KFC HOLDINGS (MALAYSIA) BHD 65787-T

Notice of Annual General Meeting6. To transact any other ordinary business of which due notice shall have been given.FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a memberwho shall be entitled to attend this 32nd AGM, the Company shall be requesting BursaMalaysia Depository Sdn Bhd in accordance with Article 64 of the Company’s Articles ofAssociation and Paragraph 7.16 of the Listing Requirements to issue a General MeetingRecord of Depositors (“ROD”) as at 14 May 2012. Depositors whose names appear on theROD as at 14 May 2012 are entitled to attend, speak and vote at the said meeting.BY ORDER OF THE BOARDIDHAM JIHADI BIN ABU BAKAR, ACIS (MAICSA 7007381)HENG AI LENG (MAICSA 7017245)Company SecretariesKuala Lumpur27 April 2012Notes:1. A member of the Company entitled to be present and vote at the above AGM may appoint a proxy or proxies to be present andvote instead of him. A Proxy may but need not be a member of the Company.2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing orif the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.3. A member of the Company may appoint more than two (2) proxies to attend the AGM. Where a member of the Company appointstwo (2) or more proxies, the appointment shall be invalid unless the member specifies the proportion of his shareholdings to berepresented by each proxy.4. Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act,1991, he may appoint at least one (1) proxy in respect of each securities account he holds with ordinary shares of the Companystanding to the credit of the said securities account.5. Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories)Act, 1991, there will be no limit to the number of proxies which the exempt authorized nominee may appoint.6. Any alteration made in this form should be initialed by the person who signs it.7. The Proxy Form and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy of thatpower of authority must be deposited at Tricor Investor Services Sdn Bhd, Level 17, The Gardens North Tower, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or anyadjournment thereof.12KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Notice of Annual General MeetingExplanatory Notes on Special Business1. Resolution Pursuant to Section 132D of the Companies Act 1965The Ordinary Resolution proposed under item 5(a), if passed, will give the Directors of the Company, from the date of the aboveGeneral Meeting, authority to issue and allot ordinary shares from the unissued share capital of the Company being for suchpurposes as the Directors consider would be in the interest of the Company. This authority will, unless revoked or varied at aGeneral Meeting, expire at the conclusion of the next AGM of the Company.The Company had, at the 31st AGM held on 27 April 2011, obtained its shareholders’ approval for the general mandate forissuance of shares pursuant to Section 132D of the Act. The Company did not issue any new shares pursuant to this mandateobtained as at the date of this notice. The Ordinary Resolution 8 proposed under item 5(a) of the Agenda is a renewal of the generalmandate for issuance of shares by the Company under Section 132D of the Act. At this juncture, there is no decision to issuenew shares. If there should be a decision to issue new shares after the general mandate is obtained, the Company will make anannouncement in respect of the purpose and utilisation of proceeds arising from such issue.The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placingof shares, for purpose of funding future investment project(s), working capital and/or acquisitions.2. Resolution pursuant to the Proposed Renewal of the Share Buy-Back AuthorityThis resolution proposed under item 5(b) will empower the Directors of the Company to purchase the Company’s shares up toten percent (10%) of the issued and paid-up share capital of the Company by utilizing the funds allocated which shall not exceedthe total retained earnings and share premium of the Company. This authority will, unless revoked or varied at a General Meeting,expire at the conclusion of the next AGM of the Company.Further information on the Proposed Renewal of the Share Buy-Back Authority are set out in the Circular to Shareholders of theCompany which is dispatched together with the Company’s Annual Report for the year ended 2011.3. Resolution pursuant to the Proposed Shareholders’ Mandate for RRPTThis resolution proposed under item 5(c) will enable the Company, its subsidiaries or any one of them to enter into any recurrenttransactions of a revenue or trading nature which are necessary for the Company and/or its subsidiaries day-to-day operations,subject to the transactions being in the ordinary course of business, made at arm’s length and on normal commercial terms andare not to the detriment of the minority shareholders of the Company.Further information on the Proposed Shareholders’ Mandate for RRPT are set out in the Circular to Shareholders of the Companywhich is dispatched together with the Company’s Annual Report for the year ended 2011.13KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Statement Accompanying Notice ofAnnual General Meeting1. DIRECTORS WHO ARE STANDING FOR RE-ELECTION AT THE ANNUAL GENERAL MEETING(a) The Directors retiring by rotation pursuant to Article 89 of the Articles of Association are:(i) Ahamad bin Mohamad(ii) Datuk Ismee bin Ismail(iii) Hassim bin Baba(b) The Director retiring by rotation pursuant to Article 96 of the Articles of Association is:(i) YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah AlhajThe details of the directors seeking re-election are set out in the Directors’ Profiles which appear on pages62 to 71 of the Annual Report.2. DETAILS OF ATTENDANCE AT BOARD MEETINGS HELD IN THE FINANCIAL YEAR ENDED31 DECEMBER 2011There were six (6) Board Meetings held during the financial year ended 31 December 2011 and the followingare the details of the Board attendance:Name of DirectorsNo of Meetings Attended1. Kamaruzzaman bin Abu Kassim6/62. Ahamad bin Mohamad6/63. Jamaludin bin Md Ali6/64. Hassim bin Baba6/65. Kua Hwee Sim6/66. Tan Sri Dato’ Dr Yahya bin Awang6/67. Datuk Ismee bin Ismail3/68. Datin Paduka Siti Sa’diah binti Sheikh Bakir4/69. YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum3/4Sultan Salahuddin Abdul Aziz Shah Alhaj(Appointed on 1 June 2011)3. THE 32ND ANNUAL GENERAL MEETING WILL BE HELD AT LEVEL 3, WISMA KFC, NO 17, JALANSULTAN ISMAIL, 50250 KUALA LUMPUR ON TUESDAY, 22 MAY 2012 AT 11.30 A.M.14KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

we bringCheery Smiles.16KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

17KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

.with a splash ofMouth-wateringVarieties.At our restaurants, we are proud to provide our customers with onlythe best value everyday. From our meals for one, to meals sharedwith family and friends, you will find a delicious meal that suits youat a great price.18KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

19KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate StatementThe Group ContinuouslyAchieves SpectacularGrowthCONSOLIDATING ACHIEVEMENTSAgainst this background, 2011 was yet another year ofoutstanding achievement for KFCH. Most importantly,a fundamentally stellar financial performance hasenabled the Group to continue making major capitalinvestments that will secure the future of the Groupfor years to come, while maintaining a healthy bottomline for the period under review.Fellow stakeholders,The growth achieved by the KFC Holdings (Malaysia)Bhd (KFCH) Group between 2006 and 2010 wasphenomenal. In just five years, the number of KFCoutlets increased from 443 to more than 600, asthe Group not only entrenched its leadership ofthe Malaysian food service sector but expandedits network in Singapore, Brunei and into India.Moreover, this massive increase in outlets wasmatched by a consistent and spectacular growth inboth revenues and profits.In short, for KFCH, after five years of remarkablegrowth, 2011 was a story of consolidation that haspositioned the Group to take the next leap forward in2012 and beyond.18KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate StatementFrom Left to Right :AHAMAD BIN MOHAMADDeputy ChairmanKAMARUZZAMAN BINABU KASSIMChairmanjamaludin BIN md alIManaging DirectorECONOMIC BACKGROUNDThe global economy remained fragile throughout2011. The still unfolding financial turmoil in Europebegan to impact developing and other high-incomecountries. In certain parts of the world, this effectivelydepressed stock markets and pushed up borrowingcosts, while capital flows to developing nations fellsharply.Towards the year end, these conditions dampenedSoutheast Asia’s growth outlook and started toweigh down on the near-term prospects for theMalaysian economy.19KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate StatementNevertheless, in 2011 the Malaysian economyremained resilient, achieving GDP growth of 5.1%,underpinned by strong domestic demand and animprovement in the external sector arising from firmregional demand.However, growth moderated in the last quarter onaccount of external developments, while towards theyear end both manufacturing sector sentiment andconsumer sentiment declined, albeit slightly.In Singapore, GDP stood at 4.9%, with a healthy7.6% growth in the manufacturing sector offsettinga contraction in the electronics cluster and slowergrowth in the precision engineering and chemicalsclusters. The Accommodation & Food Services andOther Services industries grew by 5.8% and 6.7%respectively on the back of healthy visitor inflows.GDP growth in India fell to around 7% in 2011, withthe economy hampered by a mix of domestic andglobal events, including the Eurozone crisis, a risingfiscal deficit, high inflation and a lack of policy reformsto help industry and agriculture.2011 Key Financial Highlights:DELIVERING RESULTS Revenue of all KFC restaurants of the GroupAgainst this background, although all the Group’s Revenue at KFC Malaysia hit RM1,655.3 million,climbed 11.5% to RM2,104.7 % up on last year, and achieved Same Storepressures with higher food, commodity and energySales Growth of 4.6%costs, KFCH once again achieved commendable KFC Singapore achieved 11% revenue growth tosales growth. Total revenue for the year increased toRM409.1 milliona record high of RM2,798.8 million, up 11% on the KFC Brunei advanced its revenue to RM20.5RM2,522.4 million achieved in 2010.million, a 25% increase on 2010’s figure KFC India generated RM19.8 million of revenue,Not surprisingly however, given the strategic217.9% higher than the previous yeardecision to make major capital investments, profit KFC Marketing Sdn Bhd (KFC Marketing) postedbefore tax (PBT) dipped 2.8% to RM215.5 milliona 23.3% jump in revenue to RM273.1 millionfrom RM221.8 million the year before. Specifically, Kedai Ayamas sales shot up 41.1% to RM77.7the Group invested some RM104.2 million during themillionyear in vital supply chain facilities, while its operations KFC Events Sdn Bhd (KFC Events) reportedin KFC India and KFCH International College incurredRM4.1 million in revenue arising from commissioninitial start-up cost as they build the critical mass thatgenerated from RM41 million sales, contributedwill soon carry them from break-even to profit.by catering, site selling and voucher marketing ofIn addition, the 2010 profit included a net surplusvarious corporate clientsKFC, Pizza Hut, RasaMas and Kedai Ayamas tofrom revaluation of properties of RM6.7 million. On Revenue (including intercompany sales) at thea comparable basis, the Group’s PBT thereforeGroup’s Integrated Poultry segment improved toimproved slightly by 0.2% or RM 0.4 million againstRM1,472 million, a 13.8% gain on 2010the prior year.20KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate StatementDividendsThe Group declared a total interim dividend of 3 senless tax of 25% per ordinary share for the financialyear ended 31 December 2011. No final dividendwas proposed for the financial year 2011.INVESTING IN STRONG FOUNDATIONSKFCH’s expansion in 2011 was dedicated to threevital aspects of the Group’s operations: regionalexpansion; people and supply chain.Major InitiativesImplemented Duringthe Year Included theConstruction of NineDrive-Thru Outlets inPeninsular Malaysia,and the Penetration ofKFC into Small TownsEspecially in the EastCoast of PeninsularMalaysia, Sabah andSarawak.Investing in Expansion2011 saw KFC’s Malaysian network expand byanother 24 outlets. With the rapid growth of the KFCrestaurant chain in Malaysia, our nation can nowboast one of the highest ratios of KFC restaurantsper capita in the world.Major initiatives implemented during the yearincluded the construction of nine drive-thru outlets inPeninsular Malaysia, and the penetration of KFC intosmall towns especially in the east coast of PeninsularMalaysia, Sabah and Sarawak.Two new outlets were opened in Kelantan, inKota Bharu and Koh Lanas. Other small towns inPeninsular Malaysia that welcomed KFC includedPadang Serai, Pekan Changlun and Kuala Nerangin Kedah and Sabak Bernam in Selangor. Meanwhilethree new outlets were launched in Sabah andSarawak in Kota Kinabalu, Kunak and Betong.Meanwhile, KFCH has built a strong presence inSingapore and Brunei, and in 2011 increased itsnetwork by three outlets in each country.But the biggest opportunities lie with the Group’smore recent venture into India, where in 2011 thenumber of outlets grew to 13. The potential of theIndian market is tremendous, but this is a volumegame and it will need more than 50 outlets before theIndian operations achieve profitability. KFCH’s 2011investment of RM12.9 million in its Indian networktherefore represents the foundation of a long-termplan for ongoing, aggressive expansion that beforelong will start to pay dividends in the future.21KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate StatementKedai AyamasCommencedits East MalaysianOperations in Tawauin April 2011.There are CurrentlyThree Kedai AyamasOutlets in Sabah.KFCH’s subsidiaries are also poised for continualexpansion. Ayamas Shoppe Sdn Bhd entered into ajoint venture agreement with Rastamas Trading SdnBhd (Rastamas) to form a joint venture company,Ayamas Shoppe (Sabah) Sdn Bhd to kick-startKedai Ayamas operations in Sabah. Rastamas is thebiggest poultry integrator in Sabah. The first KedaiAyamas commenced its East Malaysia operations inTawau in April 2011. There are currently three KedaiAyamas outlets in Sabah.Investing in the Supply ChainThe rapid growth of KFCH’s restaurant business inMalaysia has resulted in an increasing demand forchicken related products. To meet this demand, in2011 the Group continued to invest RM104.2 millionin facilities to increase the capacity of its upstreamoperations. This will stand KFCH in good stead aseven more people flock to its restaurants.In August 2011, the Group invested RM25 million in abreeder farm and hatchery in Sidam Kiri, Kedah. The19-hectare breeder farm will produce 25% of the totalDay-Old-Chicks (DOC) generated by the Group’s fivecompany-owned farms. The new hatchery has thecapacity to produce one million DOC per month.Combined with the other company-owned hatcheryin Salak Tinggi which produces three million DOC permonth, total output of DOC will rise to four million permonth, making KFCH self-sufficient in DOC supply.The Group has also built new broiler farms inSedenak. The first phase, completed in 2010, has acapacity of 400,000 broilers per cycle. The second22KFC Holdings (Malaysia) BHD (65787-T)Annual Report 2011

Corporate Statementphase was completed in mid 2011, with a capacity of600,000 broilers per cycle, increasing the combinedcapacity of both phases to one million broilers percycle. The total investment cost for the two phasescame to RM22 million.The Logistics division opened its new warehousein Port Klang in November 2011. The new RM7.5million facility, at 300,000 square feet, is nearly seventimes the size of its previous warehouse in Glenmarie,Shah Alam.The KFCH-owned broiler farms in Sedenak andMantin currently supplies broilers to the Group’sprocessing plants in Port Klang, Bukit Mertajamand Johor. They supply 16% of the Group’s totalbroiler requirements by producing 580,000 broilersper month, with the remaining 84% coming fromcontract farms. In 2011, the Group also invested innew broiler houses using a ‘cages’ system, whichwill increase capacity by a further two million broilersper year.The Group also purchased a site at the Bukit MinyakIndustrial Area in Penang and plans to relocate its IPIPlant there from its present location in Bukit Mertajam.Once approval has been granted by the Land Office,construction will take approximately two and a halfyears. The new plant will be able to process 40,000birds per day, which, when added to the existing twoplants, will bring the Group’s processing capacitiesto 160,000 birds per day.Investing in PeopleIn addition, end of April 2012 saw the commissioningof a new RM27.7 million sausage plant whichincreases the output of sausage production from430 metric tonnes to 800 metric tonnes per month.It is essential for KFCH to constantly deliver, maintainand enhance its customer

KFC Holdings (Malaysia) BHd (65787-T) annual Report 2011 Notice of Annual General Meeting AGENDA 1. To receive and adopt the audited Financial statements of the Company for the year ended 31 december 2011 and the Reports of the directors and auditors thereon. 2. To approve the payment of directors’ fees in respect of the financial year ended