THE WAY FORWARD 2013 Annual Report Cover Flap
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(4205-V) THE WAY FORWARD 2013 ANNUAL REPort Cover Flap OUR PROFILE Founded in 1883 by John Fraser and beverages and dairy products sectors. The core strengths of its 130-year David Chalmers Neave, from whom Fraser & Neave Holdings Bhd operates in enterprise, as reflected in its vision, the instantly recognisable initials ‘F&N’ Malaysia, Brunei, Thailand and Indochina brands and products, strong distribution are derived, F&N has evolved into an and employs over 3,000 employees. network, resources, and experience, iconic household brand and the F&N distinguish F&N and set it apart in Group today is among the oldest, As a brand that has been closely the market. These core strengths, most recognised and most successful integrated into the nation’s fabric for over moreover, enable it to deliver sustainable businesses in Singapore and Malaysia a century, F&N enjoys a special place performance and growth, in harmony with core expertise and leadership in in the hearts of Malaysians, one that is with the well-being of local communities the Food & Beverage, Property and trusted by generations while fulfilling and the environment, to meet consumers’ Publishing & Printing sectors. its promise of ‘Pure Enjoyment, Pure present and future expectations. Goodness’ through its wide portfolio of Listed on Bursa Malaysia, Fraser & brands and products. Neave Holdings Bhd is a subsidiary of Fraser and Neave, Limited and one of Malaysia’s diversified blue chip companies with leadership in the nation’s CONTENTS 002 Vision CORPORATE SUSTAINABILITY 097 Statements of Comprehensive 003 Mission 056 Workplace Principles Income 004 Our Exports 059 Community Principles 098 Statements of Financial Position 006 Five Years’ Statistics 063 Environmental Principles 101 Statements of Changes in Equity Group Financials 068 Marketplace Principles 105 Statements of Cash Flows 007 Five Years’ Statistics 107 Notes to the Financial Statements Group Financial Charts CORPORATE GOVERNANCE 181 Supplementary Information CORPORATE REVIEW 072 Statement on Corporate OTHER INFORMATION Governance 010 Chairman’s Statement 183 List of Properties 077 Report on Audit Committee 014 Profile of Board of Directors 186 Shareholdings Statistics 079 Statement on Risk Management & 026 Corporate Information 188 Share Price Charts Internal Control 027 Corporate Structure 189 Recurrent Related Party Transactions 082 Statement on Directors’ Responsibility BUSINESS REVIEW • NoTICE OF 030 CEO’s Message FINANCIAL STATEMENTS ANNUAL GENERAL MEETING 034 Soft Drinks 086 Directors’ Report 040 Dairies Malaysia PROXY FORM 093 Statement by Directors • 046 Dairies Thailand and Statutory Declaration 052 Property 094 Independent Auditors’ Report 096 Income Statements PG. OUR 005 MILESTONES This is a snapshot of F&N’s long and storied history, one which is 130 years old and remains woven into the fabric of Malaysian and Singaporean society. The F&N story begins in 1883, in a registered office in the British colony of Singapore, when two partners in a printing business, John Fraser and David Chalmers Neave, signed their names on a document that brought the Singapore and Straits Aerated Water Company into existence. 1883-2013 1883 - The Singapore and Straits 1941 - Archipelago Brewery was 1968 - Dairy production commenced 1989 - F&N acquired the interests of 1999 - F&N started the Thailand Ice 2010 - Red Bull joined the F&N product Aerated Water Company was founded. acquired, which produced Anchor beer, in Singapore and F&N Powdered Milk was Beatrice Foods and restructured its dairy Cream business with the setting up of F&N line-up. Construction of F&N Dairies another well-known brew in the region. introduced the following year. operations under F&N Dairies (Malaysia) Sdn United Ltd. manufacturing plant in Pulau Indah began. 1898 - The Singapore and Straits Bhd. End of licensing arrangement with The Aerated Water Company went public 1948 - Lion Ltd was incorporated to 1971 - Several new products were 2000 - F&N took control of Times Coca-Cola Company in Malaysia, Singapore under its present name, Fraser and Neave, manage Coca-Cola. launched: Fanta, Daisy long-life milk 1990 - F&N acquired the dairies and Publishing after acquiring a 20 per cent stake and Brunei. Limited on 27 January 1898. in Tetrapak, Zapple drinks and Sunkist property interests of Cold Storage Holdings in 1999. 1959 - The Group entered into a joint Orange. Ltd. 2011 - Official opening of the F&N 1913 - By this year, F&N had branches venture with Beatrice Foods of Chicago, 2004 - F&N’s property division started Dairies manufacturing plant in Rojana, across the peninsula, including Kuala USA, to manufacture Sweetened 1973 - Sweetened Condensed Filled 1992 - Joint venture agreement was construction on Fraser Business Park in Thailand. Lumpur, Malacca, Seremban, Ipoh and Condensed Milk, setting the foundation Milk was launched, followed by the launch signed between Fraser and Neave, Limited Sungai Besi, Kuala Lumpur. Penang. Additionally, overseas expansion for the company eventually known as F&N of Meadow Gold range of ice cream and The Coca-Cola Company (TCCC), which had begun and F&N had set up branches in Dairies (Malaysia) Sdn Bhd. products the following year. saw the birth of F&N Coca-Cola Pte. Ltd. 2006 - F&N acquired the Borneo brand Bangkok and Saigon. of Mineral Water business in East Malaysia. 1931 - Fraser and Neave, Limited 1962 - The Kuala Lumpur plant 1977 - F&N commenced its Ice Cream 1995 - Magnolia was acquired. 2007 - Fraser & Neave Holdings Bhd 2012 - F&N Dairies manufacturing plant formed Malayan Breweries Limited in a was completed and commenced its business. acquired Nestle’s Tea Pot and secured in Petaling Jaya ceased operations after joint venture with Heineken of Holland. operations. the licence to manufacture and distribute 1996 - F&N Coca-Cola Malaysia moved 52 years, making way for the Section 13, The result of this joint venture was the Nestle’s Ideal, Carnation and Milkmaid 1983 - F&N celebrated its 100th to a new plant costing RM160 million in Shah Petaling Jaya property development project. much-loved and iconic Tiger Beer. brands in Malaysia, Thailand and Singapore. 1965 - Carnation International of Los anniversary and introduced the iconic Alam on 23 March 1996. The Group’s glass, F&N Dairies (Thailand) Limited was also Angeles joined Beatrice Food and F&N to 100PLUS brand to the market, which dairies and soft drinks operation in Malaysia established this year. th 1936 - Fraser and Neave, Limited form a manufacturing company, Premier soon became the No.1 Isotonic Drink in were incorporated under the umbrella of 2013 - The 130 anniversary of the acquired the franchise rights to Coca- Milk (Malaya) Sdn Bhd in Kuala Lumpur. Malaysia and Singapore. Fraser & Neave Holdings Bhd. Fraser & Neave Group and official opening Cola drinks. In later years, the company The first F&N soft drinks factory in East 2009 - Operations at F&N Dairies of the F&N Dairies manufacturing plant in Malaysia was also opened in Kuching. (Thailand) Limited’s new plant in Rojana, Pulau Indah. acquired the rights to 7-Up, Fanta and 1985 - F&N introduced SEASONS’s 1998 - F&N Dairies commenced its Thailand, commenced. Sunkist as well. range of beverages. Pasteurised Milk and Juice business. To become the leading total beverage company in OUR Malaysia and the region VISION & To be a world-class multinational enterprise providing superior returns to our shareholders, excellent value for our customers and a rewarding OUR career for our employees VISION & MISSION PG. OUR 004 EXPORTS Europe Central America F&N PRODUCTS ARE EXPORTED TO OVER COUNTRIES 45 WORLDWIDE PG. 005 Our Exports Central Asia Middle East East Asia South Asia Indochina Africa South East Asia COUNTRIES Oceania WORLDWIDE PG. FIVe Years’ 006 STATISTICS GROUP FINANCIALS Year ended 30 September 2013 2012 2011 2010 2009 Results (RM million)* Revenue 3,508.2 3,171.9# 3,824.6# 3,918.4# 3,663.2# Profit before taxation (PBT) 308.7 230.2 463.7 777.9^ 299.8 Attributable profits 260.6 274.0 383.1 695.3^ 224.4 Dividend Per share - Earnings - basic (sen) 71.7 75.9 106.9 195.1 63.0 - Earnings - diluted (sen) 71.4 75.4 106.0 194.2 62.9 - Dividend - net (sen) 60.0** 58.0 97.0 164.5 41.8 - Dividend - cover (times) 1.2 1.3 1.1 1.2 1.5 Statement of Financial Position (RM million) Share capital 364.7 363.0 360.4 357.3 356.5 Shareholders’ equity 1,650.2 1,554.3 1,558.8 1,796.5 1,293.1 Total assets 2,763.6 2,654.9 2,487.8 2,968.9 2,759.9 Long term borrowings 150.0 - 150.0 150.0 360.4 Net assets per share (RM) 4.53 4.28 4.33 5.03 3.63 Ratio PBT on revenue (%) 8.8 7.3 12.1 19.9 8.0 Return on shareholders’ equity (%) 15.8 17.6 24.6 38.7 17.4 Net debt to equity ratio (%) 1.7 12.6 - - 26.7 * Results for financial years ended 30 September 2009 and 2010 were on a total group basis, which included continuing and discontinued operations. ** Included proposed dividend of 40 sen, which will only be recognised in the financial statements upon shareholders’ approval. ^ Included exceptional gain on divestment of glass container business of RM382 million. # Restated to reclassify sales tax incurred on intercompany transactions which was previously included in cost of sales but reclassified to revenue in financial year ended 30 September 2013. PG. FIVe Years’ 007 STATISTICS GROUP FINANCIAL CHARTS PBT / ATTRIBUTABLE EARNINGS PER SHARE / SHAREHOlders’ REVENUE PROFITS NET DIVIDEND EQUITY / TOTAL ASSETS (RM million) (RM million) (sen) (RM million) 777.9 195.1 695.3 2,968.9 3,918.4 3,824.6 2,763.6 164.5 2,759.9 3,508.2 3,663.2