ANNUAL REPORT 2017 Looking forward to 2018... OLDTOWN BERHAD OLDTOWN Join us: Follow us: (797771-M) www.oldtown.com.my OLDTOWN BERHAD Copyright©2017 Oldtown Berhad (797771-M). All Rights Reserved. (797771-M) OLDTOWN BERHAD797771-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 a time worth remembering. Come and enjoy the Aroma of Good Times with OLDTOWN™ White Coffee. CONTENTS 02 04 05 06 12 16 OUR LEGACY – GROUP STRUCTURE CORPORATE INFORMATION PROFILES OF BOARD OF DIRECTORS CHAIRMAN’S STATEMENT MANAGEMENT DISCUSSION VISION, MISSION STATEMENT & KEY SENIOR MANAGEMENT & ANALYSIS & BUSINESS OVERVIEW 31 32 36 37 47 50 FINANCIAL HIGHLIGHTS SUSTAINABILITY & CORPORATE CORPORATE RESPONSIBILITY CORPORATE GOVERNANCE AUDIT COMMITTEE REPORT STATEMENT ON RISK MANAGEMENT RESPONSIBILITY STATEMENT & INTERNAL CONTROL 53 59 148 153 157 163 ADDITIONAL COMPLIANCE FINANCIAL STATEMENTS LIST OF PROPERTIES OWNED ANALYSIS OF SHAREHOLDINGS NOTICE OF ANNUAL GENERAL MEETING PROXY FORM INFORMATION BY OLDTOWN GROUP OLDTOWN BERHAD797771-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 a time worth remembering. Come and enjoy the Aroma of Good Times with OLDTOWN™ White Coffee. CONTENTS 02 04 05 06 12 16 OUR LEGACY – GROUP STRUCTURE CORPORATE INFORMATION PROFILES OF BOARD OF DIRECTORS CHAIRMAN’S STATEMENT MANAGEMENT DISCUSSION VISION, MISSION STATEMENT & KEY SENIOR MANAGEMENT & ANALYSIS & BUSINESS OVERVIEW 31 32 36 37 47 50 FINANCIAL HIGHLIGHTS SUSTAINABILITY & CORPORATE CORPORATE RESPONSIBILITY CORPORATE GOVERNANCE AUDIT COMMITTEE REPORT STATEMENT ON RISK MANAGEMENT RESPONSIBILITY STATEMENT & INTERNAL CONTROL 53 59 148 153 157 163 ADDITIONAL COMPLIANCE FINANCIAL STATEMENTS LIST OF PROPERTIES OWNED ANALYSIS OF SHAREHOLDINGS NOTICE OF ANNUAL GENERAL MEETING PROXY FORM INFORMATION BY OLDTOWN GROUP OLDTOWN BERHAD797771-M Incorporated In Malaysia OUR LEGACY From the day our proprietary OLDTOWN™ White Coffee blend was formulated, it has been steadfastly carried down Malaysia over the years to this day. Our white coffee are roasted and prepared according to the original method to ensure that Singapore Thailand every cup of OLDTOWN™ White Coffee imparts the same full-bodied taste, texture and aroma year after year. Our Indonesia 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. Brunei To date, our white coffee products are exported to more USA Phillippines than 17 markets worldwide. Our business also includes the Taiwan Hong Kong OLDTOWN™ White Coffee chain of café outlets. Carrying the Shenzhen charm of a traditional Ipoh coffee shop, we serve a variety of Malaysian delicacies from white coffee to toasts, rice and noodles. To date, we have more than 200 café outlets Shanghai UK Australia throughout Asia. Beijing Canada New Zealand OLDTOWN BERHAD797771-M Incorporated In Malaysia Vision Business Overview To be Asia Pacific’s Leading White Coffee Brand The business activities of Oldtown Group can be divided into three broad categories as follows: Mission Statement Operation of Cafe Chain OUR PEOPLE : • Own Cafe Outlets* We Believe That Our People Are Our Assets • Franchised Outlets • Food Processing We acknowledge and appreciate our people as those who grow with us and for their full dedication. We value them for their Manufacturing of coffee and other beverages effort and what they are able to bring to the company, hence we constantly provide a platform and opportunities for career • Instant Coffee Mix growth and enrichment of knowledge. We cultivate the passion of • Roasted Coffee Powder delighting our consumers into all our staffs to bring forth the best • Instant Milk Tea Mix experience possible. • Instant Chocolate Mix Community : Marketing and sales of coffee and other beverages We Nurture The Community • Instant Coffee Mix We are aware and committed to our community hence we operate • Roasted Coffee Powder our business in a manner that does not compromise the wellness • Instant Milk Tea Mix of our future generations. We are passionate about our corporate • Instant Chocolate Mix responsibilities and do our best to provide for the community • Ready-to-drink coffee in different ways, from doing our part for the earth we live in to *Own cafe outlets include those that are fully and partially owned. 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 : Malaysia 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 Singapore Thailand and grow the passion and knowledge of caring for the environment with our partners and consumers for them to live this together with Indonesia us as part of our corporate values. INVESTORS : We Focus on Prospering Our Investors Brunei 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 Phillippines USA to provide to our consumers and the community. Taiwan Hong Kong Shenzhen Shanghai UK Australia Beijing Canada ANNUAL REPORT 2016 3 New Zealand OLDTOWN BERHAD797771-M Incorporated In Malaysia GROUP STRUCTURE 100% White Cafe Sdn Bhd 100% Gongga Food Sdn Bhd White Cafe Marketing 100% Sdn Bhd Emperor's Kitchen 100% Sdn Bhd Dynasty Confectionery 100% Sdn Bhd 100% Esquire Chef Sdn Bhd Kopitiam Asia Pacific Old Town Kopitiam 100% Sdn Bhd 100% Sdn Bhd OTK (HK) Investment Shenzhen Kopitiam 100% Limited 100% Asia Pacific Limited Oldtown Singapore 100% Pte Ltd OTK Singapore 50% Pte Ltd OldTown Berhad Old Town Kopitiam Dynasty Kitchen 100% Butterworth Sdn Bhd 100% Sdn Bhd Old Town Kopitiam 100% Kuala Lumpur Sdn Bhd Old Town Kopitiam 100% Cheras Sdn Bhd 100% Old Town (M) Sdn Bhd Oldtown Logistics April Eight (China) Guangzhou Supreme 100% Sdn Bhd 51% Limited 100% Food Service Limited 100% Oldtown APP Sdn Bhd Oldtown White Coffee Shenzhen Oldtown 100% Limited (formerly known 100% White Coffee Trading as Advance City Limited) Co., Ltd 80% Conneczone Sdn Bhd Plus One Solution 50% Sdn Bhd 40% OTK Eatery Sdn Bhd 4 ANNUAL REPORT 2017 OLDTOWN BERHAD797771-M Incorporated In Malaysia CORPORATE INFORMATION 100% White Cafe Sdn Bhd 100% Gongga Food Sdn Bhd Board of Directors Datuk Dr. Ahmed Tasir Dato’ Wong Guang Seng Chuah Seong Meng Independent Non-Executive Executive Director 100% White Cafe Marketing Bin Lope Pihie Sdn Bhd PJN, PMP, JSM, FASc Director Independent Non-Executive Clarence D’Silva A/L Leon D’Silva 100% Emperor's Kitchen Chairman Tan Chon Ing @ Executive Director Sdn Bhd Tan Chong Ling Lee Siew Heng Independent Non-Executive Goh Ching Mun Dynasty Confectionery Group Managing Director Director Executive Director 100% Sdn Bhd Tan Say Yap 100% Esquire Chef Sdn Bhd Executive Director 100% Kopitiam Asia Pacific 100% Old Town Kopitiam Sdn Bhd Sdn Bhd Board Committees OTK (HK) Investment Shenzhen Kopitiam Audit Committee Remuneration Committee Nomination Committee 100% Limited 100% Asia Pacific Limited 100% Oldtown Singapore Dato’ Wong Guang Seng Tan Chon Ing @ Tan Chong Ling Datuk Dr. Ahmed Tasir Pte Ltd Chairman Chairman Bin Lope Pihie 50% OTK Singapore Pte Ltd Chairman Datuk Dr. Ahmed Tasir Datuk Dr. Ahmed Tasir Bin Lope Pihie Bin Lope Pihie Dato’ Wong Guang Seng OldTown Berhad 100% Old Town Kopitiam 100% Dynasty Kitchen Butterworth Sdn Bhd Sdn Bhd Tan Chon Ing @ Lee Siew Heng Tan Chon Ing @ Tan Chong Ling Tan Chong Ling Old Town Kopitiam Dato’ Wong Guang Seng 100% Kuala Lumpur Sdn Bhd Goh Ching Mun Old Town Kopitiam 100% Cheras Sdn Bhd Company Secretaries Stock Exchange Listing Principal Bankers 100% Old Town (M) Sdn Bhd Wong Wai Foong Main Market of CIMB Bank Berhad (13491-P) (MAICSA 7001358) Bursa Malaysia Securities Berhad HSBC Bank Malaysia Berhad (127776-V) (Listed since 13 July 2011) Oldtown Logistics April Eight (China) Guangzhou Supreme Tan Bee Hwee 100% Sdn Bhd 51% Limited 100% Food Service Limited Stock Name: OLDTOWN Statutory Auditors (MAICSA 7021024) Stock Code: 5201 Deloitte PLT (LLP0010145-LCA) Registered Office Chartered Accountants (AF0080) 100% Oldtown APP Sdn Bhd Share Registrar Level 2, Weil Hotel, Unit 30-01 Level 30, Tricor Investor & Issuing House 292, Jalan Sultan Idris Shah, Tower A, Vertical Business Suite, Services Sdn Bhd 30000 Ipoh, Perak Darul Ridzuan. Shenzhen Oldtown Oldtown White Coffee Avenue 3, Bangsar South, Office: Tel: (605) 254 0288 100% Limited (formerly known 100% White Coffee Trading No. 8, Jalan Kerinchi, as Advance City Limited) Co., Ltd Unit 32-01, Level 32, Tower A, Fax: (605) 254 7288 59200 Kuala Lumpur. Vertical Business Suite, Tel : (603) 2783 9191 Avenue 3, Bangsar South, 80% Conneczone Sdn Bhd Fax: (603) 2783 9111 No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. Head Office Tel: (603) 2783 9299 50% Plus One Solution No. 2, Jalan Portland, Fax: (603) 2783 9222 Sdn Bhd Kawasan Perindustrian Tasek, 31400 Ipoh, Perak Darul Ridzuan.