www.genting.com GENTING GROUP We are a leading multinational corporation committed to enhancing shareholder value and maintaining long-term sustainable growth in our core businesses. OUR MISSION We will: Be responsive to the changing demands of our customers and excel in providing quality products and services. Be committed to innovation and the adoption of new technology to achieve competitive advantage. Generate a fair return to our shareholders. Pursue personnel policies which recognise and reward performance and contributions of employees and provide proper training, development and opportunities for career advancement. Be a responsible corporate citizen, committed to enhancing corporate governance and transparency. CORPORATE PROFILE Genting Berhad (www.genting.com), Malaysia’s leading corporation is the holding company of the Genting Group, one of Asia’s best-managed conglomerates. The Group comprises four listed entities namely Genting Berhad and its subsidiaries, Genting Malaysia Berhad (“Genting Malaysia”), Genting Plantations Berhad (“Genting Plantations”) and Genting Singapore PLC (“Genting Singapore”) with a combined market capitalisation of over RM124 billion (USD41 billion). With about 55,000 employees, 4,500 hectares of prime resort land and 228,000 hectares of plantation land, the Group’s principal businesses include leisure & hospitality, power generation, oil palm plantations, property development, biotechnology and oil & gas. The Genting Group has established premier leisure brands such as “Resorts WorldTM”, “Maxims” and “Crockfords”. In addition to Premium Outlets®, Genting companies have tie ups with Universal Studios®, Hard Rock Hotel and other renowned international brand partners. Backed by 47 years of solid financials and strong management leadership, the Genting Group is committed to grow in strength as a responsible global corporation. Contents Chairman’s Statement / Penyata Pengerusi / 主席文告 2 Board of Directors 10 Directors’ Profile 12 Management & Corporate Information 16 Group Corporate Structure 17 Corporate Diary 18 Financial Highlights 19 Management’s Discussion and Analysis of Business Operations and Financial Performance 20 Year in Review 22 Awards and Accolades 32 Sustainability Report 33 Corporate Governance 41 Audit Committee Report 48 Statement on Risk Management and Internal Control 51 Directors’ Report and Statement by Directors 53 Financial Statements: Income Statements 59 Statements of Comprehensive Income 60 Statements of Financial Position 61 Statements of Changes in Equity 62 Statements of Cash Flows 65 Notes to the Financial Statements 69 Statement on Directors’ Responsibility 145 Statutory Declaration 145 Independent Auditors’ Report 146 Five-Year Summary 147 List of Properties Held 148 Analysis of Shareholdings 153 Notice of Annual General Meeting 155 Statement Accompanying Notice of Annual General Meeting 159 Form of Proxy Group Offices Genting Premier Brands Chairman’s Statement Dear Shareholders, It was a busy year for Genting in 2012, as we worked hard to strengthen our key businesses amidst the uncertainty in the global economy. In 2012, the Group recorded revenue of RM17.3 billion (2011: RM18.6 billion) and profit before tax of RM4.9 billion (2011: RM6.4 billion) from continuing operations. Economic and credit uncertainty across the broader industry impacted Resorts World Sentosa (“RWS”) but it still turned in a good set of results and non-gaming businesses such as Universal Studios Singapore® and the hotels did well. This year, the pick-up in sentiment across global markets and in Asia is expected to help develop new gaming customers and tourists from new markets to visit the resort. RWS celebrated its Grand Opening on 7 December 2012. The resort remains the only destination in Southeast Asia to offer iconic family attractions such as the new Marine Life Park™, the world’s largest oceanarium. Comprising S.E.A. Aquarium™ - the world’s largest aquarium and Adventure Cove Waterpark™ - a water theme park, Marine Life Park™ dazzles with more than 800 species of marine animals as well as fun and exciting rides. Another new attraction is Asia’s flagship ESPA, offering 10,000 square metres of world-class luxury spa experiences backed by 30 years of spa heritage. Universal Studios Singapore remains a very popular attraction in Singapore and the only Universal Studios theme park in Southeast Asia. In November 2012, Genting Singapore’s wholly-owned subsidiary Tamerton Pte Ltd won a bid for a hotel site at Jurong Town Hall Road. Sited along Singapore’s western highway that connects the second Malaysia/Singapore border crossing to Sentosa and RWS, this new hotel is slated to open in 2015 with more than 500 rooms to complement RWS, less than 20 minutes’ drive away. The hotel will be the first to open in the buzzing Jurong Gateway area, giving it a first-mover advantage as the Singapore Government continues to develop the precinct with new commercial, business and leisure facilities. Genting Malaysia’s Resorts World Genting performed commendably in 2012, despite strong regional competition. Genting Malaysia will continue to focus on increasing visitations and customer spend at Resorts World Genting in Malaysia through innovative marketing strategies, exceptional value offerings and leveraging on recently refurbished premier facilities for its guests. In the United Kingdom (“UK”), the economic backdrop remains fragile with a slow but sustained recovery anticipated. Nonetheless, we are encouraged by the higher growth in patronage and business volume of premium players in Genting UK’s London casinos in 2012. The development and refurbishment programme of Genting UK’s provincial casinos will continue in 2013 to improve the competitiveness of their offerings while the London casinos will remain focused on growing their premium players business. 2 GENTING BERHAD Annual Report 2012 Chairman’s Statement (cont’d) Genting Malaysia’s team in the UK is also working on the development Genting Plantations posted lower revenue in 2012 due to weaker of Resorts World Birmingham, set to be ready by 2015. The ground- palm product selling prices which offset the effects of an increase breaking ceremony to officially start the construction of this £150 in fresh fruit bunches (“FFB”) production. Higher production costs million seven-storey integrated leisure and entertainment complex incurred including labour and fertiliser, resulted in lower profit. took place on 4 February 2013. When completed, the resort will Genting Plantations has steadily increased its landbank. Total provide a wide range of exciting leisure and entertainment offerings landbank in Malaysia and Indonesia now extends to over 228,000 for visitors to the National Exhibition Centre in Birmingham and beyond. hectares, making Genting Plantations one of Malaysia’s largest listed plantation companies by land area. In the United States of America (“US”), Resorts World Casino New York City completed its first full year of operations with excellent This year, Genting Plantations remains on track to deliver continued results, achieving the highest grossing slot operation by revenue growth in FFB production. The Indonesian plantations are expected in North America in 2012. With improved transportation links and to perform better in 2013, following the completion of two new palm extensive initiatives on growing its US customer base, we can expect oil mills. Meanwhile, the new and revised minimum wage schemes this leisure property to contribute further to the Group’s performance. introduced in Malaysia and Indonesia in early 2013 will increase labour costs for the plantation industry. Our plantations team will In addition, Genting Malaysia is making progress towards the opening continue with ongoing efforts to raise operational efficiency and in the second half of 2013 of Resorts World Bimini Bahamas, a luxury productivity to minimise these cost pressures. boutique resort and casino facility in the Bahamas. Genting Property will remain focused on developing Genting The Genting Energy division is venturing into the Indonesian power Indahpura, its flagship project in Johor, by expanding the array of market via the development of a 660MW coal-fired power plant in property offerings through planned launches to tap the growing Banten province, West Java, with an estimated project cost of about interest in Iskandar Malaysia. Johor Premium Outlet did well in 2012, USD1 billion. A 25-year power purchase agreement was signed with its first full year of operations. It has become a popular shopping and the Indonesian national utility company in July 2012 and we have retail tourist attraction in Malaysia and Southeast Asia. Phase Two of started clearing the land for the construction works. A USD730 million its expansion will add 40 new brand name stores to its offerings and long term loan facility was signed with a consortium of 5 lenders on is targeted to open by the last quarter of 2013. 10 May 2013 for the construction of the plant which is expected to commence commercial operation in 2016. Our biotechnology team at ACGT Sdn Bhd and Genting Green Tech Sdn Bhd continue to develop their research & development capabilities In October 2012, we completed the sale of the Kuala Langat power and are collaborating with renowned partners to seek solutions for plant in Malaysia for RM2.3 billion to 1Malaysia Development Bhd. sustainable agriculture. The earnings contribution from the Group’s power division will be reduced in 2013 following this sale. We will maintain