KFC Bckground
KFC Bckground
KFC Bckground
Today there are more than 500 KFC Restaurants nationwide and still counting. Great tasting chicken has become synonymous with KFC; and has been enjoyed by Malaysians ever since. In fact, KFC Malaysia has developed a distinctive Malaysian personality of its own.
In August 1999, KFC introduced its 'Tabung Penyayang' KFC Collection Box as an extension to the Tabung Penyayang KFC Programme. Collection boxes are placed at all KFC restaurants enabling customers to contribute and be apart of this charitable effort. Today, 4 of KFC Restaurants are run by speech and hearing-impaired staffs that was designed to serve physically challenged individuals. They serve to dispel the myth that a disability impede a person from leading a normal life and gives them a sense of confidence and self-esteem. These 4 restaurants are located in Peninsular and East Malaysia. First is at Sentul Raya, in Kuala Lumpur, second is at Saujana, in Sarawak, the third is at Tanjung Aru, Sabah and 4th Johor. Currently, we are still conducting other programmes for Malaysian charities. And we will continue to extend a corporate helping hand whenever and wherever we can. KFC is the largest fast-food chain in Malaysia and Brunei, serving world famous Original Recipe fried chicken which contains secret blend of 11 herbs and spices. Apart from serving finger-licking good food, we continuously aim for high quality and are committed to ensure food safety by stringent control to maintain our standards.
Our Products
We cook our products well above the minimum temperature recommended by WHO. We have developed standard procedure that would minimize risk of cross contamination between raw and ready-to-eat products. We provide information on the nutritional values of KFC products to assist our customers in planning a wholesome and balanced meal. For frying all of our products, we use non-hydrogenated palm oil that contains insignificant amount of trans fat and it is 100% cholesterol free. We have a team of food technologists constantly experimenting with new flavors and creative concepts to provide more value, choices and healthy options for our customers. Apart from introducing international products into our market, we have also developed some popular local flavors designed to enable our customers to enjoy an exciting dining experience. Quality control begins from the supply of all the raw materials. We conduct an annual supplier audit, namely the STAR Audit, which is a YUM proprietary programme, similar in many ways to the ISO approach. The STAR Audit comprises two versions; the Food Safety and the Quality Systems Audits. The STAR Audit is either conducted by a third party international auditing company appointed by YUM or our very own team of professional food technologists from the KFC Quality Assurance Department.
Supplier Quality
The results are reported to and reviewed by our regional franchisor for continuous improvement. Suppliers performances are constantly monitored through regular submission of quality reports. In addition, our food technologists also conduct quarterly QA evaluations on our in-house suppliers. We use top quality raw materials from reputable suppliers such as Nestle, UBF, Kerry Ingredients, LambWeston, Simplot, McCain and Jomalina, as well as from our in-house suppliers such as Ayamas, Region Food, KFC Bakery and KFC Commissary. Our chicken supplier Ayamas is monitored closely by Department of Veterinary Service and has obtained the VHM (Veterinary Health Mark) Logo. It is also an ISO 9001 certified company. All Ayamas chickens are slaughtered by personnel certified by Jabatan Agama Islam Selangor to ensure Halal procedures are met.
Restaurant Quality
The main attributes for KFC restaurant excellence are CHAMPS. C - Cleanliness H - Hospitality A - Accuracy M - Maintenance P - Product Quality S - Speed of Service We have a field service team of QA personnel (also known as CHAMPS Recognition Specialist) to conduct regular evaluations in every KFC restaurants throughout the country. The evaluation covers all aspects of CHAMPS including the cleanliness and sanitation of the premises and equipment, personal hygiene, hospitality/friendliness in service, accuracy in the serving order, good maintenance, product quality standards and speed of service. Above all, we follow strict temperature control and shelf life to ensure the food served to our customers is fresh and safe. We have a Mystery Customer Program known as CHAMPSCHECK which evaluates customers experience in our KFC restaurants. We have appointed a reputable surveillance company to check against the CHAMPS concept. Every restaurant is subjected to a visit by a Mystery Customer and the dine-in / take-away experience is evaluated and scored. KFC sets a minimum standard of 90% as passing score for this evaluation. Feedbacks taken from this evaluation is used and studied for continuous improvement in our restaurants.
KFC HACCP Programme We have also established a Hazard Analysis Critical Control Point (HACCP) Programme for KFC restaurants. HACCP is a management system for the assurance of food safety. The process includes identifying, evaluating and controlling hazards i.e. physical, biological and chemical to ensure food safety. It is applied from receiving of raw materials at our restaurant until serving to our customers. KFC KLCC has been audited and certified by a reputable certification body since 2005. All the established Critical Control Points (CCPs) are now included in our Daily Operations Checklist which is used by all the KFC restaurants in the country. Sanitation / Personal Hygiene Our daily operations manual clearly highlights each step of the sanitation procedure to ensure strict compliance to the KFC requirement. Each staff has to undergo the Food Handlers Course conducted internally by KFC which is recognized by the Ministry of Health. We have implemented a handwashing procedure to ensure each staff washes his/her hands at least once every hour and whenever necessary. The procedures include wetting hands first, then rubbing the hands together, fingers between fingers, around the wrist and up to the elbow with liquid antibacterial handsoap, for 30 seconds. Then the hands are rinsed with clean water under the hands-free tap, and dried with single-use paper towels. No bare hands are allowed to touch any finished products. Instead, we constantly stress on the importance of using disposable gloves, sanitized scoops or tongs. All our restaurant teams including managers are immunized against Typhoid upon employment. Pest Control Due to the encouraging conditions in the tropical climate, pest control is indeed a challenge. However,
we relentlessly continue to maintain our standards and have engaged reputable pest control companies to assist us in this matter. The trained service teams conduct regular inspections which include night treatment after operation hours and also provide follow-up checks during operation hours whenever needed, in every restaurant. There is a detailed checklist to ensure that no steps are missed. All pesticides are approved by Pesticide Board and have Material Safety Data Sheet on file for staff reference. Each pest control company will present periodic trend reports of pest activity to the management for corrective actions and remedy. The total cost for all the services nationwide is approximately half a million ringgit annually.
- Hygienic - Not harmful to health - Free from any forbidden parts of animal origin - Free from anything regarded as filth (najis) under Islamic law
In addition, meat products must be derived from animals that are permissable and slaughtered according to Islamic Law.
Locally-Manufactured Products
Internal Controls To ensure that all our products conform to Halal requirements, apart from obtaining Halal Certificate for its operational premises, we operate stringent internal controls over raw materials procurement, manufacturing, packaging, storage, transportation and utensils. We are extremely careful to prevent cross-contamination with filth (najis) or dangerous contaminants. We also adhere to industry best practices to maintain the highest standards of quality and hygiene in food production. External Certification The Department of Islamic Development Malaysia (JAKIM) inspects our factory, restaurants, ingredients and processes before permitting us to use their logo. The Halal Certification Process - Locally-Manufactured Products
Imported Products
All imported products are certified Halal by the source country local Islamic food and nutrition certification body recognised by JAKIM. To further verify the Halal status of our imported products, officials from QSR Brands Shariah Advisory Council, inspect the facilities of all our suppliers abroad. Validition Process for Imported Products
Raw Materials
All raw materials supplier are required to submit a statutory declaration to confirm that they comply with Halal requirements in relation to the manufacturing process, storage and transportation of product supplied.
Press Statement
KFC Malaysia refers to the incident at our outlet in i-City Shah Alam on 6 February 2012 and would like to extend our sincere apologies to all our customers who were present during that day, particularly to Mr Danny Ng Chee Fei, for the unsatisfactory services rendered by our staff and the inconvenience caused. Our Management has met with Mr Danny Ng and his family and they have accepted our apology. We deeply regret the occurrence of this incident and would like to assure you that it was related to the quality of service provided and not due to any other reason whatsoever. Rest assured, all relevant steps are being taken to review and improve our training programme to avoid the recurrence of such incidents and to provide only the best service to you. We treasure your comments which have helped us to improve our service and rectify any shortcomings. On behalf of KFC Malaysia, we thank you for your concern and continuous support. Alan Au Deputy President KFC Malaysia
1
KFC HOLDINGS (MALAYSIA) BHD (65787-T) (Incorporated in Malaysia) CONDENSED UNAUDITED CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE SECOND FINANCIAL QUARTER ENDED 30 JUNE 2011 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
INDIVIDUAL QUARTER CUMULATIVE QUARTERS
Revenue A9 690,090 606,207 1,334,309 Operating expenses (636,434) (553,755) (1,227,446) Other operating income 640 618 1,279 Profit from operations 54,296 53,070 108,142 Finance costs (1,333) (984) (2,529) Profit before tax A9 52,963 52,086 105,613 Income tax expense (15,900) (15,600) (31,700) Profit for the period 37,063 36,486 73,913 Other comprehensive income, net of tax : Foreign currency translation (129) (584) (230) differences for foreign operations Fair value of available-for-sale 200 1,200 financial assets Total other comprehensive income 71 (584) 970 for the period Total comprehensive income for the 37,134 35,902 74,883 period Profit attributable to : Owners of the Company 36,356 35,727 72,480 Non-controlling interests 707 759 1,433 Profit for the period 37,063 36,486 73,913 Total comprehensive income attributable to : Owners of the Company 36,427 35,143 73,450 Non-controlling interests 707 759 1,433 Total comprehensive income for the 37,134 35,902 74,883 period Earnings per share (sen) : (a) Basic 4.58 4.50 9.14 (b) Fully diluted 4.55 9.07 (The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the Annual Financial Report for the year ended 31 December 2010 and the accompanying explanatory notes attached to the interim financial statements)
1,206,883 (1,104,205) 1,346 104,024 (1,820) 102,204 (30,700) 71,504 (815) (815) 70,689
8.82 -
1
KFC HOLDINGS (MALAYSIA) BHD (65787-T) (Incorporated in Malaysia) CONDENSED UNAUDITED CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE FIRST FINANCIAL QUARTER ENDED 31 MARCH 2011 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
INDIVIDUAL QUARTER CUMULATIVE QUARTER
Revenue A9 644,219 600,676 644,219 Operating expenses (591,012) (550,450) (591,012) Other operating income 639 728 639 Profit from operations 53,846 50,954 53,846 Finance costs (1,196) (836) (1,196) Profit before tax A9 52,650 50,118 52,650 Income tax expense (15,800) (15,100) (15,800) Profit for the period 36,850 35,018 36,850 Other comprehensive income, net of tax : Foreign currency translation (101) (231) (101) differences for foreign operations Fair value of available-for-sale 1,000 1,000 financial assets Total other comprehensive 899 (231) 899 income for the period Total comprehensive income 37,749 34,787 37,749 for the period Profit attributable to : Owners of the Company 36,124 34,243 36,124 Non-controlling interests 726 775 726 Profit for the period 36,850 35,018 36,850 Total comprehensive income attributable to : Owners of the Company 37,023 34,012 37,023 Non-controlling interests 726 775 726 Total comprehensive income 37,749 34,787 37,749 for the period Earnings per share (sen) : (a) Basic 4.55 4.32 4.55 (b) Fully diluted 4.52 4.52 (The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the Annual Financial Report for the year ended 31 December 2010 and the accompanying explanatory notes attached to the interim financial statements)
(231) 34,787
KFC HOLDINGS (MALAYSIA) BHD (65787-T) A. NOTES TO THE INTERIM FINANCIAL REPORT A1. Basis of Preparation This interim financial report is unaudited and has been prepared in accordance with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad, including compliance with Financial Reporting Standard (FRS) 134, Interim Financial reporting, issued by the Malaysian Accounting Standards Board (MASB). The Interim Financial Report should be read in conjunction with the Groups audited financial statement for the year ended 31 December 2010. The accounting policies and methods of computation used in the preparation of the interim financial statements are consistent with those used in the preparation of the last audited financial statements for the financial year ended 31 December 2010. A2. Significant Accounting Policies The significant accounting policies adopted are consistent with the audited financial statements for the year ended 31 December 2010. These explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 December 2010. On 1 January 2011, the Group adopted the following FRSs, Amendments to FRSs and IC Interpretations:FRS 1 First-time Adoption of Financial Reporting Standards FRS 3 Business Combinations (Revised) FRS 127 Consolidated and Separate Financial Statements Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters Amendments to FRS 1 Additional Exemptions for First-time Adopters Amendments to FRS 2 Share-based Payment Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 7 Improving Disclosures about Financial Instruments Amendments to FRS 132 Financial Instruments: Presentation Amendments to FRS 138 Intangible Assets Amendments to FRS 1 Improvements to FRSs (2010) FRS 3, FRS 7, FRS 101, FRS 128, FRS 132, FRS 134, FRS 139 IC Interpretation 4 Determining Whether an Arrangement Contains a Lease IC Interpretation 12 Service Concession Agreements IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 18 Transfers of Assets from Customers Amendments to IC Reassessment of Embedded Derivatives Interpretation 9 Adoption of the above FRSs, Amendments to FRSs and IC Interpretations did not have any material impact on the financial performance, position or presentation of financials of the Group. 6
A3. Status on Qualification of Audited Financial Statements The audit report of the Groups preceding year financial statement was not qualified. A4. Seasonality or Cyclicality of Operations The Groups performance is generally affected by seasonal factors such as school holidays and festive seasons. A5. Unusual Items affecting Assets, Liabilities, Equity, Net Income or Cash flows There were no significant items which unusually affect assets, liabilities, equity, net income or cash flows during the financial period. A6. Change in Accounting Estimates There were no changes in estimates of amount reported in prior interim period or financial year that have a material effect in the current financial period. A7. Debt and Equity Securities There were no cancellation, resale and repayment of debt and equity securities for the financial period other than the following :(a) The paid-up share capital of the Company was increased from 793,230,984 ordinary shares of RM0.50 each or RM396,615,492 as at 31 December 2010 to 793,265,464 ordinary shares of RM0.50 each or RM396,632,732 as a result of the issuance of 34,480 new ordinary shares upon conversion of 34,480 warrants at the exercise price of RM3.00 per share. (b) The number of warrants outstanding as at 30 June 2011 was 31,557,213. Each warrant entitles the holder the right to subscribe for a new ordinary share of RM0.50 each in the Company at an exercise price of RM3.00 per share. The warrants will expire on 14 September 2015. (c) The Company bought back 802,000 of its issued and paid-up shares from the open market at an average price of RM3.73 per share. Total consideration paid for the buybacks including transaction costs was RM2,992,715 and these buybacks were financed by internally generated funds. All the bought back shares are being retained as treasury shares. A8. Dividend Paid Dividend paid on 31 March 2011 was declared on 21 February 2011, in respect of the year ended 31 December 2010 been second interim dividend of 5.5 sen less 25% tax per share, on 793,256,968 ordinary shares, amounted to RM32,721,805. 7
A9. Operating Segments Cumulative Quarters 1 Jan 30 Jun 2011 Operating RMmillion Revenue Malaysia KFC restaurants 796.0 Integrated 272.8 Poultry Ancillary 51.5 1,120.3 101.0 Foreign KFC restaurants 214.0 Consolidated 1,334.3 Total
Cumulative Quarters 1 Jan 30 Jun 2010 Operating Profit/(loss) Revenue 102.1 0.9 (2.0) 1,024.1 4.6 105.6 182.8 1,206.9 715.6 254.7 53.8 96.6 5.6 102.2
KFC HOLDINGS (MALAYSIA) BHD (65787-T) A. NOTES TO THE INTERIM FINANCIAL REPORT A1. Basis of Preparation This interim financial report is unaudited and has been prepared in accordance with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad, including compliance with Financial Reporting Standard (FRS) 134, Interim Financial reporting, issued by the Malaysian Accounting Standards Board (MASB). The Interim Financial Report should be read in conjunction with the Groups audited financial statement for the year ended 31 December 2010. The accounting policies and methods of computation used in the preparation of the interim financial statements are consistent with those used in the preparation of the last audited financial statements for the financial year ended 31 December 2010. A2. Significant Accounting Policies The significant accounting policies adopted are consistent with the audited financial statements for the year ended 31 December 2010. These explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 December 2010. On 1 January 2011, the Group adopted the following FRSs, Amendments to FRSs and IC Interpretations:FRS 1 First-time Adoption of Financial Reporting Standards FRS 3 Business Combinations (Revised) FRS 127 Consolidated and Separate Financial Statements Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters Amendments to FRS 1 Additional Exemptions for First-time Adopters Amendments to FRS 2 Share-based Payment Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 7 Improving Disclosures about Financial Instruments Amendments to FRS 132 Financial Instruments: Presentation Amendments to FRS 138 Intangible Assets Amendments to FRS 1 Improvements to FRSs (2010) FRS 3, FRS 7, FRS 101, FRS 128, FRS 132, FRS 134, FRS 139 IC Interpretation 4 Determining Whether an Arrangement Contains a Lease IC Interpretation 12 Service Concession Agreements IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 18 Transfers of Assets from Customers Amendments to IC Reassessment of Embedded Derivatives
Interpretation 9 Adoption of the above FRSs, Amendments to FRSs and IC Interpretations did not have any material impact on the financial performance, position or presentation of financials of the Group. 6
A3. Status on Qualification of Audited Financial Statements The audit report of the Groups preceding year financial statement was not qualified. A4. Seasonality or Cyclicality of Operations The Groups performance is generally affected by seasonal factors such as school holidays and festive seasons. A5. Unusual Items affecting Assets, Liabilities, Equity, Net Income or Cash flows There were no significant items which unusually affect assets, liabilities, equity, net income or cash flows during the quarter under review. A6. Change in Accounting Estimates There were no changes in estimates of amount reported in prior interim period or financial year that have a material effect in the current financial quarter. A7. Debt and Equity Securities There were no cancellation, resale and repayment of debt and equity securities for the financial quarter other than the following :(a) The paid-up share capital of the Company was increased from 793,230,984 ordinary shares of RM0.50 each or RM396,615,492 as at 31 December 2010 to 793,265,448 ordinary shares of RM0.50 each or RM396,632,724 as a result of the issuance of 34,464 new ordinary shares upon conversion of 34,464 warrants at the exercise price of RM3.00 per share. (b) The number of warrants outstanding as at 31 March 2011 was 31,557,229. Each warrant entitles the holder the right to subscribe for a new ordinary share of RM0.50 each in the Company at an exercise price of RM3.00 per share. The warrants will expire on 14 September 2015. A8. Dividend Paid Dividend paid on 31 March 2011 was declared on 21 February 2011, in respect of the year ended 31 December 2010 being second interim dividend of 5.5 sen less 25% tax per share, on 793,256,968 ordinary shares, amounted to RM32,721,805. A9. Operating Segments Current Quarter Current Quarter 1 Jan 31 Mar 2011 1 Jan 31 Mar 2010 Operating Operating RMmillion Revenue Profit/(loss) Revenue Profit Malaysia KFC restaurants 387.8 50.6 357.2 42.6 Integrated 130.9 1.5 124.9 1.9 Poultry Ancillary 23.8 (0.2) 28.5 2.9 542.5 51.9 510.6 47.4 Foreign KFC restaurants 101.7 0.8 90.1 2.7 Consolidated 644.2 52.7 600.7 50.1 Total
2006
2007
2008
2009
2010
Share Price Information RM00 0 KFCH Financial Results Annual Report Quarterly Results
RM00 0
RM00 0
RM00 0
RM00 0
TOTAL REVENUE
1,523, 839
1,730, 371
1,628, 876
1,723, 677
1,888, 072
142,3 04
150,6 24
167,1 45
190,0 15
221,8 33
98,28 0
104,2 69
118,5 35
130,4 03
TOTAL ASSETS
974,0 78
1,006, 128
1,154, 407
1,290, 047
1,583, 032
528,4 76
602,0 21
692,1 58
791,7 57
990,2 47
12.4
13.1
14.9
16.4
19.8
18
20
22
24
15.5
5.40
6.40
7.45
7.40
3.82
NO OF RESTAURAN TS
KFC MALAYSIA
368
368
403
475
515
KFC SINGAPORE
68
69
69
77
77
KFC BRUNEI
KFC INDIA
KEDAI AYAMAS
19
20
25
35
49
RASAMAS MALAYSIA
15
22
22
40
39
RASAMAS BRUNEI
2006
2007
2008
2009
2010
Share Price Information RM000 KFCH Financial Results Annual Report Quarterly Results Quarterly Financial Results Review Financial Highlights
RM000
RM000
RM000
RM000
TOTAL REVENUE
1,523,839
1,730,371
1,628,876
1,723,677
1,888,072
142,304
150,624
167,145
190,015
221,833
98,280
104,269
118,535
130,403
156,848
TOTAL ASSETS
974,078
1,006,128
1,154,407
1,290,047
1,583,032
SHAREHOLDERS' EQUITY
528,476
602,021
692,158
791,757
990,247
12.4
13.1
14.9
16.4
19.8
18
20
22
24
15.5
5.40
6.40
7.45
7.40
3.82
NO OF RESTAURANTS
KFC MALAYSIA
368
368
403
475
515
KFC SINGAPORE
68
69
69
77
77
KFC BRUNEI
KFC INDIA
KEDAI AYAMAS
19
20
25
35
49
RASAMAS MALAYSIA
15
22
22
40
39
RASAMAS BRUNEI