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INTRODUCTION OF F&N HOLDING BERHAD

F&N is amongst the regions and Malaysias oldest companies and its brand enjoys the rare distinction of being a market leader and household name in many categories. The F&N loved brand in Malaysia, today, F&N has spread its wings to more than 20 countries worldwide and established itself as a regional player.

From purveyors of carbonated soft drinks, the F&N Group is one of Malaysias diversified blue chip companies with leadership of the nations beverages and dairy products. The Group has grown from strength to strength with an annual turnover in access of RM4 billion from its core business in the manufacture, sale and marketing of soft drinks, dairies, non-carbonated beverages as F&N as property.

With a unique blend of quality and innovative products that have stood the test of time, the F&N brand has resonated with Malaysians for over 128 years. The company has come a long way since 1883 when John Fraser and David Chalmers Neave formed The Singapore Straits Aerated Water Company. Years later, F&N was consolidated and the companys love affair with the food and beverage industry began.

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F&N corporate milestones include, among others, the pioneering and launching of the F&N sweetened condensed filled milk in 1973, launching of a complete range of icecream products in 1974, the launch of 100 Plus isotonic drinks in 1984 , and the acquisition of Nestls canned milk business in Thailand and Malaysia in 2007.

Not one to rest on their laurels, F&N continues to soar to greater heights and remains committed to upholding the highest standards of corporate governance through integrity, transparency and accountability. F&N also remains responsible to their employees, business partners, stakeholders and the community; the company implements various initiatives to ensure responsible practices are carried out in all areas of the F&N business.

In Malaysia, F&N operates under the banner of Fraser & Neave Holdings Bhd (F&NHB), which is the Malaysian arm of Fraser And Neave, Limited. The company is listed on Bursa Malaysia and employs over 3,000 employees in operations across Malaysia, Brunei and Thailand. Its vision is to become the leading total Food and Beverage Company in Malaysia and the region.

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2. VISION, MISSION AND OBJECTIVE OF F&N

Vision of Fraser and Neave Holding Berhad is "To become the leading total beverage company in Malaysia and the region"

Mission of Fraser and Neave Holding Berhad is "To be a world-class multinational enterprise providing superior returns to F&N shareholders, excellent value for F&N customers and a rewarding career for F&N employees"

2.1 Aims

2.1.1 To reduce the mortality in children under the age of five from simple causes such as dehydration from diarrhoea 2.1.2 To improve mothers health and their knowledge of health issues 2.1.3 To reduce the prevalence of HIV/AIDS, Malaria and other diseases

2.2 Current Objectives

We work to a set of SMART (measurable) objectives. Our objectives are reviewed regularly. Our current objectives are available on request.

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3. F&N STRATEGIC APPROACH

F&N's role as the parent company and entrepreneurial shareholder of F&N businesses will remain unchanged: F&N will play a proactive and pivotal role, on the respective boards and board committees, in charting the strategic directions of the individual businesses, identifying and creating new opportunities of growth for F&N subsidiaries, and leveraging F&N foundations, strengths and networks to steer the Group to even greater heights.

The strategy for growth for the three businesses is clear. Given Singapore's small domestic market, growth for the Group can only be achieved by extracting operating efficiencies, expanding into new markets and venturing into new businesses - measures that have been actively pursued by F&N. Continuing to drive shareholder value, the Group targets the following:

Re-deployment of assets to higher-yielding activities to focus on asset-light, fee-based businesses;

Effective capital management to improve returns to shareholders; Expand and grow core businesses through intra-market growth, expansion to new markets and new synergistic ventures; and

Balance existing business portfolio by increasing contribution from Food & Beverage and Publishing & Printing businesses.

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4. F&N STRATEGIC DIRECTION

4.1 Strengthen and Grow the Core

Maximize synergies and grow organically to secure market leadership positions.

4.2 Build and Expand the Core

Seek inorganic growth through strategic mergers, acquisitions and alliances that leverage on the Group core competencies.

4.3 Develop and Expand into New Markets

expand geographically to tap new F&N of growth and to achieve better market diversification.

4.4 Build and Leverage on Brand Equity

Invest in a strong portfolio of internationally- recognized brands, supported by product innovations and quality improvements.

4.5 Improve Earnings Yield and Performances

Manage capital allocation to maximize returns and maintain a policy of improved payouts for shareholders.

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5. F&N HERITAGE
The F&N Group has been present in the region since 1883. Few other companies in the region can boast a mercantile heritage over two centuries during which it has earned an unflagging reputation with all stakeholders for stringent business ethics, high standards of corporate governance and product integrity. Nor can many of the regions companies boast a similarly enduring branding heritage (both corporate and product) throughout such a long jF&Nney.

Today, the F&N Group consists of mostly wholly-owned core businesses in Malaysia in soft drinks, dairies and properties. In terms of business split, the soft drinks division has historically contributed about 50 per cent of Group revenue/profit whilst the other 50 per cent is shared between the dairies and glass divisions. However for the 08/09 financial year, operating profit of the dairies division surged 59 per cent over the previous year, elevating it as a key contributor on par with the soft drinks division. Property development emerged only in the 2004-2005 financial year as a new contributor to the Groups bottom line.

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6. F&N PRODUCT AND BUSINESS BRAND

Over the years, the brands in F&Ns stable have continued to grow from strength to strength. F&N divisions have worked aggressively to deliver on the respective brand promises through bringing F&N customers consistent and memorable brand experiences. F&Ns underlying commitment to innovation, quality and excellence undoubtedly enabled the brands in F&N stable to F&N rather the challenges of the marketplace as F&N as forge ahead in their respective market segments. Please navigate to one of the brand categories such as soft drink, dairy products and property.

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7. F&N SOFTT DRINK

Some 128 years ago, the F&N brand first made its appearance in the form of an aerated water product. Today, the beverage brands under the umbrella of the F&N Group have become the preferred thirst quenchers for countless generations of Malaysians. F&N multiple brands are leaders in most of their respective segments and offer consumers the countrys most comprehensive range of soft drinks, catering to every occasion. F&N stable of brands have come to epitomize the virtues of quality, fair pricing, universal availability, and, above all, the celebration of life. F&N Beverages Marketing Sdn Bhd is Malaysias largest soft drinks manufacturer and distributor. The company operates of F&N manufacturing plants nationwide, including its stateof-the-art facility at its headquarters in Shah Alam, Selangor. FNBM distributes F&N products comprising 100PLUS, F&N Fun Flavors, F&N Originals, SEASONS and Fruit Tree. It also bottles and supplies Coca - Cola products in Malaysia.

Currently, the company together with its manufacturing arm, F&N Beverages Manufacturing Sdn Bhd, has a total workforce of about 1,400 employees in 23 offices throughout the country

The company commenced operations in 1936 when F&N Ltd secured the franchise of Coca-Cola in Singapore and Malaysia. F&N Coca-Cola (M) Sdn Bhd (F&NCC) was born as a result of this and subsequently in January 2010, following the announcement that the licensee agreements would end in September 2011, the company was renamed F&NBM. Today, it is Malaysias largest soft drinks manufacturer and distributor.

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In Malaysia, FNBMs soft drinks portfolio is dominated by 100PLUS, F&N Fun Flavors, SEASONS and Fruit Tree. 100PLUS is a notable local success story, commanding over 90 percent share of the isotonic drinks market, while also the No. 1 ready-to-drink (RTD) brand in Malaysia. Its F&N branded soft drinks is the leading player in the fruit flavored carbonated soft drinks segment in Malaysia. Meanwhile, under the divisions non-carbonated portfolio, SEASONS is currently the number two player in the Asian drinks category while Fruit Tree continues to experience growth within the juice segment.

The division continues to perform F&N during the festive periods with its products being a mainstay for all observances and occasions. It continues to pursue world-class excellence in distribution to make its products more readily available, with greater emphasis on market execution and increased efforts in training, including in expanding, imploring and building capability of the sales force across the board.

Over the years, FNBM has implemented several strategic measures that emphasize its strong brand presence as F&N as invest heavily in advertising and promotions, product availability and operational efficiency. F&N also understand that consumers are always on the lookout for high quality products and excellent services. In line with F&Ns food and beverage corporate identity, FNBM promises to offer healthy enjoyment in exciting ways. As such, the company is F&N poised to surge ahead in its drive to respond to market trends, meet changing consumer needs and exceed consumer expectations by providing quality products based on the best manufacturing practices to repay consumers support and confidence in the brand throughout the years.

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With dedication, commitment and good teamwork, the company is confident it will continue to grow and its brands will continue to prosper. FNBM invites consumers to join them for the ride. Some of F&N brand product that is under F&N production is fun flavors, 100 plus, seasons, coca cola and fruit tree.

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8. F&N DAIRY PRODUCT

Almost every Malaysian has had a taste of F&N while growing up. Be it the F&N sweetened condensed milk, evaporated milk, paste upraised milk, UHT milk, juice or ice cream. Recently, F&N added in yogurt and yogurt drinks. And as Malaysia grew, so did the company now known as F&N Dairies (Malaysia) Sdn Bhd.

F&N's dairy business grew out of a joint venture with Beatrice Foods of Chicago, USA in 1959 with the construction of Southeast Asias first F&N sweetened condensed milk plant in Petaling Jaya, Malaysia. The Carnation Company, also from the US, joined the partnership in 1965 to form Premier Milk as the manufacturing arm. This partnership proved enterprising as within that year, the highly successful Evaporated Milk was launched.

Not a company to rest on their laurels, the Group constantly seeks product innovation and invention, which resulted in more products added to its admirable business portfolio. In a strategic move in the market arena, the Group embarked on its first step toward a successful journey of F&N into the ice cream business.

In 1989, the Group acquired the interests of Beatrice Foods and restructured its dairy operations under F&N Dairies (Malaysia) Sdn Bhd. It was expanded further with the acquisition of Magnolia in 1995. In 1998, the Group commenced its paste upraised business.

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In 2008, F&N Dairies launched a LIVE, its new lifestyle F&B brand consisting of yoghurt, snack bars and cereal. A large part of the companys successful run is due to its continued emphasis on a culture of "Execution with a Difference" that focused on a seamless link of three core elements - people, strategy and processes.

F&Ns dairies division has a vision of being Malaysias leading dairy and food marketer with world-class products, standards and capabilities forming part and parcel of its offerings. The many brands under the umbrella of F&N Dairies - F&N sweetened Condensed Milk, the Magnolia, Daisy and Farmhouse brands of paste upraised milk, the Fruit Tree Fresh and Sunkist paste upraised juices, as F&N as Magnolia ice cream are the embodiment of this vision as F&N as the F&N Groups values of innovation, family values and integrity.

In 2011, F&N Dairies (Malaysia) dispose of its entire ice cream business to F&N Creameries (M) Sdn Bhd, an indirect wholly-owned subsidiary of Fraser and Neave, Limited (F &NL) as part of the overall consolidation process undertaken by F&NL for its ice cream business.

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9. A BRIEF OVERVIEW OF F&N PROPERTIES SDN BHD

The property divisions F&N-branded development projects continued to generate strong market demand and garner wide recognition for their innovative concepts. Projects like Fraser Business Park with its novel ICT-centric theme and complementary infrastructure are a fitting expression of the divisions capacity to formulate winning marketing strategies.

FN Properties is a business unit of Fraser & Neave Holdings Berhad, formed to unlock the value of land acquired and held by the company for many years. F&N first foray, the former F&N factory land at Jalan Foss, has been developed into a vibrant commercial spot today called the Fraser Business Park.

F&N development follows the general direction of Fraser & Neaves underlying philosophy of a socially responsible corporate citizen. F&N key value lies within the emphasis of continuously creating innovative designs and applications towards F&N development, giving its occupants a taste of the modern and the future alike.

As F&N continuously strive to bring innovative development to the forefront, F&N experienced a moment of proud achievement with the ASEAN Outstanding Engineering Award presented to us by the ASEAN Federation of Engineering Organization (AFEO) for Zone at Fraser Business Park Phase 2. This development was acknowledgement of its innovative concept, its extensive use of e-centric facilities and its potential for transforming the entire neighborhoods into a vibrant ICT business hub.

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The RM350 million Phase 2 project known as BXB, is an integrated commercial development positioned as the regions first purpose-built ICT-hub which features ICT retail business lots, budget e-hotel and service apartments. It is scheduled for completion by the first quarter of 2010. A lease agreement was signed with HELP University College to establish its city campus, which is expected to house a student population of 5,000 that will support the businesses of the ICT and other retailers at the park.

To realize the vision of turning BXB into the region's leading IT hub, a MOU was signed with Telekom Malaysia Bhd on August 19, 2009 for the provision of communication infrastructure and facilities. This will enable tenants and residents of the business park to have access to stateof-the-art ICT facilities including telephony, data and broadband connection with the latest fiberto-the-office (FTTO) broadband connectivity infrastructure.

More can be expected from future property launches as the unit continues to break new ground with regard to innovative design and product development that emphasize features t hat are distinctive to the F&N brand name. Some of F&N property is Fraser Business Park and HELP City Campus @ Zone E.

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10. BUSINESS FUTURE EXPORT

At F&N, growth and expansion is a key element of F&N business. F&N has an excellent reputation in Malaysia for high quality canned milk i.e. F&N sweetened condensed milk and evaporated milk, with a manufacturing history stretching over 45 years. These are very versatile products, which are largely used as beverage mixers in coffee, tea or chocolate drinks, in addition to food preparations, confectionaries, desserts, salad dressings and popular drinks like halo halo in the Philippines, or ice kacang in Malaysia.

F&Ns export initiatives started in the early 80s when the company penetrated the Hong Kong market, catering to the popular nai char (milk tea) drinkers. Today F&Ns canned milk has expanded to more than 20 countries around the world, which includes Thailand, Myanmar, Hong Kong, Taiwan, Singapore, Philippines, Indonesia, the Middle East and Africa.

The growth of the F&N business both at home and the export markets has been built on a strong reputation of F&N unwavering commitment to quality. F&N offer F&N customers a guarantee that when you pick up an F&N product in any part of the world, you are assured of the consistent superior quality, goodness and taste that F&N has long been associated with. In addition, the Halal certification offers strong reassurance to F&N Muslim customers in the growing Halal markets in the Middle East and Africa.

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F&N recognizes that the manufacturing of food and beverage requires the most stringent quality assurance and for that reason, F&N take necessary measures to ensure continuous improvements to quality, processes and safety. F&N have a team of experienced food technologists and professional managers and F&N use only the freshest and best ingredients. F&N unwavering commitment to internationally recognized standards and methods in manufacturing have been acknowledged as reflected by the numerous awards and certifications that F&N have obtained over the years

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11. F&N CORPORATE RESPONSIBILITIES

11.1 Environmental Stewardship

At F&N, F&N believe that F&N commitment to integrity in everything F&N do will be manifested through a sound environmental push. From F&N early beginnings, F&N have implemented and executed various environmental stewardship initiatives that go beyond compliance requirements in order to minimize F&N environmental footprint throughout each phase of F&N products life cycle.

11.2Waste Reduction

As part of F&N aim to reduce waste, F&N have launched numerous recycling campaigns in schools to inculcate good environmental habits among young people and thus, create awareness on the importance of recycling.

For the third year running, F&N Beverages and the Shah Alam City Council (MBSA) embarked on a three-month recycling campaign to inculcate and revive the spirit of recycling in school children whereby a total of 32 schools took part in this years campaign and yielded over 105,394 kg of recyclable materials.

Other ongoing environmental projects undertaken included its employee recycling program, a backwash water recovery system and the operation of a sophisticated effluent treatment plant which treated all wastewater from the factory before discharge into the common public drains.

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11.3 Energy Management

Cleaner operations at F&N soft drinks, dairies and glass container plants F&N are achieved after completion of a program to incorporate environmental-friendly natural gas energy F&N into all F&N manufacturing operations.

The setting up of F&N in-house PET bottle-blowing plant at the soft drinks manufacturing facility in Shah Alam has helped lessen logistics, storage and handling cost and boosted overall manufacturing efficiency and quality control. In the process, F&N also managed to do F&N bit for the environment as the move helped do away with more than 4,800 lorry trips per year that F&N are previously made by F&N PET supplier in Johor.

11.4 Water conversation

In 2005, F&N commissioned a RM2.8 million pilot plant to upgrade waste water treatment and conservation at the soft drinks division in Kuching. The plant is Sarawaks first environmentally friendly plant and also the first waste water treatment facility of its kind to be introduced within the entire Coca-Cola eco-system in Southeast Asia. This backwash water recovery system which recycles water used in the incoming water filtration process has provided savings of about RM300, 000 per year for the Group.

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12. APPENDIX

Figure 1 : FRASER BUSINESS PARK

Figure 2 : HELP CITY CAMPUS @ ZON-E

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