GENTING MALAYSIA BERHAD(58019-U) Genting Malaysia Berhad (58019-U) 24th Floor, Wisma Genting Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia T : +603 2178 2288 / 2333 2288 F : +603 2161 5304 www.gentingmalaysia.com www.gentingmalaysia.com OUR VISION To be a leading integrated resort operator in the world. OUR MISSION We are committed towards providing the most delightful and memorable experiences to our customers. We aim to generate sustainable growth and profits, and to consistently enhance our stakeholders’ value. CORPORATE PROFILE Genting Malaysia Berhad (“Genting Malaysia”) (www.gentingmalaysia.com) is one of the leading leisure and hospitality corporations in the world, with strong financial position and management leadership. Genting Malaysia was incorporated in 1980 and was subsequently listed on Bursa Malaysia’s Main Market in 1989. Genting Malaysia owns and operates major properties including Resorts World Genting, Genting Casinos UK Limited (“Genting UK”) and Resorts World Casino New York City (“RWNYC”). Genting Malaysia’s primary attraction of Resorts World Genting (www.rwgenting.com) is a premier leisure and entertain- ment resort located at Genting Highlands, Malaysia. Resorts World Genting was a five-time winner of the World’s Leading Casino Resort (2005, 2007-2010) and six-time winner of Asia’s Leading Casino Resort (2005-2010) at the World Travel Awards, and it contains over 8,000 rooms at five hilltop hotels, 50 theme park rides and entertainment attractions, 200 retail and food & beverage outlets, international shows and business convention facilities. Genting Malaysia also owns and operates the Awana Hotels & Resorts chain (www.awana.com.my), which comprises Awana Genting Highlands Golf & Country Resort and two beautiful seaside properties namely Awana Kijal Golf, Beach & Spa Resort in Terengganu and Awana Porto Malai in Langkawi. With its headquarters located in Kuala Lumpur, Genting Malaysia has since 2010 expanded its operations to the United Kingdom (“UK”) and the United States of America. Genting UK (www.gentingcasinos.co.uk) is the largest casino operator in the UK and a leading innovator in the provision of high quality customer-focused gaming. It operates five casinos and a poker club in London, as well as 38 casinos in other parts of the UK. Genting UK also holds a casino licence to develop Resorts World at The NEC (www.resortsworldnec.co.uk), a leisure and entertainment complex at the National Exhibition Centre in Birmingham. When completed, it will feature a casino, hotel accommodation, spa, conference and banqueting centre, cinema, food & bever- age outlets and a retail outlet centre. RWNYC (www.rwnewyork.com) was newly opened at the Aqueduct Racetrack in 2011 as the first video lottery facility within the city of New York. Developed and operated by Genting New York LLC, the resort is a premier entertainment hub providing the ultimate gaming and entertainment experience, with over 5,000 electronic gaming machines, food & bever- age outlets, event spaces and shows. Genting Malaysia is a member of the Genting Group, one of Asia’s best-managed conglomerates. The Genting Group is the collective name for Genting Berhad, its subsidiaries and associates, which have significant interests in leisure & hospi- tality, power generation, oil palm plantations, property development, biotechnology and oil & gas related activities. CONTENTS 2 Chairman’s Statement / Penyata Pengerusi / 8 Board of Directors 10 Directors’ Profile 14 Management & Corporate Information 15 Corporate Diary 16 Financial Highlights 17 Management’s Discussion and Analysis of Business Operations and Financial Performance 20 Operational Review 27 Awards and Accolades 28 Sustainability Report 36 Corporate Governance 41 Audit Committee Report 43 Statement on Internal Control 45 Directors’ Report and Statement by Directors Financial Statements: 50 Income Statements and Statements of Comprehensive Income 51 Statements of Financial Position 52 Statements of Changes in Equity 55 Statements of Cash Flows 60 Notes to the Financial Statements 110 Statement on Directors’ Responsibility 110 Statutory Declaration 111 Independent Auditors’ Report 112 Five-Year Summary 113 List of Properties Held 116 Analysis of Shareholdings 118 Notice of Annual General Meeting 122 Statement Accompanying Notice of Annual General Meeting Form of Proxy Group Offices CHAIRMAN’S STATEMENT Dear Fellow Shareholders, On behalf of the Board of Directors, I am delighted to present to you the Annual Report and Audited Financial Statements of Genting Malaysia Berhad (“Company”) and its group of companies (“Group”) for the financial year ended 31 December 2011. I am pleased to report that the Group has recorded another successful year, despite operating in competitive and challenging environments. Our United Kingdom (“UK”) business has performed well in spite of the uncertainties facing the UK economy. We also welcomed the maiden contribution from the operations of Resorts World Casino New York City (“RWNYC”). The Group’s revenue for 2011 was RM8.49 billion, an This has been one of the increase of 59% over RM5.33 billion in the previous year. The adjusted earnings before interest, taxes, depreciation and most exciting periods in the amortisation (“adjusted EBITDA”) of RM2.33 billion reflects a year on year increase of 15% (2010: RM2.02 billion). The “ history of the Group. We increase was mainly attributable to the leisure and hospitality are implementing a growth segment of the Group. strategy geared towards The Malaysian leisure and hospitality operations recorded revenue of RM5.42 billion in 2011, representing a 7% international expansion of increase over 2010. The corresponding adjusted EBITDA for the Malaysian operations increased by 7% to RM2.11 our core leisure, hospitality billion (2010: RM1.98 billion). These increases were mainly and entertainment due to the overall higher volume of business and higher hold percentage in the premium players business. Despite business. the intense regional competitive operating environment, the Group maintained its adjusted EBITDA margin for Malaysia at 39%. ” Our UK businesses registered revenue of RM1.15 billion and an adjusted EBITDA of RM154.1 million, with London casino properties being the major contributors. Our strategy to leverage on our Asian clientele network to grow the premium players business at our London-based casinos has proven successful. The revenue and adjusted EBITDA for our United States (“US”) businesses are RM1.84 billion and RM37.0 million during the year. Construction revenue and profit from the development of RWNYC were RM1.74 billion and RM13.4 million respectively. The remaining revenue and adjusted EBITDA of RM95.3 million and RM23.6 million were mainly contributed by RWNYC operations. Excluding the construction revenue and construction profit, the Group’s revenue and adjusted EBITDA would have increased by 27% and 14% respectively. The Group’s 2011 profit before tax of RM1.90 billion was 9.8% higher (2010: RM1.73 billion) primarily because of higher adjusted EBITDA and significantly lower impairment charges. This is offset by higher depreciation and amortisation charges of RM93.1 million mainly from our UK and US operations, as well as higher pre-operating expenses of RM56.3 million incurred for RWNYC and the master plan development in Miami. We also incurred property- related termination costs of RM39.4 million on purchase of properties in Miami. 2 I GENTING MALAYSIA BERHAD ANNUAL REPORT 2011 CHAIRMAN’S STATEMENT We are mindful of the need to conserve funds to take Due to the uncertain global economic climate, we are advantage of potential investment and expansion cautious on the outlook for the leisure and hospitality opportunities whilst recognising the importance of rewarding industry. Nevertheless, we have seen that in this region, our shareholders, many of whom have remained steadfast to industry sentiments have benefited from higher tourism the Group for a long time. In this context, we will endeavour arrivals, receipts and disposable incomes. Growth in the to maintain a consistent dividend payout in line with the gaming industry is expected to be a global trend in the performance of the Group. On 21 October 2011, the coming year, mainly driven by key Asian markets. Company paid an interim dividend of 3.8 sen less 25% tax per ordinary share of RM0.10 each, amounting to RM161.23 In 2011, Malaysia received over 24.7 million tourists and million. The Board of Directors recommended a final gross generated RM58.3 billion in tourism revenue. This is in line dividend of 4.8 sen per share for shareholders’ approval at with the Malaysia Tourism Transformation Plan 2020 which the forthcoming Annual General Meeting, bringing the total has a target of achieving 36 million tourist arrivals and tourism gross dividend per share declared by the Company for the revenue of RM168 billion receipts by 2020. Such projected financial year ended 31 December 2011 to 8.6 sen (2010: growths can only augur well for our Malaysian operations. 8.0 sen). In Malaysia, our emphasis on service excellence and yield In the UK, we initiated a major re-branding programme, with management were instrumental in addressing intense Genting Club and Genting Casino to eventually replace the regional competition. Yield management strategies have Circus, Maxims and Mint brands. The Genting Club brand is reaped tangible benefits and will continue to be pursued. We oriented towards a wider leisure offering, whereas the Genting will also capitalise on regional growth in the premium players Casino brand has a more focused offering on traditional business. Along with property enhancement initiatives at gaming. The re-branding programme is aimed at bringing a Resorts World Genting, these efforts bear testimony to our more modern and contemporary style to our casinos. Derby commitment towards enhancing the leisure, entertainment Riverlights, our first property under the new Genting Club and hospitality experiences of our customers. brand opened its doors to the public in November 2011. During the year, we secured a casino licence in Birmingham to In the UK, the subdued economic environment will not deter develop the upcoming Resorts World at the NEC.