Annual Report 2015 - Johor Corporation

1 Annual Report 2015core/strategic businessesKULIMS pearheaded by Kulim (Malaysia) Berhad. Established in 1933 in United Kingdom as Kulim Rubber Plantations Limited. Main activities: Plantations (Oil Palm), Intrapreneur Ventures as well as Oil and Gas (O&G). Kulim management and growth strategies are steered on the basis of Vision 30 AND RESTAURANT SERVICESS pearheaded by QSR Brands (M) Holdings Sdn Bhd. Main activities: Food and Restaurant Services. Total number of employees: 30,000. Implementing a fully-integrated value chain. Franchise holder and operator of KFC chain of restaurants in Malaysia, Singapore, Brunei and Cambodia. Franchise holder and operator of Pizza Hut chain in Malaysia and Singapore. Widely involved in the poultry industry through manufacturing activity of chicken feed, production of livestock and contract farming management of broilers; hatchery and processing of Ayamas chicken-based downstream products, as well as various other businesses including bread factory, commissiary, manufacturing of Life sauce and a distribution company known as QSR Trading Sdn COMPLEX DEVELOPMENTTPM TECHNOPARK SDN BHDD eveloping industrial areas and playing the vital role as Johor Corporation s project manager.

2 Involved in management services of commercial projects and developments of infrastructure. Represents as the marketing agent and developer of industrial areas owned by Johor LANGSAT PORTS tretched on a 405-hectare area, Tanjung Langsat Port is the gateway and backbone of Tanjung Langsat Industrial Complex (TLIC). STRATEGIC INVESTMENTINTRAPRENEUR AND O&G BUSINESSESThis segment represents Johor Corporation s approach in light of nurturing a entrepreneurial culture particularly among employees and external communities that demonstrates interest in business ventures particularly in cattle farming, agriculture and O& HEALTHCAREKPJ Healthcare Berhad is Malaysia s largest group of private healthcare and specialist medical care. It is a listed entity in the Main Board of Bursa Malaysia since 1994. Managing 25 private hospitals in Malaysia; Jakarta, Indonesia (two) and Dhaka, Bangladesh (one) while investing in a Bangkok-based private hospital as well as a hospital and aged-care facility in Brisbane, Australia.

3 Supported by over 1,000 medical specialists and 12,322 by Johor Land Berhad since 1972 involving residential property and commercial developments with 1,214 hectares of land bank at strategic locations within Iskandar Malaysia. Current and future development projects are Bandar Dato Onn, Bandar Tiram, Taman Seroja, Taman Damansara Aliff, Bandar Baru Majidee, Larkin Central Park, Kempas, Bandar Baru Tampoi, Pasir Gudang and Sri Gading in Batu Pahat. Implementing sustainable development concepts through provision of quality housing as well as neighbourhoods of exclusive identity for the residents of its township as well as providing strategic commercial spaces and business locations. Realising the policy of Dasar Perumahan Rakyat Johor through construction of 8,000 units of Johor Affordable Housing (RMMJ) beginning 2013 until INVESTMENTDAMANSARA ASSETS SDN BHDI mplementing commercial property investment and building management activities particularly shopping malls, office buildings, transport terminal, bazaars, sports complex and AQAR HEALTHCARE REITThe world s first Islamic REIT and the first healthcare-related Islamic REIT in M REITThe second Islamic REIT launched by Johor Crosscore/strategic businessesKULIMS pearheaded by Kulim (Malaysia) Berhad.

4 Established in 1933 in United Kingdom as Kulim Rubber Plantations Limited. Main activities: Plantations (Oil Palm), Intrapreneur Ventures as well as Oil and Gas (O&G). Kulim management and growth strategies are steered on the basis of Vision 30 AND RESTAURANT SERVICESS pearheaded by QSR Brands (M) Holdings Sdn Bhd. Main activities: Food and Restaurant Services. Total number of employees: 30,000. Implementing a fully-integrated value chain. Franchise holder and operator of KFC chain of restaurants in Malaysia, Singapore, Brunei and Cambodia. Franchise holder and operator of Pizza Hut chain in Malaysia and Singapore. Widely involved in the poultry industry through manufacturing activity of chicken feed, production of livestock and contract farming management of broilers; hatchery and processing of Ayamas chicken-based downstream products, as well as various other businesses including bread factory, commissiary, manufacturing of Life sauce and a distribution company known as QSR Trading Sdn COMPLEX DEVELOPMENTTPM TECHNOPARK SDN BHDD eveloping industrial areas and playing the vital role as Johor Corporation s project manager.

5 Involved in management services of commercial projects and developments of infrastructure. Represents as the marketing agent and developer of industrial areas owned by Johor LANGSAT PORTS tretched on a 405-hectare area, Tanjung Langsat Port is the gateway and backbone of Tanjung Langsat Industrial Complex (TLIC). STRATEGIC INVESTMENTINTRAPRENEUR AND O&G BUSINESSESThis segment represents Johor Corporation s approach in light of nurturing a entrepreneurial culture particularly among employees and external communities that demonstrates interest in business ventures particularly in cattle farming, agriculture and O& HEALTHCAREKPJ Healthcare Berhad is Malaysia s largest group of private healthcare and specialist medical care. It is a listed entity in the Main Board of Bursa Malaysia since 1994. Managing 25 private hospitals in Malaysia; Jakarta, Indonesia (two) and Dhaka, Bangladesh (one) while investing in a Bangkok-based private hospital as well as a hospital and aged-care facility in Brisbane, Australia.

6 Supported by over 1,000 medical specialists and 12,322 by Johor Land Berhad since 1972 involving residential property and commercial developments with 1,214 hectares of land bank at strategic locations within Iskandar Malaysia. Current and future development projects are Bandar Dato Onn, Bandar Tiram, Taman Seroja, Taman Damansara Aliff, Bandar Baru Majidee, Larkin Central Park, Kempas, Bandar Baru Tampoi, Pasir Gudang and Sri Gading in Batu Pahat. Implementing sustainable development concepts through provision of quality housing as well as neighbourhoods of exclusive identity for the residents of its township as well as providing strategic commercial spaces and business locations. Realising the policy of Dasar Perumahan Rakyat Johor through construction of 8,000 units of Johor Affordable Housing (RMMJ) beginning 2013 until INVESTMENTDAMANSARA ASSETS SDN BHDI mplementing commercial property investment and building management activities particularly shopping malls, office buildings, transport terminal, bazaars, sports complex and AQAR HEALTHCARE REITThe world s first Islamic REIT and the first healthcare-related Islamic REIT in M REITThe second Islamic REIT launched by Johor at a gLanceCOMMERCIAL ENTITY ROLEDEVELOPMENTAL ROLECORPORATE RESPONSIBILITY ROLE74856,302312,814,530(Domestic & abroad)(Domestic & abroad)(Domestic & abroad)

7 PIzzA HUT44931,062total Hectarage of PLANTED OIL PALM number of INDUSTRIALAREAS total Fund channelled to CORPORATE RESPONSIBILITY PROGRAMMES total number ofPATIENTS TREATED at KPJ Hospitalstotal number of RESTAURANTS total unit of DEVELOPED HOUSESKFC billionMillion187,3611,228number of OPERATING COMPANIES employment OPPORTUNITIES CREATED total ACCUMULATEDINVESTMENTS RM63total number of MOSQUES total number of PATIENTS TREATED AT WAQAF AN-NUR CLINICS & HOSPITAL>RM112618,000 Million MembersMission Membina dan Membela VisionFront coVer MotiVe rationaLethe motive is a combination of three popular illustrations representing the craftsmanship of the Malays, chinese and indians blended harmoniously and upheld as among the symbols and cores of the amalgamation of bangsa Johor solidarity that is robust, amicable and conglomerate contributing to the state and national economic growth through efficient and effective business entities while upholding community its position as a competitive, profit-generating and highly-regarded business entity that leads & dominates the catalyst harnessing sustainable business growth and subsequently achieving success to discharge its obligations as a state investment and improving the well-being of the community through business success and corporate responsibility 1 COrpOraTE 2abOuT Johor COrpOraTIONC orporate Profile & Information.

8 7 Business & Corporate of Directors ..10 Board of Audit Committee ..12 Board of Tender Committee ..12 Group Top Management Committee (TERAJU) ..13 TERAJU Korporat Committee ..14 Executive Committee (EXCO) ..16 Investment Review Committee (JAWS) ..18 SECTION 3 FINaNCIal hIghlIghTSFinancial Review ..20 Financial Highlights ( Johor Corporation ) 2011- 2015 ..21 Financial Highlights (Group) 2011- 2015 ..22 SECTION 4prOSpECTSE conomic Review ..23 KULIM Businesses ..25 Specialist Healthcare Businesses ..29 Food & Restaurant Services Business ..31 Property Division ..35 Industrial Development Division ..43 Business Development Division ..48 Corporate Responsibility Division ..50 Human Capital ..53 SECTION 5 COrpOraTE gOvErNaNCES tatement on Corporate Governance ..54 Statement on Risk Management & Internal Control ..57 Audit Committee Report ..59 SECTION 6 FINaNCIal STaTEmENTS ..61 CONTENTSOUR NEWFEATURES IN THIS Annual REPORTT hese QR code links will take you to information that is viewable on your smartphone.

9 Download an application for your phone, scan the code and the relevant page will open in your browser window. Bakodo or i-Nigma for iPhone, QR Code Scanner Pro for BlackBerryR and Barcode Scanner for Android all work is i-Nova? i-Nova is a feature within The JCorp Mobile App. It combines image recognition and Augmented Reality (AR) technology to deliver messages that go beyond print. i-Nova this page to find out how you can get the most out of this amazing technology. Six easy steps to view more information from Johor Corporation Annual Report 2015 : i. Search for i-Nova App from Apple App Store or Google Play on your Click the app and install. (Please check your device compatibility before installing).iii. Once installed, click open to launch the Augmented Reality (AR) Click the start button from the i-Nova App to launch the AR Look for the i-Nova icon in the book and scan the image with AR camera to enjoy interactive AR You may click on the interactive buttons to explore additional icon tells you where you can find more information online at 2 Annual Report 2015 / Johor CORPORATIONCORPORATE STATEMENTDaTO mOhamED KhalED bIN NOrDIN CHAIRMAN Johor CORPORATIONrESIlIENCE IN ThE FaCE OF ChallENgESDespite the challenging landscape of global macroeconomic volatilities and sluggish regional growth which defined the year 2015 , Johor Corporation delivered commendable financial performance, on the back of progress of its 2013-2022 Strategic Business Transformation Plan (BTP)

10 , which further strengthened its organisational resilience to weather the impacts of VUCA (volatility, uncertainty, complexity and ambiguity) of the global market. With the aim of achieving zero gearing by year 2022, Johor Corporation maintained clear focus on accelerating business growth within its five core business areas Plantation; Specialist Healthcare; Food & Restaurant Services; Property Development and Investment & Industrial Complex Development; and Oil & Gas (O&G) whilst improving business efficiencies to generate higher cash flows from Johor Corporation s asset and new business Corporation is well on track on its transformation journey, which has reinforced and realigned its organisational processes, systems and capacities and fortified organisational resilience in its quest to be a formidable Corporation able to withstand the challenges of a dynamic and ever shifting economic and business ethos of Business Continuity Management has been its clarion call, as the thrust of the strategy driving the organisation s efforts throughout 2015 .