in

Australia.

Note (2): IBISWorld, “Restaurants Market Research Report,” IBISWorld

Company website

Indonesia – Second Wave

The positive development in Indonesia had prompted the Group to

enter into a second Master License Agreement on 22 June 2014

(“MLA”) with the existing Master Licensee of the Group, PT Oldtown

Indonesia. The execution of the second MLA enables PT Oldtown

Indonesia to set up a network of OLDTOWN café outlets throughout

the Republic of Indonesia. PT Oldtown Indonesia is currently only

licensed to establish and operate OLDTOWN café outlets in the

territories of Jawa and Bali.

Pursuant to the MLA, the Master Licensee is also responsible

to establish, build, and operate a distribution centre as well as a

central kitchen within twelve (12) months from the opening of the

fiftieth (50th) outlet to support the larger number of café outlets

in Indonesia. Further, in order to fast track the development of

OLDTOWN café outlets in Indonesia, the Master Licensee is also

allowed to appoint Sub-Licensees. Essentially, the second MLA is

in line with the Group’s primary objective to entrust upon its Master

Licensee to fully expand OLDTOWN café outlets in Indonesia, which

is renowned as the largest archipelago in the world as well as the

most populous nation in South East Asia.

China – Laying Stronger Foundation for Future Grow�th

The Group’s medium-term plan is to set up a new food processing

centre in Guangdong Province, China to support a larger number

of new café outlets. However, the establishment of a new food

processing centre has taken longer than expected, owing to a

protracted delay in the conceptualisation and discussions with

various parties to deliver an ideal outcome. In the meantime, our

operations are well supported by a local licensed food processing

centre which supplies several core ingredients to our OLDTOWN café

outlets in Guangdong Province.

Despite some setbacks faced by the Group in 2013, the Group is still

optimistic about the huge growth potential in our café chain business

in China in view of the country’s large population base with growing

spending power coupled with the rising number of middle class

households year-on-year. The Group remains steadfast with the plan

to open more licensed outlets in strategic locations within Southern

China to tap into this massive market.

Manufacturing of Beverages

As a successful brand owner, brands and innovations are the focus

of our business model, and our white coffee products are well placed


of Operations


2121

to meet the needs and aspirations of our consumers across a variety

of categories, price points and channels, allowing us to compete

effectively in our key markets, especially in overseas.

In order to stay ahead of our competitors, we have to be sensitive

to the changing needs of today’s consumers and continually being

able to delight our consumers with fresh tastes, formats and even

packaging. In this regard, we are well supported by a group of

experienced workforce and an in-house R&D team. This, coupled

with their extensive knowledge of operating in the local marketplace

and global consumption trends, makes it a very formidable

combination through which the growth of our business will continue

to be driven. In addition to our strong brands, distribution and

marketing expertise is just as vital to our successful business model.

The regional distribution reach is complemented by the specialised

expertise we have developed in both the modern and traditional

retail formats, extending from the supermarkets, hypermarkets to

the convenience stores and even to the corner mom-and-pop stores.

This provides us with a reach wider than many of our competitors

and gives us a tremendous competitive edge in distributing our

white coffee products, and when introducing new products into the

marketplace.

Next Engine of Grow�th

The Group foresees that there are ample rooms to grow its sales

in China in view of the country’s enormous market potential and

growing affluence amongst the urban population. Since 2011, many

major retailers operating within the tier-1 cities along the coastal line

of China have been selling Oldtown’s beverage products. In 2013,

the Group managed to expand further into the central region of China

by distributing its beverage products progressively across the tier-2

cities in China.

China emerged as the fastest growing market for Oldtown’s

beverage products in FY2014. Through trade exhibitions we

have participated in China, the Group is able to meet, solicit new

business opportunity and to build rapport directly with new business

associates, trade partners and retailers. In essence, we could gauge

the acceptance level of our products in the Chinese market.

The Group will always strive to find ways and means to strengthen

its marketing initiatives and investing greater efforts in key

ASEAN countries where the Group has already established its

presence years ago. Various marketing campaigns, advertising and

promotional activities have been conducted recently to entrench

OLDTOWN White Coffee (“OTWC”) brand equity in the marketplace.

A concerted effort was also implemented to create greater

awareness of the uniqueness of OTWC amongst the target consumer

groups on a regular basis.

Comprehensive Coverage in Existing Markets

Recently, the Group has appointed new distributors in Indonesia and

Philippines. Both distributors have vast experience in distribution

and marketing of certain renowned Fast Moving Consumer Goods

(“FMCG”) brands in their respective countries. We expect the

appointment of these new distributors will boost the sales of our

white coffee mix products in both countries in the future. Essentially,

we are aiming to extend our reach into markets with growth potential

such as Indonesia and Philippines.

The Group has adopted various flexible and adaptive strategies by

customising its marketing campaign and product mix when venturing

into the international markets, as we are mindful that each consumer

market possesses unique characteristics and preferences.

Outlook and Prospects

Looking ahead, the major markets we operate in will remain

competitive and challenging. Raw material prices, inflationary

pressures and currency risks—specifically the fluctuations of the

major currencies against the Ringgit Malaysia—will likely have an

impact on our business. Nonetheless, we will pro-actively manage

costs, further strengthen our networks, and develop our segment and

country markets with foresight and flexibility.

Despite achieving another year of impressive financial performance

in FY2014, we believe that our business still has tremendous room

for growth. The Group’s strong profitability represents another year of

record performance and reflects the positive business environment

for our two businesses and the successful execution of the Group’s

growth strategy. The growth in the past has been powered by the

strength of our white coffee products across the different categories

and regional markets, and going forward this will remain the key

driver of future growth.

I believe our carefully formulated strategies to achieve sustainable

business models for growth will be executed by the management

team as planned to deliver another successful year for the Group.

Lee Siew� Heng Group Managing Director

2222

80,000

50,000

60,000

70,000

40,000

30,000

20,000

40,160

Profit Before Tax (RM’000)

43,379

51,954

74,947

10,000

0

14.00

8.00

10.00

12.00

6.00

4.00

6.66

#Earnings Per Share (Sen)

6.99

8.86

10.79

2.00

0

500,000

400,000

300,000

200,000193,666

Revenue (RM’000)

Revenue (RM’000)

RM382,1722014

Profit Before Tax (RM’000)

RM66,368Profit Attributable toOwners of the Company (RM’000)

RM48,938#Earnings Per Share

10.79SEN

2009p* 2010p* 2011 2013a^ 2014 2009p* 2010p* 2011 2013a^ 2014

2009p* 2010p* 2011 2013a^ 20142009p* 2010p* 2011 2013a^ 2014

255,133

285,424

422,054382,172

100,000

0

60,000

50,000

40,000

30,000

20,000

30,231

Profit Attributable to Owners of the Company (RM’000)

31,700

40,177

55,527

48,938

10,000

0

66,368

12.24

p* : based on the proforma consolidated financial information as disclosed in the Prospectus dated 22 June 2011. a^ : based on the audited financial statements for 15-month financial period ended 31 March 2013. The Company has on 27 August 2012 changed

the financial year end of the Company from 31 December to 31 March. The financial period ended 31 March 2013 made up of 15 months results covering period from 1 January 2012 to 31 March 2013.

# : The above EPS are calculated based on the enlarged share capital of 453.597 million ordinary shares after adjusted for 1-for-4 bonus issue for year-on-year comparison purpose.

They are different from the EPS disclosed in the Prospectus for financial years from 2009 to 2010 (computed based on the enlarged share capital prior to the public listing) and EPS disclosed in the audited financial statements for year 2011, 2013 and 2014 respectively (computed based on weighted average number of shares).

Financial Highlights


2323

Oldtown Berhad (“Oldtown” or “the Group”) recognises that acting responsibly and sustainably creates value for the group, employees, customers, shareholders and society as a whole. Sustainability is an integral part of our business and corporate responsibility serves as key to sustainability.

The Group’s corporate responsibility practices focus on four areas - Environment, Workplace, Community and Marketplace which aim to deliver sustainable value to society at large.

The Group will continue to build sustainable practices in every aspect of the Group’s business and remain steadfast in achieving excellence in its corporate responsibility activities.

(A) Environment

Environmental Sustainability is of utmost importance due to the increasing depletion of the earth’s natural resources and global climate change issues. As a dynamic business entity, we rely on the earth’s natural resources every day and climate change issues will affect the supply chain and the source of many products. Therefore, it is essential to embed environmental sustainability principles into our business operations and practices.

We aim for business growth that is in harmony with environment and are committed to protecting the earth’s natural resources, conserving and preserving the environment.

Among the approaches seek to heighten the positive impact and minimise negative impacts of the Group’s operations on the environment are:

• The efficient use of energy, water and raw materials in all our operations.

• The establishment of Oldtown EARTHCARE which inculcate environmentally intelligent practices with a variety of green initiatives, activities and awareness programs.

• The implementation of ongoing product wastage elimination program and packaging design optimisation.

• The proper utilisation of reusable resources and recyclable materials.

• The practice of 3Rs (Reduce, Reuse and Recycle) at the workplace.

• The participation in Earth Hour Campaign.

• The support of green environment and Eco-friendliness concept through “Plant a Tree” Campaign.

The Group through Oldtown EARTHCARE takes a proactive approach to promote an environmentally-conscious culture in the workplace. Oldtown EARTHCARE sends out “Oldtown Green Alert” to all employees periodically to introduce various green initiatives and measures on the responsible use of resources to reduce, reuse and recycle materials wherever possible. It provides tips for resource-

saving and promotes environmental friendly practices and awareness among employees to help make a difference to the environment.

Oldtown EARTHCARE carried out various activities during the financial year under review, such as:

• Contributed recycle bins and trees to schools.

• Allocation of Green Signage at nationwide Oldtown White Coffee outlets.

• Conducted Oldtown Recycle Competition 2013 in October 2013.

• Conducted Oldtown Carnival of the Green 2013 at Kg. Tersusun Klebang Selatan on 9th November 2013.

• Carried out Landscaping and Tree Planting Campaign at Kg Tersusun Klebang Selatan on 9th November 2013.

• Established Oldtown Mother Earth website in January 2014 – A charity fundraising platform for buying and selling recycled creations and used items.

• Participated the Earth Hour Campaign 2014 at nationwide Oldtown White Coffee outlets on 29th March 2014.

• Implemented different practices of 3Rs (Reduce, Reuse and Recycle) such as established a Recycling Corner and arranged recycling pickup services to collect the recyclable materials and sent out monthly “Green Alert” with various “go green” practices and messages to all staff.

Green Building

To support the Group’s commitment to “GREEN”, the Group’s new integrated industrial complex located at Ipoh, Perak which comprise a 21⁄2 storey factory building, 1 storey warehouse, 2 storey canteen cum Recreation Centre and 3 storey administration building was constructed based on GREEN BUILDING concept by adopting green building design and requirements.

The design and layout of the building includes green features to minimise environmental impact such as:

• Energy Efficiency

- Usage of LED bulbs with low energy consumption, motion sensor lightings and electrical sub-metering to gauge the usage of individual blocks electricity consumption.

- Installations of double glazed windows and thermal roof insulation materials to reduce heat builtup and minimise air-conditioning load.

- Limited parking capacity with parking priority for hybrid vehicles and encourage carpooling.

- Convenient location with easy access to public transportation to mitigate carbon emissions to the atmosphere.

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- Installation of air conditioning using environmentally friendly refrigerant gas.

- Committed to use machinery and equipment with inverter technology to minimise electricity peak load.

- Developed Building User Manual and forecasting budget for sustainable maintenance to ensure long usage life for plant and machinery.

• Water Efficiency

- Installation of Rainwater Harvesting System to collect rainwater for toilet flushing and plant irrigation.

- Insertion of Digital Flow Meters for effective pipeline leak detection.

- Usage of sensor taps to enhance water conservation.

• Materials Efficiency

- Disposal of construction waste according to regulations. Scrap materials collected during construction stage are stored and sent to recycle centres.

- Packaging materials wastage is sold as recyclable content to be processed as alternative burning fuel with environmental conservation objective of reducing dumping into landfill areas and also reducing the consumption of fossil fuel.

• Indoor Environmental Quality

- Implementation of Environmental Tobacco Smoke Control to establish a non-smoking policy in and around the building. Allocation of a smoking zone exclusively for a non-smoking premise.

- Installation of Air Recirculation System contributing appropriate ventilation and thermal comfort.

- Availabilities of breakout spaces, internal noise level monitoring, daylight and glare control create a conducive working environment for employees with visual, thermal and acoustic comfort.

- Landscaping works by reserving area for grass turfing and plants.

The project is registered under the name of OLDTOWN MANUFACTURING PLANT (GBI Reg No GSB/INC/2012/01). It is currently at the Completion and Verification Assessment Stage and is expected to be certified as Green Building under Non-Residential New Construction category by October 2014.

1. Design of Admin Block with calculated sun screeding angles to allow natural daylighting but at same time reducing glare.

2. Parking Priority for Employees with Hybrid Cars and employees who practices carpool.

3. Centralized Air Conditioning Unit with Invertor technology. Air conditioning system equipped with zonal temperature and humidity control to balance electricity consumption and comfort of employees.

4. High ballast lightings for wide zone illumination and Digital Power Meter to monitor electricity consumption by zones and analyis consumption trend.

5. Digital Flow Meter installed at various points and monitored using a computerized system to analyse water consumption and immediately detect any internal water pipe leakage.

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(B) Workplace

Employees are the backbone of the business. Essentially, employees are central to the smooth functioning of business operations and play a vital role in the success and sustainability of the Group.

The Group believes that human capital is the most valuable asset. In line with this belief, the Group strives to provide a dynamic and challenging workplace that gives emphasis on the opportunity to develop employee skills, talent and capability.

The Group, in fulfilling its corporate responsibility as a caring employer, places emphasis to build long lasting relationships with its employees.

The efforts towards achieving the above objectives are carried out in various aspects:

i) Employee Welfare & Well-being Program

The Group aims to enhance the employee benefits schemes to build an engaged workforce that stay loyal and grow with the Group. In pursuing the objective, we provide the following:

• Medical benefits, hospitalisation and personal accident insurance coverage.

• Financial assistance in the form of education subsidy and employee emergency assistance fund.

• Organises annual dinner and recognises long service staff with the Long Service Award in recognition of their loyalty, dedication and commitment.

• Review the Human Resource policies and staff benefits on regular basis.

ii) Safe, Healthy and Conducive Work Environment

The Group strives to provide a safe, healthy, comfortable and conducive work environment for its employees through the following initiatives:

• Setting up of Occupational Safety and Health Committee to initiate various health and safety programs such as fire drills, fire safety briefings and safety system checks on the equipment.

• Ensuring safe practices in all aspects.

• Promoting the awareness of safety precautions and health.

iii) Training and Development Program

The Group seeks to promote and develop its human assets to be competent, multi-skilled and well-motivated to increase their career advancement opportunities. The Group continues to carry out the following efforts:

• Employees are provided with the necessary job related training, seminars and workshops on an ongoing basis to further enhance their skills, knowledge, core competencies and proficiency level.

• Participation in various in-house and external training programs from technical-related skills to soft management skills.

• Participation in international trade fairs/exhibitions locally and overseas, to broaden the knowledge base and exposure of the employees to keep abreast of new developments in their respective field of expertise.

iv) Recreational, Sports and Leisure Activities

The Group acknowledges a good work-life balance will lead to a more productive workforce.

In order to cultivate balanced work life and create a caring, harmonious and cohesive working environment, employees are encouraged to participate in social, sports, recreational and leisure activities organised by the Group. Besides, communication and camaraderie among staff is fostered through social gatherings and team building events.

v) Retention, Talent Management and Succession Planning

Retaining key employees is crucial to ensure business success. The Group shall continue to ensure the rewards package remain competitive to attract, retain and motivate the right talents.

A proper succession plan is put in place for critical positions to ensure sustainability in terms of continuous effective and efficient operations within the Group and a healthy leadership pipeline.

During the financial year ended 31 March 2014, besides attending various seminars, workshops, courses and training sessions relating to different scope of skills and knowledge coverage, the staff also participated in various team building events and activities which aim at promoting cohesiveness and team spirit amongst staff.

To maintain a healthy lifestyle, the Group also organised fitness programmes after working hours for staff participation to help employees stay fit and healthy.

(C) Community

The Group recognises the interdependent relationship between business growth and social well-being and welfare. Therefore, in fulfilling its corporate responsibilities to the community it serves, the Group is obligated to nourish and improve the quality of the society at large while doing business.

To be socially responsible, the Group focuses its corporate responsibilities on enhancing community sustainability through various activities and actions aim to promote community engagement and address the needs of less fortunate and underprivileged families.

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The philanthropic activities and approaches include:

• The setting up of OldTown Children Care Fund to provide aid funds in the form of medical, educational and other short term emergency funds to orphaned, abandoned, vulnerable and deprived children.

• Monetary and in kind donations to schools, charity, welfare and voluntary associations.

• Distribution of gifts, goodie bags, basic supplies and necessities to the poor and impoverished communities during festivals.

• “Annual Orphanage Project” - Building funds donations to orphanage or purchase of building as shelter for orphans.

During the financial year ended 31 March 2014, the Group through Oldtown Children Care Fund extended monetary donations to schools, charity, welfare and voluntary association and needy families. It organised various festive celebrations, movie treats and day trips for children homes. It also donated school necessities to deprived primary school students from Pulau Ketam, Rawang, Sepang, Sungai Pelek, Tanjung Sepat, Puchong, Jenjarom, Klang, Sungai Buloh and Jinjang in the month of November 2013.

Under “Annual Orphanage Project”, the Group has purchased a bungalow in Ipoh and rented to a Children Home for RM1 (Ringgit Malaysia :One) only as a shelter for children who are orphaned and abandoned.

(D) Marketplace

To achieve the sustainable development of the marketplace, the Group endeavors to carry out activities in a sustainable manner and promote responsible practices among our investors, suppliers and customers.

(i) Investors

We strive to enhance corporate value and maintain stable and long term growth for the benefit of shareholders. It is through engagement with its shareholders that the Group may learn of new and better ways to enable a successful and sustainable business model. The Group continues its efforts to engage with its shareholders through the following initiatives:

• Disclose and disseminate all material information in a timely, open, fair and transparent manner.

• Ensuring a robust system of corporate governance.

• Implementing policies that promote ethical behavior and conducting business responsibly through high standards and business ethnics.

• Actively engages with its shareholders and investors through various channels of communication such as investor relations activities, general meetings of shareholders, financial results briefings, dialogues and regular press releases.

• Accessible in the public domain and regular investors updates on our website.

The Group aims to develop a good relationship with investors and is accountable for providing timely information about the Group to the investment community.

During the financial year ended 31 March 2014, the Group has conducted investor relations activities via various communication channels such as one-to-one meeting, small group briefing, conference calls, regular meetings and road shows.

(ii) Suppliers

We respect our suppliers and work with them through long-term relationships to realise mutual growth based on mutual trust. In this aspect, we engage with our suppliers in the following areas:

• Fosters new partnerships and delivers new business opportunities to expand the suppliers’ business coverage in the industry.

• Engages in ethical procurement practices by adopting standard procedures in vendors’ qualification.

• Ensures the products supplied are in accordance with the Group’s materials requirements.

• Conducts more in-depth suppliers’ audits to ensure improved standards in the supply chain.

(iii) Customers

Based on our philosophy of “Customer First”, we develop and provide innovative, safe and high quality products and services that meet a wide variety of customers’ demands and earn the trusts of our customers :

• Focuses on product innovation and development to meet the customers’ requirements.

• Ensures halal compliance covering materials, employees and systems.

• Enhances customers’ satisfaction and confidence by providing safe, reliable and affordable products.

• Establishes customers’ complaint and feedback system through dedicated email address, social media such as Facebook and Twitter and suggestion boxes and ensures all customers complaints are acknowledged and resolved promptly.

• Sets quantitative benchmarks for its customer service delivery standard such as Standard Waiting Time.

• Continues to be covered by the internationally recognised ISO 9001:2008 (Quality Management System), ISO 22000:2005 (Food Safety Management System), HACCP (Hazard Analysis Critical Control Point) and GMP (Good Manufacturing Practice) certifications for its manufacturing operations to ensure uniform and high standards of product.


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Community & Workplace Events and Highlights

The Group’s corporate responsibility practices focus on four areas - Environment, Workplace, Community and Marketplace which aim to deliver sustainable value to society at large.

OldTow�n Children Care Fund (OCAF)

• Donations and Sponsorships

• Procurement of Building as Shelter for Orphans

• Contributions of School Necessities

• Festival Celebrations for the Unfortunates

• Charity Day Trip

1. Christmas & New Year movie-cum-lunch treat for 100 Orphans at AEON Station 18 on 21st December 2013

2. Chinese New Year Bowling Outing With 103 Less Fortunate Children on 22nd February 2014 at Ampang Superbowl, Ipoh Parade.

3. Hari Raya Open House at Bandar Baru Bangi Outlet with 100 deprived children on 24 August 2013.

4. Donation of RM 3,600 education aid fund to 3 deprived families from Kampar, Perak.

5. Bestowal of RM 1,800 education aid fund to an underprivileged family with 4 children from Kampar, Perak.

6. Contributions of school essentials to 50 deprived students from SJK(C) Kuang, Rawang.

7. Charity Trip to Kidzania Kuala Lumpur with 73 orphans conducted on 19th April 2013.

8. Procurement of a bungalow at Merdeka Garden, Ipoh as a shelter for children who are orphaned and abandoned.

9. Sponsorship of RM 5,000 for Program Titipan Kasih Harian Metro 2013 at Kampung Sungai Nipah, Bagan Datoh, Perak.

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CorporateResponsibility


Earthcare

• Oldtown Carnival of the Green 2013

• Landscaping & Tree Planting Campaign

• Earth Hour Campaign 2014

• Contributions Of Trees and Recycle Bins To Schools

• Oldtown Recycle Competition 2013

• Oldtown Mother Earth website

• Practises of 3Rs in the Office

• Allocations of Green Signage

Workplace Activities & Events

• Learning, Training and Development Program

• Staffs Recreational, Sports and Leisure Activities

• Employee Welfare and Well-being Program

• Safe, Healthy and Conducive Work Environment

• Retention, Talent Management and Succession Planning

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10. Tree Planting Session by students from SJK(C) Pei Cheng, SJK(T) Klebang and SK Tasek at Kg Tersusun Klebang Selatan, Ipoh.

11. Tree Planting Opening Ceremony by Guests of Honor during OldTown Carnival of the Green 2013.

12. Cheque presentation to OldTown Recycle Competition 2013 first prize winner.

13. Donation of 3 sets of recycle bins to SRJK(C) Padang Gajah, Ipoh.

14. Team Building Event conducted at Nomad Adventure’s Earth Camp, Gopeng on 22nd September 2013 for Ipoh-based staffs.

15. Team Building Event Conducted at Gold Coast Morib, Banting on 21st & 22nd February 2014 for KAP staffs.

16. Team Building Event Conducted at A Famosa Malacca on 13th September 2013 for OTK staffs.

17. Staff’s Buka Puasa Treat conducted at Subang offie on 30th July 2013.

18. Service Enforcement Training conducted at OldTown White Coffee restaurants.

19. Staff fitness classes at OldTown Berhad Ipoh office.

20. Monthly Basic Operations Management Training conducted at Training Centers in Subang & Air Itam, Penang.

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Annual Report 2014

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The Board of Directors (“the Board”) of Oldtown Berhad (“the Company”) recognises the value of good governance and believes that a high standard of corporate governance will deliver long-term sustainable shareholder value. The Board is committed to ensure good corporate governance practices are applied throughout the Company and its subsidiaries (“the Group”).

This Statement sets out the key aspects of how the Company has applied the Principles and Recommendations of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) during the financial year ended 31 March 2014 and any non-observation of the Recommendations of MCCG 2012, including the reasons thereof, has been included in this Statement.

Principle 1 – Establish Clear Roles and Responsibilities

1.1 Clear Functions of The Board and Management

The Board leads the Group and plays a strategic role in overseeing the Group’s corporate objectives, directions and long term goals of the business. The Board is responsible for oversight and overall management of the Group.

The Board Committees are established to assist the Board in discharging its responsibilities. The Board delegates specific responsibilities to three (3) principal Committees, namely the Audit Committee, the Nomination Committee and the Remuneration Committee. All committees have written terms of references and operating procedures and the Board receives reports on their proceedings and deliberations. The Chairman of the respective Committees shall report the outcome of their meetings to the Board. Minutes of all Board Committee meetings are circulated to the Board members so that they are kept abreast of proceedings and matters discussed at Board Committee meetings.

Independent Non-Executive Directors provide unbiased and independent views in ensuring that the strategies proposed by the Management are fully deliberated and examined objectively, taking into perspective the long term interests of shareholders, other stakeholders and the community at large.

The Board recognizes the importance of the role of the Independent Non-Executive Directors particularly in corporate accountability. They are essential for protecting the interests of non-controlling interests and can make significant contributions to a company’s decision making by bringing in the quality of detached impartiality.

The Executive Directors take on primary responsibilities for implementing the Group’s business plans and managing the business activities.

1.2 Clear Roles and Responsibilities

In fulfilling its fiduciary and leadership functions, the Board meets regularly to perform its functions, amongst others, as follows:

a. Reviewing and Adopting The Company’s Strategic Plans

The Board provides strategic direction and guides the Group in promoting its core values, policies and objectives. The Board reviews the strategic plans presented by the Management.

b. Overseeing The Conduct of The Company’s Business

To ensure the effective discharge of its functions and responsibilities, the Board delegates the day-to-day management of the Group’s business to the Management. The Group Managing Director is responsible for the implementation of the Board’s decisions, overall responsibilities over the day to-day operations of the Group’s business and operational efficiency.

c. Identifying Principal Risks and Ensuring The Implementation of Appropriate Systems to Manage Them

The Risk Management Committee (“RMC”), headed by the Group Managing Director advises the Audit Committee and the Board on areas of high risk faced by the Group and the adequacy of compliance and control throughout the Group.

Details on the RMC and the Company’s Enterprise Risk Management are set out in the Statement on Risk Management and Internal Control of this Annual Report.

d. Succession Planning

The Board recognizes the importance of succession planning in building long-term sustainable performance excellence.

A succession planning framework has been developed to identify candidates for senior managerial positions to ensure continuity of key positions.

e. Overseeing The Development and Implementation of A Communication Policy for The Company

The Board recognizes the importance of keeping shareholders and investors informed of its latest business and corporate developments. The Board believes that an effective investor relationship is essential in enhancing value to its shareholders.

The dissemination of information about the Company, its businesses and its activities is conducted via the timely release of quarterly financial results, press releases and announcements. The Company also holds regular briefing and dialogues with fund managers, analysts, potential shareholders and research houses from time to time. Whilst the Company endeavors to provide as much information as possible, it is aware of the legal and regulatory framework governing the release of material and price sensitive information.

The Company’s website at www.oldtown.com.my provides easy access to corporate and financial information of the Group. The Investor Relations (“IR”) updates and information on financial results are uploaded on the website immediately after announcements on the same are made to Bursa Malaysia Securities Berhad (“Bursa Securities”).

During the financial year under review, the Company has been involved in investor relations activities to keep shareholders duly informed on the performance of the Company. There were meetings with local and foreign fund managers and analysts to provide insights on the operations and latest developments in the Group.

CorporateGovernanceStatement


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f. Review�ing The Adequacy and Integrity of Management Information and Internal Control System of The Company

The Board has established a sound risk management and internal control framework to manage risks and to safeguard shareholders’ investment and the Group’s assets, as presented in the Statement on Risk Management and Internal Control of this Annual Report.

1.3 Formalised Ethical Standards Through Code of Conduct

The Board has adopted a Code of Conduct for Directors and employees. It sets out the ethical standards and underlying core ethical values to guide actions and behaviors of all Directors and employees in conducting the day to day duties and operations of the Group.

The principles of which the Code of Conduct relies are principles in relation to accountability, anti-bribery, commitment, corporate social responsibility, diligence, discipline, excellence, fairness, honesty, independence, integrity, loyalty, respect, responsibility, professionalism, transparency and trust.

The key principles and expected conducts and ethical behaviour are embedded into the Group’s business operations and corporate culture. The Group strives to uphold ethical practices and high standards of integrity in the Group’s dealings with employees, customers, suppliers, business associates and shareholders.

The Board will review the Code when necessary to ensure it remains relevant and appropriate.

The full version of the Code of Conduct is published on the Company’s website at www.oldtown.com.my.

1.4 Strategies Promoting Sustainability

The Board has adopted a Sustainability and Corporate Responsibility Framework for the Group. The Framework reinforces the Group’s sustainability commitment to integrate sustainability and corporate responsibility strategies into daily operations with the ultimate objective of achieving greater efficiency, better performance of the Group and improved quality of life to the society at large.

The Group’s activities on sustainability are included in the Sustainability and Corporate Responsibility section of this Annual Report.

1.5 Access to Information and Advice

All Board members are supplied with information concerning the Company and the Group on a timely manner. All Directors are provided with comprehensive Board papers at least five (5) days before Board meetings to enable them to review and consider the agenda items to be discussed. The Board papers contain relevant information and justifications for each proposal for which Board’s approval is sought. Where necessary, members of senior management and external advisers are invited to attend these meetings to provide additional insights and professional views on specific items on the agenda.

Minutes of the Board and Board Committee meetings are circulated to Directors for their perusal prior to confirmation of the minutes at the following Board and Board Committee meetings. The Directors may request for further clarification or raise comments on the minutes prior

to confirmation of the minutes as correct records of the proceedings and signed in accordance with the provisions of Section 156 of the Companies Act, 1965.

In exercising their duties, the Board has complete and unrestricted access to all information on the Group, the advice and services of the Company Secretary and independent professional advice where necessary, at the Company’s expense.

1.6 Qualified and Competent Company Secretary

The Board is supported by the qualified and experienced Company Secretary who facilitates overall compliance with the Listing Requirements and other relevant laws and regulations.

The Company Secretary carries out the following tasks:

• Attend and ensure proper conduct and procedures at all Board Meetings, Board Committee Meetings, Annual General Meeting, Extraordinary General Meeting and any other meetings and ensure that meetings are properly convened;

• Ensure that deliberations at the meetings are well captured and minuted, and subsequently communicated to the relevant Management for necessary actions;

• Inform and keep the Board updated of the latest enhancement in corporate governance, changes in the legal and regulatory framework, new statutory requirements and best practices;

• Keep the Directors and principal officers informed of the closed period for trading in the Company’s shares; and

• Ensure proper record and maintenance of the Company’s proceedings, resolutions, statutory records, register books and documents.

1.7 Board Charter

The Directors are expected to act in a professional manner and discharge their duties with high ethical values, honesty and accountability in their commitment to good corporate governance practices.

A Board Charter was formalised and adopted by the Board on 1 March 2014. The Board Charter clearly sets out the roles, responsibilities, authorities and operation of the Board and Board Committees. All Board members are aware of their duties and responsibilities.

The Board Charter also outlines:

• The division of responsibilities and powers between the board and management, the different committees established by the board, and between the Chairman and the Group Managing Director;

• Set out processes and procedures for convening board meetings;

• The Board’s commitment in upholding integrity in financial reporting, conflicts of interest situations and related party transactions;

• List of matters reserved for decision by the Board;

• Board’s access to information and independent advice and

• The role of the Company Secretary.


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The Board Charter serves as a reference providing guidance to prospective and existing Board members and Management on the fiduciary and leadership functions of the Company’s Directors. It also ensures that the principles and practices of good Corporate Governance are applied in all their dealings in respect of and on behalf of the Company; to help foster a culture of honesty and accountability and uphold the core values of integrity when dealing with ethical issues.

A summary of the Board Charter is made available on the Company’s website and will be reviewed when necessary to ensure the Charter remains consistent with the Board’s objectives, current law and practices.

Principle 2 – Strengthen Composition

2.1 Nomination Committee

The Nomination Committee comprises exclusively Independent Non-Executive Directors. The Committee met three (3) times during the financial year under review and the attendance record is as follows:

The terms of reference of the Nomination Committee are as follows:

A. Size and Composition

i) The Board shall appoint members to the Nomination Committee, comprise wholly of Non-Executive Directors and a majority of whom are independent and shall consist of not less than three (3) members.

ii) The members of the Nomination Committee shall elect the Chairman from amongst themselves who shall be an Independent Non-Executive Director.

iii) In the event of any vacancy in the Nomination Committee resulting in the number of members being reduced to below three (3), the Board shall fill the vacancy within three (3) months.

B. Meetings

The Committee shall hold at least one meeting per year or more frequently when the need arises. The quorum for each meeting shall be two (2). Minutes of meeting shall be kept and circulated to each member.

C. Responsibilities and Functions

i) To recommend to the Board, candidates to be appointed as Director of the Company.

ii) To consider in making its recommendations, candidates for directorship proposed by the Group Managing Director or by any senior management or any director or shareholder.

iii) To recommend to the Board, candidates to fill the seats on the Board Committees.

iv) To assist the Board in its annual review of the required mix of skills and experience and other qualities including core competencies which Non-Executive Directors should bring to the Board and to assess the effectiveness of the Board as a whole, the Board Committees and the individual director on an annual basis.

The Board has not nominated a Senior Independent Non-Executive Director to whom concerns may be conveyed as the Board will shoulder this responsibility collectively. Pursuant to the recommendation of the MCCG 2012, the Nomination Committee should be chaired by a Senior Independent Director identified by the Board. The Board is of the opinion that the Independent Non-Executive Chairman of the Board is suitable to act as Chairman of the Nomination Committee in view of his experience, background and commitment.

2.2 Develop, Maintain and Review Criteria for Recruitment and Annual Assessment of Directors

Appointment of Directors

The Nomination Committee, which comprises independent directors, is responsible for making recommendations for any new appointments to the Board. In making these recommendations, the Nomination Committee considers the required mix of skills and experiences which the Directors would bring to the Board. Any new nomination received is recommended to the full Board for assessment and endorsement.

The key task of the Nomination Committee is to ensure that the Company recruits and retains the best available Executive and Non-Executive Directors with the right mix of skills and knowledge relevant to the Company.

Re-election of Directors

The Articles of Association (“Articles”) of the Company provides that one-third (1/3) of the Directors are subject to retirement by rotation at the Annual General Meeting (“AGM”) at least once in every three (3) years and all retiring Directors shall be eligible for re-election.

The Articles of the Company further provides that all Directors who are appointed during the financial year are subject to retirement and re-election by the shareholders at the AGM following their appointment.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

Name


Mark Wing Kong


Dato’ Wong Guang Seng, (Appointed on 1 April 2014)

Chairman 3/3

2/3

3/3

Not applicable

Member

Member

New Member

Independent Non-Executive Director




Designation DirectorshipAttendance

(1 April 2013 to 31 March 2014)

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Gender Diversity Policy

The Group is an equal opportunity employer and does not practice discrimination of any form, whether based on age, gender, race or religion, throughout the organisation.

Where boardroom diversity is concerned, the Board does not adopt any formal gender diversity policy in the selection of new Board candidates and does not have a specific policy on setting targets for female candidates.

The Group will continue to identify suitable candidates for appointment to the Board as and when vacancies arise. Such candidates will be considered based on merit and competence and what the chosen candidate can bring to further strengthen the Board.

The evaluation of the suitability of candidates as Board members is solely based on the candidates’ competency, character, time commitment, knowledge and experience in meeting the needs of the Group.

Annual Assessment

The Nomination Committee shall conduct evaluation on an annual basis:

• The effectiveness of each director’s ability to contribute to the effectiveness of the Board and the relevant Board Committees;

• The effectiveness of the Board Committees; and

• The effectiveness of the Board as a whole.

The Nomination Committee met three (3) times during the financial year ended 31 March 2014. The activities carried out by the Nomination Committee were as follows:

• Reviewed and assessed the mix of skills, expertise, composition, size and experience of the Board, including the core-competencies of both Executive and Non-executive Directors, effectiveness of the Board as a whole and the Board Committees. All assessments and evaluations carried out by the Nomination Committee were properly documented.

• Considered the appointment of new Director and member of the Board Committees.

• Considered and assessed the list of directors who are retiring by rotation to put forward for re-election, subject to the approval of shareholders at the Company’s Annual General Meeting.

The Nomination Committee considered that the performance of the existing Board and all Committees was consistently good and satisfactory.

2.3 Remuneration policies

Remuneration Committee

The Remuneration Committee comprises four (4) Independent Non-Executive Directors and two (2) Executive Directors. The Committee met three (3) times during the financial year under review and the attendance record is as follows:

The terms of reference of the Remuneration Committee are:

A. Size and Composition

i) The Board shall appoint members to the Remuneration Committee, comprise wholly or mainly Non-Executive Directors and shall consist of not less than three (3) members.

ii) The members of the Committee shall elect the Chairman from amongst themselves who shall be an Independent Non-Executive Director.

iii) In the event of any vacancy in the Committee resulting in the number of members being reduced to below three (3), the Board shall fill the vacancy within three (3) months.

B. Meetings

The Remuneration Committee shall hold at least one meeting per year or more frequently when the need arises. The quorum for each meeting shall be two (2). Minutes of meeting shall be kept and circulated to each member.

C. Responsibilities and Functions

i) To recommend to the Board the appropriate remuneration packages of the Group Managing Director and Executive Directors. None of the Executive Directors participate in any way in determining their individual remuneration.

ii) To ensure the Executive Directors are fairly and appropriately remunerated for their individual contributions to the Company’s overall performance.

Name



Lee Siew Heng

Mark Wing Kong

Goh Ching Mun


Chairman 3/3

3/3

3/3

Member

Member

Member

Member

Member



Group Managing Director


Executive Director


Designation DirectorshipAttendance

(1 April 2013 to 31 March 2014)

2/3

3/3

Not applicable


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iii) To ensure the remuneration offered is commensurate with the level of executive responsibilities and encourage Executive Directors to act in ways that enhance the company’s long-term profitability and value.

The Board as a whole determines the remuneration of the Non-Executive Directors. None of the individual Directors participate in determining their individual remuneration.

Directors’ Remuneration

The Company aims to set the levels of remuneration in such a way that it supports the strategies and long-term vision of the Company as well as provides adequate motivational incentive for directors to pursue the long-term growth and success of the Company. The levels of remuneration should be sufficient to attract and retain the directors needed to run the Company successfully and in line with industry standards.

Remuneration packages for Executive Directors are structured so as to link rewards to corporate and individual performance. The remuneration of Executive Directors includes salary, bonus, allowance and benefits-in-kind.

In the case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by them. Currently, the Non-Executive Directors are paid Directors’ fees and attendance allowance for each Board/Committee meeting they attended.

The aggregate remuneration of Directors of the Company for the financial year ended 31 March 2014 is categorised into the following components:

During the financial year ended 31 March 2014, the Remuneration Committee met three (3) times to deliberate the following matters:

• Reviewed the new remuneration package for Group Managing Director, Executive Directors and General Managers (“eligible personnel”) by introducing incentive bonus and service agreement to eligible personnel and recommended the same to the Board for approval;

• Reviewed the remuneration package for Independent Non-Executive Directors and recommended the increase in the Directors’ fees with effect from 1 April 2014 to the Board, for which shareholders’ approval will be sought in due course; and

• Reviewed the increment and bonus for year 2014 of the Group.

Principle 3 – Reinforce Independence

3.1 Annual Assessment of Independence

The Board recognises the importance of independence and objectivity in the decision-making process as advocated in the MCCG 2012. The Board is committed to ensure that the independent directors are capable to exercise independent judgment and act in the best interests of the Company.

In line with Recommendation 3.1 of the MCCG 2012 whereby the Board is required to develop criteria to assess independence of directors, the Board has adopted the same criteria used in the definition of “independent directors” prescribed by the Main Market Listing Requirements (“MMLR”) of Bursa Securities.

The Independent Directors of the Company fulfilled the criteria of “Independence”. They act independently of management and are not involved in any other relationship with the Group that may impair their independent judgment and decision making.

Each Director has a continuing responsibility to determine whether he has a potential or actual conflict of interest in relation to any material transactions. Such a situation may arise from external associations, interests or personal relationships.

The Director is required to immediately disclose to the Board and to abstain from participating in discussions, deliberations and decisions of the Board on the respective matter.

The Board, via Nomination Committee will develop the criteria to assess independence and formalise the current independence assessment practice.

3.2 Tenure of Independent Directors

The Board is aware of the recommended tenure of an Independent Director which should not exceed a cumulative term of nine (9) years as recommended by MCCG 2012 and that an Independent Director may continue to serve on the Board if the Independent Director is re-designated as a Non-Independent Non-Executive Director upon completion of the nine (9) years.

Executive Directors

Non-Executive Directors

1,481

63

1,383

–

105

153

95

24

3,064

240

Salaries &Other

Emoluments (RM’000)

Bonus(RM’000)

Fees (RM’000)

Benefits-in-kind

(RM’000)

Total (RM’000)

RM 50,000 and below

RM 50,001 – RM 100,000

RM 250,001 – RM 300,000

RM 550,001 – RM 600,000

RM 850,001 – RM 900,000

RM1,000,001 – RM1,050,000

0

0

2

1

1

1

2

2

0

0

0

0

Remuneration Band No. of ExecutiveDirectors

No. of Non-ExecutiveDirectors

The number of Directors whose total remuneration fall in the bands of RM50,000 for the financial year ended 31 March 2014 is tabulated below:

3434


3.3 Shareholders’ Approval for The Appointment As An Independent Director After Serving Nine (9) Years In That Capacity

Subject to the assessment of the Nomination Committee and the shareholders’ approval, the Board may retain an Independent Director who has served nine (9) years or more. Presently, there is no Independent Director of the Company whose tenure has exceeded a cumulative of nine (9) years.

3.4 Separation of Positions of The Chairman and Group Managing Director

The role of the Chairman and the Group Managing Director are clearly distinct for effective balance of power and authority because the positions are held by two different individuals. The Chairman is primarily responsible for ensuring Board’s effectiveness and conduct. He ensures that all relevant issues and quality information to facilitate decision making and effective running of the Group’s business are included in the meeting agenda.

The Group Managing Director is responsible for the daily management of the Group’s operations and implementation of the Board’s policies and decisions. He is responsible for communicating matters relating to the Group’s business affairs and issues to the Board. His vast experience, business knowledge and skills contributed significantly towards the attainment of the Group’s goals and objectives.

3.5 Composition of The Board

Presently, the Board comprises four (4) Independent Non-Executive Directors and five (5) Executive Directors (including the Group Managing Director). This composition complies with Paragraph 15.02 of the MMLR of Bursa Securities which requires at least two (2) directors or one-third (1/3) of the Board, whichever is the higher, to be independent. The profiles of the Directors are set out on page 7 to page 9 of this Annual Report.

The Executive Directors take on the primary responsibility of the day-to-day running of the Group’s business as well as implementing the policies and decisions of the Board.

The Independent Non-Executive Directors act independently of management and do not participate in any business dealings and are not involved in any other relationship with the Group that may impair their independent judgment and decision-making. They provide a broader view and independent assessment to the Board’s decision making process by acting as an effective check and balance.

Together, with their diverse backgrounds, professional experience and wide range of skills, the Board can effectively manage and run the Group’s operations.

Principle 4 – Foster Commitment

4.1 Time Commitment

The Board meets at least four (4) times a year at quarterly intervals with additional meetings to be convened where necessary to deal with urgent and important matters that require attention of the Board.

To ensure that the Directors have the time to focus and fulfill their roles and responsibilities effectively, one of the criterions is they must not hold directorships at more than five (5) public listed companies as prescribed in Paragraph 15.06 of MMLR. The Directors are required to submit an update on their other directorships annually.

During the financial year ended 31 March 2014, the Board met five (5) times to discuss issues on the Group’s financial performance, significant investments, corporate development, strategy and business plan. The attendance record of each Director at the Board Meetings is as follows:-

4.2 Meeting Calendar

The dates scheduled for Board meetings, Board Committee meetings and Annual General Meeting are set in advance and circulated to the Directors to facilitate the Directors’ time planning. Circular Resolutions are used for determination of urgent matters arising in between meetings. In accordance with Article 122 of the Articles of Association of the Company, a signed and approved resolution by the majority of the Directors shall be valid and effectual as if it had been passed at a meeting of the Directors.

4.3 Training

The Board acknowledges that continuous education is essential for the Directors to further enhance their skills and knowledge. As an integral part of their training program, they are provided with updates from time to time on the relevant changes in laws, regulations and the business environment. During the financial year ended 31 March 2014, seminars and training courses attended by the Directors are as follows:

Name of Directors


Lee Siew Heng

Mark Wing Kong



Chin Lai Yoong (Retired on 26 September 2013)

Chuah Seong Meng


Goh Ching Mun

Tan Say Yap

5/5

5/5

5/5

5/5

5/5

5/5

5/5

Not applicable

4/5

2/5

Attendance(1 April 2013 to 31 March 2014)


3535


Principle 5 – Uphold Integrity In Financial Reporting

5.1 Compliance With Applicable Financial Reporting Standards

Financial Reporting

The Board is committed to provide a balanced, clear and comprehensive assessment of the Group’s financial position and prospects by making sure the financial statements and quarterly announcements are prepared in accordance with the provisions of the Companies Act, 1965 (“the Act”) and applicable approved accounting standards.

The Board is assisted by the Audit Committee in reviewing the appropriateness of accounting policies applied by the Group as well as the changes in these policies.

The Audit Committee also assists the Board in overseeing the financial reporting process and ensuring the quality of the financial reporting by the Group. The Audit Committee reviews and monitors the accuracy and integrity of the Group’s annual and quarterly financial statements for announcement to the public within the stipulated time frame.

Statement On Directors’ Responsibility

The Directors are required, pursuant to Section 169 of the Act, to draw up financial statements for each financial year that gives a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year and of the results and cash flow for the financial year. In addition, the Directors have the overall responsibility for taking such steps as are reasonably available to them to safeguard the assets of the Group and to prevent fraud and other irregularities. In preparing the financial statements for the financial year ended 31 March 2014, the Directors have:-

(i) adopted appropriate accounting policies and applied them consistently;

(ii) made reasonable and prudent judgments and estimates;

(iii) ensured that the applicable approved Malaysian Financial Reporting Standards in Malaysia and the provisions of the Act are complied with; and

(iv) prepared financial statements on a going concern basis, having made enquiries that the Company and the Group have adequate resources to continue operations in the foreseeable future.

The Statement of Directors pursuant to the Act is set out on Page 134 in this Annual Report.

5.2 Assessment of Suitability and Independence of External Auditors

The Board has maintained a transparent and professional relationship with the Group’s external auditors through the Audit Committee.

The Group’s external auditors are invited to attend the Audit Committee meetings when deemed necessary. The Audit Committee meets the external auditors to review the scope and adequacy of the audit process, the financial statements and their audit findings.

In addition, the external auditors are invited to attend the Company’s Annual General Meeting / Extraordinary General Meeting(s) and are available to answer any questions from shareholders on the conduct of the statutory audit and the contents of the Annual Audited Financial Statements as well as any corporate exercise undertaken by the Group where the external auditors are involved.

During the financial year ended 31 March 2014, the Audit Committee met twice with the external auditors without the presence of the management.

Messrs Deloitte has in place policies on rotation for partners and senior professional personnel of an audit engagement to ensure objectivity, independence and integrity of the audit. The external auditors have declared their independence to the Group and their compliance with By-Laws (on professional ethics, conduct and practice) of the Malaysian Institute of Accountants.

Name of Directors


Lee Siew Heng

Mark Wing Kong


Chuah Seong Meng


Goh Ching Mun

Tan Say Yap

Nominating Committee Program

Managing Sustainable Business Transformation – From Good to Great

Planning Corporate Mergers & Acquisitions – For execution excellence


Financial Statement, Preparation and Analysis



Maybank Global Markets Economic Talk – currency wars – At our doorstep?

Ambank-KL Economic Seminar: Managing Change – Poised for a turnaround

UOB- Corporate Seminar 2013

Bursa Malaysia –Advocacy Session on Corporate Disclosure for Directors

Risk Management and Internal Control

Tricor - GST Conference

Training/ Courses Attended

3636


Principle 6 – Recognise And Manage Risks

6.1 Sound Framework to Manage Risks

The Board acknowledges its responsibility for maintaining a sound system of risk management and internal controls in the Company and the Group. These controls provide reasonable but not absolute assurance against material misstatement, loss or fraud.

The Directors’ responsibilities for the Group’s system of risk management and internal controls cover not only the financial aspects but also compliance and operational controls as well as risks management matters and reviewing the adequacy and integrity of the system.

The Company has in place an on-going process for identifying, evaluating and managing key risks that may affect the achievement of the business objectives of the Group. Towards cultivating a sustainable risk management culture, risk management principles and practices are embedded into existing key processes across different functions within the Group.

6.2 Internal Audit Function

The Group’s internal audit function is carried out by outsourced external consultants who assist the Audit Committee and Board in providing independent assessment on the adequacy, efficiency and effectiveness of the Group’s governance, risk management and internal control processes.

Details of the Company’s internal control system and framework are set out in the Statement on Risk Management and Internal Control of this Annual Report.

Principle 7 – Ensure Timely And High Quality Disclosure

7.1 Corporate Disclosure Policy

The Board has put in place a Corporate Disclosure Policy to ensure the disclosure of material information pertaining to the Company’s performance and operations to the public is in accordance with the disclosure requirements under the MMLR and other applicable laws and regulations.

The Policy outlines the Company’s approach towards the determination and dissemination of material information, the circumstances under which the confidentiality of information will be maintained, preventing abuse of undisclosed material information and provides guidelines for achieving consistent disclosure practices. Confidential information is restricted to top management only. Selected members of top management are responsible for making disclosures and responding to market rumours and queries.

7.2 Leverage on Information Technology for Effective Dissemination of Information

The Board has established a dedicated section for corporate information on the Company’s website where information on the Company’s announcements, financial information, share prices and analysts’ reports can be accessed.

Principle 8 – Strengthen Relationship Between Company and Shareholders

8.1 Encourage Shareholder Participation at General Meetings

Annual General Meeting (“AGM”)

The AGM serves as the principal forum for direct interaction and dialogue among shareholders, Board and management. The AGM provides an opportunity for the shareholders to seek and clarify any issues and to have a better understanding of the Group’s performance and other matters of concern. Shareholders are encouraged to actively participate in the question and answer session. The Board, senior management and the external auditors will be present to answer and provide appropriate clarifications at the meeting.

Normally, a press conference will be held after the AGM to advise the media of the resolutions passed by shareholders, brief the media on the operations, performance and financial results of the Group for the year under review and clarify issues posed by the media.

The Company dispatches its notice of AGM and related papers to shareholders at least twenty one (21) days before the meeting to enable shareholders to go through the Annual Report and papers supporting the resolutions proposed.

8.2 Encourage Poll Voting

In line with recommendation 8.2 of the MCCG 2012, the Chairman informs shareholders of their right to demand a poll vote at the commencement of the AGM.

All resolutions put for the shareholders’ approval at the 5th AGM held on 26 September 2013 were voted by a show of hands and duly passed. The resolutions passed at the meeting are released to Bursa Malaysia in a timely manner.

8.3 Effective Communication and Proactive Engagement

At the last AGM held on 26 September 2013, there was a presentation on the Company’s operational review by the Group Managing Director. The Executive Director also provided shareholders with a brief review of the Company’s performance and prospects. Shareholders have the opportunities to enquire on the Company’s performance and operations and are invited to ask questions during the question and answer session.

COMPLIANCE STATEMENT

The Board is of the view that the Group is generally in compliance with the Principles and Recommendations of the MCCG 2012. Where a specific Recommendation of the MCCG 2012 has not been observed during the financial year under review, the non-observance has been explained and the reasons thereof has been included in this Statement.

This Corporate Governance Statement is made in accordance with the resolution of the Board of Directors dated 23 July 2014.


3737


The Board of Directors (“the Board”) of Oldtown Berhad (“the Company”) is pleased to present the Audit Committee (“the Committee”) Report for the financial year ended 31 March 2014.

1. CompositionThe members of the Audit Committee are as follows:-

Chairman Mark Wing Kong, Independent Non-Executive Director

Members Datuk Dr. Ahmed Tasir Bin Lope Pihie, Independent Non-Executive Director

Tan Chon Ing @ Tan Chong Ling, Independent Non-Executive Director

Dato’ Wong Guang Seng, Independent Non-Executive Director (Appointed on 1 April 2014)

2. AttendanceThe Audit Committee of the Company held five (5) meetings during the financial year ended 31 March 2014 and details of attendance of members of the Audit Committee are as follows:-

3. Terms Of Reference

A. Objective of the Audit CommitteeThe primary objective of the Audit Committee is to assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting, system of internal controls and risk management processes, management and financial reporting practices of the Group.

B. Composition of the Audit Committee(i) The Committee shall be appointed by the Board from amongst its

number and shall consist of not less than three (3) members, all of whom must be non-executive directors, with a majority of them being independent directors.

(ii) The Chairman of the Audit Committee shall be elected among the members of the Audit Committee and shall be an independent director.

(iii) The Board shall at all times ensure that at least one (1) member of the Audit Committee:

(a) must be a member of the Malaysian Institute of Accountants; or

(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:

(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(ii) 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) fulfills such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

(iv) In the event of any vacancy in the Audit Committee resulting in the number of members being reduced to below three (3), the Board shall within three (3) months appoint such number of new members as may be required to make up the minimum number of three (3) members.

(v) No alternate director shall be appointed as a member of the Audit Committee.

(vi) The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years.

C. Authority(i) The Audit Committee is fully authorized by the Board to independently

investigate without interference from any party on any activity within its terms of reference. It shall have:-

(a) full and unrestricted access to any information pertaining to the Company and its subsidiary companies;

(b) direct communication channels with both the external Auditors and internal Auditors;

(c) the resources which are required to perform its duties; and

(d) the authority to convene meeting with the external Auditors, internal Auditors or both, excluding the attendance of the other directors and employees of the Company, wherever deemed necessary.

(ii) The Audit Committee is also authorized by the Board to obtain external or independent professional advice and may invite outsiders with relevant experience to attend their meetings, if necessary.

D. Meetings, Quorum and Procedures(i) Meetings shall be held not less than four (4) times in a financial

year, although additional meetings may be called at any time by the Chairman upon the request of any committee members, the external or the internal Auditors or at the Chairman’s discretion.

(ii) The quorum shall consist of not less than two (2) members; the majority of the members present must be independent directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

(iii) The Secretary to the Committee shall, but need not, be the Company Secretary.

(iv) The Audit Committee may, as and when deemed necessary, invite other Board members, senior management personnel, a representative of the external Auditors and external independent professional advisers to attend the meetings.

Name of Members


Mark Wing Kong


4/5

5/5

5/5

Attendance(1 April 2013 to 31 March 2014)

AuditCommittee

Report


3838


(v) The Audit Committee shall meet with the external Auditors at least twice in a financial year without the presence of any executive board member.

(vi) Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board.

E. Duties and ResponsibilitiesThe duties and responsibilities of the Committee shall be:

(i) External Audit(a) To consider and recommend the appointment of the external

Auditors, the audit fee and any questions of resignation, dismissal or re-appointment.

(b) To discuss with the external auditors before the annual audit commences, the nature and scope of audit plan.

(c) To discuss problems and reservations arising from the final and interim audits; evaluation of the system of internal controls and any matter the external Auditors may wish to discuss, including assistance given by the employees of the Group to the auditors and to review the auditors’ audit report, management letter and management’s response.

(ii) Internal Audit(a) To review the adequacy of the scope, functions, competency and

resources of the internal audit function and that it has the necessary authority to carry out its work.

(b) To review the internal audit program, processes and results and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function and provide general guidance to the internal audit function.

(c) To review the performance of the internal audit function including the appointment and termination of senior staff members of the internal audit function.

(d) To consider the major findings of internal investigations and management’s response.

(iii) Financial ReportingTo review the quarterly and annual financial statements of the Company and the Group and to recommend the same to the Board for approval, focusing particularly on:

(a) any changes in or implementation of new accounting policies and practices;

(b) significant and unusual events;

(c) significant adjustments arising from the audit;

(d) the going concern assumption; and

(e) compliance with applicable approved accounting standards and other legal and regulatory requirements.

(iv) Risk ManagementTo review the adequacy and effectiveness of risk management, internal control and governance systems instituted in the Group.

(v) Related Party Transactions To monitor and review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions on management integrity.

(vi) Other Matters To perform such other functions and responsibilities as may be agreed by the Committee and the Board, and as may be required from time to time in compliance with the MMLR.

4. Summary Of Activities During The Financial Year

The Audit Committee had carried out the following activities in accordance with the terms of reference of the Audit Committee during the financial year ended 31 March 2014:

A. Financial Reporting Reviewed the unaudited quarterly financial results and audited financial statements of the Group before recommending the same for the Board’s approval and release to Bursa Securities.

B. Internal Audit (i) Reviewed the annual audit plan of the outsourced internal audit

function to ensure adequate scope and comprehensive coverage of the activities of the Group;

(ii) Reviewed the internal audit reports, recommendations made and Management’s response to those recommendations; and

(iii) Noted the corrective actions on outstanding audit issues to ensure the key risks and control lapses have been addressed and rectified.

C. External Audit (i) Reviewed the Annual Audit Planning Memorandum prepared by the

external Auditors to ensure adequate scope and comprehensive coverage over the activities of the Group;

(ii) Discussed the scope of work, key audit areas, audit approach, audit timetable and the proposed audit fees of the Group for the financial year ended 31 March 2014;

(iii) Recommended the re-appointment of the external Auditors for the Board’s approval;

(iv) Reviewed the extent of assistance rendered by the management and issues and reservations arising from audits with the external Auditors; and

(v) Had two (2) private sessions with the external Auditors without the presence of management staff and the executive board members.

AuditCommittee

Report

3939


D. Related Party Transactions(i) Reviewed and noted all recurrent related party transactions entered

into by the Company and the Group to ensure that the transactions entered into were on normal commercial terms;

(ii) Reviewed and recommended the revised procedure for Review Methods and Procedures for Related Party Transactions for the Board’s consideration; and

(iii) Reviewed the audit reports on related party transactions presented by the outsourced external consultant to ascertain that the review procedures established to monitor the related party transactions have been complied with in accordance to the MMLR of Bursa Securities.

E. Risk Management(i) Reviewed the follow up report on Enterprise Risk Management from

outsourced external consultant to ascertain the adequacy of actions taken to mitigate the risks; and

(ii) Reviewed the status reports on Enterprise Risk Management from the Chairman of the Risk Management Committee.

F. Other Matters(i) Reviewed and recommended to the Board, dividends to be declared

to the shareholders of the Company;

(ii) Reviewed the Circular to Shareholders in relation to the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions and Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions;

(iii) Reviewed the Audit Committee Report and Statement on Risk Management and Internal Control prior to submission of the same to the Board for consideration and inclusion in the Annual Report of the Company; and

(iv) Reported to the Board on significant issues and concerns discussed during the Committee’s meetings together with applicable recommendations. Minutes of the Committee’s meetings were tabled, discussed and noted by the Board.

5. Summary Of Activities Of The Internal Audit Function

During the financial year ended 31 March 2014, the outsourced internal audit function assisted the Committee in discharging its duties and responsibilities by executing independent reviews to determine the adequacy and effectiveness of the Group’s internal control system. The activities performed by the internal audit function include:

(i) conducted review of business processes in accordance with the risk-based internal audit plan approved by the Committee, which covered reviews of the internal control system, risk management and follow up audits to address observations reported in preceding internal audit visits;

(ii) reported the results of internal audit reviews and provided recommendations for improvement to the Committee;

(iii) followed up on the implementation of audit recommendations and action plans agreed upon by the Management;

(iv) ascertained the extent of compliance with the Group’s policies, procedures and statutory requirements; and

(v) reviewed and recommended improvements to the existing system of internal controls, risk management and corporate governance processes.

The internal audits conducted during the financial year did not reveal material weaknesses which would result in material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

The costs incurred for the outsourced internal audit function in respect of the financial year ended 31 March 2014 was RM92,052.

6. Statement On Share Issuance Scheme

There was no Share Issuance Scheme in place during the financial year ended 31 March 2014.

4040


Introduction

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets. Pursuant to Paragraph 15.26 (b) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors (“the Board”) of Oldtown Berhad is pleased to present the following Statement on Risk Management and Internal Control. This Statement outlines the nature and scope of risk management and internal control of the Group and covers all of the Group’s operations except for associate companies.

Board’s Responsibility

The Board acknowledges its responsibility in maintaining a sound system of risk management and internal control and affirms its commitment for reviewing the adequacy and integrity of the system. The system of risk management and internal control covers financial, operational, environmental, governance and compliance control matters.

The Group’s system is designed to manage, rather than eliminate, the risks towards achieving the Group’s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against the occurrence of any material misstatement, fraud or loss.

Management’s Responsibility

Management is responsible for implementing the control systems and processes to identify, evaluate, monitor and report on risks identified and action steps taken to mitigate and/or minimize the risks.

Risk Management Framework

The Board recognizes that a sound risk management framework is essential to ensure proper management of the risks that may impede the achievement of the Group’s objectives.

The Group has established an Enterprise Risk Management (“ERM”) framework to identify, evaluate and manage the risks.

The key features of the ERM framework are as follows:

• It outlines the ERM methodology on the identification of key business risks through a structured approach and to determine if controls are in place in mitigating the risks identified.

• It establishes guidelines to enable the Management to prioritize the risks and allocation of resources to manage the risks.

The Board is supported by the Risk Management Committee (“RMC”), headed by the Group Managing Director in overseeing the risk management efforts within the Group. The RMC comprised of Executive Directors and senior management and ensures that the risk management and control framework is embedded into the culture, processes and structures of the Group.

The key aspects of the risk management process are:-• Business/Operations/Departmental Heads are accountable for all risks

assumed under their respective areas of responsibility. They undertake to update their risk profiles on regular basis from the previous update

and incorporate any new risk factor, review the risk profiles, ratings and update the management action plans;

• The RMC will review the updated Risk Register and evaluate the effectiveness of actions plans in mitigating the risks identified;

• The RMC meets periodically to discuss principal business risks in critical areas, assess the likelihood and impact of material exposures and determine its corresponding risk mitigation measures; and

• The Group Managing Director will update the Audit Committee on the key risk related issues and the Audit Committee shall report to the Board on the status of the risk management.

Key Internal Control Processes

The Board is committed to maintain a strong control structure whereby internal control is embedded in the business processes for the Group to pursue its objectives. The key features of the Group’s internal control system are:

1. Control Environment

i) Organisation Structure and Authorization Procedures

The Group maintains formal and structured lines of reporting that includes clear definition of responsibilities and delegation of authority. It sets out the roles and responsibilities, review and approval procedures to enhance the Internal Control system of the Group’s various operations. Limits of authorities are imposed for revenue and capital expenditure for all operating units to keep potential exposure under control. Capital and revenue expenditure, acquisition and disposal of investment interests are duly approved before they are carried out.

ii) Annual Budget

Budgetary control is applied to every company in the Group and actual performance is closely monitored against budgets to identify significant variances. Discussions are held between the Management and the Departmental Heads to ensure the budgets are attainable and realistic. A half yearly review of the annual budget is undertaken by Management to identify and where appropriate, to address significant variances from the budget.

iii) Active Involvement by Executive Directors

The Executive Directors are actively involved in the running of the business and operations and they report to the Board on significant changes in the business and external environment, which affect the operations of the Group at large.

iv) External Certification

The effectiveness of the system of internal control is also reviewed through the ISO9001:2008 (Quality Management System), ISO 22000:2005 (Food Safety Management System), HACCP (Hazard Analysis Critical Control Point) and GMP (Good Manufacturing Practice) certifications. Regular review and periodic audits are conducted internally as well as by external auditors from accredited certification bodies. Results of these audits are reported to the Management.

Statement On Risk

Management &Internal Control

4141


The demanding control procedures and documentation requirements of the certifications further strengthen the control environment and the quality requirement of the Group’s products.

v) Policies and Procedures

Operational policies and procedures form an integral part of the internal control system to safeguard the Group’s assets against material losses. These include standard operating practices, memorandum, manuals and handbooks which are updated, reviewed and revised periodically to meet changing business and operational requirements and statutory reporting needs.

vi) Trained Personnel

Emphasis is placed on enhancing the quality and ability of employees through a wide variety of training programs and workshops to enhance their knowledge and expand the employees’ competency level in executing daily jobs. Relevant training and courses are provided to personnel across all functions to maintain a high level of competency and capability.

vii) Board Committees

Board Committees such as Audit Committee, Nomination Committee and Remuneration Committee are established with formal terms of references clearly outlining their functions and duties delegated by the Board. The Board Committees assist the Board to review the effectiveness of the on-going monitoring processes on risk and control matters for areas within their scope.

viii) Code of Conduct

A Code of Conduct is established for all directors and employees, which outlines the acceptable business behaviour and conduct and to provide guidance on how the directors and employees should behave to demonstrate a culture of excellence while performing their duties.

ix) Insurance

Sufficient insurance coverage on major assets is in place to ensure the Group’s assets are adequately covered against risks that can result in material losses. The assets are insured at cost and it is reviewed on yearly basis to ensure adequate insurance coverage to protect the Group from potential loss. Besides, the Group also undertakes other insurance coverage, namely product liability, contaminated product liability and public liability to ensure the Group is adequately covered against any potential claim arising from defective products or negligence.

2. Internal Audit Function

The Group’s internal audit function is carried out by outsourced external consultants to assist the Audit Committee and Board in providing independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system.

On quarterly basis, the outsourced external consultants submit audit reports, recommended corrective measures on risks identified (if any) for Management’s implementation and also conduct subsequent follow up audit to check and ensure that the Management has dealt with the recommendations satisfactorily.

During the financial year ended 31 March 2014, the outsourced external consultants carried out audits in accordance with the risk-based internal audit plan approved by the Audit Committee.

The results of the internal audit reviews and the recommendations for improvement were deliberated upon during the Audit Committee meetings. Minutes of the Audit Committee meetings which recorded the deliberations were presented to the Board.

Based on the internal audit reviews conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this Annual Report.

3. Information and Communication

Information critical to the achievement of the Group’s business objectives are communicated through established reporting lines across the Group. This is to ensure that matters that require the Board and Senior Management’s attention are highlighted for review, deliberation and decision on a timely basis.

4. Monitoring and Review�

Scheduled operational and management meetings are held to discuss and review the business plans, budgets, financial and operational performances of the Group. The Senior Management Team meets regularly to review the reports, monitors the business development and resolves key operational and management issues. The quarterly financial statements containing key financial results and comparisons are presented to the Audit Committee for review and recommendation to the Board for its approval.

Review Of The Statement By External Auditors

Pursuant to Paragraph 15.23 of the MMLR of Bursa Securities, this Statement has been reviewed by the External Auditors for inclusion in the Annual Report of the Group for the year ended 31 March 2014. Their review was performed in accordance with Recommended Practice Guide 5 (Revised) issued by the Malaysian Institute of Accountants. The External Auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of risk management and internal control.

Conclusion

The Board has received assurance from the Group Managing Director and the General Manager of Finance and Accounts that the Group’s risk management and internal control system, in all material aspects, is operating adequately and effectively.

The Board is of the view that the Group’s systems of risk management and internal controls are adequate to safeguard shareholders’ investments and the Group’s assets. The process as outlined in this Statement for identifying, evaluating and managing risks has been in place for the year under review and up to the date of approval of this Statement.

This Statement is made in accordance with the resolution of the Board dated 23 July 2014.

4242


1. Utilisation of Proceeds

On 21 December 2012, the Company completed its Private Placement exercise and the entire 33,000,000 Placement Shares were listed on the Main Market of Bursa Securities. The gross proceeds that had been raised from the Private Placement of RM64.350 million and its status of utilisation as at the latest practicable date are as follows:

* The remaining proceeds of RM4.805 million are intended to be utilised for business expansion purposes in the domestic and international markets, which comprise, but not limited to, opening of new outlets in the domestic and international markets, acquisition of equipment for the new and existing outlets, acquisition of plant and machinery for the new and existing factories, and also investments into a “Central Kitchen Business” to support the development of the licensed shops in China.

2. Share Buy-Backs

During the financial year, the Company repurchased a total of 611,000 ordinary shares of its issued shares from the open market of Bursa Securities for a total consideration (including transaction costs) of RM1,486,508. Details of the shares purchased and retained as treasury shares during the financial year were as follows:

*inclusive of transaction costs

During the financial year, all the shares purchased by the Company were retained as treasury shares. As at 31 March 2014, the number of treasury shares was 611,000.

3. Options, Warrants or Convertible Securities

No options, warrants or convertible securities have been issued by the Company.

4. Depository Receipt Programme

The Company did not sponsor any depository receipt programme during the financial year under review.

5. Imposition of Sanctions/Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by any relevant regulatory bodies, which were material and made public during the financial year ended 31 March 2014.

6. Non-Audit Fees

The amount of non-audit fees incurred for services rendered to the Group for the financial year ended 31 March 2014 by the Company’s external auditors and their affiliates amounted to RM218,773.

7. Variation in Results

There were no variances of 10% or more between the results for the financial year ended 31 March 2014 and the unaudited results previously announced. The Company did not make any release on the profit estimates, forecasts or projections for the financial year ended 31 March 2014.

8. Profit Guarantees

The Company did not give any profit guarantee during the financial year under review.

9. Material Contracts

No material contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company and/or its subsidiaries which involved Directors’ and/or substantial shareholders’ interests, either still subsisting at the end of the financial year ended 31 March 2014 or, if not then subsisting, entered into since the end of the previous financial year.

10. Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)

The Company had obtained shareholders’ mandate at the Annual General Meeting held on 26 September 2013 to allow the Group to enter into RRPT with related parties.

The transactions entered into were in the ordinary course of business and were carried out on terms and conditions not materially different from those obtainable from transactions with unrelated parties.

The details of the RRPT conducted during the financial year ended 31 March 2014 pursuant to the shareholders’ mandate are as follows:

Capital expenditure for business expansion

Working capital

Estimated expenses

44,695

19,155

500

64,350

39,890

19,155

504

59,549

within 24 months

within 12 months

within 1 month

4,805*

–

(4)

ProposedUtilisation(RM’000)

Purpose

ActualUtilization(RM’000)

IntendedTimeframe for

Utilisation

Balance /Deviation(RM’000)

July 2013

November 2013

December 2013

10,000 28,744

401,000 978,409

200,000 479,355

611,000 1,486,508

2.83

2.40

2.38

2.90 2.87

2.59 2.44

2.39 2.40

No of shares purchased andretained as treasury shares

Month

Low�est pricepaid per share (RM)

Highest pricepaid per share (RM)

Average pricepaid per share (RM)

Totalconsiderationpaid* (RM)

Total

Additional Compliance Information

4343


Name of Company Related Parties andType of Recurrent RelatedParty Transactions

Value ofTransactionfor FY2014 (RM)

Interested Related Parties

Conneczone Sdn Bhd Rental of outlet from Gourmet Corner KL Sdn Bhd

250,800 Lim Ah Fah

Dynasty Kitchen Sdn Bhd Sale of food and beverages products to OTK Northern Sdn Bhd

871,415 Goh Ching Mun^

Emperor’s Kitchen Sdn Bhd Sub-rental of office and factory fromOld Town International Sdn Bhd

432,000 Old Town International Sdn Bhd, Lee Siew Heng^, Goh Ching Mun^, Tan Say Yap* and Lee Siew Ming#

Esquire Chef Sdn Bhd Rental of factory from Lee Siew Heng 19,800 Lee Siew Heng^

Old Town KopitiamButterworth Sdn Bhd

Rental of outlet from Noble VirtueSdn Bhd

59,400 Lee Siew Kong, Lee Teck Wai and Lee Siew Heng^, Lee Siew Ming#

Old Town KopitiamSdn Bhd

Rental of outlet from Myth EmpireSdn Bhd ( formerly known asSoonsen Enterprise Sdn Bhd )

171,600 Chin Lai Yoong, Lee Siew Kong, Lee Siew Ming#

White Cafe MarketingSdn Bhd

Sub-Rental of office from Old Town International Sdn Bhd


Rental of warehouse from CN Supplies Sdn Bhd

21,200 Lee Siew Heng and Chin Lai Cheng @Angeline

White Cafe MarketingSdn Bhd

Sale of food and beveragesproducts to :Acadian Gourmet KK Sdn BhdAcadian Gourmet PB Sdn Bhd

13,06016,949

Lee Siew Heng^ (1) , Lee Siew Ming# (1)

Gourmet Corner KL Sdn BhdOTK Logistics Sdn BhdGourmet Chef Kinrara Sdn BhdGC Bangsar Two Sdn BhdGourmet Corner Ipoh Sdn BhdOTK (Teluk Cempedak) Sdn BhdOTK (Senai) Sdn BhdOTK (Genting) Sdn Bhd

25,708440,2897,11913,18118,7722,8002,454771,094

Lim Ah Fah

OTK Northern Sdn Bhd 16,998 Goh Ching Mun^

Carefree Avenue Sdn BhdConneczone Puchong Sdn Bhd

8,0085,236

Lee Siew Ming#

Gourmet Corner Sdn Bhd 19,024 Lim Ah Fah, Chin Lai Cheng @ Angeline

OTK (Petaling Jaya) Sdn Bhd 19,353 Lim Ah Fah, Lee Teck Wai

OTK Sunway Sdn Bhd 14,939 Lim Ah Fah, Lee Teck Wai

Gongga Food Sdn Bhd Sub-rental of office and warehousefrom Old Town International Sdn Bhd


Rental of hostel and office from ACMontage Marketing Sdn Bhd

24,880 Lee Siew Heng^, Chin Lai Yoong and Lee Siew Ming#

Rental of factory from Lee Siew Ming 18,900 Lee Siew Ming#

Purchase of food and beverages products from Natural Marketing Sdn Bhd

144,581 Lim Ah Fah

4444





Gongga Food Sdn Bhd Sale of food and beveragesproducts to :GC Alamanda Sdn BhdGC Bangsar Two Sdn BhdGC Brickfields Sdn BhdGC Selayang Sdn BhdGC Shamelin Sdn BhdGourmet Chef Sdn BhdGourmet Corner KL Sdn BhdGourmet Corner Ipoh Sdn BhdGourmet Chef Kinrara Sdn BhdOTK (Alam Damai) Sdn BhdOTK (Intan) Sdn BhdOTK (Kuala Selangor) Sdn BhdOTK (Rawang) Sdn BhdOTK (Shah Alam) Sdn BhdOTK Manjung Sdn BhdOTK (Teluk Cempedak) Sdn BhdOTK (Senai) Sdn BhdOTK (Genting) Sdn BhdOTK Logistics Sdn Bhd

664,364613,830566,686523,905455,870388,659708,384860,730633,429305,003591,239388,687712,249817,734445,024237,343205,2897,223,4382,517,730

Lim Ah Fah

GC Bangsar Sdn BhdGC South City Sdn Bhd

657,279431,393

Lim Ah Fah (2)

GC Bangi Sdn Bhd 661,992 Nurul Asyiqin Motimbin bt Abdullah , Azmah Binti Abdul Aziz and Ahmed Razif bin Ahmed Tasir

Gourmet Corner Sdn Bhd 611,145 Lim Ah Fah and Chin Lai Cheng@Angeline

GC Kapar Sdn Bhd 466,274 Lim Ah Fah (4)


OTK USJ Sdn Bhd 421,911 Lee Siew Fong and Koo Yai Peng

Acadian Gourmet KK Sdn BhdAcadian Gourmet PB Sdn BhdAcadian Gourmet Sdn Bhd

505,785646,345271,230

Lee Siew Ming# (1) , Lee Siew Heng^(1)

OTK (Petaling Jaya) Sdn BhdOTK Ipoh Road Sdn BhdOTK Megah Sdn BhdOTK Sunway Sdn Bhd

803,921367,590218,804524,806

Lim Ah Fah and Lee Teck Wai

OTK (MBH) Sdn Bhd OTK Kopitiam (KLCC) Sdn BhdCarefree Avenue Sdn BhdConneczone Puchong Sdn Bhd

248,583394,770662,957295,363

Lee Siew Ming#

Kopitiam Asia PacificSdn Bhd

Purchase of uniform from MaysonTrade (M) Sdn Bhd

111,656 Chin Lai Yoong

Rental of a terrace house from LimKhim Lan

60,000 Lim Khim Lan

Sub-rental of office from Old TownInternational Sdn Bhd


Payment of logistic and loading feesto OTK Sarawak Sdn Bhd

34,062 Lim Ah Fah (5)


4545






Sale of furniture and utensils pursuant to the franchisearrangement in relation to the operation of cafe outlets to:

GC Brickfields Sdn BhdGC Shamelin Sdn BhdGourmet Corner Ipoh Sdn BhdOTK Logistics Sdn BhdGC Selayang Sdn BhdGC Alamanda Sdn BhdGourmet Chef Sdn BhdGourmet Corner KL Sdn BhdGourmet Chef Kinrara Sdn BhdOTK (Rawang) Sdn BhdOTK (Shah Alam) Sdn BhdOTK (Senai) Sdn BhdOTK (Teluk Cempedak) Sdn BhdOTK (Intan) Sdn BhdOTK (Genting) Sdn Bhd

10,7225,209481,26972,8976,36216,2345,7556,6809,027637,86313,841419,276543,9488,893927,128

Lim Ah Fah


7,15211,131

Lim Ah Fah (2)



OTK (Petaling Jaya) Sdn Bhd 110,898 Lim Ah Fah and Lee Teck Wai

OTK Northern Sdn Bhd 19,770 Goh Ching Mun

OTK Kopitiam (KLCC) Sdn BhdCarefree Avenue Sdn BhdConneczone Puchong Sdn BhdOTK (MBH) Sdn Bhd

5,62225,8475,089238,994

Lee Siew Ming#

Acadian Gourmet PB Sdn BhdAcadian Gourmet Sdn BhdAcadian Gourmet KK Sdn Bhd

7,7924,77713,241

Lee Siew Ming# (1) , Lee Siew Heng^ (1)

OTK Sunway Sdn Bhd 9,317 Lim Ah Fah and Lee Teck Wai


OTK Megah Sdn Bhd 9,225 Lim Ah Fah and Lee Teck Wai

GC Bangi Sdn Bhd 15,923 Nurul Asyiqin Motimbin bt Abdullah, Azmah Binti Abdul Aziz and Ahmed Razif bin Ahmed Tasir


Advertising and promotion feescharged to:Acadian Gourmet KK Sdn BhdAcadian Gourmet PB Sdn BhdAcadian Gourmet Sdn Bhd

36,01346,01419,678

Lee Siew Ming# (1) , Lee Siew Heng^ (1)

GC Bangi Sdn Bhd 51,876 Nurul Asyiqin Motimbin bt Abdullah , Azmah Binti Abdul Aziz and Ahmed Razif bin Ahmed Tasir

GC Alamanda Sdn BhdGC Bangsar Two Sdn BhdGC Brickfields Sdn BhdGC Selayang Sdn Bhd

58,83062,29745,29847,344

Lim Ah Fah

4646






Advertising and promotion feescharged to:GC Shamelin Sdn BhdGourmet Chef Sdn BhdGourmet Corner Ipoh Sdn BhdGourmet Corner KL Sdn BhdGourmet Chef Kinrara Sdn BhdOTK (Alam Damai) Sdn Bhd OTK (Intan) Sdn BhdOTK (Kuala Selangor) Sdn BhdOTK (Rawang) Sdn BhdOTK (Shah Alam) Sdn BhdOTK Manjung Sdn BhdOTK (Senai) Sdn BhdOTK (Teluk Cempedak) Sdn BhdOTK (Genting) Sdn Bhd

47,31134,94973,35366,79356,78523,81755,10335,87560,34972,33538,31611,38218,385894,479

Lim Ah Fah


62,94638,848

Lim Ah Fah (2)


OTK Sarawak Sdn Bhd 40,874 Lim Ah Fah (5)



73,01031,07318,72044,768




OTK Kopitiam (KLCC) Sdn Bhd Carefree Avenue Sdn BhdConneczone Puchong Sdn BhdOTK (MBH) Sdn Bhd

23,25756,97927,31322,010

Lee Siew Ming#


Payment of royalty fees pursuantto the franchise arrangement by:Acadian Gourmet KK Sdn Bhd Acadian Gourmet PB Sdn BhdAcadian Gourmet Sdn Bhd

60,02176,69032,797

Lee Siew Ming# (1) , Lee Siew Heng^(1)

GC Bangi Sdn Bhd 86,460 Nurul Asyiqin Motimbin bt Abdullah, Azmah Binti Abdul Aziz and Ahmed Razif bin Ahmed Tasir

GC Alamanda Sdn BhdGC Bangsar Two Sdn BhdGC Brickfields Sdn BhdGC Selayang Sdn BhdGC Shamelin Sdn BhdGourmet Chef Sdn BhdGourmet Corner Ipoh Sdn BhdGourmet Corner KL Sdn BhdGourmet Chef Kinrara Sdn BhdOTK (Alam Damai) Sdn Bhd

98,050103,82875,49678,90678,85258,248122,254111,32194,64239,695

Lim Ah Fah


4747






Payment of royalty fees pursuantto the franchise arrangement by:

OTK (Intan) Sdn Bhd

OTK (Kuala Selangor) Sdn Bhd

OTK (Rawang) Sdn Bhd

OTK (Shah Alam) Sdn Bhd

OTK Manjung Sdn Bhd

OTK (Senai) Sdn Bhd

OTK (Teluk Cempedak) Sdn Bhd

91,838

59,791

100,582

120,559

63,861

17,216

30,642

Lim Ah Fah


104,91064,746

Lim Ah Fah (2)


OTK Sarawak Sdn Bhd 68,123 Lim Ah Fah (5)


Oldtown Asia Pacific Limited 85,916 Lee Siew Heng^


121,68351,78831,20074,613




OTK Kopitiam (KLCC) Sdn Bhd Carefree Avenue Sdn BhdConneczone Puchong Sdn BhdOTK (MBH) Sdn Bhd

34,88594,96545,52236,684

Lee Siew Ming#

Payment of royalty fees and initialfranchise fee pursuant to thefranchise arrangement by OTK(Genting) Sdn Bhd

1,730,798 Lim Ah Fah

Details of relationships :Azmah Binti Abdul Aziz : Spouse of Datuk Dr Ahmed Tasir Bin Lope Pihie*.Ahmed Razif bin Ahmed Tasir : Son of Datuk Dr Ahmed Tasir Bin Lope Pihie*.Chin Lai Cheng @ Angeline : Spouse of Lee Siew Heng^ and sister-in-law of Lee Siew Ming#.Chin Lai Yoong : Spouse of Lee Siew Ming# and sister-in-law of Lee Siew Heng^. She ceased to be a Director and major shareholder of

Oldtown Berhad with effect from (“wef”) 26/9/2013 & 21/11/2013 respectively.Koo Yai Peng : Spouse of Lee Siew Fong and brother–in-law of Lee Siew Heng^ & Lee Siew Ming#.Lee Siew Heng ^ : Spouse of Chin Lai Cheng @ Angeline and brother of Lee Siew Kong, Lee Siew Ming# and Lee Teck WaiLee Siew Kong : Brother of Lee Siew Heng^ and Lee Siew Ming#.Lee Siew Fong : Sister of Lee Siew Heng^ and Lee Siew Ming#.Lee Siew Ming# : Brother of Lee Siew Heng^ and spouse of Chin Lai Yoong. He became a Major Shareholder of Oldtown Berhad wef 21/11/2013.Lee Teck Wai : Brother of Lee Siew Heng^ and Lee Siew Ming#.Lim Ah Fah : Sister-in-law of Lee Siew Heng^ and Lee Siew Ming#.Lim Khim Lan : Spouse of Mr Clarence D’ Silva*.Nurul Asyiqin Motimbin bt Abdullah : Daughter-in-law of Datuk Dr Ahmed Tasir Bin Lope Pihie*.^ Our Director and Major Shareholder.* Our Director and shareholder.# Our Major Shareholder.

4848


Notes:

Ahmed Razif Bin Ahmed Tasir is a substantial shareholder of GC Bangi Sdn Bhd (ceased to be substantial shareholder wef 7/11/2013).

Azmah Binti Abdul Aziz is a director and substantial shareholder GC Bangi Sdn Bhd and GC Alamanda Sdn Bhd (ceased to be a substantial shareholder of GC Alamanda wef 20/11/2013).

Chin Lai Cheng @ Angeline is a substantial shareholder of Gourmet Corner Sdn Bhd.

Chin Lai Yoong is a director and substantial shareholder of Myth Empire Sdn Bhd ( formerly known as Soonsen Enterprise Sdn Bhd ) and AC Montage Marketing Sdn Bhd.

Chin Lai Yoong is a substantial shareholder of Mayson Trade (M) Sdn Bhd.

Goh Ching Mun^ is a director and substantial shareholder of OTK Northern Sdn Bhd and Old Town International Sdn Bhd.

Koo Yai Peng is a director and substantial shareholder of OTK USJ Sdn Bhd.

Lee Siew Heng^ is a substantial shareholder of Acadian Gourmet KK Sdn Bhd(1), Acadian Gourmet PB Sdn Bhd(1), Acadian Gourmet Sdn Bhd(1) (ceased to be deemed substantial shareholder of the 3 companies wef 1/7/2013).

Lee Siew Heng^ is a director and substantial shareholder of Oldtown Asia Pacific Limited and Old Town International Sdn Bhd.

Lee Siew Heng^ is a shareholder of AC Montage Marketing Sdn Bhd (ceased to be a shareholder wef 29/4/2013).

Lee Siew Heng^ is a director and substantial shareholder of Noble Virtue Sdn Bhd (ceased to be a director and shareholder wef 22/4/2013 & 06/05/2013 respectively).

Lee Siew Kong is director and substantial shareholder of CN Properties Sdn Bhd, Noble Virtue Sdn Bhd and Myth Empire Sdn Bhd (formerly known as Soonsen Enterprise Sdn Bhd) (ceased to be a director and substantial shareholder of Myth Empire Sdn Bhd wef 12/4/2013 & 6/6/2013 respectively ).

Lee Siew Kong is a shareholder of Old Town International Sdn Bhd.

Lee Siew Fong is a director and substantial shareholder of OTK USJ Sdn Bhd.

Lee Siew Ming# was a deemed substantial shareholder of Acadian Gourmet KK Sdn Bhd (1) , Acadian Gourmet PB Sdn Bhd (1), Acadian Gourmet Sdn Bhd (1) wef 1/7/2013 to 14/04/2014.

Lee Siew Ming# became a direct substantial shareholder of Acadian Gourmet KK Sdn Bhd, Acadian Gourmet PB Sdn Bhd and Acadian Gourmet Sdn Bhd wef 15/4/2014.

Lee Siew Ming# is a director and substantial shareholder of Noble Virtue Sdn Bhd, Myth Empire Sdn Bhd, Carefree Avenue Sdn Bhd, Conneczone Puchong Sdn Bhd, OTK (MBH) Sdn Bhd and OTK Kopitiam (KLCC) Sdn Bhd.

Lee Siew Ming# is a director of CN Properties Sdn Bhd

Lee Siew Ming# is a shareholder of AC Montage Marketing Sdn Bhd.

Lee Siew Ming# is a substantial shareholder of Old Town International Sdn Bhd.

Lee Teck Wai is a director and substantial shareholder of CN Properties Sdn Bhd, Noble Virtue Sdn Bhd, OTK (Petaling Jaya) Sdn Bhd, OTK Ipoh Road Sdn Bhd, OTK Megah Sdn Bhd and OTK Sunway Sdn Bhd.

Lee Teck Wai is a shareholder of Old Town International Sdn Bhd.

Lim Ah Fah is a director and substantial shareholder of Gourmet Corner KL Sdn Bhd, Natural Marketing Sdn Bhd, GC Alamanda Sdn Bhd, GC Bangsar Sdn Bhd(2), GC Bangsar Two Sdn Bhd, GC Brickfields Sdn Bhd, GC Kapar Sdn Bhd(4), GC Selayang Sdn Bhd, GC Shamelin Sdn Bhd, GC South City Sdn Bhd(2), Gourmet Chef Kinrara Sdn Bhd, Gourmet Chef Sdn Bhd, Gourmet Corner Ipoh Sdn Bhd, and Gourmet Corner Sdn Bhd, OTK Sarawak Sdn Bhd (5), OTK (Petaling Jaya) Sdn Bhd, OTK Ipoh Road Sdn Bhd, OTK Megah Sdn Bhd and OTK Sunway Sdn Bhd.

Lim Ah Fah is a director and deemed substantial shareholder of OTK (Alam Damai) Sdn Bhd(3),OTK (Intan) Sdn Bhd(3), OTK (Senai) Sdn Bhd (3), OTK (Teluk Cempedak) Sdn Bhd(3), OTK (Kuala Selangor) Sdn Bhd(3), OTK (Rawang) Sdn Bhd(3),OTK (Shah Alam) Sdn Bhd(3)and OTK Manjung Sdn Bhd (3) and ceased to be a substantial shareholder of these 8 companies wef 21/03/2014.

Lim Ah Fah is a director and substantial shareholder OTK (Genting) Sdn Bhd and ceased to be a director and substantial shareholder wef 9/10/2013 & 21/3/2014 respectively.

Lim Ah Fah is a substantial shareholder of OTK Logistics Sdn Bhd and a shareholder of Old Town International Sdn Bhd.

Nurul Asyiqin Motimbin bt Abdullah is a director of GC Bangi Sdn Bhd and became a substantial shareholder wef 7/11/2013.

Old Town International Sdn Bhd# (OTI) is the holding company of Oldtown Berhad. Mr Lee Siew Heng^ and Mr Goh Ching Mun^ are directors and substantial shareholders of OTI. Chin Lai Yoong, Tan Say Yap* and Lee Siew Ming# are substantial shareholders of OTI. Chuah Seong Ming, a director of Oldtown Berhad is a shareholder of OTI. Lee Siew Kong, Lee Teck Wai, Tan Say Cheong (brother of Tan Say Yap) and Lim Ah Fah are shareholders of OTI.

Notes:

(1) Deemed interested by virtue of his shareholding in Acadian L’Apparel Manufacturing Sdn Bhd, pursuant to Section 6A of the Companies Act, 1965 (the Act).

(2) Deemed interested by virtue of her shareholding in Gourmet Corner KL Sdn Bhd, pursuant to Section 6A of the Act.

(3) Deemed interested by virtue of her shareholding in OTK (Genting) Sdn Bhd, pursuant to Section 6A of the Act.

(4) Deemed interested by virtue of her shareholding in Gourmet Corner Ipoh Sdn Bhd, pursuant to Section 6A of the Act.

(5) Deemed interested by virtue of her substantial shareholdings in OTK Logistics Sdn Bhd, the holding company of OTK Sarawak Sdn Bhd, pursuant to the Section 6A of the Act.


4949

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Financial

Statements

50 Directors’ Report

54 Independent Auditors’ Report

56 Statements of Profit or Loss & Other Comprehensive Income

58 Statements of Financial Position

60 Statement of Changes In Equity

62 Statement of Cash Flows

66 Notes to The Financial Statements

134 Statement by Directors

134 Declaration By The Officer Primarily Responsible For The Financial Management Of The Company


50


The directors of OLDTOWN BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended March 31, 2014.

Principal Activities

The Company is principally involved in investment holding.

The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

Results of Operations

The results of operations of the Group and of the Company for the financial year are as follows:

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

Dividends

A final dividend declared in respect of the financial period ended March 31, 2013 under single tier tax system of 3.0 sen per share, amounting to RM10,889,700 was paid on October 30, 2013.

An interim dividend declared in respect of the current financial year under single tier tax system of 3.0 sen per share, amounting to RM13,589,587 was paid on April 17, 2014.

The directors proposed a final dividend of 3.0 sen per share, amounting to RM13,589,587 in respect of the current financial year computed based on the outstanding issued and paid-up capital, excluding treasury shares held by the Company of 611,000 ordinary shares of RM1.00 each. This dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements. Upon approval by the shareholders, the dividend payment will be accounted for in equity as an appropriation of retained earnings during the financial year ending March 31, 2015.

Reserves and Provisions

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

Issue of Shares and Debentures

As approved by the shareholders at the Extraordinary General Meeting held on January 6, 2014, the issued and paid-up ordinary share capital of the Company was increased from RM363,000,000 to RM453,597,242 during the financial year by way of a bonus issue of 90,597,242 new ordinary shares of RM1 each through the capitalisation of RM40,000,000 and RM50,597,242 from share premium and retained earnings respectively on the basis of one (1) bonus share for every four (4) existing ordinary shares held.

These new shares rank pari passu with the then existing ordinary shares of the Company.

The Group RM

The Company RM

Profit for the year 50,329,638 76,300,284

Profit attributable to:

Owners of the Company 48,938,252 76,300,284

Non-controlling interests 1,391,386 -

50,329,638 76,300,284

Directors’Report

51


Treasury Shares

During the financial year, the Company repurchased a total of 611,000 units of its own shares from the open market of Bursa Malaysia Securities Berhad for a total cost of RM1,486,508 and has been deducted from equity. The average price paid for the shares repurchased during the year was RM2.43 per share.

The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as Treasury Shares in accordance with the requirements of Section 67A of the Companies Act, 1965.

The mandate given by the shareholders will expire at the forthcoming Annual General Meeting (“AGM”) and an ordinary resolution will be tabled at the AGM for shareholders to grant a fresh mandate for another year.

Share Options

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As of the end of the financial year, there were no unissued shares of the Company under options.

Other Statutory Information

Before the statements of profit or loss and other comprehensive income and the statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and had satisfied themselves that all known bad debts had been written off and that no allowance for doubtful debts was necessary; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

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

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

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

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

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

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

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

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

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

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made other than those disclosed in Note 41 to the financial statements.

52


Directors

The following directors served on the Board of the Company since the date of the last report:

Datuk Dr. Ahmed Tasir bin Lope Pihie, PJN, PMP, JSM, FASc Mr. Lee Siew Heng Mr. Mark Wing Kong Mr. Tan Chon Ing @ Tan Chong Ling Dato’ Wong Guang Seng (appointed on April 1, 2014) Mr. Chuah Seong Meng Mr. Clarence D’Silva A/L Leon D’Silva Mr. Goh Ching Mun Mr. Tan Say Yap Madam Chin Lai Yoong (retired on September 26, 2013 and not re-elected)

In accordance with Article 84 of the Company’s Articles of Association, Datuk Dr. Ahmed Tasir bin Lope Pihie, PJN, PMP, JSM, FASc, Mr. Lee Siew Heng and Mr. Goh Ching Mun retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

Dato’ Wong Guang Seng who was appointed to the Board since the last Annual General Meeting, retires under Article 91 of the Company’s Articles of Association and, being eligible, offers himself for re-election at the forthcoming Annual General Meeting.

Directors’ Interests

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

Number of ordinary shares of RM1 each

Balance as of 1.4.2013

Bought Bonus Issue Sold Balance as of 31.3.2014

Shares in the Company

Registered in the name of directors

Datuk Dr. Ahmed Tasir bin Lope Pihie,PJN, PMP, JSM, FASc

50,000 - 5,000 (30,000) 25,000

Mr. Lee Siew Heng 5,000,000 - 1,250,000 - 6,250,000

Mr. Mark Wing Kong 50,000 - 12,500 - 62,500

Mr. Clarence D’Silva A/L Leon D’Silva 100,000 - 25,000 - 125,000

Mr. Goh Ching Mun - 300,000 75,000 - 375,000

Mr. Tan Say Yap 372,750 - 93,187 - 465,937

Indirect interest by virtue of shares held by a company in which the directors have interest

Mr. Lee Siew Heng 165,345,000 - 39,651,700 (7,738,200) 197,258,500

Mr. Goh Ching Mun 165,345,000 - 39,651,700 (7,738,200) 197,258,500

Shares in the ultimate holding company,Old Town International Sdn. Bhd.

Mr. Lee Siew Heng 681,054 - - - 681,054

Mr. Chuah Seong Meng 73,684 - - - 73,684

Mr. Goh Ching Mun 968,422 - - - 968,422

Mr. Tan Say Yap 263,160 - - - 263,160

Directors’Report

53


By virtue of their interest in the shares of the Company and of the holding company, Mr. Lee Siew Heng and Mr. Goh Ching Mun are also deemed to have an interest in the shares of the subsidiaries to the extent that the Company and the holding company have an interest.

Mr. Tan Chon Ing @ Tan Chong Ling and Mr. Chuah Seong Meng did not hold shares in the Company during the financial year. Under the Company’s Articles of Association, the directors are not required to hold any share in the Company.

Directors’ Benefits

Since the end of the previous financial period, none of the directors of the Company has received or become entitled to receive any benefit (other than the benefit included in the aggregate amount of emoluments received or due and receivable by directors as disclosed in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for any benefit which may be deemed to have arisen by virtue of the transactions between the Company and certain companies in which certain directors of the Company are also directors and/or shareholders or have substantial financial interests as disclosed in Note 25 to the financial statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Holding Company

The Company is a subsidiary of Old Town International Sdn. Bhd., a company incorporated in Malaysia and the directors regard it as the ultimate holding company.

Auditors

The auditors, Messrs. Deloitte (formerly known as Deloitte KassimChan), have indicated their willingness to continue in office.

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

DATUK DR. AHMED TASIR BIN LOPE PIHIE, PJN, PMP, JSM, FASc

MR. LEE SIEW HENG

Ipoh, July 23, 2014

54


Report on The Financial Statements

We have audited the financial statements of Oldtown Berhad, which comprise the statements of financial position of the Group and of the Company as of March 31, 2014 and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on page 56 to page 133.

Directors’ Responsibility for The Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of March 31, 2014 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

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

(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiaries 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 auditors’ reports of the subsidiaries, of which we have not acted as auditors, which are indicated in Note 17 to the financial statements;

(c) we are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company 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 as required by us for those purposes; and

(d) the auditors’ reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

TO THE MEMBERS OF OLDTOWN BERHAD(Incorporated in Malaysia)

Independent Auditors’

Report

55


Other Reporting Responsibilities

The supplementary information set out in Note 42 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

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

DELOITTE AF 0080 Chartered Accountants

LIM KENG PEO Partner - 2939/01/16(J/PH) Chartered Accountant

July 23, 2014

56


FOR THE YEAR ENDED MARCH 31, 2014(With Comparative Figures For The Period January 1, 2012 To March 31, 2013)

The Group The Company

Note

Year Ended31.3.2014

(12 Months)RM

Period Ended31.3.2013

(15 Months)RM

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Revenue 6 382,171,650 422,054,343 77,134,054 34,739,024

Investment revenue 7 1,578,460 2,478,686 337,523 1,190,406

Other gains and losses 8 639,786 1,051,000 211,971 –

Other operating income 9 11,748,757 15,069,574 – –

Changes in inventories of finished goods, work-in-progress, trading merchandise, food,beverages and consumables 4,067,367 9,842

–

–

Raw materials and consumables used (100,177,769) (108,625,603) – –

Purchase of trading merchandise, food, beverages and consumables (70,890,411) (79,756,129)

–

–

Directors’ remuneration 10 (3,184,617) (2,649,522) (307,632) (375,768)

Employee benefits expenses 9 (54,121,240) (60,023,198) (113,896) (134,157)

Depreciation of property, plant and equipment 14 (15,928,327) (17,583,643) (153,172) (173,383)

Amortisation of prepaid lease payments 15 (184,743) (230,928) – –

Amortisation of intangible assets 21 (3,529,319) (2,929,087) – –

Impairment loss on investment in a subsidiary 17 – – – (950,810)

Impairment loss on goodwill 20 – (1,959,643) – –

Share of (losses)/profits of associates 18 (157,055) 527,506 – –

Finance costs 11 (1,556,523) (1,345,971) (215) (848)

Other operating expenses 9 (84,107,623) (91,140,342) (808,349) (1,291,913)

Profit before tax 66,368,393 74,946,885 76,300,284 33,002,551

Tax (expense)/income 12 (16,038,755) (19,360,019) – 23,436

PROFIT FOR THE YEAR/PERIOD 50,329,638 55,586,866 76,300,284 33,025,987

Statements of Profit or

Loss & Other Comprehensive

Income

57



Note

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Other Comprehensive Income/(Loss):

Items that may be reclassified subsequently to profit or loss:

Available-for-sale financial assets:

Changes in fair value of available-for-sale financial assets (31,582) 1,029,600 253,765 495,037

Reclassification adjustments relating to available-for-sale financial assets disposed of in the year 417,441

– (260,308)

–

Exchange differences on translating foreign subsidiaries 1,382,671 (20,139) – –

TOTAL COMPREHENSIVE INCOME FOR THE YEAR/PERIOD 52,098,168 56,596,327 76,293,741 33,521,024


Owners of the Company 48,938,252 55,527,110 76,300,284 33,025,987

Non-controlling interests 1,391,386 59,756 – –

50,329,638 55,586,866 76,300,284 33,025,987

Total comprehensive income attributable to:

Owners of the Company 50,405,249 56,536,571 76,293,741 33,521,024

Non-controlling interests 1,692,919 59,756 – –

52,098,168 56,596,327 76,293,741 33,521,024

Earnings per share

Basic and diluted (RM per share) 13 0.11 0.13

The accompanying Notes form an integral part of the financial statements.

58


AS OF MARCH 31, 2014


Note 2014 RM

2013 RM

2014 RM

2013 RM

ASSETS

Non-current assets

Property, plant and equipment 14 105,634,478 102,396,819 1,885,819 1,930,665

Prepaid lease payments 15 13,572,737 13,757,480 – –

Investment properties 16 3,890,000 2,040,000 – –

Investments in subsidiaries 17 – – 289,752,921 289,552,121

Investments in associates 18 1,505,141 1,706,196 1,101,002 1,101,002

Other investments 19 1,086,567 46,628,062 – 15,447,383

Goodwill on consolidation 20 23,711,995 23,711,995 – –

Intangible assets 21 33,398,124 19,136,699 – –

Deferred tax assets 22 963,000 1,280,000 – –

Total non-current assets 183,762,042 210,657,251 292,739,742 308,031,171

Current assets

Inventories 23 22,465,954 14,227,762 – –

Trade and other receivables 24 45,823,843 48,782,856 226,591 173,668

Amount owing by subsidiaries 25 – – 133,841,597 64,911,665

Amount owing by associates 25 1,562,022 1,349,508 44,000 –

Other investments 19 66,516,766 25,693,547 25,488,494 15,047,654

Current tax assets 12 4,059,601 1,105,598 9,774 10,951

Fixed deposits, cash and bank balances 26 99,883,920 86,227,153 19,845,929 29,343,928

Total current assets 240,312,106 177,386,424 179,456,385 109,487,866

Total assets 424,074,148 388,043,675 472,196,127 417,519,037

Statementsof Financial

Position

59



Note 2014 RM

2013 RM

2014 RM

2013 RM

EQUITY AND LIABILITIES

Capital and reserves

Issued capital 27(a) 453,597,242 363,000,000 453,597,242 363,000,000

Treasury shares 27(b) (1,486,508) – (1,486,508) –

Reserves 28 (216,616,808) (178,083,805) 4,042,138 44,048,681

Retained earnings 29 93,796,133 119,934,410 2,298,506 1,074,751

Equity attributable to owners of the Company 329,290,059 304,850,605 458,451,378 408,123,432

Non-controlling interests 30 5,041,736 2,192,022 – –

Net equity 334,331,795 307,042,627 458,451,378 408,123,432

Non-current liabilities

Hire-purchase payables 31 269,368 837,040 – –

Borrowings 32 20,102,210 25,287,874 – –

Deferred income 33 1,930,393 2,060,600 – –

Deferred capital grant 34 – 16,628 – –

Deferred tax liabilities 22 5,770,731 2,069,412 – –

Total non-current liabilities 28,072,702 30,271,554 – –

Current liabilities

Trade and other payables 35 49,844,402 40,044,852 7,826,994 206,709

Amount owing to ultimate holding company 25 6,072,479 87,936 5,917,755 –

Amount owing to subsidiaries 25 – – – 9,188,896

Hire-purchase payables 31 545,735 648,266 – –

Borrowings 32 3,379,905 7,767,923 – –

Deferred income 33 1,332,001 1,496,427 – –

Deferred capital grant 34 16,629 24,180 – –

Current tax liabilities 12 478,500 659,910 – –

Total current liabilities 61,669,651 50,729,494 13,744,749 9,395,605

Total liabilities 89,742,353 81,001,048 13,744,749 9,395,605

Total equity and liabilities 424,074,148 388,043,675 472,196,127 417,519,037


60



Statement of Changes In Equity

N

on-d

istrib

utab

le Re

serv

es

The G

roup

Note

Issue

dCa

pital RM

Treas

ury

Shar

es

RM

Shar

ePr

emium

RM

Rese

rve

Arisi

ng Fr

om

Restr

uctu

ring

RM

Fore

ign

Curre

ncy

Trans

lation

Rese

rve

RM

Inves

tmen

t Re

valua

tion

Rese

rve

RM

Distr

ibuta

ble

Rese

rve -

Re

taine

d Ea

rning

sRM

Attri

buta

bleto

Own

ers

of th

e Com

pany RM

Non-

cont

rollin

gInt

eres

ts RM

Tota

l Eq

uity

RM

Balan

ce as

of Ja

nuar

y 1, 2

012

330,

000,

000

–12

,311

,332

(222

,653

,894

)6,

984

–97

,407

,300

217,

071,

722

235,

562

217,

307,

284

Arisi

ng fr

om ac

quisi

tion

of su

bsidi

aries

30

–

–

–

–

––

–

–-

1,95

2,70

41,

952,

704

Profi

t for

the pe

riod

–

–

–

––

–55

,527

,110

55,5

27,1

1059

,756

55,5

86,8

66

Othe

r com

preh

ensiv

e inc

ome

for th

e peri

od

–

–

–

–

(20,

139)

1,02

9,60

0

–

1,00

9,46

1

–1,

009,

461

Total

comp

rehen

sive i

ncom

e for

the

perio

d

–

–

–

–

(20,

139)

1,02

9,60

055

,527

,110

56,5

36,5

7159

,756

56,5

96,3

27

Paym

ent o

f divi

dend

s 36

–

–

–

––

–(3

3,00

0,00

0)(3

3,00

0,00

0)(5

6,00

0)(3

3,05

6,00

0)

Issue

of sh

ares

27(a)

33,0

00,0

00

–

31,2

42,3

12

––

–

–

64,2

42,3

12

–

64,2

42,3

12

Balan

ce as

of M

arch

31, 2

013

363,

000,

000

–43

,553

,644

(222

,653

,894

)(1

3,15

5)1,

029,

600

119,

934,

410

304,

850,

605

2,19

2,02

230

7,04

2,62

7

Arisi

ng fr

om ac

quisi

tion

of a s

ubsid

iary

30

–

–

–

–

––

–

–3,

857,

209

3,85

7,20

9

Arisi

ng fr

om di

spos

al of

int

erest

in a s

ubsid

iary

30

–

–

–

–

––

–

–(1

,952

,704

)(1

,952

,704

)

Profi

t for

the ye

ar

–

–

–

–

––

48,9

38,2

5248

,938

,252

1,39

1,38

650

,329

,638

Othe

r com

preh

ensiv

e inc

ome

for th

e yea

r

–

–

–

–1,

081,

138

385,

859

–1,

466,

997

301,

533

1,76

8,53

0

Total

comp

rehen

sive i

ncom

e

for th

e yea

r

–

–

–

–

1,08

1,13

838

5,85

948

,938

,252

50,4

05,2

491,

692,

919

52,0

98,1

68

Paym

ent o

f divi

dend

s36

–

–

–

––

–(2

4,47

9,28

7)(2

4,47

9,28

7)(7

47,7

10)

(25,

226,

997)

Bonu

s iss

ue

27(a)

90,5

97,2

42

–

(40,

000,

000)

–

––

(50,

597,

242)

–

–

–

Buy-b

ack o

f ord

inary

share

s27

(b)

–(1

,486

,508

)

–

–

––

–

(1,4

86,5

08)

–(1

,486

,508

)

Balan

ce as

of M

arch

31,

2014

453,

597,

242

(1,4

86,5

08)

3,55

3,64

4(2

22,6

53,8

94)

1,06

7,98

31,

415,

459

93,7

96,1

3332

9,29

0,05

95,

041,

736

334,

331,

795

The

acco

mpa

nyin

g No

tes

form

an

inte

gral

par

t of t

he fi

nanc

ial s

tate

men

ts.

61


The

Com

pany

Note

Issu

edCa

pita

lRM

Trea

sury

Sh

ares

RM

Shar

ePr

emiu

m RM

Inve

stm

ent

Reva

luat

ion

Rese

rve

RM

Dist

ribut

able

Re

serv

e -

Reta

ined

Earn

ings RM

Tota

l Eq

uity

RM

Bala

nce

as o

f Jan

uary

1, 2

012

330,

000,

000

–12

,311

,332

–1,

048,

764

343,

360,

096

Profi

t for

the

perio

d

–

–

–

–33

,025

,987

33,0

25,9

87

Othe

r com

preh

ensi

ve in

com

e fo

r the

per

iod

–

–

–49

5,03

7

–49

5,03

7

Tota

l com

preh

ensi

ve in

com

e fo

r th

e pe

riod

–

–

–49

5,03

733

,025

,987

33,5

21,0

24

Paym

ent o

f divi

dend

s36

–

–

–

–

(33,

000,

000)

(33,

000,

000)

Issu

e of

sha

res

27(a

)33

,000

,000

–31

,242

,312

–

–64

,242

,312

Bala

nce

as o

f Mar

ch 3

1, 2

013

363,

000,

000

–43

,553

,644

495,

037

1,07

4,75

140

8,12

3,43

2

Profi

t for

the

year

–

–

–

–

76,3

00,2

8476

,300

,284

Othe

r com

preh

ensi

ve in

com

e fo

r the

yea

r

–

–

–

(6,5

43)

–

(6,5

43)

Tota

l com

preh

ensi

ve in

com

e fo

r th

e ye

ar

–

–

–

(6,5

43)

76,3

00,2

8476

,293

,741

Paym

ent o

f divi

dend

s36

–

–

–

–

(24,

479,

287)

(24,

479,

287)

Bonu

s is

sue

27(a

)90

,597

,242

–(4

0,00

0,00

0)

–

(50,

597,

242)

–

Buy-

back

of o

rdin

ary

shar

es27

(b)

–(1

,486

,508

)

–

–

–(1

,486

,508

)

Bala

nce

as o

f Mar

ch 3

1, 2

014

453,

597,

242

(1,4

86,5

08)

3,55

3,64

448

8,49

42,

298,

506

458,

451,

378

Non-

dist

ribut

able

Rese

rves

The

acco

mpa

nyin

g No

tes

form

an

inte

gral

par

t of t

he fi

nanc

ial s

tate

men

ts.

62


The Group

Note

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit for the year/periodAdjustments for:

50,329,638 55,586,866

Tax expense recognised in profit or loss 16,038,755 19,360,019

Depreciation of property, plant and equipment 15,928,327 17,583,643

Amortisation of intangible assets 3,529,319 2,929,087

Finance costs 1,556,523 1,345,971

Cumulative loss reclassified from equity on disposal of available-for-sale financial assets

417,441

–

Property, plant and equipment written off 343,726 1,566,759

Amortisation of prepaid lease payments 184,743 230,928

Share of losses/(profits) of associates 157,055 (527,506)

Bad debts written off 76,181 9,762

Inventories written off 20,682 138,336

Loss/(Gain) on disposal of property, plant and equipment 1,188 (924,392)

Investment revenue recognised in profit or loss (1,578,460) (2,478,686)

Changes in fair values of investment properties (523,220) (180,000)

Unrealised gain on foreign exchange (351,595) (103,264)

Gain on disposal of available-for-sale financial assets (81,426) –

Amortisation of deferred capital grant (24,179) (30,224)

Dividend income (15,000) (15,000)

Impairment on goodwill – 1,959,643

Inventories written down in value – 215,708

86,009,698 96,667,650

Movements in working capital:

(Increase)/Decrease in:

Inventories (5,536,126) 1,835,941

Trade and other receivables 9,030,443 (4,141,645)

Amount owing by associates (158,829) 21,454

(Decrease)/Increase in:

Trade and other payables (5,767,792) 1,312,614

Deferred income (298,217) (519,554)

Amount owing to ultimate holding company – 28,910

Cash Generated From Operations 83,279,177 95,205,370

Income tax refunded 627,700 1,042,623

Income tax paid (16,360,605) (24,661,799)

Net Cash From Operating Activities 67,546,272 71,586,194


Statement ofCash Flows

63


The Group

Note

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Proceeds from disposal of other investments 64,541,924 –

Withdrawal/(Placement) of fixed deposits 1,770,325 (129,773)

Interest income received 1,448,687 2,388,686

Proceeds from disposal of property, plant and equipment 110,070 1,915,263

Rental income received 129,773 90,000

Dividend income received 59,000 45,000

Purchase of other investments (59,773,804) (60,000,000)

Purchase of property, plant and equipment 38(a) (17,365,805) (63,681,693)

Acquisition of subsidiary* (16,335,721) –

Acquisition of additional shares in a subsidiary from non-controlling interests (1,952,704) –

Purchase of investment property (680,000) –

Repayment from associates – 60,000

Investment in unquoted shares – (320,815)

Advance payments for acquisition of property, plant and equipment – (208,292)

Net Cash Used In Investing Activities (28,048,255) (119,841,624)

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Proceeds from term loans 2,311,983 17,952,260

Advances from ultimate holding company 66,788 7,830

Repayment of term loans (13,263,408) (2,367,134)

Dividends paid to owners of the Company (10,889,700) (33,000,000)

Finance costs paid (1,556,523) (1,345,971)

Buy-back of shares (1,486,508) –

Repayment of hire-purchase payables (670,203) (1,205,448)

Dividends paid to non-controlling interests – (56,000)

Proceeds from issuance of shares – 64,350,000

Proceeds from trust receipts – 4,438,008

Payment for share issue expenses – (107,688)

Repayment to a director of a subsidiary – (4,463)

Net Cash (Used In)/From Financing Activities (25,487,571) 48,661,394

NET INCREASE IN CASH AND CASH EQUIVALENTS 14,010,446 405,964

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR/PERIOD Currency translation differences

83,668,0221,416,646

83,197,66764,391

CASH AND CASH EQUIVALENTS AT END OF YEAR/PERIOD 38(b) 99,095,114 83,668,022


64



The Company

Note

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit for the year/period 76,300,284 33,025,987

Adjustments for:

Depreciation of property, plant and equipment 153,172 173,383

Loss on disposal of available-for-sale financial assets 48,337 -

Property, plant and equipment written off 1,091 -

Finance cost 215 848

Dividend income (77,134,054) (34,739,024)

Investment revenue recognised in profit or loss (337,523) (1,190,406)

Cumulative gain reclassified from equity on disposal of available-for-sale financial assets (260,308)

-

Tax income recognised in profit or loss - (23,436)

Impairment loss on investment in a subsidiary - 950,810

(1,228,786) (1,801,838)

Movements in working capital:

Increase in trade and other receivables (52,923) (75,333)

Decrease in trade and other payables (62,370) (71,817)

Cash Used In Operations (1,344,079) (1,948,988)

Dividend received 26,150,046 34,739,024

Income tax refunded 4,335 -

Income tax paid (3,158) (241,840)

Net Cash From Operating Activities 24,807,144 32,548,196

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Proceeds from disposal of other investments 20,211,971 -

Interest income received 337,523 1,190,406

Advances granted to subsidiaries - net (27,178,820) (54,006,009)

Purchase of other investments (15,000,000) (30,000,000)

Investments in subsidiaries (200,800) (50,640)

Purchase of property, plant and equipment 38(a) (98,594) (1,595,692)

Repayment received from associates - 60,000

Net Cash Used In Investing Activities (21,928,720) (84,401,935)

Statement ofCash Flows

65


The Company

Note

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Dividends paid (10,889,700) (33,000,000)

Buy-back of shares (1,486,508) -

Finance cost paid (215) (848)

Proceeds from issuance of shares - 64,350,000

Advances received from subsidiaries - net - 1,734,928

Payment for share issue expenses - (107,688)

Repayment to holding company - net - (1,545)

Net Cash (Used In)/From Financing Activities (12,376,423) 32,974,847

Net Decrease In Cash And Cash Equivalents (9,497,999) (18,878,892)

Cash And Cash Equivalents At Beginning Of Year/Period 29,343,928 48,222,820

Cash And Cash Equivalents At End Of Year/Period 38(b) 19,845,929 29,343,928

RM RM

Property, plant and equipment 113,156

Distribution network 17,790,744

Inventories 2,534,006

Trade and other receivables 5,647,652

Fixed deposits, cash and bank balances 10,455,177

Trade and other payables (3,948,757)

Borrowings (1,394,797)

Current tax liabilities (549,074)

Fair value of net assets acquired 30,648,107

Non-controlling interests (3,857,209)

Group’s share of net assets acquired 26,790,898

Consideration paid in cash 26,790,898

Less: Fixed deposits, cash and bank balances (10,455,177)

Net cash outflow on acquisition of subsidiary 16,335,721

*ANALYSIS OF ACQUISITION OF SUBSIDIARY

During the financial year, the Group acquired a subsidiary as mentioned in Note 17. The fair values of the assets acquired and the liabilities assumed are as follows:


66


1. General Information

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of Bursa Malaysia Securities Berhad.

The Company is principally involved in investment holding.

The principal activities of the subsidiaries are disclosed in Note 17.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

The principal place of business of the Company is located at No. 2, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan.

The financial statements of the Group and of the Company were authorised for issue by the Board of Directors in accordance with a resolution of the directors on July 23, 2014.

2. Basis of Preparation of The Financial Statements

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

2.1 Adoption of New and Revised Mfrss

New and Revised Mfrss Affecting Amounts Reported and/or Disclosures in The Financial Statements

In the current year, the Group and the Company have applied a number of new and revised MFRSs issued by the Malaysian Accounting Standards Board (“MASB”) that are mandatorily effective for an accounting period that begins on or after January 1, 2013.

The adoption of new and revised MFRSs has had no material impact on the disclosures or on the amounts recognised in the financial statements, except as follows:

MFRS 13 Fair Value Measurement

The Group and the Company have applied MFRS 13 for the first time in the current year. MFRS 13 establishes a single source of guidance for fair value measurements and disclosures about the fair value measurements. The scope of MFRS 13 is broad; the fair value measurement requirements of MFRS 13 apply to both financial instrument items and non-financial instrument items for which other MFRSs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of MFRS 2 Share-based Payment, leasing transactions that are within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under MFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, MFRS 13 includes extensive disclosure requirements.

MFRS 13 requires prospective application from January 1, 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Group and the Company have not made any new disclosures required by MFRS 13 for the 2013 comparative period. Other than the additional disclosures, the application of MFRS 13 has not had any material impact on the amounts recognised in these financial statements.

Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income

The Group and the Company have applied the amendments to MFRS 101 Presentation of Items of Other Comprehensive Income for the first time in the current year. The amendments introduce new terminology, whose use is not mandatory, for the statement of comprehensive income and income statement. Under the amendments to MFRS 101, the “statement of comprehensive income” is renamed as the “statement of profit or loss and other comprehensive income” and the “income statement” is renamed as the “statement of profit or loss”. The amendments to MFRS 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to MFRS 101 require items of other comprehensive income to be grouped into two categories in other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis - the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the abovementioned presentation changes, the application of the amendments to MFRS 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

Notes toThe Financial

Statements

67


2.2 Standards and IC Interpretations (“IC Int.”) in issue but not yet effective

As at the date of authorisation for issue of these financial statements, the new and revised Standards and IC Int. which were in issue but not yet effective and not early adopted by the Group and the Company are as listed below:

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) ¹

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) ¹

MFRS 9 Financial Instruments (Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139) ¹

IC Int. 21 Levies ²

Amendments to MFRS 9 and MFRS 7 Mandatory Effective Date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and Transition Disclosures ¹

Amendments to MFRS 10, Investment Entities ² MFRS 12 and MFRS 127

Amendments to MFRS 119 Employee Benefits (Amendments relating to Defined Benefit Plans: Employee Contributions)

Amendments to MFRS 132 Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial Liabilities) ²

Amendments to MFRS 136 Impairment of Assets (Amendments relating to Recoverable Amounts Disclosures for Non-Financial Assets) ²

Amendments to MFRS 139 Financial Instruments: Recognition and Measurement (Amendments relating to Novation of Derivatives and Continuation of Hedge Accounting) ²

Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2010 - 2012 Cycle

Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2011 - 2013 Cycle

¹ The mandatory effective date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) which was for annual periods beginning on or after January 1, 2015 has been removed with the issuance of MFRS 9 Financial Instruments: Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139. The effective date of MFRS 9 will be decided when IASB’s IFRS 9 project is closer to completion. However, each version of the MFRS 9 is available for early adoption.

² Effective for annual periods beginning on or after January 1, 2014.

MFRS 9 and Amendments Relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures

MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and measurement of financial liabilities and for derecognition.

The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) (“MFRS 9”) relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” which became immediately effective on the issuance date of March 1, 2012 amended the mandatory effective date of MFRS 9 to annual periods beginning on or after January 1, 2015 instead of on or after January 1, 2013, with earlier application still permitted as well as modified the relief from restating prior periods. MFRS 7 which was also amended in tandem with the issuance of the aforementioned amendments introduces new disclosure requirements that are either permitted or required on the basis of the entity’s date of adoption and whether the entity chooses to restate prior periods.

Key requirements of MFRS 9:

• allrecognisedfinancialassetsthatarewithinthescopeofMFRS139Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of equity instrument (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.

68


•withregardtothemeasurementoffinancialliabilitiesdesignatedasatfairvaluethroughprofitorloss,MFRS9requiresthattheamountofchangein the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under MFRS 139, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

The directors do not anticipate the application of MFRS 9 to have significant impact on amounts reported in respect of the Group’s and of the Company’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until a detailed review has been completed.

3. Significant Accounting Policies

Basis of Accounting

The financial statements of the Group and of the Company have been prepared on historical cost basis except for certain non-current assets and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group and the Company take into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of MFRS 2, leasing transactions that are within the scope of MFRS 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in MFRS 102 or value in use in MFRS 136.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

•Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate; •Level2inputsareinputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheassetorliability,eitherdirectlyorindirectly;and •Level3inputsareunobservableinputsfortheassetorliability.

The principal accounting policies are set out below:

Subsidiaries and Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved where the Company:

•haspowerovertheinvestee; •isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and •hastheabilitytouseitspowertoaffectitsreturns.

The Company reassessed whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

•thesizeoftheCompany’sholdingofvotingrightsrelativetothesizeanddispersionofholdingsoftheothervoteholders; •potentialvotingrightsheldbytheCompany,othervoteholdersorotherparties; •rightsarisingfromothercontractualarrangements;and •anyadditionalfactsandcircumstancethatindicatethattheCompanyhas,ordoesnothave,thecurrentabilitytodirecttherelevantactivitiesatthe time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.


Statements

69


Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies.

All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group’s ownership interest in existing subsidiaries

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the relevant assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable MFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or joint venture.

Business Combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their fair value.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another Standard.

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held equity interests in the acquiree are remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised at that date.

The policy described above is applied to all business combinations that take place on or after January 1, 2011.

70


Business Combinations Involving Common Control Entities

A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties, both before and after the business combination, and that control is not transitory.

The consolidated financial statements incorporate the financial statements items of the combining entities in which the common control combination occurs as if they had been combined from the date when the combining entities first came under the control of the controlling parties.

The cost of investment in the holding’s book is recorded at the nominal value of shares acquired. A single uniform set of accounting policies is adopted by the combined entity. Therefore, the net assets of the combining entities are combined using the existing book values from the controlling parties’ perspective. No amount is recognised in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling parties’ interest.

The consolidated statement of comprehensive income includes the results of each of the combining entities from the earliest date presented or since the date when the combining entities first came under the common control, where this is a shorter period, regardless of the date of the common control combination. Expenditure incurred in connection with the restructuring is recognised as an expense in profit or loss.

The effects of all transactions between the combining entities or businesses, whether occurring before or after the combination, are eliminated in preparing the combined financial statements of the combined entity.

The debit differences arising between the cost of acquisition and the nominal value of share capital of the subsidiaries are reflected within equity as reserve arising from restructuring.

Associates

An associate is a non-subsidiary in which the Group and the Company hold not less than 20% of the equity voting rights as long-term investment and in which the Group and the Company is in a position to exercise significant influence in its management.

The investment in associate of the Group for the financial year ended March 31, 2014 is accounted for under the equity method of accounting based on the audited financial statements of the associated company made up to December 31, 2013 and appropriate adjustments have been made for the effects of significant transactions between that date and March 31, 2014. Under this method of accounting, the interest in the post-acquisition profits and reserves of the associate of the Group is included in the consolidated results while dividend received is reflected as a reduction of the investment in the consolidated statement of financial position.

Unrealised profits and losses arising on transactions between the Group and its associate are eliminated to the extent of the equity interest of the Group in the associated company except where unrealised losses provide evidence of an impairment of the asset transferred.

Goodwill/Negative Goodwill

Goodwill arising on an acquisition of a business is carried at cost less any accumulated impairment losses, if any.

Goodwill is not amortised. Instead, it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the statements of profit or loss and other comprehensive income. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Any excess of the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over costs of acquisition (previously known as negative goodwill), after reassessed, is recognised immediately to the statements of profit or loss and other comprehensive income.


Statements

71


Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, trade discounts and other similar allowances.

Sale of food and beverages

Sale of food and beverages are recognised when food and beverages are served, net of service tax.

Sale of goods

Revenue from sale of goods is recognised when the following conditions are satisfied:

•theGrouphastransferredtothecustomerthesignificantrisksandrewardsofownershipofthegoods; •theGroupretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontroloverthegoodssold; •theamountofrevenuecanbemeasuredreliably; •itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheGroup;and •thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.

Dividend income

Dividend income from quoted and unquoted investments is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably).

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest income is accrued on a time apportion basis, by reference to the principal outstanding and at the interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Rental income

Rental income is accrued on a time apportion basis, by reference to the agreements entered. Rental income from investment properties is recognised on a straight-line basis over the term of the relevant lease.

Franchise, advertising and promotion, rights and royalty fees

Franchise, advertising and promotion, rights and royalty fees are recognised on an accrual basis (provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably). Franchise fees are recognised on a straight-line basis over the period of the relevant agreement.

Fees for opening of outlets and relocation

Income from opening of outlets and relocation is recognised on a straight-line basis by reference to the terms of the agreements entered.

Income from accounting services, initial training fees and management fees

Income from rendering of accounting services, initial training fees and management fees are recognised as and when services are provided.

Licence fees

Licence fees are recognised as revenue on a straight-line basis over the length of the licensing contract.

Foreign Currencies

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Ringgit Malaysia (“RM”), which is the functional currency of the Company, and also the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency of the entity (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

72


Exchange differences are recognised in profit or loss in the period in which they arise except for:

•exchangedifferencesarisingontheretranslationofnon-monetaryitemscarriedatfairvalueinrespectofwhichgainsandlossesarerecognisedinother comprehensive income. For such non-monetary items, the exchange component of that gain or loss is also recognised in other comprehensive income; and

•exchangedifferencesonmonetaryitemsreceivablefromorpayabletoaforeignoperationforwhichsettlementisneitherplannednorlikelytooccur(therefore, forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the foreign incorporated subsidiaries of the Group are translated in RM using exchange rates prevailing at the end of the reporting period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments on identifiable assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income and accumulated in equity.

The closing rate per unit of functional foreign currency used in the translation of the subsidiaries and associate (foreign currency) into Ringgit Malaysia is as follows:

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

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

Government Grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the statements of financial position and transferred to the statements of profit or loss and other comprehensive income on a systematic and rational basis over the useful lives of the related assets.

Other government grants are recognised as revenue over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in the statements of profit or loss and other comprehensive income in the period in which they become receivable.

Foreign Currency2014

RM2013

RM

Singapore Dollar 2.5903 2.4958

Hong Kong Dollar 0.4210 0.3985


Statements

73


Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance Lease

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statements of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group general policy on borrowing costs.

Operating Lease

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Employee Benefits

Short-term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group and of the Company. Short-term accumulating compensated absences such as paid annual 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.

Defined contribution plan

The Group and the Company are required by law to make monthly contributions to statutory defined contribution plan for all its eligible employees based on certain prescribed rates of the employees’ salaries. The Group’s and the Company’s contributions to statutory defined contribution plan are recognised as an expense when employees have rendered service entitling them to the contributions and are disclosed separately. The employees’ contributions to statutory defined contribution plan are included in salaries and wages. Once the contributions have been paid, the Group and the Company have no further payment obligations.

Preliminary Expenses

Preliminary expenses are charged to the statements of profit or loss and comprehensive income in the financial year in which they are incurred.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss because of items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability of the Group and of the Company for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of reporting period.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised.

The tax effects of unutilised reinvestment allowances are only recognised upon actual realisation.

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The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of each reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the end of the reporting period, to recover or settle the carrying amount of their assets and liabilities.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The directors of the Group and of the Company reviewed the Group’s and the Company’s investment property portfolio and concluded that none of the Group’s and of the Company’s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the directors have determined that the “sale” presumption set out in the amendments to MFRS 112 is not rebutted. As a result, the Group and the Company have recognised deferred taxes on changes in fair values of investment properties based on the expected tax rate that would apply on disposal of the investment properties.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

Current and Deferred Tax for The Period

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.

The directors are unable to segregate the cost of the long-term leasehold land, which has a remaining lease period of 77 years, from the cost of long-term leasehold land and buildings. As such, the long-term leasehold land and buildings are amortised based on depreciation rate of 2% per annum. The directors do not consider the impact on the financial statements to be material.

Freehold land and capital work-in-progress are stated at cost and are not depreciated. Capital work-in-progress comprises contractors’ payments and directly attributable costs incurred in preparing these assets for their intended use. Depreciation on assets under construction commences when the assets are ready for their intended use.

Depreciation is recognised so as to write off the cost of assets, less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Annual depreciation rates used to depreciate property, plant and equipment, over their estimated remaining useful lives are as follows:

Assets held under hire-purchase arrangements are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no recoverable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset is recognised in profit or loss.

Buildings 2%

Apartments, factory and shop-office buildings 2%

Plant, machinery and equipment 5% to 20%

Motor vehicles 10% to 20%

Factory equipment, signboard and electrical fittings 10% to 20%

Air-conditioners, computers, furniture, fittings and office equipment 10% to 20%

Renovation 10% to 20%


Statements

75


Property, Plant and Equipment Under Hire-Purchase Arrangements

Assets acquired under hire-purchase arrangements which transfer substantially all of the risks and rewards incident to ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding hire-purchase obligations are recorded at their fair values or, if lower, at the present value of the minimum lease payment of the assets under hire-purchase at the inception of the respective arrangements.

Finance costs, which represent the difference between the total hire-purchase commitments and the fair values of the assets acquired, are charged to profit or loss over the term of the relevant hire-purchase period so as to give a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

Prepaid Lease Payments

Leasehold land that normally has an indefinite economic life and where title is not expected to pass to the lessee by the end of the lease period is treated as an operating lease. The payment made on entering into or acquiring a leasehold interest is accounted for as prepaid lease payments at the end of the reporting period. In the case of a lease of land and buildings, the prepaid lease payments are allocated whenever necessary, between the land element and building element of the lease at the inception of the lease in proportion to their relative fair value.

Prepaid lease payments on leasehold land are stated at cost less accumulated amortisation and accumulated impairment losses, if any.

Leasehold land is amortised on a straight-line basis over the remaining lease terms ranging from 43 to 97 years.

Investment Properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. Fair value is arrived by reference to market evidence of transaction prices for similar properties. Gain or loss arising from changes in the fair values of investment properties is included in profit or loss in the period in which they arise.

Investment properties are derecognised upon disposal or when the investment properties are permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the properties (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) are included in profit or loss in the period in which the properties are derecognised.

Investments

Investments in subsidiaries, which are eliminated on consolidation, and investment in associate, are stated in the Company’s separate financial statements at cost less accumulated impairment losses, if any.

Other investments in quoted unit trusts and unquoted shares are classified as available-for-sale investments.

Intangible Assets

Intangible assets are initially measured at either cost or fair value and amortised on a straight-line basis over their useful economic lives, which are reviewed at the end of each reporting date. The fair value attributable to intangible assets acquired through a business combination is determined by discounting the expected future cash flows to be generated from that assets at the risks adjusted weighted average cost of capital of the Group. The residual values of intangible assets are assumed to be Nil.

The estimated useful economic lives of intangible assets are as follows:

Distribution network 15 years Supplier exclusive right 10 years

The following are the main categories of intangible assets:

Distribution Network

Distribution network relates to relationship established by the subsidiary with the customers.

Supplier Exclusive Right

Supplier exclusive right represents right for sale of goods to a chain of outlets.

At the end of each reporting period, the Group assesses whether there is any indication of impairment. If such indication exists, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is provided for if the carrying amount exceeds the recoverable amount.

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Impairment of Assets excluding Goodwill and Intangible Assets

At the end of each reporting period, the Group and the Company review the carrying amounts of their assets (other than goodwill, intangible assets, investment properties, other investments, inventories and financial assets, which are dealt with in their respective policies) to determine if there is any indication that those assets may be impaired. If any such indication exists, the asset’s recoverable amount is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount would not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined principally on the “First-in, First-out” method.

Costs of trading merchandise, raw materials, packing materials, food, beverages, consumables, spare parts and goods-in-transit comprise the original purchase price plus cost incurred in bringing the inventories to their present location and condition. The costs of finished goods and work-in-progress comprise the cost of raw materials, direct labour and an appropriate proportion of production overheads. Net realisable value represents the estimated selling price less estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result of past event, it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Financial Instruments

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

Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, such financial assets are recognised and derecognised on trade date.

Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets and financial liabilities classified as fair value through profit or loss (“FVTPL”), which are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the profit or loss.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income and expense is recognised on an effective interest basis for debt instruments other than those financial assets or financial liabilities classified as at FVTPL.


Statements

77


Financial assets

Financial assets are classified into the following specified categories: financial assets at FVTPL, ‘held-to-maturity’ investments, ‘available-for-sale’ (“AFS”) financial assets and ‘loan and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Financial assets of the Group and of the Company are classified into ‘FVTPL’, ‘AFS financial assets’ and ‘loans and receivables’.

(i) Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

•ithasbeenacquiredprincipallyforthepurposeofsellingitinthenearterm;or•oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupmanagestogetherandhasarecentactualpatternof

short-term profit-taking; or •itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

•suchdesignationeliminatesorsignificantlyreducesameasurementorrecognitioninconsistencythatwouldotherwisearise;or•thefinancialassetformspartofagroupoffinancialassetsorfinancialliabilitiesorboth,whichismanagedanditsperformanceisevaluatedon

a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or •itformspartofacontractcontainingoneormoreembeddedderivatives,andMFRS139Financial Instruments: Recognition and Measurement

permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the “other gains and losses” line item in the statements of profit or loss and other comprehensive income.

(ii) Available-For-Sale (“Afs”) Financial Assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFS financial assets are measured at fair value at the end of the reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investment revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s and the Company’s rights to receive the dividends are established.

(iii) Loans and Receivables

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

(iv) Impairment of Financial Assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

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For all other financial assets, objective evidence of impairment could include:

•significantfinancialdifficultyoftheissuerorcounterparty;or•breachofcontract,suchasdefaultordelinquencyininterestorprincipalpayments;or•itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation;or•thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficulties.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in investment revaluation reserve are reclassified to profit or loss in the period.

Impairment losses of AFS financial asset previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(v) Derecognition of Financial Assets

The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risk and rewards of ownership and continues to control the transferred asset, the Group and the Company recognise their retained interest in the asset and an associated liability for amounts it may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

Financial Liabilities and Equity Instruments Issued by The Group and The Company

(i) Classification as Debt or Equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement and the definition of a financial liability and equity instrument.

(ii) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recorded at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognised as treasury shares at the cost of repurchase, and including directly attributable costs and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.


Statements

79


(iii) Financial Liabilities

Financial liabilities of the Group are classified as either financial liabilities “at FVTPL” or “other financial liabilities” categories while financial liabilities of the Company are classified into “other financial liabilities” category.

(iv) Financial Liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

•ithasbeenacquiredprincipallyforthepurposeofrepurchasingitinthenearterm;or•oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupmanagestogetherandhasarecentactualpatternof

short-term profit-taking; or •itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

•suchdesignationeliminatesorsignificantlyreducesameasurementorrecognitioninconsistencythatwouldotherwisearise;or•thefinancialliabilityformspartofagroupoffinancialassetsorfinancialliabilitiesorboth,whichismanagedanditsperformanceisevaluatedon

a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or •itformspartofacontractcontainingoneormoreembeddedderivatives,andMFRS139 Financial Instruments: Recognition and Measurement

permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the “other gains and losses” line item in the statements of profit or loss and other comprehensive income. Fair value is determined in the manner described in Note 37.

(v) Other Financial Liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs, and subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(vi) Derecognition of Financial Liabilities

The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid or payable is recognised in profit or loss.

Derivative Financial Instruments

The Group enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk.

Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset; a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

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Segment Information

For management purpose, the Group is organised into operating segments based on their business segment which is independently managed by the respective segment chief operation officer, responsible for the performance of the respective segments under their charge. The segment chief operation officer reports directly to the management of the Group who regularly reviews the segment results in order to allocate resources to the segments and to assess the segments performance.

Statements of Cash Flows

The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.

Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are readily convertible to cash with insignificant risks of changes in value.

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty

(a) Critical Judgement Made in Applying Accounting Policies

In the process of applying the accounting policies of the Group and of the Company, the directors are of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

In the application of the accounting policies of the Group and of the Company, which are described in Note 3, management is required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(b) Key Sources of Estimation Uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets in the next financial year are discussed below:

(i) Impairment of Goodwill

The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is necessary.

For the purpose of assessing impairment, goodwill is allocated to cash-generating units that are expected to benefit from the synergies of the business combination in which the goodwill arose.

Significant judgement is required in the estimation of the present value of future cash flows generated by the cash-generating units, which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Key assumptions used in determining the recoverable amount of cash generating unit based on value-in-use calculations are disclosed in Note 20. Changes in assumptions could significantly affect the results of the tests for impairment of goodwill of the Group.

(ii) Impairment of Property, Plant and Equipment and Intangible Assets

The carrying amounts of property, plant and equipment of the Group and of the Company as of March 31, 2014 are RM105,634,478 (2013: RM102,396,819) and RM1,885,819 (2013: RM1,930,665) respectively and the carrying amounts of intangible assets of the Group is RM33,398,124 (2013: RM19,136,699).

For the purpose of the impairment review of the outlet’s property, plant and equipment, each individual outlet will be considered as a single cash-generating unit. Each individual outlet’s discounted cash flow will be compared against the carrying amount of the property, plant and equipment for each individual outlet.


Statements

81


Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flow derived from that asset discounted at an appropriate discount rate. Projected future cash flows are based on the Group’s and the Company’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information. Management of the Group and of the Company have carried out an impairment review on their property, plant and equipment and concluded that there is no indication of impairment.

The Group tested intangible asset for impairment in accordance with its accounting policy.

(iii) Estimated Useful Lives of Property, Plant and Equipment and Intangible Assets

The Group and the Company regularly review the estimated useful lives of property, plant and equipment at the end of each reporting period based on factors such as business plan and strategies, expected level of usage and future technological developments. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in the estimated useful lives of property, plant and equipment would increase the recorded depreciation and decrease the value of property, plant and equipment.

The Group reviews its intangible assets with finite useful lives at the end of each reporting date. The estimated useful economic lives reflect the management’s estimates of the periods that the Group intends to derive future economic benefits from the use of these intangible assets.

(iv) Recoverability of Receivables

The carrying amounts of third-party trade and other receivables of the Group as of March 31, 2014 were RM34,894,994 (2013: RM39,236,878).

An allowance is established when there is objective evidence that the Group and the Company will not be able to collect all amounts due according to the original terms of receivables. This is determined based on the ageing profile and collection patterns.

(v) Obsolete Inventories

The Group writes off inventories based on an assessment of the recoverability of the inventories through sales and recycling for alternatives uses. Write off is applied to inventories where events or changes in circumstances indicate that the costs may not be recoverable.

The identification of obsolete inventories requires use of judgement and estimates.

Where the expectation is different from the original estimate, such difference will impact the carrying values of the inventories and inventories written off/(back) in the period in which such estimate has been changed.

(vi) Valuation of Acquired Intangible Assets

Acquisitions may result in supplier exclusive right and distribution network being recognised. These are valued using discounted cash flow methods which require the application of certain key judgements and estimates to be made in respect of discount rate and future cash flows.

5. Segment Reporting

The segment reporting is presented on the same basis as information reported to the chief operating decision maker and senior management for the purposes of allocating resources to the segment and assessing its performance. It is focused on the operations of the Group by business segment as disclosed below.

Business Segment

The Group’s operations can be segmented into three (3) business segments as follows:

a) Operation of a chain of cafes; b) Manufacturing of coffee and other beverages; and c) Others.

Inter-segment sales are charged at cost plus a percentage of profit mark-up.

82

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Notes to

The Financial Statements

Segment revenue from external customers is based on the business segments.

The GroupYear Ended 31.3.2014(12 Months)

Operations ofcafe chain

RM

Manufacturingof beverages

RMOthers

RMTotal

RM

Revenue

Total revenue 308,882,398 255,286,956 78,855,378 643,024,732

Inter-company sales (101,823,085) (80,174,619) (78,855,378) (260,853,082)

Total external sales 207,059,313 175,112,337 - 382,171,650

Results

Segment results 31,205,586 36,537,176 (1,239,251) 66,503,511

Finance costs (1,556,523)

Share of losses of associates (157,055)

Investment revenue 1,578,460

Profit before tax 66,368,393

Tax expense (16,038,755)

Profit for the year 50,329,638

Other information

Depreciation and amortisation 13,899,630 5,589,587 153,172 19,642,389

The GroupPeriod Ended 31.3.2013(15 Months)

Operations ofcafe chain

RM

Manufacturingof beverages

RMOthers

RMTotal

RM

Revenue

Total revenue 382,243,178 237,719,894 34,739,024 654,702,096

Inter-company sales (129,874,415) (68,034,314) (34,739,024) (232,647,753)

Total external sales 252,368,763 169,685,580 - 422,054,343

Results

Segment results 41,587,586 33,985,460 (2,286,382) 73,286,664

Finance costs (1,345,971)

Share of profits of associates 527,506

Investment revenue 2,478,686

Profit before tax 74,946,885

Tax expense (19,360,019)

Profit for the period 55,586,866

Other information

Depreciation and amortisation 18,120,334 2,449,941 173,383 20,743,658

Impairment loss on goodwill 1,959,643 - - 1,959,643

83


Geographical Segment

The Group operates in four principal geographical areas - Malaysia (country of domicile), South East Asia, other Asian countries and others.

The Group’s revenue from continuing operations from external customers by geographical area are detailed below:

Revenue of approximately RM39,720,000 (2013: RM46,000,000) which contributed more than 10% (2013: 10%) of the total revenue of the Group is derived from one (1) external customer (2013: one (1) external customer) under manufacturing of beverages of Malaysia segment during the financial year.

Segment assets, segment liabilities and capital additions were not disclosed as they were not regularly provided to the chief operating decision maker for their day-to-day operation decision making.

6. Revenue

Revenue from external customers

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Malaysia 263,450,956 317,447,907

South East Asia 36,743,267 41,742,703

Other Asian countries 72,629,052 54,432,958

Others 9,348,375 8,430,775

382,171,650 422,054,343


Year Ended 31.3.2014

(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Sale of goods 362,308,920 398,817,812 - -

Royalty, advertising and promotion fees 17,222,321 19,954,020 - -

Franchise fees 1,370,299 1,659,995 - -

Rights fees 650,000 750,000 - -

Initial training fees 293,836 320,000 - -

Fees for opening of outlets 224,587 331,632 - -

Licence fees 50,157 121,310 - -

Relocation fees 20,000 64,756 - -

Management fees 16,530 19,818 - -

Dividend income 15,000 15,000 77,134,054 34,739,024

382,171,650 422,054,343 77,134,054 34,739,024

84





(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Changes in fair values of investment properties 523,220 180,000 - -

Gain/(Loss) on foreign exchange:

Unrealised 351,595 103,264 - -

Realised 77,995 (186,880) - -

Gain/(Loss) on disposal of available-for-sale financial assets 81,426 - (48,337) -

Amortisation of deferred capital grant 24,179 30,224 - -

Cumulative (loss)/gain reclassified from equity on disposal of available-for-sale financial assets (417,441) - 260,308 -

(Loss)/Gain on disposal of property, plant and equipment (1,188) 924,392 - -

639,786 1,051,000 211,971 -

8. Other Gains and Losses

7. Investment Revenue



(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Investment revenue earned on loans and receivables(including cash and cash equivalents):

Interest income from:

Short-term investment funds 1,341,181 2,251,847 337,523 1,190,406

Fixed deposits 92,966 101,844 - -

Current account 14,540 34,995 - -

Investment revenue earned on non-financial asset:

Property rental income 129,773 90,000 - -

1,578,460 2,478,686 337,523 1,190,406

85


9. Other Operating Income/(Expenses) and Employee Benefits Expenses

Included in other operating income/(expenses) and employee benefits expenses are the following:



(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Service charge received - net 6,231,489 7,577,068 - -

Rental income:

Properties 741,281 1,706,743 - -

Machinery 1,300 330 - -

Rental of:

Premises (18,886,040) (24,966,279) (8,800) (60,000)

Server (217,801) - - -

Equipment (89,137) (54,639) - -

Motor vehicles (21,600) (22,800) - -

Machinery - (90,137) - -

Others (17,476) (36,628) - -

Audit fees:

Statutory audit:

- auditors of the Company (457,000) (445,000) (54,000) (50,000)

- other auditors (135,025) (34,782) - -

Non-statutory audit:

- current year (26,000) - (26,000) -

- prior year (3,000) (3,000) (3,000) (3,000)

Property, plant and equipment written off (343,726) (1,566,759) (1,091) -

Bad debts written off (76,181) (9,762) - -

Listing expenses (23,595) (37,760) (23,595) (37,760)

Inventories written off (20,682) (138,336) - -

Inventories written down in value - (215,708) - -

Preliminary expenses written off - (2,386) - -

Included in employee benefits expenses of the Group and the Company are contributions made to EPF of RM3,401,105 (2013: RM3,713,033) and RM10,740 (2013: RM12,568) respectively.

86



Number of directors

Range of remunerationExecutivedirectors

Non-executivedirectors

RM1 to RM50,000 - 2

RM50,001 to RM100,000 - 2

RM250,001 to RM300,000 2 -

RM550,001 to RM600,000 1 -

RM850,001 to RM900,000 1 -

RM1,000,001 to RM1,050,000 1 -



(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Executive directors:

Salaries, bonuses, incentives and allowances:

The Company 83,100 106,500 83,100 106,500

Subsidiaries 2,603,500 1,968,700 - -

Fees - subsidiaries 104,621 99,816 - -

Non-executive directors of the Company:

Fees 153,000 217,250 153,000 217,250

Allowances 63,000 40,500 63,000 40,500

Contributions to EPF:

Executive directors:

The Company 8,532 11,518 8,532 11,518

Subsidiaries 168,864 205,238 - -

3,184,617 2,649,522 307,632 375,768

10. Directors’ Remuneration

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the Group and from the Company amounted to RM118,927 (2013: RM139,659) and RM23,950 (2013: RM29,938) respectively.

Directors’ remuneration including benefits-in-kind paid or payable by the Company and its subsidiaries to the directors of the Company for the current financial year are broadly categorised into the following bands:

87




(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Interest on:

Term loans 1,270,119 961,305 - -

Hire-purchase 67,350 161,302 - -

Trust receipts 62,523 26,185 - -

Bank overdrafts - 7,905 - -

Bank charges and commission 156,531 189,274 215 848

1,556,523 1,345,971 215 848

11. Finance Costs

12. Tax (Expense)/Income



(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Income tax (expense)/ income comprises:

Current tax expense in respect of current year/period:

- Malaysia (10,573,350) (19,683,670) - -

- Foreign (1,195,692) - - -

(11,769,042) (19,683,670) - -

Adjustments recognised in the current year/period in relation to the income tax of prior years

(256,119) 45,309 - 23,436

(12,025,161) (19,638,361) - 23,436

Deferred tax (expense)/ income relating to origination and reversal of temporary differences

(4,109,594) 290,342 - -

Adjustments recognised in the current year/period in relation to the deferred tax of prior years

96,000 (12,000) - -

(Note 22) (4,013,594) 278,342 - -

Total tax (expense)/income (16,038,755) (19,360,019) - 23,436

88





(12 Months)RM


(15 Months)RM


(12 Months)RM


(15 Months)RM

Profit before tax 66,368,393 74,946,885 76,300,284 33,002,551

Tax expense calculated using the Malaysian statutory income tax rate of 25% (2013: 25%)

(16,592,000) (18,737,000) (19,075,000) (8,251,000)

Tax effects of:

Reinvestment allowances utilised 2,508,000 678,000 - -

Income that is not taxable in determining taxable profit 463,863 655,476 19,368,000 8,982,000

Expenses allowed for double tax deductions 321,000 1,082,000 - -

Corporate tax rebate 53,197 - - -

Expenses that are not deductible in determining taxable profit (3,149,360) (3,239,097) (207,000) (731,000)

Loss not available for offset against future taxable profit (90,000) - (86,000) -

Enhanced deduction for qualifying expenditure - 103,975 - -

Effect of difference in tax rates of subsidiaries operating in foreign jurisdictions

606,664 63,318 - -

Adjustments recognised in the current year/ period in relation to the taxes of prior years:

Income tax (256,119) 45,309 - 23,436

Deferred tax 96,000 (12,000) - -

Tax (expense)/income recognised in profit or loss (16,038,755) (19,360,019) - 23,436

The Group’s and the Company’s income tax rate remained at 25% for the years of assessment 2014 and 2013 except for its foreign subsidiaries. Taxa-tion for other jurisdictions are calculated at the rates prevailing in the relevant jurisdictions.

The Malaysian Budget 2014 announced on October 25, 2013 the reduction of corporate income tax rate from 25% to 24% with effect from year of assessment 2016. The Real Property Gains Tax (“RPGT”) is also revised to 30% for disposal within the first three years, 20% within the fourth year, 15% within the fifth year and 5% from sixth year onwards, on gains from the disposal of real property effective January 1, 2014. Following these, the applica-ble tax rate to be used for the measurement of any applicable deferred tax will be the abovementioned expected rate.

The tax (expense)/income for the year/period can be reconciled to profit before tax as follows:

89


Current tax assets and liabilities

13. Earnings Per Share

The basic and diluted earnings per share are calculated as follows:

Number of ordinary shares in issue as of April 1 includes the bonus issue of 90,597,242 units of ordinary shares issued during the financial year.

Comparative figures of the basic and diluted earnings per ordinary shares have been restated to reflect the bonus issue during the financial year.


2014RM

2013RM

2014RM

2013RM

Current tax assets:

Tax refund receivable 4,059,601 1,105,598 9,774 10,951

Current tax liabilities:

Income tax payable 478,500 659,910 - -

The Group

Basic and diluted 2014 2013

Profit for the year/period attributable to owners of the Company RM48,938,252 RM55,527,110

Number of ordinary shares in issue as of April 1 453,597,242 420,597,242

Effects of: Shares repurchased (209,819) -

Private placement - 7,470,330

Weighted average number of ordinary shares in issue 453,387,423 428,067,572

Basic and diluted earnings per ordinary share (RM) 0.11 0.13

90



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9,56

58,

218,

147

6,22

7,93

322

,566

,212

20,0

63,3

579,

568,

178

-

68,2

32,3

84

Carr

ying

am

ount

s

As o

f Mar

ch 3

1, 2

013

3,81

8,02

61,

200,

000

43,4

55,3

685,

900,

851

4,04

3,21

711

,548

,984

10,9

69,0

875,

052,

872

16,4

08,4

1410

2,39

6,81

9

As o

f Mar

ch 3

1, 2

014

2,74

8,45

481

5,00

048

,085

,540

18,0

61,3

743,

762,

899

11,8

58,3

5911

,314

,745

5,04

2,57

73,

945,

530

105,

634,

478

92


The Company

Motorvehicles

RMSignboard

RM

Furniture,fittings and

office equipment

RM

Capital work-in-progress

RMTotal

RM

Cost

As of January 1, 2012 374,113 368 174,047 - 548,528

Additions 142,097 - 72,131 1,395,239 1,609,467

As of March 31, 2013 516,210 368 246,178 1,395,239 2,157,995

Additions - - 9,316 100,101 109,417

Write off - (368) (1,300) - (1,668)

As of March 31, 2014 516,210 - 254,194 1,495,340 2,265,744

Accumulated depreciation and accumulated impairment losses

As of January 1, 2012 31,176 49 22,722 - 53,947

Depreciation charge for the period 117,211 92 56,080 - 173,383

As of March 31, 2013 148,387 141 78,802 - 227,330

Depreciation charge for the year 103,242 68 49,862 - 153,172

Write off - (209) (368) - (577)

As of March 31, 2014 251,629 - 128,296 - 379,925

Carrying amounts

As of March 31, 2013 367,823 227 167,376 1,395,239 1,930,665

As of March 31, 2014 264,581 - 125,898 1,495,340 1,885,819

Leasehold buildings, freehold land, factory buildings, shop-office buildings and capital work-in-progress of the Group with total carrying value of RM51,302,515 (2013: RM49,014,704) are charged to certain local licensed banks for banking facilities granted to the Group as mentioned in Note 32.

The carrying amounts of certain motor vehicles and plant and machinery of the Group acquired under hire-purchase arrangements are RM771,396 and Nil (2013: RM1,506,163 and RM205,200) respectively.

In 2013, disposal of property, plant and equipment of the Group included disposal of outlet operations with carrying amount of RM802,684 to third parties. Gain arising therefrom amounted to RM837,315.


Statements

93


The Group 2014

Short-termleasehold land

RM

Long-termleasehold land

RMTotal

RM

At cost

At beginning and end of year 105,820 14,256,333 14,362,153

Accumulated amortisation

At beginning of year 11,657 593,016 604,673

Amortisation for the year 2,385 182,358 184,743

At end of year 14,042 775,374 789,416

Carrying amount 91,778 13,480,959 13,572,737

The Group 2013

At cost

At beginning and end of period 105,820 14,256,333 14,362,153


At beginning of period 8,676 365,069 373,745

Amortisation for the period 2,981 227,947 230,928

At end of period 11,657 593,016 604,673

Carrying amount 94,163 13,663,317 13,757,480

15. Prepaid Lease Payments

94


Level 1RM

Level 2RM

Level 3RM

TotalRM

Investment properties - 3,890,000 - 3,890,000

The Group 2014

Long-term leasehold land and buildings

RM

Long-term leasehold

land RM

Freehold landRM

Freehold shoplot

RM Buildings

RMTotal

RM

At fair value

At beginning of year 1,320,000 - - 720,000 - 2,040,000

Transfer from property, plant and equipment (Note 14)

- - 385,000 - 261,780 646,780

Additions during the year - 300,000 - - 380,000 680,000

Increase in fair value during the year 170,000 - 235,000 - 118,220 523,220

At end of year 1,490,000 300,000 620,000 720,000 760,000 3,890,000

Carrying amounts 1,490,000 300,000 620,000 720,000 760,000 3,890,000

The Group 2013

At fair value

At beginning of period 1,140,000 - - 720,000 - 1,860,000

Increase in fair value during the period 180,000 - - - - 180,000

At end of period 1,320,000 - - 720,000 - 2,040,000

Carrying amounts 1,320,000 - - 720,000 - 2,040,000

The leasehold land of the Group with total carrying value of RM11,017,075 (2013: RM13,384,484) are charged to certain local licensed banks for banking facilities granted to the Group as mentioned in Note 32.

16. Investment Properties

The fair values of the investment properties were estimated at RM3,890,000 (2013: RM2,040,000) based on valuation by an independent qualified valuer. Valuations were arrived at by reference to market evidence of transaction prices for similar properties. There has been no change to the valuation technique during the year.

Details of the Group’s investment properties and information about the fair value hierarchy as of March 31, 2014 are as follows:

There were no transfers between Level 1 and Level 2 during the year.

The investment properties amounting to RM2,490,000 (2013: RM1,320,000) were charged to certain local licensed banks for banking facilities granted to the Group as mentioned in Note 32.

The strata title for the freehold shoplot is not available for auditor’s inspection as it is in the process of being transferred to the name of the subsidiary company.

The rental income and direct operating expenses arising from the investment properties of the Group which were recognised during the financial year/period amounted to RM129,773 (2013: RM90,000) and RM16,115 (2013: RM16,067) respectively.


Statements

95


17. Investment in Subsidiaries

The Company

2014 2013

Unquoted shares, at cost 290,703,731 290,502,931

Less: Accumulated impairment losses (950,810) (950,810)

289,752,921 289,552,121

Details of the subsidiaries of the Company as at the end of the reporting date are as follows:

^^ The financial statements of this company are examined by a member firm of the auditors of the Company.* The financial statements of these companies are examined by auditors other than the auditors of the Company.# Held through Kopitiam Asia Pacific Sdn. Bhd..^ Held through Old Town Kopitiam Butterworth Sdn. Bhd..@ Held through Old Town (M) Sdn. Bhd..** The financial statements of this company are not required to be audited by law in its country of incorporation.

Effective Equity Interest

Name of CompanyCountry of Incorporation

2014%

2013% Principal Activities

Advance City Limited^^@ Hong Kong 70.00 - Marketing of beverages.

Conneczone Sdn. Bhd. Malaysia 80.00 80.00 Operator of cafe outlets.

Dynasty Confectionery Sdn. Bhd. Malaysia 100.00 100.00 Central bakery and confectionery processing centre.

Dynasty Kitchen Sdn. Bhd. ^ Malaysia 100.00 100.00 Distribution centre.

Emperor’s Kitchen Sdn. Bhd. Malaysia 100.00 100.00 Central food processing centre and trading of food products.

Esquire Chef Sdn. Bhd. Malaysia 100.00 100.00 Central food processing centre.

Gongga Food Sdn. Bhd. Malaysia 100.00 100.00 Manufacture of roasted coffee powder and procurement of food items.

Kopitiam Asia Pacific Sdn. Bhd. Malaysia 100.00 100.00 Franchisor of cafe outlets and provision of management services.

Oldtown Singapore Pte. Ltd.* Singapore 100.00 100.00 Franchisor of cafe outlets, provision of management services, procurement of food items and operator of

cafe outlets.

Oldtown APP Sdn. Bhd. Malaysia 100.00 100.00 Dormant.

Oldtown Logistics Sdn. Bhd. Malaysia 100.00 100.00 Dormant.

Old Town Kopitiam Sdn. Bhd.# Malaysia 100.00 100.00 Operator of cafe outlets.

Old Town Kopitiam Butterworth Sdn. Bhd. Malaysia 100.00 100.00 Operator of cafe outlets.

Old Town Kopitiam Cheras Sdn. Bhd. Malaysia 100.00 100.00 Operator of cafe outlets.

Old Town Kopitiam Kuala Lumpur Sdn. Bhd. Malaysia 100.00 100.00 Operator of cafe outlets.

Old Town (M) Sdn. Bhd. Malaysia 100.00 100.00 Investment holding.

OTK (HK) Investment Limited ** @ Hong Kong 100.00 51.00 Dormant.

White Cafe Sdn. Bhd. Malaysia 100.00 100.00 Manufacturing of beverages.

White Cafe Marketing Sdn. Bhd. Malaysia 100.00 100.00 Marketing of beverages.

96


Number of non-wholly-owned subsidiaries

Industry Place of incorporation and operation 2014 2013

Fast moving consumer goods Hong Kong 1 -

Food and beverages Malaysia 1 1

Others - dormant Hong Kong - 1

2 2

Number of wholly-owned subsidiaries

Industry Place of incorporation and operation 2014 2013

Fast moving consumer goods Malaysia 2 2

Food and beverages MalaysiaSingapore

101

101

Investment holding Malaysia 1 1

Others - dormant MalaysiaHong Kong

21

2-

17 16

2014

Revenue 26,566,212


2014

Revenue 29,281,984


During the financial year, the Group acquired a subsidiary for a total consideration of RM26,790,898. The acquisition was completed on April 22, 2013.

The effect of the acquired subsidiary on the results of the Group for the period from April 22, 2013 to March 31, 2014 are as follows:

Composition of the Group

Information about the composition of the Group at the end of the reporting date is as follows:

If the acquisition of the subsidiary had occurred at the beginning of the year, the effect on the Group’s revenue and profit for the year would have been as follows:

Details of non-wholly owned subsidiaries that have material non-controlling interests are as follows:

Name of CompanyCountry of

incorporation and principal place of

business

Proportion of ownership interest and voting rights held by non-controlling

interests

Profit allocated tonon-controlling interests

Accumulatednon-controlling interests

Year Ended31.3.2014


Year Ended31.3.2014


2014%

2013%

(12 Months)RM

(15 Months)RM

(12 Months)RM

(15 Months)RM

Conneczone Sdn. Bhd. Malaysia 20 20 30,657 59,756 259,975 239,318

Advance City Limited Hong Kong 30 - 1,360,729 - 4,781,761 -

OTK (HK) Investment Limited

Hong Kong - 49 - - - 1,952,704

Total 5,041,736 2,192,022


Statements

97


Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set out below. The summarised financial information below represents amounts before intragroup eliminations.

Conneczone Sdn. Bhd.2014

RM2013

RM

Current assets 1,671,274 1,541,266

Non-current assets 887,088 490,690

Current liabilities (1,207,764) (810,982)

Non-current liabilities (50,723) (24,384)

Equity attributable to owners of the Company 1,039,900 957,272

Non-controlling interests 259,975 239,318

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Revenue 6,971,491 8,869,873

Expenses (6,818,206) (8,571,092)

Profit and total comprehensive income for the year/period 153,285 298,781

Profit and total comprehensive income attributable to owners of the Company 122,628 239,025

Profit and total comprehensive income attributable to non-controlling interests 30,657 59,756

Profit and total comprehensive income for the year/period 153,285 298,781

Dividend paid to non-controlling interests 10,000 56,000

Net cash from operating activities 628,175 534,416

Net cash (used in)/from investing activities (636,537) 30,909

Net cash used in financing activities (8,168) (456,024)

Net cash (outflow)/inflow (16,530) 109,301

98


Advance City Limited 2014

RM2013

RM

Current assets 24,626,715 -

Non-current assets 91,048 -

Current liabilities (8,778,560) -

Equity attributable to owners of the Company 11,157,442 -


Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Revenue 38,087,487 -

Expenses (33,551,725) -

Profit for the year/period 4,535,762 -


Owners of the Company 3,175,033 -


4,535,762 -

Other comprehensive income attributable to:

Owners of the Company 703,577 -

Non-controlling interests 301,533 -

Total comprehensive income for the year/period 5,540,872 -

Total comprehensive income attributable to:

Owners of the Company 3,878,610 -


Profit and total comprehensive income for the year/period 5,540,872 -

Dividend paid to non-controlling interests 737,710 -

Net cash from operating activities 5,558,330 -

Net cash from investing activities 18,612 -

Net cash used in financing activities (1,467,269) -

Net cash inflow 4,109,673 -


Statements

99


OTK (HK) Investment Limited2014

RM2013

RM

Current assets - 3,985,110

Equity attributable to owners of the Company - 2,032,406

Non-controlling interests - 1,952,704

Details of the Group’s associates as at the end of the reporting date are as follows:

The reporting date of the associates is December 31. This was the reporting date established when the associates were incorporated and management considers that it is unnecessary to change the reporting date. For the purpose of applying equity method of accounting, the audited consolidated financial statements of the respective associates for the year ended December 31, 2013/2012 have been used, and appropriate adjustments have been made for the effects of significant transactions between that date and March 31, 2014/2013.

* The financial statements of this company are examined by auditors other than the auditors of the Company.# Held through Oldtown Singapore Pte. Ltd..


2014RM

2013RM

2014RM

2013RM

Unquoted equity shares, at cost 1,461,107 1,461,107 1,101,002 1,101,002

Group’s share of post-acquisition reserve 44,034 245,089 - -

1,505,141 1,706,196 1,101,002 1,101,002

Effective Equity Interest

Name of CompanyCountry of Incorporation

2014%

2013% Principal Activities

FinancialYear End

OTK Singapore Pte. Ltd. * # Singapore 50.00 50.00 Operator of cafe outlets. December 31

OTK Eatery Sdn. Bhd. Malaysia 40.00 40.00 Operator of cafe outlets. December 31

Plus One Solution Sdn. Bhd. Malaysia 50.00 50.00 Information technology service centre. December 31

No disclosure was made on profit and total comprehensive income for the period and net cash movement for OTK (HK) Investment Limited for the period ended March 31, 2013 as the subsidiary company was only incorporated on March 26, 2013.

18. Investment In Associates

100


19. OTHER INVESTMENTS

The Group

2014 2013

Total assets 8,891,002 7,264,824

Total liabilities (7,034,228) (4,973,075)

Net assets 1,856,774 2,291,749

Group’s share of net assets of associates 802,921 1,003,976

Goodwill on associates 702,220 702,220

1,505,141 1,706,196

Total revenue 30,961,748 38,263,930

Total (loss)/profit for the year/period (357,734) 926,191

Group’s share of (losses)/profits of associates for the year/period (157,055) 527,506


2014RM

2013RM

2014RM

2013RM

Non-current

Available-for-sale investments:

Unquoted shares at cost in:

Malaysia 29,000 29,000 - -

Indonesia 1,057,567 1,057,567 - -

1,086,567 1,086,567 - -


Quoted unit trusts in Malaysia, at fair value - 45,541,495 - 15,447,383

1,086,567 46,628,062 - 15,447,383

Current


Quoted unit trusts in Malaysia, at fair value 66,516,766 25,693,547 25,488,494 15,047,654

Summarised financial information in respect of the Group’s associates is set out below:


Statements

101


The fair value hierarchy for quoted unit trusts above are classified as follows:

The Group 2014Level 1

RMLevel 2

RMLevel 3

RMTotal

RM

Available-for-sale: Other investments:

- quoted unit trusts 66,516,766 - - 66,516,766

The Group 2013



The Company 2014Level 1

RMLevel 2

RMLevel 3

RMTotal

RM



The Company 2013



There were no transfers between Level 1 and Level 2 in both 2014 and 2013.

20. Goodwill on Consolidation

The Group

2014 2013

At cost

At beginning and end of year/period 25,671,638 25,671,638

Accumulated impairment losses

At beginning of year/period 1,959,643 -

Impairment loss for the year/period - 1,959,643

At end of year/period 1,959,643 1,959,643

Carrying amount 23,711,995 23,711,995

Goodwill acquired in business combination is allocated, at acquisition, to the group of units that are expected to benefit from the synergies of the combination. For impairment testing purpose, goodwill is assigned to the acquired subsidiaries under operation of cafe outlets.

Goodwill arose from the acquisition of five (5) direct and indirect subsidiaries including Old Town Kopitiam Butterworth Sdn. Bhd., Old Town Kopitiam Kuala Lumpur Sdn. Bhd., Old Town Kopitiam Cheras Sdn. Bhd., Dynasty Kitchen Sdn. Bhd. and Conneczone Sdn. Bhd. because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of the subsidiaries. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

102


The Group also acquired the supplier exclusive rights as part of the acquisition from Emperor’s Kitchen Sdn. Bhd., Esquire Chef Sdn. Bhd. and Dynasty Confectionery Sdn. Bhd. and distribution network from Advance City Limited. These intangible assets have been separately recognised from goodwill as it met the definition of intangible assets as disclosed in Note 21.

None of the goodwill arising on these acquisitions is expected to be deductible for tax purposes.

The recoverable amounts of the CGUs were based on value-in-use calculations. The calculations were determined using projected cash flows for a ten-year period by extrapolation using the growth rate based on historical experience, management’s assessment of future trends and expectation of market development in the respective industries.

The key assumptions used in preparation of the projected cash flows are as follows:

• Pre-taxdiscountratesrangefrom14.0%to18.0%(2013:11.0%to14.0%);• Therewillbenomaterialchangesinthestructureandprincipalactivitiesofthesubsidiaries;• Chainofoutletswillcontinuetooperateunderthefranchiselicencefor2terms(5yearseachterm);• Projectedgrowthrateoffoodandbeveragesof4.0%(2013:3.0%to4.0%)perannum;• Therewillnotbeanysignificantchangesinthepricesandsupplyofrawmaterials,wagesandotherrelatedcosts,resultingfromindustrialdispute,

adverse changes in economic conditions or other abnormal factors, which will adversely affect the operations of the Group; and• ThestatutoryincometaxrateforMalaysiawillremainat25%(2013:25%).Therewillbenomaterialchangestothepresentlegislationor

regulations, rates and bases of duties, levies and other taxes affecting the Group’s activities.

The Group conducted the annual goodwill impairment testing and no impairment loss need to be recognised except for RM1,959,643 which has been recognised in previous financial period.

The directors believe that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the other subsidiaries.

21. Intangible Assets

The GroupDistribution

network RM

Supplierexclusive

right RM

TotalRM

Cost

As of January 1, 2012 - 23,432,693 23,432,693

Arising from acquisition of new subsidiary - - -

As of March 31, 2013 - 23,432,693 23,432,693

Arising from acquisition of new subsidiary 17,790,744 - 17,790,744

As of March 31, 2014 17,790,744 23,432,693 41,223,437


As of January 1, 2012 - 1,366,907 1,366,907

Amortisation for the period - 2,929,087 2,929,087

As of March 31, 2013 - 4,295,994 4,295,994

Amortisation for the year 1,186,050 2,343,269 3,529,319

As of March 31, 2014 1,186,050 6,639,263 7,825,313

Carrying amount

As of March 31, 2013 - 19,136,699 19,136,699

As of March 31, 2014 16,604,694 16,793,430 33,398,124


Statements

103


22. Deferred Tax Assets/(Liabilities)

The Group2014

At beginning

of year/periodRM

Recognised in profitor loss

RM

Translationdifferences

RM

At end of year/period

RM

Deferred tax assets

Property, plant and equipment (116,000) (132,000) - (248,000)

Deferred income 1,326,000 (204,000) - 1,122,000

Unabsorbed tax capital allowances 70,000 19,000 - 89,000

1,280,000 (317,000) - 963,000

Deferred tax liabilities

Property, plant and equipment (2,028,412) (3,649,594) (4,725) (5,682,731)

Investment properties (15,000) - - (15,000)

Unrealised foreign exchange differences on:

Trade receivables (22,000) 56,000 - 34,000

Bank balances (7,000) (99,000) - (106,000)

Borrowings 3,000 (23,000) - (20,000)

Unabsorbed tax capital allowances - 19,000 - 19,000

(2,069,412) (3,696,594) (4,725) (5,770,731)

The Group2013

Deferred tax assets

Property, plant and equipment (245,047) 129,047 - (116,000)

Deferred income 1,384,727 (58,727) - 1,326,000

Unabsorbed tax capital allowances 54,320 15,680 - 70,000

1,194,000 86,000 - 1,280,000

Deferred tax liabilities

Property, plant and equipment (2,219,061) 191,342 (693) (2,028,412)

Investment properties (15,000) - - (15,000)

Unrealised foreign exchange differences on:

Trade receivables (31,000) 9,000 - (22,000)

Bank balances - (7,000) - (7,000)

Borrowings - 3,000 - 3,000

Unabsorbed tax capital allowances 4,000 (4,000) - -

(2,261,061) 192,342 (693) (2,069,412)

104


23. Inventories

The Group

2014 RM

2013RM

Finished goods and trading merchandise 10,703,906 6,808,060

Food, beverages and consumables 4,624,697 1,776,142

Raw materials 4,580,788 3,790,727

Packing materials 1,811,052 1,084,670

Work-in-progress 396,759 389,364

Spare parts 192,857 -

Goods-in-transit 155,895 378,799

22,465,954 14,227,762

The cost of inventories of the Group recognised as an expense during the year/period was RM167,000,813 (2013: RM188,371,890).

24. Trade and Other Receivables

Trade and other receivables disclosed above are classified as loans and receivables and are therefore, measured at amortised cost.

Trade receivables of the Group comprise amounts receivable for the sale of goods. Other receivables of the Group comprise mainly expenses paid on behalf and advances granted which are unsecured, interest-free and repayable upon demand.

Included in other receivables of the Group are rental receivable from related parties of RM78,531 (2013: Nil).

Trade transactions of the Group were on cash terms and credit period which ranged from 7 to 90 days (2013: 30 to 90 days).


2014RM

2013RM

2014RM

2013RM

Trade receivables 34,414,703 36,969,378 - -

Other receivables 480,291 2,267,500 - 109,800

Refundable deposits 7,212,566 7,021,380 5,370 13,370

Loans and receivables 42,107,560 46,258,258 5,370 123,170

Advance payment for acquisition of plant and machinery 45,360 228,892 - -

Prepaid expenses 3,670,923 2,295,706 221,221 50,498

45,823,843 48,782,856 226,591 173,668


Statements

105


The currency profile of trade and other receivables are as follows:

Included in trade receivables of the Group are related parties’ balances of RM5,896,513 (2013: RM8,600,243).

Included in trade receivables of the Group are receivables with total carrying amount of RM9,385,666 (2013: RM6,129,686) which are past due at the reporting date for which the Group has not provided for impairment loss. The Group does not hold any collateral over these balances nor does it have a legal right to offset against any amounts owed by the Group to the counterparty.

Ageing of trade receivables which are past due but not impaired are as follows:

The Group seeks to maintain strict control over its outstanding trade receivables and has a credit period policy to minimise credit risk. Overdue balances are reviewed regularly by management. The Group has not provided for impairment loss on trade receivable accounts that are past due as there has not been a significant change in credit quality and the amounts are still considered recoverable.

Transaction with related parties are disclosed in Note 25.

Movement in the allowance for doubtful debts is as follows:

The Group2014

RM2013

RM

Ringgit Malaysia 23,447,533 27,231,113

Hong Kong Dollar 6,129,451 1,952,704

United States Dollar 3,340,977 8,194,172

Singapore Dollar 1,977,033 645,388

Thai Baht - 1,213,501

34,894,994 39,236,878

The Group2014

RM2013

RM

Balance at beginning of year/period - 6,325

Amounts written off during the year/period as uncollectible - (6,325)

Balance at end of year/period - -

The Group2014

RM2013

RM

Within 30 days 7,416,322 3,811,060

31 days to 60 days 1,329,949 1,759,479

61 days to 90 days 235,079 112,816

91 days to 120 days 102,359 248,652

Over 120 days 301,957 197,679

9,385,666 6,129,686

Average age (days) 39 89

106


25. Holding Company and Related Party Transactions

The Company is a subsidiary of Old Town International Sdn. Bhd., a company incorporated in Malaysia and the directors regard it as the ultimate holding company.

The amount owing to ultimate holding company arose mainly from dividend payable, rental payable and expenses paid on behalf which are unsecured, interest-free and repayable upon demand.

The trade balance of amount owing by associate of the Group arose mainly from normal trade terms. The non-trade balance arose from dividend receivable.

The amount owing by subsidiaries arose mainly from dividend receivable, advances granted and expenses paid on behalf which are unsecured, interest-free and repayable upon demand.

In 2013, the amount owing by subsidiaries arose mainly from advances and expenses paid on behalf which were unsecured, interest-free and repayable upon demand.

In 2013, the amount owing to subsidiaries related mainly to outstanding purchase consideration for the acquisition of subsidiaries, advances granted and expenses paid on behalf, which were unsecured, interest-free and repayable upon demand.

The currency profile of amount owing by associates are as follows:

The Group The Company2014

RM2013

RM2014

RM2013

RM

Amount owing by associates consist of:

Trade account 1,518,022 1,349,508 - -

Non-trade account 44,000 - 44,000 -

1,562,022 1,349,508 44,000 -


RM2013

RM2014

RM2013

RM

Singapore Dollar 1,518,022 1,349,508 - -

Ringgit Malaysia 44,000 - 44,000 -

1,562,022 1,349,508 44,000 -


Statements

107


Other than as disclosed elsewhere in the financial statements, the related parties and their relationship with the Company and its subsidiaries are as follows:

Names of related parties Relationship

Old Town International Sdn. Bhd. ) Holding company of the Company.

Advance City Limited )

Conneczone Sdn. Bhd. )

Dynasty Confectionery Sdn. Bhd. )

Dynasty Kitchen Sdn. Bhd. )

Esquire Chef Sdn. Bhd. )

Emperor’s Kitchen Sdn. Bhd. ) Subsidiaries of the Company.

Gongga Food Sdn. Bhd. )

Kopitiam Asia Pacific Sdn. Bhd. )

Old Town Kopitiam Butterworth Sdn. Bhd. )

Old Town Kopitiam Cheras Sdn. Bhd. )

Old Town Kopitiam Kuala Lumpur Sdn. Bhd. )

Old Town Kopitiam Sdn. Bhd. )

Old Town (M) Sdn. Bhd. )

Oldtown APP Sdn. Bhd. )

Oldtown Logistics Sdn. Bhd. )

Oldtown Singapore Pte. Ltd. )

OTK (HK) Investment Limited )

White Cafe Marketing Sdn. Bhd. )

White Cafe Sdn. Bhd. )

OTK Eatery Sdn. Bhd. ) Associates of the Company.

OTK Singapore Pte. Ltd. )

Plus One Solution Sdn. Bhd. )

108


The G

roup

Year

Ende

d 31.3

.2014

(12 M

onth

s)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

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ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

rela

ted

com

pani

es a

re a

s fo

llow

s:

Ultim

ate

hold

ing

com

pany

Old

Tow

n In

tern

atio

nal S

dn. B

hd.

10,7

79,0

45

-

-

-

1,14

0,00

0

-

-

-

4,80

011

,923

,845

Tran

sact

ions

with

Ass

ocia

tes

OTK

Eate

ry S

dn. B

hd.

-5,

150

-

-

-

-23

7,02

139

5,03

522

2,17

585

9,38

1

OTK

Sing

apor

e Pt

e. L

td.

-4,

098,

120

-

-

-

-63

7,21

91,

062,

022

-5,

797,

361

Plus

One

Sol

utio

n Sd

n. B

hd.

-

-

639,

939

186,

600

-

-

-

-

288,

964

1,11

5,50

3

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

AC M

onta

ge M

arke

ting

Sdn.

Bhd

.

-

-

-

-24

,880

-

-

-

-

24,8

80

Acad

ian

Gour

met

KK

Sdn.

Bhd

.

-

532,

086

-

-

-

-36

,013

60,0

2136

,225

664,

345

Acad

ian

Gour

met

PB

Sdn.

Bhd

.

-

671,

086

-

-

-

-46

,014

76,6

904,

957

798,

747

Acad

ian

Gour

met

Sdn

. Bhd

.

-

280,

717

-

-

-

-19

,678

32,7

972,

428

335,

620

Care

free

Aven

ue S

dn. B

hd.

-69

6,81

2

-

-

-

-

56,9

7994

,965

73,6

4792

2,40

3

Conn

eczo

ne P

ucho

ng S

dn. B

hd.

-30

5,68

8

-

-

-

-

27,3

1345

,522

33,4

6941

1,99

2

CN P

rope

rties

Sdn

. Bhd

.

-

-

-

-23

,716

-

-

-4,

500

28,2

16

CN S

uppl

ies

Sdn.

Bhd

.

-

-

-

-21

,200

-

-

-20

021

,400

Firs

t Hab

our C

offe

e Sh

op

-

110

-

-

-

-

-

-

-11

0

GC A

lam

anda

Sdn

. Bhd

.

-

689,

728

-

-

-

-58

,830

98,0

5033

,215

879,

823

GC B

angi

Sdn

. Bhd

.

-

686,

931

-

-

-

-51

,876

86,4

6036

,215

861,

482

GC B

angs

ar S

dn. B

hd.

-67

5,73

3

-

-

-

-

62,9

4610

4,91

037

,165

880,

754

GC B

angs

ar T

wo

Sdn.

Bhd

.

-

632,

338

-

-

-

-62

,297

103,

828

4,78

780

3,25

0

Rela

ted

Party

Tran

sact

ions


Statements

109


The G

roup

Year

Ende

d 31.3

.2014

(12 M

onth

s)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

rece

ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

GC B

rickfi

elds

Sdn

. Bhd

.

-

585,

724

-

-

-

-45

,298

75,4

966,

492

713,

010

GC K

apar

Sdn

. Bhd

.

-

488,

272

-

-

-

-40

,374

67,2

893,

610

599,

545

GC S

elay

ang

Sdn.

Bhd

.

-

542,

302

-

-

-

-47

,344

78,9

0634

,715

703,

267

GC S

ham

elin

Sdn

. Bhd

.

-

465,

333

-

-

-

-47

,311

78,8

522,

907

594,

403

GC S

outh

City

Sdn

. Bhd

.

-

447,

255

-

-

-

-38

,848

64,7

4633

,215

584,

064

Gour

met

Che

f Sdn

. Bhd

.

-

400,

574

-

-

-

-34

,949

58,2

4834

,215

527,

986

Gour

met

Che

f Kin

rara

Sdn

. Bhd

.

-

649,

575

-

-

-

-56

,785

94,6

424,

378

805,

380

Gour

met

Cor

ner I

poh

Sdn.

Bhd

.

-

1,36

0,77

1

-

-

-

-

73,3

5312

2,25

410

6,41

21,

662,

790

Gour

met

Cor

ner K

L Sd

n. B

hd.

-74

0,77

2

-

-25

0,80

0

-66

,793

111,

321

93,1

841,

262,

870

Gour

met

Cor

ner S

dn. B

hd.

-64

0,34

7

-

-

-

-

53,7

4689

,577

36,7

1082

0,38

0

May

son

Trad

e (M

) Sdn

. Bhd

.

-

-11

1,65

6

-

-

-

-

-

-11

1,65

6

Myt

h Em

pire

Sdn

. Bhd

.

-

5,28

7

-

-17

1,60

0

-

-

-

2,86

217

9,74

9

Natu

ral M

arke

ting

Sdn.

Bhd

.

-

-14

4,58

1

-

-

-

-

-

-14

4,58

1

Nobe

l Virt

ue S

dn. B

hd.

-

-

-

-

59,4

00

-

-

-

-59

,400

Oldt

own

Asia

Pac

ific

Lim

ited

-

-

-

-

-

-

-

85,9

16

-

85,9

16

OTK

(Ala

m D

amai

) Sdn

. Bhd

.

-

317,

690

-

-

-

-23

,817

39,6

954,

047

385,

249

OTK

(Gen

ting)

Sdn

. Bhd

.

-

9,17

7,38

3

-

-

-

115,

200

894,

479

1,49

0,79

846

4,03

612

,141

,896

OTK

(Inta

n) S

dn. B

hd.

-60

5,13

4

-

-

-

-

55,1

0391

,838

33,6

5778

5,73

2

OTK

(KB)

Sdn

. Bhd

.

-

43,4

11

-

-

-

-

-

-3,

000

46,4

11

OTK

(Kua

la S

elan

gor)

Sdn.

Bhd

.

-

399,

309

-

-

-

-35

,875

59,7

913,

107

498,

082

OTK

(MBH

) Sdn

. Bhd

.

-

487,

847

-

-

-

-22

,010

36,

684

1

34,8

8968

1,43

0

OTK

(Pet

alin

g Ja

ya) S

dn. B

hd.

-93

4,17

2

-

-

-

3,60

073

,010

121,

683

64,6

581,

197,

123

110


The G

roup

Year

Ende

d 31.3

.2014

(12 M

onth

s)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

rece

ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

OTK

(Raw

ang)

Sdn

. Bhd

.

-

1,36

9,96

0

-

-

-

-

60,3

4910

0,58

225

,377

1,55

6,26

8

OTK

(Sha

h Al

am) S

dn. B

hd.

-84

2,72

2

-

-

-

-

72,3

3512

0,55

916

,071

1,05

1,68

7

OTK

(Sen

ai) S

dn. B

hd.

-62

7,01

9

-

-

-

-

11,3

8217

,216

120,

000

775,

617

OTK

(Tel

uk C

empe

dak)

Sdn

. Bhd

.

-

784,

541

-

-

-

-18

,385

30,6

4210

1,63

393

5,20

1

OTK

Ipoh

Roa

d Sd

n. B

hd.

-38

4,44

7

-

-

-

-

31,0

7351

,788

16,3

5748

3,66

5

OTK

Kopi

tiam

(KLC

C) S

dn. B

hd.

-40

0,73

0

-

-

-

-

23,2

57

3

4,88

5

2,6

9246

1,56

4

OTK

Logi

stic

s Sd

n. B

hd.

-3,

030,

916

-

-

-

-

-

-

-3,

030,

916

OTK

Man

jung

Sdn

. Bhd

.

-

455,

747

-

-

-

-38

,316

63,8

6134

,227

592,

151

OTK

Meg

ah S

dn. B

hd.

-23

3,44

6

-

-

-

-

18,7

2031

,200

3,37

528

6,74

1

OTK

North

ern

Sdn.

Bhd

.

-

1,16

2,30

0

-

-

-

-

77,6

6112

9,43

513

,430

1,38

2,82

6

OTK

Sara

wak

Sdn

. Bhd

.

-

5,41

0

-

-

-

-

40,8

7468

,123

65,0

6117

9,46

8

OTK

Sunw

ay S

dn. B

hd.

-54

9,06

2

-

-

-

-

44,7

6874

,613

34,6

6570

3,10

8

OTK

USJ

Sdn.

Bhd

.

-

474,

668

-

-

-

-40

,295

67,1

5834

,309

616,

430

Tran

sact

ions

with

per

sons

co

nnec

ted

with

cer

tain

dire

ctor

s ar

e as

follo

ws:

Lee

Siew

Min

g

-

-

-

-18

,900

-

-

-

-

18,9

00

Lim

Khi

m L

an

-

-

-

-60

,000

-

-

-

-

60,0

00

Tran

sact

ions

with

a d

irect

or o

f th

e Co

mpa

ny a

re a

s fo

llow

s:

Lee

Siew

Hen

g

-

-

-

-19

,800

-

-

-30

020

,100


Statements

111


The G

roup

Perio

d End

ed 31

.3.20

13 (1

5 Mon

ths)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

rece

ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

rela

ted

com

pani

es a

re a

s fo

llow

s:

Ultim

ate

hold

ing

com

pany

Old

Tow

n In

tern

atio

nal S

dn. B

hd.

16,9

34,5

00

-

-

-

1,42

5,00

0

-

-

-

33,7

4318

,393

,243

Tran

sact

ions

with

Ass

ocia

tes

OTK

Eate

ry S

dn. B

hd.

-27

,510

-

-

-

-30

7,30

251

2,17

132

1,08

51,

168,

068

OTK

Sing

apor

e Pt

e. L

td.

-4,

767,

505

-

-

-

-72

9,23

81,

215,

397

24,7

566,

736,

896

Plus

One

Sol

utio

n Sd

n. B

hd.

-

-

884,

905

185,

775

-

-

-

-

394,

388

1,46

5,06

8

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

AC M

onta

ge M

arke

ting

Sdn.

Bhd

.

-

-

-

-65

,020

-

-

-

-

65,0

20

Acad

ian

Gour

met

KK

Sdn.

Bhd

.

-

657,

865

-

-

-

-49

,533

82,5

559,

698

799,

651

Acad

ian

Gour

met

PB

Sdn.

Bhd

.

-

909,

189

-

-

-

-63

,401

105,

668

4,65

21,

082,

910

Acad

ian

Gour

met

Sdn

. Bhd

.

-

488,

833

-

-

-

-33

,936

56,5

604,

408

583,

737

CN P

rope

rties

Sdn

. Bhd

.

-

-

-

-83

,715

-

-

-

-

83,7

15

CN S

uppl

ies

Sdn.

Bhd

.

-

-

-

-25

,500

-

-

-

-

25,5

00

Firs

t Hab

our C

offe

e Sh

op

-

550

-

-

-

-

-

-

-55

0

GC A

lam

anda

Sdn

. Bhd

.

-

877,

510

-

-

-

-73

,653

122,

755

8,91

81,

082,

836

GC B

angi

Sdn

. Bhd

.

-

852,

464

-

-

-

-63

,423

105,

706

7,84

61,

029,

439

GC B

angs

ar S

dn. B

hd.

-85

4,88

4

-

-

-

-

76,4

1312

7,35

55,

706

1,06

4,35

8

GC B

angs

ar T

wo

Sdn.

Bhd

.

-

747,

846

-

-

-

-75

,834

126,

390

4,76

495

4,83

4

112


The G

roup

Perio

d End

ed 31

.3.20

13 (1

5 Mon

ths)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

rece

ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

GC B

rickfi

elds

Sdn

. Bhd

.

-

797,

478

-

-

-

-65

,980

109,

966

7,74

098

1,16

4

GC K

apar

Sdn

. Bhd

.

-

772,

772

-

-

-

-48

,265

80,4

4215

,893

917,

372

GC S

elay

ang

Sdn.

Bhd

.

-

682,

464

-

-

-

-59

,143

98,5

724,

168

844,

347

GC S

ham

elin

Sdn

. Bhd

.

-

585,

558

-

-

-

-56

,844

94,7

392,

460

739,

601

GC S

outh

City

Sdn

. Bhd

.

-

530,

664

-

-

-

-44

,169

73,6

153,

718

652,

166

Gour

met

Che

f Sdn

. Bhd

.

-

512,

643

-

-

-

-42

,638

71,0

637,

331

633,

675

Gour

met

Che

f Kin

rara

Sdn

. Bhd

.

-

268,

674

-

-

-

-23

,314

38,8

572,

180

333,

025

Gour

met

Cor

ner I

poh

Sdn.

Bhd

.

-

1,17

2,48

4

-

-

-

-

100,

122

166,

869

12,6

831,

452,

158

Gour

met

Cor

ner K

L Sd

n. B

hd.

-95

2,52

9

-

-31

3,50

0

-84

,787

141,

312

4,20

61,

496,

334

Gour

met

Cor

ner S

dn. B

hd.

-1,

132,

848

-

-

-

-95

,238

158,

730

11,4

621,

398,

278

Man

ifest

Cor

pora

te S

ervic

es

Sdn.

Bhd

.

-

-

-

-22

,800

-

-

-

-

22,8

00

May

son

Trad

e (M

) Sdn

. Bhd

.

-

-16

2,84

7

-

-

-

-

-

-16

2,84

7

Natu

ral M

arke

ting

Sdn.

Bhd

.

-

-24

1,05

1

-

-

-

-

-

-24

1,05

1

Nobl

e Vi

rtue

Sdn.

Bhd

.

-

-

-

-66

,000

-

-

-

-

66,0

00

Oldt

own

Asia

Pac

ific

Lim

ited

-

-

-

-

-

-

-

91,7

6743

,665

135,

432

OTK

(Ala

m D

amai

) Sdn

. Bhd

.

-

351,

969

-

-

-18

,000

30,1

9750

,328

5,72

345

6,21

7

OTK

(Gen

ting)

Sdn

. Bhd

.

-

8,53

0,22

9

-

-

-

90,0

0093

7,41

21,

562,

353

25,0

3811

,145

,032

OTK

(Inta

n) S

dn. B

hd.

-76

9,00

5

-

-

-

-

71,3

3111

8,88

45,

271

964,

491

OTK

(Kua

la S

elan

gor)

Sdn.

Bhd

.

-

454,

498

-

-

-

-42

,531

70,8

854,

143

572,

057

OTK

(Pet

alin

g Ja

ya) S

dn. B

hd.

-1,

223,

673

-

-

-6,

000

96,0

9816

0,16

314

,043

1,49

9,97

7


Statements

113


The G

roup

Perio

d End

ed 31

.3.20

13 (1

5 Mon

ths)

Divid

end

paid/

paya

ble

RM

Trade

sa

les

RM

Trade

pu

rcha

ses

RM

Purc

hase

of p

rope

rty,

plant

and

equip

men

t RM

Rent

alpa

id/pa

yable

RM

Seco

ndm

ent

of st

aff

char

ges

rece

ived/

rece

ivable RM

Adve

rtisin

g an

d pro

mot

ionfe

es re

ceive

d/re

ceiva

ble RM

Roya

lty

fees

rece

ived/

rece

ivable RM

Othe

rs RMTo

tal

RM

Tran

sact

ions

with

oth

er re

late

d pa

rties

bei

ng c

ompa

nies

in

whi

ch c

erta

in d

irect

ors

or

pers

ons

con

nect

ed w

ith c

erta

in

dire

ctor

s ar

e di

rect

ors

or h

ave

subs

tant

ial fi

nanc

ial i

nter

ests

ar

e as

follo

ws:

OTK

(Raw

ang)

Sdn

. Bhd

.

-

1,12

2,88

8

-

-

-

48,0

0065

,139

108,

565

30,4

401,

375,

032

OTK

(Sha

h Al

am) S

dn. B

hd.

-1,

201,

783

-

-

-30

,000

61,3

5010

2,25

237

,802

1,43

3,18

7

OTK

Ipoh

Roa

d Sd

n. B

hd.

-47

1,32

7

-

-

-

-

36,4

3760

,728

21,4

9158

9,98

3

OTK

Logi

stic

s Sd

n. B

hd.

-3,

513,

767

-

-

-

-

-

-

-3,

513,

767

OTK

Man

jung

Sdn

. Bhd

.

-

718,

830

-

-

-30

,000

61,3

3810

2,23

15,

993

918,

392

OTK

Meg

ah S

dn. B

hd.

-32

9,49

3

-

-

-

-

26,2

2743

,704

4,22

240

3,64

6

OTK

North

ern

Sdn.

Bhd

.

-

1,55

6,72

4

-

-

-

-

96,4

2016

0,69

914

3,08

81,

956,

931

OTK

Sara

wak

Sdn

. Bhd

.

-

700

-

-

-

-87

,584

145,

973

72,9

8630

7,24

3

OTK

Sunw

ay S

dn. B

hd.

-66

3,44

6

-

-2,

700

6,00

053

,527

89,2

1110

,805

825,

689

OTK

USJ

Sdn.

Bhd

.

-

693,

565

-

-

-

-63

,727

106,

212

4,02

686

7,53

0

Myt

h Em

pire

Sdn

. Bhd

. (fo

rmer

ly kn

own

as S

oons

en E

nter

pris

e

Sdn.

Bhd

.)

-

-

-

-

197,

600

-

-

-

-

197,

600

Tran

sact

ions

with

per

sons

co

nnec

ted

with

cer

tain

dire

ctor

s ar

e as

follo

ws:

Lee

Siew

Min

g

-

-

-

-22

,500

-

-

-

-

22,5

00

Lim

Khi

m L

an

-

-

-

-75

,000

-

-

-

-

75,0

00

Tran

sact

ions

with

a d

irect

or o

f th

e Co

mpa

ny a

re a

s fo

llow

s:

Lee

Siew

Hen

g

-

-

-

-22

,500

-

-

--

22,5

00

114


The CompanyYear Ended 31.3.2014 (12 Months)

Dividend paid/payable

RM

Dividend received/

receivable RM

Advances received

RM

Advances granted

RM

Acquisition

of investmentRM

Rental paid/

payable RM

OthersRM

TotalRM

Transactions with related companies are as follows:

Ultimate holding company

Old Town International Sdn. Bhd. 10,779,045 - - - - - - 10,779,045

Subsidiaries

Conneczone Sdn. Bhd. - 40,000 - - - - - 40,000

Dynasty Confectionery Sdn. Bhd. - 2,400,000 - - - - - 2,400,000

Emperor’s Kitchen Sdn. Bhd. - 5,400,054 - - - - - 5,400,054

Esquire Chef Sdn. Bhd. - 2,400,000 - - - - - 2,400,000

Gongga Food Sdn. Bhd. - 12,300,000 - - - - - 12,300,000

Kopitiam Asia Pacific Sdn. Bhd. - 20,000,000 1,700,000 - - - 3,700,500 25,400,500

Oldtown Singapore Pte. Ltd. - - - - 200,800 - - 200,800

Old Town Kopitiam Sdn. Bhd. - - - - - - 21,949 21,949

Old Town Kopitiam Butterworth Sdn. Bhd.

- 2,900,000 - - - - - 2,900,000

Old Town (M) Sdn. Bhd. - - - 26,890,900 - - 5,900 26,896,800

Oldtown Logistics Sdn. Bhd. - - - 30,000 - - - 30,000

White Cafe Sdn. Bhd. - 24,000,000 - 24,722,113 - 4,800 26,790,900 75,517,813

White Cafe Marketing Sdn. Bhd. - 7,650,000 - - - - 1,950 7,651,950

Transactions with Associates

Plus One Solution Sdn. Bhd. - 44,000 - - - - - 44,000

Transactions with a related party being a company in which persons connected with certain directors are directors and have substantial interests are as follows:

CN Properties Sdn. Bhd. - - - - - 4,000 4,500 8,500

Related Party Transactions


Statements

115


The CompanyPeriod Ended 31.3.2013 (15 Months)

Dividend paid/payable

RM

Dividend received/

receivable RM

Advances received

RM

Advances granted

RM

Rental paid/

payable RM

OthersRM

TotalRM

Transactions with related companies are as follows:

Ultimate holding company

Old Town International Sdn. Bhd. 16,934,500 - - - - - 16,934,500

Subsidiaries

Conneczone Sdn. Bhd. - 224,000 - - - - 224,000

Dynasty Confectionery Sdn. Bhd. - 800,000 - - - - 800,000

Emperor’s Kitchen Sdn. Bhd. - 2,400,024 - - - - 2,400,024

Esquire Chef Sdn. Bhd. - 1,800,000 - - - - 1,800,000

Gongga Food Sdn. Bhd. - 5,400,000 - - - - 5,400,000

Kopitiam Asia Pacific Sdn. Bhd. - 8,125,000 2,000,000 - - 280 10,125,280

Old Town Kopitiam Sdn. Bhd. - - - 19,000,000 - - 19,000,000

Old Town Kopitiam Butterworth Sdn. Bhd.

- 3,700,000 - - - - 3,700,000

Old Town (M) Sdn. Bhd. - - - 250,000 - - 250,000

Oldtown Logistics Sdn. Bhd. - - - 2,000 - - 2,000

White Cafe Sdn. Bhd. - 7,500,000 - 34,500,000 - - 42,000,000

White Cafe Marketing Sdn. Bhd. - 4,760,000 - - - 9,806 4,769,806

Transactions with Associates

OTK Eatery Sdn. Bhd. - - - - - 60,000 60,000

Plus One Solution Sdn. Bhd. - 30,000 - - - - 30,000

Transactions with a related party being a company in which persons connected with certain directors are directors and have substantial interests are as follows:

CN Properties Sdn. Bhd. - - - - 60,000 - 60,000

116


Compensation of Key Management Personnel

The remuneration of directors is disclosed in Note 10. The remuneration of other members of key management personnel of the Group during the financial year/period are as follows:

The estimated monetary value of benefits-in-kind received and receivable by the key management personnel otherwise than in cash from the Group amounted to RM85,271 (2013: RM82,068).

26. Fixed Deposits, Cash and Bank Balances

The effective interest rates are as follows:

The fixed deposits of the Group have maturity period of 30 days to 365 days (2013: 30 days to 365 days).

The currency profile of fixed deposits, cash and bank balances are as follows:

The fixed deposits of the Group with carrying amounts of RM788,806 (2013: RM2,559,131) are placed under lien to local licensed banks as security for banking facilities granted to the Group as disclosed in Note 32.

The GroupYear Ended31.3.2014

(12 Months) RM


(15 Months)RM

Salaries, incentive, bonus and allowances 1,474,158 1,307,360

EPF contributions 139,167 136,308

1,613,325 1,443,668


%2013

%2014

%2013

%

Fixed deposits 3.00 - 3.15 3.00 - 3.14 - -

Short-term investment funds 2.06 - 2.84 2.07 - 2.95 2.06 - 2.84 2.07 - 2.95


RM2013

RM2014

RM2013

RM

Ringgit Malaysia 80,257,351 83,179,051 19,845,929 29,343,928

Hong Kong Dollar 14,162,582 - - -

Singapore Dollar 2,876,876 1,823,357 - -

Chinese Renminbi 1,498,579 - - -

United States Dollar 1,088,532 1,224,745 - -

99,883,920 86,227,153 19,845,929 29,343,928


RM2013

RM2014

RM2013

RM

Fixed deposits with licensed banks 788,806 2,559,131 - -

Short-term investment funds 69,250,378 69,293,747 19,764,867 29,235,842

Cash and bank balances 29,844,736 14,374,275 81,062 108,086

99,883,920 86,227,153 19,845,929 29,343,928


Statements

117


27. Share Capital and Treasury Shares

(a) Share Capital

The Group and The Company2014

Number ofordinary

shares

2013Number of

ordinaryshares

2014RM

2013RM

Authorised:

500,000,000 ordinary shares of RM1 each 500,000,000 500,000,000 500,000,000 500,000,000

Issued and fully paid:

Ordinary shares of RM1 each:

At beginning of year/period 363,000,000 330,000,000 363,000,000 330,000,000

Allotment of shares - 33,000,000 - 33,000,000

Bonus issue 90,597,242 - 90,597,242 -

At end of year/period 453,597,242 363,000,000 453,597,242 363,000,000

As approved by the shareholders at the Extraordinary General Meeting held on January 6, 2014, the issued and paid-up ordinary share capital of the Company was increased from RM363,000,000 to RM453,597,242 during the financial year by way of a bonus issue of 90,597,242 new ordinary shares of RM1 each through the capitalisation of RM40,000,000 and RM50,597,242 from share premium and retained earnings respectively on the basis of one (1) bonus share for every four (4) existing ordinary shares held.

These new shares rank pari passu with the then existing ordinary shares of the Company.

(b) Treasury Shares

The shareholders of the Company, by an ordinary resolution passed at the Annual General Meeting (“AGM”) held on September 26, 2013, granted the approval for the Company to repurchase its own shares. The directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the Group and of the Company.

Details of the shares repurchased and held as Treasury Shares of the Group and of the Company are as follows:

During the financial year, the Company repurchased a total of 611,000 units (2013: Nil) of its own shares from the open market of Bursa Malaysia Securities Berhad for total cost of RM1,486,508 (2013: Nil) and has been deducted from equity. The average price paid for the shares repurchased during the year was RM2.43 (2013: Nil) per share. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as Treasury Shares in accordance with the requirements of Section 67A of the Companies Act, 1965.

As of March 31, 2014, 611,000 (2013: Nil) out of the total of 453,597,242 (2013: 363,000,000) issued and paid-up ordinary shares are held as Treasury Shares by the Company. The number of ordinary shares of RM1 each in issue and paid-up as of March 31, 2014 after excluding the Treasury Shares is 452,986,242 (2013: 363,000,000).

The mandate given by the shareholders will expire at the forthcoming AGM and an ordinary resolution will be tabled at the AGM for shareholders to grant a fresh mandate for another year.

Month

No. of sharesrepurchased

RM

Lowest pricepaid per

share RM

Highest pricepaid per share

RM

Average pricepaid per share

(includingincidental costs)

RM

Totalconsideration

RM

July 2013 10,000 2.83 2.90 2.87 28,744

November 2013 401,000 2.40 2.59 2.44 978,409

December 2013 200,000 2.38 2.39 2.40 479,355

611,000 1,486,508

118


The Group and The Company

2014 RM

2013RM

Balance at beginning of year/period 43,553,644 12,311,332

Bonus issue (40,000,000) -

Issuance of ordinary shares - 31,350,000

Share issue expenses - (107,688)

Balance at end of year/period 3,553,644 43,553,644


2014 RM

2013RM

Public issue of 63,394,000 ordinary shares issued at a premium of RM0.25 per share in 2011, net of share issue expenses of RM3,537,168

12,311,332 12,311,332

Private placement of 33,000,000 ordinary shares issued at a premium of RM0.95 per share in 2013, net of share issue expenses of RM107,688

31,242,312 31,242,312

Bonus issue of 40,000,000 new ordinary shares of RM1.00 each in 2014 (40,000,000) -

3,553,644 43,553,644

The Group2014

RM2013

RM

Balance at beginning and end of year/period (222,653,894) (222,653,894)

28. Reserves

Share Premium

Reserve Arising From Restructuring

The share premium arose from the following:


RM2013

RM2014

RM2013

RM

Share premium 3,553,644 43,553,644 3,553,644 43,553,644

Reserve arising from restructuring (222,653,894) (222,653,894) - -

Foreign currency translation reserve 1,067,983 (13,155) - -

Investment revaluation reserve 1,415,459 1,029,600 488,494 495,037

(216,616,808) (178,083,805) 4,042,138 44,048,681


Statements

119



RM2013

RM2014

RM2013

RM

Balance at beginning of year/period 1,029,600 - 495,037 -

Changes in fair value of available-for-sale financial assets (31,582) 1,029,600 253,765 495,037

Cumulative (gain)/loss reclassified to profit or loss on disposal of available-for-sale financial assets 417,441

- (260,308)

-

Balance at end of year/period 1,415,459 1,029,600 488,494 495,037

The Group2014

RM2013

RM

Balance at beginning of year/period (13,155) 6,984

Exchange differences on translating foreign subsidiaries and associates 1,081,138 (20,139)

Balance at end of year/period 1,067,983 (13,155)

Foreign Currency Translation Reserve

Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency (i.e. Ringgit Malaysia) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve (in respect of translating the net assets of foreign operations) are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

Investment Revaluation Reserve

The investment revaluation reserve represents accumulated gains and losses arising from the changes in fair value of available-for-sale financial assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

29. Retained Earnings

The Company opted to disregard the Section 108 tax credit balance in accordance with the Finance Act, 2007 and switched to a single tier tax system in the prior year. As such, the entire retained earnings on March 31, 2014 is available for distribution on single tier dividend.

30. Non-Controlling Interests

The Group2014

RM2013

RM

Balance at beginning of year/period 2,192,022 235,562

Non-controlling interest arising on acquisition of interest in subsidiary 3,857,209 1,952,704

Share of profit for the year/period 1,391,386 59,756

Share of other comprehensive income for the year/period 301,533 -

Disposal of interest in subsidiary by non-controlling interest (1,952,704) -

Dividend received (747,710) (56,000)

Balance at end of year/period 5,041,736 2,192,022

120


It is the Group’s policy to acquire certain of its property, plant and equipment under hire-purchase arrangements. The terms for hire-purchase of the Group ranged from 5 years to 9 years (2013: 5 to 9 years). For the financial year ended March 31, 2014, the effective hire-purchase interest rates of the Group ranged from 4.25% to 7.11% (2013: 4.25% to 8.03%) per annum. Interest rates are fixed at the inception of the hire-purchase arrangements.

The hire-purchase payables of the Group are secured by the assets under hire-purchase and are also guaranteed by certain directors of the Company.

The fair values of the hire-purchase payables of the Group are approximately equal to their carrying amounts.

The non-current portion is repayable as follows:

The Group2014

RM2013

RM

Financial years ending March 31:

2015 - 567,856

2016 207,054 206,870

2017 49,799 49,799

2018 4,594 4,594

2019 4,956 4,956

2020 and above 2,965 2,965

269,368 837,040

31. Hire-Purchase Payables

Minimum hire-purchase payments

Present value of minimum hire-purchase payments

The Group2014

RM2013

RM2014

RM2013

RM

Amounts payable under hire-purchase arrangements:

Within one year 582,175 721,303 545,735 648,266

In the second to fifth year inclusive 276,352 870,005 266,403 829,119

After fifth year 3,039 8,427 2,965 7,921

861,566 1,599,735 815,103 1,485,306

Less: Future finance charges (46,463) (114,429) - -

Present value of hire-purchase payables 815,103 1,485,306 815,103 1,485,306

Less: Amount due within 12 months (shown under current liabilities) (545,735) (648,266)

Non-current portion 269,368 837,040


Statements

121


The Group2014

RM2013

RM

Secured :

Term loans 23,482,115 28,606,302

Trust receipts - 4,449,495

23,482,115 33,055,797

Less: Amount due within 12 months (shown under current liabilities) (3,379,905) (7,767,923)

Non-current portion 20,102,210 25,287,874

The Group2014

RM2013

RM

Financial years ending March 31:

2015 - 3,556,868

2016 3,435,771 3,724,516

2017 3,531,440 3,903,290

2018 3,631,449 3,371,539

2019 2,496,206 4,557,276

2020 and above 7,007,344 6,174,385

20,102,210 25,287,874

32. Borrowings

The non-current portion is repayable as follows:

The Group’s term loans and other banking facilities with licensed banks amounting to RM54,320,580 (2013: RM61,058,817) are secured by:

(i) Fixed legal charge over the leasehold buildings, freehold land, factory buildings, shop-office buildings, capital work-in-progress and leasehold land of the Group as mentioned in Notes 14 and 15;

(ii) Investment properties of the Group as disclosed in Note 16;(iii) Letter of set-off of fixed deposits as disclosed in Note 26; and(iv) A stamped facility agreement of RM31.003 million.

Certain term loans and other banking facilities are also guaranteed by the Company, the directors of the Company and the ultimate holding company jointly and severally.

The Group has nine (9) term loans:

(a) a fifteen (15) year term loan of RM458,000 (2013: RM458,000) which is repayable by 180 monthly instalments of RM4,130 each commencing October 2008 and RM3,393 each commencing December 2009;

(b) an eight (8) year term loan of RM8,000,000 (2013: RM8,000,000) which is repayable by 95 monthly instalments of RM98,260 each commencing January 2013 with a last instalment of RM97,918;

(c) an eight (8) year term loan of RM9,000,000 (2013: RM9,000,000) which is repayable by 95 monthly instalments of RM110,543 each commencing May 2013 with a last instalment of RM112,920;

(d) a five (5) year term loan of USD1,710,000 (2013: Nil) which is repayable by 20 quarterly principal instalments of USD95,001 each commencing November 2013;

122


The Group2014

%2013

%

Term loans 3.09 - 5.80 4.02 - 7.60

Trust receipts 3.24 3.24

Bank overdrafts - 4.50 - 7.35

The Group2014

RM2013

RM

Ringgit Malaysia 18,517,155 28,606,302

United States Dollar 4,964,960 4,449,495

23,482,115 33,055,797

(e) a ten (10) year term loan of RM1,147,500 (2013: RM1,147,500) which is repayable by 60 monthly instalments of RM11,893 each for the first to fifth year commencing October 14, 2009 and 60 monthly instalments of RM12,185 each for the sixth to tenth year commencing October 14, 2014;

(f) a ten (10) year term loan of RM552,500 (2013: RM552,500) which is repayable by 60 monthly instalments of RM5,726 each for the first to fifth year commencing October 14, 2009 and 60 monthly instalments of RM5,867 each for the sixth to tenth year commencing October 14, 2014;

(g) a ten (10) year term loan of RM765,000 (2013: RM765,000) which is repayable by 120 monthly instalments of RM7,892 each with effect from one (1) month after date of full release of the loan;

(h) a ten (10) year term loan of RM1,349,800 (2013: RM1,349,800) which is repayable by 120 monthly instalments of RM13,924 each with effect from one (1) month after date of full release of the loan; and

(i) a ten (10) year term loan of RM4,800,000 (2013: RM4,800,000) which is repayable by 120 monthly instalments of RM49,285 each commencing February 2011.

During the financial year/period, the Group fully settled three (3) term loans as follows:

(a) a seven (7) year term loan of RM4,000,000 (2013: RM4,000,000) which was repayable by 84 monthly instalments of RM58,051 each commencing April 2010;

(b) a ten (10) year term loan of RM2,500,000 (2013: RM2,500,000) which was repayable by 120 monthly instalments of RM28,451 each commencing May 2010; and

(c) a ten (10) year term loan of RM1,415,000 (2013: RM1,415,000) which was repayable by 60 monthly instalments of RM14,665 each for the first to fifth year commencing October 30, 2008 and 60 monthly instalments of RM15,025 each for the sixth to tenth year commencing October 30, 2013.

The fair values of the bank borrowings of the Group approximate their carrying amounts.

The effective interest rates per annum are as follows:

The currency profile of the borrowings are as follows:


Statements

123


33. Deferred Income

34. Deferred Capital Grant

The Group2014

RM2013

RM

Non-current portion:

Deferred franchise fees 1,930,393 2,060,600

Current portion:

Deferred franchise fees 1,041,088 1,075,883

Others 290,913 420,544

1,332,001 1,496,427

Total 3,262,394 3,557,027

The Group2014

RM2013

RM

Cost

At beginning and end of year/period 120,897 120,897


At beginning of year/period 80,089 49,865

Amortisation 24,179 30,224

At end of the year/period 104,268 80,089

Net carrying amount

Current 16,629 24,180

Non-current - 16,628

16,629 40,808

Deferred franchise fees represent franchise fees received in advance from franchisees. The revenue is recognised in the statements of profit or loss on a straight-line basis over the term of the franchise agreement of 5 years (2013: 5 years).

Others represent income from provision of information technology related services, secondment of staff charges received in advance and foreign workers training fees received in advance. The revenue income mentioned above are recognised in the statements of profit or loss on a straight-line basis over the term of the agreement of 1 year (2013: 1 year).

Deferred capital grant relates to government grant received for the acquisition of plant and machinery. There are no unfulfilled conditions or contingencies attached to this grant.

124


35. Trade and Other Payables

Trade and other payables of the Group comprise amounts outstanding for trade purchases and ongoing costs. The terms granted to the Group for trade purchases ranged from cash to credit period of 90 days (2013: cash to credit period of 90 days). These amounts are non-interest bearing. The Group and the Company have financial risk management policies to ensure that all payables are paid within the pre-agreed credit terms.

Included in trade and other payables of the Group are related parties’ balances of RM250,588 (2013: RM554,532).

The amounts owing to other payables of the Group mainly consist of dividend payable, retention sum on the construction of the factory building and relate to purchase of property, plant and equipment. The remaining amount owing to other payables are unsecured, interest-free and repayable upon demand.

The currency profile of trade and other payables is as follows:

Transactions with related parties are disclosed in Note 25.


RM2013

RM2014

RM2013

RM

Trade payables 17,167,315 19,511,887 - -

Other payables 16,374,381 7,865,509 7,746,994 133,924

33,541,696 27,377,396 7,746,994 133,924

Accrued expenses 12,063,599 9,654,566 80,000 72,785

Refundable deposits received 4,239,107 3,012,890 - -

49,844,402 40,044,852 7,826,994 206,709


RM2013

RM2014

RM2013

RM

Ringgit Malaysia 31,629,186 26,645,643 7,746,994 133,924

Hong Kong Dollar 770,423 - - -

Chinese Renminbi 510,503 - - -

Singapore Dollar 337,012 338,816 - -

United States Dollar 155,895 392,937 - -

Thai Baht 138,677 - - -

33,541,696 27,377,396 7,746,994 133,924


Statements

125



RM2013

RM2014

RM2013

RM

Financial assets

Loans and receivables:

Trade and other receivables 42,107,560 46,258,258 5,370 123,170

Amount owing by subsidiaries - - 133,841,597 64,911,665

Amount owing by associates 1,562,022 1,349,508 44,000 -

Fixed deposits, cash and bank balances 99,883,920 86,227,153 19,845,929 29,343,928

Available-for-sale:

Other investments - unquoted shares 1,086,567 1,086,567 - -

Other investments - quoted unit trusts 66,516,766 71,235,042 25,488,494 30,495,037

Financial liabilities

Amortised cost :

Trade and other payables 49,844,402 40,044,852 7,826,994 206,709

Amount owing to ultimate holding company 6,072,479 87,936 5,917,755 -

Amount owing to subsidiaries - - - 9,188,896

Hire-purchase payables 815,103 1,485,306 - -

Borrowings 23,482,115 33,055,797 - -

36. Dividends

37. Financial Instruments, Financial Risks and Capital Risks Management

Categories of Financial Instruments


2014 RM

2013RM

Final dividend of 3.0 sen per share, single tier for 2013

(2013: 4.0 sen per share, single tier for 2011) 10,889,700 13,200,000

Interim dividend of 3.0 sen per share, single tier

(2013: 6.0 sen per share, single tier) 13,589,587 19,800,000

24,479,287 33,000,000

A final dividend declared in respect of the financial period ended March 31, 2013 under single tier tax system of 3.0 sen per share, amounting to RM10,889,700 was paid on October 30, 2013.

An interim dividend declared in respect of the current financial year under single tier tax system of 3.0 sen per share, amounting to RM13,589,587 was paid on April 17, 2014.

Net dividend per share during the year is 6.0 sen (2013: 10.0 sen).

The directors proposed a final dividend of 3.0 sen per share, amounting to RM13,589,587 in respect of the current financial year computed based on the outstanding issued and paid-up capital, excluding treasury shares held by the Company of 611,000 ordinary shares of RM1.00 each in respect of the current financial year. This dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements. Upon approval by the shareholders, the dividend payment will be accounted for in equity as an appropriation of retained earnings during the financial year ending March 31, 2015.

126


Profit or LossYear Ended31.3.2014

(12 Months) RM


(15 Months)RM

HKD 439,236 58,581

SGD 135,786 63,898

RMB 22,232 -

USD (15,555) 137,295

BAHT (3,120) 36,405

Financial Risk Management Objectives and Policies

Risk management is integral to the whole business of the Group and of the Company. Management continually monitors the Group’s and the Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Group’s and the Company’s activities.

There have been no changes to the Group’s and the Company’s exposure to these financial risks or the manner in which it manages and measures the risk.

(a) Market Risk

The Group’s and the Company’s activities expose them primarily to the financial risks of changes in foreign currency exchange rates, interest rates and prices of equity.

There have been no changes to the Group’s and the Company’s exposure to market risks or the manner in which these risks are managed and measured.

(i) Foreign Currency Risk Management

The Group is exposed to the effects of foreign currency exchange rate fluctuation primarily in relation to the United States Dollar (“USD”), Singapore Dollar (“SGD”), Thai Baht (“BAHT”), Chinese Renminbi (“RMB”) and Hong Kong Dollar (“HKD”) arising from normal trading, investing and financing activities. Exposure to foreign currency risk is monitored on an ongoing basis and the Group endeavours to keep the net exposure at an acceptable level.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting date are disclosed in Notes 24, 25, 26, 32 and 35.

Foreign currency sensitivity analysis

The following table details the Group’s sensitivity to a 3% increase and decrease in RM against the relevant foreign currencies. 3% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonable possible change in foreign exchange rates in next 12 months.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 3% change in foreign currency rates. A positive/(negative) number below indicates an increase/(decrease) in profit net of tax where relevant currencies strengthen 3% against RM. For a 3% weakening of relevant currencies against RM, there would be a comparable reversed impact on the profit net of tax and the balances below would be negative.

The above impact are mainly attributable to the exposure on relevant currencies for receivables, bank balances, payables, borrowings and amount owing by associate of the Group outstanding at the end of the reporting date. In the opinion of the management, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the full exposure of the Group during the year.


Statements

127


(ii) Interest Rate Risk Management

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises primarily from its borrowings.

Interest rate sensitivity analysis

At the end of the reporting date, if interest rates had been 100 (2013: 100) basis points lower/higher, with all other variables held constant, the Group’s profit net of tax would have been RM176,116 (2013: RM214,547) higher/lower arising mainly as a result of lower/higher interest expense on floating rate borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

(iii) Equity Price Risk Management

The Group and the Company are exposed to price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes.

Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting date.

If equity prices had been 1% higher/lower, the Group’s:

• profitfortheyearwouldnotbeaffectedastheequityinvestmentsareclassifiedasavailable-for-saleandtherearenoplansfordisposalandnoindications of impairment; and

• othercomprehensiveincomefortheyearwouldincrease/decreasebyRM665,168(2013:increase/decreasebyRM534,263)asaresultofthechanges in fair value of available-for-sale unit trusts.

The Group’s sensitivity to equity prices has not changed significantly from the prior period.

If equity prices had been 1% higher/lower, the Company’s:

• profitfortheyearwouldnotbeaffectedastheequityinvestmentsareclassifiedasavailable-for-saleandtherearenoplansfordisposalandnoindications of impairment; and

• othercomprehensiveincomefortheyearwouldincrease/decreasebyRM254,885(2013:increase/decreasebyRM228,713)asaresultofthechanges in fair value of available-for-sale unit trusts.

The Company’s sensitivity to equity prices has not changed significantly from the prior period.

(b) Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and the Company. The Group and the Company have adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. The exposure of the Group to credit risk arises principally from its receivables and other financial assets while the exposure of the Company to credit risk arises from its intercompany balances, financial guarantees given to licensed banks for credit facilities granted to subsidiaries and other financial asset.

Receivables

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of account receivables.

As the Group does not hold any collateral, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position.

A significant portion of trade receivables are regular customers of the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables.

For other receivables, management does not foresee any credit risk due to the nature of other receivables which comprise mainly advances granted which are repayable upon demand.

The ageing of trade receivables that are past due and/or impaired is disclosed in Note 24.

128


Intercompany Balances

The Company provided unsecured advances to its subsidiaries. There is no fixed repayment terms imposed on intercompany balances as the credit risk is managed on a group basis by the management of the Company to ensure that risk of losses incurred by the Company due to non-repayment by subsidiaries, is minimal.

At the end of the reporting date, the maximum exposure to credit risk is represented by the carrying amounts in the statements of financial position.

At the end of the financial date, there was no indication that the balances due from subsidiaries are not recoverable.

Financial Guarantee

The Company provides unsecured financial guarantees to licensed banks in respect of credit facilities granted to subsidiaries. The Company monitors on an ongoing basis the trend of repayments made by the subsidiaries.

The maximum exposure to credit risk amounts to RM20,393,276 (2013: RM25,306,356) representing the outstanding balance of credit facilities of subsidiaries in which financial guarantees are given as of the end of the reporting date.

At the end of the reporting date, there was no indication that the subsidiaries would default on repayment.

Other Financial Assets

The credit risk on liquid funds are limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

(c) Liquidity and Cash Flow Risks Management

Ultimate responsibility for liquidity and cash flow risks management rests with the Board of Directors, which has established an appropriate liquidity and cash flow risks management framework for the management of the Group’s and of the Company’s short, medium and long-term funding and liquidity and cash flow management requirements. The Group and the Company manage liquidity and cash flow risks by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and financial liabilities.

The Group and the Company expect that the cash generated from its operations, its existing credit facilities and the trade terms provided by its suppliers will be sufficient to meet the Group’s and the Company’s currently anticipated capital expenditure and working capital needs for at least the next 12 months.

The Group has credit facilities of approximately RM11,661,000 (2013: RM9,438,000) which are unused at the end of the reporting date. The Group expects to meet its financial obligations from its operating cash flows and proceeds from maturing financial assets.

The maturity profile for the non-derivative financial assets/liabilities of the Group and of the Company at the end of the reporting date based on the undiscounted cash flows of the respective financial assets/liabilities representing the earliest date on which the Group and the Company are entitled to receive/required to pay, is as follows:

The Group2014

On demand or within 1 year

RM

1 yearto 5 years

RM

Over5 years

RMTotal

RM

Non-derivative financial assets:

Trade and other receivables 42,107,560 - - 42,107,560

Amount owing by associates 1,562,022 - - 1,562,022

Cash and cash equivalents 101,579,795 - - 101,579,795

Available-for-sale:

Other investments - unquoted shares - - 1,086,567 1,086,567

Other investments - quoted unit trusts 66,516,766 - - 66,516,766

Total undiscounted non-derivative financial assets 211,766,143 - 1,086,567 212,852,710


Statements

129


The Group2014


RM

1 yearto 5 years

RM

Over5 years

RMTotal

RM

Non-derivative financial liabilities:

Trade and other payables 49,844,402 - - 49,844,402

Amount owing to ultimate holding company 6,072,479 - - 6,072,479

Hire-purchase payables 582,175 276,352 3,039 861,566

Borrowings 4,176,078 17,616,353 4,587,079 26,379,510

Total undiscounted non-derivative financial liabilities 60,675,134 17,892,705 4,590,118 83,157,957

Total net undiscounted non-derivative financial assets/(liabilities) 151,091,009 (17,892,705) (3,503,551) 129,694,753

The Group2013

Non-derivative financial assets:

Trade and other receivables 46,258,258 - - 46,258,258

Amount owing by associates 1,349,508 - - 1,349,508


Available-for-sale:

Other investments - unquoted shares - - 1,086,567 1,086,567

Other investments - quoted unit trusts 25,693,547 45,541,495 - 71,235,042

Total undiscounted non-derivative financial assets 161,322,667 45,541,495 1,086,567 207,950,729

Non-derivative financial liabilities:


Amount owing to ultimate holding company 87,936 - - 87,936

Hire-purchase payables 721,303 870,005 8,427 1,599,735

Borrowings 9,057,830 20,773,853 8,989,091 38,820,774

Total undiscounted non-derivative financial liabilities 49,911,921 21,643,858 8,997,518 80,553,297

Total net undiscounted non-derivative financial assets/(liabilities) 111,410,746 23,897,637 (7,910,951) 127,397,432

130


The Company2014


RM

1 yearto 5 years

RM

Over5 years

RMTotal

RM

Non-derivative financial assets :

Trade and other receivables 5,370 - - 5,370

Amount owing by subsidiaries 133,841,597 - - 133,841,597

Amount owing by associates 44,000 - - 44,000


Available-for-sale :

Other investments - quoted unit trusts 25,488,494 - - 25,488,494

Total undiscounted non-derivative financial assets 179,709,630 - - 179,709,630

Non-derivative financial liabilities :


Amount owing to ultimate holding company 5,917,755 - - 5,917,755

Total undiscounted non-derivative financial liabilities 13,744,749 - - 13,744,749

Total net undiscounted non-derivative financial assets 165,964,881 - - 165,964,881

The Company2013

Non-derivative financial assets :

Trade and other receivables 123,170 - - 123,170

Amount owing by subsidiaries 64,911,665 - - 64,911,665


Available-for-sale :

Other investments - quoted unit trusts 15,047,654 15,447,383 - 30,495,037

Total undiscounted non-derivative financial assets 110,160,237 15,447,383 - 125,607,620

Non-derivative financial liabilities :

Trade and other payables 206,709 - - 206,709

Amount owing to subsidiaries 9,188,896 - - 9,188,896

Total undiscounted non-derivative financial liabilities 9,395,605 - - 9,395,605

Total net undiscounted non-derivative financial assets 100,764,632 15,447,383 - 116,212,015


Statements

The Group and the Company have not committed to any derivative financial instruments during the financial year.

(d) Capital Risk Management

The Group and the Company manage their capital to ensure the Group and the Company will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s and the Company’s overall strategy remain unchanged from 2013.

The capital structure of the Group and of the Company consists of net debt and equity of the Group and of the Company.

131


Fair Values of Financial Assets and Financial Liabilities

Financial Instruments Carried at Amortised Cost

The fair value of long-term financial assets and liabilities are determined by the present value of future cash flows estimated and discounted using the current interest rates for similar instruments at the end of the reporting date. There is no material difference between the fair values and carrying values of these assets and liabilities as of the reporting period.

The carrying amounts of short-term financial assets and financial liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.

The fair values of investments on unquoted shares are not established as it cannot be measured reliably without incurring excessive cost. Investment in unquoted shares are measured at cost. The Group intends to hold the unquoted investments on a long-term basis.

The fair values of hire-purchase payables and borrowings are included in Level 2 category of the fair value hierarchy in accordance with MFRS 7 Financial Instruments: Disclosure and have been estimated using discounted cash flow analysis based on the current borrowing rates for similar types of hire-purchase and borrowings arrangements and approximate their carrying amounts.

The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to the financial statements.

38. Statements of Cash Flows

(a) Purchase of property, plant and equipment

Property, plant and equipment were acquired by the following means:

The principal amounts of instalment repayments for property, plant and equipment acquired by hire-purchase are reflected as cash outflows from financing activities.

(b) Cash and cash equivalents

For the purposes of the statements of cash flows, cash and cash equivalents include fixed deposits, short-term investment funds and cash and bank balances. Cash and cash equivalents at the end of the reporting period as shown in the statements of cash flows can be reconciled to the related items in the statements of financial position as follows:

The Group The CompanyYear Ended31.3.2014

(12 Months)RM


(15 Months)RM

Year Ended31.3.2014

(12 Months)RM


(15 Months)RM

Cash purchase 17,365,805 63,681,693 98,594 1,595,692

Amount owing to trade and other payables 2,615,680 4,089,436 10,823 13,775

Advance payment for acquisition of property, plant and equipment in previous year 174,228 2,034,065

-

-

Trade-in - 13,000 - -

20,155,713 69,818,194 109,417 1,609,467


RM2013

RM2014

RM2013

RM

Fixed deposits 788,806 2,559,131 - -

Short-term investment funds 69,250,378 69,293,747 19,764,867 29,235,842

Cash and bank balances 29,844,736 14,374,275 81,062 108,086

99,883,920 86,227,153 19,845,929 29,343,928

Less : Fixed deposits held on lien to local licensed banks (788,806) (2,559,131) - -

99,095,114 83,668,022 19,845,929 29,343,928

132


39. Operating Lease Arrangements

Operating lease for the Group relates to leases of offices, outlets, billboards, factory, warehouses, hostels and kitchen equipment with average term of 1.5 to 3 years (2013: 1 to 3 years).

In 2013, operating lease for the Company relates to leases of office with average term of 2 years.

All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew.

The lessee does not have an option to purchase the leased offices, outlets, billboards, factory, warehouses, hostels and kitchen equipment at the expiry of the lease period.

Payment recognised as an expense:

40. Capital Commitments

As of March 31, 2014, the Group and the Company have the following capital expenditure in respect of property, plant and equipment:

Non-cancellable operating lease commitments are as follows:


RM2013

RM2014

RM2013

RM

Minimum lease payments 11,197,397 24,855,998 - 60,000


RM2013

RM2014

RM2013

RM

Within one year 9,798,503 12,947,536 - 4,000

In the second to fifth year inclusive 6,671,787 12,331,408 - -

After five years - 15,710 - -

16,470,290 25,294,654 - 4,000


RM2013

RM2014

RM2013

RM

Approved and contracted for 368,548 5,212,276 204,660 310,927

Approved but not contracted for - 916,047 - -

368,548 6,128,323 204,660 310,927


Statements

133


42. Supplementary Information - Disclosure on Realised and Unrealised Profits or Losses

The breakdown of the retained earnings of the Group and of the Company as of March 31, 2014 into realised and unrealised profits or losses, pursuant to the directive issued by Bursa Malaysia Securities Berhad on March 25, 2010, is as follows

41. Subsequent Event

A wholly foreign owned enterprise (“WFOE”), Shenzhen OldTown White Coffee Trading Co., Ltd. with a registered capital of USD1,000,000 in the territory of Shenzhen, People’s Republic of China was incorporated on July 21, 2014. The WFOE is a wholly-owned subsidiary of Advance City Limited, a subsidiary of Oldtown Berhad.

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on December 20, 2010.

This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directives of Bursa Malaysia Securities Berhad and is not made for any other purposes.


RM2013

RM2014

RM2013

RM

Total retained earnings of the Company and its subsidiaries

Realised 134,415,997 140,262,374 2,298,506 1,074,751

Unrealised (2,150,198) 852,117 - -

Total share of retained earnings from associates

Realised (27,228) 190,642 - -

Unrealised 71,262 54,447 - -

132,309,833 141,359,580 2,298,506 1,074,751

Add: Consolidation adjustments (38,513,700) (21,425,170) - -

Total retained earnings as per statements of financial position 93,796,133 119,934,410 2,298,506 1,074,751

134

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Statement by

Directors

The directors of OLDTOWN BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of March 31, 2014 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

The supplementary information set out in Note 42, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the Directors,

DATUK DR. AHMED TASIR BIN LOPE PIHIE, PJN, PMP, JSM, FASc

MR. LEE SIEW HENG

Ipoh, July 23, 2014

I, MS. CHAO KAR PO, the officer primarily responsible for the financial management of OLDTOWN BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

MS. CHAO KAR PO Subscribed and solemnly declared by the abovenamed MS. CHAO KAR PO at IPOH this 23rd day of July, 2014.

Before me,

WILSON ARUMI DHAS (A182)COMMISSIONER FOR OATHS

Declaration By The Officer Primarily

Responsible For The Financial

Management of The Company

135



List ofPropertiesOwned by

Oldtown Group

Title/Location

Description and Existing Use/Number of storey

Land Area/Built up Area(Sq feet) Tenure

ApproximateAge of Building(Years)

Audited Net Book Value (RM)

Date of Revaluation/*Date of Acquisition

1 A-5-4, Fairville Apartment, Jalan USJ 22/1, 47630 UEP Subang Jaya, Selangor Darul Ehsan.

This apartment is held under strata title Geran 52283/M1/5/154, Lot No. 49175, District of Petaling, Town of Subang Jaya, State of Selangor.

Apartment used as accommodation for factory staff

Built-up area : 818

Freehold 13 years 138,380 07.01.2011*

2 B-4-4, Fairville Apartment, Jalan USJ 22/1, 47630 UEP Subang Jaya, Selangor Darul Ehsan.



Built-up area : 818

Freehold 13 years 143,055 03.01.2011*

3 C-3-7, Fairville Apartment, Jalan USJ 22/1, 47630 UEP Subang Jaya, Selangor Darul Ehsan.



Built-up area : 818

Freehold 13 years 154,275 25.01.2011*

4 C-5-3, Fairville Apartment, Jalan USJ 22/1, 47630 UEP Subang Jaya Selangor Darul Ehsan.

This apartment is held under strata title Geran 52283/M1/5/186, Lot No. 49175 District of Petaling, Town of Subang Jaya, State of Selangor.


Built-up area : 818

Freehold 13 years 201,242 06.12.2012*


This apartment is held under strata title Geran 52283/M1-B/8/229, Lot No. 49175, District of Petaling, Town of Subang Jaya, State of Selangor.


Built- uparea : 818

Freehold 13 years 144,925 04.01.2011*


This apartment is held under strata title Geran 52283/M1-B/8/231, Lot No. 49175, District of Petaling, Town of Subang Jaya, State of Selangor.


Built-up area: 818

Freehold 13 years 144,925 04.01.2011*

136


Title/Location






7 No. 21, Lebuh Bercham (S) 2/8, Kawasan Perindustrian Bercham, 31400 Ipoh, Perak Darul Ridzuan .

The 1 storey factory and office is held under individual title PN 287301, Lot 195649 (previously held under H.S.(D) 70419 PT 115157) in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

Factory and office /1 storey

2,399 /2,400

Leasehold of60 years, expiring on 29.03.2052

17 years 227,565 10.02.2009*

8 No. 19, Lebuh Bercham (S) 2/8, Kawasan Perindustrian Bercham, 31400 Ipoh, Perak Darul Ridzuan.

The 1 storey factory and office is held under individual title PN 287302, Lot 195650 (previously held under H.S.(D) 70420 PT115158) in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

Factory and office /1 storey

2,399 /2,400

Leasehold of60 years, expiring on 29.03.2052

17 years 210,598 04.05.2006*

9 Lot 212152 (previously known as PT 126279), Persiaran Tasek Timur 7, Taman Medan Bercham, 31400 Ipoh, Perak Darul Ridzuan.

The vacant land is held under individual title PN346134 Lot 212152 (previously held under H.S.(D) 33231, PT 126279) in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

The land is vacant. A portion of the land was leased to Tenaga Nasional Berhad for a period of 30 years expiring on 14.02.2026

Land area:21,466

Leasehold of 99 years, expiring on 17.04.2093

N/A 367,488 18.08.2006*

10 PT77647, Kampung Batu 13 1/2 Puchong, 47150 Puchong, Selangor Darul Ehsan.

This property which is held under individual title H.S.(M) 30242, PT 77647 Kampung Batu 13 Puchong in the Mukim and District of Petaling, State of Selangor Darul Ehsan.

This land is vacant Land area:59,656

Leasehold of 99 years, expiring on09.12.2107

N/A 6,061,047 18.05.2010*

11 No. 166, Jalan Labrooy, Taman Merdeka, 30100 Ipoh, Perak, held under land issue document of title described as Pajakan Negeri No. Hakmilik 145225 for Lot 8053U in Bandar Ipoh (U), Daerah Kinta, Negeri Perak.

A double storeybungalow rented to a Children Home for RM1 per month /2 storeys

5,595 /4,064

Leasehold of 999 years,expiring on 28.09.2894

8 years 680,000 31.03.2014

12 No.72, Solok Pendamar Indah 1, Tmn Pendamar Indah, 42000 Port Klang, Selangor Darul Ehsan.

The 3 storey shop office is held under individual title GRN 279149, Lot 123298 (previously held under H.S.(D) 113157, PT 114925), in the Mukim of Klang, District of Klang, State of Selangor Darul Ehsan.

The ground floor of the 3 storey shop office is used to operate an OLDTOWN WHITE COFFEE cafe outlet. The first and secondfloors of the 3 storeys shop office are rented to a private entity /3 storeys

2,830 /8,365

Freehold 5 years 1,347,202 15.10.2009


Oldtown Group

137


Title/Location






13 No. 70, Solok Pendamar Indah 1, Tmn Pendamar Indah, 42000 Port Klang, Selangor Darul Ehsan.

The 3 storey shop office is held under individual title GRN 279150, Lot 123299 (previously held under H.S (D) 113158, PT 114926), in the Mukim of Klang, District of Klang, State of Selangor Darul Ehsan.

The ground, first and second floors of the 3 storey shop office are rented to private entities / 3 storeys

1,399 /4,168

Freehold 5 years 1,000,000 31.03.2014

14 No. 55, 55-1, and 55-2, Jalan Rampai Niaga 5, Medan Niaga Rampai, 53300 Kuala Lumpur.

The 3 storey shop office is held under individual title Pajakan Negeri (WP) No. Hakmilik : 49982 Lot 200210 (formerly known as H.S.(D) 117765 PT No 9138) in the Mukim of Setapak, District of Kuala Lumpur, Negeri Wilayah Persekutuan KL.

The ground and first floor of the 3 storey shop office are used to operate OLDTOWN WHITE COFFEE cafe outlet. The second floor is for general use and storage purposes in relation to the operation of the said cafe outlet / 3 storeys

4,767/12,854

Leasehold ofof 99 yearsexpiring on 28.03.2106

5 years 3,218,642 30.04.2009

15 No. 34 & 34A, Persiaran Kuala Kangsar 1, Taman Wing Onn, Kuala Kangsar Road, 30010 Ipoh, Perak.

The double storey shoplot forms part of a shop/commercial building development which is situated under the master titles PN 286717 Lot 6102U; PN 286720 Lot 6103U; PN 286721 Lot 6104U; PN 286723 Lot 6105U; PN 286725 Lot 6106U; PN 286731 Lot 6107U; PN 286733 Lot 6108U; PN 286991 Lot 6142U; PN 286992 Lot 6143U; PN 286993 Lot 6144U; Part of PN 286735 Lot 6109U and Part of PN 286994 Lot 6145U all in Bandar Ipoh (U) Daerah Kinta, Negeri Perak.

As at 31.03.2014, the shop office was under construction.It is planned to be used to operate an OLDTOWN WHITE COFFEE cafe outlet / 2 storeys

Built-up area : 4,147

Leasehold of 999 years,expiring on30.12.2896

Less than 1 year

1,562,980 21.09.2012*

16 No. 32 & 32A, Persiaran Kuala Kangsar 1, Taman Wing Onn, Kuala Kangsar Road, 30010 Ipoh, Perak.

The double storey shoplot forms part of a shop/commercial building development which is situated under the master titles PN 286717 Lot 6102U; PN 286720 Lot 6103U; PN 286721 Lot 6104U; PN 286723 Lot 6105U; PN 286725 Lot 6106U; PN 286731 Lot 6107U; PN 286733 Lot 6108U; PN 286991 Lot 6142U; PN 286992 Lot 6143U; PN 286993 Lot 6144U; Part of PN 286735 Lot 6109U and Part of PN 286994 Lot 6145U all in Bandar Ipoh (U) Daerah Kinta, Negeri Perak.

As at 31.03.2014,the shop office was under construction. It is planned to berented out / 2 storeys

Built-up area:3,160


Less than 1 year

887,210 21.09.2012*

138



Oldtown Group

Title/Location






17 No. 2, Jalan Portland, Kawasan Perindustrian Tasek, 31400 Ipoh, Perak Darul Ridzuan.

The Industrial Complex consisting of a 3 storey detached office, a 2 storey recreation block and canteen, a 2½ storey detached factory, a single storey detached warehouse and some ancillary structures, is held under individual title Pajakan Negeri No. Hakmilik 2864, Lot No. 60178 in the Mukim of Hulu Kinta, State of Perak Darul Ridzuan.

Office, recreation block and canteen,factory, warehouse /3 storeys2 storeys2½ storeys1 storey

391,923 /207,549

Leasehold of 99 yearsexpiring on 01.07.2072

1 year 50,769,824 09.01.2013

18 No. 11, Persiaran Industri Rapat 2, Kawasan Perindustrian Sri Rapat, 31350 Ipoh, Perak Darul Ridzuan.

The 1½ storey semi-detached factory and office is held under individual title PN 350435 Lot 221579 (formerly known as H.S(D) 41503, PT 132753), in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

Factory and office / 1½ storeys

10,491 /9,770


17 years 760,000 31.03.2014

19 No. 13, Persiaran Industri Rapat 2, Kawasan Perindustrian Sri Rapat, 31350 Ipoh, Perak Darul Ridzuan.

The 1½ storey semi-detached factory and office is held under individual title PN 350434 Lot 221578 (formerly known as H.S(D) 41502, PT 132752), in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

Factory and office /1½ storeys

10,491 /7,780


17 years 730,000 31.03.2014

20 No. 1, Persiaran Tasek Timur 6, Taman Medan Bercham, 31400 Ipoh, Perak Darul Ridzuan.

The 4 storey factory and office is held under the following individual titles:a) PN 296889, Lot 179748

(previously held under H.S(D) 3733);b) PN 296887, Lot 179747

(previously held under H.S(D) 3732);c) PN 296890, Lot 179749

(previously held under H.S(D) 3734);d) PN 296891, Lot 179750

(previously held under H.S(D) 3735); ande) PN 296892, Lot 179751

(previously held under H.S(D) 3736)

All in the Mukim of Hulu Kinta, District of Kinta, State of Perak Darul Ridzuan.

The factory was vacant in April 2014 since relocation of all its operation to the new Factory in Tasek Ipoh and has since been used for storage of machinery / 4 storeys

10,168 /40,507


22 years 1,253,164 27.07.2005*

139


Title/Location






21 No. 1, Jalan Tasek Lama, Taman Tasek, 31400 Ipoh, Perak Darul Ridzuan.

This double storey terrace house is held under individual title Pajakan Negeri 127287, Lot 177851, in the Mukim of Hulu Kinta, Daerah Kinta, Negeri Perak Darul Ridzuan.

Used as StaffAccommodation

2,830 /2,482


2 years 251,767 28.06.2012*


This double storey terrace house is held under individual title Pajakan Negeri 127285, Lot 177852,in the Mukim of Hulu Kinta, Daerah Kinta, Negeri Perak Darul Ridzuan.


1,539 /1,859


2 years 195,877 16.01.2012*




1,539 /1,859


2 years 195,877 16.01.2012*




1,539 /1,859


2 years 195,877 16.01.2012*

25 Lot No. 3A-G-26, Kompleks Bukit Jambul, Jalan Rumbia, 11900 Bayan Lepas, Penang.

The 1 storey shop lot, forms part of a complex known as Kompleks Bukit Jambul, which is situated under parent lot title GRN 61275, Lot 9954 in the Mukim 13, District of Timor Laut, State of Penang. The property has yet to be issued with an individual strata title.

The shop lot is rented out to a private entity /1 storey

Built up area:600

Freehold 17 years 720,000 31.03.2014

140


Authorised Share Capital RM500,000,000

Issued and paid-up share capital RM453,597,242

Class of Shares Ordinary shares of RM1.00 each

Voting rights One (1) vote per ordinary share

SHARE CAPITAL

ANALYSIS OF SHAREHOLDINGS

Size ofShareholdings

No ofShareholders %

No ofShares Held

% of Issued Share Capital*

Less than 100 89 2.19 3,797 0.00

100 to 1,000 487 12.00 276,923 0.06

1,001 to 10,000 2,577 63.52 10,397,874 2.30

10,001 to 100,000 741 18.26 19,586,477 4.32

100,001 to 22,649,111 (less than 5% of the issued share capital)

160 3.94 175,034,396 38.64

22,649,112 ( 5% of the issued shares) and above 3 0.07 247,682,775 54.68

Total 4,057 100 452,982,242 100.00

Analysis of Shareholdings

as at 10 July 2014

SUBSTANTIAL SHAREHOLDERSAs per the Register of Substantial Shareholders

DIRECTORS’ INTEREST IN SHARESAs per the Register of Directors’ Shareholdings

Notes:-1) Deemed interested by virtue of their shareholdings in Old Town International Sdn Bhd , pursuant to Section 6A of the Companies Act, 1965 2) Deemed interested by virtue of their shareholdings in Old Town International Sdn Bhd, Conneczone Puchong Sdn Bhd and Carefree Avenue Sdn Bhd pursuant to Section

6A of the Companies Act, 1965* Calculated based on 452,982,242 shares, which does not include 615,000 treasury shares

Direct Interest Indirect Interest

NameNo of

Shares Held% of Issued

Share Capital*No of


Share Capital*

Old Town International Sdn Bhd 197,258,500 43.55 - -

Lee Siew Heng 6,250,000 1.38 197,258,500 (1) 43.55

Goh Ching Mun 375,000 0.08 197,258,500 (1) 43.55

Lee Siew Ming - - 197,296,000 (2) 43.55

Franklin Resources, Inc 32,276,600 7.13 - -

Mawer Investment Management Ltd. 30,137,050 6.65 - -

Artisan International Small Cap Fund 24,169,725 5.34 - -

Matthews International Capital Management, LLC 23,527,950 5.19 - -

Direct Interest Indirect Interest

NameNo of


Share Capital*No of


Share Capital*

Datuk Dr. Ahmed Tasir Bin Lope Pihie 25,000 0.01 - -

Lee Siew Heng 6,250,000 1.38 197,258,500 (1) 43.55

Mark Wing Kong 62,500 0.01 - -

Clarence D’Silva A/L Leon D’Silva 125,000 0.03 - -

Goh Ching Mun 375,000 0.08 197,258,500 (1) 43.55

Tan Say Yap 465,937 0.10 - -

141


NAMENo of


Share Capital*

1 OLD TOWN INTERNATIONAL SDN. BHD. 189,886,000 41.92

2 CARTABAN NOMINEES (ASING) SDN BHDEXEMPT AN FOR RBC INVESTOR SERVICES TRUST (CLIENTS ACCOUNT)

33,627,050 7.42

3 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSSBT FUND A56A FOR ARTISAN INTERNATIONAL SMALL CAP FUND

24,169,725 5.34

4 HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (U.S.A.)

10,911,250 2.41

5 HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (NORGES BK)

10,322,275 2.28

6 HSBC NOMINEES (ASING) SDN BHDBBH AND CO BOSTON FOR MATTHEWS ASIA GROWTH FUND

9,908,125 2.19

7 HSBC NOMINEES (ASING) SDN BHDBBH AND CO BOSTON FOR MATTHEWS ASIA SMALL COMPANIES FUND

7,800,125 1.72

8 OLD TOWN INTERNATIONAL SDN. BHD. 7,372,500 1.63

9 HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (SWEDEN)

7,000,000 1.55

10 LEE SIEW HENG 6,250,000 1.38

11 HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR J.P. MORGAN BANK LUXEMBOURG S.A.

5,669,200 1.25

12 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSTATE STREET LUXEMBOURG FUND OD85 FOR ABN AMRO MULTI-MANAGER FUNDS

4,731,000 1.04

13 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSSBT FUND A73A FOR ARTISAN GLOBAL SMALL CAP FUND

4,636,475 1.02

14 AMANAHRAYA TRUSTEES BERHADPUBLIC SMALLCAP FUND

4,328,375 0.96

15 CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (F TEMPLETON)

4,288,600 0.95

16 UOBM NOMINEES (ASING) SDN BHDBANQUE DE LUXEMBOURG FOR BL EMERGING MARKETS

4,000,000 0.88

17 HSBC NOMINEES (ASING) SDN BHDTNTC FOR DRIEHAUS EMERGING MARKET SMALL CAP GROWTH FUND

3,516,650 0.78

18 CIMSEC NOMINEES (TEMPATAN) SDN BHDCIMB BANK FOR GOH SIN BONG (MP0081)

3,453,200 0.76

19 CITIGROUP NOMINEES (ASING) SDN BHDCBLDN FOR POHJOLA BANK PLC (CLIENT AC-EUR)

3,019,400 0.67

20 HONG LEONG ASSURANCE BERHADAS BENEFICIAL OWNER (UNITLINKED GF)

3,000,000 0.66

Top Thirty Security Account Holders(without aggregating the securities from different securities accounts belonging to the same Depositor )

142

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Analysis of

Shareholdings as at 10 July 2014

NAMENo of

Shares Held% of Issued Share

Capital*

21 HSBC NOMINEES (ASING) SDN BHDTNTC FOR LOCKHEED MARTIN CORPORATION MASTER RETIREMENT TRUST

2,836,025 0.63

22 DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHADEXEMPT AN FOR KUMPULAN SENTIASA CEMERLANG SDN BHD (TSTAC/CLNT)

2,711,800 0.60

23 CITIGROUP NOMINEES (ASING) SDN BHDCBNY FOR FORWARD INTERNATIONAL DIVIDEND FUND

2,684,300 0.59

24 HSBC NOMINEES (ASING) SDN BHDSG NANTES FOR THE W & W SOUTH EAST ASIAN EQUITY FUND

2,126,875 0.47

25 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSSBT FUND W4B0 FOR WASATCH INTERNATIONAL OPPORTUNITIES FUND

2,020,362 0.45

26 CITIGROUP NOMINEES (ASING) SDN BHDCBNY FOR FORWARD SELECT EM DIVIDEND FUND

2,013,628 0.44

27 AMANAHRAYA TRUSTEES BERHADAFFIN SELECT GROWTH FUND

1,956,200 0.43

28 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSTATE STREET MUNICH FUND U7OM FOR DEUTSCHE ASSET AND WEALTH MANAGEMENT INVESTMENT GMBH FOR OP EAST ASIA

1,901,500 0.42

29 DB (MALAYSIA) NOMINEE (ASING) SDN BHDSSBT FUND W4A9 FOR WASATCH MICRO CAP VALUE FUND

1,875,000 0.41

30 HLB NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LEE CHIAH CHEANG

1,842,500 0.41

Total 369,858,140 81.65

Top Thirty Security Account Holders(without aggregating the securities from different securities accounts belonging to the same Depositor )

143


OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Notice of

Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Sixth (6th) Annual General Meeting (“AGM”) of Oldtown Berhad (“Oldtown” or “the Company”) will be held at Impiana Hotel, Ballroom 1 & 2, 18 Jalan Raja Dr Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Wednesday, 10 September 2014 at 10.30 a.m. to transact the following businesses:-

Agenda

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 March 2014 together with the Reports of the Directors and Independent Auditors thereon.

2. To approve the payment of a final dividend of 3 sen per share under the single-tier system in respect of the financial year ended 31 March 2014.

3. To approve the payment of Directors’ fees of RM153,000 for the financial year ended 31 March 2014.

4. To re-elect the following Directors who retire pursuant to Article 84 of the Company’s Articles of Association:-

(a) Datuk Dr. Ahmed Tasir Bin Lope Pihie

(b) Lee Siew Heng

(c) Goh Ching Mun

5. To re-elect Dato’ Wong Guang Seng who retires pursuant to Article 91 of the Company’s Articles of Association.

6. To re-appoint Messrs Deloitte as Auditors of the Company and to authorise the Directors to fix their remuneration.

As Special Business:

To consider and if thought fit, to pass the following resolutions:-

7. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT subject always to the Companies Act, 1965 (“the Act”), the Articles of Association of the Company and the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Act, to allot and issue shares in the capital of the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever the Directors may in their absolute discretion deem fit provided that the aggregate number of shares to be issued pursuant to this Resolution does not exceed ten percent (10%) of the total issued share capital of the Company for the time being, AND THAT the Directors be and are hereby also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”) AND THAT such authority shall continue to be in force until the conclusion of the next AGM of the Company.”

(Please refer to Explanatory Note 1)

Ordinary Resolution 1








144



8. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED NEW SHAREHOLDERS’ MANDATE FOR THE COMPANY AND/OR ITS SUBSIDIARIES TO ENTER INTO RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE WITH RELATED PARTIES (“PROPOSED RRPT MANDATES”)

“THAT subject to Paragraph 10.09 Part E of the Main Market Listing Requirements of Bursa Securities, approval be and is hereby given to the Company and/or its subsidiaries to enter into recurrent related party transactions (“RRPT”) of a revenue or trading nature with the Related Parties as set out in Appendix II and Appendix III of the Circular to Shareholders dated 19 August 2014, subject to the following:

(i) the RRPT are:

(a) necessary for the day-to-day operations;

(b) undertaken in the ordinary course of business and at arm’s length basis and are on terms not more favourable to the related parties than those generally available to the public; and

(c) are not detrimental to the minority shareholders of the Company; and

(ii) the disclosure is made in the Annual Report of the Company of the aggregate value of the RRPT based on the type of transactions, the names of the Related Parties and their relationships with the Company pursuant to the Proposed RRPT Mandates during the financial year and in the Annual Report of the Company in the subsequent years during which the Proposed RRPT Mandates is in force; and

(iii) the Proposed RRPT Mandates is subject to annual renewal and will continue to be in full force until:

(a) the conclusion of the next AGM of the Company following this AGM at which such Proposed RRPT Mandates was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 143(1) of the Act (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

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

whichever is earlier.

AND THAT the Directors of the Company be authorised to complete and do all such acts and things as they may consider expedient or necessary (including executing all such documents as may be required) to give effect to the RRPT contemplated and/or authorised by this resolution.”

Notice ofAnnual General

Meeting

145


9. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR THE AUTHORITY TO THE COMPANY TO PURCHASE ITS OWN SHARES OF UP TO TEN PER CENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL (“PROPOSED SBB RENEWAL”)

“THAT subject to the Act, the Articles of Association of the Company, the Main Market Listing Requirements of Bursa Securities and all other applicable laws, regulations and guidelines, the Company be and is hereby authorised to purchase such number of ordinary shares of RM1.00 each in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company, provided that:

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

(ii) the funds allocated by the Company for the purpose of purchasing its shares shall not exceed the total retained profits and share premium account of the Company;

THAT upon completion of the purchase by the Company of its own shares, the Directors of the Company be authorised to deal with the shares purchased in their absolute discretion in the following manner:-

(i) cancel all the shares so purchased; and/or

(ii) retain the shares so purchased in treasury for distribution as dividend to the shareholders and/or resell on the market of Bursa Securities; and/or

(iii) retain part thereof as treasury shares and cancel the remainder.

THAT such authority conferred by this resolution shall commence upon the passing of this resolution and shall continue to be in force until:

(i) the conclusion of the next AGM of the Company following this AGM at which such resolution was passed, at which time it will lapse, unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM is required by law to be held; or

(iii) revoked or varied by an ordinary resolution passed by the shareholders of the Company in general meeting,

whichever occurs first.

AND THAT the Directors of the Company be authorised to give effect to the Proposed SBB Renewal with full power to assent to any modifications and/or amendments as may be required by the relevant authorities.”

10. To consider any other business of which due notice shall have been given in accordance with the Act.

By Order Of The Board

CHAN CHEE KHEONG (MAICSA 0810287) WONG WAI FOONG (MAICSA 7001358) Company Secretaries

Kuala Lumpur 19 August 2014


146

OLDTOWN BERHAD (797771-M) (Incorporated in Malaysia) Notice of

Annual General Meeting

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend and vote in his/her stead at the same meeting. A proxy may but need not be a member of the Company and Section 149(1)(a) and (b) of the Act shall not apply to the Company.

2. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless the member specifies the proportion of his shareholdings to be represented by each proxy. Each proxy appointed, shall represent a minimum of 100 shares held by the member.

3. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised.

6. The instrument appointing a proxy shall be deposited at the Share Registrar of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or at any adjournment thereof.

7. For the purpose of determining a member who shall be entitled to attend the meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd., in ac-cordance with Article 60(c) of the Company’s Articles of Association and Section 34(1) of the SICDA to issue a General Meeting Record of Depositors as at 2 September 2014. Only a depositor whose name appears on the General Meeting Record of Depositors as at 2 September 2014 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote in his/her stead.

EXPLANATORY NOTES

1. Item 1 of The Agenda - The Audited Financial Statements for The Financial Year Ended 31 March 2014 and The Reports of The Directors and Independent Auditors Thereon

This agenda item is meant for discussion only, as the provision of Section 169(1) of the Act does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

2. Ordinary Resolution 8 - Authority to Allot and Issue Shares pursuant to Section 132D of The Companies Act, 1965

The proposed Ordinary Resolution 8 is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Companies Act, 1965. The Ordinary Resolution, if passed, will empower the Directors of the Company, from the date of the above AGM, to allot and issue new shares of the Company up to an amount not exceeding in total ten percent (10%) of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless earlier revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company.

The authority to issue shares pursuant to Section 132D of the Companies Act, 1965 will provide flexibility and expediency to the Company for any possible fund raising activities involving the issuance or placement of shares to facilitate business expansion or strategic merger and acquisition opportunities involving equity deals or part equity or to fund future investment project(s) or for working capital requirements, which the Directors of the Company consider to be in the best interest of the Company. The approval is sought to avoid any delay and cost in convening a general meeting to approve such issuance of shares.

As at the date of this Notice, the Company did not issue any new shares pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the Fifth AGM of the Company held on 26 September 2013 and which will lapse at the conclusion of the Sixth AGM. A renewal of this authority is being sought at the Sixth AGM.

3. Ordinary Resolution 9 - Proposed RRPT Mandates

The proposed Ordinary Resolution 9, if passed, will provide the Company and/or its subsidiaries a mandate to enter into RRPT of a revenue or trading nature with the Related Parties in compliance with the Main Market Listing Requirements of Bursa Securities. The mandate, unless revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company.

Detailed information of the Proposed RRPT Mandates is set out in Appendix II and Appendix III of the Circular to Shareholders dated 19 August 2014 circulated together with this Annual Report.

4. Ordinary Resolution 10 - Proposed SBB Renewal

The proposed Ordinary Resolution 10, if passed, will give the Directors of the Company the authority to purchase the Company’s own shares up to an amount not exceeding in total ten per cent (10%) of its issued share capital at any point in time upon such terms and conditions as the Directors may deem fit in the interest of the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company. Further information on the Proposed SBB Renewal is set out in Section 3 of the Circular to Shareholders dated 19 August 2014 circulated together with this Annual Report.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)There were no Directors standing for election at the forthcoming Sixth Annual General Meeting.

147



PROXY FORMSIXTH (6TH) ANNUAL GENERAL MEETING

I/We,

NRIC No./Company No. of

being a Member of OLDTOWN BERHAD, hereby appoint

NRIC No. of

or failing him/her,

NRIC No. of

or failing him/her, *the Chairman of the meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Sixth (6th) Annual General Meeting of the Company, to be held at Impiana Hotel, Ballroom 1 & 2, 18 Jalan Raja Dr Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Wednesday, 10 September 2014, at 10.30 a.m. and, at every adjournment thereof.

*My/Our proxy is to vote as indicated below:

(Full name in block capitals)

(Address)


(Address)

(Address)


CDS Account No. of authorised nominee

RESOLUTIONS FOR AGAINST











Please indicate with an “X” in the spaces provided above how you wish your vote to be casted. If no specific direction as to the voting is given, the proxy will vote or abstain from voting at his/her discretion.

( * Strike out whichever is not desired)

Signed this day of 2014

Signature/Common Seal of Member

Telephone Number of Member

No. of shares Percentage

Total shares held 100%

Proxy 1

Proxy 2

The proportions of shareholdings to be represented by *my/*our proxies are as follows:-

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend and vote in his/her stead at the same meeting. A proxy may but need not be a member of the Company and Section 149(1)(a) and (b) of the Act shall not apply to the Company.

2. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless the member specifies the proportion of his shareholdings to be represented by each proxy. Each proxy appointed, shall represent a minimum of 100 shares held by the member.

3. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised.

6. The instrument appointing a proxy shall be deposited at the Share Registrar of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or at any adjournment thereof.

7. For the purpose of determining a member who shall be entitled to attend the meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd., in accordance with Article 60(c) of the Company’s Articles of Association and Section 34(1) of the SICDA to issue a General Meeting Record of Depositors as at 2 September 2014. Only a depositor whose name appears on the General Meeting Record of Depositors as at 2 September 2014 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote in his/her stead.

Please fold this flap for sealing

Please fold this flap for sealing

Affix RM0.80Stamp

The Company Secretary

OLDTOWN BERHAD (797771-M)

c/o Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

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OLDTOWN AR 31-03-2014a

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Transcript of OLDTOWN AR 31-03-2014a