kfcholdingAnnualReport2000

LAPORAN TAHUNAN 2 0 0 0

A N N U A L R E P O R T

KFC Holdings (Malaysia) Bhd(65787-T)

Serving up m o re t h a n j u s t g re a t - t a s t i n g chicken

Our core business enjoys a dominant share of the fast food market. Besides our established flagship lines of KFC and Pizza Hut, we are also represented in poultry, feedmill, sauces and cooking pastes, catering, bakery, specialty coffee and deli-styled restaurant businesses. Our commitment to excellence and the highest is quality at Chairmans Statement Review of Operations Restaurant Operations Integrated Poultry Operations Ancillary Operations Human Resource Development Community Relations Syariah Advisory Council of KFCH Financial Statements Directors Report Income Statement Balance Sheets Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Statement by Directors Statutory Declaration Auditors Report List of Properties Held Analysis of Shareholdings Notice of Annual General Meeting Notice of Books Closure Proxy Form 8 11 Penyata Pengerusi Ulasan Operasi Operasi Restoran Operasi Penternakan Ayam Bersepadu Operasi Tambahan Pembangunan Sumber Manusia Perhubungan Komuniti Majlis Penasihat Syariah KFCH Penyata Kewangan Laporan Pengarah Penyata Pendapatan Kunci Kira-kira Penyata Perubahan Ekuiti Penyata Aliran Tunai Nota-nota Penyata Kewangan Penyata Para Pengarah Akuan Berkanun Laporan Juruaudit Senarai Harta Tanah yang Dimiliki Analisa Pemegangan Saham Notis Mesyuarat Agung Tahunan Notis Penutupan Buku Borang Proksi 22 25 standards reflected Board of Directors Corporate Information Audit Committee 4 5 6 Lembaga Pengarah Maklumat Korporat Jawatankuasa Audit 4 5 7

Contents Kandungan

every level of our business. From great tasting food and efficient customer service to dedicated staff and improving shareholders value. Kegiatan perniagaan teras kami terus menguasai bahagian utama dalam pasaran makanan segera. Selain dari rangkaian produk utama seperti KFC dan Pizza Hut, kami juga terlibat dalam sektor ayam, makanan ternakan, sos dan pes masakan, katering, kedai roti, kopi kualiti, dan perniagaan restoran bercorak deli. Komitmen kualiti kami tertinggi terhadap telah

36 37 41 42 43 44 46 59 59 60 88 102 105 106

61 62 66 67 68 69 71 86 86 87 95 102 107 108

kecemerlangan dan standard dicerminkan di setiap peringkat perniagaan kami, termasuk menyediakan makanan yang lazat serta khidmat pelanggan yang cekap, kakitangan yang berdedikasi saham. serta usaha meningkatkan nilai pemegang

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Board of Directors Lembaga PengarahTuan Haji Izhar bin Sulaiman Executive Chairman Pengerusi Eksekutif

BOARD OF DIRECTORS Lembaga Pengarah Tuan Haji Izhar bin Sulaiman Executive Chairman/Pengerusi Eksekutif YBhg Datuk Haji Abdullah bin OmarDMSM

Executive Deputy Chairman Timbalan Pengerusi Eksekutif YBhg Datuk Haji Ishak bin IsmailDSPN

AUDIT COMMITTEE Jawatankuasa Audit YBhg Dato Seri Abdul Ghani bin Abdul Aziz* Chairman/Pengerusi YBhg Dato Mohd Salleh bin Haji Hashim* Member/Ahli YBhg Dato Abdullah bin Ngah* Member/Ahli* Independent Non-Executive Directors Pengarah-pengarah Bebas Bukan Eksekutif

Corporate Information Maklumat Korporat

Managing Director/Pengarah Urusan YBhg Dato George Ting Yew TongDIMP

Executive Director/Pengarah Eksekutif YBhg Dato Seri Abdul Ghani bin Abdul AzizSPTS, SIMP, DPMK

GROUP COMPANY SECRETARY Setiausaha Kumpulan Syarikat En C W Toh (MIA 3145) AUDITORS Juruaudit Ernst & Young Public Accountants 4th Floor Kompleks Antarabangsa Jalan Sultan Ismail 50250 Kuala Lumpur PRINCIPAL BANKERS Bank-bank Utama Alliance Bank Malaysia Berhad Bumiputra-Commerce Bank Berhad Citibank Berhad HSBC Bank Malaysia Berhad Malayan Banking Berhad Southern Bank Berhad SOLICITORS Peguamcara Abdul Aziz, Ong & Co. Iza Ng Yeoh & Kit Lee Hishammuddin Sri Ram & Co. REGISTERED OFFICE Pejabat Berdaftar Level 17 Wisma KFC Jalan Sultan Ismail 50250 Kuala Lumpur Tel: 03-206 3388 Fax: 03-238 7786 REGISTRAR & TRANSFER OFFICE Pejabat Pendaftar & Pemindahan M & C Services Sdn Bhd 11th Floor Wisma Damansara, Jalan Semantan Damansara Heights, 50490 Kuala Lumpur Tel: 03-255 7188 Fax: 03-255 0988 STOCK EXCHANGE LISTING Senarai Bursa Saham Kuala Lumpur Stock Exchange, Main Board

YBhg Dato Dr Ridzuan bin AkilDSDK, SDK

Tuan Haji Johari bin Abdul Ghani YBhg Dato Abdullah bin NgahDSMT, DPMT, DPMS, DPMJ, JSM, PJK

YBhg Dato Mohd Salleh bin Haji HashimDPMP, PCM, PMP

YBhg Datuk Haji Abdullah bin Omar DMSM Executive Deputy Chairman Timbalan Pengerusi Eksekutif

YBhg Datuk Haji Ishak bin Ismail DSPN Managing Director/Pengarah Urusan

YBhg Dato George Ting Yew Tong DIMP Executive Director/Pengarah Eksekutif

EXECUTIVE COMMITTEE Jawatankuasa Eksekutif Tuan Haji Izhar bin Sulaiman YBhg Datuk Haji Abdullah bin Omar YBhg Datuk Haji Ishak bin Ismail YBhg Dato George Ting Yew Tong SYARIAH ADVISORY COUNCIL Majlis Penasihat Syariah Tuan Haji Izhar bin Sulaiman Tan Sri Dato Abdul Kadir bin Talip YBhg Dato Haji Md Hashim bin Yahaya YBhg Dato Dr Abdul Monir bin Yaakob YBhg Dato Dr Abd Shukor bin Haji Husin YBhg Datuk Haji Hassan bin Haji Ahmad Tuan Haji Abdul Majid bin Omar Tuan Haji Omar @ Wan Mat bin Wan Teh YBhg Datuk Haji Ishak bin Ismail YBhg Datuk Abang Haji Zainie bin Abang Haji Suhai Tuan Haji Omar bin Saad Encik Azami bin Mustapha Tuan Haji Mohammad bin Haji Shafie

YBhg Dato Seri Abdul Ghani bin Abdul Aziz SPTS, SIMP, DPMK

YBhg Dato Dr Ridzuan bin Akil DSDK, SDK

Tuan Haji Johari bin Abdul Ghani

YBhg Dato Abdullah bin Ngah DSMT, DPMT, DPMS, DPMJ, JSM, PJK

YBhg Dato Mohd Salleh bin Haji Hashim DPMP, PCM, PMP

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Chairman : YBhg Dato Seri Abdul Ghani bin Abdul Aziz* SPTS, SIMP, DPMK Members : YBhg Dato Mohd Salleh Bin Haji Hashim* DPMP, PCM, PMP YBhg Dato Abdullah Bin Ngah*DSMT, DPMT, DPMS, DPMJ, JSM, PJK

* Independent Non-Executive Directors

1. CONSTITUTION The Board of Directors of KFC Holdings (Malaysia) Bhd hereby resolved to establish an Audit Committee with authority, responsibility and specific duties as described below. 2. APPOINTMENT The members of the Committee shall be appointed by the Board and their period of appointment shall be concurrent with their tenure on the Board. 3. COMPOSITION (a) The Audit Committee shall comprise not more than five members, the majority of whom are non-executive directors. (b) One of the non-executive directors shall be the Chairman to be appointed by other members of the Committee. 4. AUTHORITY (a) To initiate efficiency reviews and special project audits. (b) Unrestricted access to all of the Group's records, properties and personnel to enable it to discharge its duties. (c) To make recommendations to the Board. 5. RESPONSIBILITY (a) Responsible to the Board of Directors. (b) Not responsible for day-to-day operating decisions, except to the limited extent of establishing an effective control environment. 6. DUTIES (a) To review: the financial statements and annual reports prior to submission to the full Board; the Group's quarterly results prior to submission to the Kuala Lumpur Stock Exchange; any related transactions that may arise within the Group; and the planning, scope and areas of internal audit and external audit consideration and their respective audit findings.

(b) To review and evaluate the quality of service provided by the external auditors and to make recommendations concerning their appointment/ replacement and remuneration. (c) To assess the adequacy of management reporting. (d) To report to the Board on the significant activities and development of the Group as highlighted in the external/internal audit reports. (e) To make suitable recommendations to the Board, if necessary. 7. ATTENDANCE (a) Meetings will be attended by members of the Committee and the Group Audit Manager who will act as the Secretary. (b) Participants may be invited from time to time to attend the meeting depending on the nature of the subject under review. These participants may include the external auditors, Executive Director, Deputy President, Senior Vice Presidents, Vice Presidents, Senior General Managers, General Managers or Departmental Heads. 8. MEETINGS Meetings are to be held as and when it is deemed necessary by the Chairman of the Committee. 9. QUORUM Any two members of the Committee present at the meeting shall constitute a quorum. 10. MINUTES The Secretary shall: (a) Keep minutes of the proceedings of the meetings. (b) Send out notices of meetings. (c) Circulate minutes among members of the Committee.

Pengerusi :YBhg Dato Seri Abdul Ghani bin Abdul Aziz* SPTS, SIMP, DPMK Ahli : YBhg Dato Mohd Salleh Bin Haji Hashim* DPMP, PCM, PMP YBhg Dato Abdullah Bin Ngah*DSMT, DPMT, DPMS, DPMJ, JSM, PJK

* Pengarah-pengarah Bebas Bukan Eksekutif

1. PERLEMBAGAAN Lembaga Pengarah KFC Holdings (Malaysia) Bhd dengan ini menetapkan untuk menubuhkan satu Jawatankuasa Audit dengan kuasa, tanggungjawab dan tugas-tugas tertentu seperti yang dinyatakan di bawah. 2. PERLANTIKAN Ahli-ahli jawatankuasa ini akan dilantik oleh Lembaga Pengarah dan tempoh perlantikan mereka adalah sejajar dengan tempoh perkhidmatan mereka di dalam Lembaga. 3. AHLI-AHLI (a) Jawatankuasa Audit akan mempunyai tidak lebih daripada lima ahli, kebanyakan daripada mereka adalah terdiri daripada pengarah-pengarah bukan eksekutif. (b) Salah seorang daripada pengarah bukan eksekutif akan dilantik sebagai Pengerusi oleh ahli-ahli jawatankuasa yang lain. 4. BIDANG KUASA (a) Untuk merintis penelitian semula kecekapan dan audit-audit projek khas. (b) Hak peluang yang tidak terhad kepada semua rekod kumpulan, harta benda dan kakitangan untuk membolehkan mereka melaksanakan tugas-tugas mereka. (c) Untuk membuat syor-syor kepada Lembaga Pengarah. 5. TANGGUNGJAWAB (a) Bertanggungjawab kepada Lembaga Pengarah. (b) Tidak bertanggungjawab untuk keputusan operasi harian, kecuali sehingga had-had tertentu mengasaskan persekitaran kawalan yang berkesan. 6. TUGAS-TUGAS (a) Untuk meneliti semula: penyata kewangan dan laporan tahunan sebelum dikemukakan kepada Lembaga Pengarah;

(b)

(c) (d)

(e)

keputusan suku tahunan Kumpulan sebelum dikemukakan kepada Bursa Saham Kuala Lumpur; sebarang urusniaga berkaitan yang mungkin timbul di dalam Kumpulan; dan perancangan, skop dan pertimbangan bidang audit dalaman dan audit luaran serta kesimpulan audit yang berkenaan. Untuk meneliti semula dan mengkaji kualiti perkhidmatan yang diberikan oleh juruaudit luar dan untuk membuat syor-syor yang berkenaan dengan perlantikan/penggantian serta ganjaran mereka. Untuk menilai kecekapan laporan pengurusan. Untuk melaporkan kepada Lembaga Pengarah tentang aktiviti-aktiviti penting dan perkembangan Kumpulan seperti yang ditonjolkan di dalam laporan-laporan audit luaran dan dalaman. Untuk membuat syor-syor yang sesuai kepada Lembaga Pengarah, jika perlu.

Audit Committee Jawatankuasa Audit

7. KEHADIRAN (a) Mesyuarat-mesyuarat akan dihadiri oleh ahli-ahli jawatankuasa dan Pengurus Audit Kumpulan yang akan bertindak sebagai Setiausaha. (b) Peserta-peserta mungkin dijemput dari semasa ke semasa untuk menghadiri mesyuarat bergantung kepada perkara yang sedang diteliti. Pesertapeserta mungkin termasuk juruaudit luar, Pengarah Eksekutif, Timbalan Presiden, Naib Presiden Kanan, Naib Presiden, Pengurus Besar Kanan, Pengurus Besar atau Ketua-ketua Jabatan. 8. MESYUARAT Mesyuarat akan diadakan pada bila-bila masa dianggap perlu oleh Pengerusi Jawatankuasa. 9. KORUM Korum akan terbentuk jika mana-mana dua ahli jawatankuasa hadir dalam mesyuarat tersebut. 10. MINIT MESYUARAT Setiausaha akan: (a) Mencatatkan minit mesyuarat tersebut. (b) Menghantar notis-notis mesyuarat. (c) Mengedarkan minit mesyuarat di kalangan ahli-ahli jawatankuasa.

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The Malaysian economy got off to a rousing start in the new Millennium registering a GDP growth of 8.5% for the year 2000. This was attained in an environment of market and financial stability in the country with improved consumer confidence and spending

Chairmans Statement

under a regime of economic and political stability, low interest rates and inflation. On the backdrop of these favourable market conditions, I am pleased to present, on behalf of the Board of Directors, the Annual Report and Financial Statements of the KFC Holdings (Malaysia) Bhd Group (KFCH) for the financial year ended 31 December 2000. FINANCIAL PERFORMANCE The Group turned in a much improved performance in the year under review, registering a profit before taxation of RM85.9 million, which represented an increase of 87% over the previous years RM45.9 million which included an exceptional gain of RM15.4 million. Turnover achieved was close to the billionth ringgit mark at RM997.1 million, an increase of 13% over the previous years RM879.7 million. The improved market conditions in the year under review coupled with the buoyant consumer sentiment contributed positively to the increased demand for the Groups products. To capitalise on this positive environment and to expand its product reach to consumers, the Group continued with its restaurants expansion by adding 15 and 12 new KFC and Pizza Hut restaurants, respectively, into its extensive distribution network during the year, to end the year with 289 KFC and 83 Pizza Hut restaurants. This maintained our leadership in the growing Western Quick Service Restaurants (QSR) market segment. Market competition was stiff with attempts to garner a larger share of the Groups dominance of the chicken market segment. However, with the meticulous planning and timely implementation of effective marketing programmes such as "The Perfect Match" and the highly acclaimed Wholesome Meal Campaign, the Group managed to successfully maintain its dominance of the QSR market. focus on product innovations continues to bear dividends. The Groups Successful

launches of innovative new products like Seafood Pizza, Rendang Pizza, Chargrilled Chicken Pizza, Sicilian Pizza, Spicy Twisters and Alpha Nuggets are boosting sales and profitability. The Groups integrated poultry sector also turned in improved performance in the year under review. It benefited from increased consumer spending, better pricing and improved productivity. The Groups "halal" further processed poultry

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products which provided price and margin stabilities continued to gain market share. The feedmill and the breeder farms and hatchery registered satisfactory performance in the current year, and continued to benefit from cost stabilities brought about by the pegging of the Ringgit to the US Dollar. RECOGNITION The strengths of KFCHs restaurants operations and effectiveness of its marketing programmes were underscored by the Groups recent recognition of its efforts by its franchisor, Tricon Restaurants International. KFCH was recently awarded several Tricon Asia Pacific Excellence Awards 2000 including, inter alia : Restaurant Excellence 2000 (KFC) Marketing Excellence 2000 (KFC) Marketing Excellence 2000 (Pizza Hut) KFCHs KFC restaurants division has won the Restaurant Excellence Award for the third consecutive time. CORPORATE PROPOSALS On 9 November 2000, Ayamas Food Corporation Bhd (AFCB), a subsidiary company of KFCH, had announced the following corporate exercises:a) Proposed bonus issue of 49,750,000 new ordinary shares of RM1.00 each on the basis of one (1) new ordinary share of RM1.00 each for every one (1) existing ordinary share of RM1.00 each held. b) Proposed rights issue of 49,750,000 new ordinary shares of RM1.00 each at an issue price to be determined later together with up to 49,750,000 free new warrants on the basis of one (1) new ordinary share of RM1.00 each together with one (1) free warrant for every two (2) ordinary shares of RM1.00 held after the Proposed Bonus Issue. c) Proposed acquisition of 52,740 square metres of land together with the building structures situated in Mukim and District of Klang, State of Selangor Darul Ehsan for a purchase consideration of RM65 million. In addition, on 10 November 2000, AFCB had also announced the proposed transfer of listing of its entire enlarged issued and paid-up share capital after the completion of the proposals as set out above from the Second Board to the Main Board of the KLSE. These corporate proposals are pending relevant approvals.

Chairmans Statement

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DIVIDENDS The Board of Directors has recommended a first and final tax exempt dividend of 8 sen (1999 5 sen less tax of 28%) per ordinary share in respect of the financial year ended 31 December 2000. The dividend entitlement, if approved by the shareholders at the forthcoming Annual General Meeting, will be announced at a later date. PROSPECTS The economic slowdown in the United States, a major trading partner of Malaysia, is likely to have an impact on the economic performance of the country in year 2001. Business conditions and consumer sentiments had waned in the first quarter of the year 2001 compared to the last quarter of the previous year. However, the favourable tax proposals as contained in the Budget 2001 coupled with the recent Government proposals to pump-prime the economy may mitigate the negative effect of the difficult external environment. Thus, the Board, barring any unforeseen circumstances, is cautiously optimistic of achieving satisfactory results for the coming financial year. APPRECIATION On behalf of the Board of Directors, I wish to express my sincere appreciation to the management and staff of the KFCH Group for their continued dedication, commitment and loyalty to the Group. We would also like to extend our appreciation to our customers, financiers, suppliers, regulatory and governmental authorities, for their unwavering support in making year 2000 a highly successful year for KFCH.

Haji Izhar bin Sulaiman Executive Chairman Kuala Lumpur

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RESTAURANT OPERATIONS QSR DIVISION KFC & PIZZA HUT The strong recovery in consumer spending amidst improvement in consumer sentiments continued from the second half of 1999 into the new Millennium. Business conditions improved and the KFCH Group capitalised on this positive economic environment by further expanding its network with the addition of 15 new KFC restaurants and 12 new Pizza Hut restaurants, to close at 289 KFC and 83 Pizza Hut outlets at years end. The QSR Division registered a turnover of RM699.1 million, an increase of 17.6% over the previous years RM594.7 million. Operating profit improved more significantly, a result of its disciplined focus on operations and processes which improved productivity and yields. Operating profit was RM71.6 million, representing an increase of 58.4% over the previous years RM45.2 million. The KFC restaurant chain chalked up a turnover of RM578.9 million with an operating profit of RM56.0 million. This represented an increase of 17.1% and 63.3% over the previous years turnover and operating profit, respectively. Year 2000 witnessed a competitive chicken war in the QSR market segment. Attempts were made to capture a larger share of the These were

Review of Operations

Groups dominance of the chicken market segment.

somewhat thwarted by the timely and appropriate introduction of competitive brand differentiating promotions such as "The Perfect Match" and the "Wholesome Meal Campaign" which enhanced sales considerably. The Wholesome Meal Campaign focussed on a meal rich in protein, vitamins, minerals, carbohydrates and fibre. The campaign was a further step towards strengthening our market leadership and to offer a wholesome and complete meal with nutrients, which is unmatched by our competitors. New products such as Spicy Twister and Alpha Nuggets were introduced to add variety and create excitement and news in the

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market place. The new Alpha Nuggets were made of the choicest premium chicken meat marinated in 11 herbs and spices, specially moulded into the form of alphabets before being coated with corn flake crumbs. Big Pack Combos were also introduced in year 2000 to offer convenience in customer orders and to boost sales. On the thematic front, a TV commercial entitled "The Working Mum" was specially produced to build brand equity on the emotional side. The Pizza Hut restaurant chain recorded another sensational year in 2000. Its turnover for year 2000 was RM120.1 million,

an increase of 19.8% over the previous years RM100.2 million. Operating profit of RM15.6 million was 43.8% better than the previous years RM10.8 million. Several new products were introduced and promotions launched to ride on the growing acceptance of Pizza and the customers increasing affluence. The "Seafood Sensation" product was launched in early 2000 to drive transactions and ticket average during the Millennium Countdown, Hari Raya and Chinese New Year celebrations.

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To create product news and excitement in the market, Rendang Supreme Pizza was introduced in March 2000. The new pizza was deliciously topped with tender chunks of chicken, onion and scrumptious "kerisik" in a rich, spicy "rendang" sauce, and garnished with fresh chopped chilli. To further boost sales, Chargrilled Chicken Pizza was launched in September 2000. It was prepared with wholesome chicken grilled to perfection. Flavoured with tempting spices and topped with fresh lettuce, it was served on the irresistible stuffed crust. The Pizza Hut chain ended the year with record sales contributed by the introduction of Sicilian Pizza which comprised pizza dough blended with basil, oregano and garlic baked into the crust. It was another year of recognition by our franchisor, Tricon Restaurants International. KFCH won several of the top excellence awards

Review of Operations

presented annually to franchisees in the Asia Pacific region. Among these were the Excellence Awards for Restaurant Excellence 2000 (KFC), Marketing Excellence 2000 (KFC) and Marketing Excellence 2000 (Pizza Hut). The Restaurant Excellence award was won for the third consecutive time by KFCH.

BAKERS STREET In year 2000, this chain of six bakery-styled cafes continued to operate in a very competitive environment. Though no new outlets were built, it managed to maintain a turnover of RM1.4 million in the year under review, consistent with the previous year. Operating management is conscientiously looking into new menu and marketing strategy to increase patronage and expand its distribution network.

RASA GOURMET The chain of dine-in deli-styled restaurants turned in a commendable performance in year 2000. It achieved a turnover of RM7.7 million against the previous years RM7.4 million. The outlet in Mid Valley Megamall which was opened towards the end of 1999 turned out to be the biggest contributor to the network of 10 restaurants. Growing 13

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affluence of customers coupled with a preference for convenient and quality food boosted sales. Plans are in store to meet this growing acceptance by building new outlets to reach more consumers.

TASTEBUDS Turnover of the existing two Tastebuds outlets improved substantially by 80% to register RM1.5 million in year 2000. This was contributed by the increase in function sales at both Putrajaya and Wisma KFC. To create menu variety, its breakfast and lunch menus were expanded to include "roti canai", "thosai" and various Chinese-styled noodles, as well as tea break promotions. The Perdana Room at Level 3, Wisma KFC was renovated to offer facilities for functions and seminars with a seating capacity for 500 people. opportunity for Tastebuds to enhance its sales. This has provided an

INTEGRATED POULTRY OPERATIONS AYAMAS DIVISION Ayamas improved its turnover by 7.6% to register RM372.4 million over the previous years RM346.1 million. Correspondingly its profit before taxation improved by 16.7%, from RM17.4 million in the previous year to RM20.3 million in the year under review. The country has one of the highest per capita consumption rates in the world for chicken, estimated at 35.2kg in year 2000. Chicken meat is still the most popular and cheapest source of meat protein among Malaysians mainly because there are no dietary prohibitions and religious restrictions against chicken consumption. In addition, the outbreak of diseases such as JE and HFMD has shifted consumers preference to chicken from other meat protein, thus increasing demand for the Groups poultry products. Ayamas continued to focus on the better margin further processed poultry products which gained further market acceptance for its value

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and convenience. A new breading line was commissioned during the year to further increase its capacity and to provide room for future expansion. The introduction of new products boosted sales consistently. Thus, it was not

surprising that the new freezer-to-fryer products introduced during the year such as Hot & Spicy Drummets and new KFC Alpha Nuggets were well received by our consumers. At the operations front, its marketing and sales departments were further strengthened so as to improve brand awareness and market penetration into other trade and food service categories. Its retail division ended the year with 26 convenience stores, 10 kiosks, 5 depots and 10 Rasa Gourmet outlets with a sales growth of 14% over the previous year. Its network is expected to expand further in year 2001 with the introduction of a new concept and design for its convenience stores.

Review of Operations

FEEDMILL DIVISION This Division registered a turnover of RM104.1 million, representing an increase of 6.6% over the previous years RM97.6 million. Operating profit improved from RM4.4 million in 1999 to RM4.9 million in the year under review. The improved performance was due to higher throughput, 126,000MT sold as against 122,000MT previously, and higher feed prices, which resulted in improved margins given the relative stability of corn and soyabean meal prices. The poultry feed sector is dominated by the big poultry integrators with lower tonnage being traded in the open market. Thus the overall open market feed sector is stagnating.

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BREEDER FARMS AND HATCHERY This Division continued to turn in an improved performance in year 2000 after turning around in 1999 from losses in previous years. It chalked up an operating profit of close to a million ringgit which was attributed to the increased production of day-old-chicks to meet increasing poultry meat consumption and a significant reduction in unit cost of production of hatchable eggs and day-old-chicks, arising from the various cost-efficient measures undertaken during the year.

ANCILLARY OPERATIONS BAKERY The Bakery achieved a turnover of RM6.2 million, an increase of 19.2% over the previous years RM5.2 million. The improved performance was in line with KFC and Pizza Huts results as these chains continued to contribute 80% of the Divisions business. The balance is from the open market which registered a growth of 25.7% in year 2000. A range of new products under the brand name "BAKERS STREET" was launched in major hypermarkets, namely Carrefour and Makro. These products included frozen pies, cakes, garlic bread and pizzas. Response has been encouraging and currently, they are also being sold in other supermarkets within Klang Valley. Plans are in the pipeline to offer these products for sale in other major towns and cities in Malaysia via distributors.

COMMISSARY The Commissary, which principally operates from the KFC Complex in Glenmarie, achieved a turnover of RM9.3 million in year 2000, representing a growth of 5.7% over the previous corresponding period. Its performance is dependent upon KFC restaurants as it continues to serve as a centre supplying vegetable salads and coleslaw to the restaurant chain.

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CATERING SERVICES This Division registered a significant improvement in sales in year 2000, the first year it was operating through the larger and modernised facilities in the KFC Complex, Glenmarie. It raked in a turnover of RM4.3 million as against the previous

Review of Operations

years RM2.6 million. The production capacity in Glenmarie is about three times that of its previous capacity, and it is able to serve 10,000 meals per day. With the increased capacity in hand, it ventured into industrial catering and opened its first canteen in August 2000 in PJVM. Subsequently it secured additional contracts to operate canteens in

Matsushita, Tamura Electronics, Toshiba and Sony manufacturing facilities. This sector has been identified as an area of growth and another five industrial canteens are expected to be opened in the coming financial year.

REGION FOOD INDUSTRIES Region Food Industries (RFI), one of the leading sauce manufacturers in the country, registered significant sales growth in the year under review. It recorded a turnover of RM25.9 million representing an increase of 25% over the previous year. The robust growth was mainly attributed to the increased off-take from internal users within the KFCH Group which accounted for 49% of the divisions turnover while the balance was from the open market and exports. Total sales and production for the year were 6,773MT of sauces which represented an increase of 22% over the previous year. The new Thai Chilli Sauce was launched in January 2000. With the benefit of heavy promotions and sampling in the KFC restaurants, the response from the open market was very encouraging. This new product proved to be very well accepted in the market and strengthened our sales of table sauces in the retail sector. RFI will continue to embark on aggressive marketing activities to further strengthen its LIFE brand equity, increase market presence and visibility. Sales volume improvements will be achieved through in-store

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promotions, trade offers and joint promotions with KFC and Ayamas. In addition, efforts will be directed towards expanding its export market presence by participating in trade fairs and making market visits to broaden its customer base.

HUMAN RESOURCE DEVELOPMENT With a strong staff force of 10,800 at the end of 2000, the KFCH Group prides itself as one of the largest employers in the food industry of Malaysia. This workforce is set to grow further with the Groups expansion plans in the coming years. The Groups commitment to develop human resource is not limited to only its staff but it is also extended to school leavers, with the objective of providing them with an opportunity to acquire skills in the food service and restaurant management business. The KFCH Training Institute went through a name change. Now, it is known as the FOOD INSTITUTE of MALAYSIA (FIM) to better reflect its expanded scope of skills training and facilities. The FIM moved

to a bigger and more modern facility at No. 41-51, Jalan SS6/12, Kelana Jaya during the year and is currently offering courses for Certificate/Diploma in Foodservice and Restaurant Management and Certificate/Diploma in Pastry & Bakery. FIM has also secured student exchange programmes with the University of Hawaii and an understanding with UPM for FIM Diploma graduates to pursue their Degree in Food Studies in the November 2001/May 2002 intake. An educational advisory centre named the USEAC was set up at Wisma KFC for students intending to pursue studies in the United States. Recently, a post-graduate programme in business management called the MITem was launched in association with the University of Hawaii.

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COMMUNITY RELATIONS The Group continues to carry out its social obligations and uphold its commitment to community service.

Review of Operations

KFC CHILDRENS DAY CELEBRATION It was a day full of fun, games and great food for 100 orphans who joined in KFCs biggest ever celebration to mark the International Childrens Day and Kids Fun Club Sixth Anniversary at the National Stadium, Bukit Jalil on 8 October 2000. The orphans and hearing-impaired children from Rumah Kebajikan Anak-anak Yatim Al-Hairiah, Klang and Sekolah Rendah Pendidikan (Cacat Pendengaran) Kg Baru, Kuala Lumpur, joined 1,500 children comprising KFC Kids Fun Club members and non-members at the big "do" and had a thoroughly enjoyable time. These orphans and children had the opportunity to meet KFC HOUR hosts, Shanim and Intan. Prizes were also awarded to winners of the latest KFC Knockout Contests. The venue was transformed into a fairyland with games galore, telematches, magic show, special performances and lucky draws. Finger lickin good KFC meals were served and other KFC goodies were given away as prizes. Chicky, KFCs celebrity mascot, who was accompanied by his great friends, the hilarious and notorious famous Looney Tunes gang comprising Bugs Bunny, Daffy Duck and Tasmanian Devil, entertained the children. Some lucky ones had their pictures taken with the gang as souvenirs. This was the eighth consecutive year that KFCH was hosting the International Childrens Day celebration, and this years event was the biggest by far in terms of scope and participation. The tremendous response from children to this event resulted in KFCH having to select a bigger venue, the National Stadium in Bukit Jalil. In the previous years, this event was usually held in the Zoo Negara.

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The Kids Fun Club provides its members with many privileges.

These

include discounted purchases of KFC meal promotions, unique premiums and a quarterly club magazine. Launched in 1994, the Kids Fun Clubs current membership stands at 400,000 and the number is growing rapidly.

KFC HOUR 2000 In year 2000, the KFC HOUR kept Malaysian children entertained at 11.00 a.m. every Saturday by featuring several cartoon series in its four seasons of the year such as Tommy and Oscar, Slayers, Scooby Doo, Mojako, Oggy & The Cockroaches, Ninja Boy and Sonic Underground Hedgehog. It also held knockout contests for kids and offered great prizes to winners in the form of cash and premiums such as Oscar, Looney Tunes plush toys, hampers and colour television sets. KFC HOUR maintained its position in the top ten childrens programmes throughout the four seasons in the year under review.

NEWSPAPER IN EDUCATION The year 2000 was the third year Pizza Hut joined forces with The Star in its "Newspaper In Education" programme. This years theme, "Passport To Rewards", surpassed previous years contests in every statistic. About 206,000 students signed up, out of which a record 138,000 students completed the required number of NIE activities to win pizza prizes. This was 50% more than the 82,000 students who won in the 1999 "Design for Rewards" programme, and many times more than the 14,000 winners in the "Read For Rewards" contest in 1998. The number of schools that participated in this annual programme had increased from 200 in 1998 to 516 in year 2000. The programme also won international recognition. The "Passport To Rewards" programme won the Gold Medal in the Paupa Fletcher Challenge Newspaper

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Market Awards. In July 2000, the Pacific Area Newspaper Publisher Association or Paupa named "Passport To Rewards" the winner in the Young Readers Category.

SYARIAH ADVISORY COUNCIL OF KFCH The Syariah Advisory Council of KFCH (SAC) acts as an advisory body to KFCH on all religious matters relating to KFCHs food business and other relevant operations. Set up in 1996, members of the SAC are distinguished and prominent religious scholars from Islamic institutions. By maintaining a close rapport with the various religious departments, councils and bodies as well as conducting regular inspections on the various plant and operation outlets of KFCH, the SAC ensures that the KFCH Group complies with the "halal" requirements of the Islamic Law in general and in particular the Malaysian Government regulations.

Review of Operations

Back (left to right) : Tuan Haji Abd Majid Omar, Tuan Haji Omar Saad, Tuan Haji Omar @ Wan Mat Wan Teh, Encik Azami Mustapha, YBhg Dato Dr. Abd Shukor Hj. Husin, YBhg Datuk Abang Haji Zainie Abang Haji Suhai, Tuan Haji Mohamad Haji Shafie. Front (left to right) : YBhg Datuk Haji Md Hashim Yahaya, Tuan Haji Izhar Sulaiman, Tan Sri Dato Abdul Kader Talip, YBhg Datuk Dr. Abd Monir Yaakob not in picture : YBhg Dato Haji Hassan Haji Ahmad & YBhg Datuk Haji Ishak Haji Ismail

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Ketika negara melangkah ke alaf baru, ekonomi Malaysia mencapai pertumbuhan yang merangsangkan dengan Keluaran Dalam Negeri Kasar (KDNK) mencatatkan kadar pertumbuhan sebanyak 8.5 % pada 2000. Ini adalah disebabkan oleh keadaan

Penyata Pengerusi

pasaran dan kestabilan kewangan di negara ini serta keyakinan dan perbelanjaan pengguna yang bertambah baik di samping kestabilan ekonomi dan politik, kadar faedah dan inflasi yang rendah. Memandangkan keadaan pasaran yang menggalakkan ini, saya bagi pihak Lembaga Pengarah, dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Kumpulan KFC Holdings (Malaysia) Bhd bagi tahun kewangan berakhir 31 Disember 2000. PENCAPAIAN KEWANGAN Kumpulan mencapai prestasi yang semakin baik pada tahun sedang diulas dengan mencatatkan keuntungan sebelum cukai sebanyak RM85.9 juta atau meningkat sebanyak 87% berbanding dengan tahun sebelumnya yang mencatatkan keuntungan sebanyak RM45.9 juta. Keuntungan tersebut

termasuk keuntungan luar biasa sebanyak RM15.4 juta. Perolehan yang tercapai hampir mencecah paras satu bilion ringgit, iaitu RM997.1 juta. Pendapatan telah meningkat sebanyak 13% berbanding dengan tahun sebelumnya yang hanya merekodkan RM879.7 juta. Keadaan pasaran yang bertambah baik pada tahun sedang diulas serta sentimen pengguna yang kuat telah meningkatkan permintaan terhadap produk Kumpulan. Untuk mengambil kesempatan keadaan yang positif ini serta meluaskan peredaran produk, Kumpulan terus meluaskan rangkaian restorannya dengan menambah lagi 15 buah restoran KFC dan 12 buah Pizza Hut, menjadikan jumlah rangkaian pengedarannya bertambah kepada 289 buah restoran KFC dan 83 buah restoran Pizza Hut. Dengan ini, Kumpulan dapat mengekalkan

kedudukannya sebagai pemimpin dalam segmen pasaran Restoran Khidmat Cepat (Quick Service Restoran, atau QSR) yang berkembang dengan pesat. Persaingan pasaran adalah sengit dengan adanya percubaan pesaing-pesaing untuk menyambar bahagian yang lebih besar dalam segmen pasaran ayam yang didominasi oleh Kumpulan. Namun demikian, dengan adanya

perancangan dan perlaksanaan program pemasaran yang berkesan dan tepat pada masanya, seperti "The Perfect Match" serta Kempen Wholesome Meal yang disambut hebat, Kumpulan berjaya mengekalkan dominasinya dalam pasaran QSR. Tumpuan Kumpulan kepada inovasi produk terus mendatangkan faedah.

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Pelancaran produk-produk inovatif seperti Seafood Pizza, Rendang Pizza, Chargrilled Chicken Pizza, Sicilian Pizza, Spicy Twister dan Alpha Nuggets telah meningkatkan jualan dan keuntungan. Sektor ayam bersepadu kumpulan juga melaporkan prestasi yang bertambah baik pada tahun yang sedang diulas. Perbelanjaan pengguna yang meningkat, harga yang lebih berpatutan serta produktiviti yang bertambah baik, telah memanfaatkan sektor ini. Produk ayam "halal"kumpulan yang mendatangkan harga dan margin stabil terus mengekalkan kedudukannya di pasaran. Pada tahun semasa, kilang makanan haiwan dan ladang pembiakan serta ladang penetasan mencatatkan prestasi yang memuaskan dan terus dimanfaatkan oleh kos yang stabil akibat penetapan Ringgit kepada Dolar Amerika Syarikat. PENGIKTIRAFAN Kekuatan operasi restoran berfrancais dan keberkesanan program pemasaran KFCH telah terbukti dengan pengiktirafan yang diberi oleh pemberi francaisnya, Tricon Restaurants International. Baru-baru ini KFCH telah dianugerahi beberapa Anugerah Kecemerlangan Asia Pasifik Tricon 2000 seperti berikut: Kecemerlangan Restoran 2000 (KFC) Kecemerlangan Pemasaran 2000 (KFC) Kecemerlangan Pemasaran 2000 (Pizza Hut) Anugerah Kecemerlangan Restoran dimenangi KFCH untuk kali ketiga berturut-turut. CADANGAN KORPORAT Pada 9 November 2000, Ayamas Food Corporation Bhd (AFCB), sebuah anak syarikat KFCH telah mengumumkan rancangan korporat seperti berikut:a) Cadangan terbitan bonus sebanyak 49,750,000 saham biasa baru yang bernilai RMl.00 sesaham berdasarkan seunit saham biasa baru bernilai RM1.00 untuk setiap saham biasa bernilai RM1.00 yang dipegang. b) Cadangan terbitan hak sebanyak 49,750,000 saham biasa baru bernilai RM1.00 sesaham dengan harga terbitan yang ditetapkan kemudian bersama-sama sehingga 49,750,000 waran baru berdasarkan seunit saham biasa baru bernilai RM1.00 bersamaan dengan satu (1) waran percuma bagi setiap dua (2) sahambiasa bernilai RM1.00 sesaham yang dipegang selepas cadangan terbitan bonus tersebut. c) Cadangan pengambilalihan tanah seluas 52,740 kaki persegi bersama-sama struktur bangunan yang terletak di Mukim dan Daerah Kelang, Negeri Selangor Darul Ehsan dengan pertimbangan harga sebanyak RM65 juta. 23

Penyata Pengerusi

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Di samping itu, pada 10 November 2000, AFCB telah mengumumkan cadangan untuk memindahkan penyenaraian seluruh modal saham yang dibesarkan dan berbayar selepas selesainya cadangan-cadangan yang tersebut di atas dari Papan Kedua ke Papan Utama Bursa Saham Kuala Lumpur. Cadangan-cadangan korporat masih menunggu kelulusan-kelulusan daripada pihak berkuasa yang berkenaan. DIVIDEN Lembaga Pengarah mengesyorkan pembayaran dividen pertama dan akhir yang dikecualikan cukai sebanyak 8 sen (1999: 5 sen ditolak cukai 28%) setiap saham biasa bagi tahun kewangan berakhir 31 Disember 2000. Kelayakan untuk dividen akan diumumkan pada suatu tarikh kemudian selepas ia diluluskan oleh para pemegang saham pada Mesyuarat Agung Tahunan yang akan datang. PROSPEK Kelembapan ekonomi Amerika Syarikat yang merupakan rakan perdagangan utama Malaysia dijangka akan menjejaskan prestasi ekonomi negara ini pada tahun 2001. Keadaan perniagaan dan sentimen pengguna merosot pada suku pertama tahun 2001 berbanding dengan suku ahkir tahun sebelumnya. Namun demikian, cadangan percukaian yang menarik seperti terkandung di dalam Belanjawan 2001 serta cadangan Kerajaan baru-baru ini untuk merangsangkan ekonomi mungkin dapat mengurangkan kesan negatif keadaan ekonomi luar. Oleh yang demikian,

berdasarkan keadaan ini dan jika tidak berlaku apa-apa peristiwa yang sukar diduga, Lembaga berasa optimistik bahawa Kumpulan akan mencapai prestasi yang memuaskan bagi tahun kewangan yang akan datang. PENGHARGAAN Bagi pihak Lembaga Pengarah, saya ingin menyampaikan penghargaan ikhlas kepada pihak Pengurusan dan kakitangan Kumpulan KFCH atas dedikasi, komitmen dan kesetiaan mereka kepada Kumpulan. Kami juga ingin mengucapkan terima kasih kepada pihak para pelanggan, institusi kewangan, pembekal, pihak berkuasa kawal selia dan Kerajaan atas sokongan berterusan yang membolehkan KFCH mencapai prestasi yang begitu cemerlang pada tahun 2000.

Haji Izhar bin Sulaiman Pengerusi Eksekutif Kuala Lumpur 24

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OPERASI RESTORAN BAHAGIAN QSR - KFC & PIZZA HUT Pemulihan perbelanjaan pengguna secara ketara hasil daripada sentimen pengguna yang bertambah baik sejak pertengahan kedua tahun 1999 berkekalan sehinggan alaf baru. Keadaan perniagaan bertambah baik dan Kumpulan

Ulasan Operasi

KFC telah mengambil kesempatan keadaan ekonomi yang positif ini untuk memperkembangkan lagi rangkaiannya dengan menambah sebanyak 15 restoran KFC dan 12 restoran Pizza Hut baru, menjadikan jumlah restoran KFC dan Pizza Hut masing-masing sebanyak 289 dan 83 setakat akhir tahun lalu. Bahagian QSR (Restoran Khidmat Cepat) mencatatkan perolehan sebanyak RM699.1 juta, naik 17.6% daripada RM594.7 juta pada tahun sebelumnya. Keuntungan operasi meningkat lebih nyata hasil

tumpuannya kepada operasi dan proses yang dapat meninggikan daya produktiviti. Keuntungan operasi berjumlah RM71.6 juta, atau 58.4% lebih daripada RM45.2 juta yang tercapai pada tahun sebelumnya. Rangkaian restoran KFC melaporkan perolehan sebanyak RM578.9 juta dan keuntungan operasi ialah RM56.0 juta. Ini merupakan kenaikan sebanyak 17.1% dan 63.3% masing-masing berbanding dengan tahun sebelumnya. Pada tahun 2000, satu perang harga ayam yang sengit telah berlaku di segmen pasaran QSR. Percubaan telah dilakukan untuk merebut bahagian pasaran yang lebih besar daripada penguasaan Kumpulan di segmen pasaran ayam. Namun demikian, percubaan tersebut telah gagal oleh kerana Kumpulan telah melaksanakan promosi perbezaan jenama secara bersaing seperti "The Perfect Match" dan Kempen "The Wholesome Meal" yang telah meningkatkan jualan secara ketara. Kempen "The Wholesome Meal" tertumpu kepada hidangan yang kaya dengan protein, vitamin, karbohidrat serta serabut. Kempen ini merupakan satu langkah ke arah memperkukuhkan kedudukan kami sebagai pemimpin pasaran serta menawarkan satu hidangan yang lengkap dengan nutrien dan tidak dapat ditandingi oleh pesaing-pesaing kami. Beberapa produk baru seperti Spicy Twister dan Alpha Nuggets telah diperkenalkan untuk memberi pilihan dan merangsang pasaran.

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Alpha Nuggets baru yang diperbuat daripada daging ayam terbaik dan diperap dengan 11 jenis herba dan rempah kemudian dibentukkan menjadi abjad sebelum disalut serpihan emping jagung. Big Pack Combos juga telah diperkenalkan pada tahun 2000 untuk menawarkan kemudahan dalam pesanan pelanggan dan meningkatkan jualan. Di samping itu, satu komersil TV bertajuk

"The Working Mum" telah disiarkan untuk membina kesedaran jenama dari segi emosi. Rangkaian restoran Pizza Hut mencatatkan lagi satu pencapaian hebat pada tahun 2000. Perolehannya berjumlah RM120.1 juta, naik 19.8% daripada RM100.2 juta pada tahun sebelumnya. Keuntungan operasi berjumlah RM15.6 juta atau 43.8% lebih daripada RM10.8 juta tercapai pada tahun sebelumnya. Beberapa produk baru telah diperkenalkan dan promosi dilancarkan untuk mengambil kesempatan penerimaan Pizza yang kian meluas. Produk "Sensasi Makanan Laut " yang dilancarkan pada awal tahun 2000 demi menambah perniagaan dan jualan sempena sambutan Alaf Baru dan musim perayaan Hari Raya serta Tahun Baru Cina. Untuk merangsangkan pasaran, Rendang Supreme Pizza diperkenalkan pada Mac 2000. Pizza baru yang enak ini dihiasi ketulan daging ayam yang lembut, bawang besar, serta "kerisik" yang lazat dengan sos rendang yang kaya dan berempah, lalu dihiasi dengan cili hiris segar.

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Untuk menggalakkan lagi jualan, Chargrilled Chicken Pizza dilancarkan pada September 2000. Hidangan ini disediakan dengan ayam yang dipanggang sempurna dan diperisa dengan rempah yang menarik lalu dihiasi dengan salad segar dan dihidangkan dengan kulit berinti yang lazat. Pada akhir tahun lalu, jumlah jualan oleh rangkaian restoran Pizza Hut mencatatkan rekod baru selepas Sicilian Pizza diperkenalkan. Pizza ini mengandungi doh pizza yang dicampur basil, oregano dan bawang putih dipanggang ke dalam kulitnya. Sekali lagi KFCH mendapat pengiktirafan daripada pemberi francais kami, iaitu Tricon Restaurants International pada tahun 2000. KFCH menjuarai beberapa anugerah kecemerlangan yang dihadiahkan kepada pemegang francais di rantau Asia Pasifik pada tiap-tiap tahun. Antaranya ialah Anugerah Kecemerlangan bagi Kecemerlangan Restoran 2000 (KFC), Kecemerlangan Pemasaran 2000 (KFC) dan Kecemerlangan Pemasaran 2000 (Pizza Hut). Anugerah Kecemerlangan Restoran telah dijuarai KFCH bagi kali ketiga berturut-turut.

Ulasan Operasi

BAKER STREET Pada tahun 2000, rangkaian yang terdiri daripada enam kafe bercorak bakeri ini terus beroperasi dalam keadaan yang penuh persaingan. Walaupun tiada kafe baru dibuka, ia dapat mengekalkan jumlah perolehan sebanyak RM1.4 juta pada tahun sedang diulas, iaitu sama dengan tahun sebelumnya. Pihak pengurusan operasi sedang

berusaha mengkaji menu dan strategi pemasaran baru untuk meningkatkan bilangan pelanggan serta memperkembangkan rangkaian pengedarannya.

RASA GOURMET Restoran bercorak deli ini mencapai prestasi yang memuaskan pada tahun 2000. Jumlah perolehan yang dicapai ialah RM7.7 juta

berbanding dengan RM7.4 juta pada tahun sebelumnya. Restoran di Mid Valley Megamall yang dibuka pada hujung tahun 1999 menjadi penyumbang terbesar antara 10 restoran. Tahap pendapatan

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pelanggan yang kian meningkat serta kegemaran untuk makanan mudah lagi berkualiti dapat menambah jualan. Rancangan telah disediakan untuk membuka lebih banyak restoran demi menarik lebih ramai pelanggan.

TASTEBUDS Jumlah perolehan dua restoran yang ada sekarang bertambah secara ketara, iaitu sebanyak 80% sehingga RM1.5 juta pada tahun 2000. Ini adalah hasil daripada tambahan majlis di Putrajaya dan Wisma KFC. Untuk menambah pilihan menu, menu sarapan pagi dan makan tengah hari telah ditambah dengan "roti canai", "thosai" serta beberapa mee ala Cina dan promosi waktu rehat. Bilik Perdana di Aras 3, Wisma KFC telah diubahsuai dan ditambah dengan kemudahan untuk majlis-majlis dan seminar-seminar yang boleh menampung seramai 500 orang. Ini telah memberi peluang kepada Tastebuds untuk meningkatkan jualannya.

OPERASI PENTERNAKAN AYAM BERSEPADU BAHAGIAN AYAMAS Jumlah perolehan Ayamas meningkat sebanyak 7.6% kepada RM372.4 juta berbanding dengan RM346.1 juta pada tahun sebelumnya dan keuntungan sebelum cukai meningkat sebanyak 16.7% kepada RM20.3 juta pada tahun sedang diulas daripada RM17.4 juta pada tahun sebelumnya. Negara kita mempunyai kadar pemakanan daging ayam per kapita yang paling tinggi di dunia, iaitu dianggar sebanyak 35.2 kg pada tahun 2000. Daging ayam masih merupakan sumber protein daging yang paling popular dan paling murah di kalangan rakyat Malaysia oleh kerana tiada apa-apa larangan makanan dan sekatan agama terhadap pemakanan daging ayam. Selain daripada itu, para

pengguna telah beralih kepada daging ayam daripada protein daging lain akibat berlakunya beberapa penyakit seperti wabak JE dan Penyakit Tangan Kaki Dan Mulut. Oleh itu, permintaan untuk produk ayam Kumpulan kian meningkat.

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Ayamas terus bertumpu kepada produk ayam yang diproses selanjutnya yang mencapai keuntungan lebih tinggi dan kian diterima oleh pasaran kerana nilai dan kemudahannya. Satu proses baru menyalut serdak roti telah mula beroperasi pada tahun lalu demi meningkatkan kapasiti dan tujuan perkembangan pada masa yang akan datang. Pengenalan produk-produk baru telah menggalakkan jualan secara konsisten. Justera, produk-produk penyejuk beku ke penggoreng yang diperkenalkan pada tahun lalu seperti Hot & Spicy Drummets dan KFC Alpha Nuggets telah disambut baik oleh para pelanggan. Di peringkat operasi pula, jabatan pemasaran dan jualan Kumpulan telah diperkembangkan lagi supaya meningkatkan kesedaran jenama dan penembusan pasaran ke dalam kategori perdagangan dan khidmat makanan yang lain. Pada akhir tahun lepas, Bahagian runcitnya telah membuka sebanyak 26 buah kedai serbaneka, 10 kiosk, 5 depoh dan 10 kedai Rasa Gourmet sambil mencatatkan pertumbuhan jualan sebanyak 14% daripada tahun sebelumnya. Rangkaiannya dijangka berkembang lagi pada 2001 apabila konsep dan rekabentuk baru diperkenalkan bagi kedai serbanekanya

Ulasan Operasi

BAHAGIAN KILANG MAKANAN TERNAKAN Bahagian ini mencatatkan perolehan berjumlah RM104.1 juta, atau naik 6.6% daripada RM97.6 juta pada tahun sebelumnya. Keuntungan operasi naik kepada RM4.9 juta pada tahun sedang diulas daripada RM4.4 juta pada tahun 1999. Prestasi yang bertambah baik ini disebabkan pengeluaran dan hantaran yang lebih tinggi, iaitu sebanyak 126,000 tan metrik telah dijual berbanding dengan 122,000 tan metrik pada tempoh yang sama sebelumnya. Sebab-sebab lain ialah harga makanan ternakan yang lebih tinggi. Ini menghasilkan margin yang bertambah baik memandangkan harga jagung dan serbuk kacang soya yang relatif stabil. Sektor makanan ayam dikuasai oleh pengeluar besar ayam dengan jumlah tan yang didagangkan di pasaran terbuka amat berkurangan. Oleh yang demikian, pada dasarnya, pasaran sektor makanan ternakan terbuka agak lembap.

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LADANG PEMBIAKAN DAN PENETASAN Bahagian ini terus mencapai prestasi bertambah baik pada tahun 2000 setelah ia kembali mencapai keuntungan pada tahun 1999 selepas mengalami kerugian pada tahun-tahun sebelumnya. Bahagian ini melaporkan keuntungan operasi hampir sejuta ringgit hasil peningkatan pengeluaran anak ayam berumur sehari untuk memenuhi penggunaan daging ayam yang semakin meningkat, serta pengurangan secara nyata dalam kos unit pengeluaran telur boleh tetas dan anak ayam berumur sehari hasil langkah-langkah kecekapan kos yang diambil sepanjang tahun lalu.

OPERASI TAMBAHAN BAKERI Bakeri mencapai perolehan berjumlah RM6.2 juta, naik 19.2% daripada RM5.2 juta yang tercapai pada tahun sebelumnya. Prestasi bertambah baik ini adalah serentak dengan pencapaian KFC dan Pizza Hut oleh kerana rangkaian tersebut terus menyumbang sebanyak 80% kepada jumlah perdagangan Bahagian ini. Selebihnya adalah

daripada pasaran terbuka yang mencatatkan pertumbuhan sebanyak 25.7% pada tahun 2000. Satu barisan produk baru dengan jenama "BAKERS STREET" telah dilancarkan di pasaraya besar utama, iaitu Carrefour dan Makro. Produk tersebut termasuk pai sejuk beku, kek, roti bawang putih, dan pizza. Sambutannya adalah menggalakkan dan produk tersebut kini juga dijual di pasaraya-pasaraya di Lembah Kelang. Sementara itu, rancangan telahpun dirangka untuk menawarkan produk tersebut di bandar dan kota utama di seluruh Malaysia menerusi pengedar-pengedar.

KOMISARI Komisari yang pada dasarnya beroperasi dari Kompleks KFC di Glenmarie, telah mencapai perolehan berjumlah RM9.3 juta pada tahun 2000, atau naik 5.7% daripada tempoh sama sebelumnya.

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Prestasinya adalah bergantung kepada restoran KFC oleh kerana ia berperanan sebagai pusat pembekal salad sayuran dan coleslaw kepada rangkaian restoran KFC.

KHIDMAT KATERING Bahagian ini mencatatkan peningkatan jualan yang ketara pada tahun 2000 sejak ia mula beroperasi di kemudahan yang lebih besar dan moden di Kompleks KFC, Glenmarie setahun lalu. Ia mencapai perolehan sebanyak RM4.3 juta berbanding dengan RM2.6 juta pada tahun sebelumnya. Kapasiti pengeluaran di Glenmarie adalah tiga kali ganda lebih daripada kapasiti dahulu dan ia berupaya menyediakan sebanyak 10,000 hidangan sehari. Dengan kapasiti yang lebih tinggi, ia telah menceburi di dalam kegiatan industri katering dan telah membuka kantin pertamanya pada Ogos 2000 di PJVM. Susulan daripada itu, ia telah memperolehi lebih banyak kontrak untuk mengendalikan kantin di kilang Matsushita, Tamura Electronics, Toshiba dan Sony. Sektor ini telah dikenal pasti sebagai satu sektor pertumbuhan dan lima lagi kantin industri dijangka dibuka pada tahun kewangan yang akan datang.

Ulasan Operasi

REGION FOOD INDUSTRIES Region Food Industries (RFI) adalah salah sebuah pengilang sos utama di negara ini. Ia mencatatkan pertumbuhan jualan yang nyata pada tahun sedang diulas. Jumlah perolehannya ialah RM25.9 juta, atau peningkatan 25% lebih daripada tahun sebelumnya. Pertumbuhan yang kukuh ini terutama disebabkan oleh peningkatan jualan kepada pengguna dalaman dari Kumpulan KFCH yang merupakan 49% daripada jumlah perolehan Bahagian ini manakala selebihnya adalah daripada pasaran terbuka dan eksport. Jumlah jualan dan pengeluaran bagi tahun lalu ialah 6,773 tan metrik, atau melambung sebanyak 22% berbanding dengan tahun sebelumnya. Sos Cili Thai telah dilancarkan pada Januari 2000. Dibantu oleh

promosi dan percubaan di restoran KFC, sambutan daripada pasaran

31

5183 KFCHAR.2000(22-35) 30/5/2001 11:51 PM Page 32

terbuka amat menggalakkan. Produk baru ini terbukti disukai ramai di pasaran dan telah memperkukuhkan jualan sos meja kami di sektor runcit. RFI akan terus menjalankan aktiviti pemasaran secara agresif demi memperkukuhkan ekuiti jenama LIFE dan meningkatkan kehadirannya di pasaran. Jumlah jualan dapat ditingkatkan melalui promosi dalam stor, tawaran dagangan serta promosi bersama dengan KFC dan Ayamas. Malah, usaha akan dituju kepada

memperkembangkan kehadiran pasaran eksport dengan menyertai pameran perdagangan dan mengadakan lawatan pasaran dem memperluaskan asas pelanggannya.

PEMBANGUNAN SUMBER MANUSIA Kumpulan KFCH yang menggaji seramai 10,800 pekerja setakat akhir tahun 2000 berasa bangga sebagai salah satu majikan terbesar di dalam industri makanan di Malaysia. Tenaga kerja ini dijangka akan berkembang lagi selaras dengan rancangan pembangunan Kumpulan pada masa depan. Komitmen Kumpulan terhadap pembangunan sumber manusia tidak terhad kepada kakitangannya tetapi juga termasuk lepasan sekolah dengan tujuan menyediakan peluang kepada mereka untuk memperolehi kemahiran di dalam perkhidmatan makanan dan pengurusan perniagaan restoran, Institut Latihan KFCH telah ditukar nama dan kini dikenali sebagai Institut Makanan Malaysia (Food Institute of Malaysia, FIM) demi mencerminkan skop latihan kemahiran dan kemudahan yang telah bertambah. FIM telah berpindah ke kemudahan yang lebih moden di No.41-51, Jalan SS6/12, Kelana Jaya pada tahun lalu dan institut ini kini menawarkan kursus di peringkat sijil dan diploma di dalam bidang Pengurusan Restoran dan kursus peringkat sijil dan diploma di dalam bidang Pastri dan Bakeri. FIM juga berjaya mengadakan program pertukaran pelajar dengan University of Hawaii serta mencapai persefahaman dengan Universiti Putra Malaysia untuk membolehkan graduan Diploma FIM mengikuti kursus ijazah dalam bidang Kajian Makanan dalam pengambilan pelajar sesi November/Mei 2002.

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Sebuah pusat penasihat pendidikan yang dikenali sebagai USEAC telah ditubuhkan di Wisma KFC untuk pelajar-pelajar yang berhasrat melanjutkan pendidikan mereka di Amerika Syarikat. Baru-baru ini, satu program lepasan ijazah di dalam bidang pengurusan perniagaan yang dinamai MITem telah dilancarkan dengan kerjasama University of Hawaii.

Ulasan Operasi

PERHUBUNGAN KOMUNITI Kumpulan terus melaksanakan tanggungjawab sosialnya dan mengekalkan komitmen kepada perkhidmatan komuniti.

Sambutan Hari Kanak-Kanak KFC Seramai 100 orang anak yatim telah menghadiri perayaan KFC yang terbesar di Stadium Negara, Bukit Jalil pada 8 Oktober 2000 sempena Hari Kanak-Kanak Antarabangsa dan Ulang Tahun Ke 6 Kids Fun Club. Anak-anak yatim dan kanak-kanak dari Rumah Kebajikan Anak-anak Yatim Al-Hairiah, Klang, dan Sekolah Rendah Pendidikan (Cacat Pendengaran) Kg Baru, Kuala Lumpur bersama dengan 1,500 orang kanak-kanak yang terdiri daripada ahli KFC Kids Fun Club dan bukan ahli hadir pada sambutan yang sungguh meriah itu. Anak-anak yatim dan kanak-kanak tersebut juga berpeluang bertemu dengan hos KFC HOUR, iaitu Shanim dan Intan. Hadiah juga telah disampaikan kepada pemenang terbaru Peraduan KFC Knockout. Tempat sambutan dihiasi seindah kayangan dengan pelbagai permainan, sukanika, pertunjukan silap mata, persembahan istimewa serta cabutan bertuah turut disediakan. Hidangan KFC yang lazat juga disediakan dan banyak barang yang menarik diberikan sebagai hadiah. Chicky, maskot KFC yang dikenali ramai menghiburkan kanak-kanak diiringi oleh teman hebatnya yang lucu, iaitu watak-watak Looney Tunes yang terdiri daripada Bugs Bunny, Daffy Duck dan Tasmanian Devil manakala mereka yang bertuah berpeluang mengambil gambar bersama dengan gang ini sebagai tanda kenangan.

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Inilah tahun kelapan berturut-turut KFCH menganjurkan sambutan Hari Kanak-Kanak Antarabangsa dan acara tahun ini merupakan yang terbesar dari segi skop dan bilangan para hadirin. Oleh kerana sambutan yang begitu hebat daripada kanak-kanak, maka KFCH terpaksa memilih tempat yang lebih besar, iaitu Stadium Negara di Bukit Jalil. Pada tahun-tahun yang lepas, ia biasanya diadakan di Zoo Negara. Kids Fun Club menyediakan berbagai faedah kepada ahlinya, termasuk diskaun untuk pembelian promosi hidangan KFC dan premium unik serta majalah suku tahunan kelab. Kids Fun Club yang dilancarkan pada 1994 kini mempunyai seramai 400,000 orang ahli dan bilangan anggotanya semakin meningkat.

KFC HOUR 2000 Pada tahun 2000, KFC HOUR menyediakan hiburan kepada kanakkanak Malaysia setiap hari Sabtu pada pukul 11 pagi dengan mempersembahkan beberapa siri kartun dalam empat musim setahun seperti Tommy and Oscar, Slayers, Scooby Doo, Mojako, Oggy & The Cockroaches, Ninja Boy dan Sonic Underground Hedgehog. Ia juga mengadakan berbagai-bagai peraduan kepada kanak-kanak dengan menawarkan hadiah-hadiah menarik seperti wang tunai dan hadiah premium seperti Oscar, patung Looney Tunes, hamper dan TV warna. Sepanjang empat musim tahun sedang diulas, KFC HOUR mengekalkan kedudukannya sebagai salah sebuah daripada 10 program kanak-kanak yang paling popular.

AKHBAR DALAM PENDIDIKAN Tahun 2000 merupakan tahun ketiga berturut-turut Pizza Hut bekerjasama dengan The Star menganjurkan program "Newspaper In Education". Tema tahun ini ialah "Pasport Untuk Ganjaran".

Sambutan kepada program ini pada tahun lalu mengatasi tahun-tahun

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yang lalu dari segala segi. Seramai 206,000 orang pelajar telah berdaftar untuk menyertai program ini dan 138,000 orang daripada jumlah tersebut telah berjaya mencapai bilangan kegiatan NIE yang ditetapkan untuk memenangi hadiah pizza. Ini merupakan 50% lebih daripada 82,000 orang pelajar yang memenangi hadiah dalam program "Merekabentuk Untuk Hadiah" pada 1999 dan juga beberapa kali ganda lebih daripada 14,000 orang pemenang dalam peraduan "Membaca Untuk Ganjaran" pada 1998.

Ulasan Operasi

MAJLIS PENASIHAT SYARIAH KFCH Majlis Penasihat Syariah KFCH (SAC) bertindak sebagai badan penasihat kepada KFCH mengenai segala hal ehwal agama yang berkaitan dengan perniagaan makanan KFCH serta operasi yang

berkenaan. SAC ditubuhkan pada 1996 dan dianggotai cendekiawan agama yang terkemuka Islam. dari SAC rapat

institusi-institusi mengadakan

hubungan

dengan berbagai jabatan agama, majlis-majlis, badan-badan serta menjalankan pemeriksaan ke atas berbagai kilang dan restoran operasi KFCH untuk memastikan bahawa Kumpulan KFCH mematuhi keperluan halal Syariah pada amnya dan peraturan Kerajaan Malaysia secara khususnya.Belakang (kiri ke kanan) : Tuan Haji Abd Majid Omar, Tuan Haji Omar Saad, Tuan Haji Omar @ Wan Mat Wan Teh, Encik Azami Mustapha, YBhg Dato Dr. Abd Shukor Hj. Husin, YBhg Datuk Abang Haji Zainie Abang Haji Suhai, Tuan Haji Mohamad Haji Shafie. Depan (kiri ke kanan) : YBhg Datuk Haji Md Hashim Yahaya, Tuan Haji Izhar Sulaiman, Tan Sri Dato Abdul Kader Talip, YBhg Datuk Dr. Abd Monir Yaakob tiada dalam gambar : YBhg Dato Haji Hassan Haji Ahmad & YBhg Datuk Haji Ishak Haji Ismail

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F I N A N C I A L S TAT E M E N T S 2 0 0 0

F I N A N C I A L S TAT E M E N T S 2 0 0 0

Directors ReportThe Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2000. PRINCIPAL ACTIVITIES The principal activities of the Company are the holding of investments and provision of management services. The subsidiary companies are primarily engaged in the operations of : restaurants confectionery poultry processing and further processing plants trading in poultry and consumables convenience food store chain breeder farms hatchery feedmill foodservice and catering commissary bakery sauce manufacturing and seasoning mix plant soya bean products manufacturing property holding money lending manufacturing, selling and retailing ice-cream and other food products establishment of training and food institution growing and selling packed fresh fruits and vegetables investment holding There have been no significant changes in the nature of these activities during the year. FINANCIAL RESULTS GROUP RM'000 Operating profit Amortisation of goodwill on consolidation Profit before taxation Taxation Profit after taxation Minority interests Profit attributable to shareholders Retained profit brought forward 91,458 (5,579) 85,879 (26,184) 59,695 (5,626) 54,069 95,057 149,126 (15,388) 133,738 COMPANY RM'000 36,232 36,232 (7,628) 28,604 28,604 125,063 153,667 (15,388) 138,279

Proposed dividend Retained profit carried forward

There were no other material transfers to or from reserves or provisions during the year other than those disclosed in the financial statements. In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

37

DIVIDEND During the year, the Company paid a first and final dividend of 5%, less tax, amounting to RM6,848,196 in respect of the previous year as declared in the Directors Report of that year. The Directors recommend the payment of a first and final tax-exempt dividend of 8%, amounting to RM15,388,134 for the year ended 31 December 2000. SHARE CAPITAL During the year, the issued and paid-up share capital of the Company was increased from 190,227,670 shares of RM1.00 each to 192,351,670 shares following the issuance of 2,124,000 shares of RM1.00 each at an option price of RM2.54 per share pursuant to the Executive Employee Share Option Scheme. These new shares were issued and credited as fully paid and rank pari passu in all respects with the existing shares of the Company. The share premium arising from this issue amounted to RM3,270,960. EXECUTIVE EMPLOYEE SHARE OPTION SCHEME The Executive Employee Share Option Scheme ("The Scheme") was implemented on 28 November 1998. The Scheme granted options to eligible executive employees of the Group with the right to subscribe for new ordinary shares of RM1.00 each ("The Share") of the Company at the predetermined subscription price. The Scheme was approved by the shareholders of the Company at an Adjourned Extraordinary General Meeting held on 6 October 1998. The main features of the Scheme are :(a) The Scheme is effective for a period of five (5) years commencing 28 November 1998;

(b) The maximum number of new Shares of the Company that may be available under the Scheme shall be up to ten (10) percent of the total number of issued and paid-up shares of the Company at any point of time during the effective period of the Scheme after deducting the aggregate number of employee share options exercised under the previous Scheme; (c) The subscription price for the new Shares shall be the average of the mean market quotation of the Shares as shown in the Official Daily List issued by the Kuala Lumpur Stock Exchange for the five (5) market days immediately preceding the date the options are offered, subject to the provision that the subscription price of the Share shall in no event be less than the par value of the Share;

(d) Eligible executive employees are executive employees of the Group who are Malaysians, at least eighteen (18) years of age and have been in continuous employment of the Group for at least one (1) year as at the cut-off date of the option offer; and (e) The number of new Shares to be offered to eligible executive employees is at the discretion of the Board of Directors of the Company and based on the maximum allowable new Shares for the respective job categories of the executive employees.

As at 31 December 2000, there were 6,330,000 unissued shares under options granted pursuant to the Scheme. DIRECTORS The names of the Directors of the Company in office since the date of the last report and at the date of this report are :Tuan Haji Izhar bin Sulaiman YBhg Datuk Haji Abdullah bin Omar YBhg Datuk Haji Ishak bin Ismail YBhg Dato George Ting Yew Tong YBhg Dato Seri Abdul Ghani bin Abdul Aziz YBhg Dato Dr Ridzuan bin Akil Tuan Haji Johari bin Abdul Ghani YBhg DatoAbdullah bin Ngah YBhg Dato Mohd Salleh bin Haji Hashim En Harris Beh (Executive Chairman) (Executive Deputy Chairman) (Managing Director) (Executive Director)

(Retired on 4 October 2000)

Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement, to which the Company is a party, whereby Directors might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

38

The following Directors who held office at the end of the financial year had, according to the register required to be kept under Section 134 of the Companies Act 1965, interests in shares in the Company and its related corporations, as stated below :As at 1.1.2000 Direct and indirect interests in ordinary shares of the Company Tuan Haji Izhar bin Sulaiman YBhg Datuk Haji Abdullah bin Omar YBhg Datuk Haji Ishak bin Ismail YBhg DatoGeorge Ting Yew Tong Direct and indirect interests in ordinary shares of a quoted subsidiary, Ayamas Food Corporation Bhd YBhg Datuk Haji Ishak bin Ismail 14,000 14,000 58,063,334 58,063,334 58,063,334 333 57,000,000 57,000,000 57,000,000 1,063,334 1,063,334 1,063,334 333 During the year Bought Sold As at 31.12.2000

In accordance with Article 102 of the Companys Articles of Association, Tuan Haji Johari bin Abdul Ghani and YBhg Dato Mohd Salleh bin Haji Hashim retire by rotation and being eligible, offers themselves for re-election at the forthcoming Annual General Meeting ("AGM"). In accordance with Section 129 of the Companies Act 1965, YBhg DatoAbdullah bin Ngah retires on exceeding the age of 70 years at the forthcoming AGM, and being eligible, offers himself for re-election. Since the end of the previous financial year, no Director of the Group or of the Company has received or become entitled to receive any benefits (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors shown in the financial statements or the fixed salary of a full-time employee of the Group or the Company) by reason of a contract made by the Company or a related corporation with any Director or with a firm of which the Director is a member or with a company in which the Director has a substantial financial interest other than the following transactions between the Group and companies in which the Director is deemed interested :Name of Director YBhg Datuk Haji Ishak bin Ismail Nature of Benefit Sales of cabbages, sachet sugar, creamer, juices and beverages to the Group

SIGNIFICANT EVENTS Significant events to the balance sheet date are disclosed in Note 29 to the financial statements. SUBSEQUENT EVENT Significant subsequent event to the balance sheet date is disclosed in Note 30 to the financial statements. CORPORATE PROPOSALS (a) On 9 November 2000, a subsidiary company, Ayamas Food Corporation Bhd (AFCB), announced the following corporate exercises:(i) proposed bonus issue of 49,750,000 new ordinary shares of RM1.00 each on the basis of one (1) new ordinary share of RM1.00 each for every one (1) existing ordinary share of RM1.00 each held; (ii) proposed rights issue of 49,750,000 new ordinary shares of RM1.00 each at an issue price to be determined later together with up to 49,750,00 free new warrants on the basis of one (1) new ordinary share of RM1.00 each together with one (1) free warrant for every two (2) ordinary shares of RM1.00 each held after the Proposed Bonus Issue; and (iii) proposed acquisition of 52,740 square metres of land together with the building structures situated in Mukim and District of Klang, State of Selangor Darul Ehsan for a purchase consideration of RM65,000,000. (b) On 10 November 2000, AFCB announced the proposed transfer of listing of its entire enlarged issued and paid-up share capital after the completion of the proposals as set out in (a) from the Second Board to the Main Board of the KLSE. At the date of this report, the above corporate proposals are still awaiting the necessary approvals from the Securities Commission and other relevant authorities.

39

OTHER STATUTORY INFORMATION (a) Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps :(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and (ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the Directors are not aware of any circumstances which would render :(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and the Company inadequate to any substantial extent; and (ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading. (c) At the date of this report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements and consolidated financial statements misleading. (e) As at the date of this report, there does not exist :(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person except for that as disclosed in Note 9 to the financial statements; or (ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year. In the opinion of the Directors :(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet its obligations as and when they fall due; and (ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

(f)

AUDITORS The auditors, Ernst & Young, have expressed their willingness to continue in office.

On behalf of the Board

HAJI IZHAR BIN SULAIMAN Executive Chairman

DATUK HAJI ABDULLAH BIN OMAR Executive Deputy Chairman

Kuala Lumpur 29 March 2001

40

Income StatementFOR THE YEAR ENDED 31 DECEMBER 2000

Note REVENUE COST OF SALES GROSS PROFIT Distribution costs Administration expenses Other operating expenses Other operating income OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS Exceptional items OPERATING PROFITAFTER EXCEPTIONAL ITEMS Finance cost Amortisation of goodwill PROFIT BEFORE TAXATION Taxation PROFITAFTER TAXATION Minority interests PROFIT ATTRIBUTABLE TO SHAREHOLDERS 6 5 2

GROUP 2000 1999 RM000 RM000 997,100 (454,086) 543,014 (381,213) (70,741) (3,902) 18,982 879,705 (412,121) 467,584 (348,954) (60,591) (9,351) 10,256

COMPANY 2000 1999 RM000 RM000 14,715 14,715 (19,572) 49,844 10,670 10,670 (17,646) (722) 34,494

3 4

106,140 -

58,944 15,400

44,987 -

26,796 1,431

106,140 (14,682) (5,579) 85,879 (26,184) 59,695 (5,626) 54,069

74,344 (22,111) (6,340) 45,893 2,613 48,506 (5,310) 43,196

44,987 (8,755) 36,232 (7,628) 28,604 28,604

28,227 (11,920) 16,307 68 16,375 16,375

Basic earnings per share (sen) Fully diluted earnings per share (sen)

7 7

28 28

23 22

The annexed notes form an integral part of these financial statements.

41

Balance SheetsAS AT 31 DECEMBER 2000

GROUP Note ASSETS EMPLOYED:PROPERTY, PLANTAND EQUIPMENT SUBSIDIARY COMPANIES ASSOCIATED COMPANY INTANGIBLE ASSETS INVESTMENTS CURRENTASSETS Inventories Trade receivables Other receivables Fixed deposits Cash and bank balances 9 10 11 12 13 502,833 89,185 2,467 488,887 92,850 848 2000 RM000 1999 RM000

COMPANY 2000 1999 RM000 RM000

87,917 105,814 805

87,277 104,233 805

14 15 16

53,689 91,217 61,682 3,281 51,213 261,082

68,054 80,691 63,347 5,670 25,693 243,455

361,714 911 362,625

342,963 2,318 969 346,250

CURRENT LIABILITIES Trade payables Other payables Taxation Proposed dividend Bank borrowings BaIDS 1996/2001

17

18 19

59,222 84,416 13,102 15,388 97,951 150,000 420,079

54,613 85,344 1,633 6,848 152,404 300,842 (57,387) 525,198

13,370 1,630 15,388 33,063 150,000 213,451 149,174 343,710

10,468 669 6,848 45,481 63,466 282,784 475,099

NET CURRENT (LIABILITIES)/ASSETS

(158,997) 435,488

FINANCED BY: SHARE CAPITAL SHARE PREMIUM RESERVES

20 21

192,352 8,635 157,294 358,281

190,228 5,364 118,663 314,255 35,513 23,507 150,000 865 646 412 525,198

192,352 8,620 142,738 343,710 343,710

190,228 5,349 129,522 325,099 150,000 475,099

MINORITYINTERESTS DEFERRED TAXATION BaIDS 1996/2001 PROVISION FOR STAFF RETIREMENT BENEFITS LONG TERM LOANS HIRE PURCHASE CREDITORS

22 19 23 17

40,412 25,352 977 10,374 92 435,488

The annexed notes form an integral part of these financial statements.

42

Statement Of Changes In EquityFOR THE YEAR ENDED 31 DECEMBER 2000

Non-distributable Share capital RM000 GROUP At 1 January 1999 Profit for the year Dividend (Note 8) Issue of shares under ESOS At 31 December 1999 Translation differences Profit for the year Dividend (Note 8) Issue of shares under ESOS At 31 December 2000 186,768 3,460 190,228 2,124 192,352 Share premium RM000 36 5,328 5,364 3,271 8,635 Capital reserve RM000 23,204 23,204 23,204 Exchange fluctuation reserve RM000 402 402 (50) 352

Distributable Retained profit RM000 58,709 43,196 (6,848) 95,057 54,069 (15,388) 133,738

Total RM000 269,119 43,196 (6,848) 8,788 314,255 (50) 54,069 (15,388) 5,395 358,281

COMPANY At 1 January 1999 Profit for the year Dividend (Note 8) Issue of shares under ESOS At 31 December 1999 Profit for the year Dividend (Note 8) Issue of shares under ESOS At 31 December 2000

186,768 3,460 190,228 2,124 192,352

21 5,328 5,349 3,271 8,620

4,459 4,459 4,459

-

115,536 16,375 (6,848) 125,063 28,604 (15,388) 138,279

306,784 16,375 (6,848) 8,788 325,099 28,604 (15,388) 5,395 343,710

The annexed notes form an integral part of these financial statements.

43

Cash Flow StatementFOR THE YEAR ENDED 31 DECEMBER 2000

GROUP 2000 RM000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Adjustments for:Franchise fees and deferred expenditure written off Depreciation of property, plant and equipment Interest expense Redemption of Secondary Notes Loss/(profit) on disposal of property, plant and equipment Retirement benefits Amortisation of goodwill on consolidation Dividend income from - quoted investment Dividend income from - subsidiary companies Interest income Gain on foreign exchange Gain on disposal of quoted investments Exchange translation adjustments Provision for diminution in value of investments Operating profit before working capital changes Inventories Receivables Advances to subsidiary companies Payables Cash generated from operations Secondary Notes redeemed Interest paid Taxation paid Net cash provided by/(used in) operating activities 85,879 1,957 45,500 7,182 7,500 1,776 112 5,579 (15) (530) (50) 154,890 14,476 (18,034) 3,527 154,859 (7,500) (7,182) (3,638) 136,539 45,893 1,680 44,335 14,611 7,500 2,806 (31) 6,340 (15) (647) (358) (21,106) 6,064 107,072 (13,145) (35,008) 14,676 73,595 (7,500) (14,611) (21,441) 30,043 1999 RM000

COMPANY 2000 1999 RM000 RM000

36,232 2,553 1,255 7,500 (63) (15) (37,893) (8,218) 1,351 (183) (17,912) 2,902 (13,842) (7,500) (1,255) (6,667) (29,264)

16,307 2,439 4,420 7,500 105 (15) (32,123) (7,433) (5,431) 4,000 (10,231) 9,397 (62,089) (946) (63,869) (7,500) (4,420) (3,305) (79,094)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of investments Proceeds from disposal of property, plant and equipment Proceeds from disposal of investments Franchise fees Intangible assets Acquisition of subsidiary companies [ Note (a) ] Interest received Dividend received from - quoted investment - subsidiary companies Net cash (used in)/provided by investing activities (63,038) (1,619) 1,954 (2,813) (237) (29) 530 15 (65,237) (37,871) 3,716 27,411 (1,388) (63) (55) 647 15 (7,588) (3,238) 108 (1,581) 8,218 15 37,237 40,759 (451) 241 7,040 (64) 7,433 15 31,467 45,681

44

GROUP 2000 RM000 CASH FLOWS FROM FINANCING ACTIVITIES Issuance of shares Payment of term loans Bank borrowings Short term borrowings Dividend paid to shareholders of the Company Dividend paid to minority interest in subsidiary company Payment to hire purchase creditors Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 5,395 (26,022) (6,160) (11,430) (6,848) (1,477) (516) (47,058) 24,244 29,099 53,343 8,788 (38,741) (10,898) (7,483) (4,034) (791) (53,159) (30,704) 59,803 29,099 1999 RM000

COMPANY 2000 1999 RM000 RM000

5,395 (12,100) (6,848) (13,553) (2,058) 2,906 848

8,788 (15,367) (4,034) (10,613) (44,026) 46,932 2,906

CASH AND CASH EQUIVALENTS Fixed deposits Cash and bank balances Bank overdrafts 3,281 51,213 (1,151) 53,343 Note (a) Acquisition of subsidiary companies The fair value of the assets acquired and the liabilities assumed are as follows :RM000 138 3 650 (379) (83) 329 151 480 (451) 29 5,670 25,693 (2,264) 29,099 911 (63) 848 2,318 969 (381) 2,906

Property, plant and equipment Deferred expenditure Current assets Current liabilities Minority interests Fair value of assets acquired Goodwill

Less: Cash and cash equivalents in subsidiaries acquired Cash flow on acquisition

45

Notes To The Financial Statements31 DECEMBER 2000

(1)

SIGNIFICANTACCOUNTING POLICIES (a) Basis of Accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention and comply with approved accounting standards issued by the Malaysian Accounting Standards Board. (b) Basis of Consolidation The Group financial statements consolidate, using the acquisition method, the financial statements of the Company and all its subsidiary companies. The results of subsidiary companies acquired or disposed of are included in the consolidated financial statements from the date of acquisition or up to the date of disposal. All intercompany transactions, balances and unrealised surpluses and deficits on transactions with and between subsidiary companies are eliminated. Goodwill on Consolidation Goodwill represents the difference between the consideration paid for the shares in the subsidiary companies and the value of attributable net assets acquired. Goodwill on consolidation is amortised over 20 years on a straight line basis. Subsidiary Companies A subsidiary company is a company in which the Group owns, directly or indirectly, more than 50% of the equity share capital and has control over its financial and operating policies so as to obtain benefits from its activities. Associated Companies The Group treats as associated companies, those companies in which a long term equity interest of 20% to 50% is held and where the Group has representation on the Board and is in a position to exercise significant influence. The Groups share of the results of associated companies is included in the consolidated income statement, and the Groups share of post-acquisition retained profits/losses is added to, or deducted from, the cost of investment in the consolidated balance sheet. The results and reserves of the associated company are based on the latest available management financial statements. (f) Property, Plant and Equipment All property, plant and equipment are stated at their purchase cost and any incidental costs of acquisition. Freehold land is not amortised as it has an infinite life. Long leasehold land with unexpired lease periods of more than 50 years, is not amortised as the impact of non-amortisation is expected to be immaterial. Leasehold land with unexpired lease period of 50 years or less is amortised over the period of the lease. All other property, plant and equipment are depreciated over their estimated useful lives on a straight line basis. The principal annual rates used are as follows :Buildings Leasehold improvements and renovation Plant and machinery Motor vehicles and computers Restaurant equipment Furniture, fixtures, fittings and equipment 2 5% 10% 10% 20% 10% 10%

(c)

(d)

(e)

No depreciation is provided for crockery, cutlery and utensils. The cost of replacing these assets is charged against revenue as and when incurred. (g) Inventories Inventories are valued at the lower of cost and net realisable value, cost being determined on an actual basis. In arriving at net realisable value, due allowance is made for all obsolete and slow moving items. Cost includes the purchase price of goods and attributable expenditure. Cost of livestocks includes the original cost of purchase plus the cost of bringing the inventories to its present location and condition.

46

(g)

Inventories (Contd) Cost of finished goods includes the cost of raw materials, direct labour and certain manufacturing overheads less recovery value of by-products. Trade and Other Receivables Trade and other receivables are carried at anticipated realisable value. Specific provisions are made for debts which have been identified as bad or doubtful. In addition, general provisions are made to cover possible losses which are not specifically identified. Foreign Currencies The financial statements are stated in Ringgit Malaysia. Foreign currency transactions have been converted into Ringgit Malaysia at rates of exchange ruling on the dates of the transactions, or where settlements have not taken place by the year end at the approximate rates ruling at that date. All exchange differences are taken to the income statement. In the Group financial statements, the assets, liabilities and results of overseas subsidiary companies are translated at exchange rates ruling at the balance sheet date. The exchange differences arising on translation are dealt with through the exchange fluctuation reserve account. The exchange rates used for each unit of the main foreign currencies in the Group are:Year end rates 2000 1999 RM RM Hong Kong (HK$) Brunei Darussalam (B$) Singapore (S$) 0.4921 2.2140 2.2140 0.4937 2.3130 2.3130 Average rates 2000 1999 RM RM 0.4897 2.1920 2.1920 0.4913 2.2905 2.2905

(h)

(i)

(j)

Intangible Assets The restaurants initial franchise fees and territorial franchise fees are stated at cost and are amortised on a straight line basis over 10 and 20 years, respectively. Pre-production and pre-processing expenses are amortised on a straight line basis as follows:Retail outlets and media productions Processing plant and farms 5 years 15 years

(k)

Investments Investments are valued at cost except where it is considered that there has been a permanent diminution in value to les