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KPJ Healthcare Berhad

A leader in Malaysia's challenging healthcare services industry
On behalf of the Board of Directors, it is our pleasure to present the Annual Report and Financial Statements of KPJ Healthcare Berhad (KPJ) for the financial year ended 31 December 2007.


The year 2007 was a positive year for Malaysia, despite the increasing global oil prices. The nation's economy sustained its growth momentum, propelled by domestic activities, particularly from the private sector. The combination of strong domestic demand, primarily from private sector activities, the rapid expansion in the services sector and increasing external demand for major export products, resulted in an overall GDP growth of 6.3%. An improved Malaysian economy has undoubtedly brought about enhanced benefits to many sectors including the healthcare industry, evidenced by the growing number of private hospitals in the country.

Against this backdrop and with its vast experience and expertise, KPJ has successfully maintained its market leader status and continues to deliver impressive performance for the year under review. KPJ is the first home grown corporate healthcare group in Malaysia and is now one of the leading and largest listed private healthcare providers in the country. With its strong core values, KPJ had successfully executed its growth strategies that had enabled sustainable growth and performance.

With the Group's extensive network of 18 private specialist hospitals represented in most major towns in the country and 6 overseas, KPJ, with its firm foundation, strong dedication and commitment, is poised to meet the challenges of the globalised market and ever ready to be in the forefront of national and international healthcare service and development. KPJ has created a niche market in high tech healthcare industry and is very well positioned to continue capturing a substantial share of the existing market and seizing new opportunities.

Over the years, KPJ has successfully achieved an overall healthy return, especially in today's highly competitive industry in order to uphold its position as the leading healthcare Group in Malaysia and in the region. The changing consumer landscape in the healthcare market demand further propels KPJ to strengthen and expand its hospital network and range of services. Measures intended to maintain competitiveness were undertaken through maximising synergies, the continuous integration of the hospital operations by streamlining business processes & systems and optimising utilisation of assets and resources.

As a business entity, one of the KPJ's prime objectives is to build a positive brand image towards enhancing the Company's value, among others, through the development and implementation of Corporate and Clinical Governance. The Group's Corporate Governance measures provide the framework for management best practices, while the patient-centred Clinical Governance policies of KPJ's hospitals are in strict compliance with the guidelines set by the Ministry of Health to ensure proper risk management that safeguard the safety and health of all patients.

Being recognized as the leading brand in the private healthcare sector in Malaysia, KPJ has positioned itself to further expand beyond the Malaysian shores. Having more than 26 years experience in growing and managing private hospitals, KPJ has been invited by many overseas hospital owners to share our management skills and extend them to their hospital operations. In March 2007, KPJ signed a 5-year management agreement contract with New Jeddah Clinic Hospital, Jeddah, Saudi Arabia. The signing of this contract is a valid testimony of trust other healthcare institutions place in KPJ management capabilities, skills and expertise.

The Group has completed the acquisition of Taiping Medical Centre (TMC) in February 2008 to enlarge and further strengthen the network in the Northern region. With the support of Ipoh Specialist Hospital, TMC can now provide more comprehensive services and medical expertise to the people of Taiping and its vicinity.


KPJ recorded an outstanding milestone in 2007 when it achieved, for the first time ever, more than RM1.1 billion in revenue, attributable largely to double digit growth in terms of both outpatients and inpatients.

For the year under review, KPJ maintained its record of garnering new levels of profits, thus continually raising the bars of its financial performance year on year. For the financial year ended 31 December 2007, the Group achieved a profit before tax of RM85.3 million on a revenue base of RM1,108.0 million, compared to a profit before tax of RM60.1 million on a revenue base of RM831.5 million in 2006. Consequently, the Group net profit attributable to shareholders increased by 81.0%, from RM41.0 million to RM74.2 million. The return on equity (ROE) rose to 14.0% in 2007 compared to 8.4% in 2006 and earnings per share (EPS) increased by 77.3% to 36.0 sen per share against 20.3 sen per share in 2006.

With the positive performance for year 2007, the Group created an Economic Value Added (EVA) of RM23.4 million for the financial year ended 2007, an increase of RM14.3 million, or 157.1 %, over RM9.1 million in 2006.

Based on its prudent and innovative financial management and on the success of the first REITs exercise introduced in 2006, KPJ continued to inject 5 more hospitals into the Al-'Aqar KPJ REIT in year 2007, namely Kuantan Specialist Hospital in Pahang, Kedah Medical Centre in Kedah, Perdana Specialist Hospital in Kelantan, Sentosa Medical Centre in Kuala Lumpur and KPJ Kajang Specialist Hospital in Selangor. This second exercise enabled KPJ to further unlock a total asset value worth RM170 million and was completed in March 2008.

In early 2007, Al-'Aqar KPJ REIT had been awarded the inaugural Deal of the Year Award in the Islamic REIT category in Dubai, United Arab Emirates, by Islamic Finance News (IFN). KPJ created another landmark when in early 2008, Al-'Aqar KPJ REIT won the Islamic Finance Award in the Most Innovative Deal Category in London by Euromoney which is the industry's leading, capital-markets focused magazine for professionals around the globe involved in the world of banking.

With these awards, Al-'Aqar KPJ REIT has made groundbreaking history of many firsts: first Healthcare REIT to be listed in Asia, first listed Islamic REIT globally, first Islamic Healthcare REIT and the first to launch and be listed under the Malaysian Securities Commission's Guidelines for Islamic REITs.

Prudent management of the working capital and improvement in the business structure had resulted in the strengthening of KPJ's overall balance sheet position. Proactive measures will continue to be taken to improve the efficiency of the Group's liquidity and returns on capital employed.

With a paid up capital of more than RM207.8 million, the shareholders' fund has increased to RM508.9 million in the year under review, an improvement of 15.0% from RM442.6 million recorded in 2006. The Group's total assets have increased from RM1,101.9 million in 2006 to RM1,204.7 million in 2007, representing an increase of 9.3%. As a result of the Group's good performance, KPJ's market capitalisation of its shares increased by 76.2%, from RM408.0 million in 2006 to RM718.8 million in 2007, which is further evidence of market confidence in the company.


The Group will continue with its incremental dividend policy to reward its shareholders. For the year under review, the Group has declared payment of gross dividend amounting to 19.6% in total compared to 14.0% in year 2006. On 5 November 2007, the Group declared dividend-in-specie through the distribution of 7 units of Al-'Aqar KPJ REIT shares for every 100 units of ordinary shares in the Group, approximating to a gross dividend of 9.6%. To further reward the stakeholders, on 11 December 2007, the Group has declared an interim gross dividend of 10.0%, which was fully paid on 31 January 2008.


KPJ has always been maintaining good rapport with investment houses through Investor Relationship Programmes. Several road shows especially to attract investors from overseas were conducted through KPJ's strong affiliation with more than 20 fund managers. Currently, there are 7 houses covering KPJ, 2 International and 5 local. Through these programmes, KPJ is able to provide better understanding to the financial fraternity on KPJ's corporate role in the Malaysian healthcare industry.


The growth and success of the KPJ Group is undoubtedly attributable to the dedication and high commitment by all levels of people in KPJ. The steady and consistent growth is further enhanced through the leveraging of the Group's clinical and highly professional expertise, human capital, quality and information technology competencies and creativity of the team. KPJ is constantly striving to achieve higher quality standards in healthcare delivery by further enhancing clinical performance and outcomes, and greater operational and financial efficiency in anticipation of the rising inflation in 2008. Improvement of facilities and services will continue to be the main thrusts in maintaining KPJ as the market leader in the healthcare industry in Malaysia.

In tandem with the growing demand for KPJ's hospital services, there has been a growth in the number of the Group's total operating bed capacity in Malaysia from 1,817 in 2006 to 1,941 in 2007. The strong growth of inpatients in the Group resulted in a higher average occupancy rate of 64.1% compared to 57.4% in 2006, an increase of 6.7%. Total outpatients for the Group in 2007 rose by 11.4% recording a total of 1,733,500 patients compared to 1,556,172 patients in the same period last year. The total number of inpatients has also increased by 13.1% in 2007 to 179,227 compared to 158,412 in 2006.


In 2007, the Group recorded a total revenue of RM18.3 million from about 15,700 foreign patients compared to RM12.9 million from 10,300 foreign patients in year 2006 which was a 41% increase in revenues.

KPJ contributes directly to Malaysia's growing health tourism sector. KPJ's Johor Specialist Hospital (JSH) and Puteri Specialist Hospital (PSH), both of which are located in Johor Bahru, have established themselves as the preferred destinations for Indonesian patients. Whereas KPJ's Klang Valley hospitals, especially Ampang Puteri Specialist Hospital (AP SH) and Damansara Specialist Hospital (DSH) have received steady patient flows from Australia, the United Kingdom, Saudi Arabia, the United Arab Emirates, Kuwait, Korea, Brunei, Indonesia and Myanmar, among others.


In meeting the growing demand of our patients for quality healthcare delivery, KPJ continues to upgrade and expand its facilities by adding new equipment and modernizing hospital buildings for better comfort of the customers.

In the south, KPJ Johor Specialist Hospital (JSH) is renovating its existing building as well as constructing a new hospital block to accommodate additional beds. These projects were undertaken to cater for growing demand in the southern region and also to capture patients from neighbouring countries especially Indonesia.

Puteri Specialist Hospital (PSH), purchased two plots of adjacent land with a size of almost an acre, to allow the hospital to expand and accommodate higher level of activities.

Up in the north, KPJ Ipoh Specialist Hospital (ISH) has completed its expansion of a new hospital block to accommodate new consultant outpatient clinics as well as new wards. With the completion of the above project, a new Linear Accelerator machine has been installed to provide the latest technology in cancer treatment.

KPJ has also built a new hospital namely, Prai Specialist Hospital (PrSH) in the new PERDA township, Penang. The hospital which is expected to have 120 beds with total development cost of about RM 45 million will be completed in the third quarter of 2008.

In the central region, the new state-of-the-art Tawakal Hospital building is expected to open for business by end of August 2008. KPJ Ampang Puteri Specialist Hospital (APSH), the flagship hospital of KPJ, has undertaken renovation work for the wards, lobby and Accident & Emergency services to give a fresh look and pleasant ambience for its customers. KPJ Damansara Specialist Hospital (DSH) is constructing its new premier ward to accommodate 19 additional suites, to be completed in the second quarter of 2008.

The two new KPJ hospitals in the east Malaysia, Kuching Specialist Hospital (KcSH) and Damai Specialist Hospital (DmSH) in Kota Kinabalu, have upgraded their facilities by adding CT Scan machines. KcSH has further installed an MRI to give better diagnosis capabilities in their delivery of a more efficient and accurate medical services.


KPJ's strength lies, fundamentally, in its people. As a healthcare service provider, 'The People Factor' is highly crucial, especially in dealing with human lives. KPJ has implemented various strategies and programmes to improve the competencies of its Human Capital, and strives to be an Employer of Choice. For the year ended 2007, the Group recorded a total staff strength of 6,160 in Malaysia alone of which 5,822 or 94.5% are based at the Hospitals whilst the remaining 338 or 5.5% are at the Corporate Head Office and other subsidiary companies. The increase is mainly due to additional staff from Sentosa Medical Centre and KPJ Kajang Specialist Hospital, the newly acquired hospitals in 2007.

There are 614 medical consultants practicing in the Group and the number is expected to grow as the hospitals are attracting more Specialists from various disciplines to join the Group.

KPJ, as a caring organization, starts with caring for its own employees. Sensitive to the rising cost of living, the Group offers a fair and equitable remuneration to employees and has implemented a salary review for all employees across the board in the year under review. Further, all employees are treated fairly with equal opportunities for career advancement based on merit. A well established performance appraisal system, which is highly transparent, provides the basis for both a performance-related remuneration structure and career progression path for all employees.

As a learning organization, KPJ provides opportunities to deserving employees to further enhance their skills and expertise through formal education and short term training.

Intellectual capital and competency development are also essential and highly regarded aspects of the Group's human capital initiatives. Qualified executives are offered opportunities to embark on post-graduate programmes. To date, a total of eleven (11) executives have participated in the MBA programme with Henley Management College, London, United Kingdom, while eighteen (18) others from throughout the Group have been selected to undergo the MBA in Healthcare Management, a two-year specially-designed programme with the Universiti Teknologi Malaysia (UTM). KPJ's nursing professionals too are provided with opportunities to take up Master of Nursing, in addition to the Bachelor of Nursing programme. The Master programme, conducted in collaboration with the University of South Australia (UniSA), had commenced with the first cohort of eleven (11) nursing professionals in year 2006 followed by a second batch of twelve (12) nurses in March 2008. Nurses have also been encouraged to pursue PhD in Nursing.

In 2007, a total of RM7 million was spent by the Group, not only for the Master and Bachelor programmes but also for the continuous sponsorship of Diploma in Nursing, Medical Imaging, Pharmacy and Physiotherapy. Short courses in nursing were also conducted in the discipline of Critical Care Nursing, Renal Nursing, Paediatric Nursing and Peri-Operative Nursing to further enhance the nursing skills.

Nursing professionals in the Group have also been continuously sent to the Middle East and Bangladesh to work in hospitals there, under the Overseas Placement Pogramme. The hands-on learning experience has resulted in KPJ nurses acquiring new experiences and expanding their knowledge on the requirements of the international healthcare scenario.

Another initiative taken in preparing staff for future leadership is through a job rotation programme between JCorp and KPJ which has been implemented in November 2007. Three executives from KPJ Group are involved in this oneyear program at Johor Corporation. They will be assessed to determine their potential and capability through exposure in various management aspects.

In order to foster better relationships among employees in the Group as well promoting a healthy lifestyle, KPJ continued to organize its yearly sports carnival in August 2007. More than 500 employees participated in the event co-hosted by DSH and SMC. Other staff-oriented activities carried out by the Group include KPJ Family Days among others.

KPJ Group underpins its philosophy of caring for its employees by ensuring that the workplace at hospitals and offices are safe, secure, healthy and conducive. One of these significant initiatives is the implementation of drug detection and prevention policies. The Group has also undertaken steps to screen and vaccinate all staff in critical areas as preventive measures to avoid disease infection to the staff.


The Group's unique corporate culture extends to the creation of the yearly corporate address, PEDOMAN , where information is shared to ensure that both the management and staff share cohesive targets and aspirations for the year. The event also saw the Chairman of KPJ Healthcare Berhad, together with the Managing Director, holding a dialogue session with the staff, to further clarify on issues that impact the organization and that are of concern to staff. The Group's PEDOMAN, which commenced on 4 January 2007 with the theme of "Continuous Dedication to Caring for Life", was subsequently followed through at all KPJ hospitals, led by the Managing Director. These sessions are highly effective platforms for all levels of employees to interact and provide opportunities for them to keep abreast with the business direction of the Group, as well as aligning employees' delivery expectations at the beginning of the year.

As part of the Group's initiative in continuing medical education, KPJ organized the 7th KPJ Healthcare Medical Workshop 2007 with the theme "Clinical Governance - Effective Implementation and Monitoring" at Selesa Beach Resort, Port Dickson. This annual event was graciously officiated by the Chairman, Tan Sri Dato' Muhammad Ali Hashim, on 17 November 2007. The event brought together medical consultants, nurses and allied health professionals and health managers to share their wealth of knowledge, experiences and expertise to enhance teamwork and to bring about the best clinical practices. Several proactive measures and resolutions emphasising quality medical standards were adopted during the conference to be implemented throughout the KPJ Group of hospitals.

Another annual event is the Nursing Conference, a platform for the Group's nurses to interact, share their knowledge, as well as examine and introduce enhanced nursing policies and procedures, with the sole purpose of developing higher standards of best practices for customer care excellence.


PNC International College of Nursing and Health Sciences (PNC), which is ISO-certified by Moody International UK, is the education arm of KPJ Group. It was established in 1991 to meet the demand of nurses for KPJ hospitals at that point of time. Over the years, PNC has grown tremendously to the extent that education is now the second core business of KPJ.

The ever increasing demand for nurses have spurred KPJ to develop a purpose built campus in Kota Seriemas in Nilai which is rapidly emerging as a hub for educational excellence. The College which is equipped with state of the art facilities was officially opened by YB Dato' Mustapa Mohamed, the then Minister of Higher Education, in May 2007. In anticipation of future expansion plan over the next five to ten years of the College, PNC has purchased 17 acres of land adjacent to current campus in Kota Seriemas. Due to increasing demand, a second PNC campus in Johor Bahru was established with a capacity to accommodate 300 students. Approval from the Ministry of Higher Education was obtained and the first enrolment of students is expected in April 2008.

To date, the College's total enrolment is more than 1,200 students for 13 programmes covering Degree and Diploma in Nursing and Health Sciences. Two new programmes approved and commenced in 2007 were Diploma in Pharmacy and Diploma in Physiotherapy. Another foundation for the success of the College is PNC's long established international alliances with prestigious universities overseas which include Liverpool John Moores University, United Kingdom and University of South Australia, Australia.


KPJ is committed towards the development of a community of enterprises to create continuously increasing value, while simultaneously also promoting shared growth. To date, KPJ has two (2) intrapreneurs under the JCorp Group Intrapreneur Scheme, namely Teraju Farma Sdn Bhd, involved in the central procurement of drugs and medical supplies, and FABRiCARE Laundry Sdn Bhd, the provider of industrial laundry services. These intrapreneurs have recorded positive performance thus far, with Teraju Farma registering more than RM1.0 million in profit in 2007 after two years of business.

KPJ is dedicated to the goal of grooming more talented and qualified individuals from within its own ranks to be transformed into intrapreneurs. In addition, KPJ has also strategically outsourced and shared several support services at the hospitals to intrapreneur companies from within the JCorp Group.


In maintaining and enhancing the quality service standards achieved by KPJ, continuous quality improvement initiatives have been implemented throughout the year. As at to date, 5 hospitals in KPJ have been accredited by the Malaysian Society for Quality of Health (MSQH), the latest one being SMC. In year 2007, APSH was accredited for its 3rd consecutive three year cycle, while DSH achieved its 2nd consecutive full 3 year cycle. Another 4 hospitals have been targeted to achieve accreditation in 2008 so as to maintain high standards set by the Group.

The KPJ Group of hospitals continue to earn recognition and trust for its strong and sustained financial performance and prudent management in delivering quality healthcare services. The numerous awards that the KPJ Group has garnered over the years exemplify its unwavering commitment to its corporate mission: "Delivering Quality Healthcare Services to Our Customers". These awards and recognitions are a reflection of the industry's assessment of the achievements of the KPJ Group. This is made obvious through our consistent pursuit of excellence in everything we do.

In the year 2007 alone, KPJ and its hospitals have achieved more than 11 prestigious awards such as the inaugural ASEAN Business Award (CSR Category), Asia Hospital Management Award (Marketing Category), Export Excellence Award (Medical Services Category), Baby Friendly Initiative Hospital, National Award for Management Accounting Best Practice (NAFMA), Best Brand Asia Pacific 2007/2008 (Healthcare Category), ASEAN Business Technology Review Award 2007/2008, Enterprise 50 Awards, Service Excellence Award, Special Award - Certificate of Excellence from MPC amongst others.


The KPJ Group stands by its corporate philosophy in the provision of excellent customer service to all its customers. This encompasses the quality, accuracy, dependability, speed and warmth while rendering services to our customers. The Group is committed to making a difference in serving every customer and earning the loyalty of each and everyone of them. We believe in building longterm relationships with customers by serving every customer's unique needs and expectations with the overall aim of earning and upholding their trust and loyalty to the KPJ Group of hospitals. It is our strong conviction that this is the foundation to expanding and maintaining the Group's leading position in a competitive healthcare industry. This emphasis has been ingrained as part of the corporate culture practiced by every staff at all levels within the Group.

Owing to the above, KPJ has undertaken another significant initiative in the year 2007 by implementing Standard People Practice (SPP ), a programme for continuous improvement in customer service. Employees, especially frontline service staff, are trained to deliver consistent quality of the service level.

Through SPP training, staff feel motivated as they are encouraged to provide customers with excellent service especially when driven by their passion and belief in making a difference. The program has been fully implemented in APSH and will be replicated in all KPJ hospitals nationwide. Customer care and service excellence will eventually become synonymous with the Group.


In addition to Hospital Information Technology System (HITS), the Group has also embarked on KPJ Clinical Information System (K-CIS) implementation to further enhance the hospital information system. K-CIS incorporates the clinical information to patient management. Following the successful implementation of K-CIS in 4 hospitals, 2 other modules have been introduced, namely Nursing Care Solutions and Pharmacy Information System. Nursing Care Solution is a guided nursing care plan that has been customized to follow international standards in nursing practices. Pharmacy Information System is an electronic prescription system that provides automatic inventory update and will soon be integrated into drug information databank that will further improve patient safety.

KPJ has also implemented the KPJ Corporate Network, an IP VPN network that connects all KPJ local hospitals to KPJ computer centre at the head office. The hospitals are connected via high speed network that is upgradeable whenever demand increases. The corporate network on a common integration platform will allow the hospitals to share information and resources.

With the implementation of the KPJ Corporate Network, several consolidation initiatives are now made possible. Among others are the central management of e-mails, a centralized HR system and central management of networks. New strategies including the setting up of a central data warehouse is being initiated. Once in place, it will facilitate the collation of relevant information that facilitates and supports business and management decisions.

Patient registration using MyKad has also been implemented in 9 hospitals and the Total College Management System for Puteri Nursing College in Nilai was successfully implemented in September 2007.


KPJ strongly believes that the concept of Corporate Social Responsibility (CSR) and business are mutually inclusive for sustainability. In fact, both business and CSR must co-exist in harmony together and be seen as one. Community outreach programmes are regarded as the vital point in communicating and educating the general public on healthcare issues. KPJ believes that service to the community forms an integral part of its business and has therefore actively pursuing community health development programmes as KPJ's way of giving back to the society.

KPJ has always worked alongside with both government and non-governmental organisations in promoting preventive healthcare through its education programmes and community services. Health seminars, talks, exhibitions, school visits and nationwide campaigns were carried out throughout the year to increase health awareness amongst Malaysians. These programmes are intended to nurture a healthy lifestyle and healthy living from a young age.

Klinik Waqaf An-Nur and Dialysis clinics (KWAN) is the main community project extensively undertaken together with JCorp. For the year 2007, another 3 clinics were opened, namely KWAN Muar and Kluang in Johor in August, and KWAN Ijok, Selangor, in November, making a total of 8 KWAN clinics nationwide, other than upgrading a KWAN clinic into a 30-bedded Waqaf Hospital in Pasir Gudang, Johor. Since its inception, KWAN nationwide have treated more than 350,000 patients from all races and religions. Currently the KWAN clinics are equipped with 41 dialysis machines, providing consistent life-saving care for 125 kidney patients. KPJ's direct contribution to KWAN for year 2007 was RM750,000, other than managing the clinic operations, including provision of the doctors and nurses.

KPJ continued its involvement in the production of Medik TV, an educational TV programme and also Al-Tijarah and Tijarah Ramadan programmes to help the less fortunate.


The performance of the private healthcare industry is expected to remain healthy, despite the uncertainties in the global economy with the rising of oil prices. The competition, however, will continue to intensify due to greater consolidation as domestic healthcare groups undergo ownership and operational restructuring. Further the operating environment is expected to become more challenging through the enforcement of the new Private Healthcare Regulations, the rapid introduction of new medical technology and the entry of foreign players in hospital management services into the country.

The Group obviously has many competitive advantages that it can leverage on, to manage these challenges. Most importantly, it will leverage on advantage of scale, size and scope, exploiting fully synergies and economies. It will also continue to focus on its core business of managing hospitals, encompassing the existing integrated network as well as the expansion of its foreign ventures.

Growth will be achieved mainly through the increasing activities and enhanced productivity in all hospitals, as well as through acquisitions both locally and overseas. KPJ's hospitals are expected to accelerate their expansion plans to increase the capacity to draw in new patients, whilst also ensuring that existing patients remain as loyal customers. The Group will also intensify its efforts in promoting health tourism as one of key initiatives for growth and thus mitigate the pressure on local competition.

KPJ's education arm, acknowledged as the second core business of the Group will contribute positively to the Group revenue as well as to the nation's development, in making Malaysia as an education hub with its excellent track record. PNC will offer more courses and open more campuses, enabling it to ultimately become one of the leading, modern and progressive educational institutions, nationally and regionally.

The future prospects of the KPJ Group remain bright with the launching of various economic regions by the government recently. Further, the KPJ Group's future prospect is also dependent on the Group's competitive edge over its rivals in capturing the healthcare industry's market share. Being established for more than 26 years, the Group has built a reputation as an integrated national private healthcare service provider. Due to its brand name that has been established regionally, the Group will also be forming strategic alliances with manufacturers, pharmaceutical companies, managed care organizations and insurance companies. Strategic partnership with potential international partners has been identified as one the important strategies to grow further in hospital business whilst education will play significant roles in contributing future revenues.

The Group will also continue to improve its efficiency in anticipation of the rising inflation in 2008. Improvement of facilities and services as well as margin enhancements will continue to be the main thrust in keeping KPJ as the market leader in the healthcare industry in Malaysia.

Embracing positive values, KPJ will continuously execute its growth strategies to ensure the Group's sustainable performance. The Group's achievements are largely the result of its higher ideals as expressed in its corporate philosophy which inspires excellence and noble corporate values that bond the Group and motivates as well as energises everyone. These are the foundations to the building of powerful teams at KPJ, yet flexible enough to encourage creativity and allow the expression of individual initiatives; harnessing strategic synergy and effectively utilising its resources.

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