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OLDTOWN BERHAD

(797771-M)

ANNUAL
REPORT
2 0 1 4

In the midst of our busy and hectic lives, some


long for the good old days that we grew up in.
When everything was simple and life was peaceful.
At OLDTOWN White Coffee, we strive to recreate
charming memories of good old days.
So come and rekindle unique memories of a
time worth remembering. Come and enjoy the
Aroma Of Good Times with OLDTOWN
White Coffee.

Annual Report 2014

Contents

Our Legacy
Vision & Mission Statement

4 Group Structure

27 Corporate Responsibility
29 Corporate Governance
Statement

5 Corporate Information

37 Audit Committee Report

6 Board of Directors

40 Statement On Risk Management

7 Board of Directors Profile


10 Chairmans Statement
14

Group Managing Directors


Review of Operations

22 Financial Highlights
23

Sustainability &
Corporate Responsibility

& Internal Control

42 Additional Compliance Information


49 Financial Statements
135

List of Properties
Owned by Oldtown Group

140

Analysis of Shareholdings

143

Notice of Annual General Meeting


Proxy Form

OLDTOWN BERHAD (797771-M)

Our Legacy

(Incorporated in Malaysia)

From the day our proprietary OLDTOWN White


Coffee blend was formulated, it has been steadfastly
carried down over the years to this day. Our white
coffee are roasted and prepared according to
the original method to ensure that every cup of
OLDTOWN White Coffee imparts the same fullbodied taste, texture and aroma year after year. Our
commitment to maintain the true essence of our
heritage has helped us to create a one-of-its-kind
brand that is renowned the world over.
To date, our white coffee products are exported to
more than 13 countries worldwide. Our business also
includes the OLDTOWN White Coffee chain of caf
outlets. Carrying the charm of a traditional Ipoh coffee
shop, we serve a variety of Malaysian delicacies from
white coffee to toasts, rice and noodles. To date, we
have more than 200 caf outlets through out Asia.

Vision
To be Asia Pacifics Leading White Coffee Brand

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

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

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

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

INVESTORS :
We Focus on Prospering Our Investors
We are dedicated to growing and maximising the financial rewards of
our investors as we see it as a platform for our company to continue
to provide to our consumers and the community.

Business Overview
The business activities of Oldtown Group can be divided into three
broad categories as follows:
Operation of Cafe Chain
Own Cafe Outlets*
Franchised Outlets
Food Processing
Manufacturing of coffee and other beverages
Instant Coffee Mix
Roasted Coffee Powder
Instant Milk Tea Mix
Instant Chocolate
Marketing and sales of coffee and other beverages
Instant Coffee Mix
Roasted Coffee Powder
Instant Milk Tea Mix
Instant Chocolate
Ready-to-drink coffee
*Own cafe outlets include those that are fully and partially owned.

Group
 tructure
S

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

as at 31 March 2014

OldTown
Berhad
100%White Cafe Sdn Bhd
100%Gongga Food Sdn Bhd
100%White Cafe Marketing Sdn Bhd
100%Emperors Kitchen Sdn Bhd
100%Dynasty Confectionery Sdn Bhd
100%Esquire Chef Sdn Bhd
100%Kopitiam Asia Pacific Sdn Bhd

100% Old Town Kopitiam Sdn Bhd

100%Oldtown Singapore Pte Ltd

50%OTK Singapore Pte Ltd

100%Old Town Kopitiam


Butterworth Sdn Bhd

100%Dynasty Kitchen Sdn Bhd

100%Old Town Kopitiam


Kuala Lumpur Sdn Bhd
100%Old Town Kopitiam Cheras Sdn Bhd
100%Oldtown Logistics Sdn Bhd
70%Advance City Limited
100%Old Town (M) Sdn Bhd
100%OTK (HK) Investment Limited
100%Oldtown APP Sdn Bhd
80%Conneczone Sdn Bhd
50%Plus One Solution Sdn Bhd
40%OTK Eatery Sdn Bhd

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Corporate
Information

Board of Directors
Datuk Dr. Ahmed Tasir
Bin Lope Pihie

Mark Wing Kong

Chuah Seong Meng


Executive Director

PJN, PMP, JSM, FASc

Independent Non-Executive
Director

Independent Non-Executive
Chairman

Tan Chon Ing @ Tan Chong Ling

Executive Director

Lee Siew Heng


Group Managing Director

Independent Non-Executive
Director

Dato Wong Guang Seng

Clarence DSilva A/L Leon DSilva


Goh Ching Mun
Executive Director

Independent Non-Executive
Director

Tan Say Yap

Audit Committee

Remuneration Committee

Nomination Committee

Mark Wing Kong

Tan Chon Ing @ Tan Chong Ling

Chairman

Chairman

Datuk Dr. Ahmed Tasir


Bin Lope Pihie

Datuk Dr. Ahmed Tasir


Bin Lope Pihie

Datuk Dr. Ahmed Tasir


Bin Lope Pihie

Tan Chon Ing @


Tan Chong Ling

Lee Siew Heng

Tan Chon Ing @ Tan Chong Ling

Mark Wing Kong

Dato Wong Guang Seng

Executive Director

Board Committees

Dato Wong Guang Seng

Chairman

Mark Wing Kong

Dato Wong Guang Seng


Goh Ching Mun

Company Secretaries

Head Office

Principal Bankers

Chan Chee Kheong


(MAICSA 0810287)

CIMB Bank Berhad (13491-P)


HSBC Bank Malaysia Berhad (127776-V)

Wong Wai Foong


(MAICSA 7001358)

No. 2, Jalan Portland,


Kawasan Perindustrian Tasek,
31400 Ipoh, Perak.
Tel : (605) 541 5511
Fax: (605) 541 2860

Registered Office

Website

Level 18, The Gardens North Tower,


Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur.
Tel : (603) 2264 8888
Fax: (603) 2282 2733

www.oldtown.com.my

Registrars
Tricor Investor Services Sdn Bhd (118401-V)
Level 17, The Gardens North Tower,
Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur.
Tel: (603) 2264 3883
Fax: (603) 2282 1886

Statutory Auditors
Messrs. Deloitte (Formerly Known As
Deloitte KassimChan) (AF0080)
Chartered Accountants
No. 87, Jalan Sultan Abdul Jalil
30450 Ipoh, Perak Darul Ridzuan
Tel: (605) 253 1358
Fax: (605) 253 0090

Stock Exchange Listing


Main Market of
Bursa Malaysia Securities Berhad
(Listed since 13 July 2011)
Stock Name: OLDTOWN
Stock Code: 5201

Board of
Directors

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

01 Datuk Dr. Ahmed Tasir Bin Lope Pihie

06 Chuah Seong Meng

02 Lee Siew Heng

07 Clarence DSilva A/L Leon DSilva

03 Mark Wing Kong

08 Tan Chon Ing @ Tan Chong Ling

04 Goh Ching Mun

09 Tan Say Yap

05 Dato Wong Guang Seng

08

06

04

03

01

02

05

07

Notes:1. Family Relationship with Director and/or Major Shareholder

3. Conviction of Offences

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

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

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

4. Directors Shareholdings

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

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

2. Conflict of Interest

5. Attendance of Board Meetings

Save for related party disclosures as disclosed under Note 25 to the


Audited Financial Statements of this Annual Report and the Circular to
Shareholders dated 19 August 2014, which is despatched together
with this Annual Report, the Directors have no conflict of interest in any
business arrangement with the Company and its subsidiaries.

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

09

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Datuk Dr. Ahmed Tasir Bin Lope Pihie,


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

Lee Siew Heng, a Malaysian, aged 48,


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

Board of
Directors
Profile

Mark Wing Kong, a Malaysian, aged 55, is an


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

Board of
Directors
Profile

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Goh Ching Mun, a Malaysian, aged 43, is


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

Dato Wong Guang Seng, a Malaysian, aged


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

Chuah Seong Meng, a Malaysian, aged


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

Clarence DSilva A/L Leon DSilva, a Malaysian,


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

Tan Chon Ing @ Tan Chong Ling, a


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

Tan Say Yap, a Malaysian, aged 39, is an


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

OLDTOWN BERHAD (797771-M)

Chairmans
Statement

(Incorporated in Malaysia)

Dear Shareholders,

Strong Overall Financial Performance

On behalf of the Board of Directors, I am pleased


to present the Annual Report of Oldtown Berhad
(the Company or the Group) for the financial
year ended 31st March 2014 (FY2014).
Despite operating under a competitive business
environment, the Group turned in another year of
credible performance.

The solid financial performance of FY2014(Note) was another


exemplary effort attributed to the dedicated commitment of the
Groups management team and employees. For the FY2014, the
Group achieved a consolidated revenue and profit of RM382.172
million and RM50.33 million respectively.
Note: The Company had on 27th August 2012 changed its financial year end from
31st December to 31st March. The financial period ended 31st March 2013 was
made up of results for 15 months covering the period from 1st January 2012
to 31st March 2013. Thereafter, the fiscal financial year has restored back to
ordinary 12 months covering the period from 1st April 2013 to 31st March 2014.

Manufacturing of Beverages Took Lead as Revenue


and Earnings Growth Driver
Both the caf chain operation and manufacturing of beverages
contributed to the strong financial performance of the Group. The
operation of the caf chain segment continued to be the main and
dominant revenue contributor to the Group, bringing in 54% of the
FY2014 revenue, whilst the remaining 46% was contributed by the
manufacturing of beverages segment.
The caf chain operation registered a total revenue and profit
before tax of RM207.059 million and RM31.341 million
respectively. The Groups manufacturing of beverages segment
reported revenue of RM175.113 million and profit before tax of
RM35.929 million in FY2014.
The Groups FY2014 profit before tax included an amortisation of
intangible assets of RM3.53 million wherein RM1.19 million was
attributed to the amortisation of the acquired intangible asset of the
foreign subsidiary in Hong Kong, Advance City Limited.
Overall, the profit after taxation of the Group for FY2014 was
recorded at RM50.33 million. This was mainly attributed to the
double-digit growth in the business operations of manufacturing of
beverages segment.

10

Datuk Dr. Ahmed Tasir


Bin Lope Pihie
PJN, PMP, JSM, FASc
Independent
Non-Executive Chairman

11

OLDTOWN BERHAD (797771-M)

Chairmans
Statement

(Incorporated in Malaysia)

Sustainable Earnings
The Group registered a net profit attributable to owners of the
Company of RM48.938 million in FY2014 against the net profit
attributable to owners of the Company of RM55.527 million
in FP2013 (15-month period ended 31st March 2013), which
translated into an earnings per share of RM0.11 for FY2014 (an
average of 2.75 sen per quarter) against FP2013 earnings per
share of RM0.13 (an average of 2.60 sen per quarter), based on
an enlarged share capital base of 453.597 million ordinary shares
at RM1.00 each after adjusting for a 1-for-4 bonus issue exercise
which was completed on 28 January 2014.

Strengthening Financial Position


As at 31st March 2014, the total shareholders fund increased to
RM329.290 million, an increase of RM24.439 million from FP2013.
This has also resulted in an improved gearing ratio (Net Debt to
Equity) of 0.07x from 0.11x in FP2013. The reduction in the gearing
ratio was due to the higher net profit generated and repayment of
term loans.
The fixed deposits, cash and bank balances as at 31st March 2014
amounted to RM99.884 million against a total debt of RM24.297
million. As a result, the Group was in a net cash position of
RM75.587 million as at 31st March 2014.
With a solid financial position, the Group is well-placed to leverage
on efficient financing options as well as flexibilities to expand its
business in the near future. The Group is in a strong position to deal
with any contingencies that may arise.

Healthy Financial Liquidity


During the FY2014, the Group generated a net increase in cash
flow of RM14.010 million (compared to RM0.4 million in FP2013)
on the back of the strong EBITDA of RM87.411 million achieved
and constant vigilance on working capital management strategies.
The net increase in cash flow was generated even after the cash
purchase of property, plant and equipment of RM17.366 million and
net cash used in the acquisition of subsidiaries of RM18.289 million
to support the growth momentum of our two businesses.
This clearly underlines the unique strength of the cash generative
nature of the Groups core business for the past 3 reporting periods
since the Company first reported its audited financial statements
back in 2011.

12

The net cash outflow in respect of financing activities of


RM25.488 million was primarily due to the repayment of term
loans of RM13.263 million and dividend payment of RM10.890
million. As at 31st March 2014, the cash and cash equivalents
was RM99.095 million.

Enhancing Shareholders Value Dividend


Delivering consistent positive growth for the Group has always
been a primary target of Oldtown in order to generate value for our
shareholders. This is important given the fact that since our listing,
we have a steadfast group of shareholders who have remained with
us and have enjoyed strong dividend yields coupled with significant
capital appreciation on their investments.
Towards this end, we have adopted a dividend policy to distribute
a minimum of 50% of the Groups annual profit attributable to the
owners of the Company as a dividend.
Whilst retaining a sizable portion of profits and funds to finance
future growth, the Company also strives to reward its shareholders
with a reasonable level of dividend payout.
In respect of the financial year ended 31st March 2014, a first
interim single-tier dividend of 3.0 sen per share amounting to
RM13.589 million, based on an enlarged share capital of 453.597
million ordinary shares after completion of 1-for-4 bonus issue and
net of 0.611 million treasury shares held by the Company, was paid
on 17th April 2014.
The Board of Directors further recommended a final single-tier
dividend of 3.0 sen per share, based on an enlarged share capital of
453.597 million ordinary shares, net of treasury shares held by the
Company at the time of dividend payment, in respect of the financial
year ended 31st March 2014. The recommended final singletier dividend is subject to the approval of the shareholders at the
forthcoming Annual General Meeting.
Should the estimated final single-tier dividend of RM13.589 million
be approved by the shareholders at the forthcoming Annual General
Meeting, coupled with the RM13.589 million interim single-tier
dividend paid on 17th April 2014, this will translate into a dividend
payout ratio of 55.5% in respect of the financial year ended
31st March 2014. The cumulative total dividend payout would
be RM27.179 million against a net profit attributable to owners
of the Company of RM48.938 million in FY2014, if and after the
final single-tier dividend of RM13.589 million is approved by the
shareholders at the forthcoming Annual General Meeting.

Recent Corporate Development


Bonus Issue Exercise
On 27th November 2013, the Company has proposed to undertake
a bonus issue exercise that entails an issuance of up to 90.75
million bonus shares on the basis of one (1) bonus share for every
four (4) existing ordinary shares held by the shareholders on the
entitlement date.
The bonus issue will increase the capital base of Oldtown to a level
that will better reflect the Groups current scale of operations and
also serves to reward the existing shareholders of the Company
for their continuous support by enabling them to have greater
participation in the equity of the Company in terms of the number of
shares held whilst retaining their percentage of equity interest. The
bonus issue may also enhance the marketability, affordability and
liquidity of Companys shares trading on Bursa Malaysia Securities
Berhad (Bursa Securities).
On 28th January 2014, a total of 90.597 million bonus shares
pursuant to the 1-for-4 bonus issue exercise were successfully
listed and quoted on the Main Market of Bursa Securities. The
newly issued 90.597 million ordinary shares represented an
increase of approximately 25% against the Companys issue and
paid-up share capital of 363 million ordinary shares. The bonus
issue has subsequently increased the issued and paid-up share
capital of the Company from RM363.0 million to RM453.597
million at RM1.00 each.

Challenging Business Prospects Moving Forward


The Malaysian economy is expected to remain on a steady growth
path in 2014, expanding by 4.5%-5.5% after a robust year-on-year
GDP growth rate of 4.7% in 2013 against 5.6% in 2012. The growth
momentum is expected to be supported by improved performance
in the external sector. Domestic demand will remain the key driver
of growth, albeit at a more moderate pace, in tandem with moderate
household spending, reflecting in part the impact of higher inflation.
Notwithstanding, the moderation in domestic demand, the underlying
fundamentals of the Malaysian economy remain strong. Growth
will be driven by the private sector across a diversified range of
economic activities whilst employment remains strong and incomes
are rising. The financial system is resilient with financial institutions
expected to provide continued support to investment activities. In
addition, the strength of Malaysias external position remains intact,
with international reserves at healthy levels and external debt within
prudent limits.

13

We expect that the business environment in the Asia Pacific region


will continue to be positively supported by the gradual improvement
in external demand. However, the degree of improvement in exports
could vary across the region. Nevertheless, we do look forward to
the future with confidence because of the fundamental strengths
of our businesses. We expect both our caf chain outlets and
manufacturing of beverages to continue to generate growth by virtue
of its powerful brands, distribution strength and market position in
the regional markets on which we focus and which are delivering
such robust growth opportunities.
The Company will continue to scale new heights in the near future
based on the holistic business and corporate strategies formulated
and as described in detail in the Group Managing Directors Review
of Operations of the Company in this Annual Report. I am optimistic
that all of these initiatives will be implemented by the current
management team with the primary aim to achieve good Groups
performance in the ensuing year.

Acknowledgement
On behalf of the Board, I would like to thank and express my sincere
appreciation to our valued shareholders, bankers, customers,
business partners and regulatory authorities for their continued
support, guidance and assistance extended to the Group. The Board
would like to express its appreciation to the management and
employees of the Group for their hard work and dedication.
The Board would also like to take this opportunity to extend a warm
welcome to Dato Wong Guang Seng as an Independent NonExecutive Director of the Company. Dato Wong is a professional
accountant by training and has served Deloitte Malaysia (Deloitte)
for over 40 years, holding various positions including Head of Clients
and Markets as well as Exco Member of the firm. His extensive
experience will benefit the Group in the future as Dato Wong will
bring to the Board his valuable wealth of knowledge and expertise
gathered from his career in a wide spectrum of business activities.

Datuk Dr. Ahmed Tasir bin Lope Pihie


Chairman

Group Managing
Directors Review
of Operations

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Oldtown Berhad (the Company or the Group)


is one of the largest caf operators and beverage
players in Malaysia. Our integrated business
model, anchored by our two complementary
growth engines, has proven to be an outstanding
success. This is clearly evident by the Groups
robust performance during the 12-month financial
year ended 31st March 2014 (FY2014). The
Group has successfully sustained its business
expansion momentum to grow its operation of
caf chain and manufacturing of beverages.

Overall Financial Review - Another Record Year, An


Excellent Performance with Healthy Balance Sheet
The Group ended the financial year with a total revenue of
RM382.172 million, an increase of 10.9% from the previous year
based on 12-month comparative performance. In addition, we
were equally excited with the performance in the 3rd quarter of
FY2014 whereby we have achieved a notable breakthrough in
our business performance as the Groups revenue for a single
quarter has breached the RM100 millionth mark for the first time
since the listing of our Company in Bursa Malaysia in 2011. The
record revenue was attributable to the continued resilience of
our mainstay caf chain business and the sterling growth of our
beverage manufacturing segment.
The caf chain business remains the key revenue contributor,
generating healthy sales with revenue reaching RM207.059 million
in FY2014, an increase of 1.2% against RM204.625 million in
the previous year (on 12-month comparison). On the other hand,
revenue from the manufacturing beverage business grew 25.1% to
RM175.113 million, compared to RM140.002 million the year before
(on 12-month comparison). The healthy growth of this segment was
underpinned by strengthening demand for our white coffee 3-in-1
products in existing and new markets, which is well supported by the
additional production capacity that came on stream during the year.
Our integrated business enables us to control most aspects of the
supply chain to ensure product quality, and mitigate price fluctuations
in raw materials as well as to retain as much of the profit as possible
within the Group. Amongst others, this allows us to be more costeffective to compete with other service providers as well as other
coffee beverage producers. As a result, the Group is able to maintain
its Profit Before Tax (PBT) and Profit After Tax (PAT) margin within
a narrow range of 16-18% and 12-14% respectively in each quarter
during the financial year. Despite operating in a highly competitive
environment, the Group is able to achieve a relatively stable and
respectable PAT margin of about 17.4 % and 17.8% for the FY2014
and FP2013 (15-month financial period ended 31st March 2013)
respectively through measures that drove effective cost management
and operational efficiency.
The Groups caf chain operation recorded PBT of RM31.341 million
for the FY2014 on the back of the revenue of RM207.059 million.
This represents a 7.2% drop in PBT as compared to RM33.779
million achieved in a 12-month period ended 31st March 2013
owing to higher operating costs mainly attributable to the minimum
wage ruling for foreign workers.

14

Lee Siew Heng


Group Managing Director

15

Group Managing
Directors Review
of Operations

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Manufacturing of beverages segment recorded revenue of


RM175.113 million and PBT of RM35.929 million for the 12-month
period ended 31st March 2014. The revenue and PBT were
RM140.002 million and RM26.688 million respectively for the
12-month period ended 31st March 2013. The increase in PBT of
34.6% was attributable to the surge in revenue of 25.1% and eleven
(11) months profit contribution from the Hong Kong subsidiary
acquired during the financial year, of which the results were
consolidated from 1st May 2013.

2013/2014 OPERATIONS REVIEW


Caf Chain Segment - Challenging Environment
The operation of the caf chain segment continued to be the main
revenue contributor to the Group, attributing 54% of the consolidated
revenue for the FY2014 (60% of the consolidated revenue for the
15-month period, FP2013).
The caf chain segment revenue has grown more than four (4) folds
from a low proforma consolidated revenue of RM47.889 million
achieved in FY2007 to RM207.059 million in FY2014 (Note 1). This
clearly demonstrated the Groups ability to consistently expand the
scale of operation over the years.
The Oldtown Group spearheaded the development of the Asian caf
chain in 2005 with our first outlet in Ipoh. As at 31st March 2014,
the Group has a total of 238 caf outlets in Malaysia, Singapore,
Indonesia and China. Amongst the 238 caf outlets, 89 are fully
owned caf outlets, 20 partially owned outlets, 108 franchised and
21 licensed outlets.
Note (1): The restructuring exercise was completed on 16 May 2011 (Completion
Date) as disclosed in the Prospectus of the Company dated 22 June 2011.
The above comment on the Groups financial performance refers to the audited
Statements of Comprehensive Income for FY2014 against FY2007 which was
prepared based on the combined results of Oldtown Berhad and its subsidiaries
(the Group), assuming the Group has existed on or before 1 January 2007.

Domestic Market Vibrant and competitive


On the domestic front, we are adopting multipronged strategies to
penetrate into new market segments and strengthen our leading
market position as the largest Asian caf chain operator in Malaysia.
Under the Groups market development plans, we are planning to
add 12 to 15 new outlets in Malaysia in FY2015. Currently, our
OLDTOWN caf outlets operate mostly in urban cities throughout
Malaysia and we shall progressively expand into the suburban and
rural markets over the next few years, whereby most of the second-

16

and third-tier cities and townships present vast opportunities for the
Group to reach a wider scope and range of customers.
Since the introduction of our first Generic Outlet back in 2005, we
have progressed upscale to create Signature Outlets in 2008 and
Basic Kiosk Outlets in 2012. The evolution and innovation continued,
with the roll-out of our first Grand Outlet in 2013.
Our Groups main objective was always to provide our customers
with superior quality service and in-store experience. This means that
we put the customer at the centre of our activity, and consequently,
all our decisions and actions take into consideration the needs of our
customers. As a result, we introduced Generic, Basic, Signature and
Grand outlet concepts to position OLDTOWN caf outlets to become
the favourite destinations for comprehensive customers experience
where all Malaysians can get together regardless of their social
status, disposable income and purchasing power.
We offer our customers a wide range of products through our well
thought-out and customer-friendly menus for breakfast, lunch, tea,
dinner and supper time for each outlet concept, making it easy for
each of them to make the right choice when it comes to ordering.
To complement the in-store experience, our outlets also provide
customers with free access to wireless internet.

International Market Untapped Potential


For the international markets, we were able to penetrate deeper into
existing markets within Asia and further into new regions. As at 31st
March 2014, a total of 30 OLDTOWN caf outlets were operating
in Singapore, Indonesia and China as compared to 23 outlets as at
31st March 2013.
As our operations continue to expand overseas, we face challenges
in new markets and cultures, each with different types of customers
demanding for unique and appealing products. We continuously
strive to offer our customers superior value and satisfaction, focusing
not only on product range, but also on the services we provide.
On a related note, we have recently completed the refurbishment
of our outlets with contemporary design and innovative concept for
OLDTOWN caf outlets in Singapore. In addition, certain outlets were
relocated upon expiry of tenancy to mature developed areas such as
City Square Mall and Yew Tee Point in 2012 and 2013 respectively.
The sales performance post-refurbishment is fairly encouraging,
thereby making Singapore as the most profitable overseas market for
the Group. In line with our development plans in Singapore, two (2)

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


at the same time we are also exploring new licensing opportunities
within the same market.
For the Indonesian market, we plan to add another six (6) to eight
(8) new caf outlets in FY2015. To accelerate the expansion plans
in Indonesia, we are shifting away from the business model of
company-owned and operated outlets to the sub-licensing model as
we plan to open more sub-licensed outlets in Indonesia in FY2015.
Just a recap, we managed to open seven (7) new caf outlets in
FY2014 and currently we are operating a total of seventeen (17) caf
outlets in Indonesia as at 31st March 2014.
Consistent with our aspirations to become Asia Pacifics Leading
White Coffee Brand, we are continuing the planned expansion of
our international caf outlets. Our determined efforts to expand
into new markets to fuel further growth will materialise soon as the
Group notched up a significant milestone on 19th May 2014 with
the appointment of OTK (Australia) Sdn Bhd as Master Licensee to
spearhead the Groups expansion of OLDTOWN caf outlets business
in Australia through the execution of a Master License Agreement.
The appointed Master Licensee is responsible for the setting up
of a network of OLDTOWN caf outlets in Australia, as well as to
establish, build and operate a distribution centre and a central
kitchen to support the planned number of caf outlets in the long
run. The Master Licensee is also allowed to appoint Sub-Licensees to
hasten the development of OLDTOWN caf outlets upon fulfillment of
certain terms and conditions set by the Group.
The recent venture into the Australian market forms part of the
Groups overall international expansion plans and is expected to lift
the Groups operational performance and market position to greater
heights in order to become a more sustainable and competitive
business enterprise of tomorrow.

Manufacturing of Beverages Segment


Another Record Year with Robust Growth
The Groups manufacturing of beverages division continued to grow
from strength to strength in FY2014 with revenue of RM175.113
million, up from RM169.685 million in FP2013. This business
segment now accounted for 46% of the Groups total revenue, up
from 40% in the preceding period.
The Groups manufacturing of beverages division reported
record revenues and record profits in FY2014. Revenues grew
to RM175.113 million and profit before tax (PBT) grew to
RM35.929 million (the consolidated revenue and PBT derived

17

from the manufacturing of beverages segment in FP2013 was


RM169.685 million and RM33.765 million respectively) yearon-year increases of 3.2% and 6.4%. We believe that this record
performance marks a ringing endorsement of our products,
business model, and our strategies.
The higher quantum of revenue achieved in FY2014 compared to
FP2013, despite FY2014 only has a shorter financial period of 12
months against FP2013s extended financial period of 15 months,
was mainly due to increase in both local and export sales for the
Groups beverage products as well as rapid expansion of distribution
networks across various countries.
Despite the challenging business environment in FY2014, the
growth momentum of our manufacturing of beverages division
remained strong and we achieved another year of record financial
performance, both top-line and earnings. More significantly, our team
has delivered a multi-year growth. Over FY2007 (Note 1) FY2014,
the divisions revenue Compounded Annual Growth Rate (CAGR)
translates to 33% per annum with an even more impressive PBT
CAGR of 35% per annum. The successful execution of holistic
strategy is the winning combination that has delivered record
revenues and record earnings.

Domestic Market A Crowded Field


The local manufacturing of beverages industry is highly competitive.
The Groups success in the white coffee segment has attracted
the attention of competitors. Major local and international brands
undertook strong advertising and promotional campaigns and we
had to match the competition with more aggressive marketing
campaigns as well as frequent promotional activities. Our
competitors may disrupt our market position with lower pricing and
products of different packaging. However, we are optimistic that we
can overcome these challenges with our unique brand identity and
high-quality products.
During FY2014, the domestic market remained as our single largest
market for our white coffee products and we maintained our leading
position in the white coffee segment in Malaysia. Our differentiated
brand marketing, leveraging on the origin of white coffee is reaping
rewards as the marketing data have revealed success in reaching
the targeted market segment. In essence, our domestic market will
be a potentially large coffee market, and we believe our strategy to
develop our coffee brands as premium labels will enable sustainable
long-term growth in this growing coffee segment in the future.

Group Managing
Directors Review
of Operations

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

We believe our investment in strengthening our brand will help us


to stay ahead of the competition and taken our market position in
the domestic market to newer heights. We will consistently invest
in advertising, promotional and marketing campaigns to promote
OLDTOWNs branding and to enhance its brand equity value and
customer loyalty in the marketplace. We appreciate that a successful
brand strategy is critical to the growth of our business, especially in
influencing consumers purchasing decisions.
Our marketing and promotional campaigns are comprehensive
to ensure in-depth coverage of every customer group in the
demographics. These include print media, such as major stream
newspapers and magazines; the digital media world such as radio
and TV commercials; online media and social networks.
In addition, the Group had initiated a nationwide True White Coffee
media campaign by working closely with various mainstream print
media and online media to promote OLDTOWNs branding directly
and indirectly via their platform since 2nd Quarter 2014 in Malaysia,
such as with an English daily The Star, Chinese daily Sin Chew Jit
Poh, Sin Chew Life Online, and Malay daily Harian Metro, as well as
with the borderless online media Says dot com and MSN dot com.
We are adopting an indirect yet innovative approach in pursuing our
goals instead of via ordinary conventional direct advertisement or
advertorial page. While we try to build awareness on the culture and
the heritage of the Ipoh Old Town, we strongly advocate Oldtown as
the original True White Coffee producer; to discover OLDTOWN White
Coffees unique ingredients and the process of producing the True
White Coffee; to explore creative ways of using of 3-in-1 OLDTOWN
White Coffee in making desserts as an alternative to enjoy the True
White Coffee, etc. The underlying message is to educate consumers
on our ability to produce a wide range of products to suit different
taste preferences and raise the awareness level that the wide range
of 3-in-1 OLDTOWN White Coffee are manufactured from the best
combination of three (3) types of premium coffee beans, i.e. Liberica,
Arabica and Robusta, according to our proprietary formula.
Leveraging on the runaway success of the local production The
Journey in early 2014, we responded swiftly to collaborate with the
lead actor and actress to produce a TV commercial with a storyline
to embed the True White Coffees message while connecting heritage
with family emotions within the advertisement. The TV commercials
were featured in different channels under local satellite TV station
ASTRO, such as Wah Lai Toi, AEC, Hua Hee Dai, Shuang Xing,
TVB Xing He, TVB Classic, TVBS Asia, and TVB Entertainment News
programmes in 2nd Quarter 2014.

18

Besides the mainstream TV commercial and advertisement that


are targeted to expand the Groups market share, we have also
organised various on-the-ground events such as consumer contests,
product testing and sampling, road shows, and participated in expos
and exhibitions. In the domestic market, we foresee growing demand
as the Group is actively participating in various joint marketing
programs organised by the local key retailers such as the launching
of Old Town White Coffee Chinese New Year Gift Pack, conducting
exclusive consumer contests via collaborations with Giant and AEON
and launching of the Modern Trade Display Contest. Our marketing
team has also initiated breakthrough efforts by participating in
Jom Heboh events at various locations in Malaysia to broaden
our brand presence in the Halal market segment. Similarly, our
recent participation in ASTRO GEMPAK, and the group marketing
campaigns, at Kuala Lumpur, Johor, and Kuala Terengganu is
targeted to raise OLDTOWN White Coffee brand awareness within
the Halal-market segment.
We believe, by continuing to invest in our brand, OLDTOWN will be
able to maintain its dominant presence in the domestic market. Our
Group has commanded a leading position in terms of market share
for the past 5 years within the instant white coffee mix category,
as a result of our continuous effort to engage consumers through
successful execution of all the above mentioned promotional
activities and marketing campaigns.

International Market Growing Rapidly


Currently, with an established presence in the Asia Pacific region
and an extensive distribution network, our products can be seen
in over fourteen (14) countries and contributed about 58% of the
revenue of the manufacturing of beverages division. The aggressive
branding and marketing campaigns coupled with the continued
customisation of products have contributed to the robust business
momentum in countries such as Singapore, Taiwan, Thailand, Hong
Kong and China.
This international business segment grew strongly in FY2014 with
higher sales for the Asia region, particularly in China, Taiwan and
Hong Kong, as well as increased demand from Southeast Asian
countries. The excellent growth in Asia is well supported by the
comprehensive distribution networks.
As Hong Kong is also one of the largest export markets for the
Group, we have intensified our advertising campaign by displaying
OLDTOWN advertisements at various MTR stations (underground
train system) in Hong Kong in November-December 2013 to create

greater awareness of our beverage products. Amongst the busiest


MTR stations with heavy daily human traffic flow that have displayed
OLDTOWN advertisement during the last year-end holiday season
were Mong Kok Station, Admiralty Station, Kowloon Tong Station,
and Shatin Station. Several key objectives we wish to achieve are to
create brand awareness through Hong Kongs MTR stations and to
enhance brand value by advocating True White Coffee pioneered
by Oldtown. The acquisition of Advance City Limited (ACL) in
May 2013 had proven to be earnings accretive with an immediate
contribution to the Groups profitability in FY2014. ACL, a distributor
of OLDTOWN beverage products, manages about 2,800 distribution
network points in Hong Kong and the Guangdong Province.
The Group is able to widen its market reach by leveraging on thirdparty distributors, retailers and intermediary networks where they
will carry and distribute our beverage products in various distribution
points. Our product distribution points are no longer restricted
to conventional marketing networks, such as department stores,
hypermarkets, supermarkets, convenience stores and retail outlets,
located both locally and abroad, but also available under the online
platform or business-to-consumer e-commerce portal in China.
The Group embraces another effective and cost-efficient avenue to
promote its products in overseas market such as the social media
platform. In China, through the real-time micro blogging social
channel of Weibo, we are able to reach out to 500 million netizens
population which come from a diverse background ranging from
professionals, managers, and executives. The Group has developed
its own unique marketing and communication proposition in Weibo
China since October 2013. Weibo would act as a diverse and
dynamic platform for us to communicate and interact with our target
audiences through one of the most popular social media websites in
China today. The cost of customer acquisition and communicating
to the outside world is significantly lower than traditional advertising.
The feedback loop is making us better because of the insights we
are gaining through interactions with our customers.
For the Thailand market, the Group appointed a large and well
established regional distributor in 2013 which has a strong presence
in Thailand modern trade distribution channels, to distribute
OLDTOWN White Coffee products to more than 400 retail outlets. As
a result, our products now can be found in Tops Supermarket and a
few hypermarket chains such as Big C, Tesco and Makro.
Prior to FY2014, the Group had been constrained by its
production capacity, but had since addressed that issue when
production facilities were added in the year under review. The new

19

manufacturing facility located in Tasek Industrial Estate, Ipoh is


already fully operational since mid-2013 and able to increase the
production capacity by approximately 300% as compared to the
output capacity in the year 2012. With this increased production
capacity, the Group is expected to cope with the rising demand for
our products over the next five (5) years.
This fully commissioned and operational state-of-the-art integrated
manufacturing facility, houses the production facility, warehouse,
research and development laboratory, administrative and logistic
processing centre in a single location.

Sustaining Growth Caf Chain Operations and


Manufacturing of Beverages
In a dynamic world, where more and more competitors are striving
to grow their market share to gain a strong position, and to attract
and maintain as many customers as possible; we need to continually
meet the ever-evolving needs of the market.
Under the current competitive environment, an effective brand
strategy is critical in winning customer loyalty and sustaining market
share. Our Company took a bold step in 2013 to introduce a new
brand tag line, Aroma of Good Times. The new tag line has been
well-received and the full impact of the rebranding exercise is
expected to be more pronounced in the near future. Strong brand
equity is a key ingredient in todays extremely competitive food and
beverage industry where consumers want to associate themselves
with a successful brand that fits their lifestyle.

Caf Chain
We shall continue to expand the caf network via our franchise and
licensing programmes locally and internationally, in addition to the
establishment of our fully or partially owned outlets to fuel further
growth in our business.
Besides strengthening our position as one of the largest Asian caf
chain operators and beverages manufacturer that specialises in
coffee-related products, we will also relentlessly focus on innovation
and improvement of our existing caf chain operations in Malaysia,
Singapore, Indonesia and China.
We are making some modifications to our food and beverage items,
as well as in the set-up of our outlets to suit the individual market
consumers tastes profile and local needs. Essentially, we need to
customise our operations to local requirements and expectations,
at the same time establishing a differential advantage and then
sustaining it.

Group Managing
Directors Review
of Operations

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Towards this end, we need to put our customers at the centre of all
our decision-making activities. The market can follow new trends in
the future, but in order to succeed, we need to adopt a customeroriented approach. Our primary objective is to be the leading Asian
caf chain operator in each of our target markets by providing each
customer a unique dining experience. Superior customer service is
aimed at building a high degree of customer loyalty.
The Group has evolved from an initial domestic operated caf
chain to become a regional player where we have undergone a
tremendous change by expanding into the other Asian regions over
the years since 2005. We marketed our products to Singapore in
2008, a proximate market that has an almost similar consumer
taste profile to Malaysia, and followed by Indonesia and China
in 2011. Nonetheless, we are actively exploring opportunities in
other countries within the Asian region to be consistent with our
international market expansion plans while strengthening our market
position within each individual existing market that we presently
operate in.
The Group plans to open more outlets in Malaysia in FY2015.
Realising most of the second- and third-tier cities and townships
will present vast opportunity for the Group to reach a wider range of
customers; we are aiming to penetrate into the suburban and rural
markets over the next few years.

New Market - Australia


The appointment of a Master Licensee in Australia in May 2014
marks the Groups first foray outside Asia for the caf chain business
and the Master Licensee targets to open its first outlet, either in
Melbourne or Sydney, within the first half of 2015. The Australian
market is selected owing to the overwhelming demand and
acceptance of Asian cuisine, particularly Malaysian.
According to IBISWorld, the Australian restaurant industry performed
strongly during the 2013-2014 period and contributed AUD11.4
billion to the Australian economy (Note 2). In this respect, we are
fairly excited and optimistic that the Groups recent expansion into
Australian markets would bring promising outcome and contribution
to the Group in the medium to longer term. It is important to note
that pursuant to the agreement with the Master Licensee, our Group
is granted an option to participate directly in the Australia operations
as a shareholder with up to 51% of equity stake after the fourth (4th)
year of operations. Through this strategic option, the Group is poised
to ride on the better business performance of the caf operations in
Australia.

20

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


Company website

Indonesia Second Wave


The positive development in Indonesia had prompted the Group to
enter into a second Master License Agreement on 22 June 2014
(MLA) with the existing Master Licensee of the Group, PT Oldtown
Indonesia. The execution of the second MLA enables PT Oldtown
Indonesia to set up a network of OLDTOWN caf outlets throughout
the Republic of Indonesia. PT Oldtown Indonesia is currently only
licensed to establish and operate OLDTOWN caf outlets in the
territories of Jawa and Bali.
Pursuant to the MLA, the Master Licensee is also responsible
to establish, build, and operate a distribution centre as well as a
central kitchen within twelve (12) months from the opening of the
fiftieth (50th) outlet to support the larger number of caf outlets
in Indonesia. Further, in order to fast track the development of
OLDTOWN caf outlets in Indonesia, the Master Licensee is also
allowed to appoint Sub-Licensees. Essentially, the second MLA is
in line with the Groups primary objective to entrust upon its Master
Licensee to fully expand OLDTOWN caf outlets in Indonesia, which
is renowned as the largest archipelago in the world as well as the
most populous nation in South East Asia.

China Laying Stronger Foundation for Future Growth


The Groups medium-term plan is to set up a new food processing
centre in Guangdong Province, China to support a larger number
of new caf outlets. However, the establishment of a new food
processing centre has taken longer than expected, owing to a
protracted delay in the conceptualisation and discussions with
various parties to deliver an ideal outcome. In the meantime, our
operations are well supported by a local licensed food processing
centre which supplies several core ingredients to our OLDTOWN caf
outlets in Guangdong Province.
Despite some setbacks faced by the Group in 2013, the Group is still
optimistic about the huge growth potential in our caf chain business
in China in view of the countrys large population base with growing
spending power coupled with the rising number of middle class
households year-on-year. The Group remains steadfast with the plan
to open more licensed outlets in strategic locations within Southern
China to tap into this massive market.

Manufacturing of Beverages
As a successful brand owner, brands and innovations are the focus
of our business model, and our white coffee products are well placed

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


of categories, price points and channels, allowing us to compete
effectively in our key markets, especially in overseas.

A concerted effort was also implemented to create greater


awareness of the uniqueness of OTWC amongst the target consumer
groups on a regular basis.

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


to the changing needs of todays consumers and continually being
able to delight our consumers with fresh tastes, formats and even
packaging. In this regard, we are well supported by a group of
experienced workforce and an in-house R&D team. This, coupled
with their extensive knowledge of operating in the local marketplace
and global consumption trends, makes it a very formidable
combination through which the growth of our business will continue
to be driven. In addition to our strong brands, distribution and
marketing expertise is just as vital to our successful business model.
The regional distribution reach is complemented by the specialised
expertise we have developed in both the modern and traditional
retail formats, extending from the supermarkets, hypermarkets to
the convenience stores and even to the corner mom-and-pop stores.
This provides us with a reach wider than many of our competitors
and gives us a tremendous competitive edge in distributing our
white coffee products, and when introducing new products into the
marketplace.

Comprehensive Coverage in Existing Markets

Next Engine of Growth


The Group foresees that there are ample rooms to grow its sales
in China in view of the countrys enormous market potential and
growing affluence amongst the urban population. Since 2011, many
major retailers operating within the tier-1 cities along the coastal line
of China have been selling Oldtowns beverage products. In 2013,
the Group managed to expand further into the central region of China
by distributing its beverage products progressively across the tier-2
cities in China.
China emerged as the fastest growing market for Oldtowns
beverage products in FY2014. Through trade exhibitions we
have participated in China, the Group is able to meet, solicit new
business opportunity and to build rapport directly with new business
associates, trade partners and retailers. In essence, we could gauge
the acceptance level of our products in the Chinese market.
The Group will always strive to find ways and means to strengthen
its marketing initiatives and investing greater efforts in key
ASEAN countries where the Group has already established its
presence years ago. Various marketing campaigns, advertising and
promotional activities have been conducted recently to entrench
OLDTOWN White Coffee (OTWC) brand equity in the marketplace.

21

Recently, the Group has appointed new distributors in Indonesia and


Philippines. Both distributors have vast experience in distribution
and marketing of certain renowned Fast Moving Consumer Goods
(FMCG) brands in their respective countries. We expect the
appointment of these new distributors will boost the sales of our
white coffee mix products in both countries in the future. Essentially,
we are aiming to extend our reach into markets with growth potential
such as Indonesia and Philippines.
The Group has adopted various flexible and adaptive strategies by
customising its marketing campaign and product mix when venturing
into the international markets, as we are mindful that each consumer
market possesses unique characteristics and preferences.

Outlook and Prospects


Looking ahead, the major markets we operate in will remain
competitive and challenging. Raw material prices, inflationary
pressures and currency risksspecifically the fluctuations of the
major currencies against the Ringgit Malaysiawill likely have an
impact on our business. Nonetheless, we will pro-actively manage
costs, further strengthen our networks, and develop our segment and
country markets with foresight and flexibility.
Despite achieving another year of impressive financial performance
in FY2014, we believe that our business still has tremendous room
for growth. The Groups strong profitability represents another year of
record performance and reflects the positive business environment
for our two businesses and the successful execution of the Groups
growth strategy. The growth in the past has been powered by the
strength of our white coffee products across the different categories
and regional markets, and going forward this will remain the key
driver of future growth.
I believe our carefully formulated strategies to achieve sustainable
business models for growth will be executed by the management
team as planned to deliver another successful year for the Group.

Lee Siew Heng


Group Managing Director

OLDTOWN BERHAD (797771-M)

Financial
Highlights

(Incorporated in Malaysia)

2014

RM382,172 RM66,368 RM48,938 10.79SEN


Revenue (RM000)

Profit Before Tax (RM000)

Revenue (RM000)

#Earnings Per Share

Profit Before Tax (RM000)

500,000

80,000
422,054

400,000

382,172

74,947

66,368

70,000
60,000

285,424

300,000
200,000

Profit Attributable to
Owners of the Company (RM000)

51,954

50,000

255,133

40,000

193,666

40,160

43,379

2009p*

2010p*

30,000
20,000

100,000

10,000
0

2009p*

2010p*

2011

2013a^

2014

Profit Attributable to Owners of the Company (RM000)


60,000

48,938

30,000

30,231

10.79
8.86

8.00

31,700

20,000

6.66

6.99

4.00

10,000

2.00
2009p*

2010p*

2011

2013a^

2014

2009p*

2010p*

2011

2013a^

p* : based on the proforma consolidated financial information as disclosed in the Prospectus dated 22 June 2011.
a^ : based on the audited financial statements for 15-month financial period ended 31 March 2013. The Company has on 27 August 2012 changed
the financial year end of the Company from 31 December to 31 March. The financial period ended 31 March 2013 made up of 15 months results
covering period from 1 January 2012 to 31 March 2013.
# : The above EPS are calculated based on the enlarged share capital of 453.597 million ordinary shares after adjusted for 1-for-4 bonus issue for
year-on-year comparison purpose.

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

22

2014

12.24

12.00

6.00

2013a^

#Earnings Per Share (Sen)

10.00

40,177

40,000

2011

14.00

55,527

50,000

2014

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Sustainability
& Corporate
Responsibility

Oldtown Berhad (Oldtown or the Group) recognises that acting


responsibly and sustainably creates value for the group, employees,
customers, shareholders and society as a whole. Sustainability is an
integral part of our business and corporate responsibility serves as
key to sustainability.

saving and promotes environmental friendly practices and awareness


among employees to help make a difference to the environment.

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

Contributed recycle bins and trees to schools.

The Group will continue to build sustainable practices in every aspect


of the Groups business and remain steadfast in achieving excellence
in its corporate responsibility activities.

Conducted Oldtown Recycle Competition 2013 in October 2013.

(A) Environment
Environmental Sustainability is of utmost importance due to the
increasing depletion of the earths natural resources and global
climate change issues. As a dynamic business entity, we rely on the
earths natural resources every day and climate change issues will
affect the supply chain and the source of many products. Therefore,
it is essential to embed environmental sustainability principles into
our business operations and practices.
We aim for business growth that is in harmony with environment and
are committed to protecting the earths natural resources, conserving
and preserving the environment.
Among the approaches seek to heighten the positive impact
and minimise negative impacts of the Groups operations on the
environment are:
The efficient use of energy, water and raw materials in all our
operations.
The establishment of Oldtown EARTHCARE which inculcate
environmentally intelligent practices with a variety of green
initiatives, activities and awareness programs.
The implementation of ongoing product wastage elimination
program and packaging design optimisation.
The proper utilisation of reusable resources and recyclable
materials.
The practice of 3Rs (Reduce, Reuse and Recycle) at the
workplace.
The participation in Earth Hour Campaign.
The support of green environment and Eco-friendliness concept
through Plant a Tree Campaign.
The Group through Oldtown EARTHCARE takes a proactive approach
to promote an environmentally-conscious culture in the workplace.
Oldtown EARTHCARE sends out Oldtown Green Alert to all
employees periodically to introduce various green initiatives and
measures on the responsible use of resources to reduce, reuse and
recycle materials wherever possible. It provides tips for resource-

23

Oldtown EARTHCARE carried out various activities during the


financial year under review, such as:

Allocation of Green Signage at nationwide Oldtown White Coffee


outlets.

Conducted Oldtown Carnival of the Green 2013 at Kg. Tersusun


Klebang Selatan on 9th November 2013.
Carried out Landscaping and Tree Planting Campaign at Kg
Tersusun Klebang Selatan on 9th November 2013.
Established Oldtown Mother Earth website in January 2014 A
charity fundraising platform for buying and selling recycled
creations and used items.
Participated the Earth Hour Campaign 2014 at nationwide Oldtown
White Coffee outlets on 29th March 2014.
Implemented different practices of 3Rs (Reduce, Reuse and
Recycle) such as established a Recycling Corner and arranged
recycling pickup services to collect the recyclable materials and
sent out monthly Green Alert with various go green practices
and messages to all staff.

Green Building
To support the Groups commitment to GREEN, the Groups new
integrated industrial complex located at Ipoh, Perak which comprise
a 212 storey factory building, 1 storey warehouse, 2 storey canteen
cum Recreation Centre and 3 storey administration building was
constructed based on GREEN BUILDING concept by adopting green
building design and requirements.
The design and layout of the building includes green features to
minimise environmental impact such as:

Energy Efficiency
- Usage of LED bulbs with low energy consumption, motion sensor
lightings and electrical sub-metering to gauge the usage of
individual blocks electricity consumption.
- Installations of double glazed windows and thermal roof
insulation materials to reduce heat builtup and minimise airconditioning load.
- Limited parking capacity with parking priority for hybrid vehicles
and encourage carpooling.
- Convenient location with easy access to public transportation to
mitigate carbon emissions to the atmosphere.

Sustainability
& Corporate
Responsibility

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

- Installation of air conditioning using environmentally friendly


refrigerant gas.
- Committed to use machinery and equipment with inverter
technology to minimise electricity peak load.
2

- Developed Building User Manual and forecasting budget for


sustainable maintenance to ensure long usage life for plant and
machinery.

Water Efficiency
- Installation of Rainwater Harvesting System to collect rainwater for
toilet flushing and plant irrigation.
- Insertion of Digital Flow Meters for effective pipeline leak detection.
- Usage of sensor taps to enhance water conservation.

Materials Efficiency

- Disposal of construction waste according to regulations. Scrap


materials collected during construction stage are stored and sent to
recycle centres.
- Packaging materials wastage is sold as recyclable content to
be processed as alternative burning fuel with environmental
conservation objective of reducing dumping into landfill areas and
also reducing the consumption of fossil fuel.

Indoor Environmental Quality


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

- Installation of Air Recirculation System contributing appropriate


ventilation and thermal comfort.
- Availabilities of breakout spaces, internal noise level monitoring,
daylight and glare control create a conducive working environment
for employees with visual, thermal and acoustic comfort.
- Landscaping works by reserving area for grass turfing and plants.
The project is registered under the name of OLDTOWN MANUFACTURING
PLANT (GBI Reg No GSB/INC/2012/01). It is currently at the Completion
and Verification Assessment Stage and is expected to be certified as Green
Building under Non-Residential New Construction category by October
2014.

5
1. Design of Admin Block with
calculated sun screeding angles to
allow natural daylighting but at same
time reducing glare.
2. Parking Priority for Employees with
Hybrid Cars and employees who
practices carpool.
3. Centralized Air Conditioning Unit with
Invertor technology. Air conditioning
system equipped with zonal
temperature and humidity control to
balance electricity consumption and
comfort of employees.

24

4. High ballast lightings for wide zone


illumination and Digital Power Meter
to monitor electricity consumption
by zones and analyis consumption
trend.
5. Digital Flow Meter installed at
various points and monitored using
a computerized system to analyse
water consumption and immediately
detect any internal water pipe
leakage.

(B) Workplace
Employees are the backbone of the business. Essentially, employees
are central to the smooth functioning of business operations and play
a vital role in the success and sustainability of the Group.
The Group believes that human capital is the most valuable asset.
In line with this belief, the Group strives to provide a dynamic and
challenging workplace that gives emphasis on the opportunity to
develop employee skills, talent and capability.
The Group, in fulfilling its corporate responsibility as a caring
employer, places emphasis to build long lasting relationships with its
employees.
The efforts towards achieving the above objectives are carried out in
various aspects:

i) Employee Welfare & Well-being Program


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

Employees are provided with the necessary job related training,


seminars and workshops on an ongoing basis to further enhance
their skills, knowledge, core competencies and proficiency level.
Participation in various in-house and external training programs
from technical-related skills to soft management skills.
Participation in international trade fairs/exhibitions locally and
overseas, to broaden the knowledge base and exposure of
the employees to keep abreast of new developments in their
respective field of expertise.

iv) Recreational, Sports and Leisure Activities


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

Medical benefits, hospitalisation and personal accident


insurance coverage.

v) Retention, Talent Management and Succession Planning

Financial assistance in the form of education subsidy and


employee emergency assistance fund.

Retaining key employees is crucial to ensure business success.


The Group shall continue to ensure the rewards package remain
competitive to attract, retain and motivate the right talents.

Organises annual dinner and recognises long service staff with


the Long Service Award in recognition of their loyalty, dedication
and commitment.

A proper succession plan is put in place for critical positions to


ensure sustainability in terms of continuous effective and efficient
operations within the Group and a healthy leadership pipeline.

Review the Human Resource policies and staff benefits on regular


basis.

During the financial year ended 31 March 2014, besides attending


various seminars, workshops, courses and training sessions relating
to different scope of skills and knowledge coverage, the staff also
participated in various team building events and activities which aim at
promoting cohesiveness and team spirit amongst staff.

ii) Safe, Healthy and Conducive Work Environment


The Group strives to provide a safe, healthy, comfortable and
conducive work environment for its employees through the following
initiatives:
Setting up of Occupational Safety and Health Committee to initiate
various health and safety programs such as fire drills, fire safety
briefings and safety system checks on the equipment.

To maintain a healthy lifestyle, the Group also organised fitness


programmes after working hours for staff participation to help employees
stay fit and healthy.

(C) Community

iii) Training and Development Program

The Group recognises the interdependent relationship between


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

The Group seeks to promote and develop its human assets to be


competent, multi-skilled and well-motivated to increase their career
advancement opportunities. The Group continues to carry out the
following efforts:

To be socially responsible, the Group focuses its corporate


responsibilities on enhancing community sustainability through
various activities and actions aim to promote community engagement
and address the needs of less fortunate and underprivileged families.

Ensuring safe practices in all aspects.


Promoting the awareness of safety precautions and health.

25

Sustainability
& Corporate
Responsibility

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The philanthropic activities and approaches include:


The setting up of OldTown Children Care Fund to provide aid
funds in the form of medical, educational and other short term
emergency funds to orphaned, abandoned, vulnerable and
deprived children.
Monetary and in kind donations to schools, charity, welfare and
voluntary associations.
Distribution of gifts, goodie bags, basic supplies and necessities to
the poor and impoverished communities during festivals.
Annual Orphanage Project - Building funds donations to
orphanage or purchase of building as shelter for orphans.
During the financial year ended 31 March 2014, the Group through
Oldtown Children Care Fund extended monetary donations to
schools, charity, welfare and voluntary association and needy
families. It organised various festive celebrations, movie treats and
day trips for children homes. It also donated school necessities
to deprived primary school students from Pulau Ketam, Rawang,
Sepang, Sungai Pelek, Tanjung Sepat, Puchong, Jenjarom, Klang,
Sungai Buloh and Jinjang in the month of November 2013.
Under Annual Orphanage Project, the Group has purchased a
bungalow in Ipoh and rented to a Children Home for RM1 (Ringgit
Malaysia :One) only as a shelter for children who are orphaned and
abandoned.

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

We strive to enhance corporate value and maintain stable and long


term growth for the benefit of shareholders. It is through engagement
with its shareholders that the Group may learn of new and better
ways to enable a successful and sustainable business model. The
Group continues its efforts to engage with its shareholders through
the following initiatives:
Disclose and disseminate all material information in a timely, open,
fair and transparent manner.
Ensuring a robust system of corporate governance.
Implementing policies that promote ethical behavior and
conducting business responsibly through high standards and
business ethnics.
Actively engages with its shareholders and investors through
various channels of communication such as investor relations
activities, general meetings of shareholders, financial results
briefings, dialogues and regular press releases.

26

Accessible in the public domain and regular investors updates on


our website.
The Group aims to develop a good relationship with investors and is
accountable for providing timely information about the Group to the
investment community.
During the financial year ended 31 March 2014, the Group has
conducted investor relations activities via various communication
channels such as one-to-one meeting, small group briefing, conference
calls, regular meetings and road shows.
(ii) Suppliers

We respect our suppliers and work with them through long-term


relationships to realise mutual growth based on mutual trust. In this
aspect, we engage with our suppliers in the following areas:
Fosters new partnerships and delivers new business opportunities to
expand the suppliers business coverage in the industry.
Engages in ethical procurement practices by adopting standard
procedures in vendors qualification.
Ensures the products supplied are in accordance with the Groups
materials requirements.
Conducts more in-depth suppliers audits to ensure improved
standards in the supply chain.
(iii) Customers

Based on our philosophy of Customer First, we develop and provide


innovative, safe and high quality products and services that meet a wide
variety of customers demands and earn the trusts of our customers :
Focuses on product innovation and development to meet the
customers requirements.
Ensures halal compliance covering materials, employees and systems.
Enhances customers satisfaction and confidence by providing safe,
reliable and affordable products.
Establishes customers complaint and feedback system through
dedicated email address, social media such as Facebook and Twitter
and suggestion boxes and ensures all customers complaints are
acknowledged and resolved promptly.
Sets quantitative benchmarks for its customer service delivery
standard such as Standard Waiting Time.
Continues to be covered by the internationally recognised ISO
9001:2008 (Quality Management System), ISO 22000:2005 (Food
Safety Management System), HACCP (Hazard Analysis Critical Control
Point) and GMP (Good Manufacturing Practice) certifications for its
manufacturing operations to ensure uniform and high standards
of product.

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Community & Workplace Events


and Highlights

Corporate
Responsibility

The Groups corporate responsibility practices


focus on four areas - Environment, Workplace,
Community and Marketplace which aim to
deliver sustainable value to society at large.

OldTown Children Care Fund (OCAF)


Donations and Sponsorships
Procurement of Building as
Shelter for Orphans

Contributions of School Necessities


Festival Celebrations for the Unfortunates
Charity Day Trip

1. Christmas & New Year movie-cum-lunch treat


for 100 Orphans at AEON Station 18 on 21st
December 2013
2. Chinese New Year Bowling Outing With 103 Less
Fortunate Children on 22nd February 2014 at
Ampang Superbowl, Ipoh Parade.
3. Hari Raya Open House at Bandar Baru Bangi Outlet
with 100 deprived children on 24 August 2013.
4. Donation of RM 3,600 education aid fund to 3
deprived families from Kampar, Perak.
5. Bestowal of RM 1,800 education aid fund to an
underprivileged family with 4 children from
Kampar, Perak.

6. Contributions of school essentials to 50 deprived


students from SJK(C) Kuang, Rawang.
7. Charity Trip to Kidzania Kuala Lumpur with 73
orphans conducted on 19th April 2013.
8. Procurement of a bungalow at Merdeka Garden,
Ipoh as a shelter for children who are orphaned
and abandoned.

27

9. Sponsorship of RM 5,000 for Program Titipan Kasih


Harian Metro 2013 at Kampung Sungai Nipah,
Bagan Datoh, Perak.

Corporate
Responsibility

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

11

Earthcare
Oldtown Carnival of the Green 2013
Landscaping & Tree Planting Campaign
Earth Hour Campaign 2014
Contributions Of Trees and
Recycle Bins To Schools
10

Oldtown Recycle Competition 2013


Oldtown Mother Earth website

13

Practises of 3Rs in the Office

10. Tree Planting Session by students from SJK(C)


Pei Cheng, SJK(T) Klebang and SK Tasek at Kg
Tersusun Klebang Selatan, Ipoh.

Allocations of Green Signage

11. Tree Planting Opening Ceremony by Guests of


Honor during OldTown Carnival of the Green 2013.
12. Cheque presentation to OldTown Recycle
Competition 2013 first prize winner.

Workplace Activities & Events

13. Donation of 3 sets of recycle bins to SRJK(C)


Padang Gajah, Ipoh.

Learning, Training and Development


Program

14. Team Building Event conducted at Nomad


Adventures Earth Camp, Gopeng on 22nd
September 2013 for Ipoh-based staffs.

Staffs Recreational, Sports and Leisure


Activities

12

Employee Welfare and Well-being Program

15. Team Building Event Conducted at Gold Coast


Morib, Banting on 21st & 22nd February 2014
for KAP staffs.
16. Team Building Event Conducted at A Famosa
Malacca on 13th September 2013 for OTK staffs.

Safe, Healthy and Conducive Work


Environment

17. Staffs Buka Puasa Treat conducted at Subang


offie on 30th July 2013.
18. Service Enforcement Training conducted at
OldTown White Coffee restaurants.

Retention, Talent Management and


Succession Planning

19. Staff fitness classes at OldTown Berhad Ipoh


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

14

15

16

17

18

19

20

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

(Incorporated in Malaysia)

The Board of Directors (the Board) of Oldtown Berhad (the Company)


recognises the value of good governance and believes that a high
standard of corporate governance will deliver long-term sustainable
shareholder value. The Board is committed to ensure good corporate
governance practices are applied throughout the Company and its
subsidiaries (the Group).
This Statement sets out the key aspects of how the Company has
applied the Principles and Recommendations of the Malaysian
Code on Corporate Governance 2012 (MCCG 2012) during the
financial year ended 31 March 2014 and any non-observation of the
Recommendations of MCCG 2012, including the reasons thereof, has
been included in this Statement.

Principle 1 Establish Clear Roles and Responsibilities


1.1 Clear Functions of The Board and Management
The Board leads the Group and plays a strategic role in overseeing
the Groups corporate objectives, directions and long term goals of the
business. The Board is responsible for oversight and overall management
of the Group.
The Board Committees are established to assist the Board in discharging
its responsibilities. The Board delegates specific responsibilities to three
(3) principal Committees, namely the Audit Committee, the Nomination
Committee and the Remuneration Committee. All committees have
written terms of references and operating procedures and the Board
receives reports on their proceedings and deliberations. The Chairman
of the respective Committees shall report the outcome of their meetings
to the Board. Minutes of all Board Committee meetings are circulated
to the Board members so that they are kept abreast of proceedings and
matters discussed at Board Committee meetings.
Independent Non-Executive Directors provide unbiased and independent
views in ensuring that the strategies proposed by the Management
are fully deliberated and examined objectively, taking into perspective
the long term interests of shareholders, other stakeholders and the
community at large.
The Board recognizes the importance of the role of the Independent
Non-Executive Directors particularly in corporate accountability. They
are essential for protecting the interests of non-controlling interests and
can make significant contributions to a companys decision making by
bringing in the quality of detached impartiality.
The Executive Directors take on primary responsibilities for implementing
the Groups business plans and managing the business activities.

1.2 Clear Roles and Responsibilities


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

a. Reviewing and Adopting The Companys Strategic Plans


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

29

Annual Report 2014


Corporate
Governance
Statement

b. Overseeing The Conduct of The Companys Business


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

c. Identifying Principal Risks and Ensuring The


Implementation of Appropriate Systems to Manage Them
The Risk Management Committee (RMC), headed by the Group
Managing Director advises the Audit Committee and the Board on areas
of high risk faced by the Group and the adequacy of compliance and
control throughout the Group.
Details on the RMC and the Companys Enterprise Risk Management are
set out in the Statement on Risk Management and Internal Control of this
Annual Report.

d. Succession Planning
The Board recognizes the importance of succession planning in building
long-term sustainable performance excellence.
A succession planning framework has been developed to identify
candidates for senior managerial positions to ensure continuity of key
positions.

e. Overseeing The Development and Implementation of A


Communication Policy for The Company
The Board recognizes the importance of keeping shareholders and
investors informed of its latest business and corporate developments.
The Board believes that an effective investor relationship is essential in
enhancing value to its shareholders.
The dissemination of information about the Company, its businesses
and its activities is conducted via the timely release of quarterly financial
results, press releases and announcements. The Company also holds
regular briefing and dialogues with fund managers, analysts, potential
shareholders and research houses from time to time. Whilst the
Company endeavors to provide as much information as possible, it is
aware of the legal and regulatory framework governing the release of
material and price sensitive information.
The Companys website at www.oldtown.com.my provides easy access
to corporate and financial information of the Group. The Investor
Relations (IR) updates and information on financial results are
uploaded on the website immediately after announcements on the same
are made to Bursa Malaysia Securities Berhad (Bursa Securities).
During the financial year under review, the Company has been involved
in investor relations activities to keep shareholders duly informed on
the performance of the Company. There were meetings with local and
foreign fund managers and analysts to provide insights on the operations
and latest developments in the Group.

29

Corporate
Governance
Statement

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

f. Reviewing The Adequacy and Integrity of Management


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

1.3 Formalised Ethical Standards Through Code of Conduct


The Board has adopted a Code of Conduct for Directors and employees.
It sets out the ethical standards and underlying core ethical values to
guide actions and behaviors of all Directors and employees in conducting
the day to day duties and operations of the Group.
The principles of which the Code of Conduct relies are principles in
relation to accountability, anti-bribery, commitment, corporate social
responsibility, diligence, discipline, excellence, fairness, honesty,
independence, integrity, loyalty, respect, responsibility, professionalism,
transparency and trust.
The key principles and expected conducts and ethical behaviour are
embedded into the Groups business operations and corporate culture.
The Group strives to uphold ethical practices and high standards of
integrity in the Groups dealings with employees, customers, suppliers,
business associates and shareholders.
The Board will review the Code when necessary to ensure it remains
relevant and appropriate.
The full version of the Code of Conduct is published on the Companys
website at www.oldtown.com.my.

1.4 Strategies Promoting Sustainability

to confirmation of the minutes as correct records of the proceedings


and signed in accordance with the provisions of Section 156 of the
Companies Act, 1965.
In exercising their duties, the Board has complete and unrestricted
access to all information on the Group, the advice and services of
the Company Secretary and independent professional advice where
necessary, at the Companys expense.

1.6 Qualified and Competent Company Secretary


The Board is supported by the qualified and experienced Company
Secretary who facilitates overall compliance with the Listing
Requirements and other relevant laws and regulations.
The Company Secretary carries out the following tasks:
Attend and ensure proper conduct and procedures at all Board
Meetings, Board Committee Meetings, Annual General Meeting,
Extraordinary General Meeting and any other meetings and ensure that
meetings are properly convened;
Ensure that deliberations at the meetings are well captured and
minuted, and subsequently communicated to the relevant Management
for necessary actions;
Inform and keep the Board updated of the latest enhancement in
corporate governance, changes in the legal and regulatory framework,
new statutory requirements and best practices;
Keep the Directors and principal officers informed of the closed period
for trading in the Companys shares; and
Ensure proper record and maintenance of the Companys proceedings,
resolutions, statutory records, register books and documents.

The Board has adopted a Sustainability and Corporate Responsibility


Framework for the Group. The Framework reinforces the Groups
sustainability commitment to integrate sustainability and corporate
responsibility strategies into daily operations with the ultimate objective
of achieving greater efficiency, better performance of the Group and
improved quality of life to the society at large.

1.7 Board Charter

The Groups activities on sustainability are included in the Sustainability


and Corporate Responsibility section of this Annual Report.

A Board Charter was formalised and adopted by the Board on 1 March


2014. The Board Charter clearly sets out the roles, responsibilities,
authorities and operation of the Board and Board Committees. All Board
members are aware of their duties and responsibilities.

1.5 Access to Information and Advice


All Board members are supplied with information concerning the
Company and the Group on a timely manner. All Directors are provided
with comprehensive Board papers at least five (5) days before Board
meetings to enable them to review and consider the agenda items
to be discussed. The Board papers contain relevant information and
justifications for each proposal for which Boards approval is sought.
Where necessary, members of senior management and external advisers
are invited to attend these meetings to provide additional insights and
professional views on specific items on the agenda.
Minutes of the Board and Board Committee meetings are circulated to
Directors for their perusal prior to confirmation of the minutes at the
following Board and Board Committee meetings. The Directors may
request for further clarification or raise comments on the minutes prior

30

The Directors are expected to act in a professional manner and


discharge their duties with high ethical values, honesty and
accountability in their commitment to good corporate governance
practices.

The Board Charter also outlines:


The division of responsibilities and powers between the board and
management, the different committees established by the board, and
between the Chairman and the Group Managing Director;
Set out processes and procedures for convening board meetings;
The Boards commitment in upholding integrity in financial reporting,
conflicts of interest situations and related party transactions;
List of matters reserved for decision by the Board;
Boards access to information and independent advice and
The role of the Company Secretary.

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Board Charter serves as a reference providing guidance to


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

C. Responsibilities and Functions

A summary of the Board Charter is made available on the Companys


website and will be reviewed when necessary to ensure the Charter
remains consistent with the Boards objectives, current law and practices.

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

Principle 2 Strengthen Composition


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

Name

Designation

Directorship

Attendance
(1 April 2013 to
31 March 2014)

Independent
Non-Executive
Director

3/3

Independent
Non-Executive
Director

2/3

Member

Independent
Non-Executive
Director

3/3

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

Independent
Non-Executive
Director

Not
applicable

Datuk Dr. Ahmed


Chairman
Tasir Bin Lope Pihie
Mark Wing Kong

Tan Chon Ing @


Tan Chong Ling

Member

ii) To consider in making its recommendations, candidates for


directorship proposed by the Group Managing Director or by any
senior management or any director or shareholder.

iv) To assist the Board in its annual review of the required mix of skills
and experience and other qualities including core competencies
which Non-Executive Directors should bring to the Board and
to assess the effectiveness of the Board as a whole, the Board
Committees and the individual director on an annual basis.
The Board has not nominated a Senior Independent Non-Executive
Director to whom concerns may be conveyed as the Board will shoulder
this responsibility collectively. Pursuant to the recommendation of the
MCCG 2012, the Nomination Committee should be chaired by a Senior
Independent Director identified by the Board. The Board is of the opinion
that the Independent Non-Executive Chairman of the Board is suitable to
act as Chairman of the Nomination Committee in view of his experience,
background and commitment.

2.2 Develop, Maintain and Review Criteria for Recruitment


and Annual Assessment of Directors

Appointment of Directors

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

A. Size and Composition


i) The Board shall appoint members to the Nomination Committee,
comprise wholly of Non-Executive Directors and a majority of whom
are independent and shall consist of not less than three (3) members.
ii) The members of the Nomination Committee shall elect the Chairman
from amongst themselves who shall be an Independent NonExecutive Director.
iii) In the event of any vacancy in the Nomination Committee resulting in
the number of members being reduced to below three (3), the Board
shall fill the vacancy within three (3) months.

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

31

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


of the Company.

The Nomination Committee, which comprises independent directors,


is responsible for making recommendations for any new appointments
to the Board. In making these recommendations, the Nomination
Committee considers the required mix of skills and experiences which
the Directors would bring to the Board. Any new nomination received is
recommended to the full Board for assessment and endorsement.
The key task of the Nomination Committee is to ensure that the
Company recruits and retains the best available Executive and NonExecutive Directors with the right mix of skills and knowledge relevant to
the Company.

Re-election of Directors
The Articles of Association (Articles) of the Company provides that onethird (1/3) of the Directors are subject to retirement by rotation at the
Annual General Meeting (AGM) at least once in every three (3) years
and all retiring Directors shall be eligible for re-election.
The Articles of the Company further provides that all Directors who are
appointed during the financial year are subject to retirement and reelection by the shareholders at the AGM following their appointment.
Directors over seventy (70) years of age are required to submit
themselves for re-appointment annually in accordance with Section
129(6) of the Companies Act, 1965.

Corporate
Governance
Statement

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Gender Diversity Policy


Directorship

Chairman

Independent
Non-Executive
Director

3/3

Datuk Dr. Ahmed


Member
Tasir Bin Lope Pihie

Independent
Non-Executive
Director

3/3

Lee Siew Heng

Member

Group
Managing
Director

3/3

Mark Wing Kong

Member

Independent
Non-Executive
Director

2/3

Independent
Non-Executive
Director

Not
applicable

The effectiveness of each directors ability to contribute to the


effectiveness of the Board and the relevant Board Committees;

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

The effectiveness of the Board Committees; and

Goh Ching Mun

Executive
Director

Where boardroom diversity is concerned, the Board does not adopt any
formal gender diversity policy in the selection of new Board candidates and
does not have a specific policy on setting targets for female candidates.
The Group will continue to identify suitable candidates for appointment
to the Board as and when vacancies arise. Such candidates will be
considered based on merit and competence and what the chosen
candidate can bring to further strengthen the Board.
The evaluation of the suitability of candidates as Board members is solely
based on the candidates competency, character, time commitment,
knowledge and experience in meeting the needs of the Group.

Name

Attendance
(1 April 2013 to
31 March 2014)

Designation

The Group is an equal opportunity employer and does not practice


discrimination of any form, whether based on age, gender, race or
religion, throughout the organisation.

Tan Chon Ing @


Tan Chong Ling

Annual Assessment
The Nomination Committee shall conduct evaluation on an annual basis:

Member

The effectiveness of the Board as a whole.


The Nomination Committee met three (3) times during the financial year
ended 31 March 2014. The activities carried out by the Nomination
Committee were as follows:
Reviewed and assessed the mix of skills, expertise, composition, size
and experience of the Board, including the core-competencies of both
Executive and Non-executive Directors, effectiveness of the Board as
a whole and the Board Committees. All assessments and evaluations
carried out by the Nomination Committee were properly documented.
Considered the appointment of new Director and member of the
Board Committees.
Considered and assessed the list of directors who are retiring by
rotation to put forward for re-election, subject to the approval of
shareholders at the Companys Annual General Meeting.
The Nomination Committee considered that the performance of
the existing Board and all Committees was consistently good and
satisfactory.

2.3 Remuneration policies

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

3/3

The terms of reference of the Remuneration Committee are:

A. Size and Composition


i) The Board shall appoint members to the Remuneration Committee,
comprise wholly or mainly Non-Executive Directors and shall consist
of not less than three (3) members.
ii) The members of the Committee shall elect the Chairman from
amongst themselves who shall be an Independent Non-Executive
Director.
iii) In the event of any vacancy in the Committee resulting in the number
of members being reduced to below three (3), the Board shall fill the
vacancy within three (3) months.

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

C. Responsibilities and Functions


i) To recommend to the Board the appropriate remuneration packages
of the Group Managing Director and Executive Directors. None of
the Executive Directors participate in any way in determining their
individual remuneration.
ii) To ensure the Executive Directors are fairly and appropriately
remunerated for their individual contributions to the Companys
overall performance.

32

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

iii) To ensure the remuneration offered is commensurate with the level of


executive responsibilities and encourage Executive Directors to act in
ways that enhance the companys long-term profitability and value.
The Board as a whole determines the remuneration of the Non-Executive
Directors. None of the individual Directors participate in determining their
individual remuneration.

Directors Remuneration
The Company aims to set the levels of remuneration in such a way that it
supports the strategies and long-term vision of the Company as well as
provides adequate motivational incentive for directors to pursue the longterm growth and success of the Company. The levels of remuneration
should be sufficient to attract and retain the directors needed to run the
Company successfully and in line with industry standards.
Remuneration packages for Executive Directors are structured so
as to link rewards to corporate and individual performance. The
remuneration of Executive Directors includes salary, bonus, allowance
and benefits-in-kind.
In the case of Non-Executive Directors, the level of remuneration
reflects the experience and level of responsibilities undertaken by them.
Currently, the Non-Executive Directors are paid Directors fees and
attendance allowance for each Board/Committee meeting they attended.
The aggregate remuneration of Directors of the Company for the
financial year ended 31 March 2014 is categorised into the following
components:

Executive
Directors
Non-Executive
Directors

Salaries &
Other
Emoluments
(RM000)

Bonus
(RM000)

Fees
(RM000)

Benefitsin-kind
(RM000)

Total
(RM000)

1,481

1,383

105

95

3,064

63

153

24

240

The number of Directors whose total remuneration fall in the bands of


RM50,000 for the financial year ended 31 March 2014 is tabulated below:
Remuneration Band

33

No. of Executive No. of Non-Executive


Directors
Directors

RM 50,000 and below

RM 50,001 RM 100,000

RM 250,001 RM 300,000

RM 550,001 RM 600,000

RM 850,001 RM 900,000

RM1,000,001 RM1,050,000

During the financial year ended 31 March 2014, the Remuneration


Committee met three (3) times to deliberate the following matters:
Reviewed the new remuneration package for Group Managing Director,
Executive Directors and General Managers (eligible personnel)
by introducing incentive bonus and service agreement to eligible
personnel and recommended the same to the Board for approval;
Reviewed the remuneration package for Independent Non-Executive
Directors and recommended the increase in the Directors fees with
effect from 1 April 2014 to the Board, for which shareholders approval
will be sought in due course; and
Reviewed the increment and bonus for year 2014 of the Group.

Principle 3 Reinforce Independence


3.1 Annual Assessment of Independence
The Board recognises the importance of independence and objectivity
in the decision-making process as advocated in the MCCG 2012. The
Board is committed to ensure that the independent directors are capable
to exercise independent judgment and act in the best interests of the
Company.
In line with Recommendation 3.1 of the MCCG 2012 whereby the
Board is required to develop criteria to assess independence of
directors, the Board has adopted the same criteria used in the definition
of independent directors prescribed by the Main Market Listing
Requirements (MMLR) of Bursa Securities.
The Independent Directors of the Company fulfilled the criteria of
Independence. They act independently of management and are not
involved in any other relationship with the Group that may impair their
independent judgment and decision making.
Each Director has a continuing responsibility to determine whether he
has a potential or actual conflict of interest in relation to any material
transactions. Such a situation may arise from external associations,
interests or personal relationships.
The Director is required to immediately disclose to the Board and to
abstain from participating in discussions, deliberations and decisions of
the Board on the respective matter.
The Board, via Nomination Committee will develop the criteria to
assess independence and formalise the current independence
assessment practice.

3.2 Tenure of Independent Directors


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

Corporate
Governance
Statement

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

3.3 Shareholders Approval for The Appointment As An


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

3.4 Separation of Positions of The Chairman


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

To ensure that the Directors have the time to focus and fulfill their roles
and responsibilities effectively, one of the criterions is they must not hold
directorships at more than five (5) public listed companies as prescribed
in Paragraph 15.06 of MMLR. The Directors are required to submit an
update on their other directorships annually.
During the financial year ended 31 March 2014, the Board met five (5)
times to discuss issues on the Groups financial performance, significant
investments, corporate development, strategy and business plan. The
attendance record of each Director at the Board Meetings is as follows:-

Name of Directors

Attendance
(1 April 2013 to 31 March 2014)

Datuk Dr. Ahmed Tasir Bin Lope Pihie

5/5

Lee Siew Heng

5/5

Mark Wing Kong

4/5

The Group Managing Director is responsible for the daily management


of the Groups operations and implementation of the Boards policies and
decisions. He is responsible for communicating matters relating to the
Groups business affairs and issues to the Board. His vast experience,
business knowledge and skills contributed significantly towards the
attainment of the Groups goals and objectives.

Tan Chon Ing @ Tan Chong Ling

5/5

Chin Lai Yoong


(Retired on 26 September 2013)

2/5

3.5 Composition of The Board

Chuah Seong Meng

5/5

Presently, the Board comprises four (4) Independent Non-Executive


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

Clarence DSilva A/L Leon DSilva

5/5

Goh Ching Mun

5/5

Tan Say Yap

5/5

The Executive Directors take on the primary responsibility of the day-today running of the Groups business as well as implementing the policies
and decisions of the Board.
The Independent Non-Executive Directors act independently of
management and do not participate in any business dealings and are not
involved in any other relationship with the Group that may impair their
independent judgment and decision-making. They provide a broader
view and independent assessment to the Boards decision making
process by acting as an effective check and balance.
Together, with their diverse backgrounds, professional experience and
wide range of skills, the Board can effectively manage and run the
Groups operations.

Principle 4 Foster Commitment


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

34

Dato Wong Guang Seng,


(Appointed on 1 April 2014)

Not applicable

4.2 Meeting Calendar


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

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

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Statement On Directors Responsibility


Name of Directors

Training/ Courses Attended

Datuk Dr. Ahmed


Tasir Bin Lope Pihie

Nominating Committee Program

Lee Siew Heng

Managing Sustainable Business Transformation


From Good to Great

Mark Wing Kong

Maybank Global Markets Economic Talk


currency wars At our doorstep?
Ambank-KL Economic Seminar:
Managing Change Poised for a turnaround
UOB- Corporate Seminar 2013
Bursa Malaysia Advocacy Session on Corporate
Disclosure for Directors
Risk Management and Internal Control
Tricor - GST Conference

Tan Chon Ing @


Tan Chong Ling

Planning Corporate Mergers & Acquisitions


For execution excellence

Chuah Seong Meng

Managing Sustainable Business Transformation


From Good to Great

Clarence DSilva
A/L Leon DSilva

Financial Statement, Preparation and Analysis

Goh Ching Mun

Managing Sustainable Business Transformation


From Good to Great

Tan Say Yap

Managing Sustainable Business Transformation


From Good to Great

Principle 5 Uphold Integrity In Financial Reporting


5.1 Compliance With Applicable Financial Reporting Standards

Financial Reporting
The Board is committed to provide a balanced, clear and comprehensive
assessment of the Groups financial position and prospects by making
sure the financial statements and quarterly announcements are prepared
in accordance with the provisions of the Companies Act, 1965 (the Act)
and applicable approved accounting standards.
The Board is assisted by the Audit Committee in reviewing the
appropriateness of accounting policies applied by the Group as well as
the changes in these policies.
The Audit Committee also assists the Board in overseeing the financial
reporting process and ensuring the quality of the financial reporting by
the Group. The Audit Committee reviews and monitors the accuracy and
integrity of the Groups annual and quarterly financial statements for
announcement to the public within the stipulated time frame.

35

The Directors are required, pursuant to Section 169 of the Act, to draw
up financial statements for each financial year that gives a true and fair
view of the state of affairs of the Company and the Group as at the end
of the financial year and of the results and cash flow for the financial
year. In addition, the Directors have the overall responsibility for taking
such steps as are reasonably available to them to safeguard the assets
of the Group and to prevent fraud and other irregularities. In preparing
the financial statements for the financial year ended 31 March 2014, the
Directors have:(i) adopted appropriate accounting policies and applied them
consistently;
(ii) made reasonable and prudent judgments and estimates;
(iii) ensured that the applicable approved Malaysian Financial Reporting
Standards in Malaysia and the provisions of the Act are complied
with; and
(iv) prepared financial statements on a going concern basis, having made
enquiries that the Company and the Group have adequate resources
to continue operations in the foreseeable future.
The Statement of Directors pursuant to the Act is set out on Page 134 in
this Annual Report.

5.2 Assessment of Suitability and Independence of


External Auditors
The Board has maintained a transparent and professional relationship
with the Groups external auditors through the Audit Committee.
The Groups external auditors are invited to attend the Audit Committee
meetings when deemed necessary. The Audit Committee meets the
external auditors to review the scope and adequacy of the audit process,
the financial statements and their audit findings.
In addition, the external auditors are invited to attend the Companys
Annual General Meeting / Extraordinary General Meeting(s) and are
available to answer any questions from shareholders on the conduct
of the statutory audit and the contents of the Annual Audited Financial
Statements as well as any corporate exercise undertaken by the Group
where the external auditors are involved.
During the financial year ended 31 March 2014, the Audit Committee
met twice with the external auditors without the presence of the
management.
Messrs Deloitte has in place policies on rotation for partners and senior
professional personnel of an audit engagement to ensure objectivity,
independence and integrity of the audit. The external auditors have
declared their independence to the Group and their compliance with
By-Laws (on professional ethics, conduct and practice) of the Malaysian
Institute of Accountants.

Corporate
Governance
Statement

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Principle 6 Recognise And Manage Risks


6.1 Sound Framework to Manage Risks
The Board acknowledges its responsibility for maintaining a sound
system of risk management and internal controls in the Company and
the Group. These controls provide reasonable but not absolute assurance
against material misstatement, loss or fraud.
The Directors responsibilities for the Groups system of risk management
and internal controls cover not only the financial aspects but also
compliance and operational controls as well as risks management matters
and reviewing the adequacy and integrity of the system.
The Company has in place an on-going process for identifying,
evaluating and managing key risks that may affect the achievement of
the business objectives of the Group. Towards cultivating a sustainable
risk management culture, risk management principles and practices are
embedded into existing key processes across different functions within
the Group.

6.2 Internal Audit Function


The Groups internal audit function is carried out by outsourced external
consultants who assist the Audit Committee and Board in providing
independent assessment on the adequacy, efficiency and effectiveness
of the Groups governance, risk management and internal control
processes.
Details of the Companys internal control system and framework are set
out in the Statement on Risk Management and Internal Control of this
Annual Report.

Principle 7 Ensure Timely And High Quality Disclosure


7.1 Corporate Disclosure Policy
The Board has put in place a Corporate Disclosure Policy to ensure
the disclosure of material information pertaining to the Companys
performance and operations to the public is in accordance with the
disclosure requirements under the MMLR and other applicable laws and
regulations.
The Policy outlines the Companys approach towards the determination
and dissemination of material information, the circumstances under
which the confidentiality of information will be maintained, preventing
abuse of undisclosed material information and provides guidelines
for achieving consistent disclosure practices. Confidential information
is restricted to top management only. Selected members of top
management are responsible for making disclosures and responding to
market rumours and queries.

7.2 Leverage on Information Technology for Effective


Dissemination of Information
The Board has established a dedicated section for corporate information
on the Companys website where information on the Companys
announcements, financial information, share prices and analysts reports
can be accessed.

36

Principle 8 Strengthen Relationship Between


Company and Shareholders
8.1 Encourage Shareholder Participation at General Meetings
Annual General Meeting (AGM)
The AGM serves as the principal forum for direct interaction and dialogue
among shareholders, Board and management. The AGM provides an
opportunity for the shareholders to seek and clarify any issues and to
have a better understanding of the Groups performance and other
matters of concern. Shareholders are encouraged to actively participate
in the question and answer session. The Board, senior management and
the external auditors will be present to answer and provide appropriate
clarifications at the meeting.
Normally, a press conference will be held after the AGM to advise the
media of the resolutions passed by shareholders, brief the media on the
operations, performance and financial results of the Group for the year
under review and clarify issues posed by the media.
The Company dispatches its notice of AGM and related papers to
shareholders at least twenty one (21) days before the meeting to enable
shareholders to go through the Annual Report and papers supporting the
resolutions proposed.

8.2 Encourage Poll Voting


In line with recommendation 8.2 of the MCCG 2012, the Chairman
informs shareholders of their right to demand a poll vote at the
commencement of the AGM.
All resolutions put for the shareholders approval at the 5th AGM held on
26 September 2013 were voted by a show of hands and duly passed.
The resolutions passed at the meeting are released to Bursa Malaysia in
a timely manner.

8.3 Effective Communication and Proactive Engagement


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

COMPLIANCE STATEMENT
The Board is of the view that the Group is generally in compliance with
the Principles and Recommendations of the MCCG 2012. Where a
specific Recommendation of the MCCG 2012 has not been observed
during the financial year under review, the non-observance has been
explained and the reasons thereof has been included in this Statement.
This Corporate Governance Statement is made in accordance with the
resolution of the Board of Directors dated 23 July 2014.

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

(Incorporated in Malaysia)

The Board of Directors (the Board) of Oldtown Berhad (the Company)


is pleased to present the Audit Committee (the Committee) Report for
the financial year ended 31 March 2014.

Audit
Committee
Report

(i) he must have passed the examinations specified in Part I of the


1st Schedule of the Accountants Act 1967; or

The members of the Audit Committee are as follows:-

(ii) he must be a member of one of the associations of accountants


specified in Part II of the 1st Schedule of the Accountants Act
1967; or

Chairman
Mark Wing Kong, Independent Non-Executive Director

(c) fulfills such other requirements as prescribed or approved by Bursa


Malaysia Securities Berhad (Bursa Securities).

1. Composition

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

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

Dato Wong Guang Seng, Independent Non-Executive Director


(Appointed on 1 April 2014)

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


Committee.

2. Attendance

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

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

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

Name of Members

Attendance
(1 April 2013 to 31 March 2014)

Mark Wing Kong

4/5

Datuk Dr. Ahmed Tasir Bin Lope Pihie

5/5

Tan Chon Ing @ Tan Chong Ling

5/5

C. Authority
(i) The Audit Committee is fully authorized by the Board to independently
investigate without interference from any party on any activity within
its terms of reference. It shall have:(a) full and unrestricted access to any information pertaining to the
Company and its subsidiary companies;
(b) direct communication channels with both the external Auditors and
internal Auditors;
(c) the resources which are required to perform its duties; and

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

(d) the authority to convene meeting with the external Auditors, internal
Auditors or both, excluding the attendance of the other directors and
employees of the Company, wherever deemed necessary.
(ii) The Audit Committee is also authorized by the Board to obtain external
or independent professional advice and may invite outsiders with
relevant experience to attend their meetings, if necessary.

B. Composition of the Audit Committee

D. Meetings, Quorum and Procedures

(i) The Committee shall be appointed by the Board from amongst its
number and shall consist of not less than three (3) members, all of
whom must be non-executive directors, with a majority of them being
independent directors.

(i) Meetings shall be held not less than four (4) times in a financial
year, although additional meetings may be called at any time by the
Chairman upon the request of any committee members, the external
or the internal Auditors or at the Chairmans discretion.

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

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

(iii) The Board shall at all times ensure that at least one (1) member of
the Audit Committee:
(a) must be a member of the Malaysian Institute of Accountants; or
(b) if he is not a member of the Malaysian Institute of Accountants,
he must have at least three (3) years working experience and:

37

(iii) The Secretary to the Committee shall, but need not, be the Company
Secretary.
(iv) The Audit Committee may, as and when deemed necessary, invite
other Board members, senior management personnel, a representative
of the external Auditors and external independent professional advisers
to attend the meetings.

Audit
Committee
Report

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

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

(iv) Risk Management


To review the adequacy and effectiveness of risk management,
internal control and governance systems instituted in the Group.

(vi) Minutes of each meeting shall be kept and distributed to each


member of the Committee and of the Board.

(v) Related Party Transactions


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

E. Duties and Responsibilities


The duties and responsibilities of the Committee shall be:
(i) External Audit
(a) To consider and recommend the appointment of the external
Auditors, the audit fee and any questions of resignation, dismissal or
re-appointment.
(b) To discuss with the external auditors before the annual audit
commences, the nature and scope of audit plan.
(c) To discuss problems and reservations arising from the final and
interim audits; evaluation of the system of internal controls and
any matter the external Auditors may wish to discuss, including
assistance given by the employees of the Group to the auditors
and to review the auditors audit report, management letter and
managements response.
(ii) Internal Audit
(a) To review the adequacy of the scope, functions, competency and
resources of the internal audit function and that it has the necessary
authority to carry out its work.
(b) To review the internal audit program, processes and results and,
where necessary, ensure that appropriate actions are taken on the
recommendations of the internal audit function and provide general
guidance to the internal audit function.

(vi) Other Matters


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

4. Summary Of Activities During The Financial Year


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

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

B. Internal Audit
(i) Reviewed the annual audit plan of the outsourced internal audit
function to ensure adequate scope and comprehensive coverage of
the activities of the Group;
(ii) Reviewed the internal audit reports, recommendations made and
Managements response to those recommendations; and

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

(iii) Noted the corrective actions on outstanding audit issues to ensure


the key risks and control lapses have been addressed and rectified.

(d) To consider the major findings of internal investigations and


managements response.

(i) Reviewed the Annual Audit Planning Memorandum prepared by the


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

(iii) Financial Reporting


To review the quarterly and annual financial statements of the Company
and the Group and to recommend the same to the Board for approval,
focusing particularly on:

C. External Audit

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

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


practices;

(iii) Recommended the re-appointment of the external Auditors for the


Boards approval;

(b) significant and unusual events;

(iv) Reviewed the extent of assistance rendered by the management and


issues and reservations arising from audits with the external Auditors;
and

(c) significant adjustments arising from the audit;


(d) the going concern assumption; and
(e) compliance with applicable approved accounting standards and other
legal and regulatory requirements.

38

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

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

D. Related Party Transactions


(i) Reviewed and noted all recurrent related party transactions entered
into by the Company and the Group to ensure that the transactions
entered into were on normal commercial terms;
(ii) Reviewed and recommended the revised procedure for Review
Methods and Procedures for Related Party Transactions for the
Boards consideration; and
(iii) Reviewed the audit reports on related party transactions presented
by the outsourced external consultant to ascertain that the review
procedures established to monitor the related party transactions have
been complied with in accordance to the MMLR of Bursa Securities.

E. Risk Management
(i) Reviewed the follow up report on Enterprise Risk Management from
outsourced external consultant to ascertain the adequacy of actions
taken to mitigate the risks; and
(ii) Reviewed the status reports on Enterprise Risk Management from the
Chairman of the Risk Management Committee.

F. Other Matters
(i) Reviewed and recommended to the Board, dividends to be declared
to the shareholders of the Company;
(ii) Reviewed the Circular to Shareholders in relation to the Proposed
Renewal of Shareholders Mandate for Recurrent Related Party
Transactions and Proposed New Shareholders Mandate for
Recurrent Related Party Transactions;
(iii) Reviewed the Audit Committee Report and Statement on Risk
Management and Internal Control prior to submission of the same to
the Board for consideration and inclusion in the Annual Report of the
Company; and
(iv) Reported to the Board on significant issues and concerns discussed
during the Committees meetings together with applicable
recommendations. Minutes of the Committees meetings were tabled,
discussed and noted by the Board.

5. Summary Of Activities Of The Internal Audit Function


During the financial year ended 31 March 2014, the outsourced internal
audit function assisted the Committee in discharging its duties and
responsibilities by executing independent reviews to determine the
adequacy and effectiveness of the Groups internal control system. The
activities performed by the internal audit function include:
(i) conducted review of business processes in accordance with the
risk-based internal audit plan approved by the Committee, which
covered reviews of the internal control system, risk management
and follow up audits to address observations reported in preceding
internal audit visits;

39

(ii) reported the results of internal audit reviews and provided


recommendations for improvement to the Committee;
(iii) followed up on the implementation of audit recommendations and
action plans agreed upon by the Management;
(iv) ascertained the extent of compliance with the Groups policies,
procedures and statutory requirements; and
(v) reviewed and recommended improvements to the existing system
of internal controls, risk management and corporate governance
processes.
The internal audits conducted during the financial year did not
reveal material weaknesses which would result in material losses,
contingencies or uncertainties that would require disclosure in the
Annual Report.
The costs incurred for the outsourced internal audit function in respect of
the financial year ended 31 March 2014 was RM92,052.

6. Statement On Share Issuance Scheme


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

Statement
On Risk
Management &
Internal Control

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

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

and incorporate any new risk factor, review the risk profiles, ratings
and update the management action plans;
The RMC will review the updated Risk Register and evaluate the
effectiveness of actions plans in mitigating the risks identified;
The RMC meets periodically to discuss principal business risks in
critical areas, assess the likelihood and impact of material exposures
and determine its corresponding risk mitigation measures; and
The Group Managing Director will update the Audit Committee on the
key risk related issues and the Audit Committee shall report to the
Board on the status of the risk management.

Boards Responsibility

Key Internal Control Processes

The Board acknowledges its responsibility in maintaining a sound system


of risk management and internal control and affirms its commitment
for reviewing the adequacy and integrity of the system. The system
of risk management and internal control covers financial, operational,
environmental, governance and compliance control matters.

The Board is committed to maintain a strong control structure whereby


internal control is embedded in the business processes for the Group
to pursue its objectives. The key features of the Groups internal control
system are:

The Groups system is designed to manage, rather than eliminate, the


risks towards achieving the Groups business objectives. Accordingly,
it can only provide reasonable but not absolute assurance against the
occurrence of any material misstatement, fraud or loss.

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

Risk Management Framework


The Board recognizes that a sound risk management framework is
essential to ensure proper management of the risks that may impede the
achievement of the Groups objectives.
The Group has established an Enterprise Risk Management (ERM)
framework to identify, evaluate and manage the risks.
The key features of the ERM framework are as follows:
It outlines the ERM methodology on the identification of key business
risks through a structured approach and to determine if controls are in
place in mitigating the risks identified.
It establishes guidelines to enable the Management to prioritize the
risks and allocation of resources to manage the risks.
The Board is supported by the Risk Management Committee
(RMC), headed by the Group Managing Director in overseeing the
risk management efforts within the Group. The RMC comprised of
Executive Directors and senior management and ensures that the risk
management and control framework is embedded into the culture,
processes and structures of the Group.
The key aspects of the risk management process are: Business/Operations/Departmental Heads are accountable for all risks
assumed under their respective areas of responsibility. They undertake
to update their risk profiles on regular basis from the previous update

40

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

ii) Annual Budget


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

iii) Active Involvement by Executive Directors


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

iv) External Certification


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

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The demanding control procedures and documentation requirements


of the certifications further strengthen the control environment and the
quality requirement of the Groups products.

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

v) Policies and Procedures

The results of the internal audit reviews and the recommendations


for improvement were deliberated upon during the Audit Committee
meetings. Minutes of the Audit Committee meetings which recorded the
deliberations were presented to the Board.

Operational policies and procedures form an integral part of the


internal control system to safeguard the Groups assets against
material losses. These include standard operating practices,
memorandum, manuals and handbooks which are updated, reviewed
and revised periodically to meet changing business and operational
requirements and statutory reporting needs.

Based on the internal audit reviews conducted, none of the weaknesses


noted have resulted in any material losses, contingencies or uncertainties
that would require separate disclosure in this Annual Report.

vi) Trained Personnel

3. Information and Communication

Emphasis is placed on enhancing the quality and ability of employees


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

Information critical to the achievement of the Groups business objectives


are communicated through established reporting lines across the
Group. This is to ensure that matters that require the Board and Senior
Managements attention are highlighted for review, deliberation and
decision on a timely basis.

vii) Board Committees


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

viii) Code of Conduct


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

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

2. Internal Audit Function


The Groups internal audit function is carried out by outsourced external
consultants to assist the Audit Committee and Board in providing
independent assessment on the adequacy, efficiency and effectiveness
of the Groups internal control system.
On quarterly basis, the outsourced external consultants submit audit
reports, recommended corrective measures on risks identified (if any)
for Managements implementation and also conduct subsequent follow
up audit to check and ensure that the Management has dealt with the
recommendations satisfactorily.

41

4. Monitoring and Review


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

Review Of The Statement By External Auditors


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

Conclusion
The Board has received assurance from the Group Managing Director
and the General Manager of Finance and Accounts that the Groups
risk management and internal control system, in all material aspects, is
operating adequately and effectively.
The Board is of the view that the Groups systems of risk management
and internal controls are adequate to safeguard shareholders
investments and the Groups assets. The process as outlined in this
Statement for identifying, evaluating and managing risks has been in
place for the year under review and up to the date of approval of this
Statement.
This Statement is made in accordance with the resolution of the Board
dated 23 July 2014.

Additional
Compliance
Information

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

1. Utilisation of Proceeds

3. Options, Warrants or Convertible Securities

On 21 December 2012, the Company completed its Private Placement


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

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


Company.

Purpose

Proposed
Utilisation
(RM000)

Actual
Utilization
(RM000)

Intended
Timeframe for
Utilisation

Balance /
Deviation
(RM000)

Capital expenditure for


business expansion

44,695

39,890

within
24 months

4,805*

19,155

19,155

within
12 months

500

504

within
1 month

(4)

Working capital
Estimated expenses

64,350

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

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

6. Non-Audit Fees
The amount of non-audit fees incurred for services rendered to the
Group for the financial year ended 31 March 2014 by the Companys
external auditors and their affiliates amounted to RM218,773.

59,549

* The remaining proceeds of RM4.805 million are intended to be utilised


for business expansion purposes in the domestic and international
markets, which comprise, but not limited to, opening of new outlets in
the domestic and international markets, acquisition of equipment for
the new and existing outlets, acquisition of plant and machinery for the
new and existing factories, and also investments into a Central Kitchen
Business to support the development of the licensed shops in China.

7. Variation in Results

2. Share Buy-Backs

8. Profit Guarantees

During the financial year, the Company repurchased a total of 611,000


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

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

No of shares
purchased and
retained as
treasury shares

Lowest
price
paid per
share (RM)

Highest
price
paid per
share (RM)

Average
price
paid per
share (RM)

Total
consideration
paid* (RM)

July
2013

10,000

2.83

2.90

2.87

28,744

November
2013

401,000

2.40

2.59

2.44

978,409

December
2013

200,000

2.38

2.39

2.40

479,355

Total

611,000

Month

1,486,508

*inclusive of transaction costs


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

42

4. Depository Receipt Programme

There were no variances of 10% or more between the results for


the financial year ended 31 March 2014 and the unaudited results
previously announced. The Company did not make any release on the
profit estimates, forecasts or projections for the financial year ended 31
March 2014.

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

10. Recurrent Related Party Transactions of a Revenue or


Trading Nature (RRPT)
The Company had obtained shareholders mandate at the Annual
General Meeting held on 26 September 2013 to allow the Group to enter
into RRPT with related parties.
The transactions entered into were in the ordinary course of business
and were carried out on terms and conditions not materially different
from those obtainable from transactions with unrelated parties.
The details of the RRPT conducted during the financial year ended 31
March 2014 pursuant to the shareholders mandate are as follows:

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Name of Company

Related Parties and


Type of Recurrent Related
Party Transactions

Value of
Transaction
for FY2014 (RM)

Interested Related Parties

Conneczone Sdn Bhd

Rental of outlet from Gourmet Corner


KL Sdn Bhd

250,800

Lim Ah Fah

Dynasty Kitchen Sdn Bhd

Sale of food and beverages products


to OTK Northern Sdn Bhd

871,415

Goh Ching Mun^

Emperors Kitchen Sdn Bhd

Sub-rental of office and factory from


Old Town International Sdn Bhd

432,000

Old Town International Sdn Bhd, Lee Siew Heng^,


Goh Ching Mun^, Tan Say Yap* and Lee Siew Ming#

Esquire Chef Sdn Bhd

Rental of factory from Lee Siew Heng

19,800

Lee Siew Heng^

Old Town Kopitiam


Butterworth Sdn Bhd

Rental of outlet from Noble Virtue


Sdn Bhd

59,400

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

Old Town Kopitiam


Sdn Bhd

Rental of outlet from Myth Empire


Sdn Bhd ( formerly known as
Soonsen Enterprise Sdn Bhd )

171,600

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

White Cafe Marketing


Sdn Bhd

Sub-Rental of office from Old Town


International Sdn Bhd

60,000

Old Town International Sdn Bhd, Lee Siew Heng^,


Goh Ching Mun^, Tan Say Yap* and Lee Siew Ming#

Rental of warehouse from


CN Supplies Sdn Bhd

21,200

Lee Siew Heng and Chin Lai Cheng @Angeline

Sale of food and beverages


products to :
Acadian Gourmet KK Sdn Bhd
Acadian Gourmet PB Sdn Bhd

13,060
16,949

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

Gourmet Corner KL Sdn Bhd


OTK Logistics Sdn Bhd
Gourmet Chef Kinrara Sdn Bhd
GC Bangsar Two Sdn Bhd
Gourmet Corner Ipoh Sdn Bhd
OTK (Teluk Cempedak) Sdn Bhd
OTK (Senai) Sdn Bhd
OTK (Genting) Sdn Bhd

25,708
440,289
7,119
13,181
18,772
2,800
2,454
771,094

Lim Ah Fah

OTK Northern Sdn Bhd

16,998

Goh Ching Mun^

Carefree Avenue Sdn Bhd


Conneczone Puchong Sdn Bhd

8,008
5,236

Lee Siew Ming#

Gourmet Corner Sdn Bhd

19,024

Lim Ah Fah, Chin Lai Cheng @ Angeline

OTK (Petaling Jaya) Sdn Bhd

19,353

Lim Ah Fah, Lee Teck Wai

OTK Sunway Sdn Bhd

14,939

Lim Ah Fah, Lee Teck Wai

Sub-rental of office and warehouse


from Old Town International Sdn Bhd

492,000

Old Town International Sdn Bhd, Lee Siew Heng^,


Goh Ching Mun^, Tan Say Yap* and Lee Siew Ming#

Rental of hostel and office from AC


Montage Marketing Sdn Bhd

24,880

Lee Siew Heng^, Chin Lai Yoong and Lee Siew Ming#

Rental of factory from Lee Siew Ming

18,900

Lee Siew Ming#

Purchase of food and beverages


products from Natural Marketing
Sdn Bhd

144,581

Lim Ah Fah

White Cafe Marketing


Sdn Bhd

Gongga Food Sdn Bhd

43

Additional
Compliance
Information

(Incorporated in Malaysia)

Name of Company

Related Parties and


Type of Recurrent Related
Party Transactions

Value of
Transaction
for FY2014 (RM)

Interested Related Parties

Gongga Food Sdn Bhd

Sale of food and beverages


products to :
GC Alamanda Sdn Bhd
GC Bangsar Two Sdn Bhd
GC Brickfields Sdn Bhd
GC Selayang Sdn Bhd
GC Shamelin Sdn Bhd
Gourmet Chef Sdn Bhd
Gourmet Corner KL Sdn Bhd
Gourmet Corner Ipoh Sdn Bhd
Gourmet Chef Kinrara Sdn Bhd
OTK (Alam Damai) Sdn Bhd
OTK (Intan) Sdn Bhd
OTK (Kuala Selangor) Sdn Bhd
OTK (Rawang) Sdn Bhd
OTK (Shah Alam) Sdn Bhd
OTK Manjung Sdn Bhd
OTK (Teluk Cempedak) Sdn Bhd
OTK (Senai) Sdn Bhd
OTK (Genting) Sdn Bhd
OTK Logistics Sdn Bhd

664,364
613,830
566,686
523,905
455,870
388,659
708,384
860,730
633,429
305,003
591,239
388,687
712,249
817,734
445,024
237,343
205,289
7,223,438
2,517,730

Lim Ah Fah

GC Bangsar Sdn Bhd


GC South City Sdn Bhd

657,279
431,393

Lim Ah Fah (2)

GC Bangi Sdn Bhd

661,992

Nurul Asyiqin Motimbin bt Abdullah , Azmah Binti


Abdul Aziz and Ahmed Razif bin Ahmed Tasir

Gourmet Corner Sdn Bhd

611,145

Lim Ah Fah and Chin Lai Cheng@Angeline

GC Kapar Sdn Bhd

466,274

Lim Ah Fah (4)

OTK Northern Sdn Bhd

254,117

Goh Ching Mun^

OTK USJ Sdn Bhd

421,911

Lee Siew Fong and Koo Yai Peng

Acadian Gourmet KK Sdn Bhd


Acadian Gourmet PB Sdn Bhd
Acadian Gourmet Sdn Bhd

505,785
646,345
271,230

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

OTK (Petaling Jaya) Sdn Bhd


OTK Ipoh Road Sdn Bhd
OTK Megah Sdn Bhd
OTK Sunway Sdn Bhd

803,921
367,590
218,804
524,806

Lim Ah Fah and Lee Teck Wai

OTK (MBH) Sdn Bhd


OTK Kopitiam (KLCC) Sdn Bhd
Carefree Avenue Sdn Bhd
Conneczone Puchong Sdn Bhd

248,583
394,770
662,957
295,363

Lee Siew Ming#

Purchase of uniform from Mayson


Trade (M) Sdn Bhd

111,656

Chin Lai Yoong

Rental of a terrace house from Lim


Khim Lan

60,000

Lim Khim Lan

Sub-rental of office from Old Town


International Sdn Bhd

156,000

Old Town International Sdn Bhd, Lee Siew Heng^,


Goh Ching Mun^, Tan Say Yap* and Lee Siew Ming#

Payment of logistic and loading fees


to OTK Sarawak Sdn Bhd

34,062

Lim Ah Fah (5)

Kopitiam Asia Pacific


Sdn Bhd

44

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Name of Company

Related Parties and


Type of Recurrent Related
Party Transactions

Kopitiam Asia Pacific


Sdn Bhd

Sale of furniture and utensils pursuant to the franchise


arrangement in relation to the operation of cafe outlets to:

Kopitiam Asia Pacific


Sdn Bhd

45

Value of
Transaction
for FY2014 (RM)

Interested Related Parties

GC Brickfields Sdn Bhd


GC Shamelin Sdn Bhd
Gourmet Corner Ipoh Sdn Bhd
OTK Logistics Sdn Bhd
GC Selayang Sdn Bhd
GC Alamanda Sdn Bhd
Gourmet Chef Sdn Bhd
Gourmet Corner KL Sdn Bhd
Gourmet Chef Kinrara Sdn Bhd
OTK (Rawang) Sdn Bhd
OTK (Shah Alam) Sdn Bhd
OTK (Senai) Sdn Bhd
OTK (Teluk Cempedak) Sdn Bhd
OTK (Intan) Sdn Bhd
OTK (Genting) Sdn Bhd

10,722
5,209
481,269
72,897
6,362
16,234
5,755
6,680
9,027
637,863
13,841
419,276
543,948
8,893
927,128

Lim Ah Fah

GC Bangsar Sdn Bhd


GC South City Sdn Bhd

7,152
11,131

Lim Ah Fah (2)

GC Kapar Sdn Bhd

17,330

Lim Ah Fah (4)

Gourmet Corner Sdn Bhd

10,020

Lim Ah Fah and Chin Lai Cheng@Angeline

OTK (Petaling Jaya) Sdn Bhd

110,898

Lim Ah Fah and Lee Teck Wai

OTK Northern Sdn Bhd

19,770

Goh Ching Mun

OTK Kopitiam (KLCC) Sdn Bhd


Carefree Avenue Sdn Bhd
Conneczone Puchong Sdn Bhd
OTK (MBH) Sdn Bhd

5,622
25,847
5,089
238,994

Lee Siew Ming#

Acadian Gourmet PB Sdn Bhd


Acadian Gourmet Sdn Bhd
Acadian Gourmet KK Sdn Bhd

7,792
4,777
13,241

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

OTK Sunway Sdn Bhd

9,317

Lim Ah Fah and Lee Teck Wai

OTK USJ Sdn Bhd

44,161

Lee Siew Fong and Koo Yai Peng

OTK Megah Sdn Bhd

9,225

Lim Ah Fah and Lee Teck Wai

GC Bangi Sdn Bhd

15,923

Nurul Asyiqin Motimbin bt Abdullah, Azmah Binti Abdul


Aziz and Ahmed Razif bin Ahmed Tasir

Advertising and promotion fees


charged to:
Acadian Gourmet KK Sdn Bhd
Acadian Gourmet PB Sdn Bhd
Acadian Gourmet Sdn Bhd

36,013
46,014
19,678

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

GC Bangi Sdn Bhd

51,876

Nurul Asyiqin Motimbin bt Abdullah , Azmah Binti


Abdul Aziz and Ahmed Razif bin Ahmed Tasir

GC Alamanda Sdn Bhd


GC Bangsar Two Sdn Bhd
GC Brickfields Sdn Bhd
GC Selayang Sdn Bhd

58,830
62,297
45,298
47,344

Lim Ah Fah

Additional
Compliance
Information

(Incorporated in Malaysia)

Name of Company

Related Parties and


Type of Recurrent Related
Party Transactions

Value of
Transaction
for FY2014 (RM)

Interested Related Parties

Kopitiam Asia Pacific


Sdn Bhd

Advertising and promotion fees


charged to:
GC Shamelin Sdn Bhd
Gourmet Chef Sdn Bhd
Gourmet Corner Ipoh Sdn Bhd
Gourmet Corner KL Sdn Bhd
Gourmet Chef Kinrara Sdn Bhd
OTK (Alam Damai) Sdn Bhd
OTK (Intan) Sdn Bhd
OTK (Kuala Selangor) Sdn Bhd
OTK (Rawang) Sdn Bhd
OTK (Shah Alam) Sdn Bhd
OTK Manjung Sdn Bhd
OTK (Senai) Sdn Bhd
OTK (Teluk Cempedak) Sdn Bhd
OTK (Genting) Sdn Bhd

47,311
34,949
73,353
66,793
56,785
23,817
55,103
35,875
60,349
72,335
38,316
11,382
18,385
894,479

Lim Ah Fah

GC Bangsar Sdn Bhd


GC South City Sdn Bhd

62,946
38,848

Lim Ah Fah (2)

GC Kapar Sdn Bhd

40,374

Lim Ah Fah (4)

OTK Sarawak Sdn Bhd

40,874

Lim Ah Fah (5)

Gourmet Corner Sdn Bhd

53,746

Lim Ah Fah and Chin Lai Cheng@Angeline

OTK (Petaling Jaya) Sdn Bhd


OTK Ipoh Road Sdn Bhd
OTK Megah Sdn Bhd
OTK Sunway Sdn Bhd

73,010
31,073
18,720
44,768

Lim Ah Fah and Lee Teck Wai

OTK Northern Sdn Bhd

77,661

Goh Ching Mun^

OTK USJ Sdn Bhd

40,295

Lee Siew Fong and Koo Yai Peng

OTK Kopitiam (KLCC) Sdn Bhd


Carefree Avenue Sdn Bhd
Conneczone Puchong Sdn Bhd
OTK (MBH) Sdn Bhd

23,257
56,979
27,313
22,010

Lee Siew Ming#

Payment of royalty fees pursuant


to the franchise arrangement by:
Acadian Gourmet KK Sdn Bhd
Acadian Gourmet PB Sdn Bhd
Acadian Gourmet Sdn Bhd

60,021
76,690
32,797

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

GC Bangi Sdn Bhd

86,460

Nurul Asyiqin Motimbin bt Abdullah, Azmah Binti Abdul


Aziz and Ahmed Razif bin Ahmed Tasir

GC Alamanda Sdn Bhd


GC Bangsar Two Sdn Bhd
GC Brickfields Sdn Bhd
GC Selayang Sdn Bhd
GC Shamelin Sdn Bhd
Gourmet Chef Sdn Bhd
Gourmet Corner Ipoh Sdn Bhd
Gourmet Corner KL Sdn Bhd
Gourmet Chef Kinrara Sdn Bhd
OTK (Alam Damai) Sdn Bhd

98,050
103,828
75,496
78,906
78,852
58,248
122,254
111,321
94,642
39,695

Lim Ah Fah

Kopitiam Asia Pacific


Sdn Bhd

46

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Name of Company

Related Parties and


Type of Recurrent Related
Party Transactions

Value of
Transaction
for FY2014 (RM)

Interested Related Parties

Kopitiam Asia Pacific


Sdn Bhd

Payment of royalty fees pursuant


to the franchise arrangement by:
OTK (Intan) Sdn Bhd

91,838

Lim Ah Fah

OTK (Kuala Selangor) Sdn Bhd

59,791

OTK (Rawang) Sdn Bhd

100,582

OTK (Shah Alam) Sdn Bhd

120,559

OTK Manjung Sdn Bhd

63,861

OTK (Senai) Sdn Bhd

17,216

OTK (Teluk Cempedak) Sdn Bhd

30,642

GC Bangsar Sdn Bhd


GC South City Sdn Bhd

104,910
64,746

Lim Ah Fah (2)

GC Kapar Sdn Bhd

67,289

Lim Ah Fah (4)

OTK Sarawak Sdn Bhd

68,123

Lim Ah Fah (5)

Gourmet Corner Sdn Bhd

89,577

Lim Ah Fah and Chin Lai Cheng@Angeline

Oldtown Asia Pacific Limited

85,916

Lee Siew Heng^

OTK (Petaling Jaya) Sdn Bhd


OTK Ipoh Road Sdn Bhd
OTK Megah Sdn Bhd
OTK Sunway Sdn Bhd

121,683
51,788
31,200
74,613

Lim Ah Fah and Lee Teck Wai

OTK Northern Sdn Bhd

129,435

Goh Ching Mun^

OTK USJ Sdn Bhd

67,158

Lee Siew Fong and Koo Yai Peng

OTK Kopitiam (KLCC) Sdn Bhd


Carefree Avenue Sdn Bhd
Conneczone Puchong Sdn Bhd
OTK (MBH) Sdn Bhd

34,885
94,965
45,522
36,684

Lee Siew Ming#

Payment of royalty fees and initial


franchise fee pursuant to the
franchise arrangement by OTK
(Genting) Sdn Bhd

1,730,798

Lim Ah Fah

Details of relationships
Azmah Binti Abdul Aziz
Ahmed Razif bin Ahmed Tasir
Chin Lai Cheng @ Angeline
Chin Lai Yoong
Koo Yai Peng
Lee Siew Heng ^
Lee Siew Kong
Lee Siew Fong
Lee Siew Ming#
Lee Teck Wai
Lim Ah Fah
Lim Khim Lan
Nurul Asyiqin Motimbin bt Abdullah
^ Our Director and Major Shareholder.
* Our Director and shareholder.
# Our Major Shareholder.

47

:
: Spouse of Datuk Dr Ahmed Tasir Bin Lope Pihie*.
: Son of Datuk Dr Ahmed Tasir Bin Lope Pihie*.
: Spouse of Lee Siew Heng^ and sister-in-law of Lee Siew Ming#.
: Spouse of Lee Siew Ming# and sister-in-law of Lee Siew Heng^. She ceased to be a Director and major shareholder of
Oldtown Berhad with effect from (wef) 26/9/2013 & 21/11/2013 respectively.
: Spouse of Lee Siew Fong and brotherin-law of Lee Siew Heng^ & Lee Siew Ming#.
: Spouse of Chin Lai Cheng @ Angeline and brother of Lee Siew Kong, Lee Siew Ming# and Lee Teck Wai
: Brother of Lee Siew Heng^ and Lee Siew Ming#.
: Sister of Lee Siew Heng^ and Lee Siew Ming#.
: Brother of Lee Siew Heng^ and spouse of Chin Lai Yoong. He became a Major Shareholder of Oldtown Berhad wef 21/11/2013.
: Brother of Lee Siew Heng^ and Lee Siew Ming#.
: Sister-in-law of Lee Siew Heng^ and Lee Siew Ming#.
: Spouse of Mr Clarence D Silva*.
: Daughter-in-law of Datuk Dr Ahmed Tasir Bin Lope Pihie*.

Additional
Compliance
Information

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Notes:
Ahmed Razif Bin Ahmed Tasir is a substantial shareholder of GC Bangi Sdn
Bhd (ceased to be substantial shareholder wef 7/11/2013).

Lee Siew Ming# is a substantial shareholder of Old Town International


Sdn Bhd.

Azmah Binti Abdul Aziz is a director and substantial shareholder GC Bangi


Sdn Bhd and GC Alamanda Sdn Bhd (ceased to be a substantial shareholder
of GC Alamanda wef 20/11/2013).

Lee Teck Wai is a director and substantial shareholder of CN Properties Sdn


Bhd, Noble Virtue Sdn Bhd, OTK (Petaling Jaya) Sdn Bhd, OTK Ipoh Road Sdn
Bhd, OTK Megah Sdn Bhd and OTK Sunway Sdn Bhd.

Chin Lai Cheng @ Angeline is a substantial shareholder of Gourmet Corner


Sdn Bhd.

Lee Teck Wai is a shareholder of Old Town International Sdn Bhd.

Chin Lai Yoong is a director and substantial shareholder of Myth Empire Sdn
Bhd ( formerly known as Soonsen Enterprise Sdn Bhd ) and AC Montage
Marketing Sdn Bhd.
Chin Lai Yoong is a substantial shareholder of Mayson Trade (M) Sdn Bhd.
Goh Ching Mun^ is a director and substantial shareholder of OTK Northern
Sdn Bhd and Old Town International Sdn Bhd.
Koo Yai Peng is a director and substantial shareholder of OTK USJ Sdn
Bhd.
Lee Siew Heng^ is a substantial shareholder of Acadian Gourmet KK Sdn
Bhd(1), Acadian Gourmet PB Sdn Bhd(1), Acadian Gourmet Sdn Bhd(1)
(ceased to be deemed substantial shareholder of the 3 companies wef
1/7/2013).
Lee Siew Heng^ is a director and substantial shareholder of Oldtown Asia
Pacific Limited and Old Town International Sdn Bhd.
Lee Siew Heng^ is a shareholder of AC Montage Marketing Sdn Bhd (ceased
to be a shareholder wef 29/4/2013).
Lee Siew Heng^ is a director and substantial shareholder of Noble Virtue Sdn
Bhd (ceased to be a director and shareholder wef 22/4/2013 & 06/05/2013
respectively).
Lee Siew Kong is director and substantial shareholder of CN Properties
Sdn Bhd, Noble Virtue Sdn Bhd and Myth Empire Sdn Bhd (formerly known
as Soonsen Enterprise Sdn Bhd) (ceased to be a director and substantial
shareholder of Myth Empire Sdn Bhd wef 12/4/2013 & 6/6/2013
respectively ).
Lee Siew Kong is a shareholder of Old Town International Sdn Bhd.
Lee Siew Fong is a director and substantial shareholder of OTK USJ Sdn Bhd.
Lee Siew Ming# was a deemed substantial shareholder of Acadian Gourmet
KK Sdn Bhd (1) , Acadian Gourmet PB Sdn Bhd (1), Acadian Gourmet Sdn
Bhd (1) wef 1/7/2013 to 14/04/2014.
Lee Siew Ming# became a direct substantial shareholder of Acadian Gourmet
KK Sdn Bhd, Acadian Gourmet PB Sdn Bhd and Acadian Gourmet Sdn Bhd
wef 15/4/2014.
Lee Siew Ming# is a director and substantial shareholder of Noble Virtue Sdn
Bhd, Myth Empire Sdn Bhd, Carefree Avenue Sdn Bhd, Conneczone Puchong
Sdn Bhd, OTK (MBH) Sdn Bhd and OTK Kopitiam (KLCC) Sdn Bhd.
Lee Siew Ming# is a director of CN Properties Sdn Bhd
Lee Siew Ming# is a shareholder of AC Montage Marketing Sdn Bhd.

48

Lim Ah Fah is a director and substantial shareholder of Gourmet Corner KL


Sdn Bhd, Natural Marketing Sdn Bhd, GC Alamanda Sdn Bhd, GC Bangsar
Sdn Bhd(2), GC Bangsar Two Sdn Bhd, GC Brickfields Sdn Bhd, GC Kapar
Sdn Bhd(4), GC Selayang Sdn Bhd, GC Shamelin Sdn Bhd, GC South City Sdn
Bhd(2), Gourmet Chef Kinrara Sdn Bhd, Gourmet Chef Sdn Bhd, Gourmet
Corner Ipoh Sdn Bhd, and Gourmet Corner Sdn Bhd, OTK Sarawak Sdn Bhd
(5), OTK (Petaling Jaya) Sdn Bhd, OTK Ipoh Road Sdn Bhd, OTK Megah Sdn
Bhd and OTK Sunway Sdn Bhd.
Lim Ah Fah is a director and deemed substantial shareholder of OTK (Alam
Damai) Sdn Bhd(3),OTK (Intan) Sdn Bhd(3), OTK (Senai) Sdn Bhd (3), OTK
(Teluk Cempedak) Sdn Bhd(3), OTK (Kuala Selangor) Sdn Bhd(3), OTK
(Rawang) Sdn Bhd(3),OTK (Shah Alam) Sdn Bhd(3)and OTK Manjung Sdn
Bhd (3) and ceased to be a substantial shareholder of these 8 companies
wef 21/03/2014.
Lim Ah Fah is a director and substantial shareholder OTK (Genting) Sdn Bhd
and ceased to be a director and substantial shareholder wef 9/10/2013 &
21/3/2014 respectively.
Lim Ah Fah is a substantial shareholder of OTK Logistics Sdn Bhd and a
shareholder of Old Town International Sdn Bhd.
Nurul Asyiqin Motimbin bt Abdullah is a director of GC Bangi Sdn Bhd and
became a substantial shareholder wef 7/11/2013.
Old Town International Sdn Bhd# (OTI) is the holding company of Oldtown
Berhad. Mr Lee Siew Heng^ and Mr Goh Ching Mun^ are directors and
substantial shareholders of OTI. Chin Lai Yoong, Tan Say Yap* and Lee Siew
Ming# are substantial shareholders of OTI. Chuah Seong Ming, a director of
Oldtown Berhad is a shareholder of OTI. Lee Siew Kong, Lee Teck Wai, Tan
Say Cheong (brother of Tan Say Yap) and Lim Ah Fah are shareholders of OTI.

Notes:
(1) Deemed interested by virtue of his shareholding in Acadian LApparel
Manufacturing Sdn Bhd, pursuant to Section 6A of the Companies Act,
1965 (the Act).
(2) Deemed interested by virtue of her shareholding in Gourmet Corner KL
Sdn Bhd, pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of her shareholding in OTK (Genting) Sdn
Bhd, pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of her shareholding in Gourmet Corner Ipoh
Sdn Bhd, pursuant to Section 6A of the Act.
(5) Deemed interested by virtue of her substantial shareholdings in OTK
Logistics Sdn Bhd, the holding company of OTK Sarawak Sdn Bhd,
pursuant to the Section 6A of the Act.

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

(Incorporated in Malaysia)

50 Directors Report
54 Independent Auditors Report
56 Statements of Profit or Loss

& Other Comprehensive Income

58 Statements of Financial Position


60 Statement of Changes In Equity
62 Statement of Cash Flows
66 Notes to The Financial Statements
134
134

Statement by Directors

Declaration By The Officer


Primarily Responsible For
The Financial Management
Of The Company

49

Financial
Statements

Directors
Report

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The directors of OLDTOWN BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company
for the financial year ended March 31, 2014.

Principal Activities
The Company is principally involved in investment holding.
The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

Results of Operations
The results of operations of the Group and of the Company for the financial year are as follows:
The Group
RM

The Company
RM

50,329,638

76,300,284

Owners of the Company

48,938,252

76,300,284

Non-controlling interests

1,391,386

50,329,638

76,300,284

Profit for the year


Profit attributable to:

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by
any item, transaction or event of a material and unusual nature.

Dividends
A final dividend declared in respect of the financial period ended March 31, 2013 under single tier tax system of 3.0 sen per share, amounting to
RM10,889,700 was paid on October 30, 2013.
An interim dividend declared in respect of the current financial year under single tier tax system of 3.0 sen per share, amounting to RM13,589,587 was
paid on April 17, 2014.
The directors proposed a final dividend of 3.0 sen per share, amounting to RM13,589,587 in respect of the current financial year computed based on
the outstanding issued and paid-up capital, excluding treasury shares held by the Company of 611,000 ordinary shares of RM1.00 each. This dividend
is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the
financial statements. Upon approval by the shareholders, the dividend payment will be accounted for in equity as an appropriation of retained earnings
during the financial year ending March 31, 2015.

Reserves and Provisions


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

Issue of Shares and Debentures


As approved by the shareholders at the Extraordinary General Meeting held on January 6, 2014, the issued and paid-up ordinary share capital of the
Company was increased from RM363,000,000 to RM453,597,242 during the financial year by way of a bonus issue of 90,597,242 new ordinary shares
of RM1 each through the capitalisation of RM40,000,000 and RM50,597,242 from share premium and retained earnings respectively on the basis of
one (1) bonus share for every four (4) existing ordinary shares held.
These new shares rank pari passu with the then existing ordinary shares of the Company.

50

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Treasury Shares
During the financial year, the Company repurchased a total of 611,000 units of its own shares from the open market of Bursa Malaysia Securities Berhad for
a total cost of RM1,486,508 and has been deducted from equity. The average price paid for the shares repurchased during the year was RM2.43 per share.
The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as Treasury Shares in accordance with
the requirements of Section 67A of the Companies Act, 1965.
The mandate given by the shareholders will expire at the forthcoming Annual General Meeting (AGM) and an ordinary resolution will be tabled at the
AGM for shareholders to grant a fresh mandate for another year.

Share Options
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As of the end of
the financial year, there were no unissued shares of the Company under options.

Other Statutory Information


Before the statements of profit or loss and other comprehensive income and the statements of financial position of the Group and of the Company were
made out, the directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and had
satisfied themselves that all known bad debts had been written off and that no allowance for doubtful debts was necessary; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their
estimated realisable values.
At the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount written off as bad debts in the financial statements of the Group and of the Company inadequate to any substantial
extent or require the making of allowance for doubtful debts in the financial statements of the Group and of the Company; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of
the Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year and secures the liability of any other
person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the
financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations
as and when they fall due.
In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in
which this report is made other than those disclosed in Note 41 to the financial statements.

51

Directors
Report

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Directors
The following directors served on the Board of the Company since the date of the last report:
Datuk Dr. Ahmed Tasir bin Lope Pihie, PJN, PMP, JSM, FASc
Mr. Lee Siew Heng
Mr. Mark Wing Kong
Mr. Tan Chon Ing @ Tan Chong Ling
Dato Wong Guang Seng (appointed on April 1, 2014)
Mr. Chuah Seong Meng
Mr. Clarence DSilva A/L Leon DSilva
Mr. Goh Ching Mun
Mr. Tan Say Yap
Madam Chin Lai Yoong (retired on September 26, 2013 and not re-elected)
In accordance with Article 84 of the Companys Articles of Association, Datuk Dr. Ahmed Tasir bin Lope Pihie, PJN, PMP, JSM, FASc, Mr. Lee Siew Heng
and Mr. Goh Ching Mun retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
Dato Wong Guang Seng who was appointed to the Board since the last Annual General Meeting, retires under Article 91 of the Companys Articles of
Association and, being eligible, offers himself for re-election at the forthcoming Annual General Meeting.

Directors Interests
The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors Shareholdings
kept by the Company under Section 134 of the Companies Act, 1965, are as follows:
Number of ordinary shares of RM1 each
Balance as of
1.4.2013

Bought

Bonus Issue

Sold

Balance as of
31.3.2014

50,000

5,000

(30,000)

25,000

5,000,000

1,250,000

6,250,000

50,000

12,500

62,500

100,000

25,000

125,000

300,000

75,000

375,000

372,750

93,187

465,937

Shares in the Company


Registered in the name of directors
Datuk Dr. Ahmed Tasir bin Lope Pihie,
PJN, PMP, JSM, FASc
Mr. Lee Siew Heng
Mr. Mark Wing Kong
Mr. Clarence DSilva A/L Leon DSilva
Mr. Goh Ching Mun
Mr. Tan Say Yap
Indirect interest by virtue of shares held by
a company in which the directors have interest
Mr. Lee Siew Heng

165,345,000

39,651,700

(7,738,200)

197,258,500

Mr. Goh Ching Mun

165,345,000

39,651,700

(7,738,200)

197,258,500

681,054

681,054

73,684

73,684

Mr. Goh Ching Mun

968,422

968,422

Mr. Tan Say Yap

263,160

263,160

Shares in the ultimate holding company,


Old Town International Sdn. Bhd.
Mr. Lee Siew Heng
Mr. Chuah Seong Meng

52

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

By virtue of their interest in the shares of the Company and of the holding company, Mr. Lee Siew Heng and Mr. Goh Ching Mun are also deemed to have
an interest in the shares of the subsidiaries to the extent that the Company and the holding company have an interest.
Mr. Tan Chon Ing @ Tan Chong Ling and Mr. Chuah Seong Meng did not hold shares in the Company during the financial year. Under the Companys
Articles of Association, the directors are not required to hold any share in the Company.

Directors Benefits
Since the end of the previous financial period, none of the directors of the Company has received or become entitled to receive any benefit (other than
the benefit included in the aggregate amount of emoluments received or due and receivable by directors as disclosed in the financial statements or the
fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a
firm of which he is a member, or with a company in which he has a substantial financial interest except for any benefit which may be deemed to have
arisen by virtue of the transactions between the Company and certain companies in which certain directors of the Company are also directors and/or
shareholders or have substantial financial interests as disclosed in Note 25 to the financial statements.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might
acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Holding Company
The Company is a subsidiary of Old Town International Sdn. Bhd., a company incorporated in Malaysia and the directors regard it as the ultimate
holding company.

Auditors
The auditors, Messrs. Deloitte (formerly known as Deloitte KassimChan), have indicated their willingness to continue in office.

Signed on behalf of the Board


in accordance with a resolution of the Directors,

DATUK DR. AHMED TASIR BIN LOPE PIHIE,


PJN, PMP, JSM, FASc

MR. LEE SIEW HENG


Ipoh,
July 23, 2014

53

Independent
Auditors
Report

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

TO THE MEMBERS OF OLDTOWN BERHAD


(Incorporated in Malaysia)

Report on The Financial Statements


We have audited the financial statements of Oldtown Berhad, which comprise the statements of financial position of the Group and of the Company as of
March 31, 2014 and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of
the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out
on page 56 to page 133.

Directors Responsibility for The Financial Statements


The directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The
directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.

Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved
standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, the auditors consider internal control relevant to the entitys preparation of financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of March 31, 2014 and of
their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements


In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiaries of which we
have acted as auditors, have been properly kept in accordance with the provisions of the Act;
(b) we have considered the accounts and auditors reports of the subsidiaries, of which we have not acted as auditors, which are indicated in Note 17 to
the financial statements;
(c) we are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and
content appropriate and proper for the purposes of the preparation of the financial statements of the Group, and we have received satisfactory
information and explanations as required by us for those purposes; and
(d) the auditors reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

54

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Other Reporting Responsibilities


The supplementary information set out in Note 42 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the
financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter
No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our
opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia
Securities Berhad.

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

DELOITTE
AF 0080
Chartered Accountants

LIM KENG PEO


Partner - 2939/01/16(J/PH)
Chartered Accountant
July 23, 2014

55

Statements
of Profit or
Loss & Other
Comprehensive
Income

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

FOR THE YEAR ENDED MARCH 31, 2014


(With Comparative Figures For The Period January 1, 2012 To March 31, 2013)

The Group

Note

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Revenue

382,171,650

422,054,343

77,134,054

34,739,024

Investment revenue

1,578,460

2,478,686

337,523

1,190,406

Other gains and losses

639,786

1,051,000

211,971

Other operating income

11,748,757

15,069,574

4,067,367

9,842

(100,177,769)

(108,625,603)

(70,890,411)

(79,756,129)

10

(3,184,617)

(2,649,522)

(307,632)

(375,768)

(54,121,240)

(60,023,198)

(113,896)

(134,157)

Depreciation of property, plant and equipment

14

(15,928,327)

(17,583,643)

(153,172)

(173,383)

Amortisation of prepaid lease payments

15

(184,743)

(230,928)

Amortisation of intangible assets

21

(3,529,319)

(2,929,087)

Impairment loss on investment in a subsidiary

17

(950,810)

Impairment loss on goodwill

20

(1,959,643)

Share of (losses)/profits of associates

18

(157,055)

527,506

Finance costs

11

(1,556,523)

(1,345,971)

(215)

(848)

(84,107,623)

(91,140,342)

(808,349)

(1,291,913)

66,368,393

74,946,885

76,300,284

33,002,551

(16,038,755)

(19,360,019)

23,436

50,329,638

55,586,866

76,300,284

33,025,987

Changes in inventories of finished goods,


work-in-progress, trading merchandise, food,
beverages and consumables
Raw materials and consumables used
Purchase of trading merchandise, food, beverages and
consumables
Directors remuneration
Employee benefits expenses

Other operating expenses


Profit before tax
Tax (expense)/income
PROFIT FOR THE YEAR/PERIOD

56

The Company

12

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Changes in fair value of available-for-sale financial assets

(31,582)

1,029,600

253,765

495,037

Reclassification adjustments relating to available-for-sale


financial assets disposed of in the year

417,441

(260,308)

1,382,671

(20,139)

52,098,168

56,596,327

76,293,741

33,521,024

Owners of the Company

48,938,252

55,527,110

76,300,284

33,025,987

Non-controlling interests

1,391,386

59,756

50,329,638

55,586,866

76,300,284

33,025,987

Owners of the Company

50,405,249

56,536,571

76,293,741

33,521,024

Non-controlling interests

1,692,919

59,756

52,098,168

56,596,327

76,293,741

33,521,024

0.11

0.13

Note
Other Comprehensive Income/(Loss):
Items that may be reclassified
subsequently to profit or loss:
Available-for-sale financial assets:

Exchange differences on translating foreign subsidiaries


TOTAL COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD
Profit attributable to:

Total comprehensive income attributable to:

Earnings per share


Basic and diluted (RM per share)

13

The accompanying Notes form an integral part of the financial statements.

57

Statements
of Financial
Position

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

AS OF MARCH 31, 2014

The Group
Note

The Company

2014
RM

2013
RM

2014
RM

2013
RM

ASSETS
Non-current assets
Property, plant and equipment

14

105,634,478

102,396,819

1,885,819

1,930,665

Prepaid lease payments

15

13,572,737

13,757,480

Investment properties

16

3,890,000

2,040,000

Investments in subsidiaries

17

289,752,921

289,552,121

Investments in associates

18

1,505,141

1,706,196

1,101,002

1,101,002

Other investments

19

1,086,567

46,628,062

15,447,383

Goodwill on consolidation

20

23,711,995

23,711,995

Intangible assets

21

33,398,124

19,136,699

Deferred tax assets

22

963,000

1,280,000

183,762,042

210,657,251

292,739,742

308,031,171

Total non-current assets


Current assets

58

Inventories

23

22,465,954

14,227,762

Trade and other receivables

24

45,823,843

48,782,856

226,591

173,668

Amount owing by subsidiaries

25

133,841,597

64,911,665

Amount owing by associates

25

1,562,022

1,349,508

44,000

Other investments

19

66,516,766

25,693,547

25,488,494

15,047,654

Current tax assets

12

4,059,601

1,105,598

9,774

10,951

Fixed deposits, cash and bank balances

26

99,883,920

86,227,153

19,845,929

29,343,928

Total current assets

240,312,106

177,386,424

179,456,385

109,487,866

Total assets

424,074,148

388,043,675

472,196,127

417,519,037

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Group

The Company

Note

2014
RM

2013
RM

2014
RM

2013
RM

Issued capital

27(a)

453,597,242

363,000,000

453,597,242

363,000,000

Treasury shares

27(b)

(1,486,508)

(1,486,508)

Reserves

28

(216,616,808)

(178,083,805)

4,042,138

44,048,681

Retained earnings

29

93,796,133

119,934,410

2,298,506

1,074,751

329,290,059

304,850,605

458,451,378

408,123,432

5,041,736

2,192,022

334,331,795

307,042,627

458,451,378

408,123,432

EQUITY AND LIABILITIES


Capital and reserves

Equity attributable to owners of the Company


Non-controlling interests

30

Net equity
Non-current liabilities
Hire-purchase payables

31

269,368

837,040

Borrowings

32

20,102,210

25,287,874

Deferred income

33

1,930,393

2,060,600

Deferred capital grant

34

16,628

Deferred tax liabilities

22

5,770,731

2,069,412

28,072,702

30,271,554

Total non-current liabilities


Current liabilities
Trade and other payables

35

49,844,402

40,044,852

7,826,994

206,709

Amount owing to ultimate holding company

25

6,072,479

87,936

5,917,755

Amount owing to subsidiaries

25

9,188,896

Hire-purchase payables

31

545,735

648,266

Borrowings

32

3,379,905

7,767,923

Deferred income

33

1,332,001

1,496,427

Deferred capital grant

34

16,629

24,180

Current tax liabilities

12

478,500

659,910

Total current liabilities

61,669,651

50,729,494

13,744,749

9,395,605

Total liabilities

89,742,353

81,001,048

13,744,749

9,395,605

424,074,148

388,043,675

472,196,127

417,519,037

Total equity and liabilities


The accompanying Notes form an integral part of the financial statements.

59

60

27(b)

Buy-back of ordinary shares

453,597,242

90,597,242

(1,486,508)

(1,486,508)

Treasury
Shares
RM

The accompanying Notes form an integral part of the financial statements.

Balance as of March 31, 2014

27(a)

Payment of dividends

Bonus issue

Total comprehensive income


for the year

36

Other comprehensive income


for the year

30

Arising from disposal of


interest in a subsidiary

363,000,000

33,000,000

Profit for the year

30

Arising from acquisition


of a subsidiary

Balance as of March 31, 2013

27(a)

Payment of dividends

Issue of shares

Total comprehensive income for


the period

36

Other comprehensive income


for the period

330,000,000

30

Note

Profit for the period

Arising from acquisition


of subsidiaries

Balance as of January 1, 2012

The Group

Issued
Capital
RM

3,553,644

(40,000,000)

43,553,644

31,242,312

12,311,332

Share
Premium
RM

(222,653,894)

(222,653,894)

(222,653,894)

Reserve
Arising From
Restructuring
RM

1,067,983

1,081,138

1,081,138

(13,155)

(20,139)

(20,139)

6,984

Foreign
Currency
Translation
Reserve
RM

Non-distributable Reserves

1,415,459

385,859

385,859

1,029,600

1,029,600

1,029,600

Investment
Revaluation
Reserve
RM

93,796,133

(50,597,242)

(24,479,287)

48,938,252

48,938,252

119,934,410

(33,000,000)

55,527,110

55,527,110

97,407,300

329,290,059

(1,486,508)

(24,479,287)

50,405,249

1,466,997

48,938,252

304,850,605

64,242,312

(33,000,000)

56,536,571

1,009,461

55,527,110

217,071,722

Distributable
Reserve Attributable
Retained
to Owners
Earnings of the Company
RM
RM

5,041,736

(747,710)

1,692,919

301,533

1,391,386

(1,952,704)

3,857,209

2,192,022

(56,000)

59,756

59,756

1,952,704

235,562

Non-controlling
Interests
RM

334,331,795

(1,486,508)

(25,226,997)

52,098,168

1,768,530

50,329,638

(1,952,704)

3,857,209

307,042,627

64,242,312

(33,056,000)

56,596,327

1,009,461

55,586,866

1,952,704

217,307,284

Total
Equity
RM

Statement
of Changes
In Equity
OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

FOR THE YEAR ENDED MARCH 31, 2014


(With Comparative Figures For The Period January 1, 2012 To March 31, 2013)

61
453,597,242

The accompanying Notes form an integral part of the financial statements.

Balance as of March 31, 2014

27(b)

Buy-back of ordinary shares

90,597,242

Payment of dividends
27(a)

Total comprehensive income for


the year

Bonus issue

Other comprehensive income


for the year

36

363,000,000

Profit for the year

Balance as of March 31, 2013

33,000,000

Payment of dividends
27(a)

Total comprehensive income for


the period

Issue of shares

Other comprehensive income


for the period

330,000,000

36

Note

Profit for the period

Balance as of January 1, 2012

The Company

Issued
Capital
RM

(1,486,508)

(1,486,508)

Treasury
Shares
RM

3,553,644

(40,000,000)

43,553,644

31,242,312

12,311,332

488,494

(6,543)

(6,543)

495,037

495,037

495,037

Non-distributable
Reserves
Investment
Share
Revaluation
Reserve
Premium
RM
RM

2,298,506

(50,597,242)

(24,479,287)

76,300,284

76,300,284

1,074,751

(33,000,000)

33,025,987

33,025,987

1,048,764

Distributable
Reserve Retained
Earnings
RM

458,451,378

(1,486,508)

(24,479,287)

76,293,741

(6,543)

76,300,284

408,123,432

64,242,312

(33,000,000)

33,521,024

495,037

33,025,987

343,360,096

Total
Equity
RM

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Statement of
Cash Flows

FOR THE YEAR ENDED MARCH 31, 2014


(With Comparative Figures For The Period January 1, 2012 To March 31, 2013)

The Group
Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

50,329,638

55,586,866

Tax expense recognised in profit or loss

16,038,755

19,360,019

Depreciation of property, plant and equipment

15,928,327

17,583,643

Amortisation of intangible assets

3,529,319

2,929,087

Finance costs

Note
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES
Profit for the year/period
Adjustments for:

1,556,523

1,345,971

Cumulative loss reclassified from equity on disposal of


available-for-sale financial assets

417,441

Property, plant and equipment written off

343,726

1,566,759

Amortisation of prepaid lease payments

184,743

230,928

Share of losses/(profits) of associates

157,055

(527,506)

Bad debts written off

76,181

9,762

Inventories written off

20,682

138,336

1,188

(924,392)

Investment revenue recognised in profit or loss

(1,578,460)

(2,478,686)

Changes in fair values of investment properties

(523,220)

(180,000)

Unrealised gain on foreign exchange

(351,595)

(103,264)

Gain on disposal of available-for-sale financial assets

(81,426)

Amortisation of deferred capital grant

(24,179)

(30,224)

Dividend income

(15,000)

(15,000)

Impairment on goodwill

1,959,643

Inventories written down in value

215,708

86,009,698

96,667,650

(5,536,126)

1,835,941

Trade and other receivables

9,030,443

(4,141,645)

Amount owing by associates

(158,829)

21,454

(5,767,792)

1,312,614

(298,217)

(519,554)

28,910

83,279,177

95,205,370

627,700

1,042,623

(16,360,605)

(24,661,799)

67,546,272

71,586,194

Loss/(Gain) on disposal of property, plant and equipment

Movements in working capital:


(Increase)/Decrease in:
Inventories

(Decrease)/Increase in:
Trade and other payables
Deferred income
Amount owing to ultimate holding company
Cash Generated From Operations
Income tax refunded
Income tax paid
Net Cash From Operating Activities

62

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Group

Note

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

64,541,924

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES


Proceeds from disposal of other investments
Withdrawal/(Placement) of fixed deposits

1,770,325

(129,773)

Interest income received

1,448,687

2,388,686

Proceeds from disposal of property, plant and equipment

110,070

1,915,263

Rental income received

129,773

90,000

59,000

45,000

(59,773,804)

(60,000,000)

(17,365,805)

(63,681,693)

(16,335,721)

(1,952,704)

(680,000)

Dividend income received


Purchase of other investments
Purchase of property, plant and equipment

38(a)

Acquisition of subsidiary*
Acquisition of additional shares in a subsidiary from non-controlling interests
Purchase of investment property
Repayment from associates

60,000

Investment in unquoted shares

(320,815)

Advance payments for acquisition of property, plant and equipment

(208,292)

(28,048,255)

(119,841,624)

2,311,983

17,952,260

Net Cash Used In Investing Activities


CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
Proceeds from term loans

66,788

7,830

Repayment of term loans

(13,263,408)

(2,367,134)

Dividends paid to owners of the Company

(10,889,700)

(33,000,000)

Finance costs paid

(1,556,523)

(1,345,971)

Buy-back of shares

(1,486,508)

(670,203)

(1,205,448)

Advances from ultimate holding company

Repayment of hire-purchase payables


Dividends paid to non-controlling interests

(56,000)

Proceeds from issuance of shares

64,350,000

Proceeds from trust receipts

4,438,008

Payment for share issue expenses

(107,688)

Repayment to a director of a subsidiary

(4,463)

(25,487,571)

48,661,394

Net Cash (Used In)/From Financing Activities


NET INCREASE IN CASH AND CASH EQUIVALENTS

14,010,446

405,964

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR/PERIOD


Currency translation differences

83,668,022
1,416,646

83,197,667
64,391

99,095,114

83,668,022

CASH AND CASH EQUIVALENTS AT END OF YEAR/PERIOD


The accompanying Notes form an integral part of the financial statements.

63

38(b)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Statement of
Cash Flows

FOR THE YEAR ENDED MARCH 31, 2014


(With Comparative Figures For The Period January 1, 2012 To March 31, 2013)

Note

Year Ended
31.3.2014
(12 Months)
RM

The Company
Period Ended
31.3.2013
(15 Months)
RM

76,300,284

33,025,987

153,172

173,383

48,337

1,091

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES


Profit for the year/period
Adjustments for:
Depreciation of property, plant and equipment
Loss on disposal of available-for-sale financial assets
Property, plant and equipment written off

215

848

(77,134,054)

(34,739,024)

Investment revenue recognised in profit or loss

(337,523)

(1,190,406)

Cumulative gain reclassified from equity on disposal of


available-for-sale financial assets

Finance cost
Dividend income

(260,308)

Tax income recognised in profit or loss

(23,436)

Impairment loss on investment in a subsidiary

950,810

(1,228,786)

(1,801,838)

Increase in trade and other receivables

(52,923)

(75,333)

Decrease in trade and other payables

(62,370)

(71,817)

Cash Used In Operations

(1,344,079)

(1,948,988)

Dividend received

26,150,046

34,739,024

4,335

Movements in working capital:

Income tax refunded

(3,158)

(241,840)

24,807,144

32,548,196

20,211,971

337,523

1,190,406

Advances granted to subsidiaries - net

(27,178,820)

(54,006,009)

Purchase of other investments

(15,000,000)

(30,000,000)

Income tax paid


Net Cash From Operating Activities
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Proceeds from disposal of other investments
Interest income received

(200,800)

(50,640)

(98,594)

(1,595,692)

Repayment received from associates

60,000

Net Cash Used In Investing Activities

(21,928,720)

(84,401,935)

Investments in subsidiaries
Purchase of property, plant and equipment

64

38(a)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Year Ended
31.3.2014
(12 Months)
RM

The Company
Period Ended
31.3.2013
(15 Months)
RM

(10,889,700)

(33,000,000)

(1,486,508)

(215)

(848)

Proceeds from issuance of shares

64,350,000

Advances received from subsidiaries - net

1,734,928

Payment for share issue expenses

(107,688)

Note
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
Dividends paid
Buy-back of shares
Finance cost paid

(1,545)

(12,376,423)

32,974,847

Net Decrease In Cash And Cash Equivalents

(9,497,999)

(18,878,892)

Cash And Cash Equivalents At Beginning Of Year/Period

29,343,928

48,222,820

19,845,929

29,343,928

RM

RM

Repayment to holding company - net


Net Cash (Used In)/From Financing Activities

Cash And Cash Equivalents At End Of Year/Period

38(b)

*ANALYSIS OF ACQUISITION OF SUBSIDIARY


During the financial year, the Group acquired a subsidiary as mentioned in Note 17.
The fair values of the assets acquired and the liabilities assumed are as follows:

Property, plant and equipment


Distribution network

17,790,744

Inventories

2,534,006

Trade and other receivables

5,647,652

Fixed deposits, cash and bank balances

10,455,177

Trade and other payables

(3,948,757)

Borrowings

(1,394,797)

Current tax liabilities

(549,074)

Fair value of net assets acquired

30,648,107

Non-controlling interests

(3,857,209)

Groups share of net assets acquired

26,790,898

Consideration paid in cash

26,790,898

Less: Fixed deposits, cash and bank balances

(10,455,177)

Net cash outflow on acquisition of subsidiary

16,335,721

The accompanying Notes form an integral part of the financial statements.

65

113,156

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

1. General Information
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of Bursa Malaysia Securities Berhad.
The Company is principally involved in investment holding.
The principal activities of the subsidiaries are disclosed in Note 17.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.
The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.
The principal place of business of the Company is located at No. 2, Jalan Portland, Tasek Industrial Estate, 31400 Ipoh, Perak Darul Ridzuan.
The financial statements of the Group and of the Company were authorised for issue by the Board of Directors in accordance with a resolution of the directors
on July 23, 2014.

2. Basis of Preparation of The Financial Statements


The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (MFRSs),
International Financial Reporting Standards (IFRSs) and the provisions of the Companies Act, 1965 in Malaysia.

2.1 Adoption of New and Revised Mfrss


New and Revised Mfrss Affecting Amounts Reported and/or Disclosures in The Financial Statements
In the current year, the Group and the Company have applied a number of new and revised MFRSs issued by the Malaysian Accounting Standards Board
(MASB) that are mandatorily effective for an accounting period that begins on or after January 1, 2013.
The adoption of new and revised MFRSs has had no material impact on the disclosures or on the amounts recognised in the financial statements, except as
follows:

MFRS 13 Fair Value Measurement


The Group and the Company have applied MFRS 13 for the first time in the current year. MFRS 13 establishes a single source of guidance for fair value
measurements and disclosures about the fair value measurements. The scope of MFRS 13 is broad; the fair value measurement requirements of MFRS
13 apply to both financial instrument items and non-financial instrument items for which other MFRSs require or permit fair value measurements and
disclosures about fair value measurements, except for share-based payment transactions that are within the scope of MFRS 2 Share-based Payment,
leasing transactions that are within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value (e.g.
net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).
MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or
most advantageous) market at the measurement date under current market conditions. Fair value under MFRS 13 is an exit price regardless of whether
that price is directly observable or estimated using another valuation technique. Also, MFRS 13 includes extensive disclosure requirements.
MFRS 13 requires prospective application from January 1, 2013. In addition, specific transitional provisions were given to entities such that they need not
apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard.
In accordance with these transitional provisions, the Group and the Company have not made any new disclosures required by MFRS 13 for the 2013
comparative period. Other than the additional disclosures, the application of MFRS 13 has not had any material impact on the amounts recognised in
these financial statements.

Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income


The Group and the Company have applied the amendments to MFRS 101 Presentation of Items of Other Comprehensive Income for the first time in the
current year. The amendments introduce new terminology, whose use is not mandatory, for the statement of comprehensive income and income statement.
Under the amendments to MFRS 101, the statement of comprehensive income is renamed as the statement of profit or loss and other comprehensive
income and the income statement is renamed as the statement of profit or loss. The amendments to MFRS 101 retain the option to present profit
or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to MFRS
101 require items of other comprehensive income to be grouped into two categories in other comprehensive income section: (a) items that will not be
reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax
on items of other comprehensive income is required to be allocated on the same basis - the amendments do not change the option to present items of other
comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other
comprehensive income has been modified to reflect the changes. Other than the abovementioned presentation changes, the application of the amendments
to MFRS 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

66

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

2.2 Standards and IC Interpretations (IC Int.) in issue but not yet effective
As at the date of authorisation for issue of these financial statements, the new and revised Standards and IC Int. which were in issue but not yet effective
and not early adopted by the Group and the Company are as listed below:
MFRS 9

Financial Instruments (IFRS 9 issued by IASB in November 2009)

MFRS 9

Financial Instruments (IFRS 9 issued by IASB in October 2010)

MFRS 9

Financial Instruments (Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139)

IC Int. 21

Levies

Amendments to MFRS 9 and MFRS 7


Mandatory Effective Date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010
respectively) and Transition Disclosures
Amendments to MFRS 10,
MFRS 12 and MFRS 127

Investment Entities

Amendments to MFRS 119

Employee Benefits (Amendments relating to Defined Benefit Plans: Employee Contributions)

Amendments to MFRS 132


Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial
Liabilities)
Amendments to MFRS 136
Impairment of Assets (Amendments relating to Recoverable Amounts Disclosures for Non-Financial
Assets)
Amendments to MFRS 139

Financial Instruments: Recognition and Measurement (Amendments relating to Novation of Derivatives


and Continuation of Hedge Accounting)

Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2010 - 2012 Cycle
Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2011 - 2013 Cycle

The mandatory effective date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) which was for annual periods
beginning on or after January 1, 2015 has been removed with the issuance of MFRS 9 Financial Instruments: Hedge Accounting and amendments
to MFRS 9, MFRS 7 and MFRS 139. The effective date of MFRS 9 will be decided when IASBs IFRS 9 project is closer to completion. However, each
version of the MFRS 9 is available for early adoption.

Effective for annual periods beginning on or after January 1, 2014.

MFRS 9 and Amendments Relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures
MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement of financial assets. MFRS 9
(IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and measurement of financial liabilities and for derecognition.
The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) (MFRS 9) relating to Mandatory Effective Date
of MFRS 9 and Transition Disclosures which became immediately effective on the issuance date of March 1, 2012 amended the mandatory effective
date of MFRS 9 to annual periods beginning on or after January 1, 2015 instead of on or after January 1, 2013, with earlier application still permitted as
well as modified the relief from restating prior periods. MFRS 7 which was also amended in tandem with the issuance of the aforementioned amendments
introduces new disclosure requirements that are either permitted or required on the basis of the entitys date of adoption and whether the entity chooses to
restate prior periods.
Key requirements of MFRS 9:
all recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition and Measurement are required to be
subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to
collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding
are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are
measured at their fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to
present subsequent changes in the fair value of equity instrument (that is not held for trading) in other comprehensive income, with only dividend
income generally recognised in profit or loss.

67

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

with regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9 requires that the amount of change in
the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income,
unless the recognition of the effects of changes in the liabilitys credit risk in other comprehensive income would create or enlarge an accounting
mismatch in profit or loss. Changes in fair value attributable to a financial liabilitys credit risk are not subsequently reclassified to profit or loss.
Previously, under MFRS 139, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss
was presented in profit or loss.
The directors do not anticipate the application of MFRS 9 to have significant impact on amounts reported in respect of the Groups and of the
Companys financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until a detailed
review has been completed.

3. Significant Accounting Policies


Basis of Accounting
The financial statements of the Group and of the Company have been prepared on historical cost basis except for certain non-current assets and financial
instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value
of an asset or a liability, the Group and the Company take into account the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these
consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of MFRS 2, leasing
transactions that are within the scope of MFRS 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable
value in MFRS 102 or value in use in MFRS 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below:

Subsidiaries and Basis of Consolidation


The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries.
Control is achieved where the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassessed whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give
it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing
whether or not the Companys voting rights in an investee are sufficient to give it power, including:
the size of the Companys holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstance that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the
time that decisions need to be made, including voting patterns at previous shareholders meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

68

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total
comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Groups accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.

Changes in the Groups ownership interest in existing subsidiaries


Changes in the Groups ownership interests in subsidiaries that do not result in the Group losing control are accounted for as equity transactions. The
carrying amounts of the Groups interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries.
Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the
fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary
are accounted for as if the Group had directly disposed of the relevant assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable MFRSs). The fair value of any investment retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition and
Measurement or, when applicable, the cost on initial recognition of an investment in an associate or joint venture.

Business Combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is
measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group
to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred.
At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their fair value.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair
value of the acquirers previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired
and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds
the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirers previously held
equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entitys net assets in the event of
liquidation may be initially measured either at fair value or at the non-controlling interests proportionate share of the recognised amounts of the acquirees
identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are
measured at fair value or, when applicable, on the basis specified in another Standard.
Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration
arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify
as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about
facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on
how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and
its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent
reporting dates in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss
being recognised in profit or loss.
Where a business combination is achieved in stages, the Groups previously held equity interests in the acquiree are remeasured to fair value at the
acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss,
where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised at that date.
The policy described above is applied to all business combinations that take place on or after January 1, 2011.

69

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Business Combinations Involving Common Control Entities


A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or
businesses are ultimately controlled by the same party or parties, both before and after the business combination, and that control is not transitory.
The consolidated financial statements incorporate the financial statements items of the combining entities in which the common control combination
occurs as if they had been combined from the date when the combining entities first came under the control of the controlling parties.
The cost of investment in the holdings book is recorded at the nominal value of shares acquired. A single uniform set of accounting policies is adopted
by the combined entity. Therefore, the net assets of the combining entities are combined using the existing book values from the controlling parties
perspective. No amount is recognised in respect of goodwill or excess of acquirers interest in the net fair value of acquirees identifiable assets,
liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling parties
interest.
The consolidated statement of comprehensive income includes the results of each of the combining entities from the earliest date presented or since
the date when the combining entities first came under the common control, where this is a shorter period, regardless of the date of the common control
combination. Expenditure incurred in connection with the restructuring is recognised as an expense in profit or loss.
The effects of all transactions between the combining entities or businesses, whether occurring before or after the combination, are eliminated in
preparing the combined financial statements of the combined entity.
The debit differences arising between the cost of acquisition and the nominal value of share capital of the subsidiaries are reflected within equity as
reserve arising from restructuring.

Associates
An associate is a non-subsidiary in which the Group and the Company hold not less than 20% of the equity voting rights as long-term investment and in
which the Group and the Company is in a position to exercise significant influence in its management.
The investment in associate of the Group for the financial year ended March 31, 2014 is accounted for under the equity method of accounting based
on the audited financial statements of the associated company made up to December 31, 2013 and appropriate adjustments have been made for the
effects of significant transactions between that date and March 31, 2014. Under this method of accounting, the interest in the post-acquisition profits
and reserves of the associate of the Group is included in the consolidated results while dividend received is reflected as a reduction of the investment in
the consolidated statement of financial position.
Unrealised profits and losses arising on transactions between the Group and its associate are eliminated to the extent of the equity interest of the Group
in the associated company except where unrealised losses provide evidence of an impairment of the asset transferred.

Goodwill/Negative Goodwill
Goodwill arising on an acquisition of a business is carried at cost less any accumulated impairment losses, if any.
Goodwill is not amortised. Instead, it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be
impaired.
For the purposes of impairment testing, goodwill is allocated to each of the Groups cash-generating units (or groups of cash-generating units) that is
expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the statements of profit or loss and other comprehensive
income. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Any excess of the Groups interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities over costs of acquisition
(previously known as negative goodwill), after reassessed, is recognised immediately to the statements of profit or loss and other comprehensive income.

70

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, trade
discounts and other similar allowances.

Sale of food and beverages


Sale of food and beverages are recognised when food and beverages are served, net of service tax.

Sale of goods
Revenue from sale of goods is recognised when the following conditions are satisfied:
the Group has transferred to the customer the significant risks and rewards of ownership of the goods;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Dividend income
Dividend income from quoted and unquoted investments is recognised when the shareholders right to receive payment has been established (provided
that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably).

Interest income
Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.
Interest income is accrued on a time apportion basis, by reference to the principal outstanding and at the interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.

Rental income
Rental income is accrued on a time apportion basis, by reference to the agreements entered. Rental income from investment properties is recognised
on a straight-line basis over the term of the relevant lease.

Franchise, advertising and promotion, rights and royalty fees


Franchise, advertising and promotion, rights and royalty fees are recognised on an accrual basis (provided that it is probable that the economic benefits
will flow to the Group and the amount of revenue can be measured reliably). Franchise fees are recognised on a straight-line basis over the period of the
relevant agreement.

Fees for opening of outlets and relocation


Income from opening of outlets and relocation is recognised on a straight-line basis by reference to the terms of the agreements entered.

Income from accounting services, initial training fees and management fees
Income from rendering of accounting services, initial training fees and management fees are recognised as and when services are provided.

Licence fees
Licence fees are recognised as revenue on a straight-line basis over the length of the licensing contract.

Foreign Currencies
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates
(its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in
Ringgit Malaysia (RM), which is the functional currency of the Company, and also the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency of the entity (foreign
currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated
in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated.

71

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Exchange differences are recognised in profit or loss in the period in which they arise except for:
exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which gains and losses are recognised in
other comprehensive income. For such non-monetary items, the exchange component of that gain or loss is also recognised in other comprehensive
income; and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur
(therefore, forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified
from equity to profit or loss on repayment of the monetary items.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the foreign incorporated subsidiaries of the Group are
translated in RM using exchange rates prevailing at the end of the reporting period, unless exchange rates fluctuated significantly during that period, in
which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in equity (attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Groups entire interest in a foreign operation, or a disposal involving loss of control over a
subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant
influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the
Group are reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of
accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals
(i.e. of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments on identifiable assets and liabilities arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are
recognised in other comprehensive income and accumulated in equity.
The closing rate per unit of functional foreign currency used in the translation of the subsidiaries and associate (foreign currency) into Ringgit Malaysia
is as follows:

2014
RM

2013
RM

Singapore Dollar

2.5903

2.4958

Hong Kong Dollar

0.4210

0.3985

Foreign Currency

Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially
ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Government Grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the
grants will be received.
Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised
as deferred revenue in the statements of financial position and transferred to the statements of profit or loss and other comprehensive income on a
systematic and rational basis over the useful lives of the related assets.
Other government grants are recognised as revenue over the periods necessary to match them with the costs for which they are intended to
compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Group with no future related costs are recognised in the statements of profit or loss and other
comprehensive income in the period in which they become receivable.

72

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All
other leases are classified as operating leases.

Finance Lease
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present
value of the minimum lease payments. The corresponding liability to the lessor is included in the statements of financial position as a finance lease
obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets,
in which case they are capitalised in accordance with the Group general policy on borrowing costs.

Operating Lease
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more
representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases
are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of
incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the
time pattern in which economic benefits from the leased asset are consumed.

Employee Benefits
Short-term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by
employees of the Group and of the Company. Short-term accumulating compensated absences such as paid annual leave are recognised when services
are rendered by employees that increase their entitlement to future compensated absences and short-term non-accumulating compensated absences
such as sick leave are recognised when the absences occur.

Defined contribution plan


The Group and the Company are required by law to make monthly contributions to statutory defined contribution plan for all its eligible employees
based on certain prescribed rates of the employees salaries. The Groups and the Companys contributions to statutory defined contribution plan are
recognised as an expense when employees have rendered service entitling them to the contributions and are disclosed separately. The employees
contributions to statutory defined contribution plan are included in salaries and wages. Once the contributions have been paid, the Group and the
Company have no further payment obligations.

Preliminary Expenses
Preliminary expenses are charged to the statements of profit or loss and comprehensive income in the financial year in which they are incurred.

Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss because of items of income
or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability of the Group and
of the Company for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of reporting period.

Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised.
The tax effects of unutilised reinvestment allowances are only recognised upon actual realisation.

73

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is
realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of each reporting period. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the
end of the reporting period, to recover or settle the carrying amount of their assets and liabilities.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model,
the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption
is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the
economic benefits embodied in the investment property over time, rather than through sale. The directors of the Group and of the Company reviewed
the Groups and the Companys investment property portfolio and concluded that none of the Groups and of the Companys investment properties are
held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time,
rather than through sale. Therefore, the directors have determined that the sale presumption set out in the amendments to MFRS 112 is not rebutted.
As a result, the Group and the Company have recognised deferred taxes on changes in fair values of investment properties based on the expected tax
rate that would apply on disposal of the investment properties.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

Current and Deferred Tax for The Period


Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or
loss (whether in other comprehensive income or directly in equity), in which case the current and deferred tax is also recognised in other comprehensive
income or directly in equity respectively.

Property, Plant and Equipment


Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
The directors are unable to segregate the cost of the long-term leasehold land, which has a remaining lease period of 77 years, from the cost of longterm leasehold land and buildings. As such, the long-term leasehold land and buildings are amortised based on depreciation rate of 2% per annum. The
directors do not consider the impact on the financial statements to be material.
Freehold land and capital work-in-progress are stated at cost and are not depreciated. Capital work-in-progress comprises contractors payments and
directly attributable costs incurred in preparing these assets for their intended use. Depreciation on assets under construction commences when the
assets are ready for their intended use.
Depreciation is recognised so as to write off the cost of assets, less their residual values over their estimated useful lives, using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
Annual depreciation rates used to depreciate property, plant and equipment, over their estimated remaining useful lives are as follows:

Buildings

2%

Apartments, factory and shop-office buildings

2%

Plant, machinery and equipment

5% to 20%

Motor vehicles

10% to 20%

Factory equipment, signboard and electrical fittings

10% to 20%

Air-conditioners, computers, furniture, fittings and office equipment

10% to 20%

Renovation

10% to 20%

Assets held under hire-purchase arrangements are depreciated over their expected useful lives on the same basis as owned assets. However, when
there is no recoverable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term
and their useful lives.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued
use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sale proceeds and the carrying amount of the asset is recognised in profit or loss.

74

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Property, Plant and Equipment Under Hire-Purchase Arrangements


Assets acquired under hire-purchase arrangements which transfer substantially all of the risks and rewards incident to ownership of the assets are
capitalised under property, plant and equipment. The assets and the corresponding hire-purchase obligations are recorded at their fair values or, if lower,
at the present value of the minimum lease payment of the assets under hire-purchase at the inception of the respective arrangements.
Finance costs, which represent the difference between the total hire-purchase commitments and the fair values of the assets acquired, are charged
to profit or loss over the term of the relevant hire-purchase period so as to give a constant periodic rate of charge on the remaining balance of the
obligations for each accounting period.

Prepaid Lease Payments


Leasehold land that normally has an indefinite economic life and where title is not expected to pass to the lessee by the end of the lease period is
treated as an operating lease. The payment made on entering into or acquiring a leasehold interest is accounted for as prepaid lease payments at the
end of the reporting period. In the case of a lease of land and buildings, the prepaid lease payments are allocated whenever necessary, between the
land element and building element of the lease at the inception of the lease in proportion to their relative fair value.
Prepaid lease payments on leasehold land are stated at cost less accumulated amortisation and accumulated impairment losses, if any.
Leasehold land is amortised on a straight-line basis over the remaining lease terms ranging from 43 to 97 years.

Investment Properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at its cost,
including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. Fair value is arrived by reference to
market evidence of transaction prices for similar properties. Gain or loss arising from changes in the fair values of investment properties is included in
profit or loss in the period in which they arise.
Investment properties are derecognised upon disposal or when the investment properties are permanently withdrawn from use and no future economic
benefits are expected from the disposal. Any gain or loss arising on derecognition of the properties (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) are included in profit or loss in the period in which the properties are derecognised.

Investments
Investments in subsidiaries, which are eliminated on consolidation, and investment in associate, are stated in the Companys separate financial
statements at cost less accumulated impairment losses, if any.
Other investments in quoted unit trusts and unquoted shares are classified as available-for-sale investments.

Intangible Assets
Intangible assets are initially measured at either cost or fair value and amortised on a straight-line basis over their useful economic lives, which are
reviewed at the end of each reporting date. The fair value attributable to intangible assets acquired through a business combination is determined by
discounting the expected future cash flows to be generated from that assets at the risks adjusted weighted average cost of capital of the Group. The
residual values of intangible assets are assumed to be Nil.
The estimated useful economic lives of intangible assets are as follows:
Distribution network 15 years
Supplier exclusive right 10 years
The following are the main categories of intangible assets:

Distribution Network
Distribution network relates to relationship established by the subsidiary with the customers.

Supplier Exclusive Right


Supplier exclusive right represents right for sale of goods to a chain of outlets.
At the end of each reporting period, the Group assesses whether there is any indication of impairment. If such indication exists, an analysis is performed
to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is provided for if the carrying amount exceeds the
recoverable amount.

75

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Impairment of Assets excluding Goodwill and Intangible Assets


At the end of each reporting period, the Group and the Company review the carrying amounts of their assets (other than goodwill, intangible assets,
investment properties, other investments, inventories and financial assets, which are dealt with in their respective policies) to determine if there is any
indication that those assets may be impaired. If any such indication exists, the assets recoverable amount is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate
the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for
which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cashgenerating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, so that the increased carrying amount would not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined principally on the First-in, First-out method.
Costs of trading merchandise, raw materials, packing materials, food, beverages, consumables, spare parts and goods-in-transit comprise the original
purchase price plus cost incurred in bringing the inventories to their present location and condition. The costs of finished goods and work-in-progress
comprise the cost of raw materials, direct labour and an appropriate proportion of production overheads. Net realisable value represents the estimated
selling price less estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Provisions
Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result of past event, it is probable that
the Group and the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting
period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as
an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Financial Instruments
Financial assets and financial liabilities are recognised in the statements of financial position when the Group and the Company become a party to the
contractual provisions of the financial instrument.
Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established
by the market concerned, such financial assets are recognised and derecognised on trade date.
Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets and financial liabilities classified as fair
value through profit or loss (FVTPL), which are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue
of the financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value
of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of
financial assets or financial liabilities at FVTPL are recognised immediately in the profit or loss.

Effective Interest Method


The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees and points
paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of
the financial asset or financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Income and expense is recognised on an effective interest basis for debt instruments other than those financial assets or financial liabilities classified as at FVTPL.

76

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Financial assets
Financial assets are classified into the following specified categories: financial assets at FVTPL, held-to-maturity investments, available-for-sale
(AFS) financial assets and loan and receivables. The classification depends on the nature and purpose of the financial assets and is determined at
the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular
way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or
convention in the marketplace. Financial assets of the Group and of the Company are classified into FVTPL, AFS financial assets and loans and
receivables.

(i) Financial assets at FVTPL


Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.
A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of
short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on
a fair value basis, in accordance with the Groups documented risk management or investment strategy, and information about the grouping is
provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial Instruments: Recognition and Measurement
permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or
loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the other gains and losses
line item in the statements of profit or loss and other comprehensive income.

(ii) Available-For-Sale (Afs) Financial Assets


AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-tomaturity investments or financial assets at FVTPL. All AFS financial assets are measured at fair value at the end of the reporting period. Gains and
losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investment revaluation reserve,
with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary
assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss
previously accumulated in the investment revaluation reserve is reclassified to profit or loss.
AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives
that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at
the end of the reporting period.
Dividends on AFS equity instruments are recognised in profit or loss when the Groups and the Companys rights to receive the dividends are
established.

(iii) Loans and Receivables


Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and
receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the
effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

(iv) Impairment of Financial Assets


Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the investment have been affected.
For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be
objective evidence of impairment.

77

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

For all other financial assets, objective evidence of impairment could include:
significant financial difficulty of the issuer or counterparty; or
breach of contract, such as default or delinquency in interest or principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or
the disappearance of an active market for that financial asset because of financial difficulties.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed
for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Groups past experience of
collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes
in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the assets carrying amount
and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables,
where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the
carrying amount of the allowance account are recognised in profit or loss.
When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in investment revaluation reserve are
reclassified to profit or loss in the period.
Impairment losses of AFS financial asset previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to
an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit
or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.

(v) Derecognition of Financial Assets


The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company
neither transfer nor retain substantially all the risk and rewards of ownership and continues to control the transferred asset, the Group and the
Company recognise their retained interest in the asset and an associated liability for amounts it may have to pay. If the Group and the Company
retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the
financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the consideration received
and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in
profit or loss.

Financial Liabilities and Equity Instruments Issued by The Group and The Company
(i) Classification as Debt or Equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement
and the definition of a financial liability and equity instrument.

(ii) Equity Instruments


An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its
liabilities. Equity instruments issued by the Group and the Company are recorded at the proceeds received, net of direct issue costs.
Repurchase of the Companys own equity instruments is recognised as treasury shares at the cost of repurchase, and including directly attributable
costs and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Companys
own equity instruments.

78

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

(iii) Financial Liabilities


Financial liabilities of the Group are classified as either financial liabilities at FVTPL or other financial liabilities categories while financial liabilities
of the Company are classified into other financial liabilities category.

(iv) Financial Liabilities at FVTPL


Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
it has been acquired principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of
short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on
a fair value basis, in accordance with the Groups documented risk management or investment strategy, and information about the grouping is
provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial Instruments: Recognition and Measurement
permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or
loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the other gains and losses line item in the
statements of profit or loss and other comprehensive income. Fair value is determined in the manner described in Note 37.

(v) Other Financial Liabilities


Other financial liabilities are initially measured at fair value, net of transaction costs, and subsequently measured at amortised cost, using the
effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(vi) Derecognition of Financial Liabilities


The Group and the Company derecognise financial liabilities when, and only when, the Groups and the Companys obligations are discharged,
cancelled or expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid or payable is
recognised in profit or loss.

Derivative Financial Instruments


The Group enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk.
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at
the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective
as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset; a derivative with a negative fair value is recognised as a financial liability. A
derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not
expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

79

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Segment Information
For management purpose, the Group is organised into operating segments based on their business segment which is independently managed by
the respective segment chief operation officer, responsible for the performance of the respective segments under their charge. The segment chief
operation officer reports directly to the management of the Group who regularly reviews the segment results in order to allocate resources to the
segments and to assess the segments performance.

Statements of Cash Flows


The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.
Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are readily
convertible to cash with insignificant risks of changes in value.

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty


(a) Critical Judgement Made in Applying Accounting Policies
In the process of applying the accounting policies of the Group and of the Company, the directors are of the opinion that there are no instances of
application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.
In the application of the accounting policies of the Group and of the Company, which are described in Note 3, management is required to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.

(b) Key Sources of Estimation Uncertainty


The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant
risk of causing a material adjustment to the carrying amounts of assets in the next financial year are discussed below:

(i) Impairment of Goodwill


The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate
that this is necessary.
For the purpose of assessing impairment, goodwill is allocated to cash-generating units that are expected to benefit from the synergies of the
business combination in which the goodwill arose.
Significant judgement is required in the estimation of the present value of future cash flows generated by the cash-generating units, which
involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and
discount rates. Key assumptions used in determining the recoverable amount of cash generating unit based on value-in-use calculations are
disclosed in Note 20. Changes in assumptions could significantly affect the results of the tests for impairment of goodwill of the Group.

(ii) Impairment of Property, Plant and Equipment and Intangible Assets


The carrying amounts of property, plant and equipment of the Group and of the Company as of March 31, 2014 are RM105,634,478 (2013:
RM102,396,819) and RM1,885,819 (2013: RM1,930,665) respectively and the carrying amounts of intangible assets of the Group is
RM33,398,124 (2013: RM19,136,699).
For the purpose of the impairment review of the outlets property, plant and equipment, each individual outlet will be considered as a single
cash-generating unit. Each individual outlets discounted cash flow will be compared against the carrying amount of the property, plant and
equipment for each individual outlet.

80

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the
net present value of the projected future cash flow derived from that asset discounted at an appropriate discount rate. Projected future cash
flows are based on the Groups and the Companys estimates calculated based on historical, sector and industry trends, general market and
economic conditions, changes in technology and other available information. Management of the Group and of the Company have carried out an
impairment review on their property, plant and equipment and concluded that there is no indication of impairment.
The Group tested intangible asset for impairment in accordance with its accounting policy.

(iii) Estimated Useful Lives of Property, Plant and Equipment and Intangible Assets
The Group and the Company regularly review the estimated useful lives of property, plant and equipment at the end of each reporting period
based on factors such as business plan and strategies, expected level of usage and future technological developments. Future results of
operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in
the estimated useful lives of property, plant and equipment would increase the recorded depreciation and decrease the value of property, plant
and equipment.
The Group reviews its intangible assets with finite useful lives at the end of each reporting date. The estimated useful economic lives reflect the
managements estimates of the periods that the Group intends to derive future economic benefits from the use of these intangible assets.

(iv) Recoverability of Receivables


The carrying amounts of third-party trade and other receivables of the Group as of March 31, 2014 were RM34,894,994 (2013:
RM39,236,878).
An allowance is established when there is objective evidence that the Group and the Company will not be able to collect all amounts due
according to the original terms of receivables. This is determined based on the ageing profile and collection patterns.

(v) Obsolete Inventories


The Group writes off inventories based on an assessment of the recoverability of the inventories through sales and recycling for alternatives
uses. Write off is applied to inventories where events or changes in circumstances indicate that the costs may not be recoverable.
The identification of obsolete inventories requires use of judgement and estimates.
Where the expectation is different from the original estimate, such difference will impact the carrying values of the inventories and inventories
written off/(back) in the period in which such estimate has been changed.

(vi) Valuation of Acquired Intangible Assets


Acquisitions may result in supplier exclusive right and distribution network being recognised. These are valued using discounted cash flow
methods which require the application of certain key judgements and estimates to be made in respect of discount rate and future cash flows.

5. Segment Reporting
The segment reporting is presented on the same basis as information reported to the chief operating decision maker and senior management for the
purposes of allocating resources to the segment and assessing its performance. It is focused on the operations of the Group by business segment as
disclosed below.

Business Segment
The Groups operations can be segmented into three (3) business segments as follows:
a) Operation of a chain of cafes;
b) Manufacturing of coffee and other beverages; and
c) Others.
Inter-segment sales are charged at cost plus a percentage of profit mark-up.

81

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Segment revenue from external customers is based on the business segments.


The Group
Year Ended 31.3.2014
(12 Months)

Operations of
cafe chain
RM

Manufacturing
of beverages
RM

Others
RM

Total
RM

308,882,398

255,286,956

78,855,378

643,024,732

Inter-company sales

(101,823,085)

(80,174,619)

(78,855,378)

(260,853,082)

Total external sales

207,059,313

175,112,337

382,171,650

31,205,586

36,537,176

(1,239,251)

66,503,511

Revenue
Total revenue

Results
Segment results
Finance costs

(1,556,523)

Share of losses of associates

(157,055)

Investment revenue

1,578,460

Profit before tax

66,368,393

Tax expense

(16,038,755)

Profit for the year

50,329,638

Other information
Depreciation and amortisation

13,899,630

5,589,587

153,172

19,642,389

Operations of
cafe chain
RM

Manufacturing
of beverages
RM

Others
RM

Total
RM

382,243,178

237,719,894

34,739,024

654,702,096

Inter-company sales

(129,874,415)

(68,034,314)

(34,739,024)

(232,647,753)

Total external sales

252,368,763

169,685,580

422,054,343

41,587,586

33,985,460

(2,286,382)

73,286,664

The Group
Period Ended 31.3.2013
(15 Months)
Revenue
Total revenue

Results
Segment results
Finance costs

(1,345,971)

Share of profits of associates

527,506

Investment revenue

2,478,686

Profit before tax

74,946,885

Tax expense

(19,360,019)

Profit for the period

55,586,866

Other information
Depreciation and amortisation
Impairment loss on goodwill

82

18,120,334

2,449,941

173,383

20,743,658

1,959,643

1,959,643

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Geographical Segment
The Group operates in four principal geographical areas - Malaysia (country of domicile), South East Asia, other Asian countries and others.
The Groups revenue from continuing operations from external customers by geographical area are detailed below:
Revenue from external customers
Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

263,450,956

317,447,907

South East Asia

36,743,267

41,742,703

Other Asian countries

72,629,052

54,432,958

9,348,375

8,430,775

382,171,650

422,054,343

Malaysia

Others

Revenue of approximately RM39,720,000 (2013: RM46,000,000) which contributed more than 10% (2013: 10%) of the total revenue of the Group is
derived from one (1) external customer (2013: one (1) external customer) under manufacturing of beverages of Malaysia segment during the financial year.
Segment assets, segment liabilities and capital additions were not disclosed as they were not regularly provided to the chief operating decision maker for
their day-to-day operation decision making.

6. Revenue
The Group
Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

362,308,920

398,817,812

17,222,321

19,954,020

1,370,299

1,659,995

Rights fees

650,000

750,000

Initial training fees

293,836

320,000

Fees for opening of outlets

224,587

331,632

Licence fees

50,157

121,310

Relocation fees

20,000

64,756

Management fees

16,530

19,818

Dividend income

15,000

15,000

77,134,054

34,739,024

382,171,650

422,054,343

77,134,054

34,739,024

Sale of goods
Royalty, advertising and promotion fees
Franchise fees

83

The Company

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

7. Investment Revenue
The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

1,341,181

2,251,847

337,523

1,190,406

Fixed deposits

92,966

101,844

Current account

14,540

34,995

129,773

90,000

1,578,460

2,478,686

337,523

1,190,406

Investment revenue earned on loans and receivables


(including cash and cash equivalents):
Interest income from:
Short-term investment funds

Investment revenue earned on non-financial asset:


Property rental income

8. Other Gains and Losses


The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

523,220

180,000

351,595

103,264

Realised

77,995

(186,880)

Gain/(Loss) on disposal of available-for-sale financial assets

81,426

(48,337)

Amortisation of deferred capital grant

24,179

30,224

(417,441)

260,308

(1,188)

924,392

639,786

1,051,000

211,971

Changes in fair values of investment properties


Gain/(Loss) on foreign exchange:
Unrealised

Cumulative (loss)/gain reclassified from equity on disposal of


available-for-sale financial assets
(Loss)/Gain on disposal of property, plant and equipment

84

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

9. Other Operating Income/(Expenses) and Employee Benefits Expenses


Included in other operating income/(expenses) and employee benefits expenses are the following:
The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

6,231,489

7,577,068

Properties

741,281

1,706,743

Machinery

1,300

330

(18,886,040)

(24,966,279)

(8,800)

(60,000)

(217,801)

Equipment

(89,137)

(54,639)

Motor vehicles

(21,600)

(22,800)

(90,137)

(17,476)

(36,628)

- auditors of the Company

(457,000)

(445,000)

(54,000)

(50,000)

- other auditors

(135,025)

(34,782)

(26,000)

(26,000)

(3,000)

(3,000)

(3,000)

(3,000)

(343,726)

(1,566,759)

(1,091)

Bad debts written off

(76,181)

(9,762)

Listing expenses

(23,595)

(37,760)

(23,595)

(37,760)

Inventories written off

(20,682)

(138,336)

Inventories written down in value

(215,708)

Preliminary expenses written off

(2,386)

Service charge received - net


Rental income:

Rental of:
Premises
Server

Machinery
Others
Audit fees:
Statutory audit:

Non-statutory audit:
- current year
- prior year
Property, plant and equipment written off

Included in employee benefits expenses of the Group and the Company are contributions made to EPF of RM3,401,105 (2013: RM3,713,033) and
RM10,740 (2013: RM12,568) respectively.

85

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

10. Directors Remuneration


The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

83,100

106,500

83,100

106,500

2,603,500

1,968,700

104,621

99,816

153,000

217,250

153,000

217,250

63,000

40,500

63,000

40,500

8,532

11,518

8,532

11,518

168,864

205,238

3,184,617

2,649,522

307,632

375,768

Executive directors:
Salaries, bonuses, incentives and allowances:
The Company
Subsidiaries
Fees - subsidiaries
Non-executive directors of the Company:
Fees
Allowances
Contributions to EPF:
Executive directors:
The Company
Subsidiaries

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the Group and from the Company
amounted to RM118,927 (2013: RM139,659) and RM23,950 (2013: RM29,938) respectively.
Directors remuneration including benefits-in-kind paid or payable by the Company and its subsidiaries to the directors of the Company for the current
financial year are broadly categorised into the following bands:
Number of directors
Executive
directors

Non-executive
directors

RM1 to RM50,000

RM50,001 to RM100,000

RM250,001 to RM300,000

RM550,001 to RM600,000

RM850,001 to RM900,000

RM1,000,001 to RM1,050,000

Range of remuneration

86

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

11. Finance Costs


The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

1,270,119

961,305

Hire-purchase

67,350

161,302

Trust receipts

62,523

26,185

7,905

156,531

189,274

215

848

1,556,523

1,345,971

215

848

Interest on:
Term loans

Bank overdrafts
Bank charges and commission

12. Tax (Expense)/Income


The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

- Malaysia

(10,573,350)

(19,683,670)

- Foreign

(1,195,692)

(11,769,042)

(19,683,670)

(256,119)

45,309

23,436

(12,025,161)

(19,638,361)

23,436

(4,109,594)

290,342

96,000

(12,000)

(4,013,594)

278,342

(16,038,755)

(19,360,019)

23,436

Income tax (expense)/ income comprises:


Current tax expense in respect of current year/period:

Adjustments recognised in the current year/period in relation


to the income tax of prior years

Deferred tax (expense)/ income relating to origination and


reversal of temporary differences
Adjustments recognised in the current year/period in relation
to the deferred tax of prior years
(Note 22)
Total tax (expense)/income

87

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Groups and the Companys income tax rate remained at 25% for the years of assessment 2014 and 2013 except for its foreign subsidiaries. Taxation for other jurisdictions are calculated at the rates prevailing in the relevant jurisdictions.
The Malaysian Budget 2014 announced on October 25, 2013 the reduction of corporate income tax rate from 25% to 24% with effect from year of
assessment 2016. The Real Property Gains Tax (RPGT) is also revised to 30% for disposal within the first three years, 20% within the fourth year, 15%
within the fifth year and 5% from sixth year onwards, on gains from the disposal of real property effective January 1, 2014. Following these, the applicable tax rate to be used for the measurement of any applicable deferred tax will be the abovementioned expected rate.
The tax (expense)/income for the year/period can be reconciled to profit before tax as follows:
The Group

The Company

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

66,368,393

74,946,885

76,300,284

33,002,551

(16,592,000)

(18,737,000)

(19,075,000)

(8,251,000)

2,508,000

678,000

Income that is not taxable in determining taxable profit

463,863

655,476

19,368,000

8,982,000

Expenses allowed for double tax deductions

321,000

1,082,000

53,197

(3,149,360)

(3,239,097)

(207,000)

(731,000)

(90,000)

(86,000)

103,975

606,664

63,318

(256,119)

45,309

23,436

96,000

(12,000)

(16,038,755)

(19,360,019)

23,436

Profit before tax


Tax expense calculated using the Malaysian statutory income
tax rate of 25% (2013: 25%)

Tax effects of:


Reinvestment allowances utilised

Corporate tax rebate


Expenses that are not deductible in determining taxable profit
Loss not available for offset against future taxable profit
Enhanced deduction for qualifying expenditure
Effect of difference in tax rates of subsidiaries operating in
foreign jurisdictions
Adjustments recognised in the current year/
period in relation to the taxes of prior years:
Income tax
Deferred tax
Tax (expense)/income recognised in profit or loss

88

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Current tax assets and liabilities


The Group

The Company

2014
RM

2013
RM

2014
RM

2013
RM

4,059,601

1,105,598

9,774

10,951

478,500

659,910

Current tax assets:


Tax refund receivable
Current tax liabilities:
Income tax payable

13. Earnings Per Share


The basic and diluted earnings per share are calculated as follows:
The Group
Basic and diluted
Profit for the year/period attributable to owners of the Company
Number of ordinary shares in issue as of April 1
Effects of: Shares repurchased
Private placement
Weighted average number of ordinary shares in issue
Basic and diluted earnings per ordinary share (RM)

2014

2013

RM48,938,252

RM55,527,110

453,597,242

420,597,242

(209,819)

7,470,330

453,387,423

428,067,572

0.11

0.13

Number of ordinary shares in issue as of April 1 includes the bonus issue of 90,597,242 units of ordinary shares issued during the financial year.
Comparative figures of the basic and diluted earnings per ordinary shares have been restated to reflect the bonus issue during the financial year.

89

90

Write off

Discount

Reclassification

Translation reserve

Discount

2,997,446

815,000

(385,000)

1,200,000

1,200,000

Freehold
land
RM

* The discount was received from suppliers for assets purchased in 2011.
# The discount was received from suppliers for assets purchased in 2013.

As of March 31, 2014

Translation reserve

(288,198)

Write off

Transfer to investment properties (Note 16)

Disposals

(776,000)

Additions

Reclassification

Acquisition of subsidiary

4,061,644

Disposals

As of March 31, 2013

982,244

3,079,400

Additions

As of January 1, 2012

Cost

The Group

Leasehold land
and buildings
and
apartments
RM

14. Property, Plant and Equipment

49,425,105

894,200

4,736,176

43,794,729

40,331,090

2,168,952

1,294,687

Apartments,
factory and
shop-office
buildings
RM

26,279,521

12,336,293

(1,750)

2,307,001

11,637,977

279,310

(97,698)

582,805

10,873,560

Plant,
machinery
and
equipment
RM

9,990,832

14,164

(150,852)

1,356,027

191,941

8,579,552

(468,274)

1,795,828

7,251,998

Motor
vehicles
RM

34,424,571

23,367

561,607

(12,633) #

(109,516)

(259,885)

4,476,738

29,744,893

10,716

180,829

(14,064) *

(868,163)

(929,788)

4,844,423

26,520,940

Factory
equipment,
signboard and
electrical
fittings
RM

31,378,102

57,473

970,398

(17,421) #

(288,390)

(111,770)

3,336,627

183,657

27,247,528

23,688

2,249,451

(66,032) *

(1,376,080)

(547,900)

3,456,891

23,507,510

Air-conditioners,
computers,
furniture,
fittings and
office equipment
RM

14,610,755

57,613

(35,572) #

(961,645)

2,419,530

76,335

13,054,494

37,495

15,447

(2,129,825)

(377,860)

2,058,611

13,450,626

Renovation
RM

3,945,530

(13,986,498)

1,523,614

16,408,414

(43,056,127)

(33,600)

53,928,440

5,569,701

Capital
work-inprogress
RM

173,866,862

152,617

(673,198)

(65,626)

(1,359,551)

(524,257)

20,155,713

451,933

155,729,231

71,899

(80,096)

(4,471,766)

(2,357,422)

69,818,194

92,748,422

Total
RM

Notes to
The Financial
Statements
OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

91

Reclassification

Translation reserve

3,818,026

2,748,454

As of March 31, 2014

248,992

As of March 31, 2013

Carrying amounts

As of March 31, 2014

(26,418)

Transfer to investment properties


(Note 16)

Translation reserve

(34,920)

Write off

Reclassification

66,712

Disposals

Depreciation charge for the year

Acquisition of subsidiary

243,618

Write off

As of March 31, 2013

92,182

Depreciation charge for the period

Disposals

151,436

As of January 1, 2012

Accumulated depreciation and


accumulated impairment losses

The Group

Leasehold land
and buildings
and apartments
RM

815,000

1,200,000

Freehold
land
RM

48,085,540

43,455,368

1,339,565

34,920

965,284

339,361

174,034

165,327

Apartments,
factory and
shop-office
buildings
RM

18,061,374

5,900,851

8,218,147

(831)

2,481,852

5,737,126

(66,979)

1,676,073

4,128,032

Plant,
machinery and
equipment
RM

3,762,899

4,043,217

6,227,933

13,203

(150,847)

1,653,310

175,932

4,536,335

(8,249)

(308,949)

1,882,180

2,971,353

Motor
vehicles
RM

11,858,359

11,548,984

22,566,212

13,553

(115,483)

(176,837)

4,649,070

18,195,909

4,629

8,949

(630,956)

(521,179)

5,889,836

13,444,630

Factory
equipment,
signboard and
electrical
fittings
RM

11,314,745

10,969,087

20,063,357

32,903

(191,641)

(84,484)

3,907,248

120,890

16,278,441

9,804

(2,760)

(964,388)

(303,382)

4,852,797

12,686,370

Air-conditioners,
computers,
furniture,
fittings and
office equipment
RM

5,042,577

5,052,872

9,568,178

28,451

(708,701)

2,204,851

41,955

8,001,622

15,743

2,060

(1,242,684)

(186,441)

3,016,541

6,396,403

Renovation
RM

68,232,384

88,110

(26,418)

(1,015,825)

(412,999)

15,928,327

338,777

53,332,412

30,176

(2,905,007)

(1,319,951)

17,583,643

39,943,551

Total
RM

3,945,530 105,634,478

16,408,414 102,396,819

Capital
work-inprogress
RM

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Motor
vehicles
RM

Signboard
RM

Furniture,
fittings and
office
equipment
RM

As of January 1, 2012

374,113

368

174,047

548,528

Additions

142,097

72,131

1,395,239

1,609,467

As of March 31, 2013

516,210

368

246,178

1,395,239

2,157,995

Additions

9,316

100,101

109,417

Write off

(368)

(1,300)

(1,668)

516,210

254,194

1,495,340

2,265,744

31,176

49

22,722

53,947

Depreciation charge for the period

117,211

92

56,080

173,383

As of March 31, 2013

148,387

141

78,802

227,330

Depreciation charge for the year

103,242

68

49,862

153,172

(209)

(368)

(577)

251,629

128,296

379,925

As of March 31, 2013

367,823

227

167,376

1,395,239

1,930,665

As of March 31, 2014

264,581

125,898

1,495,340

1,885,819

The Company

Capital
work-inprogress
RM

Total
RM

Cost

As of March 31, 2014


Accumulated depreciation and accumulated
impairment losses
As of January 1, 2012

Write off
As of March 31, 2014
Carrying amounts

Leasehold buildings, freehold land, factory buildings, shop-office buildings and capital work-in-progress of the Group with total carrying value of
RM51,302,515 (2013: RM49,014,704) are charged to certain local licensed banks for banking facilities granted to the Group as mentioned in Note 32.
The carrying amounts of certain motor vehicles and plant and machinery of the Group acquired under hire-purchase arrangements are RM771,396 and
Nil (2013: RM1,506,163 and RM205,200) respectively.
In 2013, disposal of property, plant and equipment of the Group included disposal of outlet operations with carrying amount of RM802,684 to third
parties. Gain arising therefrom amounted to RM837,315.

92

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

15. Prepaid Lease Payments


Short-term
leasehold land
RM

Long-term
leasehold land
RM

Total
RM

105,820

14,256,333

14,362,153

11,657

593,016

604,673

2,385

182,358

184,743

At end of year

14,042

775,374

789,416

Carrying amount

91,778

13,480,959

13,572,737

105,820

14,256,333

14,362,153

At beginning of period

8,676

365,069

373,745

Amortisation for the period

2,981

227,947

230,928

At end of period

11,657

593,016

604,673

Carrying amount

94,163

13,663,317

13,757,480

The Group 2014


At cost
At beginning and end of year
Accumulated amortisation
At beginning of year
Amortisation for the year

The Group 2013


At cost
At beginning and end of period
Accumulated amortisation

93

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The leasehold land of the Group with total carrying value of RM11,017,075 (2013: RM13,384,484) are charged to certain local licensed banks for
banking facilities granted to the Group as mentioned in Note 32.

16. Investment Properties


Long-term
leasehold
land and
buildings
RM

Long-term
leasehold
land
RM

Freehold
land
RM

Freehold
shoplot
RM

Buildings
RM

Total
RM

1,320,000

720,000

2,040,000

Transfer from property, plant and


equipment (Note 14)

385,000

261,780

646,780

Additions during the year

300,000

380,000

680,000

170,000

235,000

118,220

523,220

At end of year

1,490,000

300,000

620,000

720,000

760,000

3,890,000

Carrying amounts

1,490,000

300,000

620,000

720,000

760,000

3,890,000

1,140,000

720,000

1,860,000

180,000

180,000

At end of period

1,320,000

720,000

2,040,000

Carrying amounts

1,320,000

720,000

2,040,000

The Group 2014


At fair value
At beginning of year

Increase in fair value during the year

The Group 2013


At fair value
At beginning of period
Increase in fair value during the period

The fair values of the investment properties were estimated at RM3,890,000 (2013: RM2,040,000) based on valuation by an independent qualified
valuer. Valuations were arrived at by reference to market evidence of transaction prices for similar properties. There has been no change to the valuation
technique during the year.
Details of the Groups investment properties and information about the fair value hierarchy as of March 31, 2014 are as follows:

Investment properties

Level 1
RM

Level 2
RM

Level 3
RM

Total
RM

3,890,000

3,890,000

There were no transfers between Level 1 and Level 2 during the year.
The investment properties amounting to RM2,490,000 (2013: RM1,320,000) were charged to certain local licensed banks for banking facilities granted
to the Group as mentioned in Note 32.
The strata title for the freehold shoplot is not available for auditors inspection as it is in the process of being transferred to the name of the subsidiary
company.
The rental income and direct operating expenses arising from the investment properties of the Group which were recognised during the financial year/
period amounted to RM129,773 (2013: RM90,000) and RM16,115 (2013: RM16,067) respectively.

94

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

17. Investment in Subsidiaries


The Company

Unquoted shares, at cost


Less: Accumulated impairment losses

2014

2013

290,703,731

290,502,931

(950,810)

(950,810)

289,752,921

289,552,121

Details of the subsidiaries of the Company as at the end of the reporting date are as follows:
Effective Equity
Interest
Name of Company

Country of
Incorporation

2014
%

2013
%

Principal Activities

Advance City Limited^^@

Hong Kong

70.00

Marketing of beverages.

Conneczone Sdn. Bhd.

Malaysia

80.00

80.00

Operator of cafe outlets.

Dynasty Confectionery Sdn. Bhd.

Malaysia

100.00

100.00

Central bakery and confectionery processing centre.

Dynasty Kitchen Sdn. Bhd. ^

Malaysia

100.00

100.00

Distribution centre.

Emperors Kitchen Sdn. Bhd.

Malaysia

100.00

100.00

Central food processing centre and trading of food


products.

Esquire Chef Sdn. Bhd.

Malaysia

100.00

100.00

Central food processing centre.

Gongga Food Sdn. Bhd.

Malaysia

100.00

100.00

Manufacture of roasted coffee powder and


procurement of food items.

Kopitiam Asia Pacific Sdn. Bhd.

Malaysia

100.00

100.00

Franchisor of cafe outlets and provision of


management services.

Oldtown Singapore Pte. Ltd.*

Singapore

100.00

100.00

Franchisor of cafe outlets, provision of management


services, procurement of food items and operator of
cafe outlets.

Oldtown APP Sdn. Bhd.

Malaysia

100.00

100.00

Dormant.

Oldtown Logistics Sdn. Bhd.

Malaysia

100.00

100.00

Dormant.

Old Town Kopitiam Sdn. Bhd.#

Malaysia

100.00

100.00

Operator of cafe outlets.

Old Town Kopitiam Butterworth Sdn. Bhd.

Malaysia

100.00

100.00

Operator of cafe outlets.

Old Town Kopitiam Cheras Sdn. Bhd.

Malaysia

100.00

100.00

Operator of cafe outlets.

Old Town Kopitiam Kuala Lumpur Sdn. Bhd.

Malaysia

100.00

100.00

Operator of cafe outlets.

Old Town (M) Sdn. Bhd.

Malaysia

100.00

100.00

Investment holding.

OTK (HK) Investment Limited ** @

Hong Kong

100.00

51.00

Dormant.

White Cafe Sdn. Bhd.

Malaysia

100.00

100.00

Manufacturing of beverages.

White Cafe Marketing Sdn. Bhd.

Malaysia

100.00

100.00

Marketing of beverages.

^^
*
#
^
@
**

95

The financial statements of this company are examined by a member firm of the auditors of the Company.
The financial statements of these companies are examined by auditors other than the auditors of the Company.
Held through Kopitiam Asia Pacific Sdn. Bhd..
Held through Old Town Kopitiam Butterworth Sdn. Bhd..
Held through Old Town (M) Sdn. Bhd..
The financial statements of this company are not required to be audited by law in its country of incorporation.

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

During the financial year, the Group acquired a subsidiary for a total consideration of RM26,790,898. The acquisition was completed on April 22, 2013.
The effect of the acquired subsidiary on the results of the Group for the period from April 22, 2013 to March 31, 2014 are as follows:
2014
Revenue

26,566,212

Profit for the year

2,736,934

If the acquisition of the subsidiary had occurred at the beginning of the year, the effect on the Groups revenue and profit for the year would have
been as follows:
2014
Revenue

29,281,984

Profit for the year

3,331,221

Composition of the Group


Information about the composition of the Group at the end of the reporting date is as follows:
Number of wholly-owned subsidiaries
Industry

Place of incorporation and operation

2014

2013

Fast moving consumer goods

Malaysia

Food and beverages

Malaysia
Singapore

10
1

10
1

Investment holding

Malaysia

Others - dormant

Malaysia
Hong Kong

2
1

2
-

17

16

Number of non-wholly-owned subsidiaries


Industry

Place of incorporation and operation

Fast moving consumer goods


Food and beverages
Others - dormant

2014

2013

Hong Kong

Malaysia

Hong Kong

Details of non-wholly owned subsidiaries that have material non-controlling interests are as follows:

Name of Company

96

Country of
incorporation and
principal place of
business

Proportion of ownership
interest and voting rights
held by non-controlling
interests

Profit allocated to
non-controlling interests

2014
%

2013
%

Accumulated
non-controlling interests

Year Ended
31.3.2014

Period Ended
31.3.2013

Year Ended
31.3.2014

Period Ended
31.3.2013

(12 Months)
RM

(15 Months)
RM

(12 Months)
RM

(15 Months)
RM

Conneczone Sdn. Bhd.

Malaysia

20

20

30,657

59,756

259,975

239,318

Advance City Limited

Hong Kong

30

1,360,729

4,781,761

OTK (HK) Investment


Limited

Hong Kong

49

1,952,704

5,041,736

2,192,022

Total

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Summarised financial information in respect of each of the Groups subsidiaries that has material non-controlling interests is set out below. The
summarised financial information below represents amounts before intragroup eliminations.
2014
RM

2013
RM

1,671,274

1,541,266

887,088

490,690

(1,207,764)

(810,982)

(50,723)

(24,384)

1,039,900

957,272

259,975

239,318

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Revenue

6,971,491

8,869,873

Expenses

(6,818,206)

(8,571,092)

Profit and total comprehensive income for the year/period

153,285

298,781

Profit and total comprehensive income attributable to owners of the Company

122,628

239,025

Profit and total comprehensive income attributable to non-controlling interests

30,657

59,756

153,285

298,781

10,000

56,000

628,175

534,416

(636,537)

30,909

(8,168)

(456,024)

(16,530)

109,301

Conneczone Sdn. Bhd.


Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners of the Company
Non-controlling interests

Profit and total comprehensive income for the year/period


Dividend paid to non-controlling interests
Net cash from operating activities
Net cash (used in)/from investing activities
Net cash used in financing activities
Net cash (outflow)/inflow

97

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

2014
RM

2013
RM

24,626,715

91,048

Current liabilities

(8,778,560)

Equity attributable to owners of the Company

11,157,442

4,781,761

Year Ended
31.3.2014
(12 Months)
RM

Period Ended
31.3.2013
(15 Months)
RM

Revenue

38,087,487

Expenses

(33,551,725)

4,535,762

Owners of the Company

3,175,033

Non-controlling interests

1,360,729

4,535,762

Owners of the Company

703,577

Non-controlling interests

301,533

5,540,872

Owners of the Company

3,878,610

Non-controlling interests

1,662,262

Profit and total comprehensive income for the year/period

5,540,872

737,710

Net cash from operating activities

5,558,330

Net cash from investing activities

18,612

(1,467,269)

4,109,673

Advance City Limited


Current assets
Non-current assets

Non-controlling interests

Profit for the year/period


Profit attributable to:

Other comprehensive income attributable to:

Total comprehensive income for the year/period


Total comprehensive income attributable to:

Dividend paid to non-controlling interests

Net cash used in financing activities


Net cash inflow

98

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

2014
RM

2013
RM

Current assets

3,985,110

Equity attributable to owners of the Company

2,032,406

Non-controlling interests

1,952,704

OTK (HK) Investment Limited

No disclosure was made on profit and total comprehensive income for the period and net cash movement for OTK (HK) Investment Limited for the period
ended March 31, 2013 as the subsidiary company was only incorporated on March 26, 2013.

18. Investment In Associates


The Group

Unquoted equity shares, at cost


Groups share of post-acquisition reserve

The Company

2014
RM

2013
RM

2014
RM

2013
RM

1,461,107

1,461,107

1,101,002

1,101,002

44,034

245,089

1,505,141

1,706,196

1,101,002

1,101,002

Details of the Groups associates as at the end of the reporting date are as follows:
Effective Equity Interest
Name of Company

Country of
Incorporation

2014
%

2013
%

Principal Activities

Financial
Year End

OTK Singapore Pte. Ltd. * #

Singapore

50.00

50.00

Operator of cafe outlets.

December 31

OTK Eatery Sdn. Bhd.

Malaysia

40.00

40.00

Operator of cafe outlets.

December 31

Plus One Solution Sdn. Bhd.

Malaysia

50.00

50.00

Information technology service centre.

December 31

* The financial statements of this company are examined by auditors other than the auditors of the Company.
# Held through Oldtown Singapore Pte. Ltd..

The reporting date of the associates is December 31. This was the reporting date established when the associates were incorporated and management
considers that it is unnecessary to change the reporting date. For the purpose of applying equity method of accounting, the audited consolidated
financial statements of the respective associates for the year ended December 31, 2013/2012 have been used, and appropriate adjustments have been
made for the effects of significant transactions between that date and March 31, 2014/2013.

99

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Summarised financial information in respect of the Groups associates is set out below:
The Group
2014

2013

8,891,002

7,264,824

(7,034,228)

(4,973,075)

1,856,774

2,291,749

Groups share of net assets of associates

802,921

1,003,976

Goodwill on associates

702,220

702,220

1,505,141

1,706,196

30,961,748

38,263,930

Total (loss)/profit for the year/period

(357,734)

926,191

Groups share of (losses)/profits of associates for the year/period

(157,055)

527,506

Total assets
Total liabilities
Net assets

Total revenue

19. OTHER INVESTMENTS


The Group

The Company

2014
RM

2013
RM

2014
RM

2013
RM

Malaysia

29,000

29,000

Indonesia

1,057,567

1,057,567

1,086,567

1,086,567

45,541,495

15,447,383

1,086,567

46,628,062

15,447,383

66,516,766

25,693,547

25,488,494

15,047,654

Non-current
Available-for-sale investments:
Unquoted shares at cost in:

Available-for-sale investments:
Quoted unit trusts in Malaysia, at fair value

Current
Available-for-sale investments:
Quoted unit trusts in Malaysia, at fair value

100

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The fair value hierarchy for quoted unit trusts above are classified as follows:
Level 1
RM

Level 2
RM

Level 3
RM

Total
RM

66,516,766

66,516,766

- quoted unit trusts

71,235,042

71,235,042

The Company 2014

Level 1
RM

Level 2
RM

Level 3
RM

Total
RM

25,488,494

25,488,494

30,495,037

30,495,037

The Group 2014


Available-for-sale:
Other investments:
- quoted unit trusts
The Group 2013
Available-for-sale:
Other investments:

Available-for-sale:
Other investments:
- quoted unit trusts
The Company 2013
Available-for-sale:
Other investments:
- quoted unit trusts

There were no transfers between Level 1 and Level 2 in both 2014 and 2013.

20. Goodwill on Consolidation


The Group
2014

2013

25,671,638

25,671,638

1,959,643

1,959,643

1,959,643

1,959,643

23,711,995

23,711,995

At cost
At beginning and end of year/period
Accumulated impairment losses
At beginning of year/period
Impairment loss for the year/period
At end of year/period
Carrying amount

Goodwill acquired in business combination is allocated, at acquisition, to the group of units that are expected to benefit from the synergies of the
combination. For impairment testing purpose, goodwill is assigned to the acquired subsidiaries under operation of cafe outlets.
Goodwill arose from the acquisition of five (5) direct and indirect subsidiaries including Old Town Kopitiam Butterworth Sdn. Bhd., Old Town Kopitiam
Kuala Lumpur Sdn. Bhd., Old Town Kopitiam Cheras Sdn. Bhd., Dynasty Kitchen Sdn. Bhd. and Conneczone Sdn. Bhd. because the cost of the
combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit
of expected synergies, revenue growth, future market development and the assembled workforce of the subsidiaries. These benefits are not recognised
separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

101

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The Group also acquired the supplier exclusive rights as part of the acquisition from Emperors Kitchen Sdn. Bhd., Esquire Chef Sdn. Bhd. and Dynasty
Confectionery Sdn. Bhd. and distribution network from Advance City Limited. These intangible assets have been separately recognised from goodwill as
it met the definition of intangible assets as disclosed in Note 21.
None of the goodwill arising on these acquisitions is expected to be deductible for tax purposes.
The recoverable amounts of the CGUs were based on value-in-use calculations. The calculations were determined using projected cash flows for a tenyear period by extrapolation using the growth rate based on historical experience, managements assessment of future trends and expectation of market
development in the respective industries.
The key assumptions used in preparation of the projected cash flows are as follows:
Pre-tax discount rates range from 14.0% to 18.0% (2013: 11.0% to 14.0%);
There will be no material changes in the structure and principal activities of the subsidiaries;
Chain of outlets will continue to operate under the franchise licence for 2 terms (5 years each term);
Projected growth rate of food and beverages of 4.0% (2013: 3.0% to 4.0%) per annum;
There will not be any significant changes in the prices and supply of raw materials, wages and other related costs, resulting from industrial dispute,
adverse changes in economic conditions or other abnormal factors, which will adversely affect the operations of the Group; and
The statutory income tax rate for Malaysia will remain at 25% (2013: 25%). There will be no material changes to the present legislation or
regulations, rates and bases of duties, levies and other taxes affecting the Groups activities.
The Group conducted the annual goodwill impairment testing and no impairment loss need to be recognised except for RM1,959,643 which has been
recognised in previous financial period.
The directors believe that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the
aggregate carrying amount to exceed the aggregate recoverable amount of the other subsidiaries.

21. Intangible Assets


The Group
Distribution
network
RM

Supplier
exclusive
right
RM

Total
RM

As of January 1, 2012

23,432,693

23,432,693

Arising from acquisition of new subsidiary

As of March 31, 2013

23,432,693

23,432,693

Arising from acquisition of new subsidiary

17,790,744

17,790,744

As of March 31, 2014

17,790,744

23,432,693

41,223,437

As of January 1, 2012

1,366,907

1,366,907

Amortisation for the period

2,929,087

2,929,087

As of March 31, 2013

4,295,994

4,295,994

Amortisation for the year

1,186,050

2,343,269

3,529,319

As of March 31, 2014

1,186,050

6,639,263

7,825,313

As of March 31, 2013

19,136,699

19,136,699

As of March 31, 2014

16,604,694

16,793,430

33,398,124

Cost

Accumulated amortisation

Carrying amount

102

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

22. Deferred Tax Assets/(Liabilities)


At
beginning
of year/period
RM

Recognised
in profit
or loss
RM

Translation
differences
RM

At end
of year/period
RM

Property, plant and equipment

(116,000)

(132,000)

(248,000)

Deferred income

1,326,000

(204,000)

1,122,000

70,000

19,000

89,000

1,280,000

(317,000)

963,000

(2,028,412)

(3,649,594)

(4,725)

(5,682,731)

(15,000)

(15,000)

(22,000)

56,000

34,000

(7,000)

(99,000)

(106,000)

3,000

(23,000)

(20,000)

19,000

19,000

(2,069,412)

(3,696,594)

(4,725)

(5,770,731)

Property, plant and equipment

(245,047)

129,047

(116,000)

Deferred income

1,384,727

(58,727)

1,326,000

54,320

15,680

70,000

1,194,000

86,000

1,280,000

(2,219,061)

191,342

(693)

(2,028,412)

(15,000)

(15,000)

(31,000)

9,000

(22,000)

Bank balances

(7,000)

(7,000)

Borrowings

3,000

3,000

4,000

(4,000)

(2,261,061)

192,342

(693)

(2,069,412)

The Group
2014
Deferred tax assets

Unabsorbed tax capital allowances

Deferred tax liabilities


Property, plant and equipment
Investment properties
Unrealised foreign exchange differences on:
Trade receivables
Bank balances
Borrowings
Unabsorbed tax capital allowances

The Group
2013
Deferred tax assets

Unabsorbed tax capital allowances

Deferred tax liabilities


Property, plant and equipment
Investment properties
Unrealised foreign exchange differences on:
Trade receivables

Unabsorbed tax capital allowances

103

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

23. Inventories
The Group
2014
RM

2013
RM

10,703,906

6,808,060

Food, beverages and consumables

4,624,697

1,776,142

Raw materials

4,580,788

3,790,727

Packing materials

1,811,052

1,084,670

Work-in-progress

396,759

389,364

Spare parts

192,857

Goods-in-transit

155,895

378,799

22,465,954

14,227,762

Finished goods and trading merchandise

The cost of inventories of the Group recognised as an expense during the year/period was RM167,000,813 (2013: RM188,371,890).

24. Trade and Other Receivables


The Group

The Company

2014
RM

2013
RM

2014
RM

2013
RM

Trade receivables

34,414,703

36,969,378

Other receivables

480,291

2,267,500

109,800

7,212,566

7,021,380

5,370

13,370

42,107,560

46,258,258

5,370

123,170

45,360

228,892

3,670,923

2,295,706

221,221

50,498

45,823,843

48,782,856

226,591

173,668

Refundable deposits
Loans and receivables
Advance payment for acquisition of plant and machinery
Prepaid expenses

Trade and other receivables disclosed above are classified as loans and receivables and are therefore, measured at amortised cost.
Trade receivables of the Group comprise amounts receivable for the sale of goods. Other receivables of the Group comprise mainly expenses paid on
behalf and advances granted which are unsecured, interest-free and repayable upon demand.
Included in other receivables of the Group are rental receivable from related parties of RM78,531 (2013: Nil).
Trade transactions of the Group were on cash terms and credit period which ranged from 7 to 90 days (2013: 30 to 90 days).

104

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

The currency profile of trade and other receivables are as follows:


The Group
2014
RM

2013
RM

Ringgit Malaysia

23,447,533

27,231,113

Hong Kong Dollar

6,129,451

1,952,704

United States Dollar

3,340,977

8,194,172

Singapore Dollar

1,977,033

645,388

1,213,501

34,894,994

39,236,878

Thai Baht

Movement in the allowance for doubtful debts is as follows:


The Group
2014
RM

2013
RM

Balance at beginning of year/period

6,325

Amounts written off during the year/period as uncollectible

(6,325)

Balance at end of year/period

Included in trade receivables of the Group are related parties balances of RM5,896,513 (2013: RM8,600,243).
Included in trade receivables of the Group are receivables with total carrying amount of RM9,385,666 (2013: RM6,129,686) which are past due at the
reporting date for which the Group has not provided for impairment loss. The Group does not hold any collateral over these balances nor does it have a
legal right to offset against any amounts owed by the Group to the counterparty.
Ageing of trade receivables which are past due but not impaired are as follows:
The Group
2014
RM

2013
RM

Within 30 days

7,416,322

3,811,060

31 days to 60 days

1,329,949

1,759,479

61 days to 90 days

235,079

112,816

91 days to 120 days

102,359

248,652

Over 120 days

301,957

197,679

9,385,666

6,129,686

39

89

Average age (days)

The Group seeks to maintain strict control over its outstanding trade receivables and has a credit period policy to minimise credit risk. Overdue balances
are reviewed regularly by management. The Group has not provided for impairment loss on trade receivable accounts that are past due as there has not
been a significant change in credit quality and the amounts are still considered recoverable.
Transaction with related parties are disclosed in Note 25.

105

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

25. Holding Company and Related Party Transactions


The Company is a subsidiary of Old Town International Sdn. Bhd., a company incorporated in Malaysia and the directors regard it as the ultimate
holding company.
The amount owing to ultimate holding company arose mainly from dividend payable, rental payable and expenses paid on behalf which are unsecured,
interest-free and repayable upon demand.
The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

1,518,022

1,349,508

44,000

44,000

1,562,022

1,349,508

44,000

Amount owing by associates consist of:


Trade account
Non-trade account

The trade balance of amount owing by associate of the Group arose mainly from normal trade terms. The non-trade balance arose from dividend
receivable.
The amount owing by subsidiaries arose mainly from dividend receivable, advances granted and expenses paid on behalf which are unsecured, interestfree and repayable upon demand.
In 2013, the amount owing by subsidiaries arose mainly from advances and expenses paid on behalf which were unsecured, interest-free and repayable
upon demand.
In 2013, the amount owing to subsidiaries related mainly to outstanding purchase consideration for the acquisition of subsidiaries, advances granted and
expenses paid on behalf, which were unsecured, interest-free and repayable upon demand.
The currency profile of amount owing by associates are as follows:
The Group

106

The Company
2014
2013
RM
RM

2014
RM

2013
RM

Singapore Dollar

1,518,022

1,349,508

Ringgit Malaysia

44,000

44,000

1,562,022

1,349,508

44,000

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Other than as disclosed elsewhere in the financial statements, the related parties and their relationship with the Company and its subsidiaries are
as follows:
Names of related parties

107

Relationship

Old Town International Sdn. Bhd.

Advance City Limited

Conneczone Sdn. Bhd.

Dynasty Confectionery Sdn. Bhd.

Dynasty Kitchen Sdn. Bhd.

Esquire Chef Sdn. Bhd.

Emperors Kitchen Sdn. Bhd.

Gongga Food Sdn. Bhd.

Kopitiam Asia Pacific Sdn. Bhd.

Old Town Kopitiam Butterworth Sdn. Bhd.

Old Town Kopitiam Cheras Sdn. Bhd.

Old Town Kopitiam Kuala Lumpur Sdn. Bhd.

Old Town Kopitiam Sdn. Bhd.

Old Town (M) Sdn. Bhd.

Oldtown APP Sdn. Bhd.

Oldtown Logistics Sdn. Bhd.

Oldtown Singapore Pte. Ltd.

OTK (HK) Investment Limited

White Cafe Marketing Sdn. Bhd.

White Cafe Sdn. Bhd.

OTK Eatery Sdn. Bhd.

OTK Singapore Pte. Ltd.

Plus One Solution Sdn. Bhd.

Holding company of the Company.

Subsidiaries of the Company.

Associates of the Company.

108

OTK Singapore Pte. Ltd.

Plus One Solution Sdn. Bhd.

AC Montage Marketing Sdn. Bhd.

Acadian Gourmet KK Sdn. Bhd.

Acadian Gourmet PB Sdn. Bhd.

Acadian Gourmet Sdn. Bhd.

Carefree Avenue Sdn. Bhd.

Conneczone Puchong Sdn. Bhd.

CN Properties Sdn. Bhd.

CN Supplies Sdn. Bhd.

First Habour Coffee Shop

GC Alamanda Sdn. Bhd.

GC Bangi Sdn. Bhd.

GC Bangsar Sdn. Bhd.

GC Bangsar Two Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

10,779,045

Dividend
paid/payable
RM

OTK Eatery Sdn. Bhd.

Transactions with Associates

Old Town International Sdn. Bhd.

Ultimate holding company

Transactions with related


companies are as follows:

The Group
Year Ended 31.3.2014 (12 Months)

Related Party Transactions

632,338

675,733

686,931

689,728

110

305,688

696,812

280,717

671,086

532,086

4,098,120

5,150

Trade
sales
RM

639,939

Trade
purchases
RM

186,600

Purchase of
property,
plant and
equipment
RM

21,200

23,716

24,880

1,140,000

Rental
paid/
payable
RM

Secondment
of staff
charges
received/
receivable
RM

62,297

62,946

51,876

58,830

27,313

56,979

19,678

46,014

36,013

637,219

237,021

Advertising
and promotion
fees received/
receivable
RM

103,828

104,910

86,460

98,050

45,522

94,965

32,797

76,690

60,021

1,062,022

395,035

Royalty
fees received/
receivable
RM

4,787

37,165

36,215

33,215

200

4,500

33,469

73,647

2,428

4,957

36,225

288,964

222,175

4,800

Others
RM

803,250

880,754

861,482

879,823

110

21,400

28,216

411,992

922,403

335,620

798,747

664,345

24,880

1,115,503

5,797,361

859,381

11,923,845

Total
RM

Notes to
The Financial
Statements
OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

109

GC Brickfields Sdn. Bhd.

GC Kapar Sdn. Bhd.

GC Selayang Sdn. Bhd.

GC Shamelin Sdn. Bhd.

GC South City Sdn. Bhd.

Gourmet Chef Sdn. Bhd.

Gourmet Chef Kinrara Sdn. Bhd.

Gourmet Corner Ipoh Sdn. Bhd.

Gourmet Corner KL Sdn. Bhd.

Gourmet Corner Sdn. Bhd.

Mayson Trade (M) Sdn. Bhd.

Myth Empire Sdn. Bhd.

Natural Marketing Sdn. Bhd.

Nobel Virtue Sdn. Bhd.

Oldtown Asia Pacific Limited

OTK (Alam Damai) Sdn. Bhd.

OTK (Genting) Sdn. Bhd.

OTK (Intan) Sdn. Bhd.

OTK (KB) Sdn. Bhd.

OTK (Kuala Selangor) Sdn. Bhd.

OTK (MBH) Sdn. Bhd.

OTK (Petaling Jaya) Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

The Group
Year Ended 31.3.2014 (12 Months)

Dividend
paid/payable
RM

934,172

487,847

399,309

43,411

605,134

9,177,383

317,690

5,287

640,347

740,772

1,360,771

649,575

400,574

447,255

465,333

542,302

488,272

585,724

Trade
sales
RM

144,581

111,656

Trade
purchases
RM

Purchase of
property,
plant and
equipment
RM

59,400

171,600

250,800

Rental
paid/
payable
RM

3,600

115,200

Secondment
of staff
charges
received/
receivable
RM

73,010

22,010

35,875

55,103

894,479

23,817

53,746

66,793

73,353

56,785

34,949

38,848

47,311

47,344

40,374

45,298

Advertising
and promotion
fees received/
receivable
RM

121,683

36,684

59,791

91,838

1,490,798

39,695

85,916

89,577

111,321

122,254

94,642

58,248

64,746

78,852

78,906

67,289

75,496

Royalty
fees received/
receivable
RM

64,658

134,889

3,107

3,000

33,657

464,036

4,047

2,862

36,710

93,184

106,412

4,378

34,215

33,215

2,907

34,715

3,610

6,492

Others
RM

1,197,123

681,430

498,082

46,411

785,732

12,141,896

385,249

85,916

59,400

144,581

179,749

111,656

820,380

1,262,870

1,662,790

805,380

527,986

584,064

594,403

703,267

599,545

713,010

Total
RM

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

110

OTK (Shah Alam) Sdn. Bhd.

OTK (Senai) Sdn. Bhd.

OTK (Teluk Cempedak) Sdn. Bhd.

OTK Ipoh Road Sdn. Bhd.

OTK Kopitiam (KLCC) Sdn. Bhd.

OTK Logistics Sdn. Bhd.

OTK Manjung Sdn. Bhd.

OTK Megah Sdn. Bhd.

OTK Northern Sdn. Bhd.

OTK Sarawak Sdn. Bhd.

OTK Sunway Sdn. Bhd.

OTK USJ Sdn. Bhd.

Lee Siew Heng

Lim Khim Lan

Transactions with a director of


the Company are as follows:

Lee Siew Ming

Transactions with persons


connected with certain directors
are as follows:

OTK (Rawang) Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

The Group
Year Ended 31.3.2014 (12 Months)

Dividend
paid/payable
RM

474,668

549,062

5,410

1,162,300

233,446

455,747

3,030,916

400,730

384,447

784,541

627,019

842,722

1,369,960

Trade
sales
RM

Trade
purchases
RM

Purchase of
property,
plant and
equipment
RM

19,800

60,000

18,900

Rental
paid/
payable
RM

Secondment
of staff
charges
received/
receivable
RM

40,295

44,768

40,874

77,661

18,720

38,316

23,257

31,073

18,385

11,382

72,335

60,349

Advertising
and promotion
fees received/
receivable
RM

67,158

74,613

68,123

129,435

31,200

63,861

34,885

51,788

30,642

17,216

120,559

100,582

Royalty
fees received/
receivable
RM

300

34,309

34,665

65,061

13,430

3,375

34,227

2,692

16,357

101,633

120,000

16,071

25,377

Others
RM

20,100

60,000

18,900

616,430

703,108

179,468

1,382,826

286,741

592,151

3,030,916

461,564

483,665

935,201

775,617

1,051,687

1,556,268

Total
RM

Notes to
The Financial
Statements
OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

111

OTK Singapore Pte. Ltd.

Plus One Solution Sdn. Bhd.

AC Montage Marketing Sdn. Bhd.

Acadian Gourmet KK Sdn. Bhd.

Acadian Gourmet PB Sdn. Bhd.

Acadian Gourmet Sdn. Bhd.

CN Properties Sdn. Bhd.

CN Supplies Sdn. Bhd.

First Habour Coffee Shop

GC Alamanda Sdn. Bhd.

GC Bangi Sdn. Bhd.

GC Bangsar Sdn. Bhd.

GC Bangsar Two Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

16,934,500

OTK Eatery Sdn. Bhd.

Transactions with Associates

Old Town International Sdn. Bhd.

Ultimate holding company

Transactions with related


companies are as follows:

The Group
Period Ended 31.3.2013 (15 Months)

Dividend
paid/payable
RM

747,846

854,884

852,464

877,510

550

488,833

909,189

657,865

4,767,505

27,510

Trade
sales
RM

884,905

Trade
purchases
RM

185,775

Purchase of
property,
plant and
equipment
RM

25,500

83,715

65,020

1,425,000

Rental
paid/
payable
RM

Secondment
of staff
charges
received/
receivable
RM

75,834

76,413

63,423

73,653

33,936

63,401

49,533

729,238

307,302

Advertising
and promotion
fees received/
receivable
RM

126,390

127,355

105,706

122,755

56,560

105,668

82,555

1,215,397

512,171

Royalty
fees received/
receivable
RM

4,764

5,706

7,846

8,918

4,408

4,652

9,698

394,388

24,756

321,085

33,743

Others
RM

954,834

1,064,358

1,029,439

1,082,836

550

25,500

83,715

583,737

1,082,910

799,651

65,020

1,465,068

6,736,896

1,168,068

18,393,243

Total
RM

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

112

GC Brickfields Sdn. Bhd.

GC Kapar Sdn. Bhd.

GC Selayang Sdn. Bhd.

GC Shamelin Sdn. Bhd.

GC South City Sdn. Bhd.

Gourmet Chef Sdn. Bhd.

Gourmet Chef Kinrara Sdn. Bhd.

Gourmet Corner Ipoh Sdn. Bhd.

Gourmet Corner KL Sdn. Bhd.

Gourmet Corner Sdn. Bhd.

Manifest Corporate Services


Sdn. Bhd.

Mayson Trade (M) Sdn. Bhd.

Natural Marketing Sdn. Bhd.

Noble Virtue Sdn. Bhd.

Oldtown Asia Pacific Limited

OTK (Alam Damai) Sdn. Bhd.

OTK (Genting) Sdn. Bhd.

OTK (Intan) Sdn. Bhd.

OTK (Kuala Selangor) Sdn. Bhd.

OTK (Petaling Jaya) Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

The Group
Period Ended 31.3.2013 (15 Months)

Dividend
paid/payable
RM

1,223,673

454,498

769,005

8,530,229

351,969

1,132,848

952,529

1,172,484

268,674

512,643

530,664

585,558

682,464

772,772

797,478

Trade
sales
RM

241,051

162,847

Trade
purchases
RM

Purchase of
property,
plant and
equipment
RM

66,000

22,800

313,500

Rental
paid/
payable
RM

6,000

90,000

18,000

Secondment
of staff
charges
received/
receivable
RM

96,098

42,531

71,331

937,412

30,197

95,238

84,787

100,122

23,314

42,638

44,169

56,844

59,143

48,265

65,980

Advertising
and promotion
fees received/
receivable
RM

160,163

70,885

118,884

1,562,353

50,328

91,767

158,730

141,312

166,869

38,857

71,063

73,615

94,739

98,572

80,442

109,966

Royalty
fees received/
receivable
RM

14,043

4,143

5,271

25,038

5,723

43,665

11,462

4,206

12,683

2,180

7,331

3,718

2,460

4,168

15,893

7,740

Others
RM

1,499,977

572,057

964,491

11,145,032

456,217

135,432

66,000

241,051

162,847

22,800

1,398,278

1,496,334

1,452,158

333,025

633,675

652,166

739,601

844,347

917,372

981,164

Total
RM

Notes to
The Financial
Statements
OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

113

OTK (Shah Alam) Sdn. Bhd.

OTK Ipoh Road Sdn. Bhd.

OTK Logistics Sdn. Bhd.

OTK Manjung Sdn. Bhd.

OTK Megah Sdn. Bhd.

OTK Northern Sdn. Bhd.

OTK Sarawak Sdn. Bhd.

OTK Sunway Sdn. Bhd.

OTK USJ Sdn. Bhd.

Myth Empire Sdn. Bhd. (formerly


known as Soonsen Enterprise
Sdn. Bhd.)

Lee Siew Heng

Lim Khim Lan

Transactions with a director of


the Company are as follows:

Lee Siew Ming

Transactions with persons


connected with certain directors
are as follows:

OTK (Rawang) Sdn. Bhd.

Transactions with other related


parties being companies in
which certain directors or
persons connected with certain
directors are directors or have
substantial financial interests
are as follows:

The Group
Period Ended 31.3.2013 (15 Months)

Dividend
paid/payable
RM

693,565

663,446

700

1,556,724

329,493

718,830

3,513,767

471,327

1,201,783

1,122,888

Trade
sales
RM

Trade
purchases
RM

Purchase of
property,
plant and
equipment
RM

22,500

75,000

22,500

197,600

2,700

Rental
paid/
payable
RM

6,000

30,000

30,000

48,000

Secondment
of staff
charges
received/
receivable
RM

63,727

53,527

87,584

96,420

26,227

61,338

36,437

61,350

65,139

Advertising
and promotion
fees received/
receivable
RM

106,212

89,211

145,973

160,699

43,704

102,231

60,728

102,252

108,565

Royalty
fees received/
receivable
RM

4,026

10,805

72,986

143,088

4,222

5,993

21,491

37,802

30,440

Others
RM

22,500

75,000

22,500

197,600

867,530

825,689

307,243

1,956,931

403,646

918,392

3,513,767

589,983

1,433,187

1,375,032

Total
RM

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Related Party Transactions


Dividend
paid/payable
RM

Dividend
received/
receivable
RM

Advances
received
RM

Advances
granted
RM

Acquisition
of investment
RM

Rental
paid/
payable
RM

Others
RM

10,779,045

Conneczone Sdn. Bhd.

40,000

40,000

Dynasty Confectionery Sdn. Bhd.

2,400,000

2,400,000

Emperors Kitchen Sdn. Bhd.

5,400,054

5,400,054

Esquire Chef Sdn. Bhd.

2,400,000

2,400,000

Gongga Food Sdn. Bhd.

12,300,000

12,300,000

Kopitiam Asia Pacific Sdn. Bhd.

20,000,000

1,700,000

3,700,500

25,400,500

Oldtown Singapore Pte. Ltd.

200,800

200,800

The Company
Year Ended 31.3.2014 (12 Months)

Total
RM

Transactions with related


companies are as follows:
Ultimate holding company
Old Town International Sdn. Bhd.

10,779,045

Subsidiaries

Old Town Kopitiam Sdn. Bhd.

21,949

21,949

Old Town Kopitiam Butterworth


Sdn. Bhd.

2,900,000

2,900,000

Old Town (M) Sdn. Bhd.

26,890,900

5,900

26,896,800

Oldtown Logistics Sdn. Bhd.

30,000

30,000

White Cafe Sdn. Bhd.

24,000,000

24,722,113

4,800

26,790,900

75,517,813

White Cafe Marketing Sdn. Bhd.

7,650,000

1,950

7,651,950

44,000

44,000

4,000

4,500

8,500

Transactions with Associates


Plus One Solution Sdn. Bhd.
Transactions with a related
party being a company in which
persons connected with certain
directors are directors and have
substantial interests are as
follows:
CN Properties Sdn. Bhd.

114

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Dividend
paid/payable
RM

Dividend
received/
receivable
RM

Advances
received
RM

Advances
granted
RM

Rental
paid/
payable
RM

Others
RM

Total
RM

16,934,500

16,934,500

Conneczone Sdn. Bhd.

224,000

224,000

Dynasty Confectionery Sdn. Bhd.

800,000

800,000

Emperors Kitchen Sdn. Bhd.

2,400,024

2,400,024

Esquire Chef Sdn. Bhd.

1,800,000

1,800,000

Gongga Food Sdn. Bhd.

5,400,000

5,400,000

Kopitiam Asia Pacific Sdn. Bhd.

8,125,000

2,000,000

280

10,125,280

Old Town Kopitiam Sdn. Bhd.

19,000,000

19,000,000

Old Town Kopitiam Butterworth


Sdn. Bhd.

3,700,000

3,700,000

Old Town (M) Sdn. Bhd.

250,000

250,000

Oldtown Logistics Sdn. Bhd.

2,000

2,000

White Cafe Sdn. Bhd.

7,500,000

34,500,000

42,000,000

White Cafe Marketing Sdn. Bhd.

4,760,000

9,806

4,769,806

OTK Eatery Sdn. Bhd.

60,000

60,000

Plus One Solution Sdn. Bhd.

30,000

30,000

60,000

60,000

The Company
Period Ended 31.3.2013 (15 Months)

Transactions with related


companies are as follows:
Ultimate holding company
Old Town International Sdn. Bhd.
Subsidiaries

Transactions with Associates

Transactions with a related


party being a company in which
persons connected with certain
directors are directors and have
substantial interests are as
follows:
CN Properties Sdn. Bhd.

115

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Compensation of Key Management Personnel


The remuneration of directors is disclosed in Note 10. The remuneration of other members of key management personnel of the Group during the
financial year/period are as follows:

Salaries, incentive, bonus and allowances


EPF contributions

Year Ended
31.3.2014
(12 Months)
RM

The Group
Period Ended
31.3.2013
(15 Months)
RM

1,474,158

1,307,360

139,167

136,308

1,613,325

1,443,668

The estimated monetary value of benefits-in-kind received and receivable by the key management personnel otherwise than in cash from the Group
amounted to RM85,271 (2013: RM82,068).

26. Fixed Deposits, Cash and Bank Balances


The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

788,806

2,559,131

Short-term investment funds

69,250,378

69,293,747

19,764,867

29,235,842

Cash and bank balances

29,844,736

14,374,275

81,062

108,086

99,883,920

86,227,153

19,845,929

29,343,928

Fixed deposits with licensed banks

The effective interest rates are as follows:


The Group

The Company
2014
2013
%
%

2014
%

2013
%

Fixed deposits

3.00 - 3.15

3.00 - 3.14

Short-term investment funds

2.06 - 2.84

2.07 - 2.95

2.06 - 2.84

2.07 - 2.95

The fixed deposits of the Group have maturity period of 30 days to 365 days (2013: 30 days to 365 days).
The currency profile of fixed deposits, cash and bank balances are as follows:
The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

Ringgit Malaysia

80,257,351

83,179,051

19,845,929

29,343,928

Hong Kong Dollar

14,162,582

Singapore Dollar

2,876,876

1,823,357

Chinese Renminbi

1,498,579

United States Dollar

1,088,532

1,224,745

99,883,920

86,227,153

19,845,929

29,343,928

The fixed deposits of the Group with carrying amounts of RM788,806 (2013: RM2,559,131) are placed under lien to local licensed banks
as security for banking facilities granted to the Group as disclosed in Note 32.

116

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

27. Share Capital and Treasury Shares


(a) Share Capital
2014
Number of
ordinary
shares

The Group and The Company


2013
Number of
ordinary
2014
shares
RM

2013
RM

Authorised:
500,000,000 ordinary shares of RM1 each

500,000,000

500,000,000

500,000,000

500,000,000

363,000,000

330,000,000

363,000,000

330,000,000

33,000,000

33,000,000

90,597,242

90,597,242

453,597,242

363,000,000

453,597,242

363,000,000

Issued and fully paid:


Ordinary shares of RM1 each:
At beginning of year/period
Allotment of shares
Bonus issue
At end of year/period

As approved by the shareholders at the Extraordinary General Meeting held on January 6, 2014, the issued and paid-up ordinary share capital of the
Company was increased from RM363,000,000 to RM453,597,242 during the financial year by way of a bonus issue of 90,597,242 new ordinary
shares of RM1 each through the capitalisation of RM40,000,000 and RM50,597,242 from share premium and retained earnings respectively on the
basis of one (1) bonus share for every four (4) existing ordinary shares held.
These new shares rank pari passu with the then existing ordinary shares of the Company.

(b) Treasury Shares


The shareholders of the Company, by an ordinary resolution passed at the Annual General Meeting (AGM) held on September 26, 2013, granted
the approval for the Company to repurchase its own shares. The directors of the Company are committed to enhancing the value of the Company to
its shareholders and believe that the repurchase plan can be applied in the best interests of the Group and of the Company.
Details of the shares repurchased and held as Treasury Shares of the Group and of the Company are as follows:

Highest price
paid per share
RM

Average price
paid per share
(including
incidental costs)
RM

Total
consideration
RM

2.83

2.90

2.87

28,744

401,000

2.40

2.59

2.44

978,409

200,000

2.38

2.39

2.40

479,355

No. of shares
repurchased
RM

Lowest price
paid per
share
RM

10,000

November 2013
December 2013

Month
July 2013

611,000

1,486,508

During the financial year, the Company repurchased a total of 611,000 units (2013: Nil) of its own shares from the open market of Bursa Malaysia
Securities Berhad for total cost of RM1,486,508 (2013: Nil) and has been deducted from equity. The average price paid for the shares repurchased
during the year was RM2.43 (2013: Nil) per share. The repurchase transactions were financed by internally generated funds. The shares repurchased are
being held as Treasury Shares in accordance with the requirements of Section 67A of the Companies Act, 1965.
As of March 31, 2014, 611,000 (2013: Nil) out of the total of 453,597,242 (2013: 363,000,000) issued and paid-up ordinary shares are held as
Treasury Shares by the Company. The number of ordinary shares of RM1 each in issue and paid-up as of March 31, 2014 after excluding the Treasury
Shares is 452,986,242 (2013: 363,000,000).
The mandate given by the shareholders will expire at the forthcoming AGM and an ordinary resolution will be tabled at the AGM for shareholders to grant
a fresh mandate for another year.

117

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

28. Reserves
The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

3,553,644

43,553,644

3,553,644

43,553,644

(222,653,894)

(222,653,894)

Foreign currency translation reserve

1,067,983

(13,155)

Investment revaluation reserve

1,415,459

1,029,600

488,494

495,037

(216,616,808)

(178,083,805)

4,042,138

44,048,681

Share premium
Reserve arising from restructuring

Share Premium
The Group and
The Company
2014
RM

2013
RM

43,553,644

12,311,332

(40,000,000)

Issuance of ordinary shares

31,350,000

Share issue expenses

(107,688)

3,553,644

43,553,644

Balance at beginning of year/period


Bonus issue

Balance at end of year/period


The share premium arose from the following:

The Group and


The Company
2014
RM

2013
RM

Public issue of 63,394,000 ordinary shares issued at a premium of


RM0.25 per share in 2011, net of share issue expenses of RM3,537,168

12,311,332

12,311,332

Private placement of 33,000,000 ordinary shares issued at a premium of


RM0.95 per share in 2013, net of share issue expenses of RM107,688

31,242,312

31,242,312

Bonus issue of 40,000,000 new ordinary shares of RM1.00 each in 2014

(40,000,000)

3,553,644

43,553,644

Reserve Arising From Restructuring


The Group

Balance at beginning and end of year/period

118

2014
RM

2013
RM

(222,653,894)

(222,653,894)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Foreign Currency Translation Reserve


The Group
2014
RM

2013
RM

(13,155)

6,984

Exchange differences on translating foreign subsidiaries and associates

1,081,138

(20,139)

Balance at end of year/period

1,067,983

(13,155)

Balance at beginning of year/period

Exchange differences relating to the translation of the net assets of the Groups foreign operations from their functional currencies to the Groups
presentation currency (i.e. Ringgit Malaysia) are recognised directly in other comprehensive income and accumulated in the foreign currency translation
reserve. Exchange differences previously accumulated in the foreign currency translation reserve (in respect of translating the net assets of foreign
operations) are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

Investment Revaluation Reserve


The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

1,029,600

495,037

Changes in fair value of available-for-sale financial assets

(31,582)

1,029,600

253,765

495,037

Cumulative (gain)/loss reclassified to profit or loss on


disposal of available-for-sale financial assets

417,441

(260,308)

1,415,459

1,029,600

488,494

495,037

Balance at beginning of year/period

Balance at end of year/period

The investment revaluation reserve represents accumulated gains and losses arising from the changes in fair value of available-for-sale financial
assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been
disposed of or are determined to be impaired.

29. Retained Earnings


The Company opted to disregard the Section 108 tax credit balance in accordance with the Finance Act, 2007 and switched to a single tier tax
system in the prior year. As such, the entire retained earnings on March 31, 2014 is available for distribution on single tier dividend.

30. Non-Controlling Interests


The Group
2014
RM

2013
RM

Balance at beginning of year/period

2,192,022

235,562

Non-controlling interest arising on acquisition of interest in subsidiary

3,857,209

1,952,704

Share of profit for the year/period

1,391,386

59,756

301,533

(1,952,704)

Dividend received

(747,710)

(56,000)

Balance at end of year/period

5,041,736

2,192,022

Share of other comprehensive income for the year/period


Disposal of interest in subsidiary by non-controlling interest

119

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

31. Hire-Purchase Payables

The Group

Minimum
hire-purchase payments
2014
2013
RM
RM

Present value of minimum


hire-purchase payments
2014
2013
RM
RM

Amounts payable under hire-purchase arrangements:


Within one year

582,175

721,303

545,735

648,266

In the second to fifth year inclusive

276,352

870,005

266,403

829,119

3,039

8,427

2,965

7,921

861,566

1,599,735

815,103

1,485,306

Less: Future finance charges

(46,463)

(114,429)

Present value of hire-purchase payables

815,103

1,485,306

815,103

1,485,306

(545,735)

(648,266)

269,368

837,040

After fifth year

Less: Amount due within 12 months


(shown under current liabilities)
Non-current portion
The non-current portion is repayable as follows:

The Group
2014
RM

2013
RM

2015

567,856

2016

207,054

206,870

2017

49,799

49,799

2018

4,594

4,594

2019

4,956

4,956

2020 and above

2,965

2,965

269,368

837,040

Financial years ending March 31:

It is the Groups policy to acquire certain of its property, plant and equipment under hire-purchase arrangements. The terms for hire-purchase of the
Group ranged from 5 years to 9 years (2013: 5 to 9 years). For the financial year ended March 31, 2014, the effective hire-purchase interest rates of the
Group ranged from 4.25% to 7.11% (2013: 4.25% to 8.03%) per annum. Interest rates are fixed at the inception of the hire-purchase arrangements.
The hire-purchase payables of the Group are secured by the assets under hire-purchase and are also guaranteed by certain directors of the Company.
The fair values of the hire-purchase payables of the Group are approximately equal to their carrying amounts.

120

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

32. Borrowings
The Group
2014
RM

2013
RM

23,482,115

28,606,302

4,449,495

23,482,115

33,055,797

Less: Amount due within 12 months (shown under current liabilities)

(3,379,905)

(7,767,923)

Non-current portion

20,102,210

25,287,874

Secured :
Term loans
Trust receipts

The non-current portion is repayable as follows:


The Group
2014
RM

2013
RM

2015

3,556,868

2016

3,435,771

3,724,516

2017

3,531,440

3,903,290

2018

3,631,449

3,371,539

2019

2,496,206

4,557,276

2020 and above

7,007,344

6,174,385

20,102,210

25,287,874

Financial years ending March 31:

The Groups term loans and other banking facilities with licensed banks amounting to RM54,320,580 (2013: RM61,058,817) are secured by:
(i) Fixed legal charge over the leasehold buildings, freehold land, factory buildings, shop-office buildings, capital work-in-progress and leasehold land of
the Group as mentioned in Notes 14 and 15;
(ii) Investment properties of the Group as disclosed in Note 16;
(iii) Letter of set-off of fixed deposits as disclosed in Note 26; and
(iv) A stamped facility agreement of RM31.003 million.
Certain term loans and other banking facilities are also guaranteed by the Company, the directors of the Company and the ultimate holding company
jointly and severally.
The Group has nine (9) term loans:
(a) a fifteen (15) year term loan of RM458,000 (2013: RM458,000) which is repayable by 180 monthly instalments of RM4,130 each commencing
October 2008 and RM3,393 each commencing December 2009;
(b) an eight (8) year term loan of RM8,000,000 (2013: RM8,000,000) which is repayable by 95 monthly instalments of RM98,260 each commencing
January 2013 with a last instalment of RM97,918;
(c) an eight (8) year term loan of RM9,000,000 (2013: RM9,000,000) which is repayable by 95 monthly instalments of RM110,543 each commencing
May 2013 with a last instalment of RM112,920;
(d) a five (5) year term loan of USD1,710,000 (2013: Nil) which is repayable by 20 quarterly principal instalments of USD95,001 each commencing
November 2013;

121

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

(e) a ten (10) year term loan of RM1,147,500 (2013: RM1,147,500) which is repayable by 60 monthly instalments of RM11,893 each for the first to fifth
year commencing October 14, 2009 and 60 monthly instalments of RM12,185 each for the sixth to tenth year commencing October 14, 2014;
(f) a ten (10) year term loan of RM552,500 (2013: RM552,500) which is repayable by 60 monthly instalments of RM5,726 each for the first to fifth year
commencing October 14, 2009 and 60 monthly instalments of RM5,867 each for the sixth to tenth year commencing October 14, 2014;
(g) a ten (10) year term loan of RM765,000 (2013: RM765,000) which is repayable by 120 monthly instalments of RM7,892 each with effect from one
(1) month after date of full release of the loan;
(h) a ten (10) year term loan of RM1,349,800 (2013: RM1,349,800) which is repayable by 120 monthly instalments of RM13,924 each with effect from
one (1) month after date of full release of the loan; and
(i) a ten (10) year term loan of RM4,800,000 (2013: RM4,800,000) which is repayable by 120 monthly instalments of RM49,285 each commencing
February 2011.
During the financial year/period, the Group fully settled three (3) term loans as follows:
(a) a seven (7) year term loan of RM4,000,000 (2013: RM4,000,000) which was repayable by 84 monthly instalments of RM58,051 each commencing
April 2010;
(b) a ten (10) year term loan of RM2,500,000 (2013: RM2,500,000) which was repayable by 120 monthly instalments of RM28,451 each commencing
May 2010; and
(c) a ten (10) year term loan of RM1,415,000 (2013: RM1,415,000) which was repayable by 60 monthly instalments of RM14,665 each for the first to
fifth year commencing October 30, 2008 and 60 monthly instalments of RM15,025 each for the sixth to tenth year commencing October 30, 2013.
The fair values of the bank borrowings of the Group approximate their carrying amounts.
The effective interest rates per annum are as follows:
The Group

Term loans
Trust receipts
Bank overdrafts

2014
%

2013
%

3.09 - 5.80

4.02 - 7.60

3.24

3.24

4.50 - 7.35

The currency profile of the borrowings are as follows:


The Group

Ringgit Malaysia
United States Dollar

122

2014
RM

2013
RM

18,517,155

28,606,302

4,964,960

4,449,495

23,482,115

33,055,797

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

33. Deferred Income


The Group
2014
RM

2013
RM

1,930,393

2,060,600

1,041,088

1,075,883

290,913

420,544

1,332,001

1,496,427

3,262,394

3,557,027

Non-current portion:
Deferred franchise fees
Current portion:
Deferred franchise fees
Others
Total

Deferred franchise fees represent franchise fees received in advance from franchisees. The revenue is recognised in the statements of profit or loss on a
straight-line basis over the term of the franchise agreement of 5 years (2013: 5 years).
Others represent income from provision of information technology related services, secondment of staff charges received in advance and foreign workers
training fees received in advance. The revenue income mentioned above are recognised in the statements of profit or loss on a straight-line basis over
the term of the agreement of 1 year (2013: 1 year).

34. Deferred Capital Grant


The Group
2014
RM

2013
RM

120,897

120,897

At beginning of year/period

80,089

49,865

Amortisation

24,179

30,224

104,268

80,089

16,629

24,180

16,628

16,629

40,808

Cost
At beginning and end of year/period
Accumulated amortisation

At end of the year/period


Net carrying amount
Current
Non-current

Deferred capital grant relates to government grant received for the acquisition of plant and machinery. There are no unfulfilled conditions or contingencies
attached to this grant.

123

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

35. Trade and Other Payables


The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

Trade payables

17,167,315

19,511,887

Other payables

16,374,381

7,865,509

7,746,994

133,924

33,541,696

27,377,396

7,746,994

133,924

12,063,599

9,654,566

80,000

72,785

4,239,107

3,012,890

49,844,402

40,044,852

7,826,994

206,709

Accrued expenses
Refundable deposits received

Trade and other payables of the Group comprise amounts outstanding for trade purchases and ongoing costs. The terms granted to the Group for trade
purchases ranged from cash to credit period of 90 days (2013: cash to credit period of 90 days). These amounts are non-interest bearing. The Group and
the Company have financial risk management policies to ensure that all payables are paid within the pre-agreed credit terms.
Included in trade and other payables of the Group are related parties balances of RM250,588 (2013: RM554,532).
The amounts owing to other payables of the Group mainly consist of dividend payable, retention sum on the construction of the factory building and
relate to purchase of property, plant and equipment. The remaining amount owing to other payables are unsecured, interest-free and repayable upon
demand.
The currency profile of trade and other payables is as follows:
The Group
2013
RM

31,629,186

26,645,643

7,746,994

133,924

Hong Kong Dollar

770,423

Chinese Renminbi

510,503

Singapore Dollar

337,012

338,816

United States Dollar

155,895

392,937

Thai Baht

138,677

33,541,696

27,377,396

7,746,994

133,924

Ringgit Malaysia

Transactions with related parties are disclosed in Note 25.

124

The Company
2014
2013
RM
RM

2014
RM

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

36. Dividends
The Group and
The Company
2013
2014
RM
RM
Final dividend of 3.0 sen per share, single tier for 2013
(2013: 4.0 sen per share, single tier for 2011)

10,889,700

13,200,000

13,589,587

19,800,000

24,479,287

33,000,000

Interim dividend of 3.0 sen per share, single tier


(2013: 6.0 sen per share, single tier)

A final dividend declared in respect of the financial period ended March 31, 2013 under single tier tax system of 3.0 sen per share, amounting to
RM10,889,700 was paid on October 30, 2013.
An interim dividend declared in respect of the current financial year under single tier tax system of 3.0 sen per share, amounting to RM13,589,587 was
paid on April 17, 2014.
Net dividend per share during the year is 6.0 sen (2013: 10.0 sen).
The directors proposed a final dividend of 3.0 sen per share, amounting to RM13,589,587 in respect of the current financial year computed based on
the outstanding issued and paid-up capital, excluding treasury shares held by the Company of 611,000 ordinary shares of RM1.00 each in respect of
the current financial year. This dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has
not been included as a liability in the financial statements. Upon approval by the shareholders, the dividend payment will be accounted for in equity as an
appropriation of retained earnings during the financial year ending March 31, 2015.

37. Financial Instruments, Financial Risks and Capital Risks Management


Categories of Financial Instruments
The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

42,107,560

46,258,258

5,370

123,170

133,841,597

64,911,665

1,562,022

1,349,508

44,000

99,883,920

86,227,153

19,845,929

29,343,928

Other investments - unquoted shares

1,086,567

1,086,567

Other investments - quoted unit trusts

66,516,766

71,235,042

25,488,494

30,495,037

49,844,402

40,044,852

7,826,994

206,709

6,072,479

87,936

5,917,755

9,188,896

815,103

1,485,306

23,482,115

33,055,797

Financial assets
Loans and receivables:
Trade and other receivables
Amount owing by subsidiaries
Amount owing by associates
Fixed deposits, cash and bank balances
Available-for-sale:

Financial liabilities
Amortised cost :
Trade and other payables
Amount owing to ultimate holding company
Amount owing to subsidiaries
Hire-purchase payables
Borrowings

125

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Financial Risk Management Objectives and Policies


Risk management is integral to the whole business of the Group and of the Company. Management continually monitors the Groups and the Companys
risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are
reviewed regularly to reflect changes in the market conditions and the Groups and the Companys activities.
There have been no changes to the Groups and the Companys exposure to these financial risks or the manner in which it manages and measures the risk.

(a) Market Risk


The Groups and the Companys activities expose them primarily to the financial risks of changes in foreign currency exchange rates, interest rates and
prices of equity.
There have been no changes to the Groups and the Companys exposure to market risks or the manner in which these risks are managed and
measured.

(i) Foreign Currency Risk Management


The Group is exposed to the effects of foreign currency exchange rate fluctuation primarily in relation to the United States Dollar (USD), Singapore
Dollar (SGD), Thai Baht (BAHT), Chinese Renminbi (RMB) and Hong Kong Dollar (HKD) arising from normal trading, investing and financing
activities. Exposure to foreign currency risk is monitored on an ongoing basis and the Group endeavours to keep the net exposure at an acceptable level.
The carrying amounts of the Groups foreign currency denominated monetary assets and monetary liabilities at the end of the reporting date are
disclosed in Notes 24, 25, 26, 32 and 35.
Foreign currency sensitivity analysis
The following table details the Groups sensitivity to a 3% increase and decrease in RM against the relevant foreign currencies. 3% is the sensitivity rate
used when reporting foreign currency risk internally to key management personnel and represents managements assessment of the reasonable possible
change in foreign exchange rates in next 12 months.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a
3% change in foreign currency rates. A positive/(negative) number below indicates an increase/(decrease) in profit net of tax where relevant currencies
strengthen 3% against RM. For a 3% weakening of relevant currencies against RM, there would be a comparable reversed impact on the profit net of tax
and the balances below would be negative.

Year Ended
31.3.2014
(12 Months)
RM

Profit or Loss
Period Ended
31.3.2013
(15 Months)
RM

HKD

439,236

58,581

SGD

135,786

63,898

RMB

22,232

USD

(15,555)

137,295

BAHT

(3,120)

36,405

The above impact are mainly attributable to the exposure on relevant currencies for receivables, bank balances, payables, borrowings and amount owing
by associate of the Group outstanding at the end of the reporting date. In the opinion of the management, the sensitivity analysis is unrepresentative of
the inherent foreign exchange risk as the year end exposure does not reflect the full exposure of the Group during the year.

126

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

(ii) Interest Rate Risk Management


Interest rate risk is the risk that the fair value or future cash flows of the Groups financial instruments will fluctuate because of changes in market
interest rates. The Groups exposure to interest rate risk arises primarily from its borrowings.
Interest rate sensitivity analysis
At the end of the reporting date, if interest rates had been 100 (2013: 100) basis points lower/higher, with all other variables held constant, the Groups
profit net of tax would have been RM176,116 (2013: RM214,547) higher/lower arising mainly as a result of lower/higher interest expense on floating
rate borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

(iii) Equity Price Risk Management


The Group and the Company are exposed to price risks arising from equity investments. Equity investments are held for strategic rather than trading
purposes.
Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting date.
If equity prices had been 1% higher/lower, the Groups:
profit for the year would not be affected as the equity investments are classified as available-for-sale and there are no plans for disposal and no
indications of impairment; and
other comprehensive income for the year would increase/decrease by RM665,168 (2013: increase/decrease by RM534,263) as a result of the
changes in fair value of available-for-sale unit trusts.
The Groups sensitivity to equity prices has not changed significantly from the prior period.
If equity prices had been 1% higher/lower, the Companys:
profit for the year would not be affected as the equity investments are classified as available-for-sale and there are no plans for disposal and no
indications of impairment; and
other comprehensive income for the year would increase/decrease by RM254,885 (2013: increase/decrease by RM228,713) as a result of the
changes in fair value of available-for-sale unit trusts.
The Companys sensitivity to equity prices has not changed significantly from the prior period.

(b) Credit Risk Management


Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and the Company. The
Group and the Company have adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from
defaults. The exposure of the Group to credit risk arises principally from its receivables and other financial assets while the exposure of the Company
to credit risk arises from its intercompany balances, financial guarantees given to licensed banks for credit facilities granted to subsidiaries and other
financial asset.
Receivables
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is
performed on the financial condition of account receivables.
As the Group does not hold any collateral, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the
statements of financial position.
A significant portion of trade receivables are regular customers of the Group. The Group uses ageing analysis to monitor the credit quality of the trade
receivables.
For other receivables, management does not foresee any credit risk due to the nature of other receivables which comprise mainly advances granted
which are repayable upon demand.
The ageing of trade receivables that are past due and/or impaired is disclosed in Note 24.

127

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Intercompany Balances
The Company provided unsecured advances to its subsidiaries. There is no fixed repayment terms imposed on intercompany balances as the credit
risk is managed on a group basis by the management of the Company to ensure that risk of losses incurred by the Company due to non-repayment by
subsidiaries, is minimal.
At the end of the reporting date, the maximum exposure to credit risk is represented by the carrying amounts in the statements of financial position.
At the end of the financial date, there was no indication that the balances due from subsidiaries are not recoverable.
Financial Guarantee
The Company provides unsecured financial guarantees to licensed banks in respect of credit facilities granted to subsidiaries. The Company monitors on
an ongoing basis the trend of repayments made by the subsidiaries.
The maximum exposure to credit risk amounts to RM20,393,276 (2013: RM25,306,356) representing the outstanding balance of credit facilities of
subsidiaries in which financial guarantees are given as of the end of the reporting date.
At the end of the reporting date, there was no indication that the subsidiaries would default on repayment.
Other Financial Assets
The credit risk on liquid funds are limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

(c) Liquidity and Cash Flow Risks Management


Ultimate responsibility for liquidity and cash flow risks management rests with the Board of Directors, which has established an appropriate liquidity and
cash flow risks management framework for the management of the Groups and of the Companys short, medium and long-term funding and liquidity
and cash flow management requirements. The Group and the Company manage liquidity and cash flow risks by maintaining adequate reserves and
banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and financial liabilities.
The Group and the Company expect that the cash generated from its operations, its existing credit facilities and the trade terms provided by its
suppliers will be sufficient to meet the Groups and the Companys currently anticipated capital expenditure and working capital needs for at least the
next 12 months.
The Group has credit facilities of approximately RM11,661,000 (2013: RM9,438,000) which are unused at the end of the reporting date. The Group
expects to meet its financial obligations from its operating cash flows and proceeds from maturing financial assets.
The maturity profile for the non-derivative financial assets/liabilities of the Group and of the Company at the end of the reporting date based on the
undiscounted cash flows of the respective financial assets/liabilities representing the earliest date on which the Group and the Company are entitled to
receive/required to pay, is as follows:
On demand or
within 1 year
RM

1 year
to 5 years
RM

Over
5 years
RM

Total
RM

Trade and other receivables

42,107,560

42,107,560

Amount owing by associates

1,562,022

1,562,022

101,579,795

101,579,795

Other investments - unquoted shares

1,086,567

1,086,567

Other investments - quoted unit trusts

66,516,766

66,516,766

211,766,143

1,086,567

212,852,710

The Group
2014
Non-derivative financial assets:

Cash and cash equivalents


Available-for-sale:

Total undiscounted non-derivative financial assets

128

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

On demand or
within 1 year
RM

1 year
to 5 years
RM

Over
5 years
RM

Total
RM

49,844,402

49,844,402

6,072,479

6,072,479

582,175

276,352

3,039

861,566

4,176,078

17,616,353

4,587,079

26,379,510

60,675,134

17,892,705

4,590,118

83,157,957

151,091,009

(17,892,705)

(3,503,551)

129,694,753

Trade and other receivables

46,258,258

46,258,258

Amount owing by associates

1,349,508

1,349,508

88,021,354

88,021,354

Other investments - unquoted shares

1,086,567

1,086,567

Other investments - quoted unit trusts

25,693,547

45,541,495

71,235,042

161,322,667

45,541,495

1,086,567

207,950,729

40,044,852

40,044,852

87,936

87,936

721,303

870,005

8,427

1,599,735

9,057,830

20,773,853

8,989,091

38,820,774

49,911,921

21,643,858

8,997,518

80,553,297

111,410,746

23,897,637

(7,910,951)

127,397,432

The Group
2014
Non-derivative financial liabilities:
Trade and other payables
Amount owing to ultimate holding company
Hire-purchase payables
Borrowings
Total undiscounted non-derivative financial liabilities
Total net undiscounted non-derivative
financial assets/(liabilities)
The Group
2013
Non-derivative financial assets:

Cash and cash equivalents


Available-for-sale:

Total undiscounted non-derivative financial assets


Non-derivative financial liabilities:
Trade and other payables
Amount owing to ultimate holding company
Hire-purchase payables
Borrowings
Total undiscounted non-derivative financial liabilities
Total net undiscounted non-derivative
financial assets/(liabilities)

129

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

On demand or
within 1 year
RM

1 year
to 5 years
RM

Over
5 years
RM

Total
RM

5,370

5,370

133,841,597

133,841,597

44,000

44,000

20,330,169

20,330,169

25,488,494

25,488,494

179,709,630

179,709,630

Trade and other payables

7,826,994

7,826,994

Amount owing to ultimate holding company

5,917,755

5,917,755

Total undiscounted non-derivative financial liabilities

13,744,749

13,744,749

Total net undiscounted non-derivative financial assets

165,964,881

165,964,881

123,170

123,170

Amount owing by subsidiaries

64,911,665

64,911,665

Cash and cash equivalents

30,077,748

30,077,748

15,047,654

15,447,383

30,495,037

110,160,237

15,447,383

125,607,620

206,709

206,709

Amount owing to subsidiaries

9,188,896

9,188,896

Total undiscounted non-derivative financial liabilities

9,395,605

9,395,605

100,764,632

15,447,383

116,212,015

The Company
2014
Non-derivative financial assets :
Trade and other receivables
Amount owing by subsidiaries
Amount owing by associates
Cash and cash equivalents
Available-for-sale :
Other investments - quoted unit trusts
Total undiscounted non-derivative financial assets
Non-derivative financial liabilities :

The Company
2013
Non-derivative financial assets :
Trade and other receivables

Available-for-sale :
Other investments - quoted unit trusts
Total undiscounted non-derivative financial assets
Non-derivative financial liabilities :
Trade and other payables

Total net undiscounted non-derivative financial assets

The Group and the Company have not committed to any derivative financial instruments during the financial year.

(d) Capital Risk Management


The Group and the Company manage their capital to ensure the Group and the Company will be able to continue as going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Groups and the Companys overall strategy remain
unchanged from 2013.
The capital structure of the Group and of the Company consists of net debt and equity of the Group and of the Company.

130

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Fair Values of Financial Assets and Financial Liabilities


Financial Instruments Carried at Amortised Cost
The fair value of long-term financial assets and liabilities are determined by the present value of future cash flows estimated and discounted using the
current interest rates for similar instruments at the end of the reporting date. There is no material difference between the fair values and carrying values
of these assets and liabilities as of the reporting period.
The carrying amounts of short-term financial assets and financial liabilities approximate their respective fair values due to the relatively short-term
maturity of these financial instruments.
The fair values of investments on unquoted shares are not established as it cannot be measured reliably without incurring excessive cost. Investment in
unquoted shares are measured at cost. The Group intends to hold the unquoted investments on a long-term basis.
The fair values of hire-purchase payables and borrowings are included in Level 2 category of the fair value hierarchy in accordance with MFRS 7
Financial Instruments: Disclosure and have been estimated using discounted cash flow analysis based on the current borrowing rates for similar types of
hire-purchase and borrowings arrangements and approximate their carrying amounts.
The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to the financial statements.

38. Statements of Cash Flows


(a) Purchase of property, plant and equipment
Property, plant and equipment were acquired by the following means:

Cash purchase
Amount owing to trade and other payables
Advance payment for acquisition of property,
plant and equipment in previous year
Trade-in

Year Ended
31.3.2014
(12 Months)
RM

The Group
Period Ended
31.3.2013
(15 Months)
RM

The Company
Year Ended
Period Ended
31.3.2014
31.3.2013
(12 Months)
(15 Months)
RM
RM

17,365,805

63,681,693

98,594

1,595,692

2,615,680

4,089,436

10,823

13,775

174,228

2,034,065

13,000

20,155,713

69,818,194

109,417

1,609,467

The principal amounts of instalment repayments for property, plant and equipment acquired by hire-purchase are reflected as cash outflows from
financing activities.
(b) Cash and cash equivalents
For the purposes of the statements of cash flows, cash and cash equivalents include fixed deposits, short-term investment funds and cash and bank
balances. Cash and cash equivalents at the end of the reporting period as shown in the statements of cash flows can be reconciled to the related items
in the statements of financial position as follows:
The Group
2013
RM

788,806

2,559,131

Short-term investment funds

69,250,378

69,293,747

19,764,867

29,235,842

Cash and bank balances

29,844,736

14,374,275

81,062

108,086

99,883,920

86,227,153

19,845,929

29,343,928

(788,806)

(2,559,131)

99,095,114

83,668,022

19,845,929

29,343,928

Fixed deposits

Less : Fixed deposits held on lien to local licensed banks

131

The Company
2014
2013
RM
RM

2014
RM

Notes to
The Financial
Statements

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

39. Operating Lease Arrangements


Operating lease for the Group relates to leases of offices, outlets, billboards, factory, warehouses, hostels and kitchen equipment with average term of
1.5 to 3 years (2013: 1 to 3 years).
In 2013, operating lease for the Company relates to leases of office with average term of 2 years.
All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew.
The lessee does not have an option to purchase the leased offices, outlets, billboards, factory, warehouses, hostels and kitchen equipment at the expiry
of the lease period.
Payment recognised as an expense:
The Group

Minimum lease payments

2014
RM

2013
RM

11,197,397

24,855,998

The Company
2014
2013
RM
RM
-

60,000

Non-cancellable operating lease commitments are as follows:


The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

Within one year

9,798,503

12,947,536

4,000

In the second to fifth year inclusive

6,671,787

12,331,408

15,710

16,470,290

25,294,654

4,000

After five years

40. Capital Commitments


As of March 31, 2014, the Group and the Company have the following capital expenditure in respect of property, plant and equipment:
The Group

Approved and contracted for


Approved but not contracted for

132

The Company
2014
2013
RM
RM

2014
RM

2013
RM

368,548

5,212,276

204,660

310,927

916,047

368,548

6,128,323

204,660

310,927

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

41. Subsequent Event


A wholly foreign owned enterprise (WFOE), Shenzhen OldTown White Coffee Trading Co., Ltd. with a registered capital of USD1,000,000 in the territory
of Shenzhen, Peoples Republic of China was incorporated on July 21, 2014. The WFOE is a wholly-owned subsidiary of Advance City Limited, a
subsidiary of Oldtown Berhad.

42. Supplementary Information - Disclosure on Realised and Unrealised Profits or Losses


The breakdown of the retained earnings of the Group and of the Company as of March 31, 2014 into realised and unrealised profits or losses, pursuant
to the directive issued by Bursa Malaysia Securities Berhad on March 25, 2010, is as follows
The Group

The Company
2014
2013
RM
RM

2014
RM

2013
RM

134,415,997

140,262,374

2,298,506

1,074,751

(2,150,198)

852,117

(27,228)

190,642

71,262

54,447

132,309,833

141,359,580

2,298,506

1,074,751

(38,513,700)

(21,425,170)

93,796,133

119,934,410

2,298,506

1,074,751

Total retained earnings of the Company and


its subsidiaries
Realised
Unrealised
Total share of retained earnings from associates
Realised
Unrealised
Add: Consolidation adjustments
Total retained earnings as per statements of
financial position

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 Determination of Realised and Unrealised
Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements as issued by the Malaysian Institute of Accountants on
December 20, 2010.
This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directives of Bursa Malaysia
Securities Berhad and is not made for any other purposes.

133

OLDTOWN BERHAD (797771-M)

Statement by
Directors

(Incorporated in Malaysia)

The directors of OLDTOWN BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a
true and fair view of the financial position of the Group and of the Company as of March 31, 2014 and of the financial performance and the cash flows of
the Group and of the Company for the year ended on that date.
The supplementary information set out in Note 42, which is not part of the financial statements, is prepared in all material respects, in accordance with
Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.
Signed in accordance with a resolution of the Directors,
DATUK DR. AHMED TASIR BIN LOPE PIHIE,
PJN, PMP, JSM, FASc
MR. LEE SIEW HENG
Ipoh,
July 23, 2014

Declaration By
The Officer Primarily
Responsible For
The Financial
Management of
The Company

I, MS. CHAO KAR PO, the officer primarily responsible for the financial management of OLDTOWN BERHAD, do solemnly and sincerely declare that the
accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by
virtue of the provisions of the Statutory Declarations Act, 1960.
MS. CHAO KAR PO
Subscribed and solemnly declared by the abovenamed MS. CHAO KAR PO at IPOH this 23rd day of July, 2014.
Before me,
WILSON ARUMI DHAS (A182)
COMMISSIONER FOR OATHS

134

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

(Incorporated in Malaysia)

Title/Location

A-5-4, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya,
Selangor Darul Ehsan.

List of
Properties
Owned by
Oldtown Group

Tenure

Approximate
Age of
Building
(Years)

Audited Net
Book Value
(RM)

Date of
Revaluation/
*Date of
Acquisition

Freehold

13 years

138,380

07.01.2011*

Built-up
area : 818

Freehold

13 years

143,055

03.01.2011*

Apartment used as
accommodation
for factory staff

Built-up
area : 818

Freehold

13 years

154,275

25.01.2011*

Apartment used as
accommodation
for factory staff

Built-up
area : 818

Freehold

13 years

201,242

06.12.2012*

Apartment used as
accommodation
for factory staff

Built- up
area : 818

Freehold

13 years

144,925

04.01.2011*

Apartment used as
accommodation
for factory staff

Built-up
area: 818

Freehold

13 years

144,925

04.01.2011*

Description and
Existing Use/
Number of storey

Land Area/
Built up Area
(Sq feet)

Apartment used as
accommodation
for factory staff

Built-up
area : 818

Apartment used as
accommodation
for factory staff

This apartment is held under strata title


Geran 52283/M1/5/154,
Lot No. 49175, District of Petaling,
Town of Subang Jaya,
State of Selangor.
2

B-4-4, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya,
Selangor Darul Ehsan.
This apartment is held under strata title
Geran 52283/M1/4/131,
Lot No. 49175, District of Petaling,
Town of Subang Jaya,
State of Selangor.

C-3-7, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya,
Selangor Darul Ehsan.
This apartment is held under strata title
Geran 52283/M1/3/108,
Lot No. 49175, District of Petaling,
Town of Subang Jaya,
State of Selangor.

C-5-3, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya
Selangor Darul Ehsan.
This apartment is held under strata title
Geran 52283/M1/5/186,
Lot No. 49175 District of Petaling,
Town of Subang Jaya,
State of Selangor.

C-8-8, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya,
Selangor Darul Ehsan.
This apartment is held under strata title
Geran 52283/M1-B/8/229,
Lot No. 49175, District of Petaling,
Town of Subang Jaya,
State of Selangor.

C-8-10, Fairville Apartment,


Jalan USJ 22/1,
47630 UEP Subang Jaya,
Selangor Darul Ehsan.
This apartment is held under strata title
Geran 52283/M1-B/8/231,
Lot No. 49175, District of Petaling,
Town of Subang Jaya,
State of Selangor.

135

List of
Properties
Owned by
Oldtown Group

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Title/Location

No. 21, Lebuh Bercham (S) 2/8,


Kawasan Perindustrian Bercham,
31400 Ipoh, Perak Darul Ridzuan .

Approximate
Age of Building
(Years)

Audited Net
Book Value
(RM)

Date of
Revaluation/
*Date of
Acquisition

Leasehold of
60 years,
expiring on
29.03.2052

17 years

227,565

10.02.2009*

2,399 /
2,400

Leasehold of
60 years,
expiring on
29.03.2052

17 years

210,598

04.05.2006*

The land is vacant.


A portion of the
land was leased to
Tenaga Nasional
Berhad for a period
of 30 years expiring
on 14.02.2026

Land area:
21,466

Leasehold of
99 years,
expiring on
17.04.2093

N/A

367,488

18.08.2006*

This land is vacant

Land area:
59,656

Leasehold of
99 years,
expiring on
09.12.2107

N/A

6,061,047

18.05.2010*

Description and
Existing Use/
Number of storey

Land Area/
Built up Area
(Sq feet)

Factory and office /


1 storey

2,399 /
2,400

Factory and office /


1 storey

The 1 storey factory and office is held


under individual title PN 287301, Lot
195649 (previously held under H.S.(D)
70419 PT 115157) in the Mukim of
Hulu Kinta, District of Kinta,
State of Perak Darul Ridzuan.
8

No. 19, Lebuh Bercham (S) 2/8,


Kawasan Perindustrian Bercham,
31400 Ipoh, Perak Darul Ridzuan.
The 1 storey factory and office is held
under individual title PN 287302, Lot
195650 (previously held under H.S.(D)
70420 PT115158) in the Mukim of
Hulu Kinta, District of Kinta,
State of Perak Darul Ridzuan.

Lot 212152 (previously known as PT


126279), Persiaran Tasek Timur 7,
Taman Medan Bercham, 31400 Ipoh,
Perak Darul Ridzuan.
The vacant land is held under individual
title PN346134 Lot 212152 (previously
held under H.S.(D) 33231, PT 126279) in
the Mukim of Hulu Kinta, District of Kinta,
State of Perak Darul Ridzuan.

10

PT77647, Kampung Batu 13 1/2 Puchong,


47150 Puchong, Selangor Darul Ehsan.
This property which is held under individual
title H.S.(M) 30242, PT 77647 Kampung
Batu 13 Puchong in the Mukim and
District of Petaling,
State of Selangor Darul Ehsan.

11

No. 166, Jalan Labrooy, Taman Merdeka,


30100 Ipoh, Perak, held under land issue
document of title described as Pajakan
Negeri No. Hakmilik 145225 for Lot 8053U
in Bandar Ipoh (U), Daerah Kinta,
Negeri Perak.

A double storey
bungalow rented to
a Children Home
for RM1 per month /
2 storeys

5,595 /
4,064

Leasehold of
999 years,
expiring on
28.09.2894

8 years

680,000

31.03.2014

12

No.72, Solok Pendamar Indah 1, Tmn


Pendamar Indah, 42000 Port Klang,
Selangor Darul Ehsan.

The ground floor


of the 3 storey
shop office is used
to operate an
OLDTOWN WHITE
COFFEE cafe outlet.
The first and second
floors of the 3
storeys shop office
are rented to a
private entity /
3 storeys

2,830 /
8,365

Freehold

5 years

1,347,202

15.10.2009

The 3 storey shop office is held under


individual title GRN 279149, Lot 123298
(previously held under H.S.(D) 113157, PT
114925), in the Mukim of Klang,
District of Klang,
State of Selangor Darul Ehsan.

136

Tenure

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Title/Location

13

No. 70, Solok Pendamar Indah 1,


Tmn Pendamar Indah, 42000 Port Klang,
Selangor Darul Ehsan.
The 3 storey shop office is held under
individual title GRN 279150, Lot 123299
(previously held under H.S (D) 113158, PT
114926), in the Mukim of Klang, District of
Klang, State of Selangor Darul Ehsan.

14

No. 55, 55-1, and 55-2,


Jalan Rampai Niaga 5, Medan Niaga
Rampai, 53300 Kuala Lumpur.
The 3 storey shop office is held under
individual title Pajakan Negeri (WP) No.
Hakmilik : 49982 Lot 200210 (formerly
known as H.S.(D) 117765 PT No 9138)
in the Mukim of Setapak, District of Kuala
Lumpur, Negeri Wilayah Persekutuan KL.

15

No. 34 & 34A, Persiaran Kuala Kangsar 1,


Taman Wing Onn, Kuala Kangsar Road,
30010 Ipoh, Perak.
The double storey shoplot forms part of
a shop/commercial building development
which is situated under the master titles
PN 286717 Lot 6102U;
PN 286720 Lot 6103U;
PN 286721 Lot 6104U;
PN 286723 Lot 6105U;
PN 286725 Lot 6106U;
PN 286731 Lot 6107U;
PN 286733 Lot 6108U;
PN 286991 Lot 6142U;
PN 286992 Lot 6143U;
PN 286993 Lot 6144U;
Part of PN 286735 Lot 6109U and
Part of PN 286994 Lot 6145U all in
Bandar Ipoh (U) Daerah Kinta, Negeri Perak.

16

No. 32 & 32A, Persiaran Kuala Kangsar 1,


Taman Wing Onn, Kuala Kangsar Road,
30010 Ipoh, Perak.
The double storey shoplot forms part of
a shop/commercial building development
which is situated under the master titles
PN 286717 Lot 6102U;
PN 286720 Lot 6103U;
PN 286721 Lot 6104U;
PN 286723 Lot 6105U;
PN 286725 Lot 6106U;
PN 286731 Lot 6107U;
PN 286733 Lot 6108U;
PN 286991 Lot 6142U;
PN 286992 Lot 6143U;
PN 286993 Lot 6144U;
Part of PN 286735 Lot 6109U and
Part of PN 286994 Lot 6145U all in Bandar
Ipoh (U) Daerah Kinta,
Negeri Perak.

137

Tenure

Approximate
Age of Building
(Years)

Audited Net
Book Value
(RM)

Date of
Revaluation/
*Date of
Acquisition

Freehold

5 years

1,000,000

31.03.2014

4,767/
12,854

Leasehold of
of 99 years
expiring on
28.03.2106

5 years

3,218,642

30.04.2009

As at 31.03.2014,
the shop office was
under construction.
It is planned to be
used to operate an
OLDTOWN WHITE
COFFEE cafe outlet /
2 storeys

Built-up
area :
4,147

Leasehold of
999 years,
expiring on
30.12.2896

Less than
1 year

1,562,980

21.09.2012*

As at 31.03.2014,
the shop office was
under construction.
It is planned to be
rented out /
2 storeys

Built-up
area:
3,160

Leasehold of
999 years,
expiring on
30.12.2896

Less than
1 year

887,210

21.09.2012*

Description and
Existing Use/
Number of storey

Land Area/
Built up Area
(Sq feet)

The ground, first and


second floors of the
3 storey shop office
are rented to private
entities /
3 storeys

1,399 /
4,168

The ground and first


floor of the 3 storey
shop office are used
to operate OLDTOWN
WHITE COFFEE cafe
outlet. The second
floor is for general use
and storage purposes
in relation to the
operation of the said
cafe outlet /
3 storeys

List of
Properties
Owned by
Oldtown Group

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Title/Location

17

No. 2, Jalan Portland,


Kawasan Perindustrian Tasek,
31400 Ipoh, Perak Darul Ridzuan.
The Industrial Complex consisting of
a 3 storey detached office, a 2 storey
recreation block and canteen, a 2 storey
detached factory, a single storey detached
warehouse and some ancillary structures,
is held under individual title Pajakan Negeri
No. Hakmilik 2864, Lot No. 60178 in the
Mukim of Hulu Kinta,
State of Perak Darul Ridzuan.

18

No. 11, Persiaran Industri Rapat 2,


Kawasan Perindustrian Sri Rapat,
31350 Ipoh, Perak Darul Ridzuan.

Approximate
Age of Building
(Years)

Audited Net
Book Value
(RM)

Date of
Revaluation/
*Date of
Acquisition

Leasehold of
99 years
expiring on
01.07.2072

1 year

50,769,824

09.01.2013

10,491 /
9,770

Leasehold of
99 years,
expiring on
04.07.2094

17 years

760,000

31.03.2014

Factory
and office /
1 storeys

10,491 /
7,780

Leasehold of
99 years,
expiring on
04.07.2094

17 years

730,000

31.03.2014

The factory was


vacant in April 2014
since relocation of
all its operation to
the new Factory
in Tasek Ipoh and
has since been
used for storage of
machinery /
4 storeys

10,168 /
40,507

Leasehold of
99 years,
expiring on
27.04.2088

22 years

1,253,164

27.07.2005*

Description and
Existing Use/
Number of storey

Land Area/
Built up Area
(Sq feet)

Office,
recreation block
and canteen,
factory,
warehouse /
3 storeys
2 storeys
2 storeys
1 storey

391,923 /
207,549

Factory and office /


1 storeys

The 1 storey semi-detached factory and


office is held under individual title
PN 350435 Lot 221579 (formerly known
as H.S(D) 41503, PT 132753), in the
Mukim of Hulu Kinta, District of Kinta,
State of Perak Darul Ridzuan.
19

No. 13, Persiaran Industri Rapat 2,


Kawasan Perindustrian Sri Rapat,
31350 Ipoh, Perak Darul Ridzuan.
The 1 storey semi-detached factory and
office is held under individual title
PN 350434 Lot 221578 (formerly known
as H.S(D) 41502, PT 132752), in the
Mukim of Hulu Kinta, District of Kinta,
State of Perak Darul Ridzuan.

20

No. 1, Persiaran Tasek Timur 6,


Taman Medan Bercham, 31400 Ipoh,
Perak Darul Ridzuan.
The 4 storey factory and office is held
under the following individual titles:
a) PN 296889, Lot 179748
(previously held under H.S(D) 3733);
b) PN 296887, Lot 179747
(previously held under H.S(D) 3732);
c) PN 296890, Lot 179749
(previously held under H.S(D) 3734);
d) PN 296891, Lot 179750
(previously held under H.S(D) 3735); and
e) PN 296892, Lot 179751
(previously held under H.S(D) 3736)
All in the Mukim of Hulu Kinta, District of
Kinta, State of Perak Darul Ridzuan.

138

Tenure

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

21

Approximate
Age of Building
(Years)

Audited Net
Book Value
(RM)

Date of
Revaluation/
*Date of
Acquisition

Leasehold of
99 years,
expiring on
22.05.2089

2 years

251,767

28.06.2012*

1,539 /
1,859

Leasehold of
99 years,
expiring on
22.05.2089

2 years

195,877

16.01.2012*

Used as Staff
Accommodation

1,539 /
1,859

Leasehold of
99 years,
expiring on
22.05.2089

2 years

195,877

16.01.2012*

Used as Staff
Accommodation

1,539 /
1,859

Leasehold of
99 years,
expiring on
22.05.2089

2 years

195,877

16.01.2012*

The shop lot is


rented out to a
private entity /
1 storey

Built up area:
600

Freehold

17 years

720,000

31.03.2014

Title/Location

Description and
Existing Use/
Number of storey

Land Area/
Built up Area
(Sq feet)

No. 1, Jalan Tasek Lama, Taman Tasek,


31400 Ipoh, Perak Darul Ridzuan.

Used as Staff
Accommodation

2,830 /
2,482

Used as Staff
Accommodation

This double storey terrace house is held


under individual title Pajakan Negeri
127287, Lot 177851, in the Mukim of
Hulu Kinta, Daerah Kinta, Negeri Perak
Darul Ridzuan.
22

No. 3, Jalan Tasek Lama, Taman Tasek,


31400 Ipoh, Perak Darul Ridzuan.
This double storey terrace house is held
under individual title Pajakan Negeri
127285, Lot 177852,in the Mukim of
Hulu Kinta, Daerah Kinta, Negeri Perak
Darul Ridzuan.

23

No. 5, Jalan Tasek Lama, Taman Tasek,


31400 Ipoh, Perak Darul Ridzuan.
This double storey terrace house is held
under individual title Pajakan Negeri
127286, Lot 177853, in the Mukim of
Hulu Kinta, Daerah Kinta, Negeri Perak
Darul Ridzuan.

24

No. 7, Jalan Tasek Lama, Taman Tasek,


31400 Ipoh, Perak Darul Ridzuan.
This double storey terrace house is held
under individual title Pajakan Negeri
127287, Lot 177854, in the Mukim of
Hulu Kinta, Daerah Kinta, Negeri Perak
Darul Ridzuan.

25

Lot No. 3A-G-26, Kompleks Bukit Jambul,


Jalan Rumbia, 11900 Bayan Lepas,
Penang.
The 1 storey shop lot, forms part of a
complex known as Kompleks Bukit Jambul,
which is situated under parent lot title
GRN 61275, Lot 9954 in the Mukim 13,
District of Timor Laut, State of Penang.
The property has yet to be issued with an
individual strata title.

139

Tenure

Analysis of
Shareholdings

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

as at 10 July 2014

SHARE CAPITAL
Authorised Share Capital

RM500,000,000

Issued and paid-up share capital

RM453,597,242

Class of Shares

Ordinary shares of RM1.00 each

Voting rights

One (1) vote per ordinary share

ANALYSIS OF SHAREHOLDINGS
Size of
Shareholdings

Less than 100


100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to 22,649,111
(less than 5% of the issued share capital)
22,649,112
( 5% of the issued shares) and above
Total

No of
Shareholders

No of
Shares Held

% of Issued Share
Capital*

89
487
2,577
741
160

2.19
12.00
63.52
18.26
3.94

3,797
276,923
10,397,874
19,586,477
175,034,396

0.00
0.06
2.30
4.32
38.64

3
4,057

0.07
100

247,682,775
452,982,242

54.68
100.00

SUBSTANTIAL SHAREHOLDERS
As per the Register of Substantial Shareholders
Direct Interest

Indirect Interest

No of
Shares Held

% of Issued
Share Capital*

No of
Shares Held

% of Issued
Share Capital*

197,258,500
6,250,000
375,000
32,276,600
30,137,050
24,169,725
23,527,950

43.55
1.38
0.08
7.13
6.65
5.34
5.19

197,258,500 (1)
197,258,500 (1)
197,296,000 (2)
-

43.55
43.55
43.55
-

Name

No of
Shares Held

% of Issued
Share Capital*

No of
Shares Held

% of Issued
Share Capital*

Datuk Dr. Ahmed Tasir Bin Lope Pihie


Lee Siew Heng
Mark Wing Kong
Clarence DSilva A/L Leon DSilva
Goh Ching Mun
Tan Say Yap

25,000
6,250,000
62,500
125,000
375,000
465,937

0.01
1.38
0.01
0.03
0.08
0.10

197,258,500 (1)
197,258,500 (1)
-

43.55
43.55
-

Name

Old Town International Sdn Bhd


Lee Siew Heng
Goh Ching Mun
Lee Siew Ming
Franklin Resources, Inc
Mawer Investment Management Ltd.
Artisan International Small Cap Fund
Matthews International Capital Management, LLC

DIRECTORS INTEREST IN SHARES


As per the Register of Directors Shareholdings
Direct Interest

Indirect Interest

Notes:1) Deemed interested by virtue of their shareholdings in Old Town International Sdn Bhd , pursuant to Section 6A of the Companies Act, 1965
2) Deemed interested by virtue of their shareholdings in Old Town International Sdn Bhd, Conneczone Puchong Sdn Bhd and Carefree Avenue Sdn Bhd pursuant to Section
6A of the Companies Act, 1965
* Calculated based on 452,982,242 shares, which does not include 615,000 treasury shares

140

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

Top Thirty Security Account Holders


(without aggregating the securities from different securities accounts belonging to the same Depositor )

141

NAME

No of
Shares Held

% of Issued
Share Capital*

OLD TOWN INTERNATIONAL SDN. BHD.

189,886,000

41.92

CARTABAN NOMINEES (ASING) SDN BHD


EXEMPT AN FOR RBC INVESTOR SERVICES TRUST (CLIENTS ACCOUNT)

33,627,050

7.42

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


SSBT FUND A56A FOR ARTISAN INTERNATIONAL SMALL CAP FUND

24,169,725

5.34

HSBC NOMINEES (ASING) SDN BHD


EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (U.S.A.)

10,911,250

2.41

HSBC NOMINEES (ASING) SDN BHD


EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (NORGES BK)

10,322,275

2.28

HSBC NOMINEES (ASING) SDN BHD


BBH AND CO BOSTON FOR MATTHEWS ASIA GROWTH FUND

9,908,125

2.19

HSBC NOMINEES (ASING) SDN BHD


BBH AND CO BOSTON FOR MATTHEWS ASIA SMALL COMPANIES FUND

7,800,125

1.72

OLD TOWN INTERNATIONAL SDN. BHD.

7,372,500

1.63

HSBC NOMINEES (ASING) SDN BHD


EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (SWEDEN)

7,000,000

1.55

10

LEE SIEW HENG

6,250,000

1.38

11

HSBC NOMINEES (ASING) SDN BHD


EXEMPT AN FOR J.P. MORGAN BANK LUXEMBOURG S.A.

5,669,200

1.25

12

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


STATE STREET LUXEMBOURG FUND OD85 FOR ABN AMRO MULTI-MANAGER FUNDS

4,731,000

1.04

13

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


SSBT FUND A73A FOR ARTISAN GLOBAL SMALL CAP FUND

4,636,475

1.02

14

AMANAHRAYA TRUSTEES BERHAD


PUBLIC SMALLCAP FUND

4,328,375

0.96

15

CITIGROUP NOMINEES (TEMPATAN) SDN BHD


EMPLOYEES PROVIDENT FUND BOARD (F TEMPLETON)

4,288,600

0.95

16

UOBM NOMINEES (ASING) SDN BHD


BANQUE DE LUXEMBOURG FOR BL EMERGING MARKETS

4,000,000

0.88

17

HSBC NOMINEES (ASING) SDN BHD


TNTC FOR DRIEHAUS EMERGING MARKET SMALL CAP GROWTH FUND

3,516,650

0.78

18

CIMSEC NOMINEES (TEMPATAN) SDN BHD


CIMB BANK FOR GOH SIN BONG (MP0081)

3,453,200

0.76

19

CITIGROUP NOMINEES (ASING) SDN BHD


CBLDN FOR POHJOLA BANK PLC (CLIENT AC-EUR)

3,019,400

0.67

20

HONG LEONG ASSURANCE BERHAD


AS BENEFICIAL OWNER (UNITLINKED GF)

3,000,000

0.66

Analysis of
Shareholdings

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

as at 10 July 2014

Top Thirty Security Account Holders


(without aggregating the securities from different securities accounts belonging to the same Depositor )

NAME

% of Issued Share
Capital*

21

HSBC NOMINEES (ASING) SDN BHD


TNTC FOR LOCKHEED MARTIN CORPORATION MASTER RETIREMENT TRUST

2,836,025

0.63

22

DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD


EXEMPT AN FOR KUMPULAN SENTIASA CEMERLANG SDN BHD (TSTAC/CLNT)

2,711,800

0.60

23

CITIGROUP NOMINEES (ASING) SDN BHD


CBNY FOR FORWARD INTERNATIONAL DIVIDEND FUND

2,684,300

0.59

24

HSBC NOMINEES (ASING) SDN BHD


SG NANTES FOR THE W & W SOUTH EAST ASIAN EQUITY FUND

2,126,875

0.47

25

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


SSBT FUND W4B0 FOR WASATCH INTERNATIONAL OPPORTUNITIES FUND

2,020,362

0.45

26

CITIGROUP NOMINEES (ASING) SDN BHD


CBNY FOR FORWARD SELECT EM DIVIDEND FUND

2,013,628

0.44

27

AMANAHRAYA TRUSTEES BERHAD


AFFIN SELECT GROWTH FUND

1,956,200

0.43

28

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


STATE STREET MUNICH FUND U7OM FOR DEUTSCHE ASSET AND
WEALTH MANAGEMENT INVESTMENT GMBH FOR OP EAST ASIA

1,901,500

0.42

29

DB (MALAYSIA) NOMINEE (ASING) SDN BHD


SSBT FUND W4A9 FOR WASATCH MICRO CAP VALUE FUND

1,875,000

0.41

30

HLB NOMINEES (TEMPATAN) SDN BHD


PLEDGED SECURITIES ACCOUNT FOR LEE CHIAH CHEANG

1,842,500

0.41

369,858,140

81.65

Total

142

No of
Shares Held

OLDTOWN BERHAD (797771-M)

OLDTOWN BERHAD (797771-M)

(Incorporated in Malaysia)

(Incorporated in Malaysia)

Notice of
Annual General
Meeting

NOTICE IS HEREBY GIVEN THAT the Sixth (6th) Annual General Meeting (AGM) of Oldtown Berhad (Oldtown or the Company) will be held at Impiana
Hotel, Ballroom 1 & 2, 18 Jalan Raja Dr Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on Wednesday, 10 September 2014 at 10.30 a.m. to transact the
following businesses:-

Agenda
As Ordinary Business
1. To receive the Audited Financial Statements for the financial year ended 31 March
2014 together with the Reports of the Directors and Independent Auditors thereon.

(Please refer to Explanatory Note 1)

2. To approve the payment of a final dividend of 3 sen per share under the single-tier
system in respect of the financial year ended 31 March 2014.

Ordinary Resolution 1

3. To approve the payment of Directors fees of RM153,000 for the financial year
ended 31 March 2014.

Ordinary Resolution 2

4. To re-elect the following Directors who retire pursuant to Article 84 of the


Companys Articles of Association:

(a) Datuk Dr. Ahmed Tasir Bin Lope Pihie

Ordinary Resolution 3

(b) Lee Siew Heng

Ordinary Resolution 4

(c) Goh Ching Mun

Ordinary Resolution 5

5. To re-elect Dato Wong Guang Seng who retires pursuant to Article 91 of the
Companys Articles of Association.

Ordinary Resolution 6

6. To re-appoint Messrs Deloitte as Auditors of the Company and to authorise the


Directors to fix their remuneration.

Ordinary Resolution 7

As Special Business:
To consider and if thought fit, to pass the following resolutions:7. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D
OF THE COMPANIES ACT, 1965
THAT subject always to the Companies Act, 1965 (the Act), the Articles of
Association of the Company and the approvals of the relevant governmental/
regulatory authorities, the Directors be and are hereby empowered pursuant to
Section 132D of the Act, to allot and issue shares in the capital of the Company
from time to time at such price, upon such terms and conditions, for such
purposes and to such person or persons whomsoever the Directors may in their
absolute discretion deem fit provided that the aggregate number of shares to be
issued pursuant to this Resolution does not exceed ten percent (10%) of the total
issued share capital of the Company for the time being, AND THAT the Directors
be and are hereby also empowered to obtain the approval for the listing of and
quotation for the additional shares so issued on Bursa Malaysia Securities Berhad
(Bursa Securities) AND THAT such authority shall continue to be in force until
the conclusion of the next AGM of the Company.

143

Ordinary Resolution 8

Notice of
Annual General
Meeting

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

8. PROPOSED RENEWAL OF SHAREHOLDERS MANDATE AND PROPOSED NEW


SHAREHOLDERS MANDATE FOR THE COMPANY AND/OR ITS SUBSIDIARIES
TO ENTER INTO RECURRENT RELATED PARTY TRANSACTIONS OF A
REVENUE OR TRADING NATURE WITH RELATED PARTIES (PROPOSED
RRPT MANDATES)
THAT subject to Paragraph 10.09 Part E of the Main Market Listing Requirements
of Bursa Securities, approval be and is hereby given to the Company and/or its
subsidiaries to enter into recurrent related party transactions (RRPT) of a revenue
or trading nature with the Related Parties as set out in Appendix II and Appendix
III of the Circular to Shareholders dated 19 August 2014, subject to the following:
(i) the RRPT are:
(a) necessary for the day-to-day operations;
(b) undertaken in the ordinary course of business and at arms length basis
and are on terms not more favourable to the related parties than those
generally available to the public; and
(c) are not detrimental to the minority shareholders of the Company; and
(ii) the disclosure is made in the Annual Report of the Company of the aggregate
value of the RRPT based on the type of transactions, the names of the Related
Parties and their relationships with the Company pursuant to the Proposed
RRPT Mandates during the financial year and in the Annual Report of the
Company in the subsequent years during which the Proposed RRPT Mandates
is in force; and
(iii) the Proposed RRPT Mandates is subject to annual renewal and will continue to
be in full force until:
(a) the conclusion of the next AGM of the Company following this AGM at
which such Proposed RRPT Mandates was passed, at which time it will
lapse, unless by a resolution passed at the meeting, the authority is
renewed;
(b) the expiration of the period within which the next AGM after that date is
required to be held pursuant to Section 143(1) of the Act (but must not
extend to such extension as may be allowed pursuant to Section 143(2) of
the Act); or
(c) revoked or varied by a resolution passed by the shareholders in general
meeting,

whichever is earlier.

AND THAT the Directors of the Company be authorised to complete and do all
such acts and things as they may consider expedient or necessary (including
executing all such documents as may be required) to give effect to the RRPT
contemplated and/or authorised by this resolution.

144

Ordinary Resolution 9

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

9. PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR THE AUTHORITY


TO THE COMPANY TO PURCHASE ITS OWN SHARES OF UP TO TEN PER CENT
(10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL (PROPOSED SBB
RENEWAL)
THAT subject to the Act, the Articles of Association of the Company, the Main Market
Listing Requirements of Bursa Securities and all other applicable laws, regulations
and guidelines, the Company be and is hereby authorised to purchase such number
of ordinary shares of RM1.00 each in the Company as may be determined by the
Directors of the Company from time to time through Bursa Securities upon such
terms and conditions as the Directors may deem fit and expedient in the interest of
the Company, provided that:
(i) the aggregate number of ordinary shares purchased and/or held by the Company
as treasury shares shall not exceed ten percent (10%) of the issued and paid-up
ordinary share capital of the Company at any point in time;
(ii) the funds allocated by the Company for the purpose of purchasing its shares shall
not exceed the total retained profits and share premium account of the Company;
THAT upon completion of the purchase by the Company of its own shares, the
Directors of the Company be authorised to deal with the shares purchased in their
absolute discretion in the following manner:(i) cancel all the shares so purchased; and/or
(ii) retain the shares so purchased in treasury for distribution as dividend to the
shareholders and/or resell on the market of Bursa Securities; and/or
(iii) retain part thereof as treasury shares and cancel the remainder.
THAT such authority conferred by this resolution shall commence upon the passing
of this resolution and shall continue to be in force until:
(i) the conclusion of the next AGM of the Company following this AGM at which such
resolution was passed, at which time it will lapse, unless by an ordinary resolution
passed at that meeting, the authority is renewed, either unconditionally or subject
to conditions;
(ii) the expiration of the period within which the next AGM is required by law to be
held; or
(iii) revoked or varied by an ordinary resolution passed by the shareholders of the
Company in general meeting,
whichever occurs first.
AND THAT the Directors of the Company be authorised to give effect to the Proposed
SBB Renewal with full power to assent to any modifications and/or amendments as
may be required by the relevant authorities.
10. To consider any other business of which due notice shall have been given in
accordance with the Act.

By Order Of The Board

CHAN CHEE KHEONG (MAICSA 0810287)


WONG WAI FOONG (MAICSA 7001358)
Company Secretaries
Kuala Lumpur
19 August 2014

145

Ordinary Resolution 10

Notice of
Annual General
Meeting

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

NOTES:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend and vote in his/her stead at the same
meeting. A proxy may but need not be a member of the Company and Section 149(1)(a) and (b) of the Act shall not apply to the Company.
2. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless the member specifies the proportion of his shareholdings to be represented
by each proxy. Each proxy appointed, shall represent a minimum of 100 shares held by the member.
3. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 (SICDA), it may appoint at least
one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account
(Omnibus Account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. An
exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of
SICDA.
5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation,
either under its common seal or under the hand of its attorney duly authorised.
6. The instrument appointing a proxy shall be deposited at the Share Registrar of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed
Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or at any adjournment thereof.
7. For the purpose of determining a member who shall be entitled to attend the meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd., in accordance with Article 60(c) of the Companys Articles of Association and Section 34(1) of the SICDA to issue a General Meeting Record of Depositors as at 2 September
2014. Only a depositor whose name appears on the General Meeting Record of Depositors as at 2 September 2014 shall be entitled to attend the said meeting or
appoint proxies to attend and/or vote in his/her stead.
EXPLANATORY NOTES
1. Item 1 of The Agenda - The Audited Financial Statements for The Financial Year Ended 31 March 2014 and The Reports of The Directors and
Independent Auditors Thereon

This agenda item is meant for discussion only, as the provision of Section 169(1) of the Act does not require a formal approval of the shareholders for the Audited
Financial Statements. Hence, this Agenda item is not put forward for voting.

2. Ordinary Resolution 8 - Authority to Allot and Issue Shares pursuant to Section 132D of The Companies Act, 1965

The proposed Ordinary Resolution 8 is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Companies Act, 1965. The
Ordinary Resolution, if passed, will empower the Directors of the Company, from the date of the above AGM, to allot and issue new shares of the Company up to an
amount not exceeding in total ten percent (10%) of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in
the best interest of the Company. This authority, unless earlier revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company.

The authority to issue shares pursuant to Section 132D of the Companies Act, 1965 will provide flexibility and expediency to the Company for any possible fund raising
activities involving the issuance or placement of shares to facilitate business expansion or strategic merger and acquisition opportunities involving equity deals or part
equity or to fund future investment project(s) or for working capital requirements, which the Directors of the Company consider to be in the best interest of the Company.
The approval is sought to avoid any delay and cost in convening a general meeting to approve such issuance of shares.

As at the date of this Notice, the Company did not issue any new shares pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was
approved at the Fifth AGM of the Company held on 26 September 2013 and which will lapse at the conclusion of the Sixth AGM. A renewal of this authority is being
sought at the Sixth AGM.

3. Ordinary Resolution 9 - Proposed RRPT Mandates


The proposed Ordinary Resolution 9, if passed, will provide the Company and/or its subsidiaries a mandate to enter into RRPT of a revenue or trading nature with the
Related Parties in compliance with the Main Market Listing Requirements of Bursa Securities. The mandate, unless revoked or varied by the Company at a general
meeting, will expire at the next AGM of the Company.

Detailed information of the Proposed RRPT Mandates is set out in Appendix II and Appendix III of the Circular to Shareholders dated 19 August 2014 circulated together
with this Annual Report.

4. Ordinary Resolution 10 - Proposed SBB Renewal


The proposed Ordinary Resolution 10, if passed, will give the Directors of the Company the authority to purchase the Companys own shares up to an amount not
exceeding in total ten per cent (10%) of its issued share capital at any point in time upon such terms and conditions as the Directors may deem fit in the interest of
the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company. Further information on the
Proposed SBB Renewal is set out in Section 3 of the Circular to Shareholders dated 19 August 2014 circulated together with this Annual Report.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING


(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)
There were no Directors standing for election at the forthcoming Sixth Annual General Meeting.

146

OLDTOWN BERHAD (797771-M)

CDS Account No. of authorised nominee

(Incorporated in Malaysia)

OLDTOWN BERHAD (797771-M)


(Incorporated in Malaysia)

PROXY FORM

SIXTH (6TH) ANNUAL GENERAL MEETING


I/We,

(Full name in block capitals)

NRIC No./Company No.

of

(Address)

being a Member of OLDTOWN BERHAD, hereby appoint


NRIC No.

(Full name in block capitals)

of

(Address)

or failing him/her,

(Full name in block capitals)

NRIC No.

of

(Address)

or failing him/her, *the Chairman of the meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Sixth (6th) Annual General
Meeting of the Company, to be held at Impiana Hotel, Ballroom 1 & 2, 18 Jalan Raja Dr Nazrin Shah, 30250 Ipoh, Perak Darul Ridzuan on
Wednesday, 10 September 2014, at 10.30 a.m. and, at every adjournment thereof.
*My/Our proxy is to vote as indicated below:
RESOLUTIONS

FOR

AGAINST

Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
Ordinary Resolution 10
Please indicate with an X in the spaces provided above how you wish your vote
to be casted. If no specific direction as to the voting is given, the proxy will vote
or abstain from voting at his/her discretion.
( * Strike out whichever is not desired)

Signed this

day of

The proportions of shareholdings to be represented by *my/*our proxies are as follows:-

No. of shares
Total shares held

Percentage
100%

Proxy 1

2014

Proxy 2
NOTES:

Signature/Common Seal of Member

Telephone Number of Member

147

1. A member of the Company entitled to attend and vote at the meeting


is entitled to appoint more than two (2) proxies to attend and vote in
his/her stead at the same meeting. A proxy may but need not be a
member of the Company and Section 149(1)(a) and (b) of the Act shall
not apply to the Company.
2. Where a member appoints two (2) or more proxies, the appointment
shall be invalid unless the member specifies the proportion of his
shareholdings to be represented by each proxy. Each proxy appointed,
shall represent a minimum of 100 shares held by the member.
3. Where a member of the Company is an authorized nominee as
defined under the Securities Industry (Central Depositories) Act 1991
(SICDA), it may appoint at least one (1) proxy in respect of each
securities account it holds with ordinary shares of the Company
standing to the credit of the said securities account.
4. Where a member of the Company is an exempt authorised nominee
which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (Omnibus Account), there is no
limit to the number of proxies which the exempt authorised nominee
may appoint in respect of each Omnibus Account it holds. An exempt
authorised nominee refers to an authorised nominee defined under
the SICDA which is exempted from compliance with the provisions of
subsection 25A(1) of SICDA.

5. The instrument appointing a proxy shall be in writing under the hand


of the appointor or of his attorney duly authorised in writing or if the
appointor is a corporation, either under its common seal or under the
hand of its attorney duly authorised.
6. The instrument appointing a proxy shall be deposited at the Share
Registrar of the Company at Level 17, The Gardens North Tower,
Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less
than forty-eight (48) hours before the time appointed for holding the
meeting or at any adjournment thereof.
7. For the purpose of determining a member who shall be entitled
to attend the meeting, the Company shall be requesting Bursa
Malaysia Depository Sdn. Bhd., in accordance with Article 60(c) of
the Companys Articles of Association and Section 34(1) of the SICDA
to issue a General Meeting Record of Depositors as at 2 September
2014. Only a depositor whose name appears on the General Meeting
Record of Depositors as at 2 September 2014 shall be entitled to
attend the said meeting or appoint proxies to attend and/or vote in
his/her stead.

Please fold this flap for sealing

Affix RM0.80
Stamp

The Company Secretary

OLDTOWN BERHAD (797771-M)


c/o Tricor Investor Services Sdn Bhd
Level 17, The Gardens North Tower,
Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur.

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The measure of
intelligence is the
ability to change.
Albert Einstein

Looking forward to 2015...