DRIVING SUSTAINABLE GROWTH ANNUAL REPORT 2019

UR PLAN IN YEAR AHEAD About Corporation

Johor Corporation was established as a public enterprise and a statutory body with the passing of the Enactment No. 4, 1968 (as amended under Enactment No. 5, 1995). As a state-owned conglomerate, Johor Corporation through its Group of Companies are involved in core businesses comprising Plantations, Specialist Healthcare, Food & Restaurant Services, as well as Property.

MISSION

A conglomerate contributing to the Playing the role of catalyst for Maintaining its position as a Contributing and improving the state and national economic growth sustainable business growth and competitive, profit generating well-being of the community through efficient and effective subsequently achieving success and highly regarded business through business success business entities while upholding to discharge its obligations as a entity that leads & dominates and corporate responsibility community interests. state investment corporation. the market. undertakings.

VISION MEMBINA & MEMBELA

JOHOR CORPORATION CORE VALUES 2.0

INTEGRITY PROFESSIONAL INNOVATIVE LOYAL TEAMWORK We execute our task We are committed We are knowledgeable, We execute our We work as a team, with trustworthiness, to executing our task visionary, creative, dare responsibilities with contributing to achieving a honesty and fairness, efficiently through to lead, responsive and dedication and common goal and shared in line with the law and professional knowledge resourceful in pursuit commitment towards vision in an interactive and corporate governance and skills, thereby of Johor Corporation’s Johor Corporation’s conducive environment. principles. providing excellent service Business Continuity mission and vision and quality product Mission. while being resilient to our customers and and devoted to Johor shareholders. Corporation. A NEW LOGO INSIDE THIS REPORT FOR A NEW 1. CORPORATE STATEMENT Chairman’s Statement 4 Corporate Statement 6 Symbolises the gateway that will bridge us all into a future of innovation and 2. ABOUT JOHOR CORPORATION advancement Corporate Profile & Information 13 Corporate Structure 14 34 Board of Directors’ Profile 16 3. FINANCIAL REVIEW PROSPECTS KULIM Statements of Comprehensive Income 20 BUSINESS Statements of Financial Position 22 Statements of Cash Flows 24 Statement of Changes In Equity 27 Financial Performance Summary JCorp & Group (2015-2019) 30

4 4. PROSPECTS

The new Johor Corporation (JCorp) brand identity reflects the ambition, CORPORATE STATEMENT Economic Review 32 aspiration and direction of the Group. The new logo is a representation of CHAIRMAN’S STATEMENT Kulim Business 34 Specialist Healthcare Division 42 JCorp’s forward trajectory, as well as its desired image moving forward – 42 Food and Restaurant Services Business 48 dynamic, modern and forward thinking. The main distinguishing feature Property Division 58 Industrial Development Division 70 in the modern logotype is its clean sharp and minimalist representation of PROSPECTS Business Development Division 78 the ‘JCorp’ identity. SPECIALIST Corporate Responsibility Division 80 HEALTHCARE Group Human Capital Management The red ‘O’ symmetrically balances the overall logo which as a whole DIVISION Division 88 Group IT Advancement Division 92 symbolises the gateway that will bridge us all into a future of innovation and advancement. 5. CORPORATE GOVERNANCE STATEMENT

The typefaces used are clean and bold, connoting strength and resilience, Corporate Governance Statement 94 Risk Management and Internal Control 99 all reminiscent of an image of a world class corporation. Designed in the Board Governance & Business colours of Johor Darul Ta’zim, our new logo also pays homage to our roots Ecosystem Committee Report 102 as we continue to carry the colours of our heritage on the path forward. 6 58 Please scan the QR Code to link to website for more DYNAMIC, MODERN AND CLEAN AND BOLD, CONNOTING CORPORATE STATEMENT PROSPECTS information on how JCorp FORWARD THINKING STRENGTH AND RESILIENCE CORPORATE STATEMENT PROPERTY DIVISION contributed to the state. P 4 P 5 SECTION 1 SECTION 1 Corporate Statement Corporate Statement

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CHAIRMAN’S CHAIRMAN’S STATEMENT

STATEMENT JCORP’S TRANSFORMATION TO ENABLE PROSPEROUS JOHOR AGENDA SINCE BEING GIVEN THE TRUST TO LEAD THE JOHOR STATE GOVERNMENT, I HAVE BROUGHT THE PROSPEROUS JOHOR AGENDA TO THE FOREFRONT, WHICH WILL FOCUS ON DEVELOPMENT IN AN EQUITABLE AND HOLISTIC MANNER FOR THE WELL-BEING AND PROPSPERITY OF OUR CITIZENS.

In our efforts to fully realise developments that benefit the people, an experienced strategic institution such as Johor Corporation (JCorp) is definitely needed to implement these aspirations.

I am confident that JCorp will be able to accomplish the Prosperous Johor agenda through the execution of the Johor Sustainable Development Plan. The synergy between JCorp, State Government and related agencies involved in the development of Johor must also continue to be galvanised. This role not only needs to be continued, JCorp’s efforts to improve its market share President and Chief Executive, as well but needs to be multiplied through in its four core businesses – agriculture, as JCorp’s Board of Directors who Johor requires a strategic plan to act intelligently, swiftly expansion of business activities as well as specialist healthcare, property as well have led the new leadership within this and in an organised way to face the post-COVID-19 era. the implementation of other important as food and restaurant services will also conglomerate. development projects for the people. generate more revenue going forward. We need to unify our expertise, energy, focus and I am confident that JCorp’s transformation I have given and will always give my I have also witnessed JCorp’s many efforts will be emulated by other state other resources to fulfil this mission and achieve the state’s vision. full support and cooperation towards achievements in the agriculture sector, development and investment agencies. JCorp’s transformation that began in namely for the MD2 pineapple, Melita, From the perspective of development, investment 2020. This transformation will be able to which has succeeded in penetrating the This initiative must also go hand-in-hand and economic progress, the people should not be bring JCorp to a higher level at both the markets of multiple countries. In addition, with new futuristic ideas, innovation, looking at topline numbers only, but also take part domestic and regional stage. downstream products such as tarts, improvements in governance, moral jam, juice and fresh-cut fruits have also values, integrity and professionalism so in these activities to benefit from the spill-over effects of economic prosperity. The idea to spread JCorp’s wings by been well-received in the market. that the Johor Prosperous agenda can be riding the Industrial Revolution 4.0 to quickly achieved. Through 34 industrial zones developed across the enter business and industry also cannot The government will also leverage on state, JCorp has succeeded in providing 220,000 job be delayed further. JCorp’s expertise to help farmers and May Allah SWT ease our tasks and bless opportunities. This is one of JCorp’s major contributions in growers succeed in its mission to plant our devoted efforts. realising the Johor State Government’s agenda. The Internet as a platform for Del Monte pineapples which has the technological business and the digital potential to produce excellent returns. economy must be fully exploited in order to create entrepreneurs for the new I also like to take this opportunity to Johor Corporation DATUK HAJI HASNI BIN MOHAMMAD economy. heartily congratulate Yang Berbahagia 30 June 2020 Menteri Besar Johor Datuk Syed Mohamed Syed Ibrahim, Johor Corporation Chairman P 6 P 7 SECTION 1 SECTION 1 Corporate Statement Corporate Statement

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CORPORATE CORPORATE STATEMENT STATEMENT DRAMATIC JCORP IS NOW FOCUSING AND PREPARING THE TRANSFORMATION TO ORGANISATION TO STEP INTO THE NEW DECADE WHILE REMAIN SUSTAINABLE BRINGING JCORP TO A MUCH HIGHER LEVEL.

A HOST OF DEVELOPMENTS IN OUR BUSINESS AND CORPORATE of its stakeholders. Currently, the global In line with this development, the Group ACHIVEMENTS HAS COLOURED THE economy has been seriously impacted is being strengthened with various FINANCIAL YEAR 2019 FOR JOHOR CORPORATION. by the COVID-19 outbreak, since systems and high-tech applications that PERFORMANCE 2019 CONCURRENTLY, THIS ECONOMIC January 2020 and it is now a global are able to improve the efficiency of data INSTITUTION AND CHANGE AGENT health emergency that has disrupted the management and services in addition REVENUE FOR THE STATE HAS FACED FIERCE economy and global communities. to accelerating operational efficiency RM6,007 million CHALLENGES AND TAKEN DELIBERATE MAIN BUSINESSES to provide a positive experience to our STEPS TO ENSURE THE GROUP’S EXPLORING THE FIFTH CORE customers – a vital element to succeed in PROFIT BEFORE TAX BUSINESS CONTINUES BUSINESS business now and in the future. million TO BE RELEVANT AND RM384 JCorp is now focusing and preparing At the same time, JCorp continues to COMPETITIVE AS WELL the organisation to step into the new strengthen its four core businesses PROFIT AFTER TAX AS CAPABLE IN THE decade while bringing JCorp to a much of plantations, property, health and MARKET. IN ADDITION, RM295 million Kulim higher level. The technology and digital food through Kulim () Berhad THE UNCERTAIN PG. 34 business is now being explored and built (Kulim), (JLand), GLOBAL POLITICAL AND up to become JCorp’s fifth core business KPJ Healthcare Berhad (KPJ Healthcare) ECONOMIC CLIMATE to generate additional revenue. This and QSR Brands (M) Holdings Bhd HAS IMPACTED BOTH transformation is aligned with global (QSR Brands) to remain dominant and GLOBAL AND DOMESTIC trends that is essentially a computer in relevant in the marketplace. ACTIVITIES. constant communication as part of a sophisticated and perplexing system. At the domestic level, Specialist Look at the developments occurring with Johor Corporation (JCorp) Healthcare the Industrial Revolution 4.0 (IR4.0) that is was also affected. The main PG. 42 seeing automation, drones and robotics factors were the effects of taking over the roles of humans. Digital the trade war between US applications and wireless technology for and China, in addition to the fifth-generation cellular network (5G) falling commodity prices in powers the way life is conducted around the world market, especially the world now. crude oil and crude palm oil. This situation required JCorp Property This fifth core business calls on JCorp to drastically change its business PG. 58 to venture into the areas where we have and operations, including expertise. This involves products that going into new portfolios to are based on innovation and intellectual generate new income in the property, such as industrial and operations future. This action is required management, corporate responsibility to enable JCorp to continue management, the establishment of waqaf its business and maintain its and the commercialisation of certain position in the market, while Food & Restaurant business and services modules. upholding the confidence Services PG. 48 P 8 P 9 SECTION 1 SECTION 1 Corporate Statement Corporate Statement

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CORPORATE CORPORATE STATEMENT STATEMENT

TRANSFORMATION & million, whereas net assets improved ORGANISATIONAL STRUCTURE to RM1.45 billion compared to RM1.40 billion in the same period. Damansara JCorp continues to place a high priority Assets Sdn Bhd recorded income of on identifying risks in the market as well as RM158.6 million compared to RM133.7 its impact on business and stakeholders, million. eventhough returns may be attractive and profitable. In this context, JCorp will QSR Brands which drives the food enter 2020 more cautiously, strategically business via KFC and Pizza Hut and with unwavering wisdom. Reviews, demonstrated excellent performance. corrections and audits are carried KFC Malaysia recorded revenue of out to identify weaknesses, strengths, RM2.8 billion, growing by 2.2% on potential or shortcomings in corporate the RM2.74 billion recorded last year. governance, finances, procurement Pizza Hut, meanwhile, achieved as well as operations, through their outstanding revenue growth for the 3rd respective control measures. consecutive year with RM596 million, a 6.6% increase compared to 2018. With these changes and new The success of both these brands was requirements, JCorp will not neglect the the result of dedicated commitment skills of its employees in order to carry to strategy, branding, exciting product out this transformation that is intended innovation and digital transformation for to elevate JCorp’s honour and status to a customer convenience. podium of excellence as Johor’s strategic institution. ISLAMIC BUSINESS from our role, vision and mission that is and food (QSR Brands) remains solid and In accordance with Islamic teachings, clearly outlined in the Johor Corporation relevant as markets all over were plagued At the same time, the potential of Waqaf JCorp emphasises the philosophy that Enactment No. 4, 1968 (Amendment No. by a variety of sentiments throughout An-Nur Corporation Berhad (WANCorp) duty and responsibility must be carried 5, 1995). 2019. continues to be honed. The space and out skilfully and with excellence. Thus, opportunities for WANCorp to leverage JCorp’s core values and corporate Examples of the drastic steps taken Kulim remained resilient even though its potential, role and achievements have culture have been streamlined to included reviewing and reorganising it was impacted by the decline in crude been identified. WANCorp will also be strengthen the personalities of every the organisational structure and palm oil and palm kernel prices in directed to explore other new areas employee who will need to be at their business plan to obtain optimal results, the international commodity market including the Islamic Business that will be best for an organisation like JCorp. in addition to the implementation of throughout 2019. This scenario able to improve capabilities and earnings Through this, JCorp is confident thethat Transformation Plan 2020-2022 that was overcome through corporate to strengthen the socioeconomic agenda the full commitment of its employees has succeeded and greatly impacted developments that strengthened its billion in 2019 compared to RM3.4 billion of the ummah. will be able to move this development JCorp and Johor especially. Focus was foundations and optimised its portfolio. the year before, mainly contributed by agency to succeed in its transformation, also given on how to mitigate economic Some of these actions included realising an increase in patient numbers. This Noting WANCorp’s achievements that will bring JCorp to a higher level, weakness because of the effects of investments, exploring new business achievement was a result of an ongoing throughout 2019, we are confident it to be sustainable and relevant while the health emergency post-COVID-19, sectors and strengthening the marketing strategy to increase the capacity of all is able to progress further. Besides its contributing to the people’s well-being. as well as the new global landscape that of agribusiness products. hospitals in its network. main responsibility as JCorp’s corporate has been redrawn. social responsibility arm, the scope of To realise and achieve this transformation JCorp’s property development and WANCorp’s activities and programmes goal, drastic actions through the CORE BUSINESS PERFORMANCE Meanwhile, KPJ Healthcare succeeded investment arm, JLand, faced a tepid which include religion, charity and intelligence process – wise but firm, in increasing its revenue despite a market with Johor recording the highest society, education and entrepreneur prudent with managed risk; have been The performance of our four core challenging business environment. level of unsold properties in the first half development will be reorganised, taken by JCorp. This has been done businesses, plantations under Kulim, The network of specialist hospitals of 2019 at 18.8%. However, this did not strengthened and expanded. without compromising or absconding property (JLand), health (KPH Healthcare) recorded revenue growth of 7% or RM3.6 prevent JLand from raking in revenue of RM400 million compared to RM374 P 10 P 11 SECTION 1 SECTION 1 Corporate Statement Corporate Statement

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CORPORATE CORPORATE STATEMENT STATEMENT

appreciation and thanks to all, especially the Johor State Government and the JCORP IS READY TO OVERCOME EXTERNAL Federal Government, together with their departments and agencies as well as UNCERTAINTIES THAT HAVE BEEN AGGRAVATED BY THE other stakeholders including bank and financial advisors on the commitment ABNORMALITIES SET OFF BY THE DISRUPTION EDGE. given.

We also pay tribute and offer our thanks to FACING CHALLENGES Iskandar, Bandar Dato’ Onn, . 01 DYMM Sultan Johor inspecting the our customers, strategic partners, media automated MD2 pineapple harvesting 02 DYMM Permaisuri Johor and our biggest stakeholders which JCorp is ready to overcome external The also graced Kulim process at the Kulim Pineapple Farm. visiting patiens at the include our individual and institutional uncertainties that have been aggravated Pineapple Farm Sdn Bhd, Tunku Laksamana Johor Hermatology Ward, Hospital shareholders of the Group’s companies by the abnormalities set off by the which was the final stopover location for Sultanah Aminah, Johor. - KPJ Healthcare, E.A. Technique Berhad, disruption edge. The effect of 5G the Program Kembara Mahkota Johor Al-Salam REIT and Al-‘Aqar Healthcare technology and technological shock 2019 convoy on 22 July 2019. The Sultan REIT; who have given or stated their resulting from the game changers of of Johor also officiated the launch of commitment to all our corporate plans, Menara JLand at KOMTAR JBCC, on artificial intelligence, robotics and drones investments and business transactions has exceeded the logical boundaries 27 November 2019. received its MS ISO throughout 2019. of mankind. These developments will 37001: 2016 Anti constantly be monitored and analysed On 17 April 2019, The Queen of Johor Bribery Management This note would only be complete with considering how these technologies officiated the launch of The Caring Systems (ABMS) our highest thanks and appreciation to could dominate the world’s intelligence Home By Pizza Hut at Hospital Sultanah certification. Kulim the entire JCorp Board Members for all through robots that are taking over Aminah, Johor Bahru. Prior to the event, was awarded Best their invaluable input and contributions, human roles one by one. Like other His Royal Highness Tunku Mahkota of Annual Report be it in the form of guidance, wisdom or entities, JCorp is faced with reputational, Johor officiated the handover of offer Of Non-Listed experience that they have accorded to brand and image risk, as well as slander letters for Rumah Impian Bangsa Johor at Organisations while ensure that JCorp remains relevant. and misinformation on social media Terminal on 3 March 2019. Kulim’s Laboratory that is difficult to control. Therefore, this Unit received the It is clear and proven that the contributions issue will be managed with speed and Meanwhile, JCorp and all its employees IKM Laboratory from all quarters have enabled JCorp intelligence. would like to extend our heartfelt Excellence Award; to accelerate its operations on a strong congratulations to YAB Datuk Hasni JCorp also acknowledges YB Dato’ KPJ Specialist Hospital platform that has the capability to CORPORATE EVENTS Mohammad on his appointment as Ishak Sahari; YBhg Datuk Seri Dr Ismail received the International Hospital overcome challenges in a new phase of Johor’s 18th Menteri Besar and JCorp’s Haji Bakar; YBhg Datuk Siti Zauyah Md Federation Award 2019; and JLand our corporate journey to a higher level at There were numerous highlights and new Chairman. This mandate was last Desa; YBhg Dato’ Azman Mahmud; YBhg celebrated its recognition at the Malaysia the national and even regional stage. corporate events colouring JCorp’s year held by YB Dato’ Dr Sahruddin Haji Jamal Datuk Dr Hafsah Hashim; YB Datuk Dr Property Awards 2019 for the categories in 2019. Through this avenue, JCorp and JCorp would like to record our Shahruddin Md Salleh; and YBhg Datuk of International Real Estate Federation would like to take this opportunity to deepest thanks and appreciation for his Ibrahim Ahmad for their guidance, and Master Plan. express our utmost gratitude to His contributions. support, wisdom and expertise while on Majesty The Sultan of Johor and Her JCorp’s Board of Directors. HEARTFELT TRIBUTE Majesty The Queen of Johor for gracing JCorp and all its employees would a number of ceremonies organised by also like to wish a warm welcome to I would also like to take this opportunity AWARDS & RECOGNITION Strong cooperation and staunch support JCorp throughout the year. YB Tuan Amir Nasruddin; YBhg Dato’ Asri to acknowledge and offer our sincere of all our stakeholders has enabled Hamidon; YBhg Dato’ Saiful Anuar Lebai thanks and gratitude to YB Dato’ Our corporate achievements are also JCorp to fulfil its role and carry out its On 28 May 2019, His Majesty The Sultan Hussen; YBhg Datuk Nor Azri Zulfakar; Kamaruzzaman Abu Kassim, who led this measured through recognition and mandate while moving closer to its of Johor, Her Majesty The Queen of Johor and YBhg Dato’ Sr Hisham Jafrey on institution from October 2010 until his awards from independent organisations goals. Thus, in representing JCorp and and His Royal Highness Tunku Mahkota their appointments as new Directors on retirement in December 2019. and standard bearers. In 2019, JCorp the Group, I wish to extend my deepest of Johor officiated Johor Corporation JCorp’s Board of Directors. 2019 breaking fast event at Masjid Sultan P 12 P 13 SECTION 1 SECTION 2 Corporate Statement About Johor Corporation

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

CORPORATE STATEMENT CORPORATE PROFILE & INFORMATION

Johor Corporation was established as a public enterprise and a statutory body via Johor Corporation Enactment No. 4 , 1968 (Amendment No. 5 , 1995).

As a State-owned Conglomerate, Johor Corporation through its Group of Registered Office Companies are involved in core businesses encompassing: JOHOR CORPORATION Level 11, Menara KOMTAR • Plantations – Kulim (Malaysia) Berhad. Johor Bahru City Centre • Specialist Healthcare – KPJ Healthcare Berhad. 80000 Johor Bahru, Johor, Malaysia. • Property - TPM Technopark Sdn Bhd, TLP Terminal Sdn Bhd, Johor Land Berhad, Telephone : +607-219 2692 Damansara Assets Sdn Bhd, Al-‘Aqar Healthcare REIT and Al-Salām REIT. Fax : +607-223 3175 • Food & Restaurant Services – QSR Brands (M) Holdings Bhd. Email : [email protected]

Johor Corporation is a domestic market leader in a number of core businesses and has expanded its operations overseas.

Branch Office The Plantations Business owns operations and interests in: JOHOR CORPORATION • Malaysia: 50,851 hectares. CAWANGAN • : 14,511 hectares.* Level 11, Menara JCorp (*Area granted under Right of Exploitation (HGU)). No 249 Jalan Tun Razak 50400 Kuala Lumpur, Malaysia. Telephone : +603-2787 2692 Fax : +603-2787 2700 Specialist Healthcare business spearheaded by KPJ Healthcare Berhad, has expanded to:

• Jakarta, Indonesia. ACKNOWLEDGEMENTS Auditor • Brisbane, Australia. Ernst & Young • , . Thanks, congratulations and a deep Level 23A, Menara Milenium, • Dhaka, Bangladesh. appreciation must go out to our 62,000 Jalan Damanlela employees of the JCorp Group that are Pusat Bandar Damansara, totally committed, dedicated, capable Kuala Lumpur, 50490, Malaysia. Food & Restaurant Services have spread from Malaysia to: and hardworking to fulfil the mandate that has been given. They have served while holding firm to our core values, • (KFC & Pizza Hut). corporate culture values, integrity and Principal Banker • Brunei (KFC). compliance to corporate governance MAYBANK • Cambodia (KFC). Lot M1-22, 106-108 City Square procedures. Our ongoing transformation Jalan Wong Ah Fook can only succeed with the support of 80000 Johor Bahru, Johor, Malaysia. each and every employee as they are the Four listed companies on : source of JCorp’s strength that will push us through new economic challenges to achieve our vision and mission – • KPJ Healthcare Berhad. • E.A. Technique (M) Berhad. Membina dan Membela • Al-‘Aqar Healthcare REIT. • Al-Salām REIT. Johor Corporation 30 June 2020 P 14 P 15 SECTION 2 SECTION 2 About Johor Corporation About Johor Corporation

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CORPORATE CORPORATE STRUCTURE STRUCTURE

Kumpulan Lablink (M) 51% 100% 36.14% 96.07% Perubatan (Johor) Sdn Bhd Sdn Bhd 100% 100% 80% 38.61% 100% 65% 100% Mahamurni Point Zone (M) EPA Management Kulim Energy Plantations Sdn Bhd Sdn Bhd Sdn Bhd 2.56% Sdn Bhd

75% 75% Business 50.60% 100% Massive Equity 56% 100% Chronicles Sdn Bhd Sdn Bhd

100%

77.62% 100% SPMB Holdings 100% Sdn Bhd 48.02% 4.21% 100% 100%

N2W 100% 11.82% Bukit Damansara Corporation Development Sdn Bhd Sdn Bhd 100% 88.18%

100% 100% 100% 100% Ibrahim Bandar Baru Johor City 60% International Majidee Development Business Development Sdn Bhd (Johor) Sdn Bhd Sdn Bhd

75% 100% 100%

Plantation Specialist Food & Property Intrapreneur Shipping Port/Logistic Industry Intrapreneur Investment WANCorp/ Significant Management Real Estate Healthcare Restaurant Development Holding OBA Direct Holding Investment Trust Services (REIT) BOARDof DIR ECTORS’ Profile

P 16 P 17 SECTION 2 SECTION 2 About Johor Corporation About Johor Corporation

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019 BOARDof DIR ECTORS’ Profile DATUK HAJI HASNI BIN DATO’ HAJI TAN SRI DR ALI AZMI BIN MOHAMMAD BIN HAMSA Chief Minister of Johor DATO’ HAJI A. RAHIM Deputy Chairman ROHANI State Secretary of Johor Chairman Johor Corporation Johor Corporation BIN HAJI NIN Appointed Director of Johor State Financial Officer of Johor He was appointed as Chairman of Johor He was appointed the Director of Corporation effective 1 January Corporation Board of Directors effective Johor Corporation effective Appointed Director of Johor Corporation representing the 2017. He holds a Bachelor 28 February 2020. He holds a Bachelor 1 November 2009. Beginning State Government effective 20 October 2017. He holds of Science (Human Resource 15 June 2020, he was appointed a Bachelor of Arts (Hons) in Economics from Universiti of Science in Civil Engineering from Development) from Universiti the Deputy Chairman as well as Kebangsaan Malaysia. He is currently the State Financial the University of Missouri, Rolla, United Teknologi Malaysia obtained Independent Director of Johor Officer of Johor. States of America. He is now the Chief in 2004 and a Bachelor of Corporation. He holds a Philosophy Minister of Johor. Development (Economic and Doctorate (PhD) from Oklahoma State Management) from Universiti University in 1997, MS (Economics) Kebangsaan Malaysia obtained from Oklahoma State University in in 1990. He is currently the State 1986, B.A (Hons) from University of Secretary of Johor. Malaya in 1979 and Diploma in Public Management from INTAN in 1980.

DATUK SYED MOHAMED BIN SYED IBRAHIM TUAN President & Chief Executive AMIR BIN Johor Corporation NASRUDDIN He was appointed President & Chief State Legal Advisor of Johor Executive and Director of Johor Corporation effective 9 Januari 2020. He was appointed Director of He holds a Degree in Economic Johor Corporation effective Analysis from Universiti Malaya and continued with the Senior Management 1 January 2020. He obtained Development in Public Enterprise a Diploma in Law and an programme in Harvard University. Advanced Diploma in Law (LLB He is also Chairman and Board Director Honours) from Institut Teknologi of Prasarana Integrated Development MARA in 1994. He is currently Sdn Bhd, Board Director of Yayasan Sultan Ibrahim Johor, Yayasan Kanser the State Legal Advisor of Johor. Tunku Laksamana Johor and Iskandar Seafront Assets Sdn Bhd. Prior to this, he was the Chairman of FELDA Investment Corporation; President & Executive Chairman of Iskandar Waterfront Holdings Sdn Bhd. He is also a Board Director for Yayasan Sultan Ibrahim Johor and Yayasan Kanser Tunku Laksamana Johor. BOARD OF DIRECTORS’ PROFILE P 18 P 19 SECTION 2 SECTION 2 About Johor Corporation About Johor Corporation

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BOARD OF DIRECTORS’ BOARD OF DIRECTORS’ PROFILE PROFILE

DATO’ SAIFUL DATO’ SR. ANUAR HISHAM BIN DATO’ ASRI BIN JAFREY BIN LEBAI Managing Director, ARH HAMIDON Jurukur Bahan Sdn Bhd Treasury Secretary-General HUSSEN Secretary General, Ministry of Ministry of Finance Appointed Director of Johor NURALIZA BINTI Economic Affairs Corporation effective 1 May Board of Directors Johor Corporation ABDUL RAHMAN Appointed Director of Johor 2020. He holds a degree in He was appointed the Director of Johor Assistant Secretary Corporation effective 1 October Quantity Surveying from the Corporation effective 15 Jun 2020. He has 2019. He holds a Bachelor of Leeds Metropolitan University, She was appointed as Johor Corporation Assistant a Bachelor’s Degree in Economics from Economics (Development) from . He is a Fellow of Secretary on 1 March 2020. She has a Professional the Hiroshima University, Japan. Prior to Universiti Kebangsaan Malaysia. the Royal Institution of Surveyor Degree from the Institute of Chartered Secretaries this, he was the Treasury Deputy Secretary- Prior to this, he held the position Malaysia and a Member of the and Administrators (ICSA)(UK). She began serving General (Policy). He is now the Treasury of Deputy Secretary-General Royal Institute of Chartered in Johor Corporation from 1 October 1997. Secretary-General. (Management) at the Ministry of Surveyors, United Kingdom. She currently holds the position of Company Health. He is currently the Director- In addition, he is also on the Secretary Department Head, Johor Corporation. General, Economic Planning Unit, Industry Member Advisory Panel of Prime Minister’s Department. SEGi University.

DATUK NOR AZRI BIN MOHD ZULFAKAR NORDIN Director-General, Implementation and JAMALUDIN Coordination Unit, Secretary Johor Corporation Prime Minister’s Office He was appointed Secretary Appointed Director of Johor of Johor Corporation effective Corporation effective 8 March 2 February 2020. He holds 2020. He holds a Degree a Bachelor of Law from the in Business Administration University of West London, (Financial Management) from United Kingdom. He began the Massachusetts Institute of serving with Johor Corporation Technology (MIT), Cambridge on 2 February 2020. He currently Massachusetts, United States of holds the position of Head America. Prior to this, he was a of Corporate Services, Board Director for the Johor Corporation. Regional Development Authority (PERDA). P 20 P 21 SECTION 3 SECTION 3 Financial Review Financial Review

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STATEMENTS OF COMPREHENSIVE INCOME STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Group Corporation Group Corporation 2019 2018 2019 2018 2019 2018 2019 2018 Note Restated Restated Restated Restated

Continuing operations Other comprehensive income, to be reclassified to Revenue 4 6,007 5,657 566 460 profit or loss in subsequent periods: Cost of sales (4,217) (3,967) (155) (194) Foreign currency translation of foreign operations 5 46 - - Gross profit 1,790 1,690 411 266 Other comprehensive income/(loss), not to be reclassified to profit or loss in subsequent periods: Other items of income Fair value adjustment for financial assets at Other income 5 381 376 112 370 FVOCI (4) (199) - - Fair value adjustment for financial assets at Other items of expense FVOCI in relation to disposal of subsidiary 99 - - - Distribution expenses (43) (54) (1) (1) Net surplus from revaluation of property, plant and equipment 42 89 - - Administrative expenses (1,220) (1,144) (155) (136) Surplus on transfer of property, plant and Other expenses 6 (178) (147) (68) (194) equipment to investment property 5 - - - Finance costs 7 (470) (451) (137) (152) Disposal of property, plant and equipment (6) - - - Share of results of associates, net of tax 27 27 - - Other comprehensive income/(loss), for the financial Share of results of joint ventures, net of tax 97 91 - - year, net of tax 141 (64) - - Profit before tax from continuing operations 8 384 388 162 153 Total comprehensive income for the financial year 429 148 164 159 Tax 11 (89) (172) 2 6 Profit attributable to: Profit from continuing operations, net of tax 295 216 164 159 Owner of the Corporation 101 62 164 159

Non-controlling interests 187 150 - - Discontinued operations Loss from discontinued operations, net of tax 12 (7) (4) - - 288 212 164 159 Profit net of tax 288 212 164 159 Total comprehensive income attributable to:

Owner of the Corporation 217 (99) 164 159

Non-controlling interests 212 247 - -

429 148 164 159

P 22 P 23 SECTION 3 SECTION 3 Financial Review Financial Review

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STATEMENTS OF FINANCIAL POSITION STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 FINANCIAL POSITION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Group Corporation Group Corporation 31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018 Note Restated Restated Restated Restated Note Restated Restated Restated Restated

ASSETS EQUITY AND LIABILITIES Non-current assets Current liabilities Property, plant and equipment 13 8,928 10,601 10,569 352 597 529 Current tax liabilities 35 34 63 - -- Right-of-use assets 14 2,079 -- 253 -- Lease liabilities 30 47 -- 6 -- Inventories 15 493 737 759 34 261 365 Loans and borrowings 31 2,123 2,635 2,307 3 807 11 Investment properties 16 4,704 4,265 3,549 1,982 1,875 1,499 Trade and other payables 32 2,119 1,788 2,022 1,164 391 1,058 Biological assets 17 - 2 1 - -- Contract liabilities 26 95 78 20 12 -- Intangible assets 18 251 252 250 - -- Derivative financial instrument 27 3 2 2 - -- Investment in subsidiaries 19 - -- 3,378 3,151 3,327 4,422 4,537 4,414 1,185 1,198 1,069 Investment in associates 20 300 282 268 4 4 4 Liabilities directly associated with disposal Investment in joint ventures 21 1,760 1,701 1,583 - -- group classified as held for sale 29 - 180 203 - -- Deferred tax assets 22 210 171 170 148 118 82 4,422 4,717 4,617 1,185 1,198 1,069 Financial assets at Fair Value through Net current assets/(liabilities) 64 (57) (236) 234 221 188 Other Comprehensive Income Non-current liabilities ("FVOCI") 23(a) 28 20 215 - -- Trade and other payables 32 442 439 271 1,067 1,100 378 Financial assets at Fair Value through Other long term liabilities 33 1,227 1,235 1,056 958 934 783 Profit or Loss (“FVTPL”) 23(b) 2 -- - -- Deferred tax liabilities 22 789 808 772 266 241 211 Trade and other receivables 25 40 23 65 - -- Loans and borrowings 31 7,272 6,642 6,387 1,789 1,808 2,609 18,795 18,054 17,429 6,151 6,006 5,806 Lease liabilities 30 81 -- 16 -- Current assets 9,811 9,124 8,486 4,096 4,083 3,981 Inventories 15 1,592 1,314 1,346 900 665 707 Total liabilities 14,233 13,841 13,103 5,281 5,281 5,050 Biological assets 17 29 21 31 - -- Net assets 9,048 8,873 8,707 2,289 2,144 2,013 Contract costs 24 7 2 4 - -- Equity Trade and other receivables 25 1,017 1,078 1,194 159 290 143 Capital reserves 34(a) 391 392 392 55 55 55 Contract assets 26 134 129 61 39 76 - Asset revaluation reserve 34(b) 159 149 123 - -- Financial assets at Fair Value through Profit or Loss ("FVTPL") 23(b) 5 4 5 21 20 56 Currency fluctuation reserve 34(c) 9 (66) (43) - -- Tax recoverable 118 83 68 1 4 4 FVOCI reserve 34(d) (99) (95) 69 - -- Cash and bank balances 28 1,136 1,239 877 116 119 30 Revenue reserve 34(e) 6,058 6,066 5,913 2,234 2,089 1,958 4,038 3,870 3,586 1,236 1,174 940 6,518 6,446 6,454 2,289 2,144 2,013 Assets of disposal group classified as held Non-controlling interests 2,530 2,427 2,253 - -- for sale 29 448 790 795 183 245 317 Total equity 9,048 8,873 8,707 2,289 2,144 2,013 4,486 4,660 4,381 1,419 1,419 1,257 Total equity and liabilities 23,281 22,714 21,810 7,570 7,425 7,063 Total assets 23,281 22,714 21,810 7,570 7,425 7,063 P 24 P 25 SECTION 3 SECTION 3 Financial Review Financial Review

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

STATEMENTS OF CASH FLOWS STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Group Corporation 2019 2018 2019 2018 Restated Restated Group Corporation 2019 2018 2019 2018 Changes in working capital Restated Restated Inventories (39) (158) (11) (156)

OPERATING ACTIVITIES Receivables 54 505 (48) 213 Profit before tax: Contract assets (5) (68) - - Continuing operations 384 388 162 153 Payables 239 (226) 984 234 Discontinued operations (8) (5) - - Contract liabilities 15 58 - - Adjustments: Associates and joint ventures 42 (5) - - Property, plant and equipment: Cash generated/(used in) from operations 1,371 1,064 917 219 Net gain on disposal (10) (31) - - Tax refunded 45 8 3 - Written off 4 1 - - Tax paid (205) (223) (3) - Depreciation 391 426 6 23 Impairment loss 10 29 2 - Net cash generated from operating activities 1,211 849 917 219 Right-of-use assets Depreciation 70 - 22 - INVESTING ACTIVITIES Investment properties: Proceeds from disposal of investment in: Changes in fair value (165) (65) (74) (183) Subsidiaries - - - 52 Net loss/(gain) on disposal - 1 - 5 Financial assets at fair value through profit or loss - 5 - - Biological assets: Acquisition of additional interest in subsidiaries - (2) (17) (60) Changes in fair value (2) 7 - - Dividend received from subsidiaries 2 5 280 212 Gain on disposal of: Dividend received from associates 11 13 - - Subsidiaries (1) - - (43) Adjustment on initial recognition of MFRS 16 - - 1 - Associates (2) - - - Interest received 32 45 11 8 Asset held for sales - (71) - - Financial assets through profit or loss: Property, plant and equipment: Changes in fair value (1) 1 (1) 44 Proceeds from disposal 24 190 - 5 Allowance for impairment : Purchase (606) (617) (37) (3) Joint venture 43 - - - Right of use asset: Subsidiaries - - - 48 Purchase (15) - - - Intangible assets: Investment properties: Written off - 1 - - Purchase (195) (428) (11) (10) Amortisation and impairment 12 5 - - Biological assets: Dividend income (2) (5) (280) (212) Proceeds from disposal 3 6 - - Unrealised foreign currency exchange loss/(gain) (3) 10 - - Purchase (7) (4) - - Amortisation: Intangible assets: Government grant (14) (16) (7) (7) Proceeds from disposal - 3 - - Land lease rental (15) (14) (11) (11) Purchase (15) (11) - - Allowance for impairment of trade and other receivables 70 12 56 9 Purchase of: Reversal of impairment for trade and other receivables (10) (4) (9) (42) Financial assets at fair value through other comprehensive income (41) - - - Interest expense 470 451 137 152 Financial assets at fair value through profit or loss (1) (5) - (42) Interest income (32) (45) (11) (8) Share of results of associates and joint ventures (124) (118) - - Investment in joint venture (47) (27) - - Operating profit/(loss) before changes in working capital 1,065 958 (8) (72) Increase in deposits with licensed bank with maturity of more than 3 months (77) (93) - - P 26 P 27 SECTION 3 SECTION 3 Financial Review Financial Review

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 STATEMENT OF CHANGES IN EQUITY Group Corporation FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 2019 2018 2019 2018 Restated Restated

INVESTING ACTIVITIES (CONTINUED) Total equity Government grant received 21 15 14 10 Net cash inflow on disposal group classified as held for sale - 181 - 91 Net cash flows (used in)/generated from investing activities (911) (724) 241 263 Non- interests

FINANCING ACTIVITIES controlling Drawdown of term loans and other long term borrowings 2,846 1,544 - - Repayment of term loans and other long term borrowings (2,799) (955) (809) (5) Repayment of the lease liabilities (24) - (8) - Repayment to subsidiaries - - (199) (224) Advances from non-controlling interest of subsidiaries, net of repayments - (5) - -

Proceed from dilution of interest in subsidiary - 120 - - reserve Total Revenue Disposal of subsidiary 3 - - - Interest paid (470) (451) (77) (112) FVOCI

Interest paid to subsidiaries - - (60) (40) reserve Dividend paid to non-controlling interests (119) (104) - - Distribution of fund to State Government (8) (12) (8) (12) Designated account (34) (17) - - reserve Currency

Net cash used in financing activities (605) 120 (1,161) (393) fluctuation

Net change in cash and cash equivalents (305) 245 (3) 89

Cash and cash equivalents at 1 January 866 607 119 30 Asset Effect of exchange rate changes on cash and cash equivalents 7 14 - - reserve revaluation Cash and cash equivalents at 31 December 568 866 116 119 - - - - (187) (187) - (187) - - - - (1) (1) - (1) - - - - 101 101 187 288 - 7 - - - 7 35 42 - 5 - - - 5 - 5 - (2) - - - (2) (4) (6) - - - (4) - (4) - (4) - - - - 99 99 - 99 - - 11 - - 11 (6) 5 - 10 11 (4) 99 116 25 141 - 10 11 (4) 200 217 212 429 ------(119) (119) - - - - (6) (6) 8 2 - - - - (2) (2) 3 1 - - - - (18) (18) - (18) (1) - 64 - (181) (118) (1) (119) (1) - 64 - (207) (144) (109) (253) 392 149 (66) (95) 6,253 6,633 2,427 9,060 392 149 (66) (95) 6,066 6,446 2,427 8,873 CASH AND CASH EQUIVALENTS 392 149 (66) (95) 6,065 6,445 2,427 8,872 Capital Cash and bank balances 761 834 100 27 reserves Fixed deposits 375 405 16 92 13 23(a) 1,136 1,239 116 119 Note Bank overdrafts (213) (129) - - Deposit with licensed bank with maturity of more than 3 months (203) (126) - - Designated account (152) (118) - - 568 866 116 119 equipment equipment to investment properties 16 at FVOCI relation to disposal of subsidiary operations financial year financial year 2019 Group At 1 January 2019 (as previously reported) Prior year adjustment 43 At 1January 2019 (restated) Effect of MFRS 16 Adjusted balance as at 1 January 2019 Profit net of tax Other comprehensive income Revaluation surplus on property, plant and Surplus on transfer of property, plant and Disposal of property, plant and equipment Fair value adjustment for financial assets Fair value adjustment for financial assets in Foreign currency translation of foreign Total other comprehensive loss for the Total comprehensive income for the Transaction with owner Dividend paid to non-controlling interests Disposal of subsididary Accretion of interest in subsidiaries Dilution of interest in subsidiaries Distribution to State Government Closing balance at 31 December 2019 391 159 9 (99) 6,058 6,518 2,530 9,048 P 28 P 29 SECTION 3 SECTION 3 Financial Review Financial Review

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

STATEMENT OF CHANGES IN EQUITY STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Asset Currency Non- Asset Capital revaluation Revenue Total 2018 Capital revaluation fluctuation FVOCI Revenue controlling Total Corporation Note reserves reserve reserve equity Group Note reserves reserve reserve reserve reserve Total interests equity At 1 January 2019 (as previously reported) 55 - 2,223 2,278 At 1 January 2018 392 123 (43) 69 6,063 6,604 2,253 8,857 Prior year adjustment 43 - - (134) (134)

Prior year adjustment 43 - - - - (150) (150) - (150) At 1 January 2019 (restated) 55 - 2,089 2,144 Effect of MFRS 16 44 - - (1) (1) At 1 January 2018 (restated) 392 123 (43) 69 5,913 6,454 2,253 8,707 Adjusted balance as at 1 January 2019 55 - 2,088 2,143 Effect of MFRS 9 - - - - 4 4 - 4 Profit net of tax - - 164 164 Adjusted balance as at 1 January 2018 392 123 (43) 69 5,917 6,458 2,253 8,711 Distribution to State Government - - (18) (18) Total comprehensive income for the financial year 55 - 2,234 2,289 Profit net of tax - - - - 62 62 150 212 Closing balance at 31 December 2019 55 - 2,234 2,289 Other comprehensive income

Revaluation surplus on property, Asset plant and equipment 13 - 26 - - - 26 63 89 Capital revaluation Revenue Total Note reserves reserve reserve equity Fair value adjustment for financial assets at FVOCI - - - (164) - (164) (35) (199) At 1 January 2018 (as previously reported) 55 118 1,814 1,987 Foreign currency translation of foreign Prior year adjustment 43 - - (120) (120) operations - - (23) - - (23) 69 46 Effect of MFRS - (118) 264 146 At 1 January 2018 (restated) 55 - 1,958 2,013 Total other comprehensive income for the financial year - 26 (23) (164) - (161) 97 (64) Effect of MFRS 9 - - (28) (28) Adjusted balance as at 1 January 2018 55 - 1,930 1,985 Total comprehensive income for the Profit net of tax - - 159 159 financial year - 26 (23) (164) 62 (99) 247 148 Total comprehensive income for the financial year 55 - 2,089 2,144 Transaction with owner Closing balance at 31 December 2018 55 - 2,089 2,144 Dividend paid to non-controlling interests ------(104) (104) Accretion of interest in subsidiaries - - - - 33 33 (35) (2) Dilution of interest in subsidiaries - - - - 54 54 66 120 - - - - 87 87 (73) 14 Closing balance at 31 December 2018 392 149 (66) (95) 6,066 6,446 2,427 8,873

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Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

FINANCIAL PERFORMANCE SUMMARY FINANCIAL PERFORMANCE JCORP & GROUP (2015-2019) SUMMARY JCORP & GROUP (2015-2019) LEGEND

LEGEND JCorp GROUP JCorp GROUP

REVENUE TOTAL ASSETS 566 6,007 6,643 23,281 2019 2019

460 5,657 7,244 22,714 2018 2018

245 5,564 7,063 21,810 2017 2017

288 5,355 7,425 21,080 2016 2016

574 5,306 7,570 20,606 2015 2015

PROFIT BEFORE TAX TOTAL LIABILITIES 162 384 5,281 14,233 2019 2019

153 388 5,281 13,841 2018 2018

93 583 5,050 13,103 2017 2017

112 541 5,275 13,293 2016 2016

262 499 4,773 11,406 2015 2015

PROFIT AFTER TAX TOTAL EQUITY 164 295 2,289 9,048 2019 2019

159 216 2,144 8,873 2018 2018

94 471 2,013 8,707 2017 2017

120 415 1,969 7,787 2016 2016

206 381 1,870 9,200 2015 2015 P 32 P 33 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

ECONOMIC ECONOMIC REVIEW REVIEW ECONOMIC REVIEW 2019 MALAYSIA’S GROSS DOMESTIC PRODUCT (GDP) RECORDED A SHARP DECLINE TO 3.6% IN THE FOURTH QUARTER OF 2019, After hovering in the range of 4.0-5.0% sectors that grew 3.8% and 0.1% over the last six consecutive quarters respectively. The construction LEADING TO 2019’S GDP GROWTH OF ONLY 4.3%. since the second quarter of 2018, sector’s marginal growth was Malaysia’s Gross Domestic Product because of the completion (GDP) recorded a sharp decline to 3.6% of large-scale projects, with 2020 ECONOMIC PERSPECTIVE US-China trade war that is still being felt response of the whole world to ease in the fourth quarter of 2019, leading fewer new projects which are until now with signs that it may erupt monetary policy and implement stimulus to 2019’s GDP growth of only 4.3%. mostly smaller scale and an The year 2020 began encouragingly again, and the fall of the crude oil market packages during the first half of 2020 In line with Malaysia’s slowest economic oversupply of real estate. where the worst market scenario by due to the price war between Saudi is expected to strengthen the recovery growth since 2009, the world economy Although the services and consensus expected the weakness in the Arabia and Russia. of global growth by the end of 2020 or and global trade only expanded 2.9% manufacturing sector were second half of 2019 to continue into the by early 2021. In line with the forecast (2018: 3.6%) and 1.0% (2018: 3.7%), the biggest contributors to first half of 2020, whereas a clear rebound The dramatic decline in the economy in of economic recovery in 2021, Malaysia respectively. This clearly demonstrated overall GDP growth, it also was seen in the second half of 2020 as the first quarter of 2020 due to the rapid is also expected to return to a positive that Malaysia was impacted by external experienced a deceleration a result of the easing of interest rates spread of COVID-19 since early March growth trajectory. pressures throughout 2019. due to weak global around the world and a more relaxed 2020 which forced the implementation demand for manufactured financial market. However, what ofwas the MCO and its variants. This was As of now, cuts to the OPR have This included global trade tensions and items and household earlier considered a local issue for China, compounded by the repeated supply amounted to 100 basis points, bringing it an increase in protectionist rhetoric that spending returning led to the outbreak of the COVID-19 disruptions in the commodity sector to 2.0% and with four stimulus packages was not limited to the US and China; an to more appropriate pandemic, a black swan event that was as well as the risk of being collateral totalling RM295 billion, it is hoped that increase in geopolitical risk in the Middle levels compared acknowledged as a global pandemic on damage in the price war between Saudi this will reduce the economic impact of East, Eastern Europe, South and the to 2018’s unusual 11 March 2020. Arabia and Russia, and the local political COVID-19. performance. Asia-Pacific; the uncertainty of economic, instability continuing to impact Malaysia’s social, political and international relations Meanwhile, the equity market based on Since then, the majority of the world’s economy negatively. BNM has also forecasted average between Europe and Britain as a result As a result of the supply disruptions the Bursa Malaysia Composite Index countries have had to institute lockdowns inflation growth of between -1.5% of Brexit, and the economic impact in commodity output in 2018, the first (KLCI) was trapped in a downward trend, and all kinds of social distancing While there is a wide range of views for and 0.5% for 2020 considering the of climate change aside from several half of 2019 witnessed the resurgence declining by 6% and closing at 1,588.8 protocols to stem the spread, resulting in Malaysia’s economic prospects in 2020, downward pressure on prices in general, internal speed-bumps in growth trends. of the agricultural and mining sectors, points (2018: -5.9% and 1,690.6 points) the world grinding to a halt. This global BNM’s official forecast of -2.0% to +0.5% largely mirroring the prospects of low especially palm oil and natural gas. health crisis and critical steps taken to is the least pessimistic, although the crude oil prices and other commodities In fact, domestic demand growth However, this all changed in the second at the end of 2019 due to outflows by foreign investors (-RM6.7 billion). stop the outbreak at both the global and likelihood that it will be a recession that is in the global market, as well as muted moderated at 4.3% due to lack of half of 2019 when there were supply However, the Ringgit ended the year local level has led to a global recession worse than the Global Financial Crisis of aggregate demand. With the focus on support from the main driver of growth, disruptions as a result of plant closures stronger by 1.1% to RM4.0925 compared and a simultaneous supply and demand 2008-2009 cannot be discounted. strengthening the support for economic the private sector. This contraction in and maintenance activities that affected to the US dollar. The average price of shock due to weak final demand and recovery, low inflationary pressures gross fixed capital formation causedthe output of crude oil and natural gas palm oil and crude oil (Brent), two global disruption in the supply chain. Therefore, the prospects for global that could threaten deflation permits a by the shrinkage in public sector resulting in the mining sector continuing commodities that has a direct impact on growth depend on how quickly the more accommodative monetary policy investments and a slowdown in private its contraction trend. The lagged impact Johor Corporation declined in 2019 with Based on the latest forecasts from the virus can be contained and eventually through further cuts to the OPR, to as sector investments growth was the main due to the drought and less fertiliser palm oil at RM2,119/metric ton (2018: International Monetary Fund (IMF) and stopped, as well as the shape, scope and low as 1.5%, which would be the lowest reason Malaysia recorded its slowest application in early 2019 affected palm RM2,235/metric ton) and crude oil at World Bank (WB), the global economy scale of the various follow-up measures in history, or further cuts to the Statutory GDP growth since 2009. oil production, the main cause of the US$64.37/per barrel (2018: US$71.19/ is expected to contract by 3.0% to for cross-border travel to control the Reserve Rates of 2.0% currently. All this decline in its recovery, although this was per barrel). 5.2%. Some of the other contributors spread of the pandemic and to reduce is to ensure the Malaysia’s real GDP In terms of the supply side, the offset by the agriculture sector which to this global recession which has the multi-dimensional negative effects does not take too long to return to its decline in GDP growth was mainly recorded growth of 2.0% (2018: 0.1%). been regarded as unprecedented and with monetary and fiscal stimulus duringlong-term potential growth output contributed by the loss of momentum unparalleled include the effects of the and post-COVID-19. The economic estimated at between 4.3% and 4.8%. in the manufacturing and construction P 34 P 35 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

KULIM KULIM BUSINESS BUSINESS in Indonesia valued at RM44.03 million, and set aside an allocation for expected REVENUE losses from a litigation case involving EA Tech and Malaysia Marine and Heavy RM1.21 billion THE YEAR 2019 HAS BEEN Engineering amounting to RM45.28 OIL & GAS REVENUE ANOTHER CHALLENGING million. Despite this, the Group’s cashflow remains strong. PERIOD FOR KULIM RM307.52 million At the same time, the Intrapreneur (MALAYSIA) BERHAD (KULIM) CPO PRICE Venture (IV) Division recorded revenue AS THE LOW PRICES OF of RM37.63 million, 21.49% less than the RM2,181 average CRUDE PALM OIL (CPO) AND RM47.93 million in 2018. This Division PALM KERNEL (PK) IMPACTED recorded profit before tax of RM0.25 million in 2019 compared to RM1.24 THE GROUP’S EARNINGS. On 13 February 2019, the disposal of million the year before. a 75% equity stake in Optimum Status Sdn Bhd (OSSB) which is owned by EPA The Oil & Gas Division recorded revenue Management Sdn Bhd to IV Kulim or Kulim However, Kulim has remained resilient of RM307.52 million, falling by 34.56% Safety Strategy Training and Services Sdn with a host of initiatives to optimise the from the RM469.92 million achieved the Bhd was successfully completed. This potential value of our business segments. year before. This Division recorded losses disposal is in line with our strategy to The Palm Oil Plantation business is still before tax of RM92.51 million compared transform KSTS into a health, safety and the main contributor to revenue despite environment management company. the uncertain price environment for to profit before tax of RM73.91 million the year before. CPO and PK, European Union sanctions On the 1 May 2019, Kulim stopped towards palm oil use, high inventories Although facing challenges in balancing operations of EPASA Shipping Agency and lower CPO exports to other main investments against creditors and Sdn Bhd and turned it into a dormant markets. Our operations were also company (not active). affected by worker shortages and the cash flow, Kulim remains committed to delivering value to our shareholders. rising cost of labour. In line with this, the Board of Directors Following this, on 7 May 2019, Kulim have approved a dividend payment of acquired the 25% stake belonging to From a financial perspective, the RM200 million for the year 2019. Intrapreneur in Renown Value Sdn Bhd. Group’s revenue declined to RM1.21 This step was to increase Kulim’s revenue billion as of end-December 2019 CORPORATE DEVELOPMENTS through stronger MD2 pineapple farming compared to RM1.39 billion by paying close attention and having full recorded in 2018. The decline In 2019, Kulim continued to streamline control of the pineapple business. was caused by the 35% all its portfolio assets in an effort to reduction in revenue from strengthen the company’s operations On 1 October 2019, Kulim and MTC Orec EA Technique (M) Berhad as well as ensure optimum revenue Sdn Bhd entered into a Subscription (EA Tech) as there was no generation. Kulim’s approach to optimise and Shareholders Agreement (SHA) for revenue from Engineering, There was a slight decrease in the The Group recorded losses before tax its portfolio takes into account factors the formation of Kulim Green Energy Procurement, Contract, production of PK to 77,256 tonnes in of RM127.85 million in 2019, compared such as the market condition, disposal Ventures Sdn Bhd (KGEV) as a joint Installation and Construction 2019 compared to 79,286 tonnes in 2018. to a profit before tax of RM57.81 million of non-profitable assets or businesses venture company for biomethane projects throughout 2019. In addition, the price of PK dropped the year before. The loss before tax that are no longer aligned with the commercialisation. MTC Orec was In addition, the lower revenue was sharply in 2019 to an average price was primarily due to the recognition Group’s strategic vision. In addition to established to capture the synergy compounded by lower contribution of RM1,289 per tonne compared to of impairments due to changes to the this, realising some of our investments is between O’REC Ind Sdn Bhd and MTC from the Plantation Division, specifically RM1,792 per tonne in 2018. However, Malaysian Financial Reporting Standards also an option if an appropriate offer is Engineering Sdn Bhd. revenue from PK amounting to RM43 the Plantations segment remains the (MFRS). The Group also recorded joint- received. million. main contributor to the Group, delivering venture losses in the oil and gas segment RM834.61 million or 69.04% of revenue. P 36 P 37 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

KULIM KULIM BUSINESS BUSINESS

On 8 October, Kulim through KGEV FFB PRODUCTION signed a Gas Purchase Agreement with and Gas Malaysia Virtual Pipeline Sdn 907,188 tonnes Bhd (GMVP), a fully owned subsidiary of Gas Malaysia Berhad (GMB). Through this CPO PRODUCTION agreement, GMVP will obtain biomethane from KGEC which will be channelled into 309,867 tonnes the Natural Gas Distribution System. REPLANTED These investments are part of Kulim’s 776 hectares long-term strategies that look to capitalise on the potential of biomethane RIGHT TO CULTIVATE (HGU) IN commercialisation. It is also in line with SOUTH Kulim’s business direction to expand its other businesses and to be involved in 14,511 HECTARES green technology. The palm oil mill is strategically located within BIOMASS PLANTS WILL BE BUILT BY 2025 GMVP’s pipe network and thus indicates 5 plants the great potential for biomethane to be commercialised and sold to GMB. period, palm kernel production declined On 31 December 2019, Kulim ended the by 2.39% to 77,108 tonnes in 2019 operations of Special Appearance Sdn from 78,995 recorded in 2018. The oil Bhd (SASB), in line with Kulim’s strategy extraction rate (OER) improved to 21.66% to wind down companies that are not Tiram Central Laboratory (UTCL) also won the IKM Laboratory Excellence Award from the 21% achieved before this. Just profitable or no longer in line with our 2019 at the Malam Kimia 2019 event. like in previous years, Kulim’s OER was strategic vision. This action was also taken higher than the industry average of to reduce the Group’s risk and ensure the 19.93% for the Peninsular and 20.21% for business continuity of Kulim. Kulim’s excellence continued to be recognised as the Kulim Pineapple Farm BUSINESS REVIEW However, the Group’s performance was Malaysia as a whole. Kulim was also able much higher in terms of the average to achieve a lower kernel extraction rate AWARDS AND RECOGNITION was the MD2 pineapple winner in the category of agricultural produce at the AGRIBUSINESS yield that was achieved by the industry, in (KER) of 5.39% compared to the 5.41% Johor, as well as in the Peninsular which recorded in 2018. Kulim continued to collect a string of National Farmers, Livestock Breeders and Fishermen Day 2019. Plantations in Malaysia recorded 19.41 tonnes and 17.95 tonnes, awards throughout 2019. This included respectively. In our commitment to good sustainability being announced the winner in the The year 2019 can be described as the practices, Kulim continues it replanting categories of World Business Leader and Meanwhile, Kulim’s subsidiary, Danamin year where Kulim showed its resilience Meanwhile, the price of CPO showed a programme to improve the age profile Inspirational Company at the BIZZ Awards At the 11th Annual Global CSR Summit (M) Sdn Bhd was awarded the On-call in facing challenges that pressured the downward trend in the first quarter of of its plantations and obtain optimum Awards Ceremony 2019, Kulim crowned Contractor 2019 award by BASF Petronas AMEA 2019. pam oil industry. For the year under the year but was able to record a high of yield. To achieve this, 776 hectares the winner in three categories which Chemicals in conjunction with the Global review, operations in Malaysia produced RM2,813 per tonne in 2019. Overall, the (Kulim and JCorp) were replanted in included Best Workplace Practice Award Safety Days 2019 event. Kulim’s Integrated Annual Report 2018 907,188 tonnes of fresh fruit bunches low price of CPO at RM2,119 per tonne 2019 using high-yielding seed clones. (Gold), CSR Leadership Awards (Silver) was chosen as the Best Annual Report of (FFB), 1.38% less than the 919,844 was due to oversupply and lower exports The replanting was carried out in stages and Empowerment of Women Awards To promote a workplace culture Non-Listed Organisations at the National tonnes produced in 2018. This caused to the main importing countries. to maximise the potential of the crop Annual Corporate Report Awards (Bronze). that is free from corruption, Kulim is currently obtaining MS ISO 37001: the yield per hectare to decline to 21.69 before trees were felled. As at end-2018, (NACRA) 2019. tonnes from 22.13 tonnes recorded the In 2019, CPO production from the the planted area of the Group in Malaysia Kulim was also the Bronze prize winner 2016 certification for the Anti-Bribery year before. Kulim plant totalled 309,867 tonnes, comprised 65% mature trees, 29% for HR Best Practises at the 19th Malaysia Management System that is expected to improving by 1.10% from the 306,483 immature trees or young trees and 6% of International HR Awards 2019. The Ulu be completed by December 2020. tonnes recorded in 2018. In the same trees aged 23 years old and above. P 38 P 39 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

KULIM KULIM BUSINESS BUSINESS

produced in the meantime was from the The Melita pineapple has been Halal good progress in the pineapple business Pasir Panjang palm oil mill. certified by the Department of Islamicwith revenue exceeding RM14.62 million. Development Malaysia (Jakim) and The maintenance work at the Sindora has also been awarded certificatesCattle Breeding Project palm oil mill is expected to be completed by MYGAP, MYBest and the System by Jun 2020. The capacity of the biogas Approach and Seed CertificationExpanding the Agro Food business has plant at the Sedenak palm oil mill will Scheme (SPBT). In addition, Kulim is also been the appropriate step taken by Kulim also be increased so that all the POME one of three companies in Malaysia that based on its achievements and track produced can be processed into has received approval from the General record in palm oil. The Group began biogas and subsequent conversion Administration of Quality Supervision, raising cattle on a small scale in line with into biomethane for distribution to the Inspection and Quarantine of the the government’s call for farm owners NGDS network owned by Gas Malaysia. People’s Republic of China (AQSIQ) to start cattle breeding and rotational The biomethane project which is to export fresh pineapples to China. grazing as well as to comply with Good expected to be completed in December The official recognition has increased Animal Husbandry Practices. Cattle were 2020 is expected to produce 250,000 the credibility of the main product as brought to the farm not only to manage MMBtu of biomethane gas annually. well as its downstream products. As grass but also as an initiative to reduce of now, Melita has nine sales kiosks cost for plantations. Pineapple Business located in Johor Bahru, and Kuala Lumpur. This project is carried out by Selai Sdn Kulim has been involved in the Bhd (Selai Cattle), a subsidiary of Kulim. pineapple business since 2008 and is Via a joint development programme with As of 2019, the number of milk producing now amongst the largest fresh premium the Malaysia Pineapple Industry Board cattle numbered 5,808 compared to MD2 pineapple producers in the country. and Agrobank for B40 Agropreneurs, 6,199 in 2018. The total number of cattle The MD2 pineapple farm is managed 12 Agropreneurs have planted MD2 for the feedlot and integration segment Plantations in Indonesia in production. by Kulim Pineapple Farm (KPF) which is pineapples on 24.29 hectares in 2019. is 6,024, an 8% decrease compared to Both plantations responsible for developing, promoting In the same year, Kulim has achieved the 6,479 in 2018. The lower number is Kulim has been given the right to plant (HGU produced 10,198 and marketing pineapple products – Right to Cultivate) in 14,511 hectares in tonnes of FFB branded Melita. As of 31 December South Sumatra, Indonesia. Of this, 57.20% translating to a yield of 4.2 tonnes per high-potential to transform 2019, KPF, which produces MD2 for or 8,271 hectares has been developed with hectare from an area of 1,938 hectares. it into a biogas and thus as a local and export consumption owns 5,228 hectares under the management of This has shown a 74.15% increase from the renewable source of energy. farms totalling 418 hectares in Ulu Tiram, PT Rambang Agro Jaya (PT RAJ) and the 5,856 tonnes produced in 2018. and . remaining 3,043 hectares managed by PT Kulim will build biogas plants Tempirai Palm Resources (PT TPR). This trend is expected to be maintained at all its five mills by 2025. considering the improvement in the Three of these biogas plants The timeline for the Group to complete the plantations which demonstrates strong are already operational MD2 PINEAPPLE rehabilitation of the plantations in Indonesia potential to produce greater yields in the whereas two more are being was April 2019. However, the programme future. constructed. 418 hectares was completed earlier than scheduled when PT RAJ completed rehabilitation on Renewable Energy – Biogas The amount of biogas SALES OF PINEAPPLES 4,317 hectares in October 2018. PT TPR also produced by the plants in completed its rehabilitation works on 3,191 Palm oil mill effluent (POME) is the waste 2019 was 3,781,857 cubic RM14.62 million hectares on July 2018, ten months ahead of produced in the processing of CPO and meters, and was used to schedule. contributes a large amount of methane generate power and fuel. COWS RAISED gas from the anaerobic process, which has The biogas plant at the Sedenak The Group’s investment in the rehabilitation 21 times more Global Warming Potential and Sindora palm oil mills 6,024 cows programme over the past two years has (GWP) compared to other gases. However, were shut for maintenance in proven effective with a substantial increase the organic content of POME grants it 2019. Therefore, all the biogas P 40 P 41 SECTION 4 SECTION 4 Prospects Prospects

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because less productive cows were agribusiness supply chain with our Cattle Breeding Project sold as well as the company no involvement in upstream, downstream, longer being involved in feedlots. trade and new value creation by Kulim’s main aim is to leverage Selai converting waste to profits. Cattle’s integrated cattle operations at INTRAPRENEUR VENTURES (IV) palm oil plantations to increase the rate The further development of the of birth and selling weight. In 2019, the IV Division recorded Agribusiness Division is important for revenue of RM37.63 million, Kulim to reduce its dependency on IV DIVISION declining by 21.49% compared palm oil activities and to reduce the to RM47.93 million recorded in impact of uncertain CPO and PK prices Kulim’s goal is to create a stronger 2018. The IV Division posted profit to the Group. This step is also a strategic foundation for the IV Division and to before tax of RM0.25 million in 2019 initiative to leverage on our internal palm increase its growth in order to bring the compared to RM1.24 million the year oil plantations expertise and extend it division to a higher level. All kinds of before. Kumpulan Extreme Edge into pineapples, cattle, coconuts and strategies will be carried out to strengthen Sdn Bhd was the most profitable other crops that are likely to contribute to the Group’s IV Division. Among them, the company in the Division, generating aid the Group’s growth. closure of businesses, exploiting joint profit before tax of RM1.04 million. ventures or disposal strategies, changing As of March 2020, vegetable oil stocks the IV business to be in line with its core Other companies that performed are expected to decline and this is business, other businesses and the satisfactorily include Kulim Safety projected to cause palm oil prices to strengthening of the IV Division to ensure Training and Services Sdn Bhd (KSTS), rise. Performance of this crop is expected the Group’s business continuity. MIT Insurance Brokers Sdn Bhd (MIT) to be good throughout the year where and Perfect Synergy Trading Sdn Bhd the price of CPO is projected to range O&G DIVISION (PSTSB). between RM2,600-RM2,700 per tonne. At this price, this commodity is still able For the O&G Division in Indonesia, Kulim Due to an uncertain economic to support demand from main markets aims to give attention to the completion environment, Kulim has reevaluated losses in the Indonesia Oil & Gas Division the RM50.92 million achieved in 2018. OUTLOOK AND PROSPECTS like China and . of the Conditional Subscription and the performance of all IV companies. valued at RM44.03 million. The Division Danamin also recorded a loss before tax Kulim remains optimistic about the Shares Purchase Agreement (CSSPA) in Companies with potential and also recorded a decrease in revenue to of RM16.52 million compared to RM2.08 Group’s prospects for the coming year In addition, the Group is focusing on 2020. Moving forward, Kulim targets to which have recorded growth will RM307.52 million, or 34.56% less than million the year before. based on our strong foundations that exploring new opportunities related reap the benefits of its investments in the be supported and grown, while the RM469.92 million recorded the year remained intact even when faced with to the environment and value-added O&G business, consider joint ventures companies that have experienced before. In Indonesia, the agreement with PT Citra all kinds of challenges throughout downstream products based on palm oil. with third parties or monetisation through a decline will be evaluated again, Sarana Energi (PT CSE) in Indonesia was 2019. Therefore, Kulim is optimistic The conversion of biogas into biomethane the liquidating of Kulim Energy Nusantara restructured or merged. We have In 2019, Kulim’s subsidiary, E.A. Technique a strategic decision to enter the O&G about its strategic initiatives that have is part of the circular economy and is Sdn Bhd’s (KENSB) equity holding in PT also laid out optimum plans and (M) Berhad (EA Tech) contributed upstream business and to develop the been outlined to strengthen and seen as Kulim’s long-term commitment to CSE for the potential of greater returns. strategies to tackle a challenging and RM271.87 million to the Group’s revenue, O&G supply chain in exploration and further explore high-potential business sustainability practices along the entire evolving market. declining from the RM419 million recorded production. opportunities. palm oil plantation business. PROPERTY in 2018. EA Tech’s profit before tax was OIL AND GAS RM32.68 million compared to a loss before This joint venture in Indonesia which is AGRIBUSINESS Pineapple Business Kulim aspires to increase the value of tax of RM90.36 million in 2018. now in its production phase is expected to the Group’s land by converting the The financial year ending 2019 was begin in 2021. While this venture will offer Plantations Kulim plans to expand its pineapple Group’s agricultural land into real estate a challenging one for the Oil & Gas Another of the Group’s subsidiaries, little or no contribution to our financial business and increase production developments in strategic locations that Division as it recorded Losses Before Danamin (M) Sdn Bhd (Danamin), a performance in 2019, Kulim believes this Kulim aspires to strengthen the through joint ventures with government are near population growth areas and Tax (LBT) of RM92.51 compared company that offers engineering and venture will contribute significantly in the effectiveness of the Agribusiness Division agencies and interested parties. Kulim high demand. to Profit Before Tax of RM73.91quality in assurance services for niche years to come once it enters its commercial through the development of upstream is also set on further developing its FY2018. LBT was mainly caused industries, recorded revenue of RM35.64 phase. activities present in the integrated downstream pineapple products. by depreciation and joint-venture million in 2019, a decline of 30.01% from P 42 P 43 SECTION 4 SECTION 4 Prospects Prospects

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SPECIALIST SPECIALIST HEALTHCARE DIVISION HEALTHCARE GROUP CAPACITY EXPANSION One other new hospital in Johor is growing, as well as medical tourists from 2019 REVENUE the KPJ Specialist Hospital Brunei and Indonesia. One of the main factors driving KPJ Healthcare’s success (KPJBP) that was opened in September RM3.6 billion DIVISION In addition to the new hospitals, KPJ is today is our ongoing strategy to increase the capacity of 2019. With 90 beds, KPJBP operates with specialist hospitals in our network. 11 specialist consultants and is able to also adding and improving facilities in EBITDA offer services to locals as well as medical existing hospitals. The Ampang Puteri Three new hospitals were opened in 2019. The Bandar Dato’ tourists from Indonesia. KPJ Specialist Hospital has opened a RM640.6 million Onn KPJ Specialist Hospital (KPJBDO) began its operations new block with 140 additional beds. The in February 2019 with six main specialities. After operating The Miri KPJ Specialist Hospital, located new block also contains an oncology PROFIT BEFORE TAX for a year, KPJBDO was given the mandate by the Ministry in Bandar Baru Permyjaya was opened centre, equipped with the latest PET-CT KPJ HEALTHCARE BERHAD RM275.4 million (KPJ HEALTHCARE) HAS of Health to offer many more services to both local and in December 2019, and fulfils the needstechnology for non-invasive imaging, foreigner patients, especially from Indonesia. of those living in Miri which is rapidly as well as radiotherapy facilities to treat NEW BLOCK AT KPJ AMPANG PUTERI RECORDED ENCOURAGING cancer patients. In , HAS MORE THAN RESULTS IN 2019. DESPITE Seremban KPJ Specialist Hospital beds A CHALLENGING GLOBAL now has a new block with two wards 140 containing 48 beds and 34 additional ENVIRONMENT, KPJ dialysis machines, which has been NUMBER OF PATIENTS IN RSMBSD HEALTHCARE ACHIEVED operational since September 2019. WARDS This has positioned KPJ Seremban as MANY POSITIVE 4,155 patients the largest private hospital in Negeri IMPROVEMENTS. Sembilan with 199 beds. THIS HAS PROVEN THE Revenue for RSMBSD has increased by 40% from RM22.1 million in 2018 to ORGANISATION’S In the north, the position of the KPJ Specialist Hospital as the only private RM31.1 million in 2019. Some of the main CAPABILITY TO ENSURE hospital in the Indera Kayangan state has factors that have stimulated this growth THAT IT REMAINS been further strengthened following the include an increase in hospital activity. In addition, the number of patients has SUSTAINABLE. approval by the Health Ministry to add additional beds, bringing the total to grown by 39% to 4,155 people with an 36 beds. This represents the Ministry’s average bed occupancy rate of 46%. belief in the hospital’s capabilities to treat The number of outpatients also locals and medical tourists mainly from increased by 17% to 79,253 people. FINANCIAL southern Thailand and . RSMPH recorded revenue increase of PERFORMANCE 23% to RM27.3 million in 2019. The KPJ IN OTHER COUNTRIES number of warded patients expanded by KPJ Healthcare recorded 10% compared to the year before, while an impressive performance KPJ Healthcare has two hospitals in outpatients showed a slight decrease of in 2019. Revenue grew by Indonesia which are the Permata Hijau 2% compared to the year before. 7%, from RM3.4 billion in 2018 (RSMPH) hospital and Bumi Serpong to RM3.6 billion in 2019. Revenue Damai (RSMBSD) hospital located in In Dhaka, Bangladesh, the Sheikh before interest, tax, depreciation Jakarta. Both hospitals have recorded Fazilatunnesa Mujib Memorial KPJ and amortisation (EBITDA) improved double-digit growth on the back of Specialised Hospital & Nursing College significantly to 29%, from RM497.0 effective marketing efforts and the recorded an increase of patients in ward million the year before to RM640.6 introduction of new treatment packages of 55.9% to 6,608 patients, whereas million in 2019. Profit before tax that have attracted patients. outpatients increased by 25.3% to increased by 7% to RM275.4 million 142,493 patients. compared to RM258.1 million the year before. P 44 P 45 SECTION 4 SECTION 4 Prospects Prospects

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IN 2019, KPJ HEALTHCARE’S REVENUE FROM THE MEDICAL TOURISM SECTOR INCREASED BY 7% FROM RM140.4 MILLION IN 2018 TO RM150.3 MILLION IN 2019, WHILE THE NUMBER OF VISITS INCREASED BY 5% FROM 158,711 TO 166,671 VISITS.

only limited to using sophisticated CORPORATE GOVERNANCE In addition, KPJ Healthcare also technology. In fact, it encompasses all of appointed three non-independent the Group’s efforts to add value. There were a number of changes in the non-executive directors who are Dato’ Board Director lineup of KPJ Healthcare Seri (Dr) Mohamed Azahari bin Mohamed By thinking out of the box, KPJ has in early 2020. This included the Kamil, Encik Rozaini bin Mohd. Sani and changed the way we deliver treatment. appointment of the highest number ever Encik Shamsul Anuar bin Abdul Majid. This includes introducing delivery of of independent non-executive directors, medicine to patient’s homes and allowing now numbering nine out of 13 directors. In line with the changes in the Board, patients to pick up their medication via They are Dato’ Yusli Bin Mohamed Yusoff KPJ has also reorganised its various drive-thru at KPJ hospitals. as the Chairman of KPJ Healthcare, Datuk Board Committees. The changes Mohd Radzif bin Mohd Yunus, Dato’ Dr have affected the Nomination and Other services include tele-consultation Ngun Kok Weng, Encik Mohamed Ridza Remuneration Committee (NRC), to make it more convenient for patients bin Abdulla, Dato’ Mohd Redza Shah bin Development & Procurement Committee to interact with KPJ’s specialists – without Abdul Wahid, Dato’ Dr Sivamohan a/l S. (DPC), Employee Share Options having to leave their homes. Namasivayam and Encik Khairuddin bin Scheme Committee (ESOS), Investment Jaflus. Committee (IC), Audit Committee (AC) PROTECTING THE ENVIRONMENT MEDICAL TOURISM that are a main focus for medical tourism including Environmental pollution that causes KPJ Healthcare has continued to Bangladesh and Somalia climate change has driven KPJ Healthcare demonstrate its excellence in medical which contributed RM3.67 to launch a campaign to eradicate the tourism activities. In 2019, KPJ million and RM4.08 million in use of single-use plastic in 2019. Almost Healthcare’s revenue from the medical 2019, respectively. all (92%) of our hospitals have completed tourism sector increased by 7% from the transition from plastic straws to RM140.4 million in 2018 to RM150.3 KPH Healthcare has also identified other In addition, KPJ Healthcare’s network of non-plastic or biodegradable million in 2019. The number of medical countries with potential for medical hospitals have improved their service alternatives. KPJ Healthcare hospitals tourists to KPJ Healthcare hospitals has tourism and this includes China, Myanmar, standards by offering a number of have ceased the distribution of mineral increased by 5%, from 158,711 visits in Pakistan and Vietnam which contributed services that include two-way transfer water bottles ans and the use of plastic 2019 to 166,671 visits in 2019. Some of RM6.9 million, RM2.03 million, RM1.76 from the airport to the hospital, an bags in its daily operations. KPJ Healthcare’s areas of treatment that million and RM1.7 million, respectively. International Patient Centre Lounge, the have attracted medical tourists include use of international insurance and others. In addition, KPJ Healthcare has continued orthopaedic, cardiology, general surgery, To ensure KPJ Healthcare remains its Clinical Plastic Waste Recycling gastroenterology and respiratory. competitive, many initiatives have been INNOVATION CULTURE programme where the plastic waste from undertaken by introducing a number clinical operations is recycled. Indonesia is one of the main markets for of health packages for the international The emphasis on innovation and creativity medical tourism that has contributed audience such as bariatric surgery, is very important as it is able to improve RM73.7 million compared to RM60.0 endoscopies, knee replacement surgery the organisation’s competitiveness. million the year before. Aside from and health tourism packages. At KPJ Healthcare, innovation is not Indonesia, there are a few other countries P 46 P 47 SECTION 4 SECTION 4 Prospects Prospects

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and the Risk and Governance Committee In 2019, KPJ Healthcare introduced Through this KWAN initiative, KPJ has KPJ was also well-aware of the incident Bursa Malaysia index, an internationally Global Health & Travel Awards. KPJ (RGC). new initiatives aimed at improving carried out various initiatives as part of at Sungai Kim Kim, Pasir Gudang, Johor recognised standard that evaluates the was also chosen as one of the Platinum competency and robustness of the our responsibility to the community. that was polluted by illegally dumped performance of companies in managing Awards winner for Reader’s Digest Most KPJ Healthcare is also prepared with Group’s workforce. The goal of the Currently, KWAN clinics now number toxic waste that caused 937 people to be social and environmental practices and Trusted Brands based on research carried a compliance policy in line with the organisation’s leadership is to create 18 including four mobile clinics. All the sick and 111 schools in the area closed in policies. out by Reader’s Digest on consumers. Securities Commission decision to dynamic human capital that is highly clinics operate at selected mosques and March 2019. KPJ mobilised 82 volunteers This award proves KPJ’s capability in introduce Section 17A of the Malaysian competitive in order to generate have received the approval of the various from its hospitals in Johor Bahru to EXCELLENCE AWARDS maintaining the confidence and loyalty Anti-Corruption Commission Act 2009 progress together in every aspect. State Islamic Religious Councils. In 2019, take part in rescue missions carried of its consumers as KPJ has been listed which will be effective from 1 June 2020. 124,618 patients throughout Malaysia out by Briged Waqaf JCorp. Through The consistency of KPJ’s performance as a winner in the Healthcare Services This Act will tighten existing regulations CONTRIBUTION TO SOCIETY utilised the services that were provided. these missions, KPJ provided medical has clearly been demonstrated through sector since 2012 with improvements to for commercial organisations to ensure assistance, medicine and tended to the the various awards and recognition it the level of recognition in 2018 and 2019. integrity of business ethics which is free KPJ is dedicated to its commitment as a Mobile clinics meanwhile are the direct needs of the victims. has won in 2019. The KPJ Specialist These awards and recognition received from corruption. responsible services provider, especially result of cooperation between the state Hospital won the prestigious Prime by KPJ will strengthen its reputation to those who are less fortunate. Baitamul (Islamic treasuries), Zakat Board We are also committed to improving Minister’s Industry Excellence Award in as a provider of world-class healthcare Based on this, KPJ Healthcare has as well as other organisations such as socio economic levels and environmental 2018 and the Asia Hospital Management services. implemented the Anti Bribery The lower-income community who Perbadanan Waqaf and Bank preservation, with the aim of cultivating Award 2019. Management System (ABMS), with the 10 require support to obtain access Muamalat Malaysia Berhad. KWAN is the country’s environmental sustainability ABMS Standard Operating Procedures to treatment and healthcare that working to open more mobile clinics. and society’s welfare wherever KPJ Tawakkal KL KPJ Specialist Hospital that will undergo the ISO37001 incur high costs have been given At this juncture, KWAN is working with operates. This view is aligned to KPJ was awarded the Orthopaedic Service (ABMS) audit. This was followed with aid by KPJ through the Klinik Waqaf the Zakat Board, Penang Zakat Healthcare’s position in the FTSE4Good Provider of the Year (Asia Pacific) at the the appointment of a Chief Integrity An-Nur (KWAN) programme nationwide. and the Islamic Religious Council. Officer (CIO) that has broad experience in implementing various polices and strategies to improve corporate governance, corporate ethics and integrity systems in the group.

STRENGTH OF OUR EMPLOYEES

The development of human capital is an important strategy in KPJ Healthcare’s efforts to maintain its position as a national health services provider. As of end-2019, KPJ has 15,624 employees, including 7,029 nurses, 2,047 allied services workers and 1,105 medical consultants who provide the core services of KPJ Group’s hospitals.

KPJ Healthcare’s leadership has always prioritised the development of its people. Talent development programmes have been in place from the early days, whether for the short-term or long-term. These efforts were targeted at increasing a skilled and excellent workforce to a sufficient level. P 48 P 49 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

FOOD AND RESTAURANT FOOD AND RESTAURANT SERVICES BUSINESS SERVICES BUSINESS KFC remained as Malaysia’s favourite brand when it Grand Prix (Optimisation on Steroids) at In 2019, three of KFC’s popular products TOTAL KFC RESTAURANTS successfully retained its position as Malaysians’ chosen brand the Malaysian Digital Association Awards were relaunched including the iconic in 2019 by garnering its fifth consecutive gold award under 2019 as well as Grand Prix: Best Entry of KFC Popcorn Chicken. This favourite 736 restaurants the Restaurant & Fast Food category at the Putra Brand – The the Competition (Anything’s Better With of the 90’s has made a return due to KFC MALAYSIA People’s Choice Awards 2019. This was followed by several Golden Egg Crunch – Even Ad Breaks!) popular demand with its taste enhanced NEW RESTAURANTS OPENED digital awards and recognised advertisements including and Advertiser of the Year. and a Hot & Spicy version. KFC Popcorn KFC MALAYSIA STARTED Chicken’s loyal fans were surprised 23 restaurants with a special delivery of an extra-large ALMOST 50 YEARS AGO WHEN sized box of Popcorn Chicken prior to 2019’S REVENUE IT FIRST OPENED AT JALAN the launch, kicking off the excitement RM2.8 billion TUNKU ABDUL RAHMAN, and reflecting its identity as an iconic product. KFC continued to attract its loyal KUALA LUMPUR IN 1973. customers by bringing back its popular KFC RESTAURANTS IN SINGAPORE burgers, the KFC Zinger Double Down restaurants Since then, KFC has experienced a and the Golden Egg Crunch during Hari 85 good pace of growth and in terms of 01 Raya. SINGAPORE KFC REVENUE achievements, defended its market share with 736 restaurants as of In addition to the relaunching of SG$176.9 million December 2019. With the opening the popular products, KFC Malaysia of 23 new restaurants, the chain saw continued to attract the attention of an additional 33 restaurants, where its customers by introducing value RM2.8 billion or 2.2% from RM2.74 billion 10 of the restaurants were built with promotions such as ‘Chicken Tuesday’ in the previous year. drive-thru facilities. Meanwhile, 137 – 9 pieces of chicken for RM19.90, branches were upgraded to create a ‘RM8.90 Fill Up Box’ and chicken nuggets While its main focus is on improving new ambience in line with KFC’s promotion ‘20 for RM15’. The value the people’s favourite Colonel Recipe’s heritage. promotions increased the store sales and fried chicken recipe, KFC successfully transactions for every window an average increased its branding in 2019 by KFC continued to be of 4.3% and 3.7% respectively. collaborating with the local streetwear committed to ensure the label, Pestle & Mortar Clothing. Inspired best customer service KFC increased its digital and mobile and designed by the people of Malaysia through its digital services. application presence through robust for the people of Malaysia, the limited Our online platform and initiatives and greater promotions collection of ‘11 Finger Lickin’ Good online store sales were throughout the year. This included the Goods’ streetwear evoked uniqueness 03 improved and optimised, in launch of ‘self-collect’ facility, kiosks in celebrating the nation, its people addition to focusing on the speed 02 and collaborations with renowned and the KFC brand’s origins in Malaysia of service and ordering features. e-commerce platforms (Lazada & besides commemorating . The progress of our restaurants is Shoppee), aggregator (Food Panda), As a brand that emphasises originality, supported with technology-based 01 Singapore KFC Customer Relationship Management staff’s new uniform KFC aspires to establish close relations innovation including digital payment was designed by (CRM) automation and collaborations with the people of Malaysia and foster as well as digital food ordering and renowned fashion with gaming applications. These love for the brand by mirroring a clean take-aways. In line with its digital desinger, Thomas initiatives were to enable easy access Wee. identity and contributing meaningfully transformation throughout 2019, KFC for customers, while giving them a good to society. Proceeds from the campaign Malaysia has strengthened its point 02 Our popular experience and closer rapport with the were channelled to the Add Hope of sales, delivery system and kitchen product, Golden KFC brand. Egg Crunch. Malaysia fund, KFC’s corporate social display to improve its operations responsibility programme that fights while ensuring best services for its 03 Pizza Hut Malaysia’s As of end-FY2019, KFC Malaysia global hunger. customers. new menu. recorded overall revenue growth of P 50 P 51 SECTION 4 SECTION 4 Prospects Prospects

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the patients there. In October 2019, KFC Brunei ended 2019 with 18 a group of 14 KFC workers helped restaurants. Two new restaurants to raised SG$37,583 for the HCA were added to the chain while six fund through The Dandelion Ride, restaurants were upgraded. In facing a cycling event where KFC emerged as new competition, its efforts to enhance the top fundraiser. customers’ dining experience boosted sales growth from 15% to 20% after the The year 2019 ended with 85 restaurant upgrading of premises. KFC Brunei’s branches with the addition of one new projected revenue for 2020 is set to restaurant. Sales grew by 0.5% from improve by 10% compared to 2019, 2018 with SG$176.9 million, which was based on several plans in addition to a an increase of SG$0.9 million from the potential new store as well as three stores previous year. The growth contribution that are in the process of upgrading. was due to several big branches’ full annual sales impact, which generated KFC Cambodia a 0.8% positive growth for same store KFC Singapore sales. KFC Cambodia recorded 11.3% revenue growth compared to 2018 with total sales In 2019, KFC Singapore continued to strengthen KFC Brunei of USD4.9 million in 2019. The growth its position as a quick service restaurant (QSR) was driven by an increase in sales through business based on its well-known chicken through KFC Brunei recorded a total revenue delivery service via collaborations with 11 attractive innovations. Among the prominent of BND13.64 million in 2019, a 12.4% more aggregators. In 2019, delivery products were Parmesan Truffle, Mala, Cereal growth compared to 2018. The revenue sales went up by 44% compared to 2018. and Sour Cream & Onion as well as the products growth was due to strategic business Several new products were also rolled that mostly appeared on Instagram such as Inspired to serve only the best order in advance and pick up their and four different designs, the new plans and supported by several marketing out to boost total sales. Mac ‘N Cheese Zinger and Waffles O.R. toDouble customers, KFC Singapore food at a desired time and chosen uniforms are not only comfortable but promotions that were carried out in 2019. Down. Of all the innovations, Cereal Chicken was advanced with the launch of KFC outlet without having to be wait also suit the role of every employee. It was however affected by competition The shift in foreign direct investments and the most popular product with over 1.1 million The Tank@KFC Tampines in long queues. from the thriving development in Miri and tourism growth of 8% contributed to the pieces of chicken sold throughout July, causing Mall, a store with an To achieve business sustainability, KFC high currency exchange that attracted positive economic growth in Cambodia. the promotion to end 11 days earlier than the open-kitchen concept, KFC restaurants in Singapore are Singapore has stopped using plastic Bruneians to spend more in Miri. Booming exports and strong internal scheduled date. in April increasingly 2019. expanding As its self- the cups first in October and introduced paper demand were catalysts that boosted such store in Singapore order kiosk technology to overcome cups as a green initiative, which reduced To boost sales performance, KFC Brunei higher disposal income among the The introduction of the new KFC Mac ‘N Cheese and Southeast Asia, The shortage of workers. The reduction the consumption of six million plastic activated local store marketing to drive locals. KFC Cambodia ended 2019 with Zinger in February had attracted global attention Tank’s open-kitchen concept in hiring counter workers have cups a year. This was followed by another awareness about promotions and rolled 12 restaurants including the opening of when news about the product was published allows customers to watch how enabled the Service Rock Stars to waste reduction initiative through the out several attractive KFC delivery a new restaurant at Furi Times Square worldwide by media from the United States of KFC’s fried chicken is prepared. serve customers. KFC Singapore introduction of reusable food trays services. This included a 20% discount shopping complex in Sihanoukville in America, the United Kingdom and Australia. The The unique store received continued to introduce the concept to replace paper boxes for 13 items promotion for Snack Plate or Dinner Plate November 2019. widespread news boosted demand for the product widespread news coverage and in two restaurants in Funan Mall and on the menu in two KFC restaurants. as well as Chicken Tuesday. KFC Brunei in international markets. positive response from customers. PLQ. This initiative is expected to be fully also planned to strengthen its digital KFC BRUNEI REVENUE implemented in 2020. presence with mobile applications as As part of the strategy to boost transactions and In its digital effort, KFC Singapore To maintain a stylish exterior while part of its future growth driver. BND13.64 million create more value for customers, KFC Singapore improved its online order platform boosting the morale of employees Giving back to society is KFC’s main launched several saving promotions such as by adding pre-order service for in KFC, new uniforms were designed philosophy throughout the world. KFC Brunei carried on with its corporate OPERATING RESTAURANTS SG$4.95 Lunch Box, 8 for SG$12, Chicken Tuesdaydine-in and take-away in addition by Singapore’s renowned designer, In 2019, 110 employees from the social responsibility by helping and value couponing throughout the year. to its delivery service. The order Thomas Wee, and were launched in restaurant support department spent underprivileged groups through 18 restaurants application enables customers to July 2019. With its striking colours time at HCA Hospis Care centre, activities such as annual contributions to a KFC welfare initiative to cheer up welfare homes during festive seasons. 12 OUTLET KFC CAMBODIA

USD4.9 million P 52 P 53 SECTION 4 SECTION 4 Prospects Prospects

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FOOD AND RESTAURANT FOOD AND RESTAURANT SERVICES BUSINESS SERVICES BUSINESS

translating to higher frequent visits and In its digital transformation journey, Pizza The year 2019 proved to be a stellar Tail Kitchen and Rider Management PIZZA HUT MALAYSIA REVENUE average ticket. Among the most popular Hut launched a mobile application in its year for Pizza Hut Malaysia when it digital system. Pizza Hut Singapore was Fast Casual Digital Store (FCDS) for faster the pioneer in the technology in 2018 innovative products in 2019 included successfully bagged various prestigious million PIZZA HUT MALAYSIA Durian Cheese Pizza and Black Volcano and easier ordering. The application was awards including the Putra Brand Awards’ and YUM has currently made it a global RM596 RECORDED OUTSTANDING Pizza. The special campaign that was improved with more attractive food visuals Silver Award under the Restaurant and standard for all Pizza Hut restaurants’ RESTAURANTS IN MALAYSIA PERFORMANCE FOR THREE based on music preference, ‘The Singing to enhance customer experience. Fast Food category as well as the Asia delivery service. The system has helped Pizza’, was also rolled out in 2019. Its Pacific R.E.D YUM Award. The innovativePizza Hut Singapore to enhance customer 400 restaurants CONSECUTIVE YEARS WITH innovative pizza boxes that also doubled The roll out of Fast Casual Delco (FCD) campaigns through ‘Singing Pizza’ and experience by promptly delivering fresh A TOTAL REVENUE OF RM596 up as digital musical boxes changed restaurants is a testimony to Pizza Hut’s Pizza Hut Delivery App also won various and hot products. REVENUE IN SINGAPORE MILLION, WHICH WAS A the way Malaysians enjoy pizzas. This commitment to continue evolving with the awards for their excellence in marketing. 6.6% GROWTH COMPARED campaign gave Pizza Hut the opportunity taste of the people of Malaysia. The FCDs Among the awards were The Effie Awards, Pizza Hut Singapore also expanded its SG$93.3 million to create a closer relationship between were built to cater to the flourishing food The Marketing Excellence Awards, The delivery service through collaboration TO 2018, DUE TO A MAJOR the brand and the younger group of delivery service industry and offer a casual Kancils Award, The Appies Malaysia and with Grab Food (in addition to existing DIFFERENTLY ABLED EMPLOYEES TURNAROUND THAT BEGAN customers. and contemporary dine-in experience. The Mob-Ex Award. collaborations with Food Panda and IN PIZZA HUT SINGAPORE IN 2016. 80 persons The success was the result of a continuous commitment to our strong branding For dine-in segment, Pizza Hut Singapore strategy, by maximising the customer rolled out ‘Bring Your Own Device experience through 3 key pillars, (BYOD)’, a new technology that enables namely; repeated value model, attractive customers to order and pay through their innovative products; as well as digital mobile phones. This innovation allows transformation for the ease and comfort customers to experience a modern and of customers. fast digital lifestyle. While this mode of shopping and transaction is a norm in Our resilience in implementing these countries such as China and Hong Kong, strategies has further strengthened it is new in Singapore and puts Pizza Hut Pizza Hut’s business foundation. This Singapore in the forefront of such services can be seen through the high business in the republic. growth rate of 5% same-store sales. The expansion of stores continued to In giving back to society, Pizza Hut generate transaction growth in the whole Singapore employed 80 differently abled system by 8.5%, strengthening Pizza Hut’s employees throughout the republic apart market position as the top pizza restaurant from working closely with the Association chain in Malaysia. The opening of the 400th of Persons with Special Needs (APSN). Pizza Hut outlet signified the company’s PIZZA HUT SINGAPORE Deliveroo). The collaboration with In 2019, Pizza Hut Singapore organised a new milestone which has almost doubled Grab Food, the largest company that pizza box designing competition among the number of stores we have compared The year 2019 was the most challenging controls 50% to 60% of the market’s total the APSN school children. The winning to our main competitor. year for Pizza Hut Singapore. Transactions aggregate, has benefitted the business. design was used by Pizza Hut throughout dropped by 1% (SG$1.2 million) to SG$93.3 the season. During its annual The repeated value model such as the million compared to 2018 (SG$94.5 Grab Food has also increased platform Christmas celebration with the ASPN ‘WOW’ take-away promotion proved to million). While the business benefittedorders through online and mobile school, Pizza Hut Singapore’s delivery be relevant and instrumental in driving from collaborations with food aggregators, application orders by rolling out the Fast workers dressed up as Santa Clause to brand penetration to target customers the overall aggressive growth within the Casual Digital Store (FCDS) according deliver free pizzas to ASPN’s students. by centralising brand accessibility. food aggregator delivery service was to Global YUM’s standards. The FCDS The student who won the design The renewed ‘WOW’ marketing campaign affected by own sales, thus the slight launched the home delivery service and competition also received a gift during the has contributed double-digit growth since decrease in delivery sales. makes it easier for customers who prefer celebration. it was launched in 2016. to order through digital platforms. Pizza Pizza Hut Singapore implemented several Hut Singapore is optimistic that with the Appealing innovations have helped core business initiatives in 2019. For full implementation of the FCDS concept to increase brand experience and delivery service, 2019 was the second in 2020, will contribute to growth of the strengthened the excellence in taste, year of the implementation of The Dragon delivery service segment in the future. P 54 P 55 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

FOOD AND RESTAURANT FOOD AND RESTAURANT SERVICES BUSINESS SERVICES BUSINESS

UPSTREAM DIVISION Breeder Farms As a primary component of the Group, AIPI is also fully committed to its To attain the standard size set by the Company: Ayamas Integrated Poultry Sdn Bhd (AIPI) AIPI is the trusted supplier of high-quality responsibility to ensuring every step of Group in order to produce quality chicken and competitively priced chickens to KFC the Integrated Poultry System complies meat, a special genetic and breeding QSR BRANDS UPSTREAM Starting from our feedmill operations to the breeding and restaurants. Apart from KFC, AIPI is also with strict guidelines imposed by the formula is closely followed by AIPI in the DIVISION COMPRISES: hatching of eggs and onto the raising of broiler meat, AIPI has the main supplier of choice in the chicken authorities, especially in the context production of eggs. The formula has a established a comprehensive Integrated Poultry System through industry, both domestically and overseas. of adhering to conditions under Halal ratio of chicken species comprising 46% its expertise, to support the Group’s Farm-to-Fork business. certification, while continuing our effortsRoss, 30% Cobb and 24% AA+. • INTEGRATED POULTRY to uphold quality and food safety. OPERATIONS (FEEDMILL, There was also a total of 36 million Feedmill BREEDER FARMS, HATCHERIES day-old-chicks (DOCs) hatched, utilising 88% of the incubator capacity. These AND BROILER FARMS; AND AIPI’s feedmill is located in Port , DOCs were then distributed to the ALSO INCLUDES SALES, where it is responsible for sourcing and Group’s broiler farms in Mantin, as well obtaining the appropriate feedstock to MARKETING AND TRADING as 31 contract broiler farms in Kedah, be converted into chicken feed at each , Selangor and Johor. OF FOOD PRODUCTS 01 stage of the breeding process – breeder DOMESTICALLY AND farms, hatcheries and Group and Broiler farms operated at 97% production contract broiler farms. The chicken feed OVERSEAS) capacity in 2019. Broiler meat that is made from vegan grains and selected achieves the target weight will be sent to raw materials that are specially imported. the Processing Centre. • ANCILLARY OPERATIONS In addition, palm oil and medicine are also supplied by AIPI to meet the needs (SAUCE PRODUCTION AND Chicken Processing of the Group and its contract farmers. Company: Ayamas Food Corporation BAKERY & COMMISSARY Sdn Bhd (AFCSB) OPERATIONS) In 2019, AIPI’s feedmill utilised 60% of its capacity and produced 97,200 tonnes There are two categories of Chicken of chicken feed. As of end-2019, both Processing Operations – Primary and The Upstream Division ended Secondary 2019 with positive revenue profits and EBITDA showed positive growth of RM1.525 billion, results. Profit was RM180 million in 2019 compared to RM153 million in 2018, QSR Brands’ primary chicken processing a 1.3% increase from 2018’s whereas EBITDA tripled to RM18 million operations involve the slaughtering revenue. EBITDA also compared to RM5 million in 2018. The and production of chicken products increased 6.3% in 2018 to main driver of the positive revenue was according to Halal procedures. Ayamas RM38.8 million. due to the stabilisation of commodity (Selangor), IPI 03 prices like soya bean and crude palm oil. (Penang), and Ayamas INTEGRATED POULTRY 02 (Johor) are the three main Processing OPERATIONS Breeder Farms, Hatcheries and Broiler Centres under AFCSB. Farms Revenue of RM1.303 billion was With an annual production capacity of 48 recorded by the Integrated Poultry A total of 51 million eggs were produced million birds-to-plant (BTP) products, all Operations segment in 2019, a 2.1% 01 Ayamas frozen in 2019 by 64 breeding houses that three Processing Centres use the Primary increase in revenue compared to 2018. chicken products. operate under four breeding farms Processing facility to produce our main This positively impacted EBITDA which 02 Day Old Chicks located in Alor Gajah, Melaka; Bangi, products which includes the ‘nine-piece jumped 57.3% compared to 2018, to (DOCs). Selangor; Linggi and Tampin in Negeri cut chicken’ which we supply to all KFC RM22.5 million. 03 Hatchery Centre. Sembilan. outlets. P 56 P 57 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

FOOD AND RESTAURANT FOOD AND RESTAURANT SERVICES BUSINESS SERVICES BUSINESS

In 2019, 25.6 million BTP were produced In 2019, the RFI Processing Centre (39.5% capacity utilisation), 5 million units by Ayamas Port Klang utilising 91% of produced 28,151 metric tonnes of sauce of raw pizza dough balls (49.7% capacity its production capacity, 13.7 million BTP and operated at full capacity. utilisation), and 1.4 million units of other were from Ayamas Bandar Tenggara products, such as curry puffs, muffins and using 85% production capacity, and 7.5 RFI’s revenue in 2019 was consisted in pies (100% capacity utilisation). million BTP were from IPI Bukit Mertajam 2018 with a 3% reduction compared using 79% of its production capacity. to 2018 with RM147 million recorded, Meanwhile, QSRM commissary whereas EBITDA also mirrored 2018 with operations produced 2.7 million packets Meanwhile, production activities RM13 million recorded. of coleslaw (48.6% capacity utilisation), of secondary chicken products like 689 metric tonnes of fresh vegetables nuggets, burgers and sausages is carried Bakery & Commissary Operations (55% capacity utilisation) and 68 metric out at Ayamas Port Klang only which Company: QSR Manufacturing (QSRM) tonnes of dairy products (16.2% capacity is equipped with Further Processing utilisation). facilities. Ayamas Port Klang reported Located in Glenmarie, Shah Alam, total production capacity of 15,653 QSRM produces and supplies bakery QSRM reported revenue of RM75 million, metric tonnes of nuggets, 12,979 metric and commissary products like buns, lower than 2018 (RM76 million). EBITDA tonnes of sausage products and 3,566 dough balls, raw pizzas, coleslaw, fresh was also negatively impacted recording metric tonnes of ‘topping’ products. vegetables and dairy products to KFC RM3.1 million this year compared to and Pizza Hut restaurants. RM8.5 million in 2018. Some of the factors AFCSB, in 2019, recorded solid sales for the reduction in revenue included a performance of RM672 million, matching A total of 63 metric tonnes of bakery change in the product mix as the Group’s what was achieved in 2018. However, goods were produced in 2019, utilising restaurant segment has a larger influence EBIDTA continued its downward trend, at 41% of the bakery’s capacity. This on QSRM’s gross profit margins. negative RM10 million in 2019 compared included 54.9 million units of buns to negative RM5 million in 2018 as a result of repair and maintenance costs.

Sales, Marketing and Trading Company: QSR Trading Sdn Bhd (QSRT)

QSRT represents the sales, marketing and trading component of QSR Brands. with activities under the Ayamas Kitchen ANCILLARY OPERATIONS RFI is one of the leaders in the sauce In addition to trading a variety of halal brand. Ayamas Kitchen offers ready-to- production sector with authentic and QSR Brands products, QSRT also eat food products, with its ingredients Ancillary Operations recorded a quality products, cold dressings and food conducts business activities for local and sourced from outside the Group. QSRT decrease in revenue and EBITDA this pastes. The products are exported to the international brands. The food brands has considered taste profiles and daily year with revenue at RM222 million global market to countries like the UK, under QSR Brands include Ayamas, nutritional needs coupled with affordable (3% less than revenue in 2018) and France, Australia, New Zealand, Japan, Ayamas Kitchen, Jodi, Life, Bakers’ Street, prices while executing Ayamas Kitchen’s RM16.3 million for EBITDA (26.1% Mauritius, Maldives, Dubai, Qatar, Saudi and others. marketing activities. lower than EBITDA in 2018). Arabia, Brunei, Vietnam, Bangladesh, and Singapore. The sauce brand, Life, In 2019, 70% of sales were from frozen QSRT’s revenue in 2019 recorded a Sauce Production is also supplied to KFC and Pizza Hut products under the Ayamas brand, while decrease to RM333 million from RM353 Company: Region Food Industries restaurants in Malaysia and Singapore. 30% were from Shelf-Stable product million in 2018. Meanwhile, EBITDA was (RFI) sales. With the success seen by the positive, increasing to RM20 million Ayamas brand as a popular consumer compared to RM17 million in 2018. choice, QSRT is now expanding its profile P 58 P 59 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

PROPERTY PROPERTY DIVISION DIVISION of a community-based lifestyle. Bandar Dato’ Onn is the ideal residential ASSET VALUE JOHOR LAND BERHAD location. This development will be fully completed over the next 10-15 years RM1.45 billion and involves the construction of 17,200 IN LINE WITH THE INDUSTRIAL units of homes and commercial units REVENUE REVOLUTION 4.0 ERA AND ITS with a GDV of RM10 billion. As of now, RM400 million 47TH ANNIVERSARY, JOHOR JLand has completed 3,333 housing and commercial units with another 706 units LAND BERHAD (JLAND), AS RESIDENTIAL AND COMMERCIAL under construction and expected to be THE REAL ESTATE DEVELOPER UNITS COMPLETED completed in 2020-2021. AND PROPERTY DEVELOPMENT 33,000 units AGENT OF JOHOR CORPORATION Throughout 2019, JLand completed building 212 double-storey terrace CONTINUES TO FOCUS ON GDV BANDAR DATO’ ONN houses and six double-storey BUILDING HOMES THAT ARE IDEAL, semi detached houses in Phase 1, RM10 billion QUALITY AND AFFORDABLE, WITH Neighbourhood 9 with a GDV of RM166.2 INNOVATIVE FEATURES. 01 million. This neighbourhood is equipped GDV BANDAR TIRAM with facilities such as a community centre, recreation park and playground. RM5 billion JLand owns a 790 hectare landbank in strategic locations in the middle of The Bandar Dato’ Onn township has customers in Bandar Dato’ Onn. Located the development. In also prepared other public facilities in Neighbourhood 14, 455 units of Flexi the last five years, JLand has built more such as mosques, recreational parks, Homes with a concept studio were built than 5,000 homes and commercial schools, college, shopping centre, for the M40 group that would allow units in Bandar Dato’ Onn, Bandar Tiram, specialist hospital, fast food restaurant, owners to utilise their homes in creative Taman Bukit Dahlia, Taman Mutiara petrol station and police station. ways. In addition, the house also has Gading and around Johor On 26 October 2019, JLand launched two entrances to enable separation of Bahru, while emphasising new sales of double-storey terrace tenants. sustainable values in each FINANCIAL PERFORMANCE quality continued to remain strong with houses and double-storey semi-detached and every development. net assets rising to RM1.45 billion in 2019 houses in Phase 2 of Neighbourhood 9 In line with the Industrial Revolution As of the end of 2019, The real estate market continued compared to RM1.40 billion in 2018. with a GDV of RM217.5 million. 4.0, JLand has planned a smart JLand has built and handed to face economic challenges and neighbourhood in Neighbourhood 13 over more than 33,000 uncertainty in 2019. Johor recorded BANDAR DATO’ ONN Efforts to upgrade the sustainable with the construction of 646 double-storey residential and commercial the highest number of unsold units in lifestyle of this township has led to JLand terrace homes that utilise smart features 02 developing the Riverside @ Bandar Dato’ with facilities such as a community centre, units to its owners. 03 the country at 18.8%, as of the first half Bandar Dato’ Onn is a premium of 2019. This was due to the mismatch development built by JLand which Onn, the longest food hub in Johor Bahru bicycle lane, pedestrian and jogging JLand continues to be committed between supply and market demand, commenced construction in 2007. This with 40 restaurants and recreational track, wifi hotspots and a guardhouse. to strengthening the business and 01 JLand offers exclusive homes aside from factors such as affordability township comprises 19 neighbourhoods facilities. Riverside is expected to be that prioritises the comfort of its operational by the second quarter of The Smart 2.0 features that are both its brand through improvements to customers. and tighter lending regulations by occupying 597 hectares of freehold land quality, practising ethics and integrity, financial institutions. that can be accessed through the North- 2020. Next to this area is the ‘Wetland’ sustainable and utilise the cradle to grave cultivating a long-term relationship 02 The Kasturi apartments won the South Highway (PLUS) and the Johor community park which has been built to concept in Bandar Dato’ Onn led to JLand FIABCI Malaysia Property Awards control water pollution in Bandar Dato’ winning the Master Plan category at the with our stakeholders while having vast 2019 for the Affordable Homes For the year ending 31 December 2019, Bahru Eastern Dispersal Link (EDL). knowledge about the real estate market. category. JLand recorded an increase in revenue Onn apart from being a recreational FIABCI Malaysia Property Awards 2019 of RM400 million compared to RM374 The modern township concept comes space that can also educate its visitors. on 2 November 2019. At the same event, 03 Bandar Tiram represents another JLand also won the Affordable Homes new township that is being million the year before. Profit before tax equipped with ecological features and developed by JLand. was RM115 million compared to RM118 a sustainable environment which also JLand has taken the initiative to category through its Kasturi Apartments the year before. JLand’s balance sheet emphasises the quality and relationships introduce innovation to fulfil requestsproject of in Bandar Dato’ Onn. P 60 P 61 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

PROPERTY PROPERTY DIVISION DIVISION

TAMAN BUKIT DAHLIA MENARA JLAND Built on top of the KOMTAR Johor Bahru As of 2019, JLand has built and handed City Centre (JBCC) shopping mall, over 2,106 affordable homes to buyers Constructed on a 168.75-hectare JLand has taken another significant step the beauty of the modern and with 304 units in Taman Seroja and 630 space, Taman Bukit Dahlia is a mixed in real estate development with the contemporary design of Menara units in Bandar Tiram. A total of 1,016 units development that comprises 3,800 construction of Menara JLand in the Johor JLand can be seen throughout the city. are Myhome and PKJ ‘B’ in Bandar Dato’ double-storey terrace houses, double- Bahru city centre. This structure is a grade The building also has a Sky Garden every Onn whereas 156 units were handed storey semi-detached houses and a A office building, applying new green two floors. Menara JLand also offers the over in Kampung Dato’ Ajib, Mersing. commercial complex. The GDV of this building concepts which adhere to the foremost tourist family attraction with A total of 1,048 affordable homes development is RM990 million. Green Building Index Gold Certification the Skyscape @ Menara JLand on the including 320 units of Rumah Impian standards and MSC specifications. 34th floor with its Observation Deck andJohor (RIBJ) in Bandar Baru Majidee as In 2019, 28 semi-detached houses were The building obtained its Certificate of Sky Walk with glass detailing, rooftop well as 488 units of RIBJ in Bandar Dato’ built whereas 64 double-storey terrace Completion and Compliance (CCC) in restaurant and other facilities that will Onn are currently being constructed houses of type A as well as 103 units of August 2018 and was occupied towards give visitors an unforgettable experience. and are expected to be completed type B were being constructed in Zone C the end of 2018. Menara JLand offers The Sultan of Johor Sultan Ibrahim Sultan in 2020. The 240 units on Jalan Kong and is expected to be completed in 2020. 262,592 square feet total space with Iskandar officiated the launch of Menara Kong-Masai is in the process of obtaining floor space ranging between 5,000 andJLand on 26 November 2019. its Certificate of Pratical Completion. TAMAN MUTIARA GADING 12,000 square feet per floor. The remaining 3,768 affordable homes is The uniqueness and significance of the expected to be completed fully by 2025. Occupying a 96 hectare area, Taman Environmentally-friendly features that building has won JLand many accolades Mutiara Gading is a mixed development were applied to this tower includes including ‘Best Office Development’ by ROLE AS A DEVELOPMENT AGENT located in , Batu Pahat, Johor. maximising daylight and the use of Asia Property Awards (Malaysia) 2018 This project comprises 1,809 residential double glazed low E windows that and ‘Best Commercial Development’ As the development agent of JCorp units, 119 office shoplots and commercial reduces the absorption of sunlight by up by StarProperty Awards 2018 Jewels of and in line with the state government’s plots with a GDV of RM700 million. to 50% and the usage of electricity by up Johor, in April and September 2018, aspirations to accelerate and expand The houses are strategically located to 73%. The use of technology and GBI- respectively. JLand also won ‘Best economic growth, JLand is also seven kilometres away from Batu Pahat specified materials has made a significant Office Development (Malaysia)’ at the responsible for the construction and town. Taman Mutiara Gading will be impact on the use of natural resources PropertyGuru Asia Property Awards upgrading of sports infrastructure in developed in stages and fully completed such as energy, water and fuel as well as Grand Final 2018, representing Malaysia the Arena Larkin development. This in 2026. reducing the impact of the building on in Bangkok on 9 November 2018. project sits on a 43.30-hectare space health and the environment. and is intended to fulfil the needs of the In September 2019, 194 double-storey DEVELOPMENT OF AFFORDABLE state government and the people in its BANDAR TIRAM GDV of RM362 million. As of 2019, terrace houses in Phase 1A and 1B with HOMES preparations to be the host for Sukma 24 office shoplots, 66 double-storey GDV of RM90.5 million were completed. GDV TAMAN BUKIT DAHLIA 2020. As of end-2019, the construction of Bandar Tiram is another prestigious terrace Carnelian 2 units and 25 terrace JLand is also building 250 double- JLand is also committed to realising the new closed stadium is at 99%, while million development carried out by JLand. Citrina units have been completed. storey terrace houses in Phase 1C & 1E RM990 the aspirations of the state government the upgrading of the aquatic stadium is This new township occupies 405 hectares Another 34 office shoplots are with being a GDV of RM131.3 million and it is by ensuring home ownership for all at 98%. JLand is also reorganising the GDV TAMAN MUTIARA GADING and can be accessed by the - constructed with another 45 to be built in expected to be completed in the first Johoreans through the Johor Affordable traffic flow in the area and upgrading the Highway and is being developed stages. The entire GDV of Bandar Tiram 1 quarter of 2021. Many facilities have Housing Policy. As such, JLand will state football stadium. RM700 million in stages (Phase 1-5). This development is RM440 million and it is expected to be been prepared for residents including a build 7,064 low cost houses and Johor offers more than 11,000 residential and fully completed in 2022. market, affordable homes, mosque and Affordable Housing (RMMJ) in Tampoi, MENARA JLAND HAS WON commercial units with a GDV of RM5 schools. Bandar Dato’ Onn, Bandar Tiram, Bandar Baru Majidee, Taman Mutiara Gading, billion and is expected to be completed Bandar Tiram is also equipped with 4 awards in 2035. public facilities such as schools, police The construction of the Sri Gading KPJ Jalan -Masai in Pasir Gudang, Specialist Hospital will also help drive Kampung Londang Batu in Mersing and stations, fire stations, bus terminals, AFFORDABLE HOMES HAVE BEEN the development of Taman Mutiara Lenga, . As of now, JLand has developed 43.30 mosques, markets and a community BUILT hectares of land in Bandar Tiram 1, hall. In terms of common use facilities, Gading. This 90-bed hospital will help comprising 799 double-storey terrace a landscaped centre has been built for to overcome the shortage of hospital 2,106 units houses and 53 office shoplots withthe community a to relax in. services in the surrounding area. P 62 P 63 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

PROPERTY PROPERTY DIVISION DIVISION

DAMANSARA ASSETS SDN BHD COOPERATION BETWEEN DASB AND UTM TO STRENGTHEN REAL ESTATE RENTABLE SPACE MANAGEMENT DAMANSARA ASSETS SDN BHD 250,000 m2 (DASB) IS A FULLY OWNED To strengthen real estate management, SUBSIDIARY OF JCORP. DASB works closely with Universiti RENTAL VALUE Teknologi Malaysia (UTM) to provide AS THE COMMERCIAL billion structured training to students RM2 PROPERTY MANAGER OF THE undertaking the Bachelor of Science TENANTS JCORP GROUP, DASB MANAGES majoring in Real Estate or the Land VARIOUS BUSINESS CENTRES, Administration and Development 1,724 OFFICE TOWERS AND A degree. Selected students will undergo industry training and a Professional TRANSPORTATION HUB. BUMIPUTERA TENANTS Real Estate Apprenticeship Programme before being considered for a position 37 % at DASB. REVENUE 01 A ceremony to recognise this million As of end-December 2019, DAB cooperation was held on 18 December RM158.6 manages 240,000 square meters of 2019 to sign a five-year Memorandum of leased space worth nearly RM2 billion Understanding between DASB and UTM tourist directory, outreach programme, that is located in strategic locations in held at the Faculty of Built Environment announcements within the Ministry’s the Klang Valley and Johor Bahru, and and Surveying in UTM Johor Bahru. network as well as being listed on the with an average occupancy rate of 80%. Ministry website. The Southern Zone ZPT The space is occupied by 1,521 tenants The ceremony was officiated by UTM recognition ceremony was held on 7 July comprising various types of companies Deputy Vice (Academic and such as corporate bodies, International) Prof Ir Ts Dr Zainuddin Abd 2019 and was officiated by its minister, Manan and DASB’s Executive Chairman, YA Datuk Seri Saifuddin Nasution Ismail government agencies, financial at the KOMTAR JBCC lobby. institutions, professional and CORPORATE SETTLEMENT GLOBAL SETTLEMENT BETWEEN Tuan Haji Yusaini Sidek. Also present private companies as well EFFORTS WITH IESB JCORP, DASB AND DBHD was Sr Dr Mohd Nadzri Jaafar, Director JOM JUMPA – B5 JOHOR STREET as small traders. Of this (Real Estate), Faculty of Built Environment MARKET & ‘BROWN SIGNAGE’ total, 37% are Bumiputera DASB through its subsidiary, Bukit JCorp, DASB and Damansara Realty and Surveying. HANDOVER companies (not including Damansara Development Sdn Bhd Berhad (DBhd) have agreed to a global JCorp subsidiaries). signed a sales and purchase agreement settlement involving the JCorp Group KOMTAR JBCC RECOGNISED AS for Pusat Bandar Damansara with Impian and DBhd Group. In relation to this, SELECTED TRADE ZONE On 20 October 2019, the ‘Brown 02 Signage’ Handover event was officiated FINANCIAL POSITION 2019 03 Ekspresi Sdn Bhd (IESB) valued at RM700 all parties have signed the Deed of million in 2009. The payment terms for Settlement on 17 December 2019. KOMTAR JBCC has been recognised as by State Tourism, Women, Family and Community Development Committee DASB Group income was RM158.6 this included RM500 million cash as well The settlement involves the transfer of one of the Selected Trade Zones (ZPT), Chairman YB Liow Cai Tung as a symbolic million as of 31 December 2019 01 Galleria @ Kotaraya. as two office spaces worth RM200 million DASB companies, TMR Urusharta Sdn together with nine business complexes in the southern zone, by the Domestic recognition of the B5 Johor Street Market compared to RM133.7 million for 02 Community Market @Mart at VSQ and Pavilion Damansara Heights. Bhd and HC Duraclean Sdn Bhd to DBhd being registered as a local tourism centre the same period in 2018. Most of the . The transaction was completed on and the transfer of shares in Healthcare Trade and Consumer Affairs Ministry, under the Promotion of Investments Act increase in revenue was because of 31 December 2019 following the Technical Services SDn Bhd from DBhd based on its level of compliance under 03 B5 Johor Street Market. the Smart Enforcement programme. 1986. rental incomes. Profit before tax for the payment on an 80,000 square feet office to DASB. In addition, DBhd agreed to Group for the same period was RM47 space in Pavilion Damansara Heights settle outstanding debt of almost RM12 million compared to RM68 million in valued at RM75 million from IESB. million to DASB in the form of 25 terrace Aside from a certificate and plaque, KOMTAR JBCC received other rewards, 2017. The difference in profit was due The entire corporate exercise was carried houses in Damansara Hills 1 and Bandar in the form of promoting ZPTs as a to an increase in financing costs and a out for the purpose of redeeming JCorp’s Damansara , Pahang. reduction in other income. sukuk debt. shopping destination, being listed in a P 64 P 65 SECTION 4 SECTION 4 Prospects Prospects

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

PROPERTY PROPERTY DIVISION DIVISION

was Member for Tampoi, Haji Abdullah Ideris; as well 01 Finals of the Angry Bird Crew Challenge 2019. as the President of the Johor Melayu Gemilang Hawker and Small Traders 02 Jom Jumpa - B5 Johor Association, Haji Onn Mohd Yassin. Street Market & “Brown Signage” Handover. In order to lighten the burden of tenants that are affected by the uncertain economic situation, DASB granted a rental rebate of as much as 30% to tenants and leeway to pay deposits and any other advanced fees over two payments. Qualified tenants were also given a two month rental exemption.

These market traders sell seafood, chicken, groceries, eggs, spices and frozen products.

JU MAULIDUR RASUL 1441H & KHITAN JAMAEI PROGRAMME

DASB together with Waqaf An-Nur Corporation Berhad, Masjid An-Nur Kotaraya and the KPJ Johor Specialist Hospital organised the Jalinan Ukhwah Sambutan Maulidur Rasul 1441H & Majlis Khitan Jamaei Programme on In conjunction with the event, tenants as well as shaping leadership 7 December 2019. Fifty children from were given the opportunity to witness skills, in addition to promoting the B40 segment underwent a free mass the latest progress with the project family theme park activities. Ahmad, DASB Executive Director, Haji circumcision at the Klinik Waqaf An-Nur through the Jom Jumpa session. The B5 The highlight of the Angry Birds Yusaini Sidek; as well as Galleria@Kotaraya. Johor Street Market offers 219 lots to Crew Challenge 2019 took place on Education Office Communications Bumiputera entrepreneurs to create job 19 November 2019, involving 100 Officer, Mohd Yunos Mahmod. The event was fully sponsored by the KPJ opportunities for the local community. students from 16 schools. Participants Johor Specialist Hospital, Klinik Waqaf With the combination of the five elementswere divided into two categories UPGRADING OF TAMAN DAHLIA An-Nur Galleria@Kotaraya and DASB. of a retail bazaar, box park, food truck, according to their age and were required MARKET The children also received aid for their food and beverages, as well as Johor arts to complete 10 tasks within the stipulated school preparations in the form of a bag and culture, the B5 Johor Street Market is time. DASB carried out upgrading works at and RM100 cash contributed by JCorp targeting both local and foreign tourists, the wet market at the 16,800 square foot Foundation and DASB. Their families as well as the youth and locals. Sekolah Kebangsaan Taman Pelangi Taman Dahlia Business Centre at a cost meanwhile, received help from Food Indah emerged champions of Category of RM2.7 million to benefit almost 400 Bank for Charity contributed by Galleria@ ANGRY BIRDS CREW CHALLENGE 2019 A and Sekolah Kebangsaan Desa traders. The handover of the completed Kotaraya and KOMTAR JBCC. was first in Category B.building Prizes with to 105 lots was officiated by This programme served as a platform the winners were handed out by Johor JCorp Property Division Vice President to expose students to a healthy lifestyle, Education Department Senior Principal cum DASB Executive Director, Haji Yusaini teamwork and confidence building, Assistant Director (Languages), Rokiah Sidek on 7 December 2019. Also present P 66 P 67 SECTION 4 SECTION 4 Prospects Prospects

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AL-`AQAR HEALTHCARE REIT FINANCIAL PERFORMANCE Profit for 2019 was RM76.2 million (2018: The unrealised profit of RM12.7 millionBUSINESS REVIEW RM92.3 million) comprising realised profit mainly relates to fair value gains on AL-`AQAR HEALTHCARE REIT Al-`Aqar recorded income of RM106.1 of RM63.4 million (2017: RM61.0 million) investment properties, which was lower As at 31 December 2019, Al-`Aqar has 22 properties in Malaysia comprising 17 hospitals, million in 2019, an increase of 3.4% and unrealised profit of RM12.7 million by RM17.6 million. three wellness/health centres and two colleges and one aged care & retirement village (‘AL-`AQAR’) WAS LISTED compared to 2018. Net property income (2018: RM30.3 million). in Australia. It represents 91.6% of the total property value and contributes 89.1% and ON THE BURSA MALAYSIA (NPI) also increased by 3.8% to RM100.3 Declared dividend for 2018 is 7.8 sen 88.7% to the revenue and net rental income of Al-`Aqar, respectively. SECURITIES BERHAD MAIN million from RM96.6 million in 2018. Realised profit increased by 3.9% or per unit totalling RM57.0 million, which The increase in revenue and NPI was RM2.4 million and was due to full rental represents 95% of the income available Jeta Gardens Aged Care and Retirement Village in Australia is the sole foreign asset BOARD ON 10 AUGUST due to full rental income received upon income received upon settlement of for distribution. owned by Al-`Aqar. The property represents 8.4% of the total property value and 2006. AL-`AQAR HAS settlement of the KPJUC Nilai acquisition the KPJUC Nilai acquisition as well as contributes 10.9% and 11.3% to the revenue and net rental income of Al-`Aqar, GROWN ITS PORTFOLIO as well as annual increment on rental annual increment on rental income. respectively. income. KPJ Batu Pahat Specialist Hospital, the 23rd asset TO 23 PROPERTIES owned by Al-’Aqar. COMPRISING 17 HOSPITALS Challenges AND THREE HEALTHCARE 2019 has shown numerous factors are advancing the growth of the healthcare RELATED PROPERTIES, TWO industry which creates challenges for the players of the industry. Going forward, ENGINEERING COLLEGES Al-`Aqar is in the opinion that the following are the three main challenges for the AND ONE SENIOR CITIZEN Fund: AND RETIREMENT CENTRE IN 1 Significant consolidation in the healthcare industry over MALAYSIA AND AUSTRALIA. the past several years has resulted in more complex back Technology end technology and systems as networks get larger. Trends In Healthcare The main challenges in adopting technological innovations in the healthcare sector lies in cost and the ability of such innovations to meet consumer needs.

PROPERTIES The Malaysian Cabinet announcement on the 23 2 implementation of price control measures for Implementation pharmaceutical drugs is expected to affect the PROPERTY VALUE STOOD AT of Drug Ceiling pharmaceutical value chain, impacting clinics, hospitals Price and pharmacies. Operating profit margin for healthcare RM1.57 billion operators would be compressed further and indirectly it could affect the tenant’s ability to serve their lease obligations.

Al-`Aqar is managed by Damansara REIT Managers Sdn Berhad (DRMSB On 16 September 2018, Australian Prime Minister Scott 3 or the Manager), a wholly owned Morrison announced that the government had decided subsidiary of Johor Corporation Group Royal to establish a Royal Commission into the residential aged and supported by KPJ Healthcare Commission care sector. Its formation creates an increased level of Into Aged Care uncertainty for operators which includes the possible Berhad (KPJ). Quality & Safety impact of the Royal Commission’s future recommendations on the profitability and value of aged care businesses. As at 31 December 2019, Al-`Aqar’s property value stood at RM1.57 billion with a market capitalisation of RM971.5 million. P 68 P 69 SECTION 4 SECTION 4 Prospects Prospects

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PROSPECTS and Management of Jeta Despite the increase in revenue, PROSPECTS Gardens are currently Al-Salām REIT registered a lower realised Despite the above challenges, the monitoring the impact of the EPU in 2019 mainly due to lower NPI Al-Salām REIT’s retail assets represent Manager expects the Fund to be able to Royal Commission findings. contribution from KOMTAR JBCC of the majority of the fund’s portfolio record stable and resilient earnings as RM21.0 million as compared to RM25.2 composition, and the increase in the healthcare real estate is an alternative Al-Salām REIT million in 2018. competition coupled with dampened specialised asset class that is less consumer spending had impacted reliant on the economy. In addition, the Al-Salām REAL ESTATE Profit for the year was RM36.2 million its performance in 2019. While prime healthcare market is driven by an increase INVESTMENT TRUST (REIT) compared to RM40.3 million shopping malls in prominent locations of demand, both local and overseas. was listed on the Main the year before, comprising have sustained their revenues, which Market of Bursa Malaysia realised profit of RM28.4 is derived from stable footfall, tenant The growth in healthcare tourism bodes Securities Berhad on 29 million and unrealised profit occupancy and rental revision rates, well for KPJ’s prospects and brand September 2015. Al-Salām of RM7.8 million compared players operating at a smaller scale recognition as the preferred operator REIT is a Shariah compliant to RM8.4 million the year and located in less strategic areas through its excellent operational and fund with principal activity to before. Realised profit waswill be most affected by the intense service standards. Together with KPJ’s invest in diversified Shariah- lower by 10.9% from the competition in the retail landscape. strategy to strengthen its presence compliant properties. previous year mainly due to This scenario will continue to develop due nationwide through the brownfield lower NPI of KOMTAR JBCC to the rising threat of e-commerce which expansion plan and introduction of its With an initial portfolio of (RM4.2 million). is disrupting physical store performance. Ambulatory Care Centres (ACC) facilities, 31 properties, Al-Salām REIT These factors are affecting Johor Bahru’s the long-term prospects are positive, has grown to 49 properties The unrealised profit of retail scene as new shopping malls and will eventually benefit the comprisingFund three retail malls, RM7.8 million comprised continue to offer various incentives to that is currently looking into business one office building, 38 Food of fair value gain of RM3.6 attract tenants. opportunities in other segments. & Beverage restaurants and million and unbilled A number of new hospitals and expansion seven Food & Beverage rental income from Mydin By virtue of KOMTAR JBCC’s well known projects have been identified to be Non-Restaurant outlets Hypermart Gong Badak of strategic location and strong brand injected into the Fund and will augur well located across Malaysia. RM4.2 million. The higher value, these competitive strengths are for the performance of Al-`Aqar. The property value has net fair value gain was key drivers to attract new retailers whilst grown 30% from an initial mainly attributable to F&B retaining existing operators that are due As there have been no major acquisitions portfolio of RM911.5 million related properties. for lease renewals. With the upcoming recently, the settlement of the acquisition to RM1.19 billion as at developments within the city centre, of Batu Pahat KPJ Specialist Hospital is 31 December 2019. The dividend declared KOMTAR JBCC will continue to prosper viewed as the starting point of Al-`Aqar’s for 2019 is 4.75 sen per due to locals and Singaporean patrons, expansion. The establishment of the Al-Salām REIT is managed by unit (FY2018: 5.35 sen) considering that Malaysia represents Royal Commission in Australia was tasked Damansara REIT Managers totaling RM27.6 million, the most convenient and closely located to review the overall aged care industry’s Sdn Berhad (DRMSB or the Manager) FINANCIAL PERFORMANCE which represents 97% of shopping haven. current practices and recommend a wholly-owned subsidiary of Johor the income available for improvements to the services. The Corporation (JCorp). The Manager is a Al-Salām REIT achieved a gross revenue distribution. The long-term triple net lease agreements Commission has issued an Interim Report Capital Markets Service licence holder, of RM94.9 million for the financial year for the Restaurant and Non-Restaurant and found that a fundamental overhaul authorised to carry out fund management ended 31 December 2019, a growth of 02 F&B segments will strengthen Al-Salām of the design, objectives, regulation activities in relation to REIT. 15.5% against RM82.2 million achieved REIT’s revenue. This arrangement will also and funding of aged care in Australia in 2018, mainly contributed by additional minimise the Fund’s exposure to increase is required. Accordingly, this will have 01 KFC Restaurants is part of Al-Salam in operational costs that are needed for As at 31 December 2019, Al-Salām REIT rental income from Mydin Hypermart REIT’s assets. an impact on the future viability of the asset value stood at RM1.25 billion with a Gong Badak and 17 QSR Brands properties in the long-term. aged care businesses. The Managers market capitalisation of RM469.8 million. assets, for which the acquisitions were 02 Menara KOMTAR JBCC. completed on 21 September 2018 and 19 March 2019, respectively. P 70 P 71 SECTION 4 SECTION 4 Prospects Prospects

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INDUSTRIAL INDUSTRIAL DEVELOPMENT DEVELOPMENT DIVISION DIVISION RM94.92 billion through 1,980 domestic and foreign investors, areas in addition to managing commercial MARKETING OF INDUSTRIAL LAND NEW INVESTMENTS while creating 220,479 job opportunities. In 2019, IDD recorded and industrial developments. 60 new investors with investments amounting to RM401 million. JCorp, through TTSB, is consistently RM401 million Revenue under the TTSB Group’s focused on attracting investments to As at end-2019, JCorp has offered 900 hectares of industrial Financial Performance as of 31 December Johor as the choice location for investors FOUR INDUSTRIAL ZONES land for development located in Industrial Park (KIP), 2019 was RM71.97 million compared to in Malaysia, especially in industrial areas JCORP ESTABLISHED THE Muar Furniture Park (MFP), Industrial Park RM40.15 million in 2018. Profit before in Kulai, Muar, Pengerang and KPTL. 900 hectares INDUSTRIAL DEVELOPMENT (PIP) and Kompleks Perindustrian (KPTL). tax increased to RM10.4 million in Through cooperation with state and DIVISION (IDD) TO CARRY The development of these new industrial areas is aligned to the 2019 compared to a loss before tax of federal government agencies, TTSB PROJECTS MANAGED BY TTSB government’s aspirations to spur economic growth especially RM2.68 million in 2018. This was due to often participates in both local and OUT ITS MANDATE AS A STATE in the era of the Industrial Revolution 4.0 and the oil and gas the realisation of industrial land sales in international promotion efforts. In 2019, 42 projects DEVELOPMENT AGENCY. sector. Sedenak that was recorded in 2019. TTSB participated in investment missions SOME OF THE DIVISION’S organised by the Malaysian Investment JCORP’S SEDENAK MASTERPLAN TPM TECHNOPARK SDN BHD (TTSB) TTSB expects to record better results in Development Authority to South Korea, MAIN ACTIVITIES INCLUDE 2,834 hectares the years ahead through new industrial Taiwan, Australia, Indonesia and the PLANNING AND DEVELOPING TTSB is a wholly-owned subsidiary company of JCorp under development projects in Pengerang and United States. INDUSTRIAL AREAS IN EVERY 01 IDD. It provides project management services, development, Bakri, Muar. As the marketing agent for JCorp’s marketing, as well as the management of JCorp’s industrial DISTRICT IN JOHOR. industrial areas, throughout 2019, TTSB sold 143.2 hectares of land valued at This task is carried by TPM Technopark RM422.8 million, while sales collection Sdn Bhd (TTSB). In addition to this, the achieved was RM265.8 million. division’s main activities are supported by port and logistics services through PROJECT MANAGEMENT TLP Terminal Sdn Bhd; while skills training is handled by Johor Skill Aside from the marketing of JCorp’s Development Centre (JSDC). industrial areas, TTSB also offers project management services. In 2019, TTSB The opening of new industrial managed 42 developments with a areas is important to project value of RM96.7 million. increase economic growth as well as ensuring that TTSB also acts as project manager for locals are able to benefit projects awarded by the Prime Minister’s from positive economic Department via the State Development spillover effects. This would 03 Office (SDO) of Johor. Throughout 2019, occur through the development 02 TTSB managed 17 SDO projects valued of new townships, as well as the at RM48.72 million. Since 2011, TTSB has creation of supporting businesses and managed or is managing a total of 60 jobs. Industrial development will also 01 Shipping Tanker at projects valued at RM131.175 million. generate demand for other activities, . such as housing and commercial Overall, TTSB completed 34 projects development. 02 Electrical and valued at RM99.4 million in 2019. It Mechatronic student involved 26 industrial projects mostly at the Johor Skills To date, IDD has developed 34 Development located in KPTL, Pasir Gudang and industrial areas which spans 6,587 Centre. Sedenak; and seven commercial projects hectares across Johor. These under the SDO valued at RM20.5 million. 03 Small and Medium developments have succeeded in Industrial Complex. attracting investments amounting to P 72 P 73 SECTION 4 SECTION 4 Prospects Prospects

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DEVELOPMENT OF MUAR Physical development has begun and tax declined to RM5.8 million compared Located only 12 nautical miles from the FURNITURE INDUSTRIAL HUB ground work progress at the site has to RM10.6 million in 2018 due to new international shipping lane, PTL has exceeded 63 percent as of December accounting standards for leasing (MFRS seven berths for liquid cargo with a As planned in the Johor Budget 2019 and is expected to generate 16) for dock rentals, and a rise in port capacity of 23 million MT and two berths 2016, JCorp has been entrusted investments valued at RM17.4 billion. operational costs. for dry goods/bulk cargo with a capacity by the State Government to The involvement of JCorp is expected of 3 million MT. To fully complete the develop a more systematic to complement the existing and TLPT was awarded the Best Private Jetty ports and logistics ecosystem, TLP is also furniture industrial hub that incoming infrastructure at PIPC such at the Port Industrial Award 2019 by the supported by the following clusters: would be named Muar Furniture as the Pengerang Deepwater Terminal, Authority. In addition, TLPT Park (MFP). This hub is equipped maritime industrial area and commercial received the silver award from Etiqa a) Oil storage tanks with a capacity with a variety of infrastructure services hub. Insurance (risk adviser) for its outstanding of 986,500 cubic metres situated facilities and amenities for risk management record. on a 150-hectare site, comprising furniture manufacturers currently EXPANSION OF KPTL oil terminals for petroleum and operating on agriculture land ENABLER - PORT SERVICES petrochemical cargo, edible oil cargo across Muar. KPTL is a large-scaled industrial zone as well as direct piping to the jetty. owned by JCorp, spanning 1,957 Throughout 2019, TLP recorded cargo As of now, a few foreign and Spanning 399 hectares, physical hectares and dedicated to heavy industry. handling of 11.76 million metric tonnes international investors are operating development began in February Currently, there are 122 local and foreign (MT). The largest contributor to this was here including Dialog Terminals 2018 and the first 28.3 hectare investors with committed investments of petroleum with 10.62 million MT (90%) Langsat Sdn Bhd, Langsat Bitumen platform was handed over to RM27 billion. Of this amount, 80 factories while the rest comprised edible oil and Terminal (owned by Puma Energy, investors on 9 October 2019. In valued at RM21.18 billion have started bulk cargo with 0.64 million MT (5%) and subsidiary of Trafigura Group), Musim 2019, a 150.1 hectare industrial operations. 0.50 million MT (4%), respectively. Mastika Oil & Fats (M) Sdn Bhd area valued at RM264 million (subsidiary of Musim Mas Group), was sold to 124 investors. TLP TERMINAL SDN BHD PORT BUSINESS Langsat Bulkers Terminals (owned by Lawatan Ketua Setiausaha Negara ke Pengerang Industrial Park. When complete, the MPF Felda Johore Bulkers) and Menajaya is expected to generate TLP Terminal Sdn Bhd (TLPT) is JCorp’s Equipped with berthing facilities and the Oil & Fats Sdn Bhd. Norman Process DEVELOPMENT OF SEDENAK b) KIDEX investments of RM1.5 billion and fully owned subsidiary company which capability of handling vessels of Suezmax Oil Sdn Bhd (subsidiary of Orghkim the creation of 15,000 jobs. manages Tanjung Langsat Port (TLP). and Aframax sizes, TLP is working Group) is in the process of building a a) Johor Corporation Master Plan Malaysia Digital Economy Corporation TLPT recorded income of RM63.3 million to remain as a preferred harbouring factory to process rubber oil without (MDEC), the main entity leading Malaysia PENGERANG OIL & GAS for the financial year 2019. Profit before destination among traders and investors. carcinogens for the rubber industry Sedenak Industry 4.0 Hub and Smart into the digital economy, began its SUPPORT INDUSTRIAL AREA and synthetic tires. City Master Plan cooperation with JCorp to develop Sedenak as an international standard data The development of the b) Oilfield Services & Equipment Hubs JCorp’s Sedenak Masterplan for a 2,834 centre which would be named Sedenak Pengerang Industrial Park (OFSE): 174 hectares of industrial hectare area was mooted in 2016. Iskandar Data Hub. AECOM, a design and (PIP) on a 319-hectare site for Offshore Engineering Services This plan is an important component engineering firm, prepared the SIDH master is to provide the Pengerang has been allocated to global OFSE that supports the Greater Sedenak plan in 2016 based on the principle of Integrated Petroleum Complex companies to operate in TLP, to Masterplan covering a total area of live-work-play. (PIPC) with supporting oil & gas provide their services to a rapidly 20,242 hectares. According to the plan industries. Aggressive marketing growing industry in this region. JCorp has targeted for development to In 2019, SIDH was rebranded to Kulai was conducted to attract owners Some of the companies operating be more focused towards the Industry Iskandar Data Exchange (KIDEX), of downstream activities, such as here include, Asiaflex Products Sdn 4.0 Centre and Smart City. Infastructure work began in 2016. In 2019, aromatics, chemical production, Bhd (Technip Group company), investors began development works O&G equipment storage and Kiswire Neptune Sdn Bhd; and Bahru for a Tier 3 data centre began in and it is O&G engineering and services. Stainless Sdn Bhd (subsidiary of expected to be operational in 2021. Acerinox Pte Ltd). P 74 P 75 SECTION 4 SECTION 4 Prospects Prospects

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c) Regional Marine Supply Base: ENABLER – FREE COMMERCIAL ZONE ENABLER – READY BUILT FACTORIES This port has also been equipped with a Regional Marine Supply Base To add value for investors as well as to a) Premium Corporate Premises (PCP) comprising a Common User Supply maximise its strategic location, JCorp Base, as well as a Logistics and has taken the initiative to set up a Free Consisting of 14 units of ready built Warehouse Hub, each occupying Commercial Zone (FCZ) within the port factories in Zone 12B Phase 2, Pasir 20 hectares. These facilities provide area. The Ministry of Finance granted Gudang Industrial Area, the PCP is services to contractors, service approval for JCorp to set up the TTSB’s effort to generate diverse providers and others who are 75-hectare facility in June 2016. revenue streams beyond its core supporting oil exploration in the business. Seven units have been sold region. to date and promotional efforts for the rest are underway. i. Common User Supply Base b) Small and Medium Industry The CUSB facilities were Complex (SMI) constructed by Langsat OSC Sdn Bhd (LOSC), which is a joint i. Pasir Gudang SMI venture company of Langsat Marine Base Sdn Bhd, a subsidiary The construction of 30 ready built of JCorp with Oilfields Supply factories in the Pasir Gudang Center Ltd, a company in Dubai. Industrial Area on a 1.9-hectare LOSC is operating with a Public site was financed with a RM30 Warehouse License and Licensed million Federal Government Manufacturing Warehouse in grant. Completed in 2019, this accordance with Section 65 and project is targeted to fully cater to 65A of the Customs Act 1967. the demand of small and medium This facility has 16 workshops that Bumiputera businesses. can be utilised by the downstream oil & gas industry. With shared a Public Warehouse Licence HANDLED BY TLP ii. Muar SME Furniture Park expertise managing this facility under Section 65 of the Customs million MT in the form of Jebel Ali Freezone Act 1967. Other companies that 11.76 In addition, 24 ready built (JAFZA), Dubai, United Arab have invested in LMT are Welfab factories under construction at the CAPACITY THROUGH SEVEN LIQUID Emirates, LOSC is able to attract Engineering Sdn Bhd, Tiong Nam TERMINALS Muar Furniture Park was financed well-known O&G companies to Logistics Solution Sdn Bhd and with a RM22 million Federal operate here. FGV Logistics Sdn Bhd. 23 million MT Government grant. Construction started in October 2019 and is ii. Logistics and Warehousing Hub ENABLER – PALM OIL INDUSTRIAL INVESTMENT IN POIC expected to be completed in CLUSTER Equipped with components, such as The FCZ was gazetted on April 2018 and the middle of 2022. Focused on billion The logistics and warehousing RM1.77 office and factory buildings, operations biomass began on November 2018. Bumiputera SME businesses, this hub that was built by Langsat plant, oil storage tanks, as well as other Aiming to turn TLP into an integrated project is expected to create 450 The development of the Palm Oil SME FACTORIES IN MUAR & infrastructure on a 131-hectare site, POIC Marine Terminal Sdn Bhd (LMT) Industrial Cluster (POIC) at the Tanjung PASIR GUDANG logistics hub in the region, there has new job opportunities. has succeeded in drawing NKGBS Langsat Industrial Complex was carried provides value add to palm oil operators been encouraging demand for industrial Malaysia Sdn Bhd, a Japan- out with a RM103 million grant from the 54 factories in TLP. As of end-2019, sales of industrial lots in the FCZ area from both local and headquartered company to rent Federal Government, that was allocated land at POIC exceeded 70%, comprising foreign investors with sales achieved to the entire closed warehouse for through the Ministry of Plantation JSDC GRADUATES nine fully operational strategic investors date of 53% of the entire 75-hectare area. 10 years, beginning in 2016. Industries and Commodities. with investments totalling RM1.77 billion. graduates The whole LMT operates under 499 P 76 P 77 SECTION 4 SECTION 4 Prospects Prospects

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INDUSTRIAL PARK MANAGEMENT aspiration of constantly ensuring such as the Internet of Things, Artificial IDD is also focusing on developing industrial development is well equipped Intelligence and robotic automation will alternative energy projects in line with To add more value for investors, TTSB with technical skills training centres improve effectiveness and productivity; the government’s aspirations. One of the was appointed to provide industrial to produce skilled and semiskilled and manufacturing just in time will enable projects that has been implemented is park management services for all manpower, in line with the needs and investors to have smaller factory spaces. the Biomass Steam Plan in POIC, KPTL. JCorp-owned industrial zones. Some of growth of the nation’s industries. the services include gated & guarded, In addition, in line with the business Going forward, IDD is expected to continuous monitoring of facilities in As of 2019, JSDC has produced 71,000 cycle and economic conditions, investors carry out more high impact projects. industrial areas, as well as customer graduates through all kinds of industry are expected to choose the Asset Light This includes the development of the service. This service is considered an training programmes, professional principle where factory infrastructure is Kulai Industrial Park with a space of important requirement and further certificates as well as coursesrented, for so school that they are not tied to any 2,834 hectares as outlined in JCorp’s planning for its implementation is leavers. The latest plans are to offer particular location for the long-term. Sedenak Masterplan. This development underway. It is expected to be used in training courses to the furniture industry In the near future, IDD will focus on is focused on Industry 4.0, medical 2020 for the Muar Furniture Industrial and O&G support industry. investors who utilise high technology, as and pharmaceuticals, in addition to Park, Sedenak Iskandar Data Hub and the well as high value-add industries. being a Smart City, and residential and Pengerang Industrial Park. PROSPECTS commercial area. SUSTAINABLE INDUSTRIAL ZONES ENABLER – JOHOR SKILLS DIRECTION OF INDUSTRIALISATION Some of the longer-term projects that DEVELOPMENT CENTRE Aside from constructing industrial zones have been planned include offering third- IDD forecasts that industrialisation will be that are fully equipped with infrastructure, party negotiation services for industrial The Johor Skills Development Centre focusing more on incorporating Industry IDD has taken the next step forward. zones outside Johor. This will leverage on (JSDC) was established with the 4.0 across economic sectors. Features The division will continue to confine the the expertise and experience of IDD as development of specialised industrial the premier developer of industrial zones zones to their respective sectors and in Johor. industries; like MFP as a furniture hub, ii. Contingency Planning and COMPREHENSIVE TRAINING CENTRE PIP for O&G industries and the Kulai IMPROVING PORT FACILITIES Emergency Response Industrial Park for high-technology JSDC’s framework offers all kinds industries, such as data and multimedia IDD continues to expend efforts to bring As an active participant of the Pasir of industrial training that is tailored centres. in new investors to TLPT through value Gudang Emergency Mutual Aid to market needs. Some of these add and continuous improvements to (PAGEMA), TLPT has organised a include, furniture making, oil & gas, IDD will also target to equip JCorp facilities and port services. few training sessions that involved green industries and Industry 4.0. industrial zones with ready built factories various agencies to test employee The collaboration between the private and workers quarters as one of its i. Digitalisation and Technological preparedness and the effectiveness sector and state and federal government sustainable initiatives. In order to meet Advancement of safety procedures. In March 2019, agencies is also strengthened to ensure the needs of the data centre sector, it is the TLPT ERT team was involved in that comprehensive training is provided important for IDD to ensure the industrial With our aspiration to be a next Ops Sg Kim-Kim where a large-scale and in line with the aspirations of the zone has continuous supply of utilities generation port, TLPT has come up environmental pollution disaster government to produce independent and is free from any form of disruption. with a Digitalisation and Technology occurred due to the dumping of skilled and semi-skilled workers. Plan to spur productivity gains and chemical waste in Sungai Kim Kim, In line with the green technology trend, security. The Port Safety System was Pasir Gudang, Johor that involved Assuming all our projects can be carried the incorporation of renewable energy, implemented in April 2019 and TLPT more than 5,000 people. out smoothly, IDD is expected to retain recycling and creation of green spaces for continues to focus on improving its its status as the main contributor of recreation purposes will be an important network infrastructure and systems, profits and cash to JCorp, while also agenda to increase the value of industrial as well as innovations, such as Internet strengthening its strategic institutional zone development in Johor, so that it of Things and Big Data analytics. role in driving industrial development in is benchmarked to industry standards. Johor. P 78 P 79 SECTION 4 SECTION 4 Prospects Prospects

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BUSINESS BUSINESS DEVELOPMENT DEVELOPMENT DIVISION DIVISION developing 18 Intrapreneur companies, 21 companies in 2018. Four of the 18 Indonesia. Besides continuing with its STRATEGIC COOPERATION INTRAPRENEUR 2.0 SCHEME core business of managing corporate JCorp has embarked in various business Intrapreneur companies recorded profit COMPANIES services such as tourism and amil before tax of more than RM1 million each zakat (amil zakat) and organising umrah On 19 January 2019, an exchange of JOHOR CORPORATION zakat (zakat management), information as a result of restructuring of business and hajj pilgrimage trips, Capaian also Memoranda of Understanding (MoU) 18 companies technology, transportation, food and activities and company liabilities. manages Humanitarian Aid Missions between JCorp and nine Johor state (JCORP) IS ALSO TASKED beverage, health care and industrial to Cambodia, Thailand and Vietnam government-linked companies was POSTED TURNOVER WITH THE IMPLEMENTATION training. INTRAPRENEUR COMPANIES to fulfil the mandate entrustedcarried by the out to leverage the expertise, RM281 million OF ENTREPRENEURIAL community to contribute to Muslims in resources, capital, technological FINANCIAL PERFORMANCE In upholding its commitment to ensure the neighbouring countries. advancement and strategic development CREATED PACKAGE DEVELOPMENT AND business sustainability, Capaian Aspirasi of the companies to develop ENTREPRENEURIAL SCHEME As of FY ending 31 December 2019, Sdn Bhd (Capaian), led by Tuan Haji Ismail Capaian also has plans to offer Kembara entrepreneurs in Johor. KEMBARA PROGRAMMES, ESPECIALLY IN there were 18 companies placed under Mat Ali, further expanded its business Islam to Egypt in the near future. With this the Intrapreneur 2.0 Scheme with a by offering Kembara Islam (Islamic Tour) package, Capaian is inspired to add tour The companies involved included ISLAM JOHOR. turnover of RM281 million compared to Islamic countries such as Jordan, agency services in order to complete its Kumpulan Prasarana Rakyat Johor Sdn with turnover of RM280 million from Turkey and Balkan countries apart from lineup of businesses. Bhd (KPRJ), Permodalan Darul Ta’zim (ISLAMIC Creating an entrepreneurial community (PDT), Perbadanan Pengangkutan Participants of the Humanitarian aid mission to Cambodia organised by Capaian Aspirasi Sdn Bhd. Awam Johor (PAJ), Perbadanan Islam TOUR) in various fields including Small and Medium-sized Enterprises (SME) is Johor Holdings Sdn Bhd (PIJ), Johor CLASSRUUM PACKAGE vital in supporting industrial growth Biotechnology & Biodiversity Corporation as well as the country’s economy. (J-Biotech), Perbadanan Usahawan Johor 4,134 subscribe Since 2017, JCorp has rolled out Sdn Bhd (EDC), Yayasan Pelajaran Johor three entrepreneur categories under and YPJ Holdings Sdn Bhd. the Intrapreneur 2.0 Scheme namely a wider network. The industries include Category A: Innovative/ High Impact, The MoU has further opened up agriculture, real estate development and Category B: Dynamic/Sustainable and opportunities for Intrapreneur companies management, furniture industry supply Category C: Social. under JCorp and the Group besides chain, chicken and cattle livestock, oil and aiming to resolve economic issues in gas, services, food and transportation. It is mandatory for entrepreneurs the related industries by leveraging on in Category A to adapt projects or implement innovation towards generating better revenue in their organisations. All the 18 Intrapreneur companies are in Category B. These companies, which have either collaborated with or complemented existing JCorp businesses, can be integrated into open markets. Every Intrapreneur has the opportunity to graduate after five years and ensuring a high return of investment to the parent company.

To crystalise the role of JCorp as an entrepreneurial development agent, this scheme encourages the participation of external companies that have the potential and interest in being JCorp’s strategic partner. By P 80 P 81 SECTION 4 SECTION 4 Prospects Prospects

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CORPORATE RESPONSIBILITY CORPORATE DIVISION Hajj course at the Sultan Iskandar Mosque, RESPONSIBILITY Bandar Dato’ Onn. THE KWAN NETWORK KLINIK WAQAF AN-NUR A total of 22 Klinik Waqaf An-Nur (KWAN) DIVISION 22 clinics and Mobile Clinics were established from 1998 to December 2019. KWAN’s WAQAF AN-NUR outpatient medical services serves MEDICAL TREATMENTS CORPORATION BERHAD communities from all races and religions million at a fee of RM5. As of 2019, a total 1.8 of 1,856,781 treatments have been DIALYSIS MACHINES CORPORATE RESPONSIBILITY administered to patients in the KWAN IS THE THIRD MANDATE network, including 167,110 treatments 72 machines UNDER THE ESTABLISHMENT for non-Muslim patients. To date, there are nine clinics offering treatment to KIDNEY PATIENTS TREATED OF JOHOR CORPORATION kidney patients through 72 dialysis (JCORP). THIS CORPORATE machines at a minimum 350 patients RESPONSIBILITY IS REALISED charge of RM90.

THROUGH VARIOUS ACTIVITIES JALINAN UKHUWAH ™ DANA NIAGA INVOLVING TARGETED GROUPS AT THE GRASSROOTS LEVEL. Jalinan Ukuwah is a Dana Niaga is an initiative to provide grassroots programme interest-free Al-Qardhul Hassan financial PART OF THESE CORPORATE to foster closer relations support to micro entrepreneurs who RESPONSIBILITIES ARE between leaders and local want to expand their business. The CARRIED OUT THROUGH communities through initiative is aimed at increasing the gotong-royong, free greatness of Islam through business and WAQAF AN-NUR health screenings, mosque stimulating the Islamic economy besides CORPORATION BERHAD activities and contributions benefitting Muslim entrepreneurs who (WANCORP). to the needy. It is also a need assistance. As of 2019, a total of 464 platform for JCorp’s and loans amounting to RM1,143,376 have AN-NUR MOSQUE NETWORK WANCorp’s management been distributed to micro entrepreneurs and employees to engage throughout Johor. WANCorp manages six with community leaders mosques – Masjid Sultan as well as religious leaders In addition, the Murabahah Tawarruq Iskandar and Masjid An-Nur (ahli kariah) at selected facility provides larger support of Kotaraya, Larkin Sentral, locations with the between RM10,000 and RM20,000 cooperation of Briged with a profit rate of 4% to 6%. The loan Bandar Pasir Gudang, The opening of the Islamic Information Waqaf, the Johor State was recognised as Syariah compliant Kompleks Pasir Gudang Centre (IIC) in December 2019 was the 03 Islamic Council and the by WANCorp’s Syariah Committee on and Taman Cendana – which highlight of efforts to attract more local Malaysian Royal Police Force 31 March 2019. To date, three borrowers organise various religious, and foreign tourists. IIC gives visitors (PDRM). In 2019, six Jalinan have received a total of RM55,000 in recreational and community 01 Jalinan Ukhuwah and mass the opportunity to learn more about Ukhuwah programmes loans. programmes. The Masjid Sultan Iskandar circumcision programme. the aesthetics of Islam and mosque at Bandar Dato’ Onn, which was already were organised in selected 02 Briged Waqaf members architecture. In addition, visitors also in Johor. The application for Dana Niaga loans can known as a Tourism Mosque in 2018, participating in the Civil Defence get to see various replicas of different be made online at www.wancorp.com.my received the recognition from the Emergency Response Team versions of the al-Quran, and the beauty Volunteer Course. Malaysia Tourism Quality Assurance and history of the Kaabah via a hologram (MyTQA) as a Tourism Mosque under the 03 Dialysis services at the Waqaf machine. auspices of the Ministry of Tourism, Arts An-Nur clinic. and Culture in 2019. P 82 P 83 SECTION 4 SECTION 4 Prospects Prospects

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CORPORATE RESPONSIBILITY CORPORATE RESPONSIBILITY DIVISION DIVISION

THIS TWO-PRONGED PROGRAMME NOT ONLY EXPANDED THE KWAN CHAIN OF CLINICS, BUT IT ALSO PRESERVED THE ENVIRONMENT THROUGH TREE PLANTING AT SELECTED AREAS WITH THE COLLABORATION OF LOCAL COUNCILS IN JOHOR.

contributions or gifts for charitable INFAQ WARISAN of the 2019 National Landscape Day in purposes or religious purposes (berwakaf) early March 2019, which was to transform through the Hibah wakaf programme. The KWAN chain continues to remain landscapes in the country towards The programme involves collaborations popular with a year on year increase in making Malaysia the Most Beautiful with takaful companies, property the number of patients. To ensure that Garden Nation by 2020. A remote sensing management, system was used trustees and trust for benefactors fund management to conveniently by opening up monitor the trees bigger and better that were planted. opportunities for people to contribute COVID-19 FUND to welfare through CONTRIBUTION additional income with the skills that are Briged Waqaf was also involved in WANCorp. DANA NIAGA LOANS obtained. In 2019, the Sewing Waqaf corporate responsibility through various WANCorp through Community in Taman Bukit Tiram, community programmes that were The programme, the Sultan Iskandar 464 loans Ulu Tiram and Taman Bukit Dahlia, organised throughout the year. The which started in Mosque launched Pasir Gudang trained 12 participants. year 2019 also saw the establishment October 2019, a Covid-19 fund to LOANS DISTRIBUTED of Kompeni Ibnu Sina, a new company is receiving invite the people The Barber Community Centre in comprising employees from KPJ million good response. WANCorp introduced the to donate in order to lighten the burden RM1.14 Kempas Town Centre resumed its Healthcare Berhad in the Klang Valley. This programme enables takaful of certain target groups. WANCorp operation in March 2019 and has trained Hibah Wakaf and Infaq MAXIMUM LOAN holders to contribute up to 30% from extended a variety of aid including three 27 participants through three series of The Annual Briged Waqaf Camp was Warisan programmes the protection amount that would be ventilators to selected hospitals, personal Barber Courses to date. held from 11 to 13 October 2019. RM20,000 received upon death. The public is also to enable the public to protective equipment (PPE), liquid hand The biennial event is aimed at fostering encouraged to dedicate their property embrace the blessings of sanitiser and infrared thermometers. closer relationships (ukhuwah) between PARTICIPANTS RECEIVED TRAINING through their will or hibah (giving BRIGED WAQAF™ the leadership and brigade members charitable giving AT WAQAF COMMUNITY CENTRES without expectation while alive) that The Barber Waqaf Community Centre besides testing the skills of the members. can be managed by will management granted six-month rental exemptions to 39 participants Briged Waqaf is a voluntary programme Briged Waqaf members were recognised companies and trustee companies. the management and community service participants of an incubator for barbers for employees in JCorp and companies when they won the Best March under the provided can continue, the Infaq Warisan while the Tailoring Waqaf Community under the Group, who are active in Corporate Body category in conjunction The public’s voluntary contributions programme was introduced to increase Centre helped to tailor PPE. In addition, WAQAF COMMUNITY CENTRE offering humanitarian aid and carrying with the 2019 Johor State National Day (pewakafan) will be translated to wakaf the number of clinics in the chain. out community programmes. The team Parade. those who received financing from Dana assets and the purchase of Syariah- Niaga were given a six-month repayment The Waqaf Community Centre was plays a significant role in aiding victims compliant shares to strengthen the value This two-pronged programme not only moratorium while tenants of the established by leveraging on WANCorp’s of disasters such as fire and floodsHIBAH in WAKAF of Ain WANCorp, which would eventually expanded the KWAN chain of clinics, WANCorp Group received discounts or purchase of properties. The centre offers addition to helping in the Sungai Kim increase the dividend distribution to but it also preserved the environment rebates on their monthly rent. WANCorp sewing and barber lessons to target Kim toxic waste pollution incident in WANCorp continued to actively invite the through tree planting at selected areas benefit the public. allocated RM3.9 million to help those groups, enabling them to generate Pasir Gudang. public to benefit from giving voluntary with the collaboration of local councils in that were affected by the pandemic. Johor. This was in line with the objective P 84 P 85 SECTION 4 SECTION 4 Prospects Prospects

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CORPORATE RESPONSIBILITY CORPORATE RESPONSIBILITY DIVISION DIVISION

Following are the foundation’s activities and achievements: YAYASAN JOHOR CORPORATION TUITION PROJECT 1. YAYASAN JOHOR CORPORATION YAYASAN JOHOR 6,745 students TUITION PROJECT CORPORATION Established since 2012 with the 577 obtained 3As and above JOHOR CORPORATION cooperation of the Johor State (JCORP) ESTABLISHED Education Department, the PRO DU-IT FINANCIAL programme is meant for students MANAGEMENT PROGRAMME THE YAYASAN JOHOR from selected primary schools CORPORATION ON 9 JUNE throughout Johor. 1,800 students

1997 AS AN ORGANISATION TOTAL SAVINGS THAT ENABLES THE To date, 6,745 students from 260 schools have benefitted from the RM452,000 CONTINUITY OF JCORP’S CSR programme. These students have ACTIVITIES IN THE FIELD OF shown improvement and excellent EDUCATION TO THE PUBLIC. performance in their exams. For the record, a total of 577 students have This financial management module was developed through collaboration achieved excellent results in the UPSR The aim of the foundation is to be the with Universiti Malaya. Overall, exams i.e scoring 3As and above. main driver to improve quality of life, there are 6 modules that centres human capital and self-development in The learning method is not only around smart financial knowledge, education, entrepreneurship, skills and entrepreneurship, technology and focused in classrooms but also provision of training to help develop social responsibility for children aged includes E-Learning system through the country’s economy. 7 to 12. Classruum.com. The various learning It is also a platform to maximise tax methods were implemented to interest students more in addition The programme was first introduced exemption for donors who contribute in Johor schools in 2017. To date, to allowing the students easy access in tandem with the foundation’s 1,800 students from 60 schools at anytime and anywhere. objective. Johor state and national level have 2. PRO DU-IT FINANCIAL benefited from the programme. Its three main core activities Throughout the programme, students MANAGEMENT PROGRAMME are to optimise the use of were given a log book each to record technology and mass media This programme was developed their daily finances. The total savings that are more edutainment, recorded was RM452,000 or RM251 due to awareness of weak financial flexible and wider, to instil on average per student. the values of civic education management among youth and which are happiness, love, teenagers. It emphasises a systematic responsibility and respect, financial management skills and as well as to collaborate with trains youths and teenagers to save relevant agencies. and manage their finances better. P 86 P 87 SECTION 4 SECTION 4 Prospects Prospects

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CORPORATE RESPONSIBILITY CORPORATE RESPONSIBILITY DIVISION DIVISION

To date, 50 selected schools have The quiz is open to all students aged 6. EDUCATION AID participated in the programme by 7 to 18. A total of 6,610 participants PENDIDIKAN SEMARAK JAWI 2.0 setting up 25 companies, recording have signed up while 305,929 visitors This programme aims to ease students total sales of RM654,000. The have browsed the facebook page of the financial burden of parents/330 programme also includes mentorship JCorp for information on the quiz. guardians through the provision by entrepreneurs from JCorp Group of fee assistance for education or 160,428 visitors sought and agencies such as FAMA, MARA, 5. SEMARAK JAWI 2.0 EDUCATION preschool. All applications for aid information on the quiz Kolej Komuniti and GiatMara as will be tabled through the Yayasan advisors. Semarak Jawi 2.0 sees an improved Johor Corporation Fund Distribution EDUCATION AID and more innovative programme & Procurement Committee. To date, The programme aims to create and compared to the original programme RM175,619 has been distributed to RM175,619 shape the young generation and with the involvement of the Johor 450 recipients. distributed to 450 recipients youths with entrepreneurial and State Education Department, Johor leadership qualities that include State Islamic Department, calligraphy skills, independence, charisma, and associations and NGOs of Jawi art creative and innovative thinking. enthusiasts.

4. READING PROGRAMME This programme was activated in 2020 amongst primary and secondary Beginning 2019, Yayasan Johor school students in Johor. The Corporation was appointed as a implementation of this programme Local Partner by The Asia Foundation also incorporated entrepreneurial (TAF) to rollout the English Language aspects, online competitions and Reading and Strengthening Jawi reading and identification Programme in for programmes for primary students three years. Throughout the period, through the Kem Semarak Jawi. JCorp Foundation will receive 20,000 copies of non-fiction books to be For a start, 330 students from 11 3. KELAS RANCANGAN USAHAWAN distributed for free through the Books selected schools took part in Semarak KELAS RANCANGAN USAHAWAN ENTREPRENEURSHIP ENTREPRENEURSHIP PROGRAMME For Asia programme. Jawi 2.0 through programmes PROGRAMME organised by Yayasan JCorp. In RM654,000 The implementation of the addition, 1,056 contestants took Johor Corporation’s involvement in total sales recorded programme is not limited to only the part in the Semarak Jawi Quiz and entrepreneurship began in 1992 with distributed reading material but also Beautiful Handwriting Competition READING PROGRAMME the start of the BISTARI programme, through JCorp English Challenge, (Jawi), which is held once a month. an entrepreneurial programme for 20,000 copies of a quiz competition that can be A total of 160,428 contestants have secondary school students in Johor. non-fiction books received downloaded from JCorp’s Facebook visited JCorp’s page for information page to promote the Books For on the quiz. Beginning 2016, the implementation Asia programme. Participants can concept was rebranded through the 6,610 participants have also download e-books from The signed up Kelas Rancangan Usahawan (KRU). Asia Foundation’s Let’s Read mobile The new programme focuses on Form application which is available on 4 and 5 students from Commerce, 305,929 visitors have Google Store. Economy and Accounting streams. browsed the facebook page of JCorp for information on the quiz P 88 P 89 SECTION 4 SECTION 4 Prospects Prospects

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GROUP HUMAN CAPITAL GROUP HUMAN CAPITAL MANAGEMENT DIVISION MANAGEMENT DIVISION For this purpose, as many as 50 employees were identified as high- SUCCESSION PLANNING potential candidates to replace the current leadership. Their selection was Succession Planning is one of the strategic initiatives outlined based on performance and leadership THE GROUP HUMAN CAPITAL by Group Human Capital Management Division to identify and potential after going through a number MANAGEMENT DIVISION develop the potential of selected employees as preparation to of assessments including external PLAYS AN IMPORTANT ROLE replace the lineup of leaders in the future. consultants under the Leadership Assessment Centre programme. IN SUPPORTING JCORP’S ADMINISTRATION AND THE GROUP’S COMPANIES TO DEVELOP STRATEGIC AND SUSTAINABLE HUMAN CAPITAL. 01

PERFORMANCE MANAGEMENT

In order to measure the performance of the company and its staff, JCorp This Leadership Talent group will be in terms of leadership and personality, continued to implement the Balance monitored to ensure that they remain JCorp through the Human Capital Scorecard approach as well as Key relevant to the qualifying criteria. Development Department – Academy Performance Indicators, which began This assessment is important to ensure and the Human Capital Development in 2017. This management that their leadership talent is always Department – Education, launched eight approach ensures that JCorp’s related programmes in 2019. goals are aligned from top sufficient to steer the leaders of JCorp and the Group. To ensure the continuity management down to every in growth and development of this Amongst this was the implementation of single employee. group, exposure to career mobility has the Group Leadership & Management been implemented through transfers or Framework (LMDF) based on an outlined BALANCED SCORE CARD secondments to other companies within developed in December 2016 to shape (BSC) 02 the group to widen their experience and leaders at every level and position of self-growth. They are also given priority a worker’s development. This LMDF The BSC is the method used for promotions and additional work that programme falls under the JCorp by JCorp and its subsidiaries is more challenging. Education Sponsorship Programme to measure the organisation’s (JESP), JCorp Chartered Accountancy performance. It looks at achievement 01 Advanced HUMAN CAPITAL DEVELOPMENT Programme (JCAP), Basic Management from four different angles, comprising JLP Cohort 2 PROGRAMME Programme (BMP), Self-Transformation Financials, Shareholders, Internal 2019/2020. Programme (STP), JCorp Leadership Processes and Organisational Capacity. 02 Cultural Human capital development is important Programme (JLP), Advanced JCorp Awareness & for the continuity of an organisation. Leadership Programme (AJLP) and Acceptance Workshop. Therefore, as an organisation that seeks External Senior Leadership Development to produce successful human capital Programme (ESLDP) initiatives. P 90 P 91 SECTION 4 SECTION 4 Prospects Prospects

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GROUP HUMAN CAPITAL GROUP HUMAN CAPITAL MANAGEMENT DIVISION MANAGEMENT DIVISION

EMPLOYEE SATISFACTION SURVEY PEDOMAN

In 2019, JCorp and its group of The Group Human Capital Management companies conducted the JCorp Division is responsible for organising this Employee Satisfaction Survey with the assembly with employees of JCorp and objective of: its group of companies that is known as • Finding out about employee Majlis Perhimpunan Dialog dan Amanat satisfaction towards JCorp’s policies (PEDOMAN) that has been consistently • Identifying the issues that lead to organised for the past 35 years. In 2019, employee dissatisfaction this session was organised in the early • Identifying the issues that need to be part and the middle of the year. This improved platform serves to provide information • Outlining an action plan to improve about the company’s direction, business employee satisfaction plans, achievements and feedback from JCorp’s senior management with employees. During the assembly, promotions, as well as the appointments of first-time chairmen and directors for the Group’s companies are announced.

CULTURE INTERVENTION JCAP aims to generate professional DIVISION OPEN DAY PLAN manpower in the area of accounting from those who have To strengthen the human capital The Culture Intervention Plan undergone training at audit firms.relationship that is valued by JCorp and (CIP) began in July 2018 and Some of the accounting ceritifcations its employees, the Group Human Capital was continued in 2019 with include ICAEW, CPA and Australia’s Management Division through the the objective of strengthening MICPA. A total of 23 trainees completed Human Capital Management Division- the lifespan of JCorp 2.0 Core training in 2018-2019 and were placed in Operations, organised a host of activities Values among employees. jobs in finance, accounting and tax. including the Open Day Programme Value Behaviour Descriptors that serves as a platform to disseminate were created to become a JESP is a strategic human capital the latest information about human reference point for definitions development initiative to fulfil JCorp’sresources. of each core value, in addition to needs in critical areas in the future. aligning the understanding of A total of 68 graduates have attended This programme is organised six times each employee to the meaning this programme since 2015. Four of a year and involves both the public and of each value. Some of the CIP these graduates have graduated and are private sector. Some of the briefing activities included workshops, now serving JCorp since 2019. are related to the Human Capital campaign advertisements, Management System, Performance briefings and performance Other programmes that were carried out Improvement Plan, Assessment evaluations. included Basic Management Programme and Training, Business Performance (BMP), STP, JLP, AJLP and ESLDP. Management System, Employee Health Benefits and Property and Financial Management. P 92 P 93 SECTION 4 SECTION 4 Prospects Prospects

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GROUP IT GROUP IT ADVANCEMENT DIVISION ADVANCEMENT DIVISION while simultaneously avoiding potential losses or downtime in the event of a AP THROUGHOUT JOHOR disaster or crisis. It is also to ensure the recovery process is quick, effective and 800 access points structured, and carried out to implement the resumption of operations after a LOCATIONS disaster or crisis. ITDR covers critical and

operational applications in JCorp that 300 represents the key to assuring business CIO CIRCLE BENEFITTING confidence towards the continuity of its operations even during challenging 30,000 users THE CIO CIRCLE JOHOR times. CORPORATION 2019, DATA ANALYSIS SUKMA 2020 APPLICATION WITH THE THEME ‘CYBER RESILIENCE & INCIDENCE In taking advantage of the wealth of JCorp was given the mandate and trust RESPONSE’, WAS A CYBER organisation knowledge in the Group, by the state government to manage JCorp is determined to strengthen its the Athletes Village and Athlete Food SECURITY CONFERENCE Platform Data Analytics capabilities that it Distribution for Sukma Johor 2020 that HELD AT PERSADA JOHOR has been building since 2018. This effort, is scheduled for July 2020. To bring this ON 23 OCTOBER 2019 AS in collaboration with Universiti Teknologi biennial sports carnival to a higher level Malaysia (UTM), has succeeded in and digital base, Group ICT Advancement A FOLLOW UP TO JCORP’S improving the platform to a stage where Division has taken the initiative to MANDATE IN DRIVING CYBER it can amalgamate JCorp’s main business develop a mobile application to manage SECURITY IN JOHOR. trends with analysis, aside from social all requisite functions for the event. The media analysis and sentiments towards application can be used by athletes, the JCorp Group. It is also able to give sports officials, secretariat, suppliers such The main objective of the conference wide-ranging and in-depth views and as food coordinators and state team was to promote cyber security give focus to allow management to make managers. The digitalisation of SUKMA’s awareness and to cultivate best effective and inclusive decisions. operations has been accepted and practices for cyber security in praised by state sports administrations JCorp Group. In conjunction JCORP WIFI as a positive move, proving JCorp’s with the conference, an determination and capabilities in its agreement was signed with JCorp WiFi is the free high-speed efforts to digitalise its entire organisation. Cyber Security Malaysia (CSM) internet connection that connects comprising cyber security businesses and Johoreans. The addition initiatives organised by CSM. of new hotspots have been placed in This initiative would emphasise the KOMTAR shopping centre in Johor DC HUB well as Johor Bahru and its surrounding IT DISASTER RECOVERY the development of technical skills Bahru City Centre. This Hotspot brings areas. It is operated by JCorp’s Group for the Johor Corporation Computer the total number of access points (AP) in JCorp achieved another digital success ICT Advancement Division and offers As part of our sustained efforts to Emergency Response Team (JCERT), in Johor to more than 800, covering more with the launch of the DC Hub data centre services such as co-location, high-speed ensure JCorp’s business and operations line with JCorp’s efforts to be a member than 300 locations. The year 2020 will see that complies with Tier-III data centre internet connections, as well as managed continuity, the Group ICT Advancement of the globally-recognised Forum on additional APs being installed to expand standards, at the MSC-certified Menaraservices, including ICT support and IT Division has completed the ITDR Incident Response and Security Team coverage at the B5 Johor Street Market, JLand. This hub is capable of providing disaster recovery – ITDR. project, a strategic initiative under the (FIRST). Tampoi and the Riverside Park in Bandar data centre related services to businesses ICT Master Plan 2017-2022. This project Dato’ Onn. in Menara JLand, Menara KOMTAR as is intended to eliminate single points of failure in JCorp’s ICT infrastructure P 94 P 95 SECTION 5 SECTION 5 Corporate Governance Statement Corporate Governance Statement

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CORPORATE GOVERNANCE CORPORATE GOVERNANCE STATEMENT STATEMENT

BOARD OF DIRECTORS

Board Board Board Investment Governance & Tender & Committee Business Ecosystem Procurement (BIC) Committee Committee (BGBEC)

BOARD DIRECTORS

Composition

As enshrined in the Johor Corporation Enactment No.4 / 1968, the membership of JCorp’s Board of Directors consists of: i. A Chairman that holds the post of Johor Chief Minster; ii. Deputy Chairman appointed by the Sultan; iii. Three representatives from the Johor civil service (holding the posts of state secretary, state legal advisor and state financial officer of Johor); iv. Directors of the Corporation that are appointed under Section 12 (known as President and Chief Executive); v. Three representatives from the Federal Government; vi. Three independent directors appointed by the Sultan who have qualifications, experience and expertise in areas of banking, manufacturing, housing, business, finances, professional services or administration.

All Board Directors are considered to be non-executive directors except for the As a state corporation, JCorp is subjected to the laws Johor Corporation constantly upholds the Federal BOARD OF DIRECTORS AND Corporation’s Director who is also the President and Chief Executive. of its formation which include the Johor Corporation Government’s recommendations and initiatives, BOARD COMMITTEES Enactment No.4/1968 and Amendment; Enactment especially in the context of corporate governance. Role and Responsibilities No.5/1995, the Corporation Act (State Legislative JCorp also ensures that its administrative affairs and To carry out their tasks, the Board is Competency) 1962 (Act 380) and Loan Guarantee operations always adhere to good corporate governance supported by three key committees, The Board of Directors is responsible for the overall performance of JCorp by setting Act (Establishment of the Corporation) 1965 (Act 96). practices, with the believe that a robust corporate namely the Board of Investment its direction and objectives, ensuring that JCorp fulfils its main role as the leading governance framework will contribute to an improvement Committee, Board of Governance developer of Johor’s economy, and that it is done efficiently and effectively, through in the accountability, integrity, transparency and the & Business Ecosystem Committee commercial business entities that are competitive and market leaders; as well as sustainability of a company’s initiatives. and Board of Tender & Procurement contributing to the welfare of the people through corporate responsibility initiatives. Committee. P 96 P 97 SECTION 5 SECTION 5 Corporate Governance Statement Corporate Governance Statement

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CORPORATE GOVERNANCE CORPORATE GOVERNANCE STATEMENT STATEMENT

Board Directors Attendance CORPORATE GOVERNANCE IN JOHOR CORPORATION GROUP LISTED ENTITIES

Throughout the financial year ending 31 December 2019, the Board of Directors met a total of five times. The list of JCorp’s Board JCorp supports best practices in corporate governance in the Group’s companies, especially in its four entities listed on Bursa of Directors follows: Malaysia namely KPJ Healthcare Berhad, Al-`Aqar Healthcare REIT, E.A Technique (M) Berhad and Al-Salām REIT. These four listed companies also adhere to statutory requirements, best practices and guidelines set out by the Securities Commission, Director Bursa Malaysia Securities Berhad Main Market Listing Requirements, Bursa Malaysia Corporate Governance Guidelines and the (Independent/ Date of Malaysian Code on Corporate Governance. These entities also have their respective Board of Directors and Audit Committees. No Name Position Non-Independent) Appointment YAB Dato’ Haji Osman Bin Haji Sapian Non-Independent 12/5/2018 (Former) Chief Minister of Johor/ – 1 Chairman, 13/4/2019 CORPORATE GOVERNANCE COMPONENTS IN JOHOR CORPORATION Johor Corporation Dato’ Dr Sahruddin Bin Haji Jamal Non-Independent 14/4/2019 The Governance and Business Ecosystem Division assists in mobilising governance in JCorp. The objective of the Division is as YBhg Tan Sri Dr Ali Bin Hamsa Independent 1/11/2017 follows: Deputy Chairman, – 2 • To serve independent of the JCorp Group’s sentinel role • To support the corporate governance framework, mechanism Johor Corporation 31/9/2019 that adds value to operations; and implementation of JCorp Group’s operations in areas YBhg Tan Sri Dr Ismail Bin Haji Bakar Non-Independent 1/10/2017 • To support the continuous improvement in asset lifecycle, such as: 3 Yang Berhormat Dato’ Kamaruzzaman President and Non-Independent 1/1/2017 project and contract management in JCorp Group; - Customer service management; Bin Abu Kassim Chief Executive, – • To monitor and advise on matters relating to ethics, - Procurement management; Johor Corporation 31/12/2019 management and integrity; - Human Resource management; • To catalyse JCorp Group’s Business Continuity; and - Asset management; Yang Berhormat Dato’ Haji Azmi State Secretary, Non-Independent 1/1/2017 4 - Risk management; and Bin Rohani Johor State Government - Financial management. 5 YB Dato’ Ishak Bin Sahari Legal Advisor, Non-Independent 1/1/ 2014 Johor State Government – There are a few components that are placed under this Division and each of these components play an important role in strengthening 31/12/2019 corporate governance in JCorp. The components under the Division are as follows: Yang Berhormat Dato’ Haji A. Rahim Non-Independent 20/10/2017 6 State Financial Officer, Bin Haji Nin Johor State Government CORPORATE GOVERNANCE & 7 YBhg Datuk Siti Zauyah Binti Md Desa Deputy Secretary Non-Independent 11/3/2019 BUSINESS ECOSYSTEM DIVISION General of Treasury (Policy) – Ministry of Finance 14/11/2019

8 YBhg Dato’ Azman Bin Mahmud Chief Executive Officer Non-Independent 1/3/2018 Malaysian Investment Development Authority

(MIDA) BUSINESS GROUP GROUP RISK 9 YBhg Datuk Dr Hafsah Binti Hashim Board Director, Independent 1/12/2017 GROUP COMPLIANCE GROUP INTERNAL CONTINUITY INSPECTORATE & MANAGEMENT Johor Corporation UNIT AUDIT DEPARTMENT MANAGEMENT PROJECT MONITORING DEPARTMENT DEPARTMENT DEPARTMENT 10 YBhg Datuk Ibrahim Bin Ahmad Board Director, Independent 1/9/2017 Johor Corporation 11 YB Datuk Dr Shahruddin Bin Md Salleh Deputy Minister, Independent 15/6/2018 Federal Territories Ministry P 98 P 99 SECTION 5 SECTION 5 Corporate Governance Statement Corporate Governance Statement

Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019

CORPORATE GOVERNANCE STATEMENT RISK MANAGEMENT AND INTERNAL CONTROL Aside from this, the core value of Innovation is also emphasised in JCorp and the Group’s companies. Through the Business Continuity Department, JCorp organised the JCorp Innovation RISK MANAGEMENT AND RESPONSIBILITY OF JOHOR CORPORATION MEMBERS Leadership Circle (JILC) twice, on 7 May 2019 and 1 October INTERNAL CONTROL ARE 2019 for the purpose of improving the innovation capabilities The Board of Directors is committed to creating and maintaining a risk management and of senior management in JCorp and the Group’s companies. IMPORTANT ASPECTS internal control system that is robust, effective and efficient in order to protect shareholder JILC also served as a platform to discuss suggestions, issues IN GOVERNANCE, investments and the Group’s assets. The risk management and internal control system has and challenges related to innovation while encouraging an MANAGEMENT AND been designed to identify, analyse, evaluate, control and monitor the Group’s risk so that it open discussion amongst the senior management in JCorp and is always within an acceptable risk threshold. the Group’s companies. THE OPERATIONS OF THE COMPANY. The Board of Directors considers risk management as an essential part of business The strengthening of the core value of Integrity and Teamwork RISK MANAGEMENT operations. In that regard, the Board clearly upholds its responsibility to identify the main was demonstrated through the Governance Awareness Day FOCUSES ATTENTION ON risks and ensure that a dynamic system is implemented to manage risk to an acceptable programme that took place in 3 October 2019. This programme level. was attended by all JCorp employees and management of IDENTIFYING THREATS AND OPPORTUNITIES companies in the Group. The objective of this programme was JOHOR CORPORATION GROUP RISK MANAGEMENT DEPARTMENT (GRMD) to increase awareness and knowledge of JCorp employees WHILE INTERNAL and companies in the Group about corporate governance CONTROL PREVENTS GRMD is a department in the Group Governance and Business Ecosystem that is responsible elements, human governance and integrity values through talks THREATS AND CAPITALISES for managing the risk that JCorp is exposed while also protecting the interests of JCorp and and sharing by speakers with broad experience in corporate companies in the Group. governance. This programme was also an opportunity for Johor ON OPPORTUNITIES. Corporation employees and companies in the Group to better EFFECTIVE RISK GRMD tasks and responsibilities are as follows: understand the functions of the Governance and Business MANAGEMENT AND • To identify, analyse, evaluate and mitigate the risk that JCorp and companies in the Ecosystem Division through special talks that were related INTERNAL CONTROL WILL Group are exposed to in an organised way with minimum cost; to the functions of each Department Head as well as special • To promote a risk awareness culture that encourages all employees to take part in HELP THE DECISION- counters that displayed information about the departments in managing risk and opportunities in a cost-effective way. the Division. MAKING PROCESS BY CORPORATE GOVERNANCE ACTIVITIES AND PROGRAMMES IN JOHOR CORPORATION MAKING DECISIONS THAT GROUP RISK MANAGEMENT PROCESS RISK MANAGEMENT AND INTERNAL CONTROL CONSIDER RISKS THAT Throughout 2019, various activities and programmes were At the Group level, risks arise from business operations that are going concerns. The risk that Johor Corporation’s Statement on Risk Management and NEED TO BE TAKEN AND carried out by the Governance and Business Ecosystem Division is identified is registered in a Risk Register and evaluated as severe, major, significant, minor Internal Control for the financial year ending 31 December IMPLEMENTING CONTROLS to strengthen and enhance corporate governance in Johor or trivial. The process of ranking the risk is done through a risk probability matrix and the 2019 is as stated in the Statement on Risk Management and Corporation. Some of the activities and programmes include THAT ARE NEEDED TO impact of the risk should it occur, as well as financial and non-financial impact. Thus, the risk Internal Control on page 94. the ISO 37001:2016 Anti Bribery Management Systems (ABMS) ACHIEVE THE COMPANY’S owner will carry out steps to reduce the risk to head in the direction of achieving residual risk that is at an acceptable tolerance level. certification that took place between April and October 2019. RELATIONSHIP WITH AUDITORS OBJECTIVES EFFECTIVELY. This certification is intended to prevent, monitor and combat corruption and integrity risk in JCorp, and involved all JCorp A progress report about mitigation steps taken will be reported every quarter by the risk The Board through the Board of Governance & Business owner for discussion by the Group Governance & Business Ecosystem Committee (GGBEC). employees. In addition, the certification also promotes the Ecosystem Committee always maintains a transparent and culture of Integrity and JCorp’s core values 2.0. The adequacy and effectiveness of the mitigation steps will be evaluated and enhanced if sound relationship with the internal and external auditors. necessary. The report will then be updated and sent to the Board Governance & Business Further information on the duties and responsibilities of the To encourage better corporate governance, aside from the Ecosystem Committee (BGBEC) for a strategic discussion. Mitigation steps will be further Board of Governance & Business Ecosystem Committee may be proactive steps taken to combat corruption, a forum entitled refined to ensure action plans are being carried out with the right assumptions. This referred to the Board of Governance and Business Ecosystem Forum on Corporate Liability: Awareness & Prevention was approach has yielded a risk management system that is robust, sustainable and responsive Committee Report on page 102. held on 30 April 2019. The objective of this programme is to to the changing business environment. encourage business and commercial activities to be carried out free from corruption while ensuring that sufficient steps have been taken to prevent corruption. P 100 P 101 SECTION 5 SECTION 5 Corporate Governance Statement Corporate Governance Statement

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RISK MANAGEMENT AND RISK MANAGEMENT AND INTERNAL CONTROL INTERNAL CONTROL

MAIN RISK MANAGEMENT INITIATIVES MAIN FEATURES OF INTERNAL CONTROL

The following main initiatives were implemented by the Group Risk Management Department in 2019: Control Framework the planned financial results. Specific controls are in place to ensure prudent financial management as well as safeguard ABCDE The Group’s strategy is formulated by the management team assets from physical loss and insuring them at appropriate and approved by the Board. Management has the ultimate levels. responsibility for implementing plans, identifying risks and Reviewing and Streamlining Risk Towards ISO Cooperating with Cooperating with ensuring appropriate control measures are in place. This is Investment Appraisal improving Risk Evaluation, Risk 2230:2012 (BCMS) and helping the and helping the achieved through an organisational structure that clearly Management Policies Matrix and Risk certification Group Integrity Unit Quality Unit in its defines responsibilities, levels of authority and reportingThe Group has clearly defined procedures for the approval and Frameworks in Exposure at the – Developing in obtaining ISO Compliance Process procedures. line with the latest Company level in the Business 37001:2016 Anti- Audit by SIRIM. of investments and other capital expenditures. Planned Risk Management Group; Resumption Bribery Management expenditure is set out in the annual budget. Approval of The Group adopts The Committee of the Sponsoring capital expenditure commitments is made in accordance Guidelines, ISO Management System (ABMS) Organisation of the Treadway Commission (COSO) Internal with the delegated authority levels approved by the Board. 31000:2018; Policies and certification. Control Framework and has in place manuals on policies All major investment proposals are subjected to review by Frameworks; and and procedures for accounting and financial reporting, Board Investment Committee, before being presented to delegation of authorities and authorisation levels, property the Board for approval. operations and human resource management. Monitoring Controls Financial Reporting GROUP GOVERNANCE & BUSINESS ECOSYSTEM COMMITTEE (‘GGBEC’) The effectiveness of internal financial control systems and Detailed budgets prepared by each division are reviewed by th operational procedures is monitored by the management The formation of GGBEC was approved on 28 July 2017, in line with a resolution passed in the Audit Committee’s 34 meeting. the Strategic Planning Committee before the consolidated and audited by the Group Internal Audit Department (GIA) This Committee is in charge of strengthening and further improving the management, operations and business ecosystem of budget is approved by the Board. The results from the of Johor Corporation. GIA adopts a risk-based audit plan, JCorp and the Group. Balanced Scorecard (BSC) and operations are prepared and an approach whereby the auditor focuses on the factors checked to compare against the budget that was allocated. that affect, beneficially or adversely, the achievement of the organisational objectives and its operations. Its scope Objective of the GGBEC Terms of Reference Operating Controls covers the risks themselves, and the way those risks are formation of GGBEC governed, managed and controlled. It then reports to • Review and discuss findings, conclusions and suggestions in relation to: The Group’s management teams operate within the Group’s Board Governance & Business Ecosystem Committee • To support the - Internal audit activities by the JCorp Group as well as suggesting appropriate guidelines on operating procedures designed to achieve (BGBEC) on internal control weaknesses and monitors the functions of actions to be taken next; optimum operating efficiency and service effectiveness and implementation of recommendations for improvements. the Board of - Main risks that have been identified, category of risk, effects and mitigation as well Governance & as suggesting appropriate actions to be taken next; Business Ecosystem - Improving corporate governance practices as well as good project management; INTERNAL AUDIT Committee as an - The needs of top management, policies and the institution’s procedures. institution that • Aligning all matters that are related to ethics, management integrity, operations and Internal audit function of Johor Corporation is undertaken by the Group Internal Audit Department (GIA) and the department carries out check and business that are raised by the JCorp Group. reports directly to the BGBEC. GIA receives reports from the Internal Audit Department of Johor Corporation Group of balance tasks and • All matters discussed by the Committee are considered private and confidential; Companies for review and deliberations by the BGBEC. The department plans its internal audit schedules each year in consultation with the management; (but is independent from it) and the plan is submitted to BGBEC for approval. responsibilities as • The committee will manage any conflicts of interest that arise; and well as to improve • Meeting procedures: Johor Corporation is also a corporate member of the Institute of Internal Auditors Malaysia (IIAM). GIA subscribes to, and is the management and - Frequency – once a quarter guided by the International Standards for the Professional Practice of Internal Auditing (“the Standards”) and has incorporated operations of JCorp - Chairman – Head of JCorp’s Governance & Business Ecosystem Division these Standards into its audit practices. The Standards cover requirements on independence, professional proficiency, scope and the Group. - Member – Heads of Governance from the JCorp Group (Core Businesses). of work, performance of audit work and management of internal audit activities.

To ensure that the internal audits are performed by competent professionals and technical knowledge remains current and relevant, GIA provides appropriate training and development opportunities to its staff, including the Certified Internal Auditor (CIA) programme. At present, there are eight practicing CIAs throughout Johor Corporation Group. For the year ending 31 December 2019, GGBEC met three times in April, July and September to discuss the latest status and reports related to the Group Governance function in the areas of internal audit, risk management, compliance, integrity, project management and technical audit. P 102 P 103 SECTION 5 SECTION 5 Corporate Governance Statement Corporate Governance Statement

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BOARD GOVERNANCE & BUSINESS BOARD GOVERNANCE & ECOSYSTEMCOMMITTEE REPORT BUSINESS ECOSYSTEM External Audit and Financial Statement Ethics and Integrity

• Review the year-end financial statements of Johor • Oversee, review and advise on matters pertaining to ethics COMMITTEE REPORT Corporation, focusing particularly on: and integrity of management, operations and transactions − Compliance with accounting standards and other legal highlighted/raised by JCorp and its Group of Companies. Composition requirements; − Any changes in accounting policies and practices; Business Continuity Management BGBEC is chaired by Yang Berbahagia Datuk Ibrahim Ahmad, an independent member of the Board and consists of three members. − Significant adjustments arising from the audit; and − Special emphasis. • Review, deliberate and advise on the implementation of • Meet separately with the external auditors; strategic initiatives for JCorp business continuity that focuses Yang Berhormat Dato’ Haji A. Rahim Haji Nin is a member of the JCorp Board and is currently the State Financial Officer of Johor. • Review the findings of the external auditors and response on: from management; Puan Zainah Mustafa is an independent member of the Committee and is a Fellow of the Association of Certified Chartered − Implementation of policies prescribed by Johor Accountants (ACCA) United Kingdom. • Discuss the problems or observations arising from the Corporation Strategic Innovation and Corporate interim and final work of the audit; and Responsibility Frameworks; ATTENDANCE AT MEETINGS • Recommend for Board consideration and approval of Johor − Implementation of the projects stipulated in Johor Corporation’s Financial Statements. Corporation Strategic Innovation and Corporate Responsibility Frameworks and the activities/ initiatives BGBEC meets on a scheduled basis at least four (4) times a year. In 2019, BGBEC met on five (5) occasions (including two (2) special meetings) as follows: Risk Management related thereto; − Creation of a conducive innovation ecosystem; DATE OF MEETING • Ensure risk management process is comprehensive and − Business sustainability; and continuous; and 26 FEBRUARY 17 MAY 5 JULY 27 SEPTEMBER 6 DECEMBER − Assessing the impact and outcomes of JCorp business continuity strategic initiatives . (Special (Special • Review and deliberate the findings, conclusions and recommendations by the Group Risk Management Meeting) Meeting) Department in relation to key risk identified basedStrategic on their Planning YBhg Datuk Ibrahim Ahmad ///// categories, impact and mitigation as well propose the YB Dato’ Haji A. Rahim Haji Nin ///// actions pursuant thereto. • If necessary, review and deliberate on strategic planning of Johor Corporation and its Group of Companies. Puan Zainah Mustafa ///// Compliance Other Responsibilities DUTIES AND RESPONSIBILITIES • Ensures compliance of Johor Corporation’s management, operations and business activities with key legal • Catalyze institutional commitment to strong and effective The Board Governance & Business Ecosystem Committee discussed the following matters: requirements, institutional policies and procedures. internal controls; • Continuous review of policies related to audit, risk Internal Audit Inspectorate management, inspectorate and project monitoring, ethics and integrity and compliance vis-à-vis regulatory • Monitor the internal audit process in JCorp and its Group of • Ensure a comprehensive framework for a dynamic audit, • Review and deliberate the findings, conclusions and requirements, conflicts of interest and fraud prevention; Companies; governance and implementation for internal and external recommendations by the Group Inspectorate and Project • Monitor the status of current and pending key litigations that • Review and approve the annual internal audit plans of JCorp audit; and Monitoring Department as well as propose the actions to involve JCorp and its Group of Companies; and and companies in the group; • Catalyze a healthy and collaborative relationship between be taken to improve corporate governance and project • Ensures adequate access to information required for • Review and deliberate reports and findings pursuant to Johor Corporation internal and external audit functions with management. the effective performance of Johor Corporation internal internal audit exercises by Johor Corporation and internal internal management and operations. functions. audit departments in its Group of Companies as well as propose the actions pursuant thereto; P 104 SECTION 5 Corporate Governance Statement

Johor Corporation / Annual Report 2019

BOARD GOVERNANCE & BUSINESS ECOSYSTEM COMMITTEE REPORT

SUMMARY OF ACTIVITIES

Activities carried out by the Board Governance & Business Ecosystem Committee throughout the financial year ending 31 December 2019 are as follows:

• Review reports by the Board Governance & Business • Review the completion of JCorp’s Business Continuity Ecosystem Committee which held meetings on 1 April strategic initiatives executed throughout the year 2019 2019, 18 July 2019 dan 20 September 2019; by the Business Continuity Management Department;

• Review and deliberate reports and findings pursuant • Discuss the findings reported by the Inspectorate and to internal audit exercises by Johor Corporation and its Project Monitoring Department and recommend for departments as well as propose the actions pursuant improvement towards better corporate governance thereto; practices and project management;

• Discuss problems and issues that arise during the audit, • Discuss the relevant Acts and Guidelines that govern and any matter both internal and external auditors may Johor Corporation and its Group of Companies, as well wish to discuss confidentially; as a status report on compliance and mitigation plans;

• Review the adequacy of the scope, functions and • Discuss the completion of initiatives and activities resources of the external auditors, and that it has the undertaken by the Group Integrity Unit throughout the necessary authority to carry out its work; year 2019;

• Review the results of year-end audit by the external • Review the current status of legal actions involving auditors and discussed the findings and other concerns Johor Corporation and its Group of Companies. of the external auditors; Johor Corporation Level 11, Menara KOMTAR, Johor Bahru City Centre, 80000 Johor Bahru, Johor, Malaysia.

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