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OLDTOWN BERHAD(797771-M) Annual Report 2015

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II annual report 2015

OLDTOWN BERHAD (797771-M)

Incorporated in Malaysia

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 atime worth remembering. Come and enjoy the Aroma Of

Good Times with OLDTOWN White Coffee.

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2 Our Legacy Vision, Mission Statement & Business Overview

4 Group Structure

5 Corporate Information

6 Board of Directors

8 Board of Directors Profile

12 Chairmans Statement

15 Group Managing Directors Review of Operations

22 Financial Highlights

23 Sustainability & Corporate Responsibility

27 Corporate Responsibility

29 Corporate Governance Statement

37 Audit Committee Report

40 Statement On Risk Management & Internal Control

42 Additional Compliance Information

49 Financial Statements

137 List of Properties Owned by Oldtown Group

142 Analysis of Shareholdings

146 Notice of Annual General Meeting

Proxy Form

Contents

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2 annual report 2015



OurLegacy

From the day our proprietary OLDTOWN White

Coffee blend was formulated, it has been steadfastly

carried down over the years to this day. Our white

coffee are roasted and prepared according to

the original method to ensure that every cup of

OLDTOWN White Coffee imparts the same full-

bodied taste, texture and aroma year after year. Our

commitment to maintain the true essence of our

heritage has helped us to create a one-of-its-kind

brand that is renowned the world over.

To date, our white coffee products are exported to

more than 14 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 throughout Asia.

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annual report 2015 3



VisionTo be Asia Pacifics Leading White Coffee Brand

Mission StatementOUR PEOPLE :

We Believe That Our People Are Our Assets

We acknowledge and appreciate our people as those who grow

with us and for their full dedication. We value them for their

effort and what they are able to bring to the company, hence

we constantly provide a platform and opportunities for careergrowth 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 looklightly 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 continueto provide to our consumers and the community.

Business OverviewThe business activities of Oldtown Group can be divided into three

broad categories as follows:

Operation of Cafe Chain

Own Cafe Outlets*

Franchised Outlets

Food Processing

Manufacturing of coffee and other beverages

Instant Coffee Mix Roasted Coffee Powder

Instant Milk Tea Mix

Instant Chocolate

Marketing and sales of coffee and other beverages

Instant Coffee Mix

Roasted Coffee Powder

Instant Milk Tea Mix

Instant Chocolate

Ready-to-drink coffee

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

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OldTown Berhad

100% Old Town Kopitiam Sdn Bhd

100% OTK (HK) Investment Limited

50% OTK Singapore Pte Ltd

100% Dynasty Kitchen Sdn Bhd

100% Shenzhen Oldtown White

Coffee Trading Co., Ltd

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% Oldtown Singapore Pte Ltd

100%

Old Town Kopitiam

Butterworth Sdn Bhd

100% Old Town Kopitiam

Kuala Lumpur Sdn Bhd

100% Old Town Kopitiam

Cheras Sdn Bhd

100% Old Town (M) Sdn Bhd

100% Oldtown Logistics Sdn Bhd

100% Oldtown APP Sdn Bhd

80% Conneczone Sdn Bhd

70% Advance City Limited

50% Plus One Solution Sdn Bhd

40% OTK Eatery Sdn Bhd

as at 31 March 2015

GroupStructure

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Board of Directors

Board Committees

Audit Committee Remuneration Committee Nomination Committee

Dato Wong Guang SengIndependent Non-Executive

Director

Tan Chon Ing @

Tan Chong LingIndependent Non-Executive

Director

Datuk Dr. Ahmed Tasir

Bin Lope PihiePJN, PMP, JSM, FASc

Independent Non-Executive

Chairman

Lee Siew HengGroup Managing Director

Chuah Seong MengExecutive Director

Clarence DSilva A/L Leon DSilvaExecutive Director

Goh Ching MunExecutive Director

Tan Say Yap

Executive Director

Tan Chon Ing @ Tan Chong LingChairman


Bin Lope Pihie

Lee Siew Heng

Dato Wong Guang Seng

Goh Ching Mun

Dato Wong Guang SengChairman


Bin Lope Pihie

Tan Chon Ing @

Tan Chong Ling

Company Secretaries

Wong Wai Foong

(MAICSA 7001358)

Ng Bee Lian

(MAICSA 7041392)

Tan Hsiao Yuen

(MAICSA 7056952)Website

www.oldtown.com.my

Head Office

No. 2, Jalan Portland,

Kawasan Perindustrian Tasek,31400 Ipoh, Perak.

Tel : (605) 541 5511

Fax: (605) 541 2860

Stock Exchange Listing

Main Market of

Bursa Malaysia Securities Berhad

(Listed since 13 July 2011)Stock Name: OLDTOWN

Stock Code: 5201

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 3883Fax: (603) 2282 1886

Principal Bankers

CIMB Bank Berhad (13491-P)

HSBC Bank Malaysia Berhad(127776-V)

Registered Office

Level 18, The Gardens North Tower,

Mid Valley City, Lingkaran Syed Putra,

59200 Kuala Lumpur.

Tel : (603) 2264 8888

Fax: (603) 2282 2733

Statutory Auditors

Messrs. Deloitte (AF0080)

Chartered Accountants

Level 2, Weil Hotel

292, Jalan Sultan Idris Shah,

30000 Ipoh, Perak Darul Ridzuan

Tel: (605) 254 0288

Fax: (605) 254 7288


Bin Lope PihieChairman

Dato Wong Guang Seng

Tan Chon Ing @ Tan Chong Ling

CorporateInformation

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Notes:-

1. Family Relationship with Director and/or Major Shareholder

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

Oldtown Berhad.

(ii) Mr Lee Siew Heng is the brother of Mr Lee Siew Ming, a

deemed substantial shareholder of Oldtown Berhad.

Save as disclosed herein, none of the Directors has any family

relationship with any Director and/or major shareholder of

Oldtown Group.

2. Conflict of Interest

Save for related party disclosures as disclosed under Note 25

to the Audited Financial Statements of this Annual Report and

the Circular to Shareholders dated 19 August 2015 which is

despatched together with this Annual Report, the Directors haveno conflict of interest in any business arrangement with the

Company and its subsidiaries.

3. Conviction of Offences

None of the Directors has been convicted of any offence within

the past 10 years other than possible traffic offences.

4. Directors Shareholdings

The details of Directors interest in securities of the Company

are set out in the Analysis of Shareholdings on page 143 of this

Annual Report.

5. Attendance of Board Meetings

The details of attendance of Directors at the Board Meetings are

set out in the Corporate Governance Statement on page 34.

OLDTOWN BERHAD (797771-M)Incorporated in Malaysia

01.Datuk Dr. Ahmed Tasir Bin Lope Pihie

02.Lee Siew Heng

03.Tan Chon Ing @ Tan Chong Ling

04.Dato Wong Guang Seng

05.Chuah Seong Meng

06.Clarence DSilva A/L Leon DSilva

07.Goh Ching Mun

08.Tan Say Yap


BoardofDirectors

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01 0207 0405 06 0803

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Datuk Dr. Ahmed Tasir Bin Lope Pihie, a Malaysian, aged 64,

is the Independent Non-Executive Chairman of Oldtown Berhad

and was appointed to the Board on 10 November 2009. He is the

Chairman of the Nomination Committee and a member of the Audit

Committee and Remuneration Committee respectively. He holds a

Doctor of Philosophy (PhD) in Science and Technology Policy from

the University of Manchester, Master of Science in Seed Technology

from the University of Edinburgh, Scotland and a Bachelor in

Agriculture Science from the University of Malaya. He was with the

Malaysian Agricultural Research and Development Institute (MARDI)

from 1972 to 1992 and last held the post as a Director before he

left the Institute. He was the Chief Executive Officer of the Malaysia

Industry-Government Group for High Technology (MIGHT) from

1993 to 2008. He is presently the Chairman of Strand Aerospace

Malaysia Sdn Bhd; President and Director of Inno Bio Ventures Sdn

Bhd, Inno Biologics Sdn Bhd, Inno Bio Diagnostics Sdn Bhd, Director

for Universiti Kebangsaan Malaysia (UKM), MARA Aerospace &

Technologies Sdn Bhd and several private companies including A7N

Sdn Bhd and R7 Sdn Bhd.

Lee Siew Heng, a Malaysian, aged 49, 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 23 years of experience in the

manufacturing and retailing industries, of which more than 13 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.

BoardofDirectors'Profile

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Dato Wong Guang Seng, a Malaysian, aged 63 is an Independent Non-

Executive Director of Oldtown Berhad and was appointed to the Board

on 1 April 2014. He was appointed Chairman of the Audit Committee on

3 November 2014. He is also a member of the Nomination Committee

and Remuneration Committee. 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 Certied 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 41 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.

Tan Chon Ing @ Tan Chong Ling, a Malaysian, aged 54, is an

Independent Non-Executive Director of Oldtown Berhad and was

appointed to the Board on 7 November 2012. He is the Chairman of the

Remuneration Committee and is a member of the Audit Committee and

Nomination Committee of Oldtown Berhad. He graduated with a honours

degree in Bachelor of Civil Engineering from the National University of

Singapore in 1985. He joined WTS Konsultant in Kuching from 1985

to 1990 as a Civil Engineer. He was the Managing Director of Uomo

Donna Sarawak Sdn Bhd from 1991 to 1993 and was appointed Chief

Executive Ofcer of PT Indoscala, Indonesia, a wholesaler and retailer

of ladies apparel, from 1993 to 1996. He is a business entrepreneur

with more than 18 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 13 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.

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Clarence DSilva A/L Leon DSilva, a Malaysian, aged 54, is an Executive

Director of Oldtown Berhad and was appointed to the Board on 10

November 2009. He has over a span of 32 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.

Chuah Seong Meng, a Malaysian, aged 40, 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 17 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 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.

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Goh Ching Mun, a Malaysian, aged 44, is an Executive Director of

Oldtown Berhad and was appointed to the Board on 30 November 2007.

He is also a member of the Remuneration Committee. He completed his

secondary education in 1988. As the co-founder of Oldtown Group of

Companies, he has accumulated more than 22 years of experience in

the coffee manufacturing industry. His career started in 1983 when he

was involved in the family business of operating the Nam Heong Coffee

Shop in Ipoh. Subsequently in 1999, he co-founded and established

White Cafe Sdn Bhd where he was appointed Product Research and

Development Director and was then responsible for the formulation of

the blend of white coffee that is currently produced by the Group and the

product research and development activities of the Group from 1999 to

2013. Mr Goh & Mr Tan Say Yap are currently assuming a co-advisory

role to the Group Managing Director in matters relating to the FMCG

segment in relation to the production of coffee mixtures.He is also the

Chairman of the Corporate Social Responsibility (CSR) Committee that

carries out the social responsibility functions of the Group via Oldtown

Children Care Fund (OCAF) and Oldtown Earthcare activities. He is a

director of several private companies which are involved in property

investments and cafe and restaurant business.

Tan Say Yap, a Malaysian, aged 40, is an Executive Director of Oldtown

Berhad and was appointed to the Board on 10 November 2009. He

has more than 15 years of experience in the coffee manufacturing

industry. As the co-founder of the Oldtown Group of Companies, he

is instrumental in the formulation of the blend of white coffee, which

started the beverage manufacturing business of the Group. He obtained

a Diploma in Hotel Business Management from Syuen Hotel and Catering

Management Institute, Ipoh in 1996. His career started in 1997 as

Commis One at the Pangkor Laut Resort Hotel where he was mainly

involved in the preparation of food for the 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 Pacic Sdn Bhd and

was 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.

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Bin Lope PihiePJN, PMP, JSM, FASc

Independent

Non-Executive Chairman

Chairman'sStatement

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We are managing our business to deliver positive contributions to

our shareholders despite the challenging business environment.

The Group generated a net cash inow of RM62.215 million from

operations (compared to RM68.670 million in FY2014) on the back

of the strong EBITDA of RM83.975 million for FY2015.

The fixed deposits, cash and bank balances as at 31 March 2015

amounted to RM134.981 million against a total debt of RM19.501

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

RM115.480 million as at 31 March 2015.

The Groups financial position remains strong.

Rewarding our Shareholders Dividend

We are always grateful for the support of our shareholders,

and remain committed to pay out at least 50% of our net profit

as dividends. We seek to distribute a reasonable portion of the

Companys profit each year, taking into account numerous factors,

including the prevailing economic conditions and prospects in

the markets in which we operate, anticipated capital expenditure,

prospective acquisition opportunities, the availability and cost of

borrowings and the need to reward shareholders for their investment

in the Company.

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

RM13.264 million was paid on 16 April 2015 in FY 2015.

The Board of Directors further recommended a final single-tier

dividend of 3.0 sen per share, based on the share capital of 442.135

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

as at 31 March 2015. The recommended final single-tier dividend is

subject to the approval of the shareholders at the forthcoming Annual

General Meeting.

Should the proposed nal single-tier dividend of RM13.264 million

be approved by the shareholders at the forthcoming Annual General

Meeting, the cumulative total dividends will amount to RM26.528

million. This will translate to 55.9% of the profits attributable to the

owners of the Company.

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report and the Audited Financial

Statements of Oldtown Berhad and its Group for the financial year ended 31 March 2015.

This has been another year of success despite the challenging business environment.

Strong Overall Financial Performance

The Groups strong fundamentals had enabled us to deliver a

net prot of RM49.080 million on the back of the revenue of

RM397.740 million amidst a challenging and volatile business

environment during the financial year.

Our Dual Engines of Growth Caf Chain Operations

and Manufacturing of Beverages Operations

The caf chain operations segment continued to be the largest

revenue contributor to the Group, bringing in 55% of the FY2015

revenue whilst the remaining 45% was contributed by the

manufacturing of beverages segment.

The caf chain operations registered a total revenue and profit before

tax of RM217.059 million and RM26.216 million respectively, whilst

the Groups manufacturing of beverages segment reported revenue of

RM180.636 million and prot before tax of RM38.087 million in FY2015.

The Groups FY2015 profit before tax included an impairment

on goodwill of RM3.50 million. The impairment on goodwill was

primarily attributable to the unanticipated change in the business

environment of one of our subsidiaries which has caf outlets in an

area where construction projects are in progress. This, coupled with

increased competition, caused lower customers patronage.

Sustainable Earnings

The Group registered a net profit attributable to owners of the

Company of RM47.494 million in FY2015 against the net prot

attributable to owners of the Company of RM48.938 million in

FY2014, which translated into earnings per share of 10.61 sen for

FY2015 against FY2014 earnings per share of 10.93 sen, based

on the issued and paid-up share capital base of 447.758 million

ordinary shares at RM1.00 each.

Strong Financial Position

Shareholders funds increased by RM3.779 million to RM333.069

million for FY2015. Gearing ratio improved from 0.07x in FY2014 to

0.06x in FY2015. The reduction in the gearing ratio was mainly due

to the repayment of term loans.

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Business Prospects

Despite a challenging external environment, the Malaysian economy

is expected to register steady growth of 4.5% - 5.5% in 2015,

supported mainly by sustained expansion in domestic demand amid

strong domestic fundamentals and a resilient export sector. Domestic

demand will continue to anchor growth in 2015, driven by private

sector spending. After registering five consecutive years of above-

average growth rates, private consumption is expected to grow by

6.0% in 2015. While the implementation of the GST in April 2015

and lower earnings in the commodity-related sectors are expected

to affect spending, this will, however, be partially mitigated by higher

household disposable income, lower fuel prices and the continuous

measures by the Government to assist low-and middle-income

households.

In Asia, growth is expected to be sustained in 2015, supported

by the continued expansion in domestic activity and improving

external demand. Of significance, capital spending, particularly on

infrastructure development, will continue to support the expansion

in domestic demand. In the external sector, the improving growth

prospects of several advanced economies, particularly the US,

will continue to benefit Asias export performance. Nevertheless,

the degree of improvement will vary across economies based on

their trade exposure, especially to the US and China. For the major

commodity exporters in the region, the lift from improving external

demand could also be partly mitigated by the lower commodity

prices. Overall, the Asian region is projected to remain an important

driver of global economy activity, contributing to over 50% of global

growth in 2015.

Although the Group is well-positioned for growth, the year ahead will

continue to be a challenging one in the midst of operating under a

competitive business environment.

We will focus on growing both our caf chain outlets and

manufacturing of beverages products in existing core markets and

new markets. We will continue to develop and protect our brand,

and build on the strength of our business model by improving on the

distribution network, expanding the manufacturing capabilities and

increasing product and service innovation.

We have already built a strong brand equity position, and this will

allow us to boost our market share. I am confident that we have the

business strategies as described in detail in the Group Managing

Directors Review of Operations of the Company in this Annual

Report, a strong management team, dedicated staff and resources

to achieve sustainable growth and to deliver greater value to our

consumers, customers and shareholders.

Acknowledgement

On behalf of the Board, I would like to take this opportunity to

express my gratitude to all 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, dedication and loyalty.

The Board also would like to express its highest appreciation to Mr

Mark Wing Kong who resigned as director on 3 November 2014, for

his invaluable contribution to the Group..

Datuk Dr. Ahmed Tasir bin Lope PihieChairman

Chairman'sStatement

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Despite the solid growth in the Groups revenue, the Prot Before Tax

(PBT) decreased by RM2.203 million or approximately 3.3%, from

RM66.368 million for FY2014 to RM64.165 million for FY2015.

The reduction was primarily attributable to the RM3.50 million

impairment on goodwill. The impairment on goodwill was primarily

attributable to the unanticipated change in the business environment

of one of our subsidiaries which has caf outlets in an area where

construction projects are in progress. This, coupled with increased

competition, caused lower customers patronage.

The Group generated a prot after tax (PAT) of RM49.080 million

on the back of the revenue of RM397.740 million in FY2015.

Excluding the impairment on goodwill, PAT was marginally higher.

The Groups caf chain operations recorded PBT of RM26.216

million for FY2015 on the back of the revenue of RM217.059 million.

This represents a 16.4% drop in PBT as compared to RM31.341

million achieved in FY2014 (mainly due to impairment on goodwill of

RM3.50 million). Generally, the protability of cafe chain operations

was negatively impacted by the twin effects of the tight labour

market and increasingly competitive market conditions.

The manufacturing of beverages segment recorded revenue of

RM180.636 million and PBT of RM38.087 million for FY2015.

The revenue and PBT were RM175.112 million and RM35.929

million respectively for FY2014. The increase in PBT of 6.0% was

attributable to the reorganization and realignment of distributors

coverage in the domestic market as well as the positive impact from

the weak Ringgit Malaysia (RM) against foreign currencies.

Overall Financial Review - Commendable

Performance with Resilient Balance Sheet

A strong operating and financial performance has been achieved

for FY2015. The revenue of the Group increased by approximately

1.9% from RM390.194 million for the year ended 31 March 2014

(FY2014) to RM397.740 million for FY2015. This was mainly

attributable to the growth in revenue of both caf chain operations

and manufacturing of beverage segments.

In FY2015, the Groups total revenue rose to RM397.740 million, an

increase of RM7.546 million or 1.9% compared to the previous year.

The manufacturing of beverages segment reported the strongest

growth, increasing by 3.2% to RM180.636 million. The Cafoperations segment posted marginal growth, increasing by 0.9% to

RM217.059 million in revenue. Both business segments continued

to grow, owing to rising consumption demand in our domestic

and regional markets, which are well supported by their strong

economies and fast-growing middle class consumers.

The business environment for the food and beverages sector has

become more challenging due to rising operating costs. However,

the Group has implemented effective cost management measures to

mitigate increase in such costs.

Oldtown Berhad is forging ahead with a strong and successful brand as a trusted food and beverage

entity with a sound integrated business model. We are continuously working to ensure our products

evolve with the changes in consumer lifestyles and preferences. The solid financial performance

achieved during the financial year ended 31 March 2015 (FY2015) is a good testimony of our effective

business strategies and a sound integrated business model.

GroupManagingDirector's

ReviewofOperations

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Lee Siew Heng

Group Managing Director


ReviewofOperations

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OPERATIONS REVIEW

Cafe Chain Segment

The caf chain operations segment continued to be the main

revenue contributor to the Group, attributing 55% of the consolidated

revenue for FY2015 (54% of the consolidated revenue for FY2014).

The Oldtown Group spearheaded the development of the Asian-

styled caf chain in 2005 with our first outlet in Ipoh, and this year

2015 marks our 10th anniversary for our caf operations. Since

2005, the Group has transformed from a small domestic caf chain

to a significant international player. Our sustainable development

strategy remained on track and we made good progress with steady

growth in our business performance.

As at 31 March 2015, the Group has a total of 245 caf outlets in

Malaysia, Singapore, Indonesia and China. Amongst the 245 caf

outlets, 93 are fully owned caf outlets, 17 partially owned outlets,

119 franchised and 16 licensed outlets. In the countries where we

operate our caf chain, we strive to provide to each customer a

unique dining experience to enjoy food and beverages which are

customized to local requirements and expectations with their friends

and family members.

Domestic Market Challenging and competitive

Our domestic caf operations continued to be the key driver of the

Groups results. Having contributed to approximately 91% of the

Groups total caf operations revenue, our business operations

in Malaysia provide a solid foundation for accomplishing an even

greater market penetration and expansion of our business. We are

positioning ourselves to penetrate into new market segments and

strengthen our leading market position as the largest Asian-styled

caf chain operator in Malaysia.

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 has

continued, with the roll-out of our first Grand Outlet in 2013, and

during the year under review, we have successfully opened another

two (2) Grand Outlets, one (1) each in Johor Bahru and Melaka. As

our society becomes more affluent, customer profiles have become

increasingly segmented into niche markets. By broadening our caf

chain portfolio, we have been able to satisfy dif ferent customer

segments in the market place.

Our Groups main objective is to continuously and consistently

provide our customers with superior quality service and in-store

experience. Our constant focus and commitment are on serving the

vast majority of the citys population with affordable, quality meals

whenever and wherever they need them near their homes and

next to their offices.

The Group places the greatest importance to customer satisfaction

and thus, it has from time to time introduced new products to bring

customers fresh dining experiences. In addition, the Groups wide

variety and quality food offerings under the OLDTOWN brand have

always maintained its competitiveness in terms of price. In this

connection, we launched a new menu in March 2015 to deliver even

more delights in taste to our customers.

International Markets Expanding

As at 31 March 2015, a total of 31 OLDTOWN caf outlets were

operating in Singapore, Indonesia and China as compared to 30 outlets

as at 31 March 2014. The expansion of our caf chain beyond Asias

border became a reality when the first licensed outlet opened its doors

for business in Melbourne, Australia on 16th June 2015.

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.

During the year, OLDTOWN cafe outlets in Singapore had to face

the effects of an increasingly t ight labour market and high rentals.

In order to manage property rentals and related expenses, Oldtown

will focus on promoting the Basic concept model with smaller

sized outlets to lower operating costs for future caf outlets in the

Singapore market.

For the Indonesian market, thus far, the sub-licensing model has

proven to be successful, as we managed to increase another two (2)

new caf outlets in FY2015. We were operating a total of twenty (20)

caf outlets in Indonesia as at 31 March 2015.

To facilitate our expansion of cafe outlets in Southern China, Oldtown

Logistics Sdn Bhd, a wholly-owned subsidiary company of Oldtown,

entered into a conditional agreement on 27 January 2015 to

acquire 51% stake in April Eight (China) Limited (AEC), which has a

subsidiary company that is involved in the central kitchen business

in Guangzhou. The expansion of cafe outlets in Southern China will

be dependent on the support of a central kitchen whose primary

role would be to ensure that the products supplied to the caf

outlets meet the specifications and food safety standards of the local

authorities in Southern China and OLDTOWN. The central kitchen

would also allow for a more consistent delivery of quality products to

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the outlets whilst ensuring price efficiency as a result of consolidated

procurement procedures.

The Group appointed OTK (Australia) Sdn Bhd as Master Licensee to

spearhead the Groups expansion of OLDTOWN caf operations in

Australia through the execution of a Master License Agreement on

19 May 2014. Our venture into the Australian market forms part of

the Groups overall international expansion plans and is consistent

with the Groups aspirations to become Asia Pacics Leading White

Coffee Brand.

Manufacturing of Beverages Segment Another Record Year with Solid Performance

The Groups manufacturing of beverages segment continued to grow

from strength to strength in FY2015 with a revenue of RM180.636

million, up from RM175.112 million in FY2014. This business

segment accounted for 45% of the Groups total revenue.

The positive FY2015 results reaffirm our business strategies, which

are to focus on our core markets in Asia, build on our key capabilities

to compete, invest in the development of our brand, drive innovation

for expansion into attractive growth categories and improve our

market presence.

Following the paths of our record performance in FY2014, this

year, we have maintained the growth momentum and generated

RM180.636 million of revenue or an increase of 3.2%. The

prot before tax (PBT) grew by 6.0% to RM38.086 million, up

from RM35.929 million in FY2014. We believe that this record

performance further underlines the growing demand for our unique

white coffee beverages.

A successful innovative business model complemented by our

strong brands, distribution and marketing expertise has enabled us

to respond to changing consumer preferences and played a vital

role in driving growth and demand. To grow this segment, we have

developed and launched a new product known as OLDTOWN 3

in 1 Less Sugar White Coffee to suit consumer with dif ferent taste

preferences in FY 2015.

Domestic Market Stiff Competition

In recent years, more competitors are striving to grow their

market share and increase their brand equity value to attract

more customers. Backed by the scale of our business and the

diversity of our product range, we have been able to stay aheadof the competition. In this difficult business environment, we have

maintained our competitiveness and marketed our position through

the disciplined implementation of our business initiatives, process

enhancement and sustainability during the past few years.

In FY2015, the domestic market remained as our single largest

market for our white coffee products and we maintained our

dominant position in the white coffee segment in Malaysia. Our

differentiated brand marketing, leveraging on the origins of white

coffee is reaping rewards as our marketing research data revealed

success in reaching the targeted market segment.

In order to reiterate our OLDTOWN brand association with white

coffee, Oldtown has teamed up with Ernest Zacharevic, a renowned

Lithuanian artist to create the Art of OLDTOWN as a celebrationof the heritage and history shared between Ipoh, Old Town and

OLDTOWN White Coffee. In conjunction with this collaboration,

Zacharevic demonstrated his unique artistic creativity through

the painting of seven (7) murals to celebrate Ipoh, Old Town, the

birthplace of white coffee.

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 important to

the growth of our business, especially in influencing consumerspurchasing decisions.

To deliver sustainable and profitable growth, we expanded our

domestic distribution network to increase our footholds in the local

market through the reorganisation of the market coverage of local

distributors. New distributors have been appointed in East and West

Malaysia in mid-2014. As a result of the successful outcome of the

reorganisation, our domestic market recorded positive growth in

revenue in FY2015.

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. These

advertisements have complemented well with the Companys

continuous promotional activities throughout the year. During the

year, we organised various on-the-ground events such as consumer

contests, product testing and sampling, road shows and participated

in expos and exhibitions.

Since the introduction of OLDTOWN white coffee products in 1999,

we have grown our brand over the years to become a trusted brand

recognised for its quality. We believe, by continuing to invest in our

brand, OLDTOWN will be able to maintain its dominant presence in

the domestic market.


ReviewofOperations

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International Market Vast opportunities

Currently, our OLDTOWN white coffee products are widely

distributed in the Asia Pacic region, and through an extensive

distribution network, our products can be found in fourteen (14)

countries. For the FY2015, the export market contributed about

57% of the Groups manufacturing of beverages division revenue.

The on-going branding and marketing campaigns coupled with the

continued customisation of products have contributed to the robust

business momentum in overseas markets.

This international business segment grew strongly in FY2015with higher sales in the Asia region, particularly in Taiwan and

Singapore. The growth in Asia was mainly attributed to the

comprehensive distribution networks.

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

Group and an important link to China, we have intensified our

advertising campaign by displaying OLDTOWN advertisements at

various MTR stations (underground train system) in Hong Kong in

November-December 2014 to create greater awareness of our

beverage products. Amongst the busiest MTR stations that have

displayed OLDTOWN advertisement during the year-end holidayseason were Mong Kok Station, Admiralty Station, Kowloon Tong

Station and Shatin Station. We wish to raise brand awareness

through Hong Kongs MTR stations and to enhance brand value by

advocating True White Coffee pioneered by Oldtown.

The Group can widen its market reach through multi-layered

distribution network comprising third-party distributors, wholesalers

and retailers where they will carry and distribute our beverage

products in various distribution points. This gives us access to

a wider spectrum of traditional and modern trade channels

from small retailers, through to wholesalers, supermarkets andhypermarkets. In addition, our Group also leverages on the online

platform and business-to-consumer e-commerce portal in China to

reach its consumers.

In China, Tmall flagship store was launched in April 2014 with a

primary objective to expand our market penetration in China. Tmall

was selected in view of its business model, which only accepts

trusted brand names, and hence, there is an assurance that

products sold online are genuine. The Group has also 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. This form of advertisement costs significantly less than

the traditional advertising methods.

Pursuing Growth

Caf Chain Operations and Manufacturing of Beverages

Building a brand that is acceptable by our consumers is central to

our strategy for sustainable growth. By ensuring the quality and value

of our products and services, we are able to consistently deliver our

promises to our consumers and provide them with fuss free dining

that they can enjoy.

Caf Chain

We are delighted to report that our caf chain operations, which

is celebrating its 10th anniversary, experienced a successful and

productive year in FY2015. Our sustainable development strategy

remained on track and we made good progress with steady growth

in our business performance. 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.

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 in2008, a proximate market that has an almost similar consumer taste

profile to Malaysia, followed by Indonesia and China in 2011.

Going forward, the caf operations intends to promote the lower

cost model (known as OLDTOWN White Coffee Basic) in Malaysia

with an estimated ten (10) new outlets for the financial year ending

31 March 2016 (FY2016). The caf operations will also penetrating

into the kids and family segment with the launch of its Kids and

Family marketing programs in FY2016, which is expected to improve

the frequency of consumer visits to its caf outlets.

In addition, the cafe operations have also signed an exclusive

agreement with Select Service Partners, an International Food

and Beverage specialist for airports and transportation hubs to

develop the OLDTOWN White Coffee Caf outlets at such locations

throughout Asia Pacic.

With a strong and solid foundation in the domestic market, we are

gearing up for expansion and reinforcing our market leadership

position through a multi-branding strategy based on organic and

inorganic growth. We may explore possible opportunities through

mergers and acquisitions or strategic alliances to enter new markets,

which will broaden our income streams and add further value to our

shareholders.

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For the China market, the Group is expected to proceed with a

re-launch of its operations in the third quarter of FY2016. In view of

the countrys large population base and growing disposable income,

the Group is optimistic about the growth potential of the caf chain

business in China. It is anticipated that, after the completion of the

April Eight (China) Limited (AEC) acquisition in FY2016 and setting

up of its central kitchen operations, we will be able to strengthen

the Groups quality and hygiene standards, boost its operational

efficiency and standardise its quality control to support the expansion

of caf chain business in China.

Besides China, we will also relentlessly focus on innovation and

improvement of our existing caf chain operations in Singapore and

Indonesia. Development plans for Singapore will follow suit with the

introduction of the Basic concept with an estimated three (3) new

outlets in FY2016. For the Indonesian market, the Group granted the

right to the Master Licensee in Indonesia to establish and operate

outlets in the territory of Jawa and Bali, Indonesia in the year 2011.

A second Master License Agreement was executed in June 2014

to cover the rest of Indonesia. The Group will continue to adopt the

sub-licensing model to accelerate the expansion plans in Indonesia

and targets to open seven (7) new outlets by FY2016.

The Master Licensee in Australia is actively evaluating other viable

locations after the successful commencement of business of the

first outlet in Melbourne, Australia in June 2015. The Australian

market presents a vast opportunity for future growth owing to the

overwhelming demand and acceptance of Asian cuisine, particularly

Malaysian.

Going forward, the Group aims to elevate its operating standards and

enhance profitability. The Group is expanding its cafe chain network

across different regions from existing markets, and is continuing to

execute its well-planned store-opening strategy in a flexible way by

adapting to changing market conditions from time to time.

In addition to caf chain development, we are making some

modifications to our food and beverage items, as well as in the set-

up of our outlets to suit the local taste profile and lifestyle.

The Group shall continue its efforts to maintain its margins and

improve its top-line growth for caf chain operations through various

initiatives, namely streamlining the menu offerings and focusing

on building brand loyalty among customers via consistent product

quality and customer service.

Manufacturing of Beverages

Since the commencement of the manufacturing of beverages

business, the Company has established defined and clear business

principles and practices with focus on quality management for our

white coffee beverages. Therefore, our OLDTOWN brand has

been widely recognised amongst white coffee consumers in the

market place. In addition, the Company has also focused on brand

strengthening to create awareness of the OLDTOWN brand

amongst the consumers with new innovative creations to meet

the consumers lifestyle, including innovations related to products,

activities and campaigns.

As a brand owner, branding and innovations are the focus of our

business model. Our white coffee products are well placed to meet

the needs of our consumers across a variety of categories, price

points and channels, allowing us to compete effectively in our key

markets, especially in overseas.

Competition in the manufacturing of beverages business is quite

intense. There are potential new entrants to the market. In order

to stay ahead of our competitors, we have to be sensit ive to the

changing needs of todays consumers and continuously beingable 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. Our continued

investment in R&D has positioned us to be able to compete with

other international companies.

In addition, 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 and hypermarkets to the convenience stores andeven to the corner mom-and-pop stores. This provides us with a

wider reach compared to 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.

Seizing growth opportunities in Asia

The Group foresees that there are ample opportunities to grow its

revenue in Asia in view of the regions enormous market potential

and growing affluence amongst the urban population. As a leading

regional player, Oldtown can capitalise on the potential growth in

appetite for white coffee products in the emerging markets withinthe Asia region. In several of these markets, Oldtown is in fact the

market leader.


ReviewofOperations

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

marketing initiatives and place greater efforts in key Asias countries

in which the Group has already established i tself as one of the early

players, and its products are well recognized among consumers.

Various marketing campaigns, advertising and promotional activities

have been conducted recently to entrench the OLDTOWN White

Coffee (OTWC) brand equity in the marketplace. A concerted

effort was also implemented to create greater awareness of the

uniqueness of OTWC amongst the target consumer groups on a

regular basis.

Comprehensive coverage in existing markets

The Group will step up its efforts to work with the existing appointed

distributors in various emerging markets to achieve a thorough and

comprehensive coverage of its distribution network. Constant review

of the performance of appointed distributors in overseas markets

will enable us to respond swiftly to the needs of diverse customers.

Initiatives to capitalise on our core strengths brand and products,

distribution network and facilities to sustain the Groups top and

bottom-line growth, will be executed through product innovation that

caters to the consumers discerning lifestyles whilst enhancing theoverall operational efficiency of our supply chain in the business.

The need to adapt to constantly changing consumer habits,

market trends and macro factors requires our Group to be flexible

and attentive. While maintaining a global outlook in business

management, the Group pays close attention to the consumer tastes

and sentiments in each of its diverse local markets.

Outlook and Prospects

Overall, the Group expects the local market conditions to remain

competitive while greater upside risks to inflation and currency

fluctuations will impact the Groups operating results. The coming

financial year promises to be challenging as rationalization of

several governments policies may also have a short-term impact on

consumer spending.

In response to these imminent challenges, we shall continue our

near-term business development initiatives and long-term growth

plans in order to maintain a healthy and steady growth. Our team

will continue to drive efficiencies and effectiveness to reinforce our

leading position in segments in which we have a strong foundation,

continuing with our steady and cautious expansion strategy for our

Group.

The economic outlook and consumption trend in our key overseas

markets remain positive, supported by the growth of affluent, middle

class consumers. We have already built a solid brand equity position,

and this will allow us to lift our market share. I am confident that

we have the right business strategies, a strong management team,

dedicated staff and resources to achieve sustainable growth and to

deliver greater value to our consumers, customers and shareholders.

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 record year for the Group.

Acknowledgement

I would like to thank all our customers, government authorities,

vendors and bankers for their assistance and patronage.

To all our employees, our deepest appreciation for their efforts,

dedication and loyalty.

Last but not least, I would like to thank my management team and

the Board for their counsel and support throughout the year.

Lee Siew Heng

Group Managing Director

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Profit Before Tax (RM000)

#Earnings Per Share (Sen)

Note B

261,706

Revenue (RM000)

Note A

Revenue (RM000)

Note A

RM397,7402015

Profit Before Tax (RM000)

RM64,165Profit Attributable to

Owners of the Company (RM000)

RM47,494#Earnings Per Share

Note B

10.47SEN

2010p* 2011 2013a 2014 2015

292,779

432,085390,194 397,740

31,700

2010p* 2011 2013a 2014 2015

40,177

55,527

48,938 47,494

6.99

2010p* 2011 2013a 2014 2015

8.86

12.24

10.79 10.47

43,379

2010p* 2011 2013a 2014 2015

51,594

74,947

66,368 64,165

Profit Attributable to Owners of the Company (RM000)

p* : based on the proforma consolidated nancial 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.

Note A : Previous years revenue has been restated to conform to current years presentation for fair comparison purpose.

Note B : The 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 nancial year 2010 (computed based on the enlarged share capital prior to the

public listing) and EPS disclosed in the audited nancial statements for year 2011, 2013, 2014 and 2015 respectively (computed based on weighted

average number of shares)

FinancialHighlights

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Oldtown Berhad (Oldtown or the Group) recognises that acting

responsibly and sustainably creates value for the group, employees,

customers, shareholders and society as a whole. Sustainability is an

integral part of our business and corporate responsibility serves as

key to sustainability.

The Groups corporate responsibility practices focus on four areas -

Environment, Workplace, Community and Marketplace which aim to

deliver sustainable value to society at large.

The Group will continue to build sustainable practices in every aspect

of the Groups business and remain steadfast in achieving excellence

in its corporate responsibility activities.

(A) Environment

Environmental Sustainability is of utmost importance due to the

increasing depletion of the 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 efcient 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 recyclablematerials.

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

workplace.

The participation in Earth Hour Campaign.

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.

Implementation of Environmental Tobacco Smoke Control to

establish a non-smoking policy in and around the building andallocation of a smoking zone exclusively for a non-smoking

premise.

Promote other initiatives to maintain Indoor Environmental Quality

through landscaping, gardening and reserving area for grass

turfing and plants.

The Group through Oldtown EARTHCARE takes a proactive approach

to promote an environmentally-conscious culture in the workplace.

Oldtown EARTHCARE sends out Oldtown Green Alert to all

employees periodically to introduce various green initiatives and

measures on the responsible use of resources to reduce, reuse and

recycle materials wherever possible. It provides tips for resource-

saving and promotes environmental friendly practices and awareness

among employees to help make a difference to the environment.

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

Allocation of Green Signage at nationwide Oldtown White Coffee

outlets.

Conducted Oldtown Carnival of the Green 2014 at SJK(C) Pasir

Pinji 2 Ipoh on 22nd November 2014.

Maintained Oldtown Mother Earth website which was established

in January 2014 A charity fundraising platform for buying and

selling recycled creations and used items.

Participated the Earth Hour Campaign 2015 at nationwide

Oldtown White Coffee outlets on 28th March 2015.

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.

Sponsored UTAR Perak Environmental Tree Run Event conducted

on 7th March 2015 with the objective to educate the citizens in

Kampar about GREEN environment.

Green Building

To support the Groups commitment to GREEN, the Groups

integrated industrial complex located at Ipoh, Perak which comprisea 2 storey factory building, 1 storey warehouse, 2 storey canteen

cum Recreation Centre and 3 storey administration building was

constructed based on GREEN BUILDING concept by adopting green

building design and requirements.

The design and layout of the building includes green features which

can reduce electricity and water usage to minimise environmental

impact.

The project is registered under the name of OLDTOWN

MANUFACTURING PLANT (GBI Reg No GSB/INC/2012/01). It has

been awarded Green Building Index SILVER on 16 December 2014

(Green Building Index Certificate No. GBI-INC-0004). The plant is the

rst food manufacturing plant in Malaysia being awarded the SILVERclassification under the category of Industrial New Construction.

Sustainbility&

CorporateResponsibility

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(B) Workplace

Employees are the backbone of the business. Essentially, employees

are central to the smooth functioning of business operations and play

a vital role in the success and sustainability of the Group.

The Group believes that human capital is the most valuable asset.

In line with this belief, the Group strives to provide a dynamic and

challenging workplace that gives emphasis on the opportunity to

develop employee skills, talent and capability.

The Group, in fulfilling its corporate responsibility as a caring

employer, places emphasis to build long lasting relationships with its

employees.

The efforts towards achieving the above objectives are carried out in

various aspects:

(i) Employee Welfare & Well-being Program

The Group aims to enhance the employee benefits schemes to build

an engaged workforce that stay loyal and grow with the Group. In

pursuing the objective, we provide the following:

Medical benets, hospitalisation and personal accident insurance

coverage.

Financial assistance in the form of education subsidy and

employee emergency assistance fund.

Organises annual dinner and recognises long service staff with

the Long Service Award in recognition of their loyalty, dedication

and commitment.

Review the Human Resource policies and staff benets on

regular basis.

(ii) Safe, Healthy and Conducive Work Environment

The Group strives to provide a safe, healthy, comfortable and

conducive work environment for its employees through the following

initiatives:

Setting up of Occupational Safety and Health Committee to

initiate various health and safety programs such as fire drills, fire

safety briefings and safety system checks on the equipment.

Ensuring safe practices in all aspects.

Promoting the awareness of safety precautions and health.

(iii) Training and Development Program

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

competent, multi-skilled and well-motivated to increase their career

advancement opportunities. The Group continues to carry out the

following efforts:

Employees are provided with the necessary job related training,

seminars and workshops on an ongoing basis to further enhance

their skills, knowledge, core competencies and proficiency level.

Participation in various in-house and external training programs

from technical-related skills to soft management skills.

Participation in international trade fairs/exhibitions locally and

overseas, to broaden the knowledge base and exposure of

the employees to keep abreast of new developments in their

respective field of expertise.

Sustainbility&CorporateResponsibi

lity

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(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

festive celebration.

To maintain a healthy lifestyle, the Group also organised fitness

programmes after working hours for staff participation to help

employees stay fit and healthy.

(v)Retention, Talent Management and Succession Planning

Retaining key employees is crucial to ensure business success.

The Group shall continue to ensure the rewards package remain

competitive to attract, retain and motivate the right talents.

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

ensure sustainability in terms of continuous effective and efficient

operations within the Group and a healthy leadership pipeline.

(vi) Diversity and Equal Opportunities

Oldtown embraces diversity at the workplace as we believe diversityenriches our work environment and workforce diversity is of great

importance for growing our business.

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. The Group insists on a working

environment that is free of prejudice.

The Group encourages differences on age, gender, ethnicity, religious

beliefs, nationality, language, abilities, physical appearance, cultural

and socio-economic background. All employees are treated with

respect and fair manner.

As at the end of the financial year, the gender, ethnicity and age mixof the Groups employees (excluding foreign workers and part time

workers) are as follows:

(C) Community

The Group recognises the interdependent relationship between

business growth and social well-being and welfare. Therefore, in

fulfilling its corporate responsibilities to the community it serves, the

Group is obligated to nourish and improve the quality of the society

at large while doing business.

To be socially responsible, the Group focuses its corporateresponsibilities on enhancing community sustainability through

various activities and actions aim to promote community engagement

and address the needs of less fortunate and underprivileged families.

The philanthropic activities and approaches include:

The setting up of Oldtown Children Care Fund to provide aid

funds in the form of medical, educational, medical 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.Ethnicity %

Bumiputera 53

Chinese 33

Indian 5

Others 9

Grand Total 100

Age Group %

< 30 39

30 to < 40 36

40 to < 50 18

50 & Above 7

Grand Total 100

Gender %

Male 45

Female 55

Grand Total 100

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During the financial year ended 31 March 2015, the Group through

Oldtown Children Care Fund has carried out the following initiatives:

Extended monetary donations to charity, welfare and voluntary

association and needy families.

Organised various festive celebrations for orphans.

Donated school necessities to 611 deprived primary school

students from Puchong, Sg Pelek, Ampang, Menglembu, Batu

Gajah, Kampung Tawas, Bidor and Tronoh Mines in the month of

November 2014.

Organized Educational Charity Day Trip for 61 Orphans to KajangOstrich Farm and Kajang Teddy Town on 6 June 2014.

Established Student Excellence Learning Foundations aid

fund for students who demonstrate financial needs and achieve

outstanding academic excellence.

(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)InvestorsWe 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 andbusiness ethnics.

Actively engages with its shareholders and investors through

various channels of communication such as investor relations

activities, general meetings of shareholders, financial results

briefings, dialogues and regular press releases.

Accessible in the public domain and regular investors updates on

our website.

The Group aims to develop a good relationship with investors and is

accountable for providing timely information about the Group to the

investment community.

During the financial year ended 31 March 2015, 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 condence 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) certications

for its manufacturing operations to ensure uniform and high

standards of product.

Sustainbility&CorporateResponsibi

lity

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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 Initiatives

Donations and Sponsorships

Contribution of School Necessities

Festival Celebrations for the Unfortunates

Charity Day Trip

Student Excellence Learning Foundations Aid Fund

1. Contribution of a 3-door upright chiller worth RM4,200 to

Persatuan Kebajikan Kanak-Kanak Terencat Akal Malaysia.

2. Donation of RM50,000 Medical Aid Fund to 2-year-old Putra

Muhammad Ilyas from Klebang, Ipoh for his Liver Transplant

Surgery.

3. Bestowal of education essentials to 40 deprived students from

SJK(T) Menglembu.

4. Sponsorship of 3 in 1 Oldtown White Coffee to SMK SeafieldSubang Jaya in conjunction with a fund raising carnival.

5. Students from SJK(C) Pasir Pinji 2, Ipoh receiving SELF aid fund.

6. Chinese New Year Karaoke Outing at OTK Studio Greentown Ipoh

on 28 Feb 2015.

7. Christmas Laser Battle Outing for 88 Orphans at Ipoh Parade on

20 Dec 2014.

8. Deepavali Movie Outing at AEON Station 18 on 1 Nov 2014.

9. Hari Raya Celebration with 45 orphans at Oldtown White Coffee

Mahkota Square, Kuantan on 9 Aug 2014.

10. Educational Charity Day Trip for 61 Orphans to Kajang Ostrich

Farm on 6 June 2014.

11. Sponsorship of RM3,600 Living Expenses and Medical Aid Fund

to 6-year-old Lai Chen Hao from Ipoh.

1 2

5

8

6

10

119

4

7

3


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Earthcare Initiatives

Oldtown Carnival of the Green 2014.

Earth Hour Campaign 2015.

Oldtown Mother Earth website A charity fundraising platform

for buying and selling recycled creations and used items.

Practise of 3Rs - Reduce, Reuse & Recycle in Oldtown Berhad.

Allocations Green Signage at nationwide Oldtown White Coffee

outlets.

Donations & Sponsorships to Environmental Events & Activities.

Workplace Activities & Events

Learning, Training and Development Program.

Staffs Recreational, Sports and Leisure Activities.

Employee Welfare and Well-being Program.

Safe, Healthy and Conductive Work Environment.

Retention, Talent Management and Succession Planning.

1. The Launching Ceremony for Oldtown Carnival of the Green

conducted at SJK(C) Pasir Pinji 2 Ipoh on 22 November 2014.

2. Nationwide Oldtown White Coffee outlets celebrate Earth Hour

2015 on 28 March 2015.

3. Sponsorship to UTAR Environmental Tree Run Event conducted

on 7 March 2015.

4. Customer Service Training conducted at Oldtown White Coffee

outlets in Sept 2014.

5. Staffs Buka Puasa Celebration conducted at Oldtown Subang

office on 18 July 2014.

6. Staffs Chinese New Year Celebration held at Oldtown Subang

office on 13 Feb 2015.

7. Making A Difference Training organized in July 2014 at Oldtown

Berhad Headquarter.

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

recognises the value of good governance and believes that a high

standard of corporate governance will deliver long-term sustainable

shareholder value. The Board is committed to ensure good corporate

governance practices are applied throughout the Company and its

subsidiaries (the Group).

This Statement sets out the key aspects of how the Company has

applied the Principles and Recommendations of the Malaysian

Code on Corporate Governance 2012 (MCCG 2012) during the

financial year ended 31 March 2015 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 the oversight of the 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

of the long term interests of shareholders, other stakeholders and the

community at large.

The Board recognises 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 bybringing 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 Groups Strategic Plans

The Board provides strategic direction and guides the Group in

promoting its core values, policies and objectives. The Board reviews the

strategic plans presented by the Management.

b. Overseeing the Conduct of the Groups 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. The findings relating thereto will be tabledto the Audit Committee on a regular basis.

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

OLDTOWN AR 31-03-2015.pdf

Documents

Transcript of OLDTOWN AR 31-03-2015.pdf