JOHOR CORPORATION

1 JOHOR CORPORATIONA nnual Report 2011 JOHOR CORPORATIONJOHOR CORPORATIONL evel 2, PERSADA JOHORJ alan Abdullah Ibrahim80000 JOHOR BahruJohor, : 607 219 2692 Fax : 607 223 3175 Email : Membina dan Membela MISSIon A state investment CORPORATION contributing to state and national economic growth through an efficient and effective business entity while upholding the community interest. Upholding position as a business entity that spearheads and controls market, competitive, profit-motivated and recognized. A catalyst to sustainable business growth which will further create success in fulfilling its obligation as a state investment CORPORATION .

2 Contributing and adding values to the well-being of the community through business success as well as Corporate Social Responsibility of contents section 1corporate statement 4 section 2about JOHOR corporationCorporate Profile 14 Corporate Information 15 Business Structure 16 Corporate Structure 17 Board of Directors 18 Board of Directors Profile 20 Board of Investment Committee 22 Board of Audit Committee 23 Group Top Management Committee (TERAJU) 24 Group Human Resource Committee (TERAS) 25 Executive Committee (EXCO) 26 Investment Review Committee (JAWS) 27 section 3financial HigHligHts 2005-2011 30 section 4corporate social responsibility 34 section 5prospect 41 Economic Review 42 Plantation Sector 44 Food And Quick Service Restaurants Sector 56 Healthcare Sector 62 Hospitality Sector 70 Property Sector 71 Logistics/Service Sector 80 section 6intrapreneur business 90 section 7corporate goVernance statement 102 Audit Committee Report 106 Internal Control Statement 108 Risk Management 110 section 8 Human Capital Development 114 Significant Events 2011 116 JCorp in the Media 124 Recognition 126 Corporate History 128 section 9financial statements 133 DYMM Sultan Ibrahim Ibni Almarhum Sultan

3 Iskandar, Sultan of JOHOR listens to the brefing on Tanjung Leman Integrated Resort and Coastal Township in conjunction with Kembara Mahkota JOHOR 2012 at Felda Residence, Tanjung Leman, Mersing on 13 May 1corporate statement EXCELLENT PERFORMANCE SUSTAINED DOMESTIC ECONOMY 2011 JCORP S FINANCIAL PERFORMANCE 2011 CORPORATE EVENTS CORPORATE RESTRUCTURING PLAN ECONOMIC TRANSFORMATION PROGRAMME TRANSFORMATION IN JCORP FOCUS ON NEW BUSINESSES HUMAN CAPITAL DEVELOPMENT CORPORATE GOVERNANCE ACCOUNTABILITY INDEX AWARDS & RECOGNITIONS JCORP S THREE MAIN ROLES MEMBINA DAN MEMBELA AND CSR APPRECIATIONJoHor CORPORATION AnnUAL REPORT 20114 CORPORATE STATEMEnTYAB DATO HAJI ABDUL GHANI BIN OTHMANC hief Minister of JOHOR Chairman.

4 JOHOR CorporationybHg tuan HaJi KamaruZZaman bin abu KassimPresident & Chief Executive, JOHOR Corporationcorporate statement JOHOR CORPORATION AnnUAL REPORT 20115 Similarly, the Group s asset rose by about 20% to billion as compared to billion in were achieved through steadfastness in facing external challenges coupled with ongoing business rationalisations and continuous improvements in management efficiencies and business operations. Finally, strong dedication and loyalty from the Group s 78,141-strong-workforce has also driven the growth momentum in from the ongoing business rationalisations which include strengthening its core businesses, the Group has taken a cohesive approach in evaluating marketability of new products and potentials of new ECONOMY IN 2011 The country experienced an economic growth between 5% and 6% which was contributed by high domestic demands and steady flow of exports.

5 Carefully planned macro-economic policies evidenced by, among others, rapid developments in the six Economic Corridors have been successful in attracting both domestic and foreign investors. The outcome from the policy of promoting private sector s participation in investment and nation building has become more significant. Clearly, the Government s Transformation Programme (GTP) and Economic Transformation Programme (ETP) initiatives are starting to deliver their intended results, mainly in strengthening investors confidence and inclination towards long term investments. Public sector s investments, which are directed towards providing essential public services and improving government s delivery system, are catalysts in their own way in terms of sustaining economic the volatile nature of the global economic situation throughout 2011, demand for commodities, in particular Crude Palm Oil (CPO) in the international market had not dampened.

6 This augurs well for JCorp Group, in particular Kulim ( malaysia ) Berhad (Kulim) which is one of the nation s largest oil palm plantation players, which saw a marked increase in its revenue. CONTINUED COMMENDABLE RESULTSJCorp s group of companies ( JCorp Group or Group ) has attained its most outstanding results since 41 years of its establishment whereby the Group managed to record profit post-taxation and zakat of some billion for the year 2011. This represents an increase of 55% or RM682 million compared to statementJoHor CORPORATION AnnUAL REPORT 20116 The Group is confident of the long term prospects of the CPO and is committed in its contributions towards realising the vision of malaysia becoming a high income nation by 2020.

7 It is projected that by then the CPO market will contribute to some RM100 billion in national income. JCORP S FINANCIAL PERFORMANCE The year 2011 saw JCorp Group s best ever results recorded since its establishment 41 years ago, with pre-tax profit of billion, a significant increase of 47% compared to RM962 million recorded in 2010. The Group s revenue rose by 4% to billion compared to billion in the previous financial year. For 2011, the aggregate revenue earned from all sectors in the Group was billion but due to JCorp s equity interest in KPJ Healthcare Berhad in 2011 was that of an associate company, KPJ s revenue was not consolidated as part of the Group s STATEMEnTThis came about from the collective efforts within the Group; in particular the Group s focused strategic planning undertaken within the last one-and-a-half-year-period.

8 This has in turn led to a transformation programme that has been successful in improving business, operations and management efficiencies. All five core businesses of the Group delivered outstanding results. The Plantation sector recorded pre-tax profit of billion in 2011 against RM732 million in 2010, a 42% increase. The Food sector earned RM296 million compared to RM277 million in the previous year. The property sector delivered pre-tax profit of RM273 million in 2011, an astounding 326% increase compared to RM64 million in JCorp s level, the pre-tax profit decreased slightly to RM114 million compared to RM118 million in 2010, on the back of additional provisions made in the current year for operational and developmental activities, whilst revenue had increased to RM474 million in contrast to RM388 million in 2010, a 22% statement JOHOR CORPORATION AnnUAL REPORT 20117corporate eVents Several corporate transactions were undertaken in 2011.

9 Amongst others, JCorp had on 14 December 2011, announced the proposal of acquiring the entire business, assets and liabilities of KFC Holdings ( malaysia ) Bhd and QSR Brands Bhd for billion. Massive Equity Sdn Bhd (MESB), a subsidiary of JCorp, has been identified as the special vehicle for the acquisition. The Employees Provident Fund and CVC Capital Partners will be participating as co-investors in MESB. The acquisition is expected to be completed by the end of restructuring master plan The Corporate Restructuring Master Plan (CRMP) was conceived in 2002 in an effort to defray JCorp s bond obligations in several stages, with the final stage of some billion that will fall due on 31 July 2012.

10 Subsequent to the year-end, JCorp has redeemed a major portion of the obligations through several redemption plans, the most significant being a private treaty scheme to early settled the bonds. Through the private treaty scheme, JCorp has secured a total of 76% acceptances from the bond holders and had paid approximately billion. With this, the balance to be redeemed by 31 July 2012 was reduced to RM800 Federal and State Governments have approved the provision of Government Guarantee in respect of the JCorp s issuance of billion Sukuk Wakalah. The Sukuk Wakalah will be issued in 3 series, namely RM400 million with a 5-year maturity, RM800 million with 7-year maturity and finally billion with 10-year maturity.