1 BHD 65787-T
KFC Holdings (Malaysia) BHD (65787-T)
Annual Report 2011
Contents
ShareholdersOverview
Financial Highlights 6
Notice of Annual General Meeting 9
Statement Accompanying Notice of Annual General Meeting 14
The Corporation
Board of Directors 60
Top Management Committee 76
Head of Division 77
Shariah Advisory Council 80
Corporate Information 81
Group Structure 82
Accountability
Corporate Governance Statement 84
Audit Committee Report 93
Statement on Internal Control 97
Additional Compliance Information 100
Financial Statements
Directors Report 127
Statements of Financial Position 131
Statements of Comprehensive Income 132
Consolidated Statement of Changes in Equity 133
Statement of Changes in Equity 135
Statements of Cash Flows 137
Notes to the Financial Statements 139
Statement by Directors 204
Statutory Declaration 204
Independent Auditors Report 205
List of Properties Held 207
Analysis of Shareholdings 220
Analysis of Warrant Holdings 223
Form of Proxy
we bring
a So Good
Family Meal...
...with a side of
Happiness.
Financial Highlights
2007
2008
2009
2010
2011
RM 000
RM 000
RM 000
RM 000
RM 000
REVENUE
KFC Malaysia
KFC Singapore
1,043,438
1,284,429
1,365,542
1,496,907
1,655,340
280,200
330,771
342,666
368,586
409,126
11,679
13,676
15,469
16,347
20,424
KFC Brunei
KFC India
Integrated Poultry
6,232
19,813
316,985
445,018
484,132
533,397
586,706
Education
1,068
4,725
78,069
105,894
89,622
99,821
102,646
1,730,371
2,179,788
2,297,431
2,522,358
2,798,780
Ancillary
Total
Profit Before Tax
150,624
167,457
190,015
221,833
215,493
105,543
120,350
132,797
159,702
146,571
104,269
118,535
130,403
156,848
144,005
EBITDA
224,160
241,986
281,326
312,785
330,606
593,599
678,900
773,241
999,984
1,228,459
1,006,128
1,154,407
1,290,470
1,583,032
1,838,226
Total Borrowings
122,987
141,055
116,436
152,547
254,249
793,099
793,099
793,099
793,231
793,266
Shareholders Equity
602,021
692,158
791,757
990,247
1,074,215
17.32
17.13
16.47
15.84
13.41
10.36
10.27
10.11
9.91
7.83
6.22
2.10
14.08
13.15
14.95
16.44
19.78
18.18
0.76
0.87
1.00
1.25
1.36
20
22
24
15.5
6.40
7.45
7.40
3.82
3.84
Total Assets
Return on Shareholders
Equity (%)
NO. OF RESTAURANTS
KFC Malaysia
403
436
475
515
539
69
73
77
77
80
KFC Brunei
12
KFC India
13
Kedai Ayamas
20
25
35
49
75
RasaMas Malaysia
22
34
40
39
25
521
578
639
699
746
KFC Singapore
RasaMas Brunei
Financial Highlights
Revenue
RM (Million)
1,730
2007
151
2007
2008
2,180
2008
2009
2,297
2009
2,522
2010
2,799
2011
167
190
2010
222
2011
215
250
200
150
100
50
3000
2500
2000
1500
1000
500
Total Assets
RM (Million)
Shareholders Equity
RM (Million)
1,006
2007
1,154
2008
990
2010
1,838
2011
792
2009
1,583
2010
692
2008
1,290
2009
602
2007
1,074
2011
1250
1000
750
500
250
2000
1600
1200
800
400
Financial Highlights
403
69
7
2008
436
73
8
2009
475
77
9
2010
515
77
9
7
2011
539
80
12
13
KFC Malaysia
KFC Singapore
KFC Brunei
KFC India
600
500
400
300
200
100
20
22
2008
25
34
2
2009
35
40
3
2010
49
39
3
2011
75
Kedai Ayamas
25
RasaMas Malaysia
RasaMas Brunei
90
75
60
45
30
15
NOTICE IS HEREBY GIVEN that the 32nd Annual General Meeting of KFC Holdings (Malaysia) Bhd will be
held at Level 3, Wisma KFC, No 17, Jalan Sultan Ismail, 50250 Kuala Lumpur on Tuesday, 22 May 2012 at
11:30 a.m. for the following purposes:AGENDA
1. To receive and adopt the Audited Financial Statements of the Company for the year
ended 31 December 2011 and the Reports of the Directors and Auditors thereon.
Resolution 1
2. To approve the payment of Directors fees in respect of the financial year ended
31 December 2011.
Resolution 2
3. (a) To re-elect the following Directors retiring pursuant to Article 89 of the Companys
Articles of Association:
Resolution 3
Resolution 4
Resolution 5
(b) To re-elect the following Director retiring pursuant to Article 96 of the Companys
Articles of Association:
(i) YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum Sultan Salahuddin Abdul Aziz
Shah Alhaj
Resolution 6
4. To re-appoint Messrs KPMG as Auditors of the Company and to authorize the Directors
to fix their remuneration.
Resolution 7
5. As special business:
(a) Ordinary Resolution - Authority to allot and issue shares pursuant to Section
132D of the Companies Act 1965 (the Act)
THAT pursuant to Section 132D of the Act, full authority be and is hereby given to
the Directors to issue shares of the Company from time to time upon such terms and
conditions and for such purposes as the Directors may in their absolute discretion
deem fit provided that the aggregate number of shares to be issued pursuant to
this resolution does not exceed ten percent (10%) of the issued share capital of the
Company and that such authority shall continue in force until the conclusion of the
next Annual General Meeting (AGM) of the Company, and that the Directors be
and are hereby empowered to obtain the approval of the Bursa Malaysia Securities
Berhad (Bursa Securities) for the listing and quotation for the new shares to be
issued.
Resolution 8
(a) the aggregate number of shares so purchased and/or held pursuant to this
ordinary resolution (Purchased Shares) does not exceed ten percent (10%) of
the total issued and paid-up share capital of the Company at any one time; and
(b) the maximum amount of funds to be allocated for the Purchased Shares shall
not exceed the aggregate of the retained profits and/or share premium of the
Company;
AND THAT the Directors be and are hereby authorized to decide at their discretion
either to retain the Purchased Shares as treasury shares (as defined in Section 67A
of the Act) and/or cancel the Purchased Shares and/or to retain the Purchased
Shares as treasury shares for distribution as share dividends to the shareholders
of the Company and/or be resold through Bursa Securities in accordance with the
relevant rules of Bursa Securities and/or cancelled subsequently and/or to retain part
of the Purchased Shares as treasury shares and/or cancel the remainder and to deal
with Purchased Shares in such other manner as may be permitted by the Act, rules,
regulations, guidelines, requirements and/or orders of Bursa Securities and any other
relevant authorities for the time being in force;
AND THAT the Directors be and are hereby empowered to do all acts and things
(including the opening and maintaining of a central depositories account(s) under
the Securities Industry (Central Depositories) Act, 1991) and to take such steps
and to enter into and execute all commitments, transactions, deeds, agreements,
arrangements, undertakings, indemnities, transfers, assignments, and/or guarantees
as they may deem fit, necessary, expedient and/or appropriate in the best interest
of the Company in order to implement, finalise and give full effect to the Proposed
Renewal of the Share Buy-Back Authority with full powers to assent to any conditions,
modifications, variations (if any) as may be imposed by the relevant authorities;
AND FURTHER THAT the authority conferred by this ordinary resolution shall be
effective immediately upon passing of this ordinary resolution and shall continue in
force until the conclusion of the next AGM of the Company or the expiry of the period
within which the next AGM of the Company is required by law to be held (whichever is
earlier), unless earlier revoked or varied by ordinary resolution of the shareholders of
the Company in general meeting, but shall not prejudice the completion of purchase(s)
by the Company before that aforesaid expiry date and in any event in accordance
with provisions of the Listing Requirements and other relevant authorities.
10
Resolution 9
THAT authority be and is hereby given in line with Paragraph 10.09 of the Listing
Requirements, for the Company, its subsidiaries or any of them to enter into any of the
transactions falling within the types of the RRPT, particulars of which are set out in the
Circular to Shareholders dated 27 April 2012 (the Circular), with the Related Parties
as described in the Circular, provided that such transactions are of revenue and/or
trading nature, which are necessary for the day-to-day operations of the Company
and/or its subsidiaries, within the ordinary course of business of the Company and/
or its subsidiaries, made on an arms length basis and on normal commercial terms
which those generally available to the public and are not detrimental to the minority
shareholders of the Company;
AND THAT such authority shall commence immediately upon the passing of this
Ordinary Resolution until:
(i) the conclusion of the next AGM of the Company following the general meeting
at which the ordinary resolution for the Proposed Shareholders Mandate for the
RRPT is passed, at which time it shall lapse, unless the authority is renewed by a
resolution passed at the next AGM; or
(ii) the expiration of the period within which the next AGM after the date it is required
by law to be held; or
whichever is earlier.
AND FURTHER THAT the Directors of the Company be authorized to complete
and do all such acts and things (including executing all such documents as may be
required) as they may consider expedient or necessary to give effect to the Proposed
Shareholders Mandate for RRPT.
Resolution 10
11
6. To transact any other ordinary business of which due notice shall have been given.
FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member
who shall be entitled to attend this 32nd AGM, the Company shall be requesting Bursa
Malaysia Depository Sdn Bhd in accordance with Article 64 of the Companys Articles of
Association and Paragraph 7.16 of the Listing Requirements to issue a General Meeting
Record of Depositors (ROD) as at 14 May 2012. Depositors whose names appear on the
ROD as at 14 May 2012 are entitled to attend, speak and vote at the said meeting.
Notes:
1. A member of the Company entitled to be present and vote at the above AGM may appoint a proxy or proxies to be present and
vote instead of him. A Proxy may but need not be a member of the Company.
2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or
if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.
3. A member of the Company may appoint more than two (2) proxies to attend the AGM. Where a member of the Company 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.
4. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act,
1991, he may appoint at least one (1) proxy in respect of each securities account he holds with ordinary shares of the Company
standing to the credit of the said securities account.
5. Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories)
Act, 1991, there will be no limit to the number of proxies which the exempt authorized nominee may appoint.
6. Any alteration made in this form should be initialed by the person who signs it.
7. The Proxy Form and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy of that
power of authority must be deposited at Tricor Investor Services Sdn Bhd, 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 for holding the meeting or any
adjournment thereof.
12
The Company had, at the 31st AGM held on 27 April 2011, obtained its shareholders approval for the general mandate for
issuance of shares pursuant to Section 132D of the Act. The Company did not issue any new shares pursuant to this mandate
obtained as at the date of this notice. The Ordinary Resolution 8 proposed under item 5(a) of the Agenda is a renewal of the general
mandate for issuance of shares by the Company under Section 132D of the Act. At this juncture, there is no decision to issue
new shares. If there should be a decision to issue new shares after the general mandate is obtained, the Company will make an
announcement in respect of the purpose and utilisation of proceeds arising from such issue.
The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing
of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.
Further information on the Proposed Renewal of the Share Buy-Back Authority are set out in the Circular to Shareholders of the
Company which is dispatched together with the Companys Annual Report for the year ended 2011.
Further information on the Proposed Shareholders Mandate for RRPT are set out in the Circular to Shareholders of the Company
which is dispatched together with the Companys Annual Report for the year ended 2011.
13
(a) The Directors retiring by rotation pursuant to Article 89 of the Articles of Association are:-
(b) The Director retiring by rotation pursuant to Article 96 of the Articles of Association is:-
(i) YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Alhaj
The details of the directors seeking re-election are set out in the Directors Profiles which appear on pages
62 to 71 of the Annual Report.
2. DETAILS OF ATTENDANCE AT BOARD MEETINGS HELD IN THE FINANCIAL YEAR ENDED
31 DECEMBER 2011
There were six (6) Board Meetings held during the financial year ended 31 December 2011 and the following
are the details of the Board attendance:-
Name of Directors
No of Meetings Attended
6/6
6/6
6/6
6/6
6/6
6/6
3/6
4/6
3/4
3. THE 32ND ANNUAL GENERAL MEETING WILL BE HELD AT LEVEL 3, WISMA KFC, NO 17, JALAN
SULTAN ISMAIL, 50250 KUALA LUMPUR ON TUESDAY, 22 MAY 2012 AT 11.30 A.M.
14
we bring
Cheery Smiles...
16
17
...with a splash of
Mouth-watering
Varieties.
At our restaurants, we are proud to provide our customers with only
the best value everyday. From our meals for one, to meals shared
with family and friends, you will find a delicious meal that suits you
at a great price.
18
19
Corporate Statement
CONSOLIDATING ACHIEVEMENTS
Fellow stakeholders,
The growth achieved by the KFC Holdings (Malaysia)
Bhd (KFCH) Group between 2006 and 2010 was
phenomenal. In just five years, the number of KFC
outlets increased from 443 to more than 600, as
the Group not only entrenched its leadership of
the Malaysian food service sector but expanded
its network in Singapore, Brunei and into India.
Moreover, this massive increase in outlets was
matched by a consistent and spectacular growth in
both revenues and profits.
18
Corporate Statement
ECONOMIC BACKGROUND
The global economy remained fragile throughout
2011. The still unfolding financial turmoil in Europe
began to impact developing and other high-income
countries. In certain parts of the world, this effectively
depressed stock markets and pushed up borrowing
costs, while capital flows to developing nations fell
sharply.
Towards the year end, these conditions dampened
Southeast Asias growth outlook and started to
weigh down on the near-term prospects for the
Malaysian economy.
19
Corporate Statement
DELIVERING RESULTS
segments
experienced
inflationary
RM409.1 million
million
20
Corporate Statement
Dividends
The Group declared a total interim dividend of 3 sen
less tax of 25% per ordinary share for the financial
year ended 31 December 2011. No final dividend
was proposed for the financial year 2011.
INVESTING IN STRONG FOUNDATIONS
KFCHs expansion in 2011 was dedicated to three
vital aspects of the Groups operations: regional
expansion; people and supply chain.
Major Initiatives
Implemented During
the Year Included the
Construction of Nine
Drive-Thru Outlets in
Peninsular Malaysia,
and the Penetration of
KFC into Small Towns
Especially in the East
Coast of Peninsular
Malaysia, Sabah and
Sarawak.
Investing in Expansion
2011 saw KFCs Malaysian network expand by
another 24 outlets. With the rapid growth of the KFC
restaurant chain in Malaysia, our nation can now
boast one of the highest ratios of KFC restaurants
per capita in the world.
Major initiatives implemented during the year
included the construction of nine drive-thru outlets in
Peninsular Malaysia, and the penetration of KFC into
small towns especially in the east coast of Peninsular
Malaysia, Sabah and Sarawak.
Two new outlets were opened in Kelantan, in
Kota Bharu and Koh Lanas. Other small towns in
Peninsular Malaysia that welcomed KFC included
Padang Serai, Pekan Changlun and Kuala Nerang
in Kedah and Sabak Bernam in Selangor. Meanwhile
three new outlets were launched in Sabah and
Sarawak in Kota Kinabalu, Kunak and Betong.
Meanwhile, KFCH has built a strong presence in
Singapore and Brunei, and in 2011 increased its
network by three outlets in each country.
But the biggest opportunities lie with the Groups
more recent venture into India, where in 2011 the
number of outlets grew to 13. The potential of the
Indian market is tremendous, but this is a volume
game and it will need more than 50 outlets before the
Indian operations achieve profitability. KFCHs 2011
investment of RM12.9 million in its Indian network
therefore represents the foundation of a long-term
plan for ongoing, aggressive expansion that before
long will start to pay dividends in the future.
21
Corporate Statement
Kedai Ayamas
Commenced
its East Malaysian
Operations in Tawau
in April 2011.
There are Currently
Three Kedai Ayamas
Outlets in Sabah.
22
Corporate Statement
23
Corporate Statement
24
Corporate Statement
25
Corporate Statement
BOOSTING QUALITY
IMPROVING GOVERNANCE
KFCHs success depends on the integrity and conduct
of its people, and the Group is totally committed to
conducting business in a responsible, accountable
and ethical manner. In 2011, further efforts were
dedicated to improving stewardship and governance
processes for the benefit of stakeholders.
26
Corporate Statement
ACHIEVING RECOGNITION
2011 was a year of significant recognition for KFCH
and its subsidiaries.
KFC received the 2010/2011 BrandLaureate Award
for the Best Brand in Brand Strategy. KFC also
won a series of Yum!s 2011 Franchise Awards
for Development Excellence (KFC Malaysia) and
Advertising Excellence (KFC Singapore).
27
Corporate Statement
STRATEGISING 2012
Operational Excellence
In the years ahead KFCH will be further expanding
its network of restaurants, focusing especially
on opening new drive-thru outlets, which offer
exceptional convenience to people leading busy
lives who need a quick and tasty meal. At the same
time, the Group will be enhancing its restaurant
ambiance to provide a more contemporary feel and
create a pleasant place for families and friends to
get together. KFCH will also be expanding into small
towns to increase its market coverage.
28
Corporate Statement
Upstream Business
Overseas Expansion
29
Corporate Statement
LOOKING AHEAD
The global economic outlook still appears uncertain
in view of the lingering debt crisis in Europe, although
there are nascent signs of recovery in the US economy
judging by the improving job market and corporate
earnings released thus far. The positive data from
US appears to outweigh concerns in Europe at this
moment and, if sustainable, will be pivotal to win
back investors and consumers confidence in the
global economy.
Profit Centres
Although consolidation is a priority, the Group is also
aiming to turn its Logistics division into a profit centre
in the future. The new double-storey warehouse
facility in Port Klang, with its vast square footage,
16 loading bays and advanced equipment, currently
serves 921 of the Groups restaurants and outlets
but has the capacity to serve third parties as well as
the other Groups subsidiaries.
30
Corporate Statement
EXPRESSING GRATITUDE
In 2011, KFCH once again consistently delivered top
quality products and customer service. On behalf of
the Board, we offer each of our employees heartfelt
congratulations and gratitude.
We also profoundly appreciate the support we
received from customers, investors, financiers,
suppliers and various governmental and regulatory
authorities. We are equally grateful to Yum! for their
continued confidence and for the guidance received
from them throughout the year.
31
Review of Operations
Customers Remain
the Groups
Number One Priority
INTRODUCTION
Groupwide, 2011 was a year of commendable
achievement. The KFC network continued to expand
in Malaysia, Singapore, Brunei as well as India, and
an imaginative programme of enticing new menu
items, irresistible special promotions and appealing
outlet enhancements continued to draw ever larger
crowds.
Subsidiaries also made considerable progress,
particularly the Integrated Poultry Operations and
Ancillary Operations, while the KFCH International
College has already attracted more than 800
students to date, many of whom are expected to join
the Group as staff members in due course.
KFC MALAYSIA
In 2011, KFC Malaysia revenue jumped to RM
1,655.3 million, 10.6% up on the RM1,496.9 million
recorded the year before.
The Malaysian team achieved this success with a
combination of compelling marketing and promotional
campaigns and irresistible new products to draw
customers into the outlets. Simultaneously, a range
of service enhancements and facilities upgrades
improved comfort and efficiency, whether customers
are eating in, taking away or driving through.
jamaludin bin md alI
Managing Director
32
Review of Operations
The
33
Groups
third
quality
initiative
was
the
Review of Operations
period.
anchor product.
34
Review of Operations
collectible figurines.
35
Review of Operations
customer testimonials.
enthusiasm.
closures.
36
Review of Operations
KFC BRUNEI
KFC Brunei expanded from nine to 12 restaurants
in 2011, and total revenue surged 25% to RM20.5
million.
Expansion plans for 2012 include two new inline restaurants, two drive-thrus, and image
enhancements for the KFC Berakas facilities.
KFC INDIA
In its second year of operations, KFC India reported
revenue of RM19.8 million, an impressive increase
on 2010 sales of RM13.6 million.
To capitalise on the Indian passion for Cricket, KFC
India was an Official Partner in the 2011 ICC World
Cup. The staff got into the spirit by wearing special
tournament t-shirts, and customers took advantage
of the limited time offer of meals served in a cricketthemed Fan Bucket.
37
Review of Operations
The Integrated
Poultry Operations
Segment Saw
Another Year of
Growth in 2011.
Revenue Including
Intercompany Sales
Advanced 13.8%
from 2010, Climbing
to RM1,472 Million.
More positively, vigorous marketing campaigns used
varied media and creative tactics to reach consumers
throughout 2011. RasaMas devised a new menu in
February, and in April commenced a campaign to
celebrate the brands Typically Malaysian identity.
The redesigned website came online in April,
and by July, the visitor count exceeded 10,000.
The marketing team maximized the use of social
media Twitter, Facebook, blog and website as
well as e-mail and SMS to publicise 16 promotions
throughout the year, including Chinese New Year and
Ramadan specials, new product announcements as
well as coupon offers.
Meanwhile, Kedai Ayamas sales jumped by 41.1%
to RM77.7 million, and the new Kedai Ayamas
(Sabah) contributed an additional RM743,000 to the
2011 revenue stream. The store count increased
from 49 at the beginning of 2011 to 75 at the end
of the year.
40 outlets now offer delivery services, and August
saw the installation of e-pay terminals in the
branches to give customers yet another level of
convenience. 2011s new products included the
Percik Roaster, and Ayamas re-launched the highly
38
Review of Operations
products,
prices
made
performance.
an
impact
Demand
for
upon
the
chicken
position.
39
Review of Operations
Each
push-cart
is
independently
market sector.
40
Review of Operations
Estimates
of
broiler
requirements
41
Review of Operations
the
reduce costs.
Commissarys
ongoing
improvements
will
Tepak Marketing
aluminium cans.
customers.
42
Review of Operations
a profit centre.
award ceremonies.
organisation.
Technology.
43
business
and
management
abilities.
Review of Operations
coming year.
procurement,
44
preparation,
packaging,
storage
Review of Operations
Esteemed
scholars
from
Islamic
LOOKING FORWARD
institutions
success.
45
we bring
Balance
to a Healthy
Lifestyle...
46
47
...with a spoonful of
Responsibility.
49
Corporate Social
Responsibility (CSR)
Plays an Increasingly
Important Role in the
Malaysian Business
Arena, and KFC
Holdings (Malaysia)
Bhd (KFCH) has Made
it an Integral Part of the
Groups Culture.
48
COMMUNITY
2011 marks the fifth year that KFC and Pizza Hut
participated in the World Hunger Relief Programme.
On 29 October, the Group organised the Step Out,
Stop Hunger 5km charity walk in Putrajaya. Over
10,000 people joined this event, which also featured
a games carnival, musical concerts and various
contests as well as other activities. Over RM2.1
million was collected and distributed to the faminestricken around the world as well as local charities.
49
50
Utusan Sepaktakraw
For the second year in a row, KFC sponsored the
KFC-Utusan Sepaktakraw tournament. The Grand
Finale, held at The Curve, Petaling Jaya, was
attended by YB Dato Ahmad Shabery bin Cheek,
Minister of Youth and Sports.
51
MARKETPLACE
Halal Initiatives
One of the most essential aspects of the Groups
continued success is its insistence upon strict halal
compliance. Customers rely upon all KFCH products
52
WORKPLACE
53
Champs Challenges
54
Gerak Kemas
5S to 6 Sigma (6S).
THE ENVIRONMENT
employees.
55
day.
56
LOOKING AHEAD
57
we bring
Freshness
and Quality
to your Dining
Experience...
58
59
...with a dash of
Tender
Loving Care.
At our restaurants, we have one mission: To serve only the best
food. We start with only the finest ingredients that is delivered fresh
from our farms all the way onto your plate. Easy? No. But it only
takes one bite to remember why all that extra effort is worthwhile.
Because fresh tastes better. 60
KFC Holdings (Malaysia) BHD (65787-T)
Annual Report 2011
61
Board of Directors
60
Board of Directors
61
Profile of Directors
62
Profile of Directors
Committee
of
the
Company.
63
Profile of Directors
31 December 2011.
64
Profile of Directors
31 December 2011.
65
Profile of Directors
Malaysia.
Certified
Registered
Accountant
(UK)
and
31 December 2011.
66
Profile of Directors
67
Profile of Directors
Assessment
Committee
and
Remuneration
November 2010.
Datuk Ismee is presently the Group Managing
Director and Chief Executive Officer of Lembaga
31 December 2011.
68
Profile of Directors
69
Profile of Directors
Glasgow (FRCS).
Surgeons of Asia.
General Hospital.
the Institute.
70
Profile of Directors
offences.
31 December 2011.
71
MICHAEL GIAN
Chairman
Director
72
73
NELKY GOH
Deputy Chairman
Managing Director
74
Director
Director
Director
75
Managing Director
Executive Director
3. AZIZAH BINTI ABDUL
RAHMAN
Director
6. MJ LING
5. ALAN AU
Deputy President,
7. EDMUND LOONG
Senior General Manager,
Group Finance
76
Head of Division
Managing Director
President
Vice President
Poultry Integration
General Manager
Maintenance
77
Head of Division
7. SHARIFAH MUSAINAH
BINTI SYED ALWI
General Manager
General Manager
9. HISHAMUDDIN BIN
HAMIDON
General Manager
Kedai Ayamas & RasaMas
78
Head of Division
10
11
12
Managing Director
KFC India
KFC Brunei
79
1. KAMARUZZAMAN
BIN ABU KASSIM
7. MOHD ROSLAN
BIN MOHD SALUDIN
80
Corporate Information
Board of Directors
Company Secretaries
Auditors
Principal Bankers
Solicitors
Registered Office
Audit Committee
81
Group Structure
100%
Kentucky Fried
Chicken (Malaysia)
Sdn Bhd
- KFC restaurants
100%
KFC (Peninsular
Malaysia) Sdn Bhd
- KFC restaurants
- Commissary
100%
SPM Restaurants
Sdn Bhd
- Meals on wheels
- Property holding
100%
KFC (Sarawak) Sdn Bhd
- KFC restaurants
90%
KFC (Sabah) Sdn Bhd
51%
KFC (B) Sdn Bhd
- KFC restaurants
- KFC restaurants
100%
KFC Events Sdn Bhd
100%
Rasamas Sdn Bhd
(Brunei)
- Restaurants
100%
Cilik Bistari Sdn Bhd
- Sale of board games
70%
Yayasan Amal Bistari
- Corporate foundation
100%
KFCH Education (M)
Sdn Bhd
- College/Learning institute
100%
KFCIC Assets Sdn Bhd
- Property holding
100%
Roasters Chicken
Sdn Bhd
- Investment holding
55%
Tepak Marketing
Sdn Bhd
- Contract packing
100%
Region Food
Industries Sdn Bhd
- Sauce manufacturing
82
89.2%
Rasamas Tebrau
Sdn Bhd
- Restaurant (Intrapreneur)
89.1%
Rasamas Taman
Universiti Sdn Bhd
- Restaurant (Intrapreneur)
Group Structure
100%
WQSR Holdings (S)
Pte Ltd
100%
Kentucky Fried
Chicken Management
Pte Ltd
- Investment holding
- KFC restaurants
100%
KFC India Holdings
Sdn Bhd
- Investment holding
100%
Mauritius Food
Corporation Pvt Ltd
100%
KFCH Restaurants
Private Limited
- Investment holding
- KFC restaurants
100%
Integrated Poultry
Industry Sdn Bhd
100%
Pune Chicken
Restaurants Private
Limited
- KFC restaurants
100%
Ayamas Integrated
Poultry Industry Sdn
Bhd
- Property holding
- Restaurants
65%
Ayamas Shoppe
(Sabah) Sdn Bhd
100%
KFC Manufacturing
Sdn Bhd
- Trading
- Bakery
100%
Ayamas Food
Corporation Sdn Bhd
100%
Ladang Ternakan
Putihekar (N.S.)
Sdn Bhd
100%
MH Integrated Farm
Berhad
100%
Rasamas Holdings
Sdn Bhd
- KFC restaurants
- Breeder farm
100%
Ayamas Shoppe
Sdn Bhd
100%
Kernel Foods Private
Limited
100%
Pintas Tiara Sdn Bhd
- Property holding
100%
KFC Marketing Sdn Bhd
- Sales & marketing of
food products
90%
Ayamazz Sdn Bhd
- Push Cart
100%
Usahawan Bistari
Ayamas Sdn Bhd
- Sudut Ayamas
83
1. INTRODUCTION
The Board of Directors (the Board) of KFC Holdings (Malaysia) Bhd (KFCH or the Company)
subscribes to and supports the Malaysian Code on Corporate Governance (Revised 2007) (the Code) as
a minimum basis for practices on corporate governance. The Board further recognizes that the principles
of integrity, transparency and professionalism are key components for the Groups continued growth and
success. These will not only safeguard and enhance shareholders value but will at the same time ensure
that the interests of other stakeholders are protected.
The Board is pleased to report to the shareholders in particular and other stakeholders in general on the
manner the Company has applied the principles of corporate governance as set out in Part 1 of the Code
as well as the extent of its compliance with the Best Practices as set out in Part 2 of the Code.
2. THE BOARD OF DIRECTORS
2.1 Composition, Size and Effectiveness of the Board
The Board is led and managed by an experienced and effective Board with a wide range of knowledge
and expertise. The Board is primarily assigned for charting the strategic direction of the Group.
On 1 June 2011, the Company welcomed the appointment of YAM Tengku Sulaiman Shah Alhaj Ibni
Almarhum Sultan Salahuddin Abdul Aziz Shah Alhaj as our new Independent Non Executive Director.
With the changes, the Board currently has 9 members comprising the following:
The Company is in compliance with the Bursa Malaysia Securities Berhads Listing Requirements
which require at least two directors or one-third of the total number of Directors, whichever is higher, to
be Independent Directors. The Board retains full and effective control of the Company. The Managing
Director has direct responsibilities for business operations whilst non-executive directors have the
necessary skill and experience to bring independent judgments to bear on the issues relating to
strategy, performance and resources. Key matters, such as approval of annual and interim results,
acquisitions and disposals, material agreements, major capital expenditures, budgets and long term
plans would require Boards approval.
The Board views that the number and composition of the current Board members are sufficient and
well-balanced for the Company to carry out its duties effectively, whilst providing assurance that no
individual or small group of individuals can dominate Boards decision making.
To ensure that there is balance of power and authority, the roles of the Chairman/Deputy Chairman
and Managing Director are separated and clearly defined. The Chairman/Deputy Chairman is
primarily responsible for the orderly conduct and effectiveness of the Board, including but not
limited to organizing information necessary for the Board to deal with the agenda of meetings,
whilst the Managing Directors primary task is to report, communicate and recommend key strategic
and operational matters and proposals to the Board for decision making purposes as well as to
implement policies and decisions approved by the Board. The Independent Directors and NonIndependent Non Executive Directors are from varied business and professional backgrounds and
bring with them a wealth of experience that is brought to bear favourably in board decisions and
policy formations. Together, the Directors bring a wide range of business and financial experience
relevant to the direction of the expanding Group.
Other than the Chairman and the Managing Director, the shareholders or stakeholders may convey any
concerns that they may have to the Chairperson of the Audit Committee who is also an Independent
Non Executive Director.
84
The Board assumes six principal stewardships responsibilities:a. Reviewing and adopting a strategic plan for the Company.
The Board will review and approve the 5-year strategic plan for the Group.
The strategic and business plan for the period 2012 2016 was tabled, discussed and approved
by the Board at its meeting held on 14 December 2011.
Additionally, on an ongoing basis as the need arises, the Board will assess whether projects,
purchases and sale of equity as well as other strategic consideration being proposed at Board
meetings during the year are in line with the objectives and broad outline of the adopted strategic
plans.
b. Overseeing the conduct of the Companys business to evaluate whether the business is being
properly managed.
At Board meetings, all key operations matters will be discussed and expert advice will be sought
if necessary.
The performances of the various companies and operating units within the Group represent
the major element of the Board agenda. Where and when available, data are compared against
national trends and performance of similar companies.
The Group uses Key Performance Indicator (KPI) system as the primary driver and anchor to
its performance management system, of which is continually refined and enhanced to reflect the
changing business circumstances.
The Organisational Chart and the Group Authority Limits and Guidelines define, amongst others,
the limits to management responsibilities. At the end of each financial year the Board will set KPI
that should be achieved by the management for the next financial year.
c. Identifying principal risks and ensure the implementation of appropriate systems to manage
these risks.
The Group has set up a Risk Management Committee for this purpose to assist the Board.
The principal objectives of the Enterprise Risk Management are, amongst others, to meet the
strategies, goal and objectives of the Group; to safeguard financial and non-financial assets of
the Group; to allocate and optimize the use of resources and to comply with policies, procedures,
guidelines, laws and regulations. For further information of the Risk Management Committee,
please refer to page 90 of the Annual Report.
d. Succession planning, including appointing, training, fixing the compensation of and where
appropriate, replacing senior management.
The Boards responsibility in this aspect is being closely supported by the Group Human
Resource division. More importantly, after several years of continuous efforts in emphasizing
and communicating the importance of succession planning, the subject has now become an
ongoing agenda being reviewed at various high-level management and operational meetings of
the Group.
85
Various strategies and approaches are employed by the Group so as to ensure that investors
and shareholders are well-informed about the Group affairs and developments.
f.
Reviewing the adequacy and the integrity of the Companys internal controls and management
information systems, including compliance with applicable laws, regulations, rules, directives
and guidelines.
The Boards function as regard to fulfilling the above responsibility is supported and reinforced
through the various Committees established at both the Board and Managements level. Aided
by an independent function of the Group Internal Audit Division, the active functioning of these
Committees through their regular meetings and discussions would provide a strong check and
balance and reasonable assurance on the adequacy of the Groups internal controls. Details on
the Group Internal Audit functions are further discussed in the Internal Control Statement and
Audit Committee Report in this Annual Report.
At the same time, the Board also ensures the sustenance of a dynamic and robust corporate
climate focused on strong ethical values. This emphasizes active participation and dialogues on a
structured basis involving key people at all levels, as well as ensuring accessibility to information and
transparency on all executive action. The Group has established a formal avenue for all employees
to report directly to the Managing Director of any misconduct or unethical behaviour conducted by
any employees of the Group. The corporate climate is also continuously nourished by value-centred
programmes for team-building and active subscription to core values.
The specific agendas tabled for the Boards deliberation are the key financial and operational results
and performances of the Group, Company and its subsidiaries, strategic and corporate initiatives
such as approval of corporate plans and budgets, acquisitions and disposals of material assets,
major investments and changes to management and control structure of the Group, including key
policies, procedures and authority limits. The total number of Board Meetings held during the financial
year was six (6) and all Directors have complied with the minimum 50% attendance as required
by Paragraph 15.05 of the Listing Requirements. The Directors are provided with adequate Board
Papers together with the agenda and minutes of the previous meeting on a timely manner prior to the
Board Meeting so as to give the Directors time to deliberate on the issues to be raised at the meeting.
All deliberations and conclusions of the Board meetings are duly recorded and minutes kept by the
Company Secretary.
86
The Board recognizes the importance of providing timely, relevant and up-to-date information in
ensuring an effective decision making process by the Board. In this regard, the Board is provided
with not just quantitative information but also those of qualitative nature that is pertinent and of a
quality necessary to allow the Board to effectively deal with matters that are tabled in the meeting.
All Directors have access to information within the Company and to the advice and services of the
Company Secretaries. The Directors may also obtain independent professional advice, in furtherance
of their duties.
In between meetings, the Managing Director meets regularly with the Chairman and other Board
members (where necessary) to keep them abreast of current development. Circular Resolutions are
used for determination of matters arising in between meetings.
The number and composition of Board membership are reviewed on a regular basis appropriate to
the prevailing size, nature and complexity of the Groups business operations so as to ensure the
relevance and effectiveness of the Board.
The Board is responsible to the shareholders. All Directors appointed during the financial year retire
at the Annual General Meeting (AGM) of the Company in the period of appointment and are eligible
for re-election. In compliance with Paragraph 7.26(2) of the Listing Requirements, all directors shall
retire once at least in every 3 years.
In accordance with Article 89 of the Articles of Association of the Company, the following directors
retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for
re-election:
The Board believes that the levels of remuneration offered by the Group are sufficient to attract
Directors of calibre and with sufficient experience and talents to contribute to the performance of the
Group. The remuneration framework for Executive Director has an underlying objective of attracting
and retaining director needed to run the Company successfully. Remuneration packages of Executive
Director are structured to commensurate with corporate and individuals performance. The NonExecutive Directors are remunerated based on fixed annual fees approved by the shareholders of the
Company.
87
Benefits
-in-kind
RM
Total
RM
131,141
1,228,725
621,156
178,348 298,080
-
-
115,000
84,000
-
-
-
26,867
115,000
110,867
-
-
33,667
69,000
-
-
-
-
33,667
69,000
56,000
56,000
-
-
-
65,000
54,500
65,000
-
-
-
-
-
-
65,000
54,500
65,000
4,167
4,167
724,682 298,080
158,008
1,801,926
621,156
The Company complies with the requirements set out in the amendments to the Listing Requirements
in that it regularly assess the training needs of its directors to ensure that they are equipped with the
requisite knowledge and competencies to make effective contribution to the boards functioning. All
Directors have successfully completed the Mandatory Accreditation Programme (MAP) prescribed
by Bursa Malaysia. The Continuous Education Programme (CEP) was repealed by Bursa Malaysia
with effect from 1 January 2005 and Directors who are required to fulfill this programme complied
with the deadline before due date. Nevertheless the Directors are encouraged to continue attending
various training programmes that are relevant to the discharge of their responsibilities.
Among the training programmes, seminars and briefings attended during the year are as follows:
1. Updates of FRS 2010/2011 New & Revised FRSs, Amendments, Interpretations and the New
Bursa Listing Requirements
88
Apart from this requirement, all new directors who are appointed from among the Groups Senior
Executives must attend an internally-administered directors course and pass the examination set
prior to being eligible for appointment to the Board. All new directors will be given comprehensive
briefing of the Groups history, operations and financial control systems in order to provide them
with first-hand knowledge of the Groups operations. In the light of increasing complexities in global
markets as well as within the industry, in financial reporting and in shareholders expectations, training
is an ongoing process in an effort to help Directors stay abreast of relevant new developments.
3. Board And Management Committees
The Group has formed several committees to facilitate the operations of the Group. Each committee
has written terms of reference defining their scope, powers and responsibilities. The list of committees
includes, amongst others:Board Committees:
i. Audit Committee
Pursuant to paragraph 15.15 of the Listing Requirements of Bursa Securities, the Audit Committee
Report for the financial year, which sets out the composition, terms of reference and a summary of
activities of the Audit Committee, is contained on pages 93 to 96 of this Annual Report.
The Board has on 21 February 2011 resolved to establish its own NRC. With the establishment of the
Companys NRC, the functions and responsibilities previously vested with JCorp Group NRC are now
assumed by the Companys NRC. The Board is of the view that the composition of the NRC meets
the objectives and principles of the corporate governance.
A. Nomination
B. Remuneration
1. Provide assistance to the Board in determining the remuneration of executive directors,
senior management and Chief Executive Officer. In fulfilling these responsibilities, the NRC
is to ensure that executive directors and applicable senior management of the Company:
2. Establish the Managing Director/Chief Executive Officers goals and objectives; and
3. Review the Managing Director/Chief Executive Officers performance against the goals and
objectives set.
89
Membership
The NRC shall consist of the following:1. Kamaruzzaman bin Abu Kassim
Chairman
2. Ahamad bin Mohamad
Deputy Chairman
3. Tan Sri Dato Dr Yahya bin Awang
Independent Non Executive Director
4. Jamaludin bin Md Ali
Managing Director/Chief Executive Officer
The Board has established the Risk Management Committee (RMC) and the Enterprise Risk
Management (ERM) framework. The RMC is chaired by the Chief Risk Officer who is also the
Executive Director Group Finance. The principal objectives of the ERM are, amongst others, to
meet the strategies, goal and objectives of the Group; to allocate and optimize the use of resources
and to comply with policies, procedures, guidelines, laws and regulations.
The Audit Committee will oversee the effectiveness of ERM process across the Group whereby the
Board retains the overall risk management responsibility.
Create a high-level risk strategy (policy) aligned with Groups strategic business objectives;
Communicate board vision, strategy, policy, responsibilities, and reporting lines to all employees
across the Group;
Identify and communicate to the Board the critical risks (present or potential) the Group faces,
their changes, and the management action plans to manage the risks;
Perform risk oversight and review risk profiles and organisational performance;
Aggregating the Groups risk position and yearly reporting to the Board on the risk situation/
status;
Set performance measures for the Group; and
Provide guidance to the business units on the Groups and business units risk appetite and
capacity, and other criteria which, when exceeded, trigger an obligation to report upward to the
Board.
Management Committees:
i.
90
1. Managing Director
2. Executive Director Group Finance
3. Director Integrated Poultry & Food Manufacturing
4. Director Legal Advisory, Corporate Services & Property
5. Deputy President KFC Peninsular Malaysia
6. Senior General Manager Group Finance
7. Senior Vice President Pizza Hut Malaysia & KFC East Malaysia
3. Meetings are to be held on every Thursday or as and when it deems necessary basis.
The principal term of reference of the Agreement Committee is to assist the Group in preparing and
reviewing the terms and conditions of legal documents for corporate and/or commercial transactions
to be entered into by the Group.
The principal term of reference of the Asset Committee is to acquire properties of existing rented
premises as well as procuring/disposing of suitable sites for outlets expansion and other operations
of the Group.
The principal term of reference of the Tender Committee is to review and evaluate tenders of purchases
and expenditures and to make such appropriate recommendations to the relevant Committees for
approval.
4. SHAREHOLDER RELATIONSHIP
In line with the Groups commitment to observe the highest level of accountability and transparency to its
stakeholders, the Group continually ensures that it maintains a high level of disclosure and communication
with its shareholders and stakeholders through various practicable and legitimate channels. The Group
is duty-bound to keep the shareholders and investors informed of any major developments and changes
affecting the Group.
The management holds discussions and dialogues with analysts and investors on a regular basis. During
the discussions and dialogues, presentations based on permissible disclosures are made to the analysts
and investors to provide details on the Group i.e. financial performance, any major developments and
future plans. Apart from the mandatory requirement to make public announcements via the Bursa
Securities, the Group also disseminates information through press releases on corporate events, product
launches and any significant developments of the Group.
In addition to the above, the Group has an interactive web-site available at http:www.kfcholdings.com.my
to communicate with investors and the investing public. The web-site is being used as a forum to answer
inquiries and provide information on the activities of the Group.
The Annual General Meeting is the principal forum for dialogue and interaction with the shareholders of
the Company. Besides the usual agenda of the Annual General Meeting, the Board presents the progress
and performance of the business. Thereafter, the shareholders are presented with the opportunity to
participate in question and answer sessions with the Directors.
91
The quarterly reports, prior to tabling to the Board for approval will be reviewed and approved by the
Audit Committee.
The Groups Statement on Internal Control is set out on page 97 of this Annual Report.
The Board through the Audit Committee has maintained a formal procedure of carrying out an
independent review of all quarterly reports, annual audited financial statements, External Auditors
audit plan, report, internal control issues and procedures. The Audit Committee meets with the
External Auditors without the presence of the Executive Board and Senior Management at least twice
a year. During the year, two meetings have been conducted without the presence of the management.
Representatives from the External Auditors are also invited to attend every Annual General Meeting.
The Groups internal audit department, reporting to the Audit Committee performs regular reviews
of business processes to assess the effectiveness of internal controls and highlight significant risks
impacting the Group. The Audit Committee conducts annual reviews on the adequacy of the internal
audit departments scope of work and resources.
The Report of the Audit Committee is set out on pages 93 to 96 of the Annual Report.
The provisions of the Companies Act, 1965 require the directors to be responsible in preparing the
financial statements for each financial year which gives a true and fair view of the state of affairs of
the Group and the Company at the end of the financial year and of the results and cash flows for
the financial year then ended. In complying with these requirements, the directors are responsible
for ensuring that proper accounting records are maintained and suitable accounting policies are
adopted and applied consistently. In cases whereby judgment and estimates were required, the
directors have ensured that these were made prudently and reasonably.
The Directors also ensured that all applicable accounting standards have been followed and confirmed
that the financial statements have been prepared on a going concern basis.
In addition, the Directors are also responsible for safeguarding the assets of the Company by taking
reasonable steps to prevent and detect fraud and other irregularities.
92
Date of Meetings
16 Feb
18 May
16 Aug
16 Nov
The Managing Director, Divisional Directors, Head of Finance and Head of Internal Audit attended the audit
committee meetings at the invitation of the Committee. The external auditors also attended two of the meetings
where they held private discussion with the Committee without the presence of Management.
SUMMARY OF ACTIVITIES
The Committee carried out the following activities during the financial year in accordance to its terms of
reference:
a. Reviewed the quarterly result announcements prior to the approval of the Board.
b. Reviewed the audited financial statements prior to the approval of the Board.
c. Reviewed the external auditors fees, scope of work and audit plan prior to the commencement of audit.
d. Discussed with the external auditors on significant matters arising from their examination of the financial
statements, including compliance with applicable accounting standards.
e. Reviewed the external auditors Management Letter and evaluated Managements response.
f. Reviewed and approved the internal audit plan and the key performance indicators (KPIs) of the internal
audit function for the year.
g. Reviewed and monitor the adequacy of scope, function, competency and resources of the internal audit
function towards the achievement of the internal audit plan and its KPIs.
93
h. Deliberated on the key internal audit findings and appraised Managements response to the observations
and recommendations including following-up on Managements implementation of the recommendations.
i. Reviewed the related party transactions entered into by the Group.
j. Reviewed the key risks identified in the Enterprise Risk Management report.
k. Reviewed the operations report prepared by Management including pertinent matters on taxation, legal
and regulatory compliance.
TERMS OF REFERENCE
Composition
i. The members shall be appointed by the Board from among its numbers and their appointment shall be
concurrent with their tenure on the Board.
ii. The Committee shall comprise not less than three members and all the members must be non-executive
directors with a majority of them being independent directors.
iii. In the event a member retires or ceases to be a member resulting in the number reducing to below three,
the Board shall within three months appoint new members to make up the minimum number of three
members.
iv. At least one member of the Committee must be a member of the Malaysian Institute of Accountants or must
have the necessary experience and recognised qualifications or such other requirements as prescribed or
approved by Bursa Malaysia Securities Berhad.
v. No alternate director shall be appointed as an Audit Committee member.
Chairperson
The Chairperson shall be an independent non-executive director appointed by the Board.
Secretary
The Company Secretary shall act as the Secretary of the Committee.
Review of performance
The term of office and performance of the Committee and each of its members shall be reviewed by the Board
at least once every three years.
Meetings
The Committee shall meet not less than four times a year. Additional meetings may be called at any time at
the discretion of the Chairperson.
94
Quorum
The quorum for Audit Committee meetings shall be two members and the majority of the members present
shall be independent non-executive directors.
Attendance
The Head of Finance and Head of Internal Audit would normally attend meetings. Other board members,
senior management and external auditors may attend meetings upon the invitation of the Committee.
Authority
The Committee is empowered by the Board:
i. To have explicit authority to investigate any matter within its terms of reference.
ii. To have full and unrestricted access to all records, information, properties and personnel.
iii. To have direct communication channels with the external and internal auditors.
iv. To be able to obtain independent professional advice and to secure the attendance of outsiders with the
relevant experience and expertise if the Committee considers this necessary.
v. To be able to convene meetings with the external auditors, the internal auditors, or both, excluding the
attendance of other directors and employees, whenever deemed necessary.
Duties and Responsibilities
i. To consider the appointment of the external auditors, their audit fee and any questions of resignation or
dismissal.
ii. To discuss with the external auditors prior to the commencement of audit, the nature and scope of the audit
and ensure co-ordination where more than one audit firm is involved.
iii. To review the quarterly, half-yearly and year-end financial statements prior to the approval of the Board,
focusing on:
iv. To discuss problems and reservations arising from the interim and final audits, and any significant matters
the external auditor may wish to discuss (in the absence of Management where necessary).
v. To review the external auditors Management Letter and Managements response.
vi. To do the following with regard to the internal audit function:
95
Review the adequacy of scope, function, competency and resources of the internal audit function and
that it has the necessary authority to carry out its work.
Review the internal audit programme and the results of audit work and where necessary ensure that
appropriate action is taken on the recommendations of the internal auditors.
Review the coordination of external audit and internal audit.
Review any major discoveries of audit investigations and Managements response.
Approve the appointment of senior staff members of internal audit function, review performance
appraisals and be informed of resignations and providing the resigning staff an opportunity to submit
his/her reason for resigning.
vii. To review any related party transaction and conflict of interest situation that may arise within the Company
or Group including any transaction, procedure or course of conduct that raises questions of Managements
integrity.
viii. Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily
resolved resulting in a breach of the Listing Requirements, the Committee shall promptly report such matter
to Bursa Malaysia.
ix. To undertake any other responsibilities as may be agreed by the Committee and the Board.
INTERNAL AUDIT FUNCTION
The internal audit function is undertaken by the Group Internal Audit Department (GIAD). It reports directly to
the Committee and assists the Committee in discharging its duties and responsibilities.
GIAD is adequately staffed by experienced and qualified auditors and it incurred an estimated cost of RM1.8
million during the financial year. GIADs scope of work is spelt out in the annual audit plan that is approved
by the Committee. The plan covers all the operating divisions and support functions of the Group including
the foreign operations in Singapore, Brunei and India. GIADs performance is measured against the approved
KPIs.
In every audit assignment, GIAD conducted risk assessments, reviewed the adequacy and effectiveness of the
system of internal controls and reviewed the extent of compliance with the Groups policies and procedures
and regulatory requirements. GIAD also reviewed the key business processes with the objective of improving
the efficiency and effectiveness of the Groups operations.
During the financial year, GIAD tabled 47 audit reports to the Committee for deliberation and followed-up to
ensure pertinent audit recommendations are implemented by Management.
96
This Statement on Internal Control has been prepared in compliance with the Listing Requirements of Bursa
Malaysia Securities Berhad (Bursa Malaysia) and in accordance with the Guidance for Directors of Public
Listed Companies.
BOARD RESPONSIBILITY
The Board recognises the importance of maintaining a sound system of internal controls and risk management
practices within the Group and affirms its responsibility to review the adequacy and effectiveness of these
systems and processes on a regular basis. The system of internal controls is designed to provide reasonable
assurance on the effectiveness and efficiency of operations, reliability of financial reporting and compliance
with applicable laws and regulations. It is also meant to effectively manage business risks towards the
achievement of objectives so as to enhance the value of shareholders investments and to safeguard the
Groups assets.
However, as in any system of internal control, it is designed to manage rather than eliminate the risk of failure
to achieve business objectives and therefore, it can only provide reasonable and not absolute assurance
against material misstatement or loss.
INTERNAL CONTROL FRAMEWORK
The key components of the Groups internal control framework are as follows:
Board and Management Committees
The Group has established several committees to assist the Board and Management in discharging their
responsibilities and the objectives of these committees are clearly spelt out in their terms of reference.
The Executive Committee (Exco) is established to formulate strategic business plans, directions and
policies for the Group and makes appropriate recommendations for the approval of the Board. The Top
Management Committee (TMC) is established to manage all aspects of the Groups business and to
oversee the implementation of the approved business plans and policies.
Other committees such as Tender Committee, Agreement Committee and Risk Management Committee
are established to ensure that Management abides by approved policies and procedures and best practices
in the evaluation and award of tendered purchases, drafting of legal documentation and implementation of
risk management practices to safeguard the Groups interests.
Organisation Structure
The Board has established a formal organisation structure for the Group with delineated lines of authority,
responsibility and accountability. It has put in place suitably qualified and experienced management
personnel to head the Groups diverse operating units into delivering results and their performance are
measured against the Key Performance Indicators that are approved by the Board.
Authority Limits
The Board has established authority limits for approving revenue and capital expenditures for each level of
management and also established cheque signatories for approving payments. Major capital investments,
acquisitions and disposals exceeding a certain threshold must be referred to the Board or relevant committee
for approval.
97
98
The Board monitors the Groups performance by reviewing the quarterly results and operations and examines
the announcement made to Bursa Malaysia. These are usually reviewed by the Audit Committee before they
are tabled to the Board.
Human Resource
There are policies and procedures for recruitment, performance appraisals and promotion to ensure that
suitably qualified and competent personnel across all levels of management are hired and retained. The
Group is also dedicated to continuously develop employees with the relevant and appropriate skills by
conducting regular training programmes that are tailored for restaurant excellence as well as corporate and
leadership programmes for the supporting staff.
Procurement
There is a centralised and coordinated procurement function for major purchases of assets and inventory,
project development and maintenance expenditures which enables the Group to leverage on economies of
scale and ensures adherence to authority limits, policies and procedures. Aided by an integrated purchasing,
inventory and accounting system, the Group is capable of keeping track of the accuracy, integrity and
recording of its assets and expenditures. Significant capital and revenue expenditures exceeding a certain
value are subjected to tender procedures and appraised by the Tender Committee before they are approved
by the Board or relevant committee.
Regulatory and Halal Compliance
The Group adheres strictly to health, safety and environmental regulations and complies with halal standards
and is subjected to regular inspections by the relevant authorities. Quality Assurance Department conducts
product safety and quality audits at restaurants and the entire supply chain on an ongoing basis. The Group
has also established a Shariah Advisory and Compliance Department to perform regular halal audits and to
liaise closely with the government agencies on halal related matters.
CONCLUSION
The Board is of the view that the present system of internal control is adequate for the Group to manage its
risks and to achieve its business objectives. The Board is committed in ensuring that the Group continuously
reviews the internal control system so that it is effective in enhancing shareholders investments and
safeguarding the Groups assets.
99
1. NON-AUDIT FEES
The amount of non-audit fees paid and payable to the external auditors and their affiliated company by
the Group for the financial year ended 31 December 2011 is as follows:-
KPMG
KPMG Tax Services Sdn Bhd
Total
RM000
38
22
60
2. MATERIAL CONTRACTS
Other than those disclosed in the financial statements on pages 198 to 199, there are no material
contract including contracts relating to any loans entered into by the Group and its subsidiaries involving
Directors and major shareholders interest.
3. DISCLOSURE OF THE RESTRICTIVE COVENANT CLAUSE IN THE INTERNATIONAL FRANCHISE
AGREEMENTS (IFA) GOVERNING KFC FRANCHISE
KFCH group operates KFC restaurants in Malaysia, Singapore and Brunei under the International
Franchise Agreements entered into with the Franchisor. The right to develop KFC restaurants in Malaysia,
Singapore and Brunei is granted to KFCH by the Franchisor under the Development Agreements entered
into with the Franchisor.
Any occurrence of events of default under the International Franchise Agreements may lead to the
termination of the KFC franchise by the Franchisor. The International Franchise Agreements and/or
Development Agreements are also subject to renewal.
The International Franchise Agreements also contain a covenant which requires the consent of the
Franchisor for any direct or indirect acquisition by any third party competitor of QSR and/or KFCH or
any third party holding twenty percent (20%) or more of QSR and/or KFCH, failing which the Franchisor
may terminate the International Franchise Agreements and/or adopt any of the remedies specified in the
International Franchise Agreements. As KFCH is listed on Bursa Securities and the respective shares are
freely traded, any person, whether individually or together with persons acting in concert, could possibly
acquire more than twenty percent (20%) of the voting shares of KFCH without obtaining the consent of
the Franchisor. As such, if the Franchisor does not consent to any such acquisition, the Franchisor may
terminate the International Franchise Agreements or choose not to renew the International Franchise
Agreements upon the expiry. A similar covenant also applies to KFCH Restaurants Private Limited
(formerly known as Mumbai Chicken Private Limited) and Pune Chicken Restaurants Private Limited in
respect of the rights to operate KFC business in Mumbai and Pune, India granted by Yum! Restaurants
(India) Private Limited.
100
The aggregate value of the RRPT conducted pursuant to the shareholders mandate during the financial
year under review between the Company and/or its subsidiary companies with related parties are set out
below: -
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
- Ayamas
Food
Corporation
Sdn Bhd
(Ayamas)
- KFC
Marketing
Sdn Bhd
(KFC
Marketing)
Name of
Related
Parties
Pizza Hut
Restaurants
Sdn Bhd
(PHR)
Kampuchea
Food
Corporation
Co Ltd
(Kampuchea)
Pizza Hut
Singapore
Pte Ltd (PH
Singapore)
PHD Delivery
Sdn Bhd
(PHD)
Nature of
Transactions
Ayamas and
KFC Marketing
sale of prime
cut chicken
and further
processed
products
to PHR,
Kampuchea,
PH Singapore
and PHD
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
PHR is a
wholly owned
subsidiary of
QSR Brands
Bhd (QSR).
QSR is the
holding
company of
KFC Holdings
(Malaysia) Bhd
(KFCH). Kulim
(Malaysia)
Berhad
(Kulim) is
the holding
company of
QSR. Johor
Corporation
(JCorp) is
the holding
corporation of
Kulim.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
35,166
Kampuchea is
a subsidiary of
QSR.
PH Singapore
is a wholly
owned
subsidiary of
Multibrand
QSR Holdings
Pte Ltd which
is wholly owned
by QSR.
PHD is a
wholly owned
subsidiary of
PHR.
101
Interested
Major
Shareholders
QSR/QSR
Ventures Sdn
Bhd (QSR
Ventures)
Kulim
JCorp
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFC
Manufacturing
Sdn Bhd
(KFCM)
Name of
Related
Parties
PHR
Kampuchea
PHD
Nature of
Transactions
KFCM sale
of packaging
materials,
spare parts
and bakery
products
to PHR,
Kampuchea
and PHD
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
PHR is a
wholly owned
subsidiary of
QSR.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
62,466
Kampuchea is
a subsidiary of
QSR.
PHD is a
wholly owned
subsidiary of
PHR.
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
KFC (Peninsular PHR
Malaysia) Sdn
Bhd (KFCPM) Kampuchea
PHD
KFCPM sale
of vegetables,
salad and
coleslaw
to PHR,
Kampuchea
and PHD
PHR is a
wholly owned
subsidiary of
QSR.
Kampuchea is
a subsidiary of
QSR.
PHD is a
wholly owned
subsidiary of
PHR.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
102
937
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Region Food
Industries Sdn
Bhd (RFISB)
Name of
Related
Parties
PH Singapore
PHR
Nature of
Transactions
RFISB sale
of chilli and
tomato
sauces to PH
Singapore and
PHR
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
PH Singapore
is a wholly
owned
subsidiary of
Multibrand
QSR Holdings
Pte Ltd which
is wholly owned
by QSR.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
1,126
PHR is a
wholly owned
subsidiary of
QSR.
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
103
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
- SPM
Restaurants
Sdn Bhd
(SPM)
- Kentucky
Fried Chicken
(Malaysia)
Sdn Bhd
(KFC(M))
- KFCPM
Name of
Related
Parties
PHR
Nature of
Transactions
Payment of
monthly rental
by PHR to
SPM, KFC(M)
and KFCPM for
the following
properties:-
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
PHR is a
wholly owned
subsidiary of
QSR.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
1,090
1. KFCPM
- Lot PT
15144, Jalan
Kepong
Batu, 6 ,
52100 Kuala
Lumpur
(5,617 sq ft)
2. KFCPM Lot
PT 6878
Jalan 8/27A,
Wangsa
Maju, 53300
Kuala
Lumpur
(5,793 sq ft)
3. SPM 9
Jalan Taiping,
41400 Klang
(3,300 sq ft)
4. SPM 1 &
1.1 Jalan
Niaga, Pusat
Perniagaan,
Jalan Mawai
81900 Kota
Tinggi (2,273
sq ft)
5. KFC(M)
Lot 14083
Jalan Kuchai
Lama,
58200 Kuala
Lumpur
(4,467 sq ft)
Tenancy
Agreements
for the above
properties are
for a period of 3
years.
104
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
- KFCH
Name of
Related
Parties
JKing Sdn Bhd
(JKing)
- KFCM
- KFC(M)
Nature of
Transactions
KFCH, KFCM,
KFC(M) and
KFCPM
purchase of
apparels from
JKing
- KFCPM
Nature of
relationship
with KFCH
Group
Relatioship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
JKing is a
subsidiary
of Johor
Franchise
Development
Sdn Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
43
Interested
Major
Shareholder
JCorp
- Ayamas
- KFCPM
- Rasamas
Holdings
Sdn Bhd
(Rasamas
Holdings)
- Ayamas
Shoppe Sdn
Bhd (KAY)
Rajaudang
Trading
Sdn Bhd
(Rajaudang)
Ayamas,
KFCPM,
Rasamas
Holdings and
KAY purchase
of processed
chicken and
rice from
Rajaudang
Rajaudang is
a subsidiary
of Rajaudang
Aquaculture
Sdn Bhd which
in turn is a
subsidiary of
Johor Ventures
Sdn Bhd.
Johor Ventures
Sdn Bhd is a
wholly owned
subsidiary of
Johor Capital
Holdings Sdn
Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
105
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
6,891
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
- RFISB
Rajaudang
- KFCM
- Tepak
Marketing
Sdn Bhd
(Tepak)
- KFC
Marketing
- Tepak
Hotel Selesa
JB Sdn Bhd
(Hotel Selesa
JB)
Nature of
Transactions
RFISB, KFCM
and Tepak sale
of sauce, Deli
Pai, Sardine
Roll and Zippie
drinks to
Rajaudang
KFC Marketing
and Tepak
sale of chicken
products and
Zippie products
to Hotel Selesa
JB
Nature of
relationship
with KFCH
Group
Relatioship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Rajaudang is
a subsidiary
of Rajaudang
Aquaculture
Sdn Bhd which
in turn is a
subsidiary of
Johor Ventures
Sdn Bhd.
Johor Ventures
Sdn Bhd is a
wholly owned
subsidiary of
Johor Capital
Holdings Sdn
Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
NIL
Hotel Selesa
JB is a
wholly owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
Interested
Major
Shareholder
JCorp
106
14
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFCH
Name of
Related
Parties
Metro Parking
(M) Sdn
Bhd (Metro
Parking)
Nature of
Transactions
KFCHs
payment of
season parking
fees to Metro
Parking at
Wisma KFC.
The parking
facility at
Wisma KFC is
managed by
Metro Parking
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Metro Parking
is a subsidiary
of Sindora
Berhad
(Sindora).
Sindora is a
wholly owned
subsidiary of
Kulim.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
138
Interested
Major
Shareholders
Kulim
JCorp
KFCH
Metro Parking
Monthly rental
received by
KFCH from
Metro Parking
for rental of the
parking lots
located at the
basements and
Levels 4 to 8 of
Wisma KFC
Metro Parking
is a subsidiary
of Sindora.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
Kulim
JCorp
107
210
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFCH Group
Name of
Related
Parties
Pro Corporate
Management
Services Sdn
Bhd (Pro
Corporate)
Nature of
Transactions
KFCH Groups
payment of
share registrar
and secretarial
services fees to
Pro Corporate
Nature of
relationship
with KFCH
Group
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Pro Corporate
is a wholly
owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
541
Interested
Major
Shareholder
JCorp
- KFCH
- Ayamas
- KFCPM
- Rasamas
Holdings
- KFCH
Education
Teraju Fokus
Sdn Bhd
(Teraju Fokus)
KFCH, Ayamas,
Rasamas
Holdings,
KFCH
Education
and KFCPMs
payment to
Teraju Fokus for
the provision
of security
services by
Teraju Fokus
JCorp owned
30% equity
interest in
Teraju Fokus.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
108
312
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
KFCH Group
JCorp
Nature of
Transactions
KFCH Groups
payment to
JCorp for the
transportation,
administrative
and secretarial
services
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
JCorp is
the holding
corporation
of QSR via
its direct
and indirect
shareholdings
(through Kulim).
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
268
Interested
Major
Shareholder
JCorp
- KFCH
- KFCPM
- Rasamas
Holdings
- TMR
Urusharta
(M) Sdn Bhd
(TMR)
KFCH, KFCPM
and Rasamas
Holdings
payment to
TMR for the
provision of
building and
maintenance
services
TMR is a
subsidiary of
Damansara
Assets
Sdn Bhd
(Damansara
Assets) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
109
1,246
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
- RFISB
- Ayamas
Name of
Related
Parties
Pro
Communication
Sdn Bhd ( Pro
Communication)
Nature of
Transactions
RFISB and
Ayamas
purchase of
signboard
from Pro
Communication
Nature of
relationship
with KFCH
Group
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Pro
Communication
is a subsidiary
of Johor
Franchise
Development
Sdn Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
55
Interested
Major
Shareholder
JCorp
KFCPM
Bistari Young
Entrepreneur
Sdn Bhd
(Bistari
Young)
KFCPM
purchase of
Catur Bistari
board games
from Bistari
Young
Bistari Young,
a subsidiary of
Johor Ventures
Sdn Bhd which
in turn is a
wholly owned
subsidiary of
Johor Capital
Holdings
Sdn Bhd.
Johor Capital
Holdings
Sdn Bhd is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
110
124
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFCH Group
Name of
Related
Parties
Pro Office
Solutions Sdn
Bhd (Pro
Office)
Nature of
Transactions
KFCH Groups
payment to
Pro Office for
the provision
of courier and
mailing room
services
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Pro Office is a
subsidiary of
Sindora.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
1,926
Interested
Major
Shareholders
Kulim
JCorp
- Ayamas
- Tepak
Epasa Shipping
Agency Sdn
Bhd (EPASA)
Ayamas
and Tepaks
payment to
EPASA for
the provision
of forwarding
services
EPASA is a
subsidiary of
Sindora
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad
bin Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
Kulim
JCorp
111
69
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
- KFC(M)
Tepak
- KFCM
- KAY
Nature of
Transactions
Tepak sale
of tea and
Zippie drinks to
KFC(M), KFCM
and KAY
Nature of
relationship
with KFCH
Group
Relatioship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Tepak is a
subsidiary of
KFCH. Sindora
owns 20%
whilst JCorp
owns 19.99%.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
182
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
KFC Events
Sdn Bhd (KFC
Events)
PHR
Payment of
commissions
by PHR to
KFC Events
for the sale of
vouchers
PHR is a
wholly owned
subsidiary of
QSR.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
112
786
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
KFCPM
Metro Parking
Nature of
Transactions
KFCPMs
monthly rental
payment to
Metro Parking
for storage
space located
at Level 1
(Car Park),
Persada Johor
International
Convention
Centre, Jalan
Abdullah
Ibrahim, 80000
Johor Bahru,
Johor (264
sq ft)
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Metro Parking
is a subsidiary
of Sindora.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
Kulim
JCorp
KFC Marketing
Hotel Selesa
Sdn Bhd
(Hotel Selesa)
KFC Marketing
sale of chicken
products to
Hotel Selesa
Hotel Selesa is
a wholly owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
113
20
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
- KFCPM
Tepak
- KFC
Marketing
Tepak
- KFC
Marketing
Nature of
Transactions
Tepak sale
of tea and
packing service
to KFCPM and
KFC Marketing
Nature of
relationship
with KFCH
Group
Relatioship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Tepak is a
subsidiary of
KFCH. Sindora
owns 20%
whilst JCorp
owns 19.99%.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
56
KFC
Marketings
payment to
Tepak for
transportation
services
30
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
KFCPM
Puteri Hotels
Sdn Bhd
(Puteri Hotels)
Payment of
monthly rental
by KFCPM
to Puteri
Hotels for the
Exhibition Food
& Beverages,
Level 1,
Persada Johor
International
Convention
Centre, Jalan
Abdullah
Ibrahim,
80000 Johor
Bahru, Johor
(2,660.54 sq ft)
Puteri Hotels is
a wholly owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Tenancy
Agreement
for the above
property is for
a period of 3
years.
114
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
138
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
KFC Marketing
Puteri Hotels
Nature of
Transactions
KFC Marketing
sale of chicken
products to
Puteri Hotels
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Puteri Hotels is
a wholly owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
97
Interested
Major
Shareholder
JCorp
- KFCH
- KFCPM
- KFC(M)
- Tepak
KFCH, KFCPM,
KFC(M) and
Tepaks
payment to
IPPJ for the
provision of
seminars and
trainings
IPPJ is a
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
115
120
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
Rasamas
Holdings
- Damansara
Assets
- TPM
Management
Sdn Bhd
(TPM)
Nature of
Transactions
Payment of
monthly rental
by Rasamas
Holdings to
Damansara
Assets and
TPM for the
following
properties:1. Damansara
Assets L2-35A,
Aras Lereng
Bukit, Plaza
Kotaraya,
Jalan Trus,
80000 Johor
Bahru,
Johor (784
sq ft)
2. TPM - Lot
5B-03(A),
Ground
Floor,
Terminal
Larkin
Sentral,
81100 Johor
Bahru,
Johor (1,660
sq ft)
Nature of
relationship
with KFCH
Group
Relatioship
of KFCH
Group with
related parties
- Damansara
Assets is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
- TPM is
a related
company to
JCorp. JCorp
owned 0.61%
through its
subsidiary.
Tenancy
Agreements
for the above
properties are
for a period of
3 years.
116
Aggregate
Value of
Transaction
RM000
43
Interested
Major
Shareholder
JCorp
80
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
- RFISB
Tepak
- KFCM
Nature of
Transactions
Tepak sale of
lemon grass to
RFISB. Tepaks
provision
of packing
services
of KFCs
condiment to
KFCM.
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Tepak is a
subsidiary of
KFCH. Sindora
owns 20%
whilst JCorp
owns 19.99%.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
NIL
Interested
Major
Shareholders
QSR/QSR
Ventures
Kulim
JCorp
KFC Marketing
Tanjung Tuan
Hotel Sdn Bhd
(Tanjung Tuan
Hotel)
KFC Marketing
sale of chicken
products to
Tanjung Tuan
Hotel.
Tanjung Tuan
Hotel is a
wholly owned
subsidiary of
JCorp Hotels
and Resorts
Sdn Bhd
(formerly known
as Kumpulan
Penambang
(Johor) Sdn
Bhd) which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
117
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
KAY
Rajaudang
Rasamas
Holdings
IPPJ
Nature of
Transactions
KAY sale
of chicken
products to
Rajaudang.
Rasamas
Holdings sale
of its variant
chicken
products to
IPPJ
Nature of
relationship
with KFCH
Group
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Rajaudang is
a subsidiary
of Rajaudang
Aquaculture
Sdn Bhd which
in turn is a
subsidiary of
Johor Ventures
Sdn Bhd.
Johor Ventures
Sdn Bhd is a
wholly owned
subsidiary of
Johor Capital
Holdings Sdn
Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
607
IPPJ is a
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
Interested
Major
Shareholder
JCorp
118
NIL
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFCH
Name of
Related
Parties
Akademi
JCorp Sdn
Bhd (Akademi
JCorp)
Nature of
Transactions
KFCHs
payment to
Akademi
JCorp for the
provision of
training and
seminars
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Akademi JCorp
is a subsidiary
of JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
133
Interested
Major
Shareholder
JCorp
- KFCPM
- KFCM
The Secret of
Secret Garden
Sdn Bhd
(TSSG)
KFCPMs
purchase of
TSSG products
(toiletries) for
souvenirs.
TSSG is a
wholly owned
subsidiary of
Kulim.
KFCMs
purchase of
TSSG products
as inventory for
re-sale
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
Interested
Major
Shareholders
Kulim
JCorp
119
115
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Usahawan
Bistari Ayamas
Sdn Bhd
(Usahawan
Bistari)
Name of
Related
Parties
Pro
Communication
Nature of
Transactions
Nature of
relationship
with KFCH
Group
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Usahawan
Bistari
purchase of
marketing
materials
(billboards,
signages,
banners,
posters and
etc) from Pro
Communication
Pro
Communication
is a subsidiary
of Johor
Franchise
Development
Sdn Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
18
Interested
Major
Shareholder
JCorp
- KFCPM
- KFCM
- KAY
Rajaudang
KFCPM, KFCM
and KAY
sale of used
cooking oil to
Rajaudang
Rajaudang is
a subsidiary
of Rajaudang
Aquaculture
Sdn Bhd which
in turn is a
subsidiary of
Johor Ventures
Sdn Bhd.
Johor Ventures
Sdn Bhd is a
wholly owned
subsidiary of
Johor Capital
Holdings Sdn
Bhd which
in turn is a
wholly owned
subsidiary of
JCorp.
120
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
Interested
Major
Shareholder
JCorp
1,028
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
KFCH
Education
(M) Sdn Bhd
(formerly known
as Paramount
Holdings (M)
Sdn Bhd)
(KFC College/
Education)
Name of
Related
Parties
1. Pro Biz
Solution
Sdn Bhd
(Pro Biz
Solution)
2. Pro
Communi cation
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
1. KFCH
Educations
payment
of monthly
rental of
office space
located at
Lot 1B,
Podium
Menara
Ansar, No
65 Jalan
Trus, 80000
Johor
Bahru,
Johor (395
sq ft) to Pro
Biz Solution
1. Pro Biz
Solution is a
subsidiary of
Damansara
Assets.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
33
2. KFCH
Educations
payment of
promotion
and
advertising
fees (printed
marketing
materials like
billboards,
signages,
banners
and poster
etc) to Pro
Communi cation
2. Pro
Communi cation is a
subsidiary
JCorp
of Johor
Franchise
Development
Sdn Bhd
which in turn
is a wholly
owned
subsidiary of
JCorp.
Nature of
Transactions
121
Interested
Major
Shareholders
Kulim
36
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
Name of
Related
Parties
Nature of
relationship
with KFCH
Group
Nature of
Transactions
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
3. Pro Office
3. KFCH
3. Pro Office is
Educations
a subsidiary
payment to
of Sindora.
Pro Office
for the
provision of
courier and
mailing room
services.
NIL
4. Sovereign
Multimedia
Resources
Sdn Bhd
(Sovereign)
4. KFCH
Educations
payment
of rental
cost of
computers
to Sovereign
4. Sovereign is
a subsidiary
of Johor
Ventures
Sdn Bhd
which in turn
is a wholly
owned
subsidiary
of Johor
Capital
Holdings
Sdn Bhd.
Johor
Capital
Holdings
Sdn Bhd
is a wholly
owned
subsidiary of
JCorp.
133
5. TSSG
5. KFCH
Educations
purchase of
souvenir and
gifts from
TSSG
5. TSSG is
a wholly
owned
subsidiary of
Kulim
122
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
MH Integrated
Berhad (MH
Int)
Name of
Related
Parties
Nature of
Transactions
Nature of
relationship
with KFCH
Group
Relationship
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali,
Kua Hwee Sim,
Datin Paduka
Siti Sadiah
binti Sheikh
Bakir and
Datuk Ismee
bin Ismail
70
1. EPA
Manage ment Sdn
Bhd (EPA)
1. MH Int
payment of
management and
administrative
services for
the palm oil
businesses
and palm
oil estate
manage ment to EPA
1. EPA is
a wholly
owned
subsidiary of
Kulim.
2. Extreme
Edge
Sdn Bhd
(Extreme
Edge)
2. MH Int
purchase of
computer
equipments
from
Extreme
Edge. MH
Int payment
for the
computer
services
provided
by Extreme
Edge
2. Extreme
Edge is
a wholly
owned
subsidiary of
EPA.
3. Edaran
Badang
Sdn Bhd
(Edaran)
3. MH Int
purchase of
hardwares,
spare parts
for motor
vehicles and
furniture
from Edaran
3. Edaran is a
subsidiary of
EPA.
109
4. Kulim
Nursery Sdn
Bhd (Kulim
Nursery)
4. MH Int
purchase
of oil palm
seedling and
bio compost
from Kulim
Nursery
4. Kulim
Nursery is a
subsidiary of
Kulim.
12
NIL
Interested
Major
Shareholders
Kulim
JCorp
123
KFCH or
subsidiary
of KFCH
involved in the
Recurrent RPT
SPM
Name of
Related
Parties
Damansara
Assets
Nature of
Transactions
Payment of
monthly rental
by SPM to
Damansara
Assets for the
4 storey office
building located
at HS(D)
484887 PTD
156353, Mukim
Tebrau, District
of Johor Bahru,
Johor (approx
87,178 sq ft)
for the college
Nature of
relationship
with KFCH
Group
Relationhip
of KFCH
Group with
related parties
Aggregate
Value of
Transaction
RM000
Damansara
Assets is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
1,918
Tenancy
Agreement
for the above
property is for
a period of 3
years.
Tepak
Bistari Young
Payment
to Tepak
for packing
services
Interested
Major
Shareholder
JCorp
Bistari Young,
a subsidiary of
Johor Ventures
Sdn Bhd which
in turn is a
wholly owned
subsidiary of
Johor Capital
Holdings
Sdn Bhd.
Johor Capital
Holdings
Sdn Bhd is a
wholly owned
subsidiary of
JCorp.
Interested
Directors
Kamaruzzaman
bin Abu
Kassim,
Ahamad bin
Mohamad,
Jamaludin bin
Md Ali, Datin
Paduka Siti
Sadiah binti
Sheikh Bakir
and Datuk
Ismee bin
Ismail
19
Interested
Major
Shareholder
JCorp
Total
124
118,427
5. SHARE BUY-BACK
During the financial year ended 31 December 2011, the Company bought back a total of 2,078,000 of
its own shares for a total consideration of RM7,933,666.94. These shares are presently held as treasury
shares. None of the shares purchased has been resold or cancelled during the financial year.
Details of the shares purchased during the year are as follows:
Lowest
purchase
Date of
No of shares
price
purchase
purchased
(RM)
3 May 2011
128,200
3.68
4 May 2011
130,000
3.66
5 May 2011
40,000
3.69
6 May 2011
116,400
3.69
9 May 2011
57,800
3.70
10 May 2011
178,400
3.74
11 May 2011
77,400
3.72
12 May 2011
51,800
3.73
13 May 2011
22,000
3.84
18 July 2011
220,000
3.84
19 July 2011
175,000
3.83
20 July 2011
105,000
3.87
26 July 2011
186,000
3.88
27 July 2011
67,300
3.93
28 July 2011
14,500
3.93
29 July 2011
40,000
3.94
1 August 2011
73,000
3.95
2 August 2011
79,000
3.95
3 August 2011
40,200
3.87
8 August 2011
205,000
3.60
9 August 2011
10,000
3.48
11 August 2011
16,000
3.69
12 August 2011
10,000
3.78
17 August 2011
25,000
3.90
19 August 2011
10,000
3.83
Total
Highest
purchase
price
(RM)
3.6989
3.7027
3.7010
3.7013
3.7123
3.7201
3.7333
3.7613
3.8429
3.8752
3.8691
3.8933
3.9102
3.9620
3.9521
3.9450
3.9851
3.9684
3.8725
3.6390
3.4800
3.6900
3.7800
3.9196
3.8300
475,963.84
483,139.46
148,677.54
432,453.06
215,479.03
666,055.94
290,110.98
195,673.31
85,161.43
855,557.40
679,526.91
410,345.53
729,897.28
267,722.53
57,724.48
158,478.74
292,072.32
314,738.17
156,344.23
748,656.79
35,054.24
59,471.96
38,076.14
98,705.34
38,580.29
2,078,000
7,933,666.94
125
3.71
3.73
3.72
3.71
3.72
3.70
3.75
3.80
3.85
3.94
3.90
3.90
3.94
3.98
3.97
3.95
3.99
3.98
3.88
3.68
3.48
3.69
3.78
3.94
3.83
Average
purchase
Purchase
price (RM) Consideration (RM)
Financial Statements
Directors Report 127
Statements of Financial Position 131
Statements of Comprehensive Income 132
Consolidated Statement of Changes in Equity 133
Statement of Changes in Equity 135
Statements of Cash Flows 137
Notes to the Financial Statements 139
Statement by Directors 204
Statutory Declaration 204
Independent Auditors Report 205
List of Properties Held 207
Analysis of Shareholdings 220
Analysis of Warrant Holdings 223
Form of Proxy
Directors Report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and
of the Company for the year ended 31 December 2011.
Principal Activities
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries
are as stated in Note 6 to the financial statements. There has been no significant change in the nature of
these activities during the financial year.
Results
Group Company
RM000 RM000
Profit attributable to:
Owners of the Company
Non-controlling interests
144,005
2,566
95,621
-
146,571
95,621
a second interim dividend of 5.5 sen per ordinary share less tax at 25% on 31 March 2011, totalling
RM32,722,000 (4.1 sen net per ordinary share) in respect of the year ended 31 December 2010; and
ii)
an interim dividend of 3.0 sen per ordinary share less tax at 25% on 7 October 2011, totalling
RM17,802,000 (2.3 sen net per ordinary share) in respect of the year ended 31 December 2011.
The Directors do not propose any final dividend for the year ended 31 December 2011.
Directors of the Company
Directors who served since the date of the last report are:
Kamaruzzaman bin Abu Kassim
Ahamad bin Mohamad
YAM Tengku Sulaiman Shah Alhaj ibni Almarhum
Sultan Salahuddin Abdul Aziz Shah Alhaj
Jamaludin bin Md Ali
Kua Hwee Sim
Datin Paduka Siti Sadiah binti Sh Bakir
Tan Sri Dato Dr Yahya bin Awang
Datuk Ismee bin Ismail
Hassim bin Baba
(Chairman)
(Deputy Chairman)
(Appointed on 1 June 2011)
(Managing Director/Chief Executive Officer)
127
DirectorsReport
for the year ended 31 December 2011
Directors interests
The interests in the shares and warrants of the Company and of its related corporations (other than whollyowned subsidiaries) of those who were Directors at year end (including the interests of the spouses or
children of the Directors who themselves are not Directors of the Company) as recorded in the Register of
Directors Shareholdings are as follows:
Number of ordinary shares of RM0.50 each
At At
1.1.2011 Acquired Disposed 31.12.2011
Direct interest
Company
Ahamad bin Mohamad
Hassim bin Baba
172,000
400
-
-
(172,000)
-
400
Number of ordinary shares of RM1.00 each
At At
1.1.2011 Acquired Disposed 31.12.2011
Immediate holding company
QSR Brands Bhd
Datin Paduka Siti Sadiah binti Sh Bakir
Hassim bin Baba
1,000
32
-
-
-
-
1,000
32
Number of ordinary shares of RM0.25 each
At At
1.1.2011 Acquired Disposed 31.12.2011
Intermediate holding company
Kulim (Malaysia) Berhad
Ahamad bin Mohamad
Datin Paduka Siti Sadiah binti Sh Bakir
229,600
69,500
733,800
208,500
-
-
963,400
278,000
Number of warrants
At At
1.1.2011 Acquired Disposed 31.12.2011
Company
Hassim bin Baba
16
16
32
32
-
-
114,800
34,750
(114,800)
-
34,750
None of the other Directors holding office at 31 December 2011 had any interest in the ordinary shares and
warrants of the Company and of its related corporations during the financial year.
128
DirectorsReport
for the year ended 31 December 2011
Directors benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled
to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or
due and receivable by Directors as shown in the financial statements) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which the Director is a member, or with
a company in which the Director has a substantial financial interest.
There were no arrangements during and at the end of the financial year which had the object of enabling
Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
Issue of shares
During the financial year, the Company increased its issued and paid-up share capital from 793,230,984 to
793,266,104 ordinary shares of RM0.50 each by the issuance of 35,120 new ordinary shares of RM0.50
each upon the conversion of 35,120 warrants at the exercise price of RM3.00 per new ordinary share.
There were no other changes in the authorised, issued and paid-up share capital of the Company during
the financial year.
Treasury shares
During the financial year, the Company repurchased 2,078,000 of its issued ordinary shares from the
open market at an average price of RM3.82 per share. The total consideration paid for the repurchase
including transaction costs was RM7,933,667. The shares repurchased are being held as treasury shares in
accordance with Section 67A of the Companies Act, 1965.
As at 31 December 2011, the Company held as treasury shares a total of 2,078,000 of its 793,266,104
issued ordinary shares. Such treasury shares are held at a carrying amount of RM7,933,667 and further
details are disclosed in Note 11 to the financial statements.
Warrants
The main features of the warrants are disclosed in Note 11 to the financial statements.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the year.
Other statutory information
Before the statements of financial position and statements of comprehensive income of the Group and of
the Company were made out, the Directors took reasonable steps to ascertain that:
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii)
any current assets which were unlikely to be realised in the ordinary course of business have been
written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts, or the amount of the provision for doubtful debt,
in the Group and in the Company inadequate to any substantial extent, or
129
DirectorsReport
for the year ended 31 December 2011
that would render the value attributed to the current assets in the financial statements of the Group and
of the Company misleading, or
iii) 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
iv) not otherwise dealt with in this report or the financial statements, that 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:
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial
year and which secures the liabilities of any other person, or
ii)
any contingent liability in respect of the Group or of the Company that has arisen since the end of the
financial year.
No contingent liability or other liability of any company in the Group 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, the financial performance of the Group and of the Company for the financial
year ended 31 December 2011 have not been substantially affected by any item, transaction or event of a
material and unusual nature nor has any such item, transaction or event occurred in the interval between the
end of that financial year and the date of this report.
Significant events
Details of the significant events are disclosed in Note 31 to the financial statements.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
130
Group Company
2011
2010
2011
2010
Note RM000 RM000 RM000 RM000
Assets
Property, plant and equipment
Intangible assets
Investment properties
Investments in subsidiaries
Other investments
3
4
5
6
7
1,228,459
74,034
910
-
24,282
999,984
73,596
910
-
22,400
24,687
-
-
513,260
24,282
24,106
395,072
22,400
1,327,685
1,096,890
562,229
441,578
8
9
10
234,322
173,270
102,949
200,797
153,633
131,712
-
171,713
1,812
170,362
3,975
510,541
486,142
173,525
174,337
Total assets
1,838,226
1,583,032
735,754
615,915
11
11
11
396,633
101,562
576,020
396,615
111,406
482,226
396,633
3,892
222,370
396,615
11,309
177,099
1,074,215
990,247
622,895
585,023
Non-controlling interests
17,265
15,025
Total equity
1,091,480
1,005,272
622,895
585,023
12
13
14
188,504
74,022
2,700
105,845
51,795
2,913
46,400
1,255
-
779
-
265,226
160,553
47,655
779
400,848
14,626
65,745
301
357,164
12,697
46,702
644
62,204
-
3,000
-
10,113
20,000
-
481,520
417,207
65,204
30,113
Total liabilities
746,746
577,760
112,859
30,892
1,838,226
1,583,032
735,754
615,915
Inventories
Trade and other receivables
Cash and cash equivalents
Equity
Share capital
Reserves
Retained earnings
Liabilities
Loans and borrowings
Deferred tax liabilities
Employee benefits
The notes on pages 139 to 202 are an integral part of these financial statements.
131
Group Company
2011
2010
2011
2010
Note RM000 RM000 RM000 RM000
Revenue
16
2,798,780
2,522,358
115,867
51,337
Cost of sales (1,310,546) (1,167,928)
-
Gross profit
Other income
Administrative expenses
Selling and marketing expenses
Other expenses
1,488,234
26,613
(145,736)
(1,140,157)
(6,759)
1,354,430
24,905
(127,365)
(1,017,561)
(8,212)
115,867
33,213
(33,830)
-
(382)
51,337
40,644
(38,569)
-
222,195
(6,702)
226,197
(4,364)
114,868
(969)
53,412
(994)
18
20
215,493
(68,922)
221,833
(62,131)
113,899
(18,278)
52,418
(10,389)
146,571
159,702
95,621
42,029
(2,529)
599
(947)
1,521
-
599
1,521
89,843
2,252
(1,930)
90,417
599
3,773
144,641
250,119
96,220
45,802
144,005
2,566
156,848
2,854
95,621
-
42,029
-
146,571
159,702
95,621
42,029
142,075
2,566
247,265
2,854
96,220
-
45,802
-
144,641
250,119
96,220
45,802
21
18.18
19.78
18.05
19.64
The notes on pages 139 to 202 are an integral part of these financial statements.
132
-
-
133
(18,373)
363
198,340
396,615
At 31 December 2010
(18,721)
348
-
-
-
198,274
66
-
-
-
-
-
18,736
198,275
At 1 January 2010
4,107
4,107
-
(17)
4,124
-
-
-
-
1,521
-
-
-
-
-
1,521
1,521
-
1,521
1,125
-
-
-
-
-
(947)
(947)
-
(947)
2,072
104,290
(10,722)
-
-
-
-
-
(214)
(10,508)
89,843
89,843
-
89,843
25,169
-
-
-
-
-
-
-
482,226
(222,127)
(179,553)
-
(4,124)
(38,664)
-
214
156,848
-
156,848
547,505
990,247
(48,775)
-
397
-
(38,664)
-
(10,508)
247,265
90,417
156,848
89,843
1,521
(947)
791,757
1,521
(947)
96
15,025 1,005,272
(320) (49,095)
-
-
397
-
- (38,664)
(416)
(416)
96
- (10,508)
2,854 250,119
- 90,417
2,854 159,702
- 89,843
12,491 804,248
Attributable to owners of the Company
Non-distributable
Distributable
Non Share Share Warrants Fair value Translation Revaluation Treasury Retained controlling Total
capital
premium
reserve
reserve
reserve
reserve
shares
earnings Total
interests equity
Group Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
134
18
396,633
92
-
-
-
18
-
-
-
At 31 December 2011
455
92
-
-
-
-
-
-
363
-
-
396,615
At 1 January 2011
4,102
(5)
(5)
-
-
-
-
-
-
-
4,107
2,120
-
-
599
599
-
599
1,521
(1,404)
-
-
(2,529)
(2,529)
-
(2,529)
1,125
104,222
(68)
(313)
245
-
-
104,290
(7,933)
(7,933)
-
(7,933)
-
-
-
-
-
-
576,020
(50,211)
-
-
(50,524)
-
313
-
144,005
-
144,005
482,226
1,074,215
(58,107)
105
(7,933)
(50,524)
-
-
245
142,075
(1,930)
144,005
599
(2,529)
990,247
599
(2,529)
619
245
144,641
(58,433)
17,265 1,091,480
(326)
-
105
-
(7,933)
- (50,524)
(945)
(945)
619
-
-
2,566
-
(1,930)
2,566 146,571
15,025 1,005,272
Attributable to owners of the Company
Non-distributable
Distributable
Non Share Share Warrants Fair value Translation Revaluation Treasury Retained controlling Total
capital
premium
reserve
reserve
reserve
reserve
shares
earnings Total interests
equity
Group Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
(18,721)
348
-
-
(18,373)
348
198,274
66
-
-
198,340
396,615
At 31 December 2010
-
-
-
-
-
-
-
-
18,721
-
-
198,275
At 1 January 2010
135
4,107
4,107
-
(17)
4,124
-
-
-
-
-
-
-
1,521
-
-
1,521
1,521
-
1,521
-
5,333
(271)
(76)
(195)
2,252
2,252
-
-
2,252
3,352
-
-
-
-
-
-
-
-
-
-
177,099
(222,146)
(179,553)
-
(4,124)
(38,664)
-
195
42,029
-
42,029
-
-
357,216
585,023
(38,343)
397
(38,664)
(76)
-
45,802
3,773
42,029
1,521
2,252
577,564
Non-distributable
Distributable
Share Share
Warrants Fair value Revaluation Treasury Retained Total
capital
premium
reserve
reserve
reserve
shares
earnings
equity
Company Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
92
-
-
92
440
-
-
-
18
-
-
18
396,633
At 31 December 2011
136
4,102
(5)
(5)
-
-
-
-
-
-
4,107
2,120
-
-
-
-
-
599
599
-
1,521
The notes on pages 139 to 202 are an integral part of these financial statements.
-
-
-
-
348
-
-
396,615
At 1 January 2011
5,163
(170)
-
-
-
(174)
4
-
-
5,333
(7,933)
(7,933)
-
(7,933)
-
-
-
-
-
222,370
(50,350)
-
-
(50,524)
174
-
95,621
-
95,621
177,099
622,895
(58,348)
105
(7,933)
(50,524)
96,220
599
95,621
585,023
Non-distributable
Distributable
Share Share
Warrants Fair value Revaluation Treasury Retained Total
capital
premium
reserve
reserve
reserve
shares
earnings
equity
Company Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Group Company
2011
2010
2011
2010
Note RM000 RM000 RM000 RM000
Cash flows from operating activities
Profit before tax
Adjustments for:
Amortisation of franchise fees
4
Depreciation of property, plant and
equipment
3
Finance costs
17
Loss/(Gain) on disposal of property,
plant and equipment
Dividend income from subsidiaries
Interest income
Impairment loss on:
Goodwill on consolidation
Property, plant and equipment
Reversal on impairment loss of property,
plant and equipment
Operating profit/(loss) before changes in
working capital
Changes in working capital:
Inventories
Trade and other payables
Employee benefits
Trade and other receivables
Subsidiaries
Related companies
215,493
221,833
5,061
6,736
103,350
6,702
86,590
4,364
5,008
-
(441)
3,920
-
(402)
113,899
-
52,418
-
1,890
969
1,536
994
382
(114,115)
(6,380)
(118)
(50,938)
(5,997)
-
-
17
10,913
-
-
(17,651)
335,173
(32,764)
42,480
(556)
(12,098)
-
(5,980)
316,320
(28,349)
35,380
57
(12,953)
-
8,401
(3,355)
(2,105)
-
(3,898)
-
(1,195)
(10,689)
(32)
1,902
1,051
75,142
-
326,255
(6,702)
(45,990)
318,856
(4,364)
(49,979)
(19,169)
(969)
(1,557)
75,990
(994)
(473)
273,563
264,513
(21,695)
74,523
(338,706)
(220,085)
(4,337)
(1,885)
2,307
(1,283)
2,390
(20,879)
1,238
(1,283)
960
(20,879)
-
(50,429)
-
6,380
96,915
(14,000)
(25,522)
5,997
42,683
48,484
(12,646)
136
-
(4,681)
441
-
(341,786)
137
(9,513)
-
(5,039)
402
-
(252,724)
Group Company
2011
2010
2011
2010
Note RM000 RM000 RM000 RM000
Cash flows from financing activities
Issuance of shares
Purchase of treasury shares
11
Proceeds from bank borrowings
Repayment of bank borrowings
Dividends paid to shareholders of
the Company
22
Dividends paid to non-controlling
interests of subsidiaries
105
(7,933)
150,143
(48,441)
397
-
68,193
(33,105)
105
(7,933)
49,400
(20,000)
397
(20,000)
(50,524)
(38,664)
(50,524)
(38,664)
(945)
(416)
42,405
(3,595)
(28,952)
(58,267)
(25,818)
8,194
(2,163)
3,610
(2,945)
131,712
69
123,449
-
3,975
365
10
10
23,446
79,503
52,893
78,819
177
1,635
125
3,850
102,949
131,712
1,812
3,975
The notes on pages 139 to 202 are an integral part of these financial statements.
138
These financial statements of the Group and the Company have been prepared in accordance with
Financial Reporting Standards (FRSs), generally accepted accounting principles and the Companies
Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations of the FRS framework
that have been issued by the Malaysian Accounting Standards Board (MASB) but have not been
adopted by the Group and the Company:
FRSs, Interpretations and amendments effective for annual periods beginning on or after
1 July 2011
FRSs, Interpretations and amendments effective for annual periods beginning on or after
1 January 2012
FRSs, Interpretations and amendments effective for annual periods beginning on or after
1 July 2012
139
FRSs, Interpretations and amendments effective for annual periods beginning on or after
1 January 2014
FRSs, Interpretations and amendments effective for annual periods beginning on or after
1 January 2015
The Groups and Companys financial statements for annual period beginning on 1 January 2012
will be prepared in accordance with the Malaysian Financial Reporting Standards (MFRSs) issued
by the MASB and International Financial Reporting Standards (IFRSs). As a result, the Group and
the Company will not be adopting the above FRSs, Interpretations and amendments.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following
assets as explained in their respective accounting policy notes:
These financial statements are presented in Ringgit Malaysia (RM), which is the Companys
functional currency. All financial information is presented in RM and has been rounded to the
nearest thousand, unless otherwise stated.
The preparation of financial statements in conformity with FRSs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
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 and in any future periods
affected.
140
There are no significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have significant effect on the amounts recognised in the financial statements other
than those disclosed in the following notes:
The accounting policies set out below have been applied consistently to the periods presented in these
financial statements, and have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control
exists when the Group has the ability to exercise its power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that presently are exercisable are taken into account.
The accounting policies of subsidiaries are changed when necessary to align them with the
policies adopted by the Group.
Business combinations are accounted for using the acquisition method from the acquisition
date, which is the date on which control is transferred to the Group.
The Group has changed its accounting policy with respect to accounting for business
combinations.
From 1 January 2011 the Group has applied FRS 3, Business Combinations (revised) in
accounting for business combinations. The change in accounting policy has been applied
prospectively in accordance with the transitional provisions provided by the standard and
does not have impact on earnings per share.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition
date as:
141
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss
of control as equity transactions between the Group and its non-controlling interest holders.
Any difference between the Groups share of net assets before and after the change, and any
consideration received or paid, is adjusted to or against Group reserves.
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary
not attributable directly or indirectly to the equity holders of the Company, are presented in the
consolidated statement of financial position and statement of changes in equity within equity,
separately from equity attributable to the owners of the Company. Non-controlling interests in
the results of the Group is presented in the consolidated statement of comprehensive income
as an allocation of the profit or loss and the comprehensive income for the year between noncontrolling interests and the owners of the Company.
Since the beginning of the reporting period, the Group has applied FRS 127, Consolidated
and Separate Financial Statements (revised) where losses applicable to the non-controlling
interests in a subsidiary are allocated to the non-controlling interests even if doing so causes
the non-controlling interests to have a deficit balance. This change in accounting policy is
applied prospectively in accordance with the transitional provisions of the standard and does
not have impact on earnings per share.
142
In the previous financial years, where losses applicable to the non-controlling interests exceed
their interests in the equity of a subsidiary, the excess, and any further losses applicable to
the non-controlling interests, were charged against the Groups interest except to the extent
that the non-controlling interests had a binding obligation to, and was able to, make additional
investment to cover the losses. If the subsidiary subsequently reported profits, the Groups
interest was allocated with all such profits until the non-controlling interests share of losses
previously absorbed by the Group had been recovered.
Intra-group balances and transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Monetary assets and liabilities denominated in foreign currencies at the reporting period are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at
the end of the reporting date except for those that are measured at fair value are retranslated to
the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except
for differences arising on the retranslation of available-for-sale equity instruments or a financial
instrument designated as a cash flow hedge of currency risk, which are recognised in other
comprehensive income.
The assets and liabilities of operations in functional currencies other than RM, including
goodwill and fair value adjustments, are translated to RM at exchange rates at the end of
the reporting period, except for goodwill and fair value adjustments arising from business
combinations before 1 January 2006 which are reported using the exchange rates at the dates
of the acquisitions. The income and expenses of foreign operations are translated to RM at
exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated
in the foreign currency translation reserve (FCTR) in equity. However, if the operation is a nonwholly-owned subsidiary, then the relevant proportionate share of the translation difference is
allocated to the non-controlling interests. When a foreign operation is disposed off, in part or
in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or
loss on disposal.
In the consolidated financial statements, when settlement of a monetary item receivable from
or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign
exchange gains and losses arising from such a monetary item are considered to form part of a
net investment in a foreign operation and are recognised in other comprehensive income, and
are presented in the FCTR in equity.
143
A financial instrument is recognised in the statements of financial position when, and only when,
the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial
instrument not at fair value through profit or loss, transaction costs that are directly attributable
to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as
a derivative if, and only if, it is not closely related to the economic characteristics and risks of
the host contract and the host contract is not categorised at fair value through profit or loss.
The host contract, in the event an embedded derivative is recognised separately, is accounted
for in accordance with the policy applicable to the nature of the host contract.
Financial assets
(a) Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted in an
active market and the Group or the Company has the positive intention and ability to hold
them to maturity.
(b) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an
active market, trade and other receivables and cash and cash equivalents.
Investments in equity instruments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured are measured at cost. Other
financial assets categorised as available-for-sale are subsequently measured at their
fair values with the gain or loss recognised in other comprehensive income, except for
impairment losses, foreign exchange gains and losses arising from monetary items and
gains and losses of hedged items attributable to hedge risks of fair value hedges which
are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised
in other comprehensive income is reclassified from equity into profit or loss. Interest
calculated for a debt instrument using the effective interest method is recognised in profit
or loss.
All financial assets are subject to review for impairment (see Note 2(j)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost.
144
A financial asset or part of it is derecognised when, and only when the contractual rights to the
cash flows from the financial asset expire or the financial asset is transferred to another party
without retaining control or substantially all risks and rewards of the asset. On derecognition of
a financial asset, the difference between the carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability assumed) and any cumulative
gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified
in the contract is discharged or cancelled or expires. On derecognition of a financial liability,
the difference between the carrying amount of the financial liability extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
Items of property, plant and equipment are stated at cost / valuation less any accumulated
depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and
any other costs directly attributable to bring the asset to working condition for its intended
use, and the costs of dismantling and removing the items and restoring the site on which they
are located. For qualifying assets, borrowing costs are capitalised in accordance with the
accounting policy on borrowing costs.
The cost of property, plant and equipment recognised as a result of a business combination is
based on fair value at acquisition date. The fair value of property is the estimated amount for
which a property could be exchanged between a willing buyer and a willing seller in an arms
length transaction wherein the parties had each acted knowledgeably, prudently and without
compulsion. The fair value of other items of plant and equipment is based on the quoted
market prices for similar items and replacement cost where appropriate.
Where significant parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of property, plant and
equipment.
The gains and losses on disposal of an item of property, plant and equipment are determined
by comparing the proceeds from disposal with the carrying amount of property, plant and
equipment and are recognised net within other income or other expenses respectively in
profit or loss. When revalued assets are sold, the amounts included in the revaluation surplus
reserve are transferred to retained earnings.
Surplus arising from revaluation are dealt with in profit or loss to the extent of a previous
decrease for the same property and the net surplus is then dealt with in the revaluation reserve
account. Any deficit arising is offset against the revaluation reserve to the extent of a previous
increase for the same property. In all other cases, a decrease in carrying amount is recognised
in profit or loss.
The Group revalues its property comprising land and building every five (5) years and at shorter
intervals whenever the fair value of the revalued assets is expected to differ materially from
their carrying value.
145
The cost of replacing part of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within
the part will flow to the Group and its cost can be measured reliably. The carrying amount of
the replaced part is derecognised to profit or loss. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other
amount substituted for cost, less its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful
lives of each part of an item of property, plant and equipment. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term. Freehold land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Buildings
Leasehold land
Leasehold improvements and renovation
Plant and machinery
Motor vehicles
Restaurant and office equipment
20 - 50 years
45 - 999 years
10 years
10 years
5 years
5 - 10 years
No depreciation is provided for crockery, cutlery and utensils. Subsequent replacements are
written off to profit or loss as and when incurred.
Depreciation methods, useful lives and residual values are reassessed at the end of the
reporting period.
Leases in terms of which the Group or the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases. On initial recognition of the leased
asset is measured at an amount equal to the lower of its fair value and the present value of
the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance
expense and the reduction of the outstanding liability. The finance expense is allocated to
each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Contingent lease payments are accounted for by revising the
minimum lease payments over the remaining term of the lease when the lease adjustment is
confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and
equipment.
146
Payments made under operating leases are recognised in profit or loss on a straight-line basis
over the term of the lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset are consumed. Lease incentives
received are recognised in profit or loss as an integral part of the total lease expense, over
the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in
which they are incurred.
Subsequent expenditure is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognised in profit or loss as incurred.
(iv) Amortisation
Goodwill with indefinite useful lives are not amortised but are tested for impairment annually
and whenever there is an indication that it may be impaired.
The restaurants initial and renewal franchise fees are stated at cost and are amortised on a
straight-line basis over ten (10) years.
Amortisation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted, if appropriate.
147
Investment properties are measured initially at cost and subsequently at fair value with any
change therein recognised in profit or loss for the period in which they arise. Where the fair
value of the investment property under construction is not reliably determinable, the investment
property under construction is measured at cost until either its fair value becomes reliably
determinable or construction is complete, whichever is earlier.
Cost includes expenditure that is directly attributable to the acquisition of the investment
property. The cost of self-constructed investment property includes the cost of materials and
direct labour, any other costs directly attributable to bringing the investment property to a
working condition for their intended use and capitalised borrowing costs.
When an item of property, plant and equipment is transferred to investment property following
a change in its use, any difference arising at the date of transfer between the carrying amount
of the item immediately prior to transfer and its fair value is recognised in other comprehensive
income and accumulated in equity as revaluation reserve. However, if a fair value gain
reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal
of an investment property, any surplus previously recorded in equity is transferred to retained
earnings; the transfer is not made through profit or loss.
When the use of a property changes such that it is reclassified as property, plant and
equipment or inventories, its fair value at the date of reclassification becomes its deemed cost
for subsequent accounting.
The fair values are based on market values, being the estimated amount for which a property
could be exchanged on the date of the valuation between a willing buyer and a willing seller in
an arms length transaction wherein the parties had each acted knowledgeably, prudently and
without compulsion.
In the absence of current prices in an active market, the valuations are prepared by considering
the aggregate of the estimated cash flows expected to be received from renting out the
property. A yield that reflects the specific risks inherent in the net cash flows then is applied to
the net annual cash flows to arrive at the property valuation.
Valuations reflect the remaining economic life of the property. When rent reviews or lease
renewals are pending with anticipated reversionary increases, it is assumed that all notices
and where appropriate counter-notices have been served validly and within the appropriate
time.
148
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is
based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories
and bringing them to their existing location and condition.
In the case of livestocks, cost includes the original cost of bringing the inventories to its present
location and condition.
In the case of finished goods, cost includes an appropriate share of production overheads based
on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.
The fair value of inventories acquired in a business combination is determined based on its
estimated selling price in the ordinary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort required to complete and sell the
inventories.
All financial assets (except for investments in subsidiaries) are assessed at each reporting date
whether there is any objective evidence of impairment as a result of one or more events having
an impact on the estimated future cash flows of the asset. Losses expected as a result of
future events, no matter how likely, are not recognised. For an equity instrument, a significant
or prolonged decline in the fair value below its cost is an objective evidence of impairment.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised
in profit or loss and is measured as the difference between the assets carrying amount and the
present value of estimated future cash flows discounted at the current market rate of return for
a similar financial asset.
149
The carrying amounts of non-financial assets (except for inventories, deferred tax asset and
assets arising from employee benefits) are reviewed at the end of each reporting period to
determine whether there is any indication of impairment. If any such indication exists, then
the assets recoverable amount is estimated. For goodwill, and intangible assets that have
indefinite useful lives or that are not yet available for use, the recoverable amount is estimated
each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group
of assets that generates cash inflows from continuing use that are largely independent of
the cash inflows of other assets (known as cash-generating unit). The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to a cash-generating
unit or a group of cash-generating units that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its
fair value less costs to sell. 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 or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cashgenerating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the cash-generating unit or the group of cash-generating units and then to reduce
the carrying amount of the other assets in the cash-generating unit (or a group of cashgenerating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment
losses recognised in prior periods are assessed at the end of each reporting period for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount since
the last impairment loss was recognised. An impairment loss is reversed only to the extent
that the assets carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Reversals of impairment losses are credited to profit or loss in the financial year in which the
reversals are recognised.
150
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.
(i) Issue expenses
Where treasury shares are distributed as share dividends, the cost of the treasury shares is
applied in the reduction of the share premium account or distributable reserves, or both.
Where treasury shares are sold or reissued subsequently, the difference between the sales
consideration net of directly attributable costs and the carrying amount of the treasury shares
is recognised in equity, and the resulting surplus or deficit on the transaction is presented in
share premium.
Borrowing costs that are not directly attributable to the acquisition, construction or production of
a qualifying asset are recognised in profit or loss using the effective interest method.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities that
are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of
borrowing costs is suspended or ceases when substantially all the activities necessary to prepare
the qualifying asset for its intended use or sale are interrupted or completed.
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.
Short term employee benefit obligations in respect of salaries, annual bonuses, paid annual
leave and sick leave are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus
or profit-sharing plans if the Group has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
The Groups contributions to statutory pension funds are charged to the profit or loss in the
year to which they relate. Once the contributions have been paid, the Group has no further
payment obligations.
151
The Groups net obligation in respect of defined benefit retirement plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earned in return
for their service in the current and prior periods; that benefit is discounted to determine the
present value. Any unrecognised past service costs and the fair value of any plan assets are
deducted. The discount rate is the yield at the reporting period on seven (7)-year high quality
corporate bonds that have maturity dates approximating the terms of the Groups obligations
and that are denominated in the same currency in which the benefits are expected to be paid.
The calculation is performed by a qualified actuary conducted every two (2) years with the
last actuarial report dated 13 January 2012 using the projected unit credit method. When the
calculation results in a benefit to the Group, the recognised asset is limited to the net total of
any unrecognised past service costs and the present value of any future refunds from the plan
or reductions in future contributions to the plan.
In order to calculate the present value of economic benefits, consideration is given to any
minimum funding requirements that apply to any plan in the Group. An economic benefit is
available to the Group if it is realisable during the life of the plan, or any settlement of the plan
liabilities.
When the benefits of a plan are improved, the portion of the increased benefit relating to past
service by employees is recognised in the profit or loss on a straight-line basis over the average
period until the benefits become vested. To the extent that the benefits vest immediately, the
expense is recognised immediately in profit or loss.
The Group recognises all actuarial gains and losses arising from defined benefit plans in
other comprehensive income and all expenses related to defined benefit plans in personnel
expenses in profit or loss.
The Group recognises gains and losses on the curtailment or settlement of a defined benefit
plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises
any resulting change in the fair value of plan assets, change in the present value of defined
benefit obligation and any related actuarial gains and losses and past service cost that had
not previously been recognised.
(n) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot
be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability
of outflow of economic benefits is remote. Possible obligations, whose existence will only be
confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as
contingent liabilities unless the probability of outflow of economic benefits is remote.
152
Revenue from the sale of goods is measured at fair value of the consideration received or receivable,
net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when
the significant risks and rewards of ownership have been transferred to the buyer, recovery of the
consideration is probable, the associated costs and possible return of goods can be estimated
reliably, and there is no continuing management involvement with the goods.
The following specific recognition criteria must also be met before revenue is recognised.
(i) Sale of restaurant food and beverages
Sales revenue represents retail sales at the Groups restaurants and is recognised at the point
of sales. The Group recognises sales revenue net of sales tax and service charge.
Dividend income is recognised in profit or loss when the right to receive payment is
established.
Interest income is recognised as it accrues, using the effective interest method in profit or loss
except for interest income arising from temporary investment of borrowings taken specifically
for the purpose of obtaining a qualifying asset which is accounted for in accordance with the
accounting policy on borrowing costs.
Income tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination or items
recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted by the end of the reporting period, and any
adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between
the carrying amounts of assets and liabilities in the statement of financial position and their tax
bases. Deferred tax is not recognised for the following temporary differences: the initial recognition
of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured
at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed
at the end of each reporting period and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
Unutilised reinvestment allowance and investment tax allowance are treated as tax base of assets
and are recognised as a reduction of tax expense as and when they are utilised.
153
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic
EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the period, adjusted for
own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares, which comprise convertible notes and share options granted to
employees.
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that relate
to transactions with any of the Groups other components. An operating segments operating
results are reviewed regularly by the chief operating decision maker, which in this case is the Chief
Executive Officer of the Group, to make decisions about resources to be allocated to the segment
and to assess its performance, and for which discrete financial information is available.
154
172,759
16,297
-
(768)
-
38,619
226,907
26,571
-
(692)
-
-
252,786
26,571
226,215
252,786
Cost/Valuation
At 1 January 2010
Additions
Acquisition of subsidiaries
Disposals/Write off
Effect of movement in exchange rates
Revaluation surplus
At 31 December 2011
155
Representing:
At cost
At valuation
At 31 December 2011
121,957
11,928
110,029
121,957
110,029
11,928
-
-
-
-
78,559
3,357
-
-
-
28,113
281,881
69,839
212,042
281,881
244,122
34,763
-
-
(548)
3,544
220,943
2,468
3,227
(1,242)
(104)
18,830
344,845
344,845
-
344,845
277,431
83,827
-
(13,977)
1,342
(3,778)
215,154
74,577
178
(10,943)
(1,535)
-
270,439
270,439
-
270,439
215,066
55,583
11
(221)
-
-
191,689
24,612
-
(1,235)
-
-
37,249
37,249
-
37,249
36,897
8,286
-
(7,952)
18
-
36,685
3,612
118
(3,440)
(78)
-
539,434
539,434
-
539,434
436,102
117,748
12
(15,432)
770
234
358,583
95,162
2,018
(18,470)
(1,191)
-
1,848,591
1,300,305
548,286
1,848,591
1,546,554
338,706
23
(38,274)
1,582
-
1,274,372
220,085
5,541
(36,098)
(2,908)
85,562
156
56,468
-
56,468
At 31 December 2010:
Accumulated depreciation
Accumulated impairment losses
5,276
4,303
973
61,135
40,756
20,379
59,421
5,164
249
(1,242)
(13)
(2,444)
58,733
-
-
-
-
(2,265)
Depreciation for the year
Acquisition of subsidiaries
Disposals/Write off
Effect of movement in exchange rates
Reversal of impairment loss
10,647
927
-
-
-
(6,298)
36,598
22,823
101,484
101,484
-
89,500
22,894
64
(9,986)
(988)
-
88,224
1,276
122,834
122,834
-
107,986
16,015
-
(1,167)
-
-
107,986
-
25,478
25,478
-
24,895
3,504
100
(2,976)
(45)
-
24,895
-
173,895
173,895
-
149,949
38,086
1,123
(14,417)
(846)
-
148,682
1,267
546,570
468,750
77,820
501,131
86,590
1,536
(29,788)
(1,892)
(11,007)
409,761
91,370
157
170,439
At 31 December 2011
196,318
114,026
Carrying amounts
At 1 January 2010
56,468
-
56,468
At 31 December 2011:
Accumulated depreciation
Accumulated impairment losses
56,468
-
-
-
-
-
114,734
104,753
67,912
7,223
6,250
973
5,276
1,947
-
-
-
-
215,332
182,987
161,522
66,549
46,170
20,379
61,135
5,371
-
-
(673)
716
227,020
175,947
125,654
117,825
117,825
-
101,484
28,222
-
(12,224)
1,075
(732)
130,416
92,232
83,703
140,023
140,023
-
122,834
17,380
2
(193)
-
-
14,837
11,419
11,790
22,412
22,412
-
25,478
3,859
-
(6,962)
37
-
329,802
262,207
208,634
209,632
209,632
-
173,895
46,571
3
(11,580)
727
16
1,228,459
999,984
773,241
620,132
542,312
77,820
546,570
103,350
5
(30,959)
1,166
-
14,647
-
(769)
1,938
2,260
-
-
314
558
82
-
-
2,870
499
(722)
-
4,639 24,974
1,304
1,885
(55) (1,546)
- 2,252
At 31 December 2010/
1 January 2011
Additions
Disposals/Write off
Transfer to subsidiary
15,816
-
(692)
-
2,574
-
-
-
640
-
-
(82)
2,647
1,125
(1,354)
-
5,888 27,565
3,212
4,337
(75) (2,121)
(219)
(301)
At 31 December 2011
15,124
2,574
558
2,418
8,806
Representing:
At cost
At valuation
-
15,124
-
2,574
558
-
2,418
-
8,806 11,782
- 17,698
At 31 December 2011
15,124
2,574
558
2,418
8,806
29,480
29,480
Depreciation
At 1 January 2010
Depreciation for the year
Disposals/Write off
-
-
-
212
52
-
185
65
-
1,019
515
(662)
1,211
904
(42)
2,627
1,536
(704)
At 31 December 2010/
1 January 2011
Depreciation for the year
Disposals/Write off
Transfer to subsidiary
264
61
-
-
250
60
-
(16)
872
392
(429)
-
2,073
1,377
(72)
(39)
3,459
1,890
(501)
(55)
At 31 December 2011
325
294
835
3,339
4,793
Carrying amounts
At 1 January 2010
14,647
2,048
373
1,851
3,428
22,347
At 31 December 2010/
1 January 2011
15,816
2,310
390
1,775
3,815
24,106
At 31 December 2011
15,124
2,249
264
1,583
5,467
24,687
158
In 2010, the Group had recognised impairment loss of RM11,377,000 as a result of the valuation
conducted in that year. Impairment loss of RM10,913,000 had been recognised in other expenses,
while the remaining RM464,000 had been recognised in the revaluation reserve.
3.2 Security
The Groups freehold land, leasehold land and buildings were revalued on 15 December 2010 by
an independent professional qualified valuer using the open market value method. Had the freehold land, leasehold land and buildings been carried under the cost model, their carrying amounts
would have been included in the financial statements of the Group as at 31 December 2011 as
follows:
Net
Accumulated
carrying
Cost depreciation
amount
Group RM000 RM000 RM000
At 31 December 2011
Freehold land
Leasehold land
Buildings
158,570
85,365
210,116
-
5,368
56,118
158,570
79,997
153,998
454,051
61,486
392,565
At 31 December 2010
Freehold land
Leasehold land
Buildings
159,184
85,365
210,116
-
3,836
51,466
159,184
81,529
158,650
454,665
55,302
399,363
Company
At 31 December 2011
Freehold land
Buildings
10,287
2,172
-
476
10,287
1,696
12,459
476
11,983
At 31 December 2010
Freehold land
Buildings
10,901
2,172
-
414
10,901
1,758
13,073
414
12,659
159
The titles of certain properties are either in process of being transferred to the Group and the Company or are pending the issuance of strata titles by the relevant authorities.
Group
2011
2010
RM000 RM000
Leasehold land with unexpired lease period of more than 50 years
Leasehold land with unexpired lease period of less than 50 years
113,741
993
103,507
1,246
114,734
104,753
4. Intangible assets
Goodwill on Franchise
consolidation
fees Total
Group RM000 RM000 RM000
Cost
At 1 January 2010
Additions
Write off
44,965
6,636
-
48,782
5,039
(2,008)
93,747
11,675
(2,008)
51,601
818
51,813
4,681
103,414
5,499
At 31 December 2011
52,419
56,494
108,913
Accumulated amortisation
At 1 January 2010
Amortisation for the year
Impairment Loss
Write off
1,566
-
17
-
23,507
6,736
-
(2,008)
25,073
6,736
17
(2,008)
1,583
-
28,235
5,061
29,818
5,061
At 31 December 2011
1,583
33,296
34,879
Carrying amounts
At 1 January 2010
43,399
25,275
68,674
50,018
23,578
73,596
At 31 December 2011
50,836
23,198
74,034
160
50,836
50,018
The recoverable amounts of the CGUs were determined based on value-in-use calculations using pretax cash flow projections based on financial budgets approved by management covering a ten (10)-year
period. The growth rate used to extrapolate the cash flows beyond the ten (10)-year period was 4%
(2010: 4%). The growth rate does not exceed the average historical growth rate over the long term for
the industry.
Value in use was determined by discounting the future cash flows generated from the continuing use of
the units and was based on the following assumptions:
There will be no material changes in the structure and principal activities of the Group.
Raw material price inflation - there will not be any significant increase in the prices and supply of
raw materials, wages and other related costs, resulting from industrial dispute, adverse changes
in the economic conditions or other abnormal factors, which will adversely affect the operations of
the Group.
Statutory income tax rate - the tax rate for Malaysia was 25% and Singapores tax rate is 17%.
There will be no material changes in the present legislation or regulations, rates and bases of duties, levies and other taxes affecting the Groups activities.
Interest rates - the interest rates on the existing financing facilities will prevail.
Foreign exchange rate - the foreign exchange rate will not be substantially and adversely different
from the current rate.
Growth rate used to extrapolate segment beyond the ten (10) year-period is 4% which is in line with
the estimated GDP growth rate of the country.
A pre-tax discount rate of 9.93% was applied in determining the recoverable amount of the unit.
The discount rate was estimated based on the weighted average cost of capital of the Group.
Based on the assessment above, the recoverable amount was determined to be higher than the carrying amount, thus no impairment loss was recognised.
Sensitivity analysis were performed on the cash flow projections based on the following criteria:
i. 40% decrease of the projected sales growth rate of 4%;
ii. 200 basis points increase on pre-tax discount rate of 9.93%; and
iii. 10% decrease in gross profit margin.
Each sensitivity analysis is used on the basis that all other variables remain constant. The result of the
sensitivity analysis does not have an impact on the carrying amount of goodwill on consolidation.
161
5. Investment properties
Group
2011
2010
RM000 RM000
At 1 January
910
898
Change in fair value recognised in profit or loss
-
12
At 31 December
910
910
590
320
590
320
910
910
The rental income earned by the Group for the year ended 31 December 2011 from its investment
properties, all of which are leased out under operating leases, amounted to RM70,500 (2010:
RM69,000). There were no direct operating expenses (including repair and maintenance) arising from
the investment properties.
6. Investments in subsidiaries
Company
2011
2010
RM000 RM000
At cost:
Unquoted shares
- in Malaysia
474,234
433,805
- outside Malaysia
35,322
25,322
509,556
459,127
Less: Accumulated impairment losses
- in Malaysia
(64,055)
(64,055)
Advances receivable
445,501
67,759
395,072
-
513,260
395,072
The advances receivable from Rasamas Holdings Sdn Bhd and Ayamas Shoppe Sdn Bhd are interest
free and are determined to form part of the Companys net investments in subsidiaries, as repayment
of these amounts are neither fixed nor expected in the near term.
162
100.0
100.0
100.0
100.0
100.0
100.0
Malaysia
100.0
100.0
Malaysia
100.0
100.0
Malaysia
Restaurants
100.0
100.0
100.0
100.0
Malaysia
College/learning institute
100.0
100.0
Malaysia
Property holding
100.0
100.0
Malaysia
Investment holding
100.0
100.0
100.0
100.0
163
164
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.0
90.0
55.0
55.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
81.0
81.0
70.0
70.0
165
90.0
90.0
90.0
100.0
90.0
90.0
89.2
89.2
89.1
89.1
85.0
85.0
84.8
75.0
75.0
65.0
100.0
100.0
100.0
100.0
100.0
100.0
Investment holding
100.0
100.0
Restaurants
100.0
100.0
Restaurants
45.9
45.9
Restaurants
45.9
45.9
Dormant
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
100.0
100.0
Dormant
90.0
90.0
Dormant
90.0
90.0
166
90.0
90.0
90.0
90.0
90.0
90.0
90.0
90.0
90.0
90.0
90.0
90.0
89.2
89.2
80.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
45.9
45.9
During the year, the Company had acquired a number of subsidiaries pursuant to the re-organisation of its group structure (refer Note 31(i)).
(ii) During the year, the Company had contributed to Yayasan Amal Bistaris capital contribution of
RM700,000.
(iii) During the year, the Company had subscribed for an additional 9,500,000 ordinary shares of
RM1.00 each in KFCH Education (M) Sdn Bhd (formerly known as Paramount Holdings (M) Sdn
Bhd) at par.
167
7. Other investments
Unquoted
Quoted
shares shares in
Total in Malaysia Malaysia
Group RM000 RM000 RM000
2011
Non-current
Available-for-sale financial assets
24,282
-
24,282
Held-to-maturity investment
4,500
4,500
Less: Impairment loss
(4,500)
(4,500)
-
-
24,282
24,282
24,282
24,282
Market value of quoted investments
2010
Non-current
Available-for-sale financial assets
Held-to-maturity investments
Less: Impairment loss
24,282
24,282
22,400
22,400
4,500
(4,500)
-
22,400
22,400
22,400
22,400
22,400
22,400
24,282
24,282
24,282
24,282
24,282
24,282
22,400
22,400
Representing item:
At fair value
4,500
(4,500)
-
Representing item:
At fair value
Market value of quoted investments
Company
2011
Non-current
Available-for-sale financial assets
Representing item:
At fair value
Market value of quoted investments
2010
Non-current
Available-for-sale financial assets
Representing item:
At fair value
22,400
22,400
22,400
22,400
168
8. Inventories
Group
2011
2010
RM000 RM000
At cost:
Raw materials
33,209
39,205
Groceries, poultry and consumables
80,267
66,290
Equipment and spare parts
20,262
21,439
Advertising materials
3,748
2,514
Livestock
17,826
13,458
Finished goods
79,010
57,891
234,322
200,797
-
12,558
16,387
67,277
11,194
-
6,578
16,420
74,534
9,651
162,107
32
2,476
5,291
1,807
163,661
1,284
5,288
129
107,416
107,183
171,713
170,362
173,270
153,633
171,713
170,362
The non-trade receivables due from subsidiaries and related companies are unsecured, interest
bearing at 4.13% (2010: 3.79%) per annum and repayable on demand.
Included in the other receivables of the Group are lease considerations paid to related companies
amounting to RM1,943,000 (2010: RM2,029,000) which comprised of the lease of a vacant land
at Terminal Larkin Sentral, Johor Bahru for a term of fifteen (15) years expiring on 16 March
2023 (2011: RM801,000; 2010: RM851,000) and the lease of a portion of a single-storey
building erected in Tg. Leman, Johor for a period of thirty (30) years (2011: RM1,142,000;
2010: RM1,178,000), respectively. Both these leased properties are now occupied with KFC
restaurants.
9.3 Deposits
Included in the deposits of the Group and of the Company is a deposit paid to a related company
amounting to RM5,228,000 (2010: RM5,228,000) for purchase of a leasehold industrial land at
Bandar Tenggara, Kulai, Johor Darul Takzim.
169
11. Share capital and reserves
23,446
79,503
52,893
78,819
177
1,635
125
3,850
102,949
131,712
1,812
3,975
The holders of ordinary shares are entitled to receive dividends as declared from time to time and
are entitled to one vote per share at meetings of the Company.
11.2 Reserves
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
Non-distributable
Share premium
455
363
440
348
Warrants reserve
4,102
4,107
4,102
4,107
Fair value reserve
2,120
1,521
2,120
1,521
Translation reserve
(1,404)
1,125
-
Revaluation reserve
104,222
104,290
5,163
5,333
Treasury shares
(7,933)
-
(7,933)
Distributable
Retained earnings
101,562
111,406
3,892
11,309
576,020
482,226
222,370
177,099
677,582
593,632
226,262
188,408
The movement in each category of the reserves are disclosed in the statements of changes in
equity.
170
This reserve comprises the premium paid on subscription of shares in the Company over
and above the par value of the shares.
A total of 31,723,949 new free warrants were issued by the Company in conjunction with
the issuance of bonus shares on 15 September 2010. Each warrant entitles the holder the
right to subscribe for a new ordinary share of RM0.50 each in the Company at an exercise
price of RM3.00 per new ordinary share. As at the year end, the number of outstanding
warrants was 31,556,573 (2010: 31,591,693). The warrants will expire on 14 September
2015.
The fair value reserve relates to the fair valuation of financial assets categorised as availablefor-sale until the investments are derecognised or impaired.
The translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign operations whose functional currencies are different
from that of the Groups presentation currency. It is also used to record the exchange
differences arising from monetary items which form part of the Groups net investment in
foreign operations, regardless of the currency of the monetary items.
This amount relates to the acquisition cost of treasury shares net of the proceeds received
on their subsequent sale or issuance.
During the financial year, the Company repurchased 2,078,000 of its issued ordinary shares
from the open market at an average price of RM3.82 per share. The total consideration paid
for the repurchase shares were RM7,933,667 which were financed by internally generated
funds. The shares repurchased are being held as treasury shares in accordance with Section
67A of the Companies Act, 1965.
Of the total 793,266,104 (2010: 793,230,984) issued and fully paid ordinary shares as at 31
December 2011, 2,078,000 (2010: Nil) were held as treasury shares by the Company. As at
31 December 2011, the number of outstanding ordinary shares in issue net of the treasury
shares was therefore 791,188,104 ordinary shares of RM0.50 each.
171
Subject to agreement by the Inland Revenue Board, the Company has Section 108 tax
credit and tax-exempt income to frank all of its distributable reserves at 31 December 2011
if paid out as taxable dividends.
The Finance Act, 2007 introduced a single tier company income tax system with effect from
1 January 2008. As such, the remaining Section 108 tax credit as at 31 December 2011 will
be available to the Company until such time the credit is fully utilised or upon expiry of the
six-year transitional period on 31 December 2013, whichever is earlier.
65,745
46,702
3,000
46,708
141,796
1,610
104,235
46,400
-
188,504
105,845
46,400
254,249
152,547
49,400
20,000
172
20,000
2013
2018
2013
2014
2015
2016
677
46,400
9,093
49,500
71,679
34,900
369
-
7,275
2,000
14,101
-
2012
34,000
34,000
2012
8,000
8,000
254,249
65,745
28,478
127,546
32,480
2011
2013
2022
2031
2013
2014
2015
20,154
1,046
212
755
23,187
45,000
51,511
20,154
369
13
21
9,275
-
6,188
-
369
14
23
9,275
-
10,872
-
308
48
75
4,637
45,000
34,451
137
636
-
2011
5,682
5,682
2011
5,000
5,000
152,547
46,702
2010
Term loans
- secured
- secured
- secured
- secured
- unsecured
- unsecured
- unsecured
Bankers acceptance
- unsecured
Revolving credit
- unsecured
308
580
1,818
2,000
16,802
6,970
-
13,340
32,480
-
45,500
40,776
27,930
-
20,553
84,519
773
580
13,340
32,480
Company
2011
Term loans
- secured
2018
Revolving credit
- unsecured
2012
3,000
3,000
49,400
3,000
580
13,340
32,480
2010
Term loans
- secured
20,000
20,000
2011
46,400
12.2 Security
The term loans granted to the Group and the Company are secured by the following:
(a) First and third party charges over certain land and buildings (Note 3);
(b) Corporate guarantee of a related company; and
(c) Debenture on a subsidiarys assets.
173
-
-
(750)
(780)
-
-
(889)
(292)
70,570
16,410
-
-
41,300
16,655
-
-
(6,399)
(5,029)
(4,979)
-
-
-
-
-
(12,958)
(6,160)
86,980
70,570 41,300
16,410 16,655
(750)
(889)
(780)
(292)
(6,399)
(5,029)
(4,979)
-
57,955
74,022
51,795
Company
Property, plant and equipment
Revaluation of land and buildings
-
-
-
-
1,120
135
640
139
1,120
135
640
139
Tax liabilities
1,255
779
1,255
779
In recognising the deferred tax assets attributable to unutilised tax losses carry-forward and unutilised
capital allowances carry-forward, the Directors made an assumption that there will not be any substantial
change (more than 50%) in the shareholders before these assets are utilised. If there is substantial
change in the shareholders, unutilised tax losses carry-forward and unutilised capital allowances carryforward amounting to approximately RM3,948,000 (2010: RM4,365,000) and RM21,648,000 (2010:
RM15,554,000) respectively will not be available to the Group, resulting in an increase in net deferred
tax liabilities of RM6,399,000 (2010: RM4,979,000).
Deferred tax assets have not been recognised in respect of the following items:
Group
2011
2010
RM000 RM000
Tax losses carry-forward
16,550
13,356
Unutilised capital allowances carry-forward
27,747
28,024
Property, plant and equipment
(5,973)
(5,766)
38,324
35,614
At 25%
9,581
174
8,904
Tax losses carry-forward and unabsorbed capital allowance do not expire under current legislation.
Included in tax losses carry-forward and unabsorbed capital allowances are amounts of RM16,550,000
(2010: RM13,356,000) and RM27,747,000 (2010: RM28,024,000), respectively, representing tax losses
carry-forward and unabsorbed capital allowances, pertaining to certain dormant subsidiaries, which will
not be available to the Group if there is a substantial change in shareholders (more than 50%) in these
subsidiaries.
The comparative figures have been restated to reflect the revised taxable temporary differences of the
tax losses carry-forward and unabsorbed capital allowances available to the Group.
175
176
394
63
457
32,940
30,200
6,147
(890)
(210)
(2,307)
-
Company
Property, plant and equipment
Revaluation of land and buildings
-
-
31
31
-
-
-
-
-
246
246
-
8,316
11,069
-
1
(82)
(2,672)
-
76
-
76
10,508
-
10,508
-
-
-
-
779
640
139
51,795
41,300
16,655
(889)
(292)
(4,979)
-
480
480
-
22,472
29,270
-
139
(488)
(1,420)
(5,029)
(4)
-
(4)
(245)
(245)
-
1,255
1,120
135
74,022
70,570
16,410
(750)
(780)
(6,399)
(5,029)
Recognised Recognised
Acquisition
in profit
in profit
At
of
or loss Recognised At
or loss Recognised At
1.1.2010 subsidiaries
(Note 20)
in equity 31.12.2010
(Note 20)
in equity 31.12.2011
Group RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Group
2011
2010
RM000 RM000
3,557
86
(642)
3,500
270
(213)
3,001
3,557
126
155
(195)
138
164
(32)
86
270
Actuarial assumptions
Principal actuarial assumptions at the end of reporting period (expressed as weighted averages):
Group
2011
2010
Discount rate at 31 December
5.1%
5.6%
Future salary increases
4.0%
4.0%
177
-
82,237
104,530
21,989
-
75,097
110,452
16,657
55,989
936
5,279
-
1,608
8,505
-
208,756
202,206
62,204
10,113
400,848
357,164
62,204
10,113
The non-trade payables due to subsidiaries are unsecured, interest free and repayable on
demand.
16. Revenue
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
Sales of goods
2,797,028
2,521,959
-
Gross dividends
- subsidiaries
-
-
114,115
50,938
- others
1,752
399
1,752
399
2,798,780
2,522,358
115,867
51,337
6,702
178
4,364
969
994
297
118
433
-
8
401
-
1
-
6,380
-
5,997
-
814
1,201
-
837
783
32
17,651
-
-
1,089
1,224
45
-
179
282
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
Directors:
Fees
564
556
508
475
Remuneration
1,142
1,088
1,136
1,078
Benefits-in-kind
158
220
158
220
1,864
1,864
1,802
1,773
3,014
2,988
2,095
2,057
Total short-term employee benefits
4,878
4,852
3,897
3,830
Other key management personnel comprises persons other than the Directors of the Group, having
authority and responsibility for planning, directing and controlling the activities of the entity either directly
or indirectly.
20. Income tax expense
Recognised in profit or loss
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
57,306
(11,758)
3,650
(2,748)
59,680
(7,594)
1,729
-
19,260
(1,462)
-
-
11,015
(872)
-
46,450
53,815
17,798
10,143
14,008
8,464
6,456
1,860
480
-
246
-
22,472
8,316
480
246
68,922
62,131
18,278
10,389
180
215,493
221,833
53,873
(3,568)
24,179
(1,781)
55,458
(2,439)
16,279
(2,860)
28,475
-
2,552
(11,287)
13,105
2,636
(4,480)
681
(103)
1,580
1,530
Overprovided in prior years
74,964
(6,042)
67,865
(5,734)
19,740
(1,462)
11,261
(872)
68,922
62,131
18,278
10,389
113,899
52,418
10,508
76
The calculation of basic earnings per ordinary share at 31 December 2011 was based on the profit
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
calculated as follows:
Profit for the year attributable to shareholders (RM000)
2011
2010
144,005
156,848
792,184
793,132
18.18
19.78
181
Group
The calculation of diluted earnings per ordinary share at 31 December 2011 was based on the profit
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows:
Profit for the year attributable to shareholders (RM000)
2011
Group
2010
144,005
156,848
792,184
5,783
793,132
5,337
797,967
798,469
18.05
19.64
22. Dividends
Sen Total
per share
amount Date of
2011
(net of tax) RM000
payment
4.1
2.3
Total amount
50,524
2010
Final 2009 ordinary
First interim 2010 ordinary
23,793
14,871
Total amount
The Directors do not propose any final dividend for the year ended 31 December 2011.
12.0
7.5
182
32,722
17,802
31 March 2011
7 October 2011
27 May 2010
30 September 2010
38,664
The Group has three reportable segments, as described below, which are the Groups strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic
business units, the Groups Top Management Committee (TMC) reviews internal management reports
on a monthly basis. The following summary describes the operations in each of the Groups reportable
segments:
Restaurants
-
Integrated Poultry
-
Ancillary
-
Performance is measured based on segment profit before tax and interest as included in the internal
management reports that are reviewed by the Groups TMC. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results
of certain segments relative to other entities that operate within these industries.
Segment assets
The total of segment asset is measured based on all assets (including goodwill) of a segment, as included in the internal management reports that are reviewed by the Groups TMC.
Segment liabilities
The total of segment liability is measured based on all liabilities of a segment, as included in the internal
management reports that are reviewed by the Groups TMC.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant
and equipment, and intangible assets other than goodwill.
183
(4,364)
(62,131)
159,702
(6,702)
(68,922)
146,571
Finance costs
Income tax expense
226,197
2,522,358
2,522,358
-
226,197
2,798,780
2,798,780
-
222,195
(549,307)
-
(549,307)
(614,998)
-
(614,998)
(9,110)
362,314
100,889
261,425
10,383
401,241
107,371
293,870
Unallocated expenses
8,964
821,279
533,397
287,882
222,195
208,882
907,834
586,706
321,128
6,932
222,341
1,888,072
2,104,703
Segment results
1,888,072
-
2,104,703
-
Business segments
Total external revenue
Inter-segment revenue
184
354,863
185
Impairment loss
Depreciation/Amortisation
72,642
4,110
62,701
25,123
6,671
23,108
47,382
10,646
41,314
149
7,517
14,728
108,411
10,930
93,326
225,124
343,387
121,723
163,014
577,760
746,746
Total liabilities
180,350
525,965
51,795
672,724
74,022
183,109
146,243
108,705
-
-
Segment liabilities
275,788
234,151
250,693
Unallocated liabilities
1,583,032
391,240
1,838,226
455,415
Total assets
571,734
1,583,032
772,754
1,838,226
875,252
Business segments
Segment assets
Non-current assets
1,170,985
967,208 105,864
Segment assets
294,958
190,123
48,429
35,001
343,387
225,124
24,282
24,282
162,076
102,949
162,076
102,949
289,307
265,025
24,282
24,282
24,282
9
10
169,906
1,812
169,906
1,812
196,000
171,718
24,282
Company
Other investments
Trade and other receivables
(excluding current tax assets)
Cash and cash equivalents
186
12
15
254,249
400,848
254,249
400,848
655,097
655,097
12
15
49,400
62,204
49,400
62,204
111,604
111,604
Company
Loans and borrowings
Trade and other payables
Carrying
amount L&R AFS
Note RM000 RM000 RM000
2010
Financial assets
Group
Other investments
Trade and other receivables
(excluding current tax assets)
Cash and cash equivalents
22,400
9
10
143,982
131,712
143,982
131,712
298,094
275,694
22,400
22,400
9
10
170,233
3,975
170,233
3,975
196,608
174,208
22,400
152,547
357,164
152,547
357,164
509,711
509,711
12
15
20,000
10,113
20,000
10,113
30,113
30,113
Company
Other investments
Trade and other receivables
(excluding current tax assets)
Cash and cash equivalents
2010
Financial liabilities
Group
Loans and borrowings
12
Trade and other payables
15
Company
Loans and borrowings
Trade and other payables
187
22,400
22,400
Credit risk
Liquidity risk
Market risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The Groups exposure to credit risk arises
principally from its receivables from customers. The Companys exposure to credit risk arises
principally from loans and advances to subsidiaries and financial guarantees given to banks for
credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
The Group trades only with recognised and trustworthy third parties. It is the Groups policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis and the Groups exposure to
bad debt is not significant. For transactions that are not denominated in the functional currency
of the relevant operating unit, the Group does not offer credit terms without the specific approval
of the Head of Credit Control.
Exposure to credit risk, credit quality and collateral
The Group does not have any significant exposure to any individual customer or counterparty
nor does it have any major concentration of credit risk related to any financial instruments.
As the Groups transactions are substantially on cash basis, its credit risk is minimal.
188
Individual
Group
Gross impairment Net
RM000 RM000 RM000
2011
Not past due
32,069
- 32,069
Past due 0 30 days
21,876
- 21,876
Past due 31 120 days
10,432
- 10,432
Past due more than 120 days
2,503
(1,026)
1,477
66,880
(1,026)
65,854
24,208
1,005
20,477
2,112
-
-
-
(1,352)
24,208
1,005
20,477
760
47,802
(1,352)
46,450
2010
Not past due
Past due 0 30 days
Past due 31 120 days
Past due more than 120 days
The movements in the allowance for impairment losses of receivables during the financial year were:
Group
2011
2010
RM000 RM000
At 1 January
Impairment loss recognised
Impairment loss reversed
Impairment loss written off
1,352
198
(45)
(479)
1,639
(32)
(255)
At 31 December
1,026
1,352
Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of banking facilities
granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the
subsidiaries and repayments made by the subsidiaries.
As at the end of the reporting period, there was no indication that any subsidiary would default
on repayment.
The financial guarantees provided were not recognised since the fair value on initial recognition
was not material.
189
The Group manages its debt maturity profile, operating cash flows and the availability of funding
so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall
prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible
investments to meet its working capital requirements. In addition, the Group strives to maintain
available banking facilities of a reasonable level to its overall debt position. As far as possible,
the Group raises committed funding from both capital markets and financial institutions and
prudently balances its portfolio with some short term funding so as to achieve overall cost
effectiveness.
190
The table below summarises the maturity profile of the Groups financial liabilities as at the end of the reporting period based on undiscounted contractual payments:
2011
Term loans
- secured
- unsecured
Bankers acceptance unsecured
Revolving credit unsecured
Trade and other payables
12
12
12
12
15
191
12
12
15
Company
2011
Term loans
- secured
Revolving credit unsecured
Trade and other payables
3.97
4.14
3.54
3.72
-
3.97
3.72
-
111,604
46,400
3,000
62,204
655,097
47,077
165,172
34,000
8,000
400,848
135,694
70,481
3,009
62,204
701,323
71,249
186,962
34,240
8,024
400,848
70,662
5,449
3,009
62,204
480,641
5,866
31,663
34,240
8,024
400,848
5,857
5,857
-
-
40,728
6,208
34,520
-
-
-
25,129
25,129
-
-
145,908
25,129
120,779
-
-
-
34,046
34,046
-
-
34,046
34,046
-
-
-
Maturity analysis
2010
Term loans
- secured
- unsecured
Bankers acceptance unsecured
Revolving credit unsecured
Trade and other payables
12
12
12
12
15
192
12
15
Company
2010
Term loans
- secured
Trade and other payables
4.10
3.52
3.23
3.47
-
4.08
-
30,113
20,000
10,113
509,711
22,167
119,698
5,682
5,000
357,164
30,207
20,094
10,113
534,606
22,988
143,573
5,866
5,015
357,164
30,207
20,094
10,113
419,643
20,769
30,829
5,866
5,015
357,164
24,649
502
24,147
-
-
-
89,203
606
88,597
-
-
-
1,111
1,111
-
-
-
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and other prices which will affect the Groups financial position or cash flows.
The foreign currency risk of the Group arises from subsidiaries operating in foreign countries,
which generate revenue and incur costs denominated in foreign currencies. The currency
exposure is primarily Singapore Dollars (SGD), Indian Rupees (Rs), Brunei Dollars (B$) and US
Dollars (USD).
The Group is exposed to foreign currency risk on purchases that are denominated in a currency
other than the respective functional currencies of Group entities. The currencies giving rise to this
risk are primarily US Dollars.
Risk management objectives, policies and processes for managing the risk
The Group does not enter into any hedging activities. Hence, is not exposed to any hedging
risk.
The Groups exposure to foreign currency (a currency which is other than the currency of the
Group entities) risk, based on carrying amounts as at the end of the reporting period was:
Denominated in
Group SGD Rs
B$ USD
RM000 RM000 RM000 RM000
2011
Trade and other receivables
976
382
-
Term loans - unsecured
-
(11,700)
-
(31,779)
Trade and other payables
(37,341)
(742)
(1,017)
(36,365)
(12,060)
(1,017)
(31,779)
2010
Trade and other receivables
Term loans - unsecured
Trade and other payables
1,064
-
(35,987)
16
-
(1,622)
11
-
(935)
(18,511)
-
(34,923)
(1,606)
(924)
(18,511)
The exposure to currency risk of Group entities which functional currency is other than RM is not
material and hence, sensitivity analysis is not presented.
193
The Groups interest rate risk arises primarily from interest-bearing borrowings. Borrowings at
floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates
expose the Group to fair value interest rate risk.
Risk management objectives, policies and processes for managing the risk
The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate
borrowings.
The interest rate profile of the Groups and the Companys significant interest-bearing financial
instruments, based on carrying amounts as at the end of the reporting period was:
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
23,446
(42,000)
52,893
(10,682)
177
(3,000)
125
-
(18,554)
42,211
(2,823)
125
(212,249)
(141,865)
(46,400)
(20,000)
The Group does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss, and the Group does not designate derivatives as hedging instruments
under a fair value hedged accounting model. Therefore, a change in interest rates at the end
of the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points (bp) in interest rates at the end of the reporting period would
have increased/(decreased) equity and post-tax profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular foreign currency rates, remained
constant.
Profit or loss
Profit or loss
50 bp
50 bp
50 bp
50 bp
increase decrease
increase decrease
2011
2011
2010
2010
RM000 RM000 RM000 RM000
Group
Floating rate instruments
796
(796)
532
(532)
Company
Floating rate instruments
174
(174)
75
(75)
194
Equity price risk arises from the Groups investments in equity securities.
Risk management objectives, policies and processes for managing the risk
Management of the Group monitors the equity investments on a portfolio basis. Material
investments within the portfolio are managed on an individual basis and all buy and sell decisions
are approved by the Risk Management Committee of the Group.
The carrying amounts of cash and cash equivalents, short term receivables and payables and
short term borrowings approximate fair values due to the relatively short term nature of these
financial instruments.
The fair values of other financial assets and liabilities, together with the carrying amounts shown
in the statement of financial position, were as follows:
2011
2010
Carrying Fair Carrying Fair
Group
amount
value
amount
value
Note RM000 RM000 RM000 RM000
Quoted shares
- in Malaysia
Term loans - non-current
- secured
- unsecured
Company
Quoted shares
- in Malaysia
Term loans - non-current
- secured
24,282
24,282
22,400
22,400
12
12
(46,708)
(141,796)
(46,708)
(141,796)
(1,610)
(104,235)
(1,610)
(104,235)
24,282
24,282
22,400
22,400
12
(46,400)
(46,400)
The following summarises the methods used in determining the fair value of financial instruments
reflected in the above table.
The fair values of financial assets that are quoted in an active market are determined by reference
to their quoted closing bid price at the end of the reporting period.
195
Fair value, which is determined for disclosure purposes, is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the end of
the reporting period.
The interest rates used to discount estimated cash flows, where applicable, were as follows:
2011
2010
Group
Loans and borrowings
2.72% - 10.75%
2.55% 5.15%
Company
Loans and borrowings
3.97%
4.08%
Comparative figures were not presented for 31 December 2010 by virtue of the exemption
provided in paragraph 44G of FRS 7.
The table below analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
Level 1:
Level 2:
Level 3:
The Groups objectives when managing capital is to maintain a strong capital base and safeguard the
Groups ability to continue as a going concern, so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Directors monitor and determine to maintain an
optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
196
Net debt
151,300
20,835
1,074,215
990,247
Debt-to-equity ratios
0.14
0.02
There were no changes in the Groups approach to capital management during the financial year.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to
maintain a consolidated shareholders equity equal to or not less than the 25 percent of the issued and
paid-up capital (excluding treasury shares) and such shareholders equity is not less than RM40 million.
The Company had complied with this requirement.
The Group is also required to maintain a maximum debt-to-equity ratio of 2.0 to comply with a bank
covenant, failing which, the bank may call an event of default. The Group has complied with this
covenant.
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
94,827
105,816
-
97,729
120,156
632
2,885
5,769
-
2,884
8,654
-
200,643
218,517
8,654
11,538
The Group and the Company has entered into non-cancellable operating lease agreements for the
use of land and buildings. These leases have an average term of fifteen (15) years with no renewal or
purchase option included in the contracts. Certain contracts include escalation clauses or contingent
rental arrangements computed based on sales achieved while others include fixed rentals for an average
of three (3) years. There are no restrictions placed upon the Group and the Company by entering into
these leases.
197
290,939
18,920
284,315
17,627
2,556
922
2,720
922
309,859
301,942
3,478
3,642
231,911
141,958
For the purposes of these financial statements, parties are considered to be related to the Group or
the Company if the Group or the Company has the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating decisions, or vice versa, or
where the Group or the Company and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group either directly or indirectly. The key management
personnel includes all the Directors of the Group, and certain members of senior management of the
Group.
The significant related party transactions of the Group and the Company, other than key management
personnel compensation (disclosed in Note 19), were as follows:
Transaction value
for year ended
31 December
Group
2011
2010
RM000 RM000
Ultimate holding corporation
Rendering of services
268
116
Holding companies
Sale of goods
Related companies
Gross dividends
Sale of goods
Purchase of goods
Purchase of apparels
Purchase of balloons
Purchase of printing, publication materials
Purchase of souvenir and gifts
Rendering of services
Interest payable
Allocation of expenses
Management fees income
Equipment rental payable
198
1,752
100,473
7,654
43
8
109
8
5,027
-
6,087
2,993
133
399
96,836
14,725
8
69
9
7,597
139
5,831
4,061
224
312
524
165
-
Company
Ultimate holding corporation
Rendering of services
103
64
114,115
22,986
6,380
50,938
29,670
5,997
1,752
2,993
2,521
210
5
27
399
4,061
2,250
210
4
-
35
26
Subsidiaries
Gross dividends
Management fees income
Interest receivable
Related companies
Gross dividends
Management fees income
Rendering of services
Rental income
Purchase of souvenir and gifts
Purchase of equipment
Related parties
Rendering of services
There were no material outstanding balances as at reporting period other than that disclosed in
Note 9 and Note 15.
There was no impairment loss provided in respect of these balances outstanding at year end.
199
90.0% of the issued and paid-up share capital of Southern Poultry Farming Sdn Bhd;
84.8% of the issued and paid-up share capital of Synergy Poultry Farming Sdn Bhd;
90.0% of the issued and paid-up share capital of Ventures Poultry Farm Sdn Bhd; and
100% of the issued and paid-up share capital of Agrotech Farm Solutions Sdn Bhd
for a total cash consideration of RM1,111,951. These acquisitions were completed on 14 January
2011.
(ii) On 11 March 2011, the Company announced that it had via its wholly-owned subsidiary, Ayamas
Shoppe Sdn Bhd, incorporated a company, ie. Ayamas Shoppe (Sabah) Sdn Bhd pursuant to the
Joint Venture Agreement dated 27 October 2010 with Rastamas Trading Sdn Bhd for the purpose
of operating Kedai Ayamas business in Sabah.
Disposal of interest in subsidiary in 2011
(iii) On 2 August 2011, the Company announced that it had through KFC Marketing Sdn Bhd entered
into a Sale and Purchase of Shares incorporating Shareholders Agreement with Ayamazz Sdn Bhd
and Mohamed Hashim bin Mohd Kamil (Intrapreneur).
During the year, the Group disposed off 10% of its interest in Ayamazz Sdn Bhd for a cash
consideration of RM50,000.
These acquisitions have the following effect on the Groups assets and liabilities on acquisition date:
Recognised
values on
acquisition
RM000
Property, plant and equipment
18
Inventories
761
Trade and other receivables
16
Cash and cash equivalents
1,248
Current tax assets
74
Trade and other payables
(1,204)
Non-controlling interests
(619)
294
818
1,112
(1,248)
(136)
200
These acquisitions have the following effect on the Groups assets and liabilities on acquisition date:
Recognised
values on
acquisition
RM000
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents (bank overdraft)
Loans and borrowings
Deferred tax liabilities
Trade and other payables
Current tax liabilities
Non-controlling interests
4,005
109
549
(385)
(1,023)
(31)
(597)
(39)
(96)
2,492
6,636
9,128
385
9,513
201
The effect of net profits and net assets contributed by these companies is not material in relation to the
consolidated net profit and net assets of the Group for the year.
Acquisition-related costs
The Groups acquisition-related costs in relation to external legal fees have been included in other
expenses in the Groups consolidated statement of comprehensive income and are not material to the
Groups net profit for the year.
2,198
4,363
9,250
2,406
1,145
10,000
6,038
1,829
3,000
40,229
(ii) Reference is made to the announcement made by the Company in relation to the letter of offer by
Massive Equity Sdn Bhd (MESB) dated 14 December 2011, wherein MESB stated its intention to
acquire the entire business and undertaking of KFC, including all assets and liabilities of KFC, at an
aggregate cash consideration equivalent to:(a) RM4.00 per ordinary share of RM0.50 each held in KFC (KFC Share) multiplied by the total
outstanding KFC Shares (less treasury shares, if any) at a date to be determined later; and
(b) RM1.00 per warrant of KFC (KFC Warrant) multiplied by the total outstanding number of KFC
Warrants in issue at a date to be determined later.
MESB had also on even date made an offer to acquire substantially all the business and undertaking
of QSR Brands Bhd (QSR), including substantially all of the assets and liabilities of QSR (QSR
Offer). The KFC Offer and the QSR Offer are inter-conditional.
The Company had on 21 December 2011 announced that the Board (save for the Interested
Directors under the KFC Offer) had considered, inter-alia, the views of the Main Adviser and
the Independent Adviser and all other relevant aspects of the KFC Offer. Pursuant thereto, the
Independent Directors of KFC had agreed to accept the KFC Offer subject to further negotiations
and mutual agreement on terms and conditions to be incorporated into the definitive sale and
purchase agreement.
The KFC Offer is in the midst of being implemented for Shareholders and Warrantholders approval,
with the details to be announced in due course.
202
Pursuant to Paragraph 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, the
breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised
and unrealised profits were as follows:
Group Company
2011
2010
2011
2010
RM000 RM000 RM000 RM000
Total retained earnings of the Company
and its subsidiaries:
- realised
588,019
471,260
223,490
177,739
- unrealised
(57,612)
(35,140)
(1,120)
(640)
530,407
436,120
222,370
177,099
Add: Consolidation adjustments
45,613
46,106
-
576,020
482,226
222,370
177,099
The determination of realised and unrealised profits is based on the Guidance of 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, issued by Malaysian Institute of Accountants
on 20 December 2010.
203
Statement by Directors
In the opinion of the Directors, the financial statements set out on pages 131 to 202 are drawn up in
accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a
true and fair view of the financial position of the Group and of the Company at 31 December 2011 and of
their financial performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out in Note 32 to the financial statements has been compiled
in accordance with the Guidance of 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,
issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa
Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Kuala Lumpur
Date: 7 March 2012
Statutory Declaration
I, Sheik Sharufuddin bin Sheik Mohd, being the Officer primarily responsible for the financial management
of KFC Holdings (Malaysia) Bhd, do solemnly and sincerely declare that the financial statements set out on
pages 131 to 203 are, to the best of my knowledge and belief, correct and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations
Act, 1960.
Subscribed and solemnly declared by the above named in Kuala Lumpur on 7 March 2012.
Before me:
Faridah binti Abdul Hamid (W420)
Commissioner for Oaths
204
Independant AuditorsReport
to the members of KFC Holdings (Malaysia) Bhd
205
Independant AuditorsReport
to the members of KFC Holdings (Malaysia) Bhd
KPMG
Firm Number: AF 0758
Chartered Accountants
Johan Idris
Approval Number: 2585/10/12(J)
Chartered Accountant
Petaling Jaya
Date: 7 March 2012
206
KEDAH
Geran 34780 Lot 1908, Mukim Sidam Kiri
27/11/2011
Daerah Kuala Muda, Kedah
NEGERI SEMBILAN
Geran 22067 Lot 3468, Mukim Linggi
15/12/2010
Daerah Port Dickson
Geran 6348 PT 2149, Mukim Lenggeng
15/12/2010
Daerah Seremban
Lot 559 Mukim Gemencheh, Daerah Tampin 15/12/2010
HS (D) 5977-5980 PT 924-927
15/12/2010
Mukim Titian Bintangor, Daerah Rembau
Freehold
Freehold
Freehold
Freehold
Freehold
21
207
21
15
20 acres
30,557
20 acres
55 acres
47.28 acres
Breeder farm
Breeder farm
Breeder farm
AGRICULTURAL PROPERTIES
SELANGOR
Geran 24766 Lot 1462, Mukim Beranang
15/12/2010
22
Freehold
-
63 acres
Breeder farm
Daerah Hulu Langat
HS (D) 20746 PT153
15/12/2010
13
Leasehold
25/01/2105
32 acres
Breeder farm & hatchery
Bandar Baru Salak Tinggi, District of Sepang
1,362
4,805
2,939
5,222
15,249
9,684
13,043
208
COMMERCIAL PROPERTIES
PERLIS
9 Persiaran Putra Timur Satu
15/12/2010
17
Leasehold
25/09/2092
2,660
02000 Kuala Perlis
KEDAH
Lot No 269 Pekan Dindong
15/12/2010
17
Freehold
-
3,260
07000 Kuah Langkawi
368
443
33,007
44,000
Double-storey intermediate
shophouse for storage and
accommodation
JOHOR
Mukim of Mersing, District of Johor
15/12/2010
-
Freehold
-
855 acres
Vacant land and oil palm estate
Part of Lot land held under PTD 9374
02/11/2011
1
Leasehold
16/08/2081
400 acres
Broiler farms
HSD 14897 Mukim Bukit Batu
Daerah Kulai Jaya, Johor
MELAKA
Lots 1375-1397, 1689 and 1706
15/12/2010
21
Freehold
-
151 acres
Breeder farm
9,760
Mukim Ayer Paabas, Daerah Alor Gajah
475
495
209
1,512
247
1,683
2,431
2,656
648
PULAU PINANG
34 Jalan Mahsuri, 11950 Bandar Bayan Baru 15/12/2010
19
Leasehold
15/05/2090
7,176
Double-storey shophouse
for restaurant
3A-G-18 Blok 3A, Kompleks Bukit Jambul
15/12/2010
15
Freehold
-
2,972 Ground floor of a shopping complex
Jalan Rumbia, 11900 Pulau Pinang
for restaurant
Unit No G-103 Megamal Pinang
15/12/2010
15
Leasehold
04/07/2094
3,342 Ground floor of a shopping complex
2828 Jalan Baru, Bandar Perai Jaya
for restaurant
13600 Seberang Perai Tengah
Parcel No S-C1-05, Pusat Bandar
15/12/2010
8
Freehold
-
2,798
Double-storey intermediate
Nibong Tebal, 14300 Pulau Pinang
shophouse for restaurant
1-5G, 1-6G & 1-9G, Eden Parade
15/12/2010
11
Freehold
-
4,397
3 adjoining ground and mezzanine
Jalan Sungai Emas, 11100 Batu Ferringhi
floors of a shopping complex
for restaurant
KEDAH (contd)
210
Freehold
Freehold
27
43,561
7,542
Double-storey intermediate
shophouse for restaurant
SELANGOR
18A Ground Floor, Jalan SS6/3
15/12/2010
23
Freehold
-
1,490 Ground floor of a 5-storey
Kelana Jaya, 47301 Petaling Jaya
shophouse for retail outlet
PERAK
79 Jalan Dato Lau Pak Khuan
15/12/2010
41
Freehold
-
4,980
Ipoh Garden, 31400 Ipoh
65 Jalan Dato Onn Jaafar, 30300 Ipoh
15/12/2010
25
Freehold
-
19,375
801
6,717
589
1,750
589
9,600
6,848
211
Leasehold
Freehold
28/05/2108
5,968
5,000
SELANGOR (contd)
4,667
7,902
4-storey shopoffice
4,181
3,959
1,466
639
1,963
4,719
212
3,969
2,488
2,136
812
3,619
6,660
NEGERI SEMBILAN
26 Jalan Dato Sheikh Ahmad
15/12/2010
27
Freehold
-
3,000
Double-storey corner shophouse
70000 Seremban
for retail outlet and staff hostel
20 & 21 Jalan Dato Sheikh Ahmad
15/12/2010
31
Freehold
-
7,812
2 adjoining units of 4-storey
70000 Seremban
shophouse for restaurant and hostel
213
MELAKA
9 Jalan PPM 9, Plaza Pandan Malim
15/12/2010
14
Leasehold
09/06/2095
5,818
75250 Melaka
555 Plaza Melaka, Jalan Hang Tuah
15/12/2010
25
Freehold
-
9,990
75300 Melaka
PM 222 Lot No. 4260, Mukim Bukit Katil
15/12/2010
-
Leasehold
14/09/2077
42,851
Daerah Melaka Tengah
621
1,182
3,123
2,343
423
3,400
1,126
498
2 units of a double-storey
shophouse for restaurant
214
910
371
381
Freehold
Leasehold
Freehold
15/12/2010
30/06/2103
3,080
4,620
6,987
509
528
853
Lot 590 & Lot 591, PTD 171459 Taman Perling 15/12/2010
-
Freehold
-
45,000
Vacant land for restaurant
8,400
Mukim Pulai, 81200 Johor
JOHOR
11 Jalan Sri Perkasa 2/1
15/12/2010
15
Leasehold
13/04/2094
4,620
3-storey intermediate shophouse
Taman Tampoi Utama, 81200 Johor Bahru
for restaurant and staff hostel
1 & 1-1 Jalan Niaga, Pusat Perniagaan
15/12/2010
12
Leasehold
14/05/2085
2,926
Corner unit of double-storey
Jalan Mawai, 81900 Kota Tinggi
shophouse for restaurant
MELAKA (contd)
215
PAHANG
Retail 1 & 2 Ground Floor
15/12/2010
7
Leasehold
29/08/2106
2,878
Bangunan Baru UMNO Pekan, 26600 Pekan
1,146
406
6,171
5,904
1,279
669
TERENGGANU
10 Persiaran Melor, Kijal Beach Resort
15/12/2010
17
Leasehold
25/11/2101
3,300
Double-storey intermediate
24100 Kijal
shophouse for restaurant
JOHOR (contd)
No. 2 Jalan Bandar 1
11/11/2011
1
Leasehold
16/07/2101
5,280
Pusat Bandar Baru Ayer Hitam
86100 Ayer Hitam, Johor
No. 1 Jalan Bandar 1
11/11/2011
1
Leasehold
16/07/2101
9,936
Pusat Bandar Baru Ayer Hitam
86100 Ayer Hitam, Johor
Part of PTD 84134, Bandar Dato Onn
16/06/2011
-
Freehold
-
2 acres
Johor Bahru
Part of C9 Taman Damansara Aliff
25/05/2011
1
Freehold
-
41,295
Tampoi, Johor Bahru
216
Freehold
0.494 acres
PULAU PINANG
2718 Jalan Seladang Alma
15/12/2010
23
Freehold
-
47,376
14000 Bukit Mertajam
BRUNEI
EDR BD 44812 Lot 51759
17/02/2011
Kampong Sengkurong
Mukim Sengkurong, Brunei
INDUSTRIAL PROPERTIES
SABAH
Lot 25 Block 3 Bornion Centre, Jalan Kolam 15/12/2010
27
Leasehold
15/05/2915
5,710
88300 Kota Kinabalu
SINGAPORE
18 Yung Ho Road, Singapore 618591
15/12/2010
36
Leasehold
16/12/2036
2,912
1,345
1,359
3,744
1,122
Freehold
8.231 acres
217
KEDAH
Mukim of Sungai Petani/Sungai Pasir
15/12/2010
-
Freehold
-
District of Kedah
45,900
square
metres
SELANGOR
Lot 5 Jalan 51A/223, 46675 Petaling Jaya
15/12/2010
24
Leasehold
18/11/2067
27,930
Lot 20153 Jalan Pelabuhan Utara
15/12/2010
25
Leasehold
17/12/2086
124,031
42000 Pelabuhan Klang
17, 19 & 21 Jalan Pemaju U1/15
15/12/2010
14
Freehold
-
169,200
Seksyen U1, HICOM-Glenmarie Industrial Park
40150 Shah Alam
Lot 166 Jalan Pemaju U1/15
15/12/2010
-
Freehold
-
205,603
Seksyen U1, HICOM-Glenmarie Industrial Park
40150 Shah Alam
1, 3 & 6 Lorong Gerudi 1
15/12/2010
17
Leasehold
15/03/2087
312,594
Off Jalan Pelabuhan Utara
42000 Pelabuhan Klang
21,600
13,124
39,062
39,511
7,256
8,909
Industrial complex
218
RESIDENTIAL PROPERTIES
W.P. KUALA LUMPUR
90 Pinggir Zaaba, Taman Tun Dr Ismail
15/12/2010
20
Freehold
-
5,388
60000 Kuala Lumpur
NEGERI SEMBILAN
Unit Nos 1D, 1E, 1F, 1G & 2D
15/12/2010
14
Leasehold
27/07/2094
3,251
Marina Bay Admiral Cove, 71000 Port Dickson
JOHOR
PLO 398 Kilang Siapbina PKENJ
15/12/2010
21
Leasehold
18/04/2050
24,057
Jalan Perak, Kawasan Perindustrian
Pasir Gudang, 81770 Pasir Gudang
SABAH
Lot 43A Karamunsing Warehouse
15/12/2010
26
Leasehold
22/01/2901
11,832
88000 Kota Kinabalu
2,149
2,978
953
PAHANG
Unit No 3556 Block B
15/12/2010
24
Freehold
-
1,399
Awana Golf & Country Resort
69000 Genting Highlands
141
304
299
318
219
Analysis of Shareholdings
as at 2 April 2012
8,921
2,186
4,189
689
123
3
55.37
13.57
26.00
4.28
0.76
0.02
49,647
1,714,904
17,081,256
19,328,844
169,437,853
583,576,600
0.01
0.22
2.16
2.44
21.41
73.76
16,111
100.00
791,189,104
100.00
SUBSTANTIAL SHAREHOLDERS
Direct Indirect
No. of KFCH No. of KFCH
Shareholder Shares held
% Shares held
QSR Brands Bhd
QSR Ventures Sdn Bhd
Kulim (Malaysia) Berhad
Johor Corporation
Lembaga Tabung Haji
175,719,600
228,320,000
6,157,800
343,000
181,200,600
*i
228,320,000
22.21
28.86
*ii
404,039,600
0.78
*iii
410,197,400
0.04
22.9
-
%
28.86
51.07
51.85
-
Notes:
Deemed interested via interest in QSR Ventures Sdn Bhd pursuant to Section 6A of the Companies Act
1965 (the Act).
*ii
Deemed interested via interest in QSR Brands Bhd pursuant to Section 6A of the Act.
*iii
Deemed interested via interest in Kulim (Malaysia) Berhad pursuant to Section 6A of the Act.
*i
DIRECTORS DIRECT AND INDIRECT INTERESTS IN THE COMPANY AND ITS RELATED
CORPORATIONS
Save as disclosed below, none of the Directors has any interest, direct or indirect, in the Company and its
related corporations.
In the Company
Direct Indirect
Director No. of Shares
% No. of Shares
%
Hassim bin Baba
100
*
-
Notes
* Insignificant
220
Analysis of Shareholdings
as at 2 April 2012
No. of Shares
228,320,000
28.86
181,200,600
22.90
174,056,000
22.00
22,089,700
2.79
14,024,000
1.77
11,725,200
1.48
9,318,400
1.18
8,906,300
1.13
7,889,200
1.00
6,161,700
0.78
6,157,800
0.78
5,689,700
0.72
3,891,904
0.49
3,534,000
0.45
1 OSK Noms (T) Sdn Bhd - A/C Bank Muamalat Malaysia Berhad for
4 Malaysia Noms (T) Sdn Bhd - A/C Great Eastern Life Assurance
6 Mayban Noms (T) Sdn Bhd - A/C Mayban Trustees Berhad for
Public Ittikal Fund (N14011970240)
7 AmanahRaya Trustees Berhad - A/C Public Islamic Select
Treasures Fund
8 DB (Malaysia) Nom (A) Sdn Bhd - A/C Exempt An for Deutsche
221
Analysis of Shareholdings
as at 2 April 2012
No. of Shares
Investments Berhad
3,320,400
0.42
3,093,600
0.39
17 CIMB Group Noms (T) Sdn Bhd - A/C CIMB Bank Berhad (EDP 2)
2,802,100
0.35
2,588,100
0.33
2,508,600
0.32
2,253,700
0.28
2,239,200
0.28
2,217,000
0.28
Fund Inc.
2,114,200
0.27
24 Mayban Noms (T) Sdn Bhd - A/C Etiqa Takaful Berhad (Family PRF EQ)
2,012,300
0.25
(Bermuda) Ltd.
2,000,000
0.25
2,000,000
0.25
1,988,000
0.25
1,663,600
0.21
29 Mayban Noms (T) Sdn Bhd - A/C Etiqa Insurance Berhad (Life Non-Par FD) 1,600,000
0.20
1,516,200
0.19
718,881,504
90.86
18 HSBC Noms (A) Sdn Bhd - A/C Exempt An for Credit Suisse Securities
(Europe) Limited (CLTAC N-Treaty)
19 Malaysia Noms (T) Sdn Bhd - A/C Great Eastern Life Assurance
21 Citigroup Noms (A) Sdn Bhd - A/C CBNY for DFA Emerging Markets
Small Cap Series
22 Malaysia Noms (T) Sdn Bhd - A/C Great Eastern Life Assurance
(Malaysia) Berhad (LSF)
23 HSBC Noms (A) Sdn Bhd - A/C HSBC-FS I for Lim Asia Arbitrage
25 Citigroup Noms (A) Sdn Bhd A/C GSI for Orvent Master Fund
Total
222
Exercise Price
Exercise Period
1,497
1,322
917
229
10
3
37.63
33.23
23.05
5.76
0.25
0.08
27,283
425,086
4,345,127
6,136,253
2,825,848
17,795,976
0.09
1.35
13.77
19.45
8.95
56.39
TOTAL
3,978
100.00
31,555,573
100.00
DIRECTORS DIRECT AND INDIRECT INTERESTS IN THE COMPANY AND ITS RELATED
CORPORATIONS
Save as disclosed below, none of the Directors has any interest, direct or indirect, in the Company and its
related corporations.
In the Company
Direct Indirect
Director No. of warrants
% No. of warrants
%
Hassim bin Baba
16
*
-
Notes
* Insignificant
In the immediate holding company QSR Brands Bhd
Direct Indirect
Director No. of warrants
% No. of warrants
%
Hassim bin Baba
32
*
-
Notes
* Insignificant
In the intermediate holding company Kulim (Malaysia) Berhad
Direct Indirect
Director No. of warrants
% No. of warrants
%
Datin Paduka Siti Sadiah
binti Sheikh Bakir
34,750
0.02
-
-
223
No. of Warrants
9,132,800
28.94
6,870,476
21.77
1,792,700
5.68
1,060,808
3.36
5 Johor Corporation
645,000
2.04
6 Yeow Ho Huat
202,800
0.64
145,100
0.46
136,900
0.43
135,640
0.43
135,000
0.43
134,600
0.43
120,000
0.38
110,000
0.35
100,000
0.32
100,000
0.32
93,600
0.30
17 CimSec Noms (T) Sdn Bhd - A/C for Toh Lay Fan (Penang-CL)
91,900
0.29
90,000
0.29
88,000
0.28
85,000
0.27
21 Public Noms (T) Sdn Bhd - A/C Choo Hon Leng (E-SPG)
80,000
0.25
80,000
0.25
75,040
0.24
24 HLG Nom (T) Sdn Bhd - A/C Hong Leong Bank Bhd for Mah Nyok Ha
73,000
0.23
25 Mayban Noms (T) Sdn Bhd - A/C Etiqa Insurance Berhad (Life Non-Par FD)
70,576
0.22
67,300
0.21
66,544
0.21
65,900
0.21
29 Oh Chee Wah
65,000
0.21
63,000
0.20
21,976,684
69.64
1 OSK Noms (T) Sdn Bhd - A/C Bank Muamalat Malaysia Berhad for
3 HSBC Noms (A) Sdn Bhd - Exempt An for Credit Suisse Securities
Total
224
I/ We, ...............................................................................................................................................................................
of .....................................................................................................................................................................................
..................................................................................................................................................................................................................................................
being a member/ members of KFC Holdings (Malaysia) Bhd (Company), hereby appoint .................................................
..................................................................................................................................................................................................................................................
(Name of proxy as per NRIC, in capital letters)
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 32nd
Annual General Meeting (AGM) of the Company to be held at Level 3, Wisma KFC, No 17, Jalan Sultan Ismail, 50250
Kuala Lumpur on Tuesday, 22 May 2012 at 11:30 a.m. or any adjournment thereof in respect of my/ our holdings of shares
in the manner indicated below:
FOR
Resolution 1
Resolution 2
Re-election of Directors:-
Resolution 3
Resolution 4
Resolution 5
AGAINST
Resolution 6 YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum Sultan Salahuddin
Abdul Aziz Shah Alhaj
Resolution 7
Resolution 8
Resolution 9
Resolution 10
(Please indicate with a () in the appropriate box whether you wish your vote to be cast for or against the resolution. In the absence of specific direction, your
proxy will vote or abstain as he thinks fit. However, if more than one proxy is appointed, please specify the number of shares represented by each proxy, failing
which the appointment shall be invalid)
....................................................................
Signature(s)/ Common Seal of Shareholder(s)
Notes:
1. A member of the Company entitled to be present and vote at the above AGM may appoint a proxy or proxies to be present and vote instead of him.
A Proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 need not be complied
with.
2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or if the appointor is a
corporation, either under its common seal or under the hand of an officer or attorney duly authorised.
3. A member of the Company may appoint more than two (2) proxies to attend the AGM. Where a member of the Company 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.
4. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991, he may appoint
at least one (1) proxy in respect of each securities account he holds with ordinary shares of the Company standing to the credit of the said securities
account.
5. Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991, there
will be no limit to the number of proxies which the exempt authorized nominee may appoint.
6. Any alteration made in this form should be initialed by the person who signs it.
7. The Proxy Form and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority
225
must be deposited at Tricor Investor Services Sdn Bhd, Level 17, The
Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala
KFC Holdings (Malaysia) BHD (65787-T)
Lumpur not less than forty-eight (48) hours before the time for holding
the meeting
or any adjournment thereof.
Annual Report
2011
AFFIX
STAMP
HERE