THIS INFORMATION CIRCULAR IS FOR YOUR INFORMATION ONLY. NO ACTION IS REQUIRED TO BE TAKEN.

If you have sold or transferred all your shares in KFC Holdings (Malaysia) Bhd (65787-T) (KFCH or Company), you should at once hand this Information Circular to the agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee. Malaysia Securities Exchange Berhad takes no responsibility for the contents of this Information Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Information Circular.

KFC HOLDINGS (MALAYSIA) BHD

(Company No.: 65787-T) (Incorporated in Malaysia)

INFORMATION CIRCULAR TO SHAREHOLDERS

IN RELATION TO THE

DISCLOSURE OF THE RESTRICTIVE COVENANT CLAUSE

IN THE INTERNATIONAL FRANCHISE AGREEMENTS GOVERNING THE

KFC FRANCHISE

Prepared by

This Information Circular is dated 2 March 2004

DEFINITIONS Except where the context otherwise requires, the following definitions will apply throughout this Information Circular: Act Ayamas Ayamas Acquisition : : : Companies Act, 1965 Ayamas Food Corporation Bhd (139112-H) Acquisition by KFCH and disposal by QSR of the entire equity interest in Ayamas, comprising up to 245,800,000 Ayamas Shares (on the assumption that all outstanding Ayamas Warrants are exercised) and up to 49,734,497 Ayamas Warrants (on the assumption that none of the outstanding Ayamas Warrants are exercised) upon completion of the Ayamas Share and Warrant Swap and Ayamas Listing Transfer, for a cash consideration of RM260 million forming part of the Ayamas Scheme of Arrangement Transfer of the listing status of Ayamas to QSR upon completion of the Ayamas Share and Warrant Swap forming part of the Ayamas Scheme of Arrangement Scheme of arrangement between Ayamas and its shareholders and warrantholders, and QSR and its shareholders under Section 176 of the Act which involves the Ayamas Share and Warrant Swap, Ayamas Listing Transfer, Ayamas Acquisition, CIE Acquisition and PH Disposal Share and warrant swap between the shareholders and warrantholders of Ayamas, and QSR wherein all the Ayamas Shares and Ayamas Warrants will be exchanged with new QSR Shares and new QSR Warrants, credited as fully paid-up, on the basis of one (1) new QSR Share for every one (1) existing Ayamas Share held and one (1) new QSR Warrant for every one (1) existing Ayamas Warrant held forming part of the Ayamas Scheme of Arrangement Ordinary shares of RM1.00 each in Ayamas Outstanding warrants 2002/2007 in Ayamas C.I. Enterprise Sdn Bhd (493664-H) Acquisition by QSR and disposal by CIH of the entire equity interest in CIE, comprising 300,000 ordinary shares of RM1.00 each, for a cash consideration of RM1 and the assumption by QSR of an amount due to CIH amounting to RM198 million forming part of the Scheme of Arrangement C.I. Holdings Berhad (37918-A) Commerce International Merchant Bankers Berhad (18417-M) KFCH, KFCMPL and PHS and Franchisee would refer to any of them Yum! Restaurants Asia Pte Ltd which has been assigned the IFAs by Kentucky Fried Chicken International Holdings, Inc, Pizza Hut International, LLC and Taco Bell Corp, in respect of the KFC franchise in Malaysia, Singapore and Brunei, Pizza Hut franchise in Malaysia and Singapore and Taco Bell franchise in Singapore with effect from 1 January 2004 International Franchise Agreement The brand KFC KFC Holdings (Malaysia) Bhd (65787-T)

Ayamas Listing Transfer

Ayamas Scheme of Arrangement

Ayamas Share and Warrant Swap

Ayamas Shares Ayamas Warrants CIE CIE Acquisition

: : : :

CIH CIMB Franchisees Franchisor

: : : :

IFA KFC KFCH

: : :

DEFINITIONS (Contd) KFCH Group KFCMPL LLC MSEB Multibrand Pep Bottlers Disposal : : : : : : KFCH and its subsidiaries Kentucky Fried Chicken Management Pte Ltd (198600837-K) Limited liability company Malaysia Securities Exchange Berhad (635998-W) A concept where food from two (2) of these brands, KFC, Pizza Hut and Taco Bell are sold in one (1) location Disposal by KFCH and acquisition by CIH of the entire equity interest in Pep Bottlers Sdn Bhd, comprising 300,000 ordinary shares of RM1.00 each, for a cash consideration of RM35.28 million Pizza Hut Holdings (Malaysia) Sdn Bhd (362794-A) Disposal by KFCH and acquisition by QSR of the entire equity interest in PH, comprising 40,000,000 ordinary shares of RM1.00 each, for a cash consideration of RM115 million forming part of the Ayamas Scheme of Arrangement Pizza Hut Singapore Pte Ltd (199302293-D) Pep Bottlers Disposal, PH Disposal, Ayamas Acquisition and Restricted Offer for Sale/Placement QSR Brands Bhd (599171-D) (formerly known as QSR Brands Sdn Bhd) Ordinary shares of RM1.00 each in QSR New warrants in QSR to be issued pursuant to the Ayamas Share and Warrant Swap A reorganisation scheme which involves CIH, Ayamas and KFCH in various proposals to reorganise the group structure of the respective companies The restrictive covenant clause in the IFAs governing the KFC franchise, the details of which are as set out in Section 2 of this Information Circular Restricted offer for sale to the shareholders of KFCH (except CIE) and placement to identified senior management personnel of the KFCH Group by Pan-Tiara Corporation Sdn Bhd, a wholly-owned subsidiary of KFCH, of its entire 48.43% equity interest in QSR, comprising 94,953,500 QSR Shares and 34,984,500 QSR Warrants (upon completion of the Ayamas Share and Warrant Swap and Ayamas Listing Transfer) Securities Commission Yum! Restaurants International, the international division of Yum! Brands Inc which is the parent company of the Franchisor

PH PH Disposal

: :

PHS Proposals QSR QSR Shares QSR Warrants Reorganisation Scheme

: : : : : :

Restrictive Covenant Clause Restricted Offer for Sale/Placement

: :

SC Yum

: :

Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. Any reference in this Information Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Information Circular shall be a reference to Malaysian time, unless otherwise stated.

ii

CONTENTS

LETTER TO THE SHAREHOLDERS OF KFCH CONTAINING: SECTION 1. 2. 3. 4. INTRODUCTION DETAILS OF THE RESTRICTIVE COVENANT CLAUSE RISKS OF THE RESTRICTIVE COVENANT CLAUSE RATIONALE OF THE RESRICTIVE COVENANT CLAUSE PAGE 1 2 2 3

APPENDIX I FURTHER INFORMATION 4

iii

KFC HOLDINGS (MALAYSIA) BHD

(Company No.: 65787-T) (Incorporated in Malaysia)

Registered Office: Level 17, Wisma KFC No. 17, Jalan Sultan Ismail 50250 Kuala Lumpur 2 March 2004 Directors YBhg Datuk Haji Izhar bin Sulaiman (Group Executive Chairman) YBhg Dato Haji Johari bin Abdul Ghani (Group Managing Director) YBhg Dato Seri Abdul Ghani bin Abdul Aziz (Non-Independent Non-Executive Director) Puan Rita a/p Benoy Bushon (Non-Independent Non-Executive Director) YBhg Dato Abdullah bin Ngah (Independent Non-Executive Director) YBhg Dato Mohd Salleh bin Haji Hashim (Independent Non-Executive Director)

To: The Shareholders of KFC Holdings (Malaysia) Bhd

Dear Sir/Madam

DISCLOSURE OF THE RESTRICTIVE COVENANT CLAUSE FRANCHISE AGREEMENTS GOVERNING THE KFC FRANCHISE

IN

THE

INTERNATIONAL

1.

INTRODUCTION In its letter dated 12 August 2003, the SC has granted its approval for the Proposals subject to, inter alia, the removal of the restrictive covenant clause in the IFA dated 17 February 2003 in relation to any direct or indirect acquisition by any person or entity acting in concert of more than fifteen percent (15%) of the voting shares of KFCH/PH and/or CIH prior to implementation of the Reorganisation Scheme. On 28 August 2003, CIMB, on behalf of KFCH, submitted an application to the SC for a waiver from complying with the aforementioned condition as Yum requires that the Restrictive Covenant Clause be retained in the IFAs, due to the rationale as set out in Section 4 herein. The SC had, in a letter dated 12 January 2004, approved the waiver sought and imposed the following conditions on KFCH: (i) KFCH is required to provide a written undertaking to the SC that it will take pro-active action to ensure that any actions undertaken by Yum/Franchisor under the Restrictive Covenant Clause are always in the best interest of KFCH and its minority shareholders; KFCH is not allowed to enter into any restrictive covenant clause in the future, which is more stringent that the existing Restrictive Covenant Clause; KFCH must disclose in an information circular to its shareholders the details of the Restrictive Covenant Clause, including (but not limited to) the risks as well as the reasons for the Restrictive Covenant Clause; and Full disclosure is required to be made by KFCH on the existence of the Restrictive Covenant Clause in its annual report for as long as the clause is still relevant.

(ii)

(iii)

(iv)

KFCH had fulfilled condition (i) in a letter of undertaking to the SC dated 30 January 2004 and condition (iii) through the disclosure made in this Information Circular. The Board of Directors of KFCH will ensure compliance with the rest of the conditions. THE PURPOSE OF THIS INFORMATION CIRCULAR IS TO PROVIDE YOU WITH DETAILS OF THE RESTRICTIVE COVENANT CLAUSE, ITS RISKS AND RATIONALE. NO ACTION IS REQUIRED ON YOUR PART.

2.

DETAILS OF THE RESTRICTIVE COVENANT CLAUSE Upon completion of the Reorganisation Scheme which is expected to be in June 2004, the KFCH Group will continue to operate, amongst others, KFC restaurants in Malaysia, Singapore and Brunei, whilst the Pizza Hut restaurants in Malaysia and Singapore and the Taco Bell restaurants in Singapore will be operated by QSR and its subsidiaries. The operation of the KFC restaurants are governed by, inter alia, the IFAs with the Franchisor, details of which are as set out below. Under the IFAs, each outlet has a tenure of ten (10) years commencing on the day of grant for each outlet set up and renewable at the end of the tenth (10th) year for another ten (10) years, provided that all the terms and conditions in the IFA are satisfactorily fulfilled. The respective IFAs are as follows: Agreement IFA dated 17 February 2003 (in respect of KFC Malaysia and Brunei) IFA dated 1 June 2002 (in respect of KFC Singapore) IFA dated 1 June 2002 (in respect of Multibrand Singapore) Franchisee KFCH Particulars 336 outlets as at 31 December 2003

KFCMPL

69 outlets as at 31 December 2003

KFCMPL and PHS

4 outlets as at 31 December 2003

The Restrictive Covenant Clause provides that the Franchisor may terminate the IFA by notice to the Franchisee effective upon receipt by the Franchisee of the notice, and/or adopt any of the remedies specified in the IFA, in the event the following occurs: ...any direct or indirect acquisition by any person or entity acting in concert with others of more than fifteen (15%) of the voting shares of Franchisee and/or CIH, whether by itself or with or through its affiliated companies or another person or entity or taken together with any previous transaction; and/or the ability of such person and persons acting in concert with him by virtue of their shareholding to amend any provisions of the Memorandum and Articles of Association of Franchisee and/or CIH or to have any ability to direct in the management or board of Franchisee and/or CIH; and/or such person(s) or entity does not (i) execute such shareholders deed(s) and such other documentation in the form as Franchisor requires; or (ii) undertake that it will not sell, transfer, gift, charge or pledge any interest or share to any party; or (iii) comply with the terms of the IFA(s); and/or in opinion of Franchisor, such acquisition is likely to be detrimental to the business...

3.

RISKS OF THE RESTRICTIVE COVENANT CLAUSE The Restrictive Covenant Clause requires that any direct or indirect acquisition by any person or entity acting in concert of more than fifteen percent (15%) of the voting shares of Franchisee and/or CIH must obtain the consent of the Franchisor, failing which the Franchisor may terminate the IFA and/or adopt any of the remedies specified in the IFA. As KFCH is listed on the MSEB, any person, either individually or together with parties acting in concert, could potentially acquire more than fifteen percent (15%) of the voting shares of KFCH without obtaining the consent of the Franchisor. As such, in the event the Franchisor does not consent to such new major shareholder(s), the Franchisor may terminate the IFAs or choose not to renew the IFAs upon their expiry. 2

As set out in the circular to the shareholders of KFCH dated 9 October 2003, the Proposals will not have any effect on the substantial shareholders shareholdings in KFCH. However, the CIE Acquisition will result in the changing of KFCHs indirect substantial shareholder, with an equity interest of 28.79% in KFCH (based on the Register of Substantial Shareholders of KFCH as at 31 January 2004), from CIH to QSR. As set out in the explanatory statement to shareholders and warrantholders and circular to shareholders of Ayamas dated 9 October 2003, approval from the Franchisor for the CIE Acquisition was obtained on 17 February 2003, subject to, inter alia, the approval from the relevant authorities and the shareholders of KFCH and Ayamas for their respective proposals under the Reorganisation Scheme as well as the completion of the Reorganisation Scheme by 16 May 2004 (as extended vide a letter from the Franchisor dated 12 February 2004) or such extension of time granted by the Franchisor at its sole discretion. As CIH will cease to be a substantial shareholder holding more than fifteen percent (15%) of the voting shares (which is held through its wholly-owned subsidiary CIE) of KFCH, upon completion of the CIE Acquisition, the management of KFCH and QSR will initiate discussions with the Franchisor to remove any reference to CIH from the Restrictive Covenant Clause upon completion of the CIE Acquisition.

4.

RATIONALE OF THE RESTRICTIVE COVENANT CLAUSE The primary intent of the Restrictive Covenant Clause is to allow the Franchisor (as intellectual property rights owners and franchisors) to protect its proprietary information and trade secrets and to ensure the continued growth of and relationship with the Franchisees. The rights and obligations provided under the IFAs are personal to the Franchisee concerned and extend to their respective shareholders as a change in shareholder would tantamount to a new franchisee coming into the franchise relationship. In a case where a potential shareholder desires to acquire a large stake in the Franchisee, the Restrictive Covenant Clause acts as an avenue to allow the Franchisor to comprehend such shareholders intent and objective to ensure the alignment of his objectives with that of the Franchisors, which is for the benefit of the KFC, Pizza Hut and Taco Bell business. The Restrictive Covenant Clause gives the Franchisor an avenue to prevent potential shareholders (who may include unknown individuals or corporations with competing business or contrary interests) from adversely influencing and controlling the Franchisees business and corporate decisions or gaining access to its proprietary information. Should such a situation occur, the value of the KFC, Pizza Hut and Taco Bell brands and business may be adversely affected and this would no doubt be detrimental to the interests of KFCHs shareholders. In addition, where a potential shareholder with competing businesses and/or contrary interests acquires voting shares in the Franchisee and adversely influences and controls the Franchisees business and/or corporate decisions and/or attempts to gain access to the Franchisors proprietary information, the Franchisor would be able to disengage via the Restrictive Covenant Clause. If not, the potential damage caused to the KFC, Pizza Hut and Taco Bell brands, their goodwill and other franchise businesses worldwide would be irreversible and calamitous.

Yours faithfully for and on behalf of the Board of KFC Holdings (Malaysia) Bhd

Datuk Haji Izhar bin Sulaiman Group Executive Chairman

APPENDIX I

FURTHER INFORMATION

1.

Responsibility statement This Information Circular has been seen and approved by the Board of Directors of KFCH and they collectively and individually accept full responsibility for the accuracy of the information contained herein and confirm that after having made all reasonable enquiries, and to the best of their knowledge and belief, there are no false or misleading statements or information or facts, the omission of which would make any statement herein false or misleading.

2.

Written consent CIMB has given and has not subsequently withdrawn its written consent to the inclusion of its name in this Information Circular in the form and context in which it appear.