ON BEHALF OF THE BOARD OF DIRECTORS (“THE BOARD”) OF VERSATILE CREATIVE BERHAD (“VCB”) AND ITS SUBSIDIARIES (“THE GROUP”), I AM PLEASED TO PRESENT THE ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2026 (“FYE 2026”).
FYE2026 was characterised by a dynamic operating environment influenced by geopolitical uncertainties, cost volatility and evolving consumer spending patterns. Despite these challenges, the Group remained resilient through prudent financial management, disciplined cost controls and operational efficiency across its businesses.
The Grocery Division continued to be the Group's primary growth driver, supported by stable demand for essential consumer goods and the continued strengthening of its retail operations. Meanwhile, the Manufacturing Division remained focused on operational efficiency, customer service and cost optimisation amid softer market demand.
Throughout the year, the Group also strengthened its sustainability governance and reporting practices, reflecting our commitment to responsible business conduct and long-term value creation. Climate-related considerations and sustainability matters continue to be integrated into our business planning and risk management processes.
Looking ahead, the Board remains cautiously optimistic. While external uncertainties are expected to persist, we believe the Group is well-positioned to navigate future challenges through its diversified business model, operational discipline and commitment to sustainable growth.
Grocery Division: Expanding Consumer Reach
The Grocery Division remained a key growth driver for the Group during the year, contributing RM419.88 million or 92.58% of the Group's total revenue. With ten (10) strategically located outlets across the Klang Valley, the division continued to benefit from stable domestic demand for essential food items, particularly within urban markets.
Despite inflationary pressures and more value-conscious consumer spending, the division prioritised the consistent availability of fresh products while enhancing the overall in-store experience. Through a continued focus on product quality, competitive pricing and customer satisfaction, store operations were further strengthened to enhance the shopping experience and support sales growth.
During the year, the Group strengthened its long-term retail platform and operational footprint through the acquisition of a retail property located at Plaza Pelangi Astana, Petaling Jaya, by its 51% owned subsidiary, NSK Grocer (KL) Sdn. Bhd. This strategic investment enhances the Group's asset base and supports its future expansion plans by securing a suitable location for retail operations while reducing reliance on leased premises. The acquisition reflects the Group's commitment to strengthening its market presence, enhancing operational flexibility and creating sustainable long-term value for shareholders.
Looking ahead, the Grocery Division is expected to remain a key growth pillar for the Group. The division will continue to focus on enhancing operational efficiency, reinforcing its presence in high-potential urban locations and positioning the business to capture future growth opportunities within the grocery retail market.
Manufacturing Division: Driving Efficiency and Innovation
The Manufacturing Division, comprIsIng the Paper Products and Plastics Products Divisions, recorded revenue of RM33.11 million for the financial year, compared to RM38.98 million in the preceding year. The decline was primarily attributable to softer demand from domestic customers, as well as the downsizing exercise and discontinuation of certain unprofitable product lines within the Plastics Products Division during the year.
As part of the Group's strategic initiatives to optimise resources and enhance operational efficiency, the Plastics Products Division underwent a comprehensive restructuring and relocation of its operations during the financial year. Although the exercise temporarily affected production capacity and revenue contribution during the transition period, the Division demonstrated resilience by achieving improved profit margins through disciplined cost management, enhanced operational efficiencies, and a leaner operating structure. These initiatives have strengthened the Division's operational foundation, positioning it for greater efficiency, competitiveness, and sustainable growth in the years ahead. The Group also continued to implement cost containment measures, optimise production processes and review material utilisation across its manufacturing operations. These efforts were directed towards managing costs, maintaining product quality and ensuring timely delivery to customers.
Despite the challenging market conditions and softer demand environment, the Manufacturing Division remained focused on operational discipline, customer service and continuous improvement. The Group continues to strengthen customer relationships, actively pursue opportunities to expand its customer base and enhance its operational capabilities. These efforts are aimed at reinforcing the Division's resilience, improving competitiveness and supporting sustainable long term growth and performance.
Sustainability Commitment and forward strategy
We view sustainability as an integral part of our long-term business success. Across our operations, we continue to embed responsible business practices, whether through improving resource efficiency, strengthening governance standards or promoting responsible sourcing within our retail operations. Our objective is to create sustainable value for stakeholders while balancing economic growth with environmental and social responsibilities.
During the year, the Group continued to strengthen its sustainability governance and reporting practices, including the management of climate-related risks and opportunities. The management of the Group's 11 material sustainability matters is discussed in this year's Sustainability Statement, reflecting our commitment to transparency, stakeholder engagement and long-term value creation.
Appreciation
The Board and I are proud of Team Versatile and their demonstration of teamwork and relentless efforts towards outstanding results for the Group for FYE 2026. On that note, and on behalf of the Board, I would also like to express our sincere appreciation to Team Versatile for their resilience and dedication.
My warmest regards are also extended to our shareholders, esteemed customers and suppliers, financial institutions and other stakeholders for their continued support and confidence in the Group. I believe that team Versatile, with the guidance of the Board and support from the management, will prevail in strengthening the adoption of various initiatives for sustainability to meet standards and demand, thus enhancing a sustainable future for the Group moving forward. May we continue to work together and strive forward to reach for more opportunities and achieve business growth and success for the betterment of the Group in the coming years.
Tan Sri Dato' Seri Mohd Shariff Bin Omar
Independent Non-Executive Chairman
22 July 2026
Remuneration Committee