Download - 05 Corporate Statement
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QSR BRANDS BHD ANNUAL REPORT 2008
016
Introduction of Online Ordering
System to improve the performance
of Pizza Hut delivery business
Strong expansion of the KFC network,
with 37 new stores in Malaysia,
eight in Singapore and one in Brunei
Successful product launches
in KFC Malaysia and Brunei that
included our crowd pleaser, Colonel
Chicken Rice, which coincided withour 35th anniversary celebrations
The introduction of the KFC
breakfast menu to target the morning
crowds and 24-hour operating hours
extension at 139 KFC restaurant.
The increase in RasaMas stores
with 15 new openings, bringing the
total to 36 and an addition of five
Kedai Ayamas stores bringing the
total to 27 stores to date
New Primary Processing Plant
in Bandar Tenggara, Johor, now fully
operational since December 2008
Strong sales by KFC Marketing
Sdn Bhd of Ayamas further
processed products locally
and in the export market
The beginning of our foray
into Cambodia, beginning with
the opening of KFC Asia Hotel,
followed by another KFC restaurant
in Phnom Penh
Dividends
Worthwhile returns for the benefit of
our investors remain a mainstay of QSRs
corporate philosophy. For 2008, the Board
of Directors recommended a total dividend
of 11 sen per share (comprising an interim
dividend of 4 sen and a final dividend
of 7 sen).
The recommended total dividend isafter taking into account the rights issue
(mentioned below) which enlarged QSRs
share capital by 40,911,847 rights shares,
from 245,471,082 to 286,382,929 shares.
The total dividend for 2007 stood at 9 sen
per share.
STRENGTHENING OUR BUSINESS
Enhancing shareholder value has always
been at the heart of QSR. In that aspect,
our Strategic Plan 2008-2012 laid great
emphasis on what needs to be done
to forge our success story forward.
During the year, QSR continued to
increase its interest in KFCH by acquiring
shares in the open market. As of 2 January
2009, QSR acquired an additional 865,300
ordinary KFCH shares, increasing its total
holding in KFCH to 50.25%. Subsequently,
KFCH became a subsidiary of QSR.
This important milestone is crucial towards
streamlining of business activities and
most important towards long term
management stability and ensuring a
steady income contribution to QSR.
Our foray into Cambodia has been a
gradual rise upwards. On 29 February
2008, the venture was formalised by the
signing of the Joint Venture Agreement
with two partners: Royal Group of
Companies Ltd and Rightlink Corporation
Limited Hong Kong, with QSR having a
55% stake in the joint venture company.
The first KFC outlet in Cambodia opened
on 2 March 2008 and has been wellreceived by Cambodian customers.
Upon obtaining approval to operate KFC
restaurants in Cambodia from Yum! during
the third quarter of last year, we started
our upward spiral and to date we have
four KFC restaurants in Cambodia three
in Phnom Penh and one in Siem Reap.
Due to our commitment to building
the KFC brand in Cambodia, Yum! Brand
Inc (Yum!) has given us the approval to
also operate Pizza Hut restaurants in the
country. The first Pizza Hut restaurant
there is expected to be completed in
mid 2009.
In addition, we have completed our
capital restructuring through the carrying
out of the renounceable rights issuance
exercise. The renounceable rights issues
undertaken were of 40,911,847 new
ordinary shares of RM1 each with free
detachable warrants on the basis of one
Rights Share and one Warrant for every
six existing ordinary shares.
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With over 200 Pizza Hut restaurants
in Malaysia and Singapore, Pizza Hut
is the most popular pizzeria on either
side of the Causeway!
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KFC, with over 500 restaurants
in Malaysia, Singapore, Brunei and
Cambodia, is the regions #1 Western
quick service restaurant chain.
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QSR BRANDS BHD ANNUAL REPORT 20
019
QSRs paid-up share capital as at
end of last year has increased from
RM245,471,082 to RM286,382,929
following the issuance of 40,911,847 new
ordinary shares at RM1.00 each coupled
with 40,911,847 new free detachable
warrants. This was on the basis of one
rights share together with one free
warrant for every six existing ordinary
shares of RM1.00 each held.
The number of warrants outstanding as
at 31 December 2008 was 40,911,847.
The warrants, which will expire on 5
March 2013 provide an incentive to the
shareholders to subscribe to the Rights
Shares and allow them to benefit from the
future growth of the Group. At the same
time it will also raise further proceeds
for QSR when they are exercised.
The rights issue which was approved by
the Securities Commission, Bank Negara
Malaysia, Bursa Malaysia Securities
Berhad and the QSR shareholders,
was completed on 10 March 2008.
ENERGISING PERFORMANCE
QSRs work culture is one that is
fervently driven by performance.
Our Key Performance Indicators
(KPIs) support our performance culture.
The KPIs are used to measure corporate
achievement and also form the basis
for rewarding and promoting our
valued people.
Pedoman is one of our most powerful
cultural bonding and performance building
tools. It is conducted annually throughout
the Johor Corporation Group of Companies,
including QSR and our holding company
Kulim Malaysia Berhad. For the year 2008,
the theme Business Jihad was adopted
for the QSR Pedoman. The term Jihad,
a sustainable strive for higher success,
comes in various forms, be it spiritual,social, political and economic. Jihad in
Business advocates the enriching of all
members of the QSR community, and
through QSR outreach, the enriching of
the public at large, through QSRs ethical
business practises and consistently
delivering value.
Pedomans Business Jihad fundamentals
encourage an ethics-based business
module that is both market and business
driven. It also states that, in its pursuit
for profits, business must also contribute
positive outcomes to society, nature and
all creation. At the minimum it must not
bring harm and diminish value to society,
nature and creation.
As we move forward as one of the
fastest growing corporations in Malaysia,
Pedoman will help us overcome various
future challenges that might arise from
the size of the business, its ever growing
complexity, as well as the effects of
external shifts and changes.
Pedomans open and informal concept
which encourages mutual trust, faith
and confidence, will enable the Group
to progress forward while maintaining
our dynamic focus as a reputable,
sustainable Group.
During the year, QSR and KFCH
simultaneously hosted a Group-wide Hari
Mekar. We are delighted to announce thatQSR has garnered the Overall Champions
Trophy for two years running. With the
theme Pursuit of Excellence in Quality,
Hari Mekar, an annual quality event
organised by Johor Corporation, is a
quality movement that allows participants
to showcase their innovative ideas on
ways to increase sales, reduce costs,
enhance profitability, improve efficiency
and move creativity. Through the setup
of a quality focus in the Group, several
teams have been formed to propel this
quality movement, including suggestion
scheme teams, innovative and creative
circle teams and cross functional teams.
Hari Mekar encourages staff to put their
thinking caps on and come up with ideas
that can take the Group to a higher level.
IMPROVING GOVERNANCE
Realising the importance of strong
governance, QSR adheres to the
fundamental principles of disclosure and
transparency as a means to help realise
long term shareholder value. Taking into
account the interests of our many
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QSR BRANDS BHD ANNUAL REPORT 2008
020
stakeholders, we try our utmost best
to be transparent in all our corporate
activities. Furthermore, for better
governance control, we ensure that all
staff, from the top management right
down to our service and front line,
adopt the highest ethical standards
and practise a strong sense of due
diligence, responsibility and absolute
integrity in all their business dealings.
BEING A RELIABLE, SUSTAINABLE
CORPORATE CITIZEN
QSR is highly committed in giving back
to the communities in which we serve and
operate. On a day-to-day basis, we work
together with all our stakeholders our
people, suppliers, governmental and NGO
bodies, right up to our shareholders to
help create a more sustainable approach
in how we operate our business. When
we act in a sustainable manner from
how we govern our business and enhanceour people skills right up to how we help
communities in need, we express our
respect for all of those around us. It is
about doing good and acting in an
honest, reliable manner.
Halalcompliance, a vital part of our
business, is duly recognised as our core
Corporate Social Responsibility. Other
than embedding halalpractices into our
processes, the company sponsors the
World Halal Forum and the Malaysia
International Halal Showcase, both
of which involve the promotion of our
many products.
The Group also participated at the
annual Halal Food Standards Realisation
(HAFSTAR) MS 1500:2004. The halal
market is not just for the Muslim community.
The concept of halalwhich puts great
emphasis on cleanliness, hygiene anda healthy lifestyle has also captured the
interest of non-Muslims globally. Having
identified halalas one of QSRs critical
success factors, we have put in place an
elaborate and professional halalAudit
infrastructure, the first of its kind in
Malaysias foods industry.
We also believe in the all encompassing
power of knowledge. As one of the
building blocks of the country, we heeded
the Governments call to increase English
proficiency in local schools. Pizza Hutsponsors The Star Newspaper-in-Education
(NIE), a programme that is supported by
the Ministry of Education, and helps students
grasp the internationally used language
of the masses. In 2008, close to 94,000
students from 362 schools throughout the
country participated in the programme.
Also well known as a health conscious
Group, QSR continues to promote a
healthy, active lifestyle especially in the
sponsorship programmes related to local
sports activities. We are proud to
associate ourselves with some of the
leading sporting personalities in the
country, including Datuk Nicole David,
through our support of squash in Malaysia.
We sponsor a state-of-the-art glass squash
court used by the Malaysian Squash
Association in some of the leading
tournaments in the country, including
the Malaysian CIMB Open 2008.
In addition, our subsidiary QSR, supports
the Johor FC football team. The Group
also sponsors the Malaysian Yachting
Association and futsal activities, with the
aim of encouraging young Malaysians to
pursue sports not only as a hobby, but
also as a means to garner international
recognition for oneself and country. Indee
some of the sailors trained under the
Association have made us and Malaysia
proud in some of the leading Yachting
competitions in Malaysia as well asinternationally.
Another cause close to our hearts is
entrepreneur development. A collaborative
effort with Johor Corporations, the
entrepreneurial development programmes
Tunas Bistari, Didik Bistari and Siswa
Bistari, help develop entrepreneurial skills
among young, talented Malaysians so tha
they are both market as well as global
ready individuals.
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A new name and a new logo, but the
same commitment to quality, service
and great taste. RasaMas currently
operates 36 restaurants in Malaysia.
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Fast, convenient, and gaining an
ever wide following, Ayamas currently
operates 27 stores selling freezer to
fryer and shelf chicken products,
roasters and snacks.
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QSR BRANDS BHD ANNUAL REPORT 20
023
Under our Intrapreneurship Development
programme, Johor Corporation has
initiated Catur Bistari a Malaysian
business board game which cultivates
entrepreneurial skills amongst the younger
generation. Developed by Bistari Young
Intraprenuers, a subsidiary of Johor
Corporation, the investment game is
currently sold at KFC outlets nationwide.
As part of our CSR effort, KFC alsoorganises and sponsors Catur Bistari
competitions yearly to encourage
entrepreneurship developmental skills
amongst Malaysians. This is part of our
CSR marketplace initiative, aimed at making
a success of Malaysias developmental
program in the next lap in the countrys
economic growth. This next lap has
obviously to be more business-driven
than before, thus relying extensively
on the role to be played by the countrys
entrepreneurs, and QSR has positioned
itself to play a strong supportive role.
In addition, we continue to extend
our hands and hearts to the less
fortunate. QSR and KFCH continued
the sponsorship of three episodes per
year of Tijarah Ramadhan a television
programme that helps many poverty
stricken families in Malaysia.
We also actively participated in the Yum!
Brands Annual World Hunger Relief
Campaign. The campaign, the worlds
largest volunteer movement and private
sector effort to combat hunger, aims
to help stop world hunger through
volunteerism and increased donations
to benefit the United Nations World Food
Programme (WFP) and other hunger relief
agencies. In 2008, KFC and Pizza HutMalaysias Hunger Relief Period 2008
campaign raised RM1million for charity.
Our Projek Penyayang founded in 1996,
is our avenue to feed and reach orphaned
and underprivileged children. Organised
every quarter, to date around 150 charitable
homes and institutions throughout the
country continue to receive finger lickin
good KFC meals.
AWARDS AND ACCOLADES
Our commitment to quality has not gone
unnoticed. Throughout the year, QSR has
been recognised and awarded for amongst
others, product excellence, marketing
excellence and brand promise delivery.
Pizza Huts commitment to winning
over Malaysian consumers, won the
Brand Laureate Award 2008-2009
excellence in Product Branding as
well as the Gold Trusted Brand for the
Readers Digest Trusted Brand poll,
considered the regions leading, objective
barometer of brand performance.
In addition, for our continuous dedication
and hard work, Pizza Hut Malaysia became
the proud recipient of two Yum! awards
- the Best Home Service award and the
White Plate Award. The Best Home Servic
Award was given for the outstanding
achievement in building Pizza Hut as a
strong brand and sales in Home Service.
Another feather in our cap is Pizza HutsBronze Award win at the 1st Malaysia
Effie Awards 2008 for the effectiveness
of the Sensasi Delight Campaign. The
Effie Awards programme is presented
annually in the United States by the New
York American Marketing Association in
recognition of the years most effective
marketing communications campaigns.
It is acknowledged as the most
recognised award by companies in
the communications industry.
KFCH, our subsidiary, received the
Gold Trusted Brand award in the Readers
Digest Trusted Brand poll. It was also
awarded the Brand Laureate Award 2008
-2009 for Brand Excellence in Product
Branding under the Fast Foods Chicken
Category, while Ayamas received the
Brand Laureate Award 2008-2009 for
Excellence in Product Branding under
the Chicken Based Products category.
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