1. INTRODUCTION

The Board of Directors of KPJ ("Board") wishes to announce that KPJSB had, on 12 November 2008 entered into a Joint Venture Agreement incorporating Shareholders' Agreement ("JVA") with SMSB to offer sterilisation services to hospitals under the KPJ Group ("KPJ Hospitals"), hospitals owned by the Ministry of Health, Malaysia and hospitals outside of the KPJ Group and any other related businesses.

The Proposed Joint Venture will be jointly held through a joint venture company ("JV Co"), the name of which will be announced at a later date once the JV Co has been incorporated.


2. THE PROPOSED JOINT VENTURE

2.1 The JV Co

2.1.1 Nature of JV Co

The JV Co shall pursue and engage in the following business:-

(i) offering sterilisation service centre ("SSC") services to the KPJ Hospitals and if so appointed to set up and operate a SSC services facility with
a complete supply network comprising inter alia a sterile goods reprocessing facility, the provision of sterile goods, full logistic services to
manage the supply, collection and delivery of sterile goods and proper documented operations;

(ii) providing SSC services to the hospitals owned by the Ministry of Health, Malaysia by setting up and operating a SSC services facility
("Government Contracts"). SMSB undertakes to procure a reasonable value of Government Contracts within three (3) years of the company
commencing its operations;

(iii) providing SSC services to other hospitals outside of the KPJ Healthcare Group (other than hospitals owned by the Ministry of Health,
Malaysia) by setting up and operating a SSC services facility; and

(iv) any other business relating or incidental to or compatible with the above or any other business as may be agreed upon by SMSB and KPJSB
from time to time.

The JV Co shall have an initial authorised share capital of RM10 million comprising of 10 million ordinary shares of RM1.00 each and an initial
issued and paid-up share capital of RM5 million comprising of 5 million ordinary shares of RM1.00 each.


2.1.2 Funding Requirement

The total investment cost of the JV Co is RM8.5 million of which KPJSB's contribution is at RM5.53 million which will be sourced through
internal funds and external borrowings.


2.1.3 Shareholdings of the Parties

The shareholdings of the Parties in the JV Co are as follows:-

Parties Shareholdings
%

KPJSB 65.00
SMSB 35.00

SMSB is entitled to increase its shareholdings up to a maximum of 49% which shall commensurate with the Government Contracts
procured by SMSB for the JV Co and to purchase/subscribe to the additional shares at RM1.00 per share.


2.2 Conditions Precedent

The JVA is conditional upon the following:-

(i) Approval of the Board and the shareholders of the Parties (if necessary) at a duly authorised meeting of the Board or a general
meeting; and

(ii) Any approvals necessary to implement and operate the JV Co has been obtained and that such approvals be obtained by the JV Co
within 6 months from the date of execution of the JVA or any extension thereof to be agreed mutually by both Parties.

In the event that the approvals or conditions as mentioned above are not obtained or achieved within the period stipulated in Section 2.2(ii), the
JVA shall cease to have effect and become null and void and neither Party shall have any claim against the other.

The Parties shall as soon as practicable upon the fulfilment of the above conditions precedent procure the incorporation of the JV Co.

3. BACKGROUND INFORMATION ON SMSB

SMSB was incorporated in Malaysia on 15 February 1992 as a private limited company under the Companies Act, 1965.

SMSB is involved in the business of sterilisation and decontamination services using gamma radiation and ethylene oxide gas and has its registered address at 3rd Floor, Bangunan Fung Keong, 108 Jalan Tun H.S. Lee, Kuala Lumpur.

As at the date of this announcement, SMSB has an authorised share capital of RM10 million comprising 10 million ordinary shares of RM1.00 each ("Shares"), of which 8,000,002 Shares have been issued and are fully paid-up.


4. RATIONALE FOR THE PROPOSED JOINT VENTURE

The Proposed Joint Venture combines both parties' respective resources and expertise for their mutual benefit to undertake the business of providing centralised sterile services departments and other related services for hospitals.


5. PROSPECTS OF THE JOINT VENTURE COMPANY

Based on the synergistic values arising from the Proposed Joint Venture, the Board expects the JV Co to contribute positively to the future earnings of the KPJ Group, thereby translating to better returns to the shareholders of KPJ in the long run.


6. RISK FACTORS

The Board is not aware of any risk factors arising from the Proposed Joint Venture other than the normal market and global economic risks as well as the inherent risks in the healthcare industry.


7. EFFECTS OF THE PROPOSED JOINT VENTURE

The effects of the Proposed Joint Venture are as follows:-

7.1 Share Capital and Substantial Shareholders' Shareholding Structure
The Proposed Joint Venture will not have any effect on the issued and paid-up share capital of KPJ, and the shareholdings of its substantial
shareholders in KPJ as the Proposed Joint Venture does not involve any issuance of new shares in KPJ.

7.2 Earnings and Earnings per Share

The JV Co is expected to commence operations in 2009. As such, the Proposed Joint Venture is not expected to have any effect on the
earnings and earnings per share of KPJ for the financial year ended 31 December 2008.

Barring unforeseen circumstances, the Board believes that the Proposed Joint Venture is expected to contribute positively to the earnings of
the KPJ Group in the future.

7.3 Net Assets Per Share

The Proposed Joint Venture will not have any material effect on the net assets per share of the KPJ Group.

7.4 Gearing

The Proposed Joint Venture is not expected to have any material effect on the gearing position of the KPJ Group.


8. APPROVALS REQUIRED

There are no approvals required from the shareholders of KPJ or any regulatory authorities for the Proposed Joint Venture.


9. ESTIMATED TIMEFRAME FOR COMPLETION

KPJ expects to complete the Proposed Joint Venture by June 2009.


10. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

None of the directors and/or major shareholders of KPJ or persons connected with them have any interest, direct or indirect, in the Proposed Joint
Venture.


11. DIRECTORS' STATEMENT

Having considered all aspects of the Proposed Joint Venture, the Board is of the opinion that the Proposed Joint Venture is in the best interests of the
KPJ Group in the long term.


12. DEPARTURE FROM THE GUIDELINES ON THE OFFERING OF EQUITY AND EQUITY-LINKED SECURITIES OF THE SECURITIES
COMMISSION ("SC GUIDELINES")

To the best knowledge and belief of the Board, there are no departures from the SC Guidelines in connection with the Proposed Joint Venture.


13. DOCUMENTS FOR INSPECTION

A copy of the JVA is available for inspection by the shareholders of KPJ at the Registered Office of KPJ at 13th Floor, Menara Johor Corporation,
Kotaraya, 80000 Johor Bahru, Johor Darul Takzim, during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3)
months commencing from the date of this announcement.