Building Trust Inspiring Lives - IOI Properties

Building TrustInspiring LivesINTEGRATED ANNUAL REPORT 2020

IOI PROPERTIES GROUP BERHAD

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MISSIONTRUSTED... to deliverWe perform our best, prioritise our customers, and demand quality excellence in everything we do.

TRUSTED... to build confidence We consistently deliver products and services that exceed expectations.

TRUSTED... to innovateWe constantly strive to innovate our products and services, enriching lives and delivering emotional connections with our customers.

TRUSTED... to conduct our business with integrity We are guided by strong values of ethics and integrity to safeguard the interests of all stakeholders at all times.

TRUSTED... to empower our people Our success lies in our people, the champions of value creation, whom we nurture and support to achieve their aspirations, enabling collaboration and teamwork towards shared goals.

TRUSTED... to safeguard our environment We consider the impact of our actions, endeavour to create sustainable value for our surroundings and to safeguard our environment; contribute to the preservation of our earth for generations to come.

TRUSTED... to build sustainable communities We strive to create vibrant and thriving communities through positive impacts, responsible actions and sustainable management of our operations.

TRUSTED.VISION

INTEGRATED ANNUAL REPORT 2020

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CORE VALUESINTEGRITYwithout which nothing we do matters

QUALITYas the basis of our reputation

INNOVATION AND CREATIVITYto unlock value by breaking boundaries

COMMITMENT AND PASSIONto excel in all that we do

COST EFFECTIVENESSto achieve the desired results without compromising on cost efficiency

PEOPLE FIRSTto unleash potential of our People

TEAMWORKto drive our Vision forward together

BuildingTrust, Inspiring Lives


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ABOUT THIS REPORT

COVER RATIONALE

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Building Trust, Inspiring Lives

As a reputable property developer, our purpose and success are defined by our focus on people. We remain committed to conducting our business in a sustainable and responsible manner, reinforced by a strong desire to deliver quality, drive innovation and produce excellence. Fuelled by our passion and commitment that seeks to shape sustainable and thriving communities, IOIPG is Building Trust, Inspiring Lives.

REPORTING PRINCIPLES AND FRAMEWORKIOI Properties Group Berhad’s (“IOIPG”) Integrated Annual Report is a wide-ranging assessment of the Group’s activities for the Financial Year 2020 (“FY2020”), providing insight into our strategies for FY2020 and the Group’s outlook for FY2021. It is a continuation of our Integrated Reporting journey which began in FY2019 and underscores our commitment to transparency and good corporate governance practices. Guided by the International Integrated Reporting Council framework, we continue to highlight how the Group creates sustainable value for our stakeholders over the long-term, while also giving readers a broad overview on how we mitigate our risks and leverage on opportunities. This Report is aligned with local reporting requirements such as the Malaysian Code on Corporate Governance, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and the Malaysian Financial Reporting Standards.

FORWARD-LOOKING STATEMENTSIn this Report, we have used forward-looking statements to express the Group’s objectives, strategies and performance. These statements should not be construed as a guarantee of future operating or financial results considering the potential risks and uncertainties that can arise from unforeseen events beyond the Group’s control.

SUSTAINING SUSTAINABILITY

49 Our Sustainability Journey

- Delivering Excellence

- Caring for the Environment

- Creating Value for Our Employees

- Developing Sustainable Communities

- Content Index

WHO GOVERNS US

116 Board of Directors

118 Profile of Directors

125 Senior Management Team

126 Profile of Senior Management Team

HOW WE ARE GOVERNED

135 Corporate Governance Overview Statement

145 Audit Committee Report

151 Risk Management Committee Report

153 Statement on Risk Management and Internal Control

159 Statement of Directors’ Interests

160 Shareholdings of Senior Management Team

161 Other Information

FINANCIAL REPORTS

163 Directors’ Report

170 Financial Statements

312 Group’s Material Properties

SHAREHOLDERS INFORMATION

317 Shareholders Information

NOTICE

320 Notice of Annual General Meeting

325 Statement Accompanying Notice of AGM

Proxy Form

GROUP OVERVIEW

2 Our Group Operations

4 Our Awards

INSIDE THIS REPORT

BUSINESS REVIEW

6 Working Together to Create Success

7 IOI Resort City Powers On

8 Sustainable Living

9 Delivering Better Experiences Through Digitalisation

10 Chairman’s Statement

14 Executive Vice Chairman’s Statement

16 CEO’s Q&A

20 How We Create Value

22 Market Landscape

26 Five-Year Financial Highlights

28 Key Indicators

29 Group Financial Position

30 Group Financial and Segmental Performance Highlights

31 Segmental Performance

32 Group Quarterly Results

33 Financial Calendar

34 Management Discussion and Analysis

- Group Financial Review

- Group Business Review

- How We Manage Our Risks

48 Corporate Information


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THE GROUP IS COMMITTED TO DELIVER

SUSTAINABLE LONG-TERM RETURNS WITH

ITS IMPRESSIVE PORTFOLIO OF SIGNATURE

PROPERTY DEVELOPMENTS AND PRIME

PROPERTY ASSETS. ASPIRING TO MAKE A

POSITIVE DIFFERENCE IN PEOPLE’S LIVES,

OUR PROPERTY STRATEGIES ARE FOCUSED

ON ACHIEVING SUSTAINABLE GROWTH.

MALAYSIAPenang

Selangor

Negeri Sembilan

Malacca

Johor

SINGAPORESeascape, Sentosa Cove

Cape Royale, Sentosa Cove

Cityscape @ Farrer Park

South Beach

The Trilinq

Central Boulevard Towers

THE PEOPLE’SREPUBLIC OF CHINAIOI Park Bay, Jimei @ Xiamen

IOI Palm City, Jimei @ Xiamen

IOI Palm International Parkhouse, Xiang An @ Xiamen

OUR GROUPOPERATIONS

Regional presence


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3

Main Airport

North-South Expressway

East Coast Expressway

SELANGORBandar Puchong Jaya & Bandar Puteri Puchong

16 Sierra, Puchong

IOI Resort City, Putrajaya

Bandar Puteri Bangi

Warisan Puteri Sepang

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3

4

5

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PENANGDesaria, Sungai Ara1

Locations of operations in Malaysia

NEGERI SEMBILAN

Bandar IOI, Bahau

MALACCAAyer Keroh

JOHORBandar IOI Segamat

Taman Lagenda Putra

Bandar Putra Kulai

I-Synergy

Taman Kempas Utama

The Platino

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8

9

10

11

12

13

14

MALACCA

1

2

3

7

9

1011

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NEGERI SEMBILAN

JOHOR

SELANGOR

PENANG

4

65

8

14

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KLIA

SenaiInternational

Airport

PenangInternational

Airport


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IOIPG bagged three awards – Best Developer

in the People’s Choice Award category,

Best Office Development (Future) for Stellar Suites

and Best Luxury High-Rise Development (Completed)

for Wave@Marina Cove at iProperty Development Excellence Awards 2019.

iProperty Development

Excellence Awards 2019

OUR AWARDS

IOIPG clinched Top Ten Property Developer Award

in The Edge Malaysia Property Excellence

Awards 2019, which ranks the best property players based on quantitative and

qualitative attributes.

The Edge Malaysia Property Excellence Awards

2019

IOIPG bagged the PropSocial People’s Property Award 2019

(PPPA 2019) in the Innovative Design category

for N’Dira Townhouse at 16 Sierra.

PropSocial People’s

Property Award 2019

IOIPG was recognised as Best Developer while The Cruise Residence in Bandar Puteri Puchong received an award for

Best Modern Living Development. ASEAN Property Developer

Awards acknowledges and celebrates the best among property developers who

have shaped the local property industry.

ASEAN Property Developer Awards

2019/2020

South Beach was named as winner for

Best Mixed-Use Development (Singapore). Asia Pacific Property Awards is one of the largest and

widely recognised event in this region and is part of the

International Property Awards.

Asia Pacific Property Awards

2020-2021

IOIPG won the Community CSR Award in the iProperty Development Excellence

Awards 2020. The Community CSR Award recognises

the corporate social responsibility (CSR) initiatives to support the

community during the COVID-19 pandemic.

iProperty CommunityCSR Award

2020


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IOIPG was voted as one of the Top 5 Most

Attractive Employer in Real Estate/Property category

for the second year running at the Graduates’

Choice Award 2019.

Graduates’ Choice Award

2019

IOIPG received Special Recognition for Land Use

and Biodiversity at the Sustainable Business

Awards Malaysia 2019, which acknowledged the Group’s commitment to

conserve urban biodiversity in its developments and

its efforts in creating awareness on biodiversity

among the community.

Sustainable Business

Awards Malaysia 2019

Palm Garden Hotel received the award for the Best Guest Experience in

Food category.

Traveloka Hotel Awards

2019

Palm Garden Hotel received recognition for its high customer

review rating.

Agoda 2019 Customer Review

Awards

IOIPG was recognised as winner of the

Special Award on Sustainable Development

Goals (SDGs) in the Malaysia Green Building

Council Leadership in Sustainability Awards

2020. The award was presented to

the best organisation in championing and achieving the United

Nations SDGs.

Malaysia Green Building

Council Leadership in Sustainability Awards 2020

Le Méridien Putrajaya was named as winner of the 2020 Travellers’

Choice Award by Tripadvisor. This award celebrates the favourite hotels, restaurants and

airlines of travellers worldwide and winners

are determined based on the quality and quantity of reviews, opinions and

ratings on Tripadvisor in 2019.

2020 Travellers’

Choice Award

Putrajaya Marriott Hotel was named as winner

of Hotels.com’s Loved by Guests Award 2020.

The hotel was selected as a winner based on its high

guest ratings in 2019.

Hotels.com Loved by

Guests Award 2020


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Working Together to Create Success

At IOIPG, our People and Culture are the backbone of our organisation. We invest heavily in our employees, ensuring they are infused with the culture of excellence. As the key enablers, our people are given the mandate to execute their duties guided by our core values of integrity, quality, innovation and creativity, commitment and passion, cost effectiveness, people first and teamwork.

To ensure a high-performance culture to drive the company forward, we create a conducive work environment that propels the capabilities of our people and retains talent. The Group will continue to deepen the culture of excellence through fostering learning and development among its people to shape a resilient and forward-thinking workforce, ultimately placing the organisation as one of the best employers in the industry.

I have learnt a lot while working with IOI Properties Group as I have been given more responsibilities to handle infrastructure projects; providing opportunities for further career growth. IOIPG has instilled in me the values of quality, teamwork and cost effectiveness. For every project that I manage, I always think of how to do things better. With the new IOIPG vision, mission and core values, I hope it will motivate staff to perform better. We have to work as a team because success belongs to everyone; and we must be able to trust each other in order to do so.

Ricky Chong Hon ChingResident Engineer

The company takes care of its staff by nurturing and training them to grow together with the company, and this has given me an opportunity to showcase my talent. IOIPG has taught me to always do my best, prioritise integrity by not compromising on the quality of our products and services, and that nothing is impossible – there is always a solution to every problem. I believe we must always be committed in our role, be proactive and be sure to do what is right in order to safeguard the interests of the company.

Sukvender Kaur Salakhan SinghBuilding Services Manager


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IOI Resort City Powers On

Spread over a magnificent 788-acre green expanse in Putrajaya, the masterplanned IOI Resort City is IOIPG’s signature development, bringing together all the elements of integrated development and sustainable living. IOI Resort City truly epitomises the concept of Stay, Work and Play with excellent connectivity and accessibility that enriches lives. IOIPG has also taken great care in ensuring sustainable design features are incorporated into this thriving development as we strive to create a modern eco city both in form and function.

Boosting its appeal further is the strategic location of IOI Resort City in a high-growth area, surrounded by a wide range of amenities such as parks, hospitals and educational institutions. There is also excellent accessibility to IOI Resort City with its dedicated connection to the South Klang Valley Expressway, which is further connected to five other major highways.

We are currently driving forward with various exciting developments, adding further vibrancy, value and functionality to IOI Resort City. Our ongoing key projects are the Phase 2 expansion of IOI City Mall which includes a rooftop sports centre, exhibition hall and alfresco dining arcade, and the Gems Residences, a development which seeks to inculcate healthy living habits and offers wellness services for multi-generational households.

Current Components ResidentialBeverly Row Bungalows Diamond Hill BungalowsThe Clio ResidencesConezión ResidencesPuteri Palma CondominiumsPar 3 Condo & Condo Villa

Hospitality & LeisurePutrajaya Marriott HotelLe Méridien PutrajayaPalm Garden HotelPalm Garden Golf Club

Retail & OfficeIOI City MallConeziónOne & Two IOI SquareIOI City Tower 1 & 2

Current Developments The Clio 2 Residences Contemporary service apartments offering multiple sky gardens and premium semi-D layouts

Gems Residences Unique homes designed for multi-generational living, centred around an overall wellness theme and complementary health infrastructure

IOI City Mall Phase 2 adds approximately 1.00 million sq ft of new retail, entertainment and lifestyle-centred options to what is already the biggest mall in Southern Klang Valley; expected opening in November 2021

Upcoming Development The Clio 3 Residences

IOI Resort City In Numbers(Completed Developments)

Total Residential Units

2,447

Hotel rooms

992

Office net lettable area

2.33mil

Retail net lettable area

1.47mil


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Sustainable Living

Gems Residences, IOI Resort City

Sustainable Homes and Lifestyle IOI Properties Group’s commitment to sustainability goes beyond just building properties. We are drawn to providing ecosystems that are truly functional, incorporating aspects of healthy living. The aim is to empower current and future generations to lead sustainable and healthy lifestyles and to take charge of their own wellness in order to solve some of the problems faced by modern society.

With careful thought and consideration for the needs of both the young and the old, the Group has jointly developed Gems Residences with Japanese property developer, Mitsubishi Jisho Residence. This flagship development at IOI Resort City enables multiple generations to live within the same enclave and supports aging in place. Its Wellness Concierge provides peace of mind for working adults who need to juggle between demanding work schedules and taking care of their children and elderly parents. Gems Residences subscribes to universal design principles to cater for residents and visitors with different needs. In here, we place paramount importance to providing a safe environment for children while they are out playing and exploring the development’s resort-style facilities.

Surrounded by lush greenery, the Gems Residences is the ideal place for families to grow together, supported by a strong wellness ecosystem, physical infrastructure and social activities. Older people are often socially isolated and that affects their mental health which directly affects their physical health. In Gems Residences, older residents will have a dedicated community space for social activities and interaction with each other to keep them mentally alert. Special assistance and medical services can also be made available through the Wellness Concierge to cater for special segments of residents who are less physically able. For the younger generation, there are facilities such as an Olympic-sized lap pool, a large leisure pool, an exploratory and reading lab for children to explore and learn, as well as exercise facilities like a gymnasium, tennis court and green spaces for reflexology, yoga and tai chi.


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Digitalisation is a game-changer in many respects and as we undergo a five-year Digital Transformation Roadmap, it will fundamentally change the way the Group uses technology, the way people work and how we evolve processes to meet changing business and market needs. Through digital transformation, the Group aims to respond to the potential for disruption from other competitors and start-ups, while further strengthening the Group’s long-term goals towards sustainability. The Digital Transformation Roadmap is ultimately aimed at enhancing customer experience by simplifying, automating and integrating the different business processes within the Group. Customer experience will be elevated across all interfaces and touchpoints as we focus on delivering the best-in-class products and service excellence. The other important focus area involves back office processing which will be made more efficient by streamlining and reducing paper-based documentation. With automation and integration, certain processes that involve multiple departments will also be made more efficient, as seen in our Building Maintenance App that streamlines operations across departments.

For our customers, the digital ecosystem we have created so far and continued to improve and expand includes:

Delivering Better Experiences Through Digitalisation

IOI eMarketplace A one-stop platform that brings us together with bankers, lawyers and purchasers to facilitate seamless communication to enhance customer convenience; and to enable tracking of every stage in their property purchase(s) process

IOI Support A digital mobile platform for property owners to submit and track progress of feedback and defect reports

IOI LiVO A mobile loyalty programme application with leisure offerings, lifestyle privileges, instant updates and latest deals for our customers

IOI Community An online community engagement platform for homeowners to communicate with the property management team, make bookings for facilities, manage visitors and make payments

Robotic Process Automation (RPA)RPA imitates employee actions when they interact with software, thus eliminating mundane and repetitive rule-based processes from the employee workflow, and improving overall efficiency

Enterprise Content Management (ECM)Streamline the lifecycle of information with document management and the automation of process workflows.

IOIPG-PQSH AppThis app enables the project team to conduct paperless site inspections, reduces the time spent to conduct inspections and assessments; and improves the completeness and timeliness of required information – thereby enhancing quality, health and safety at project sites

Purchase and Payment AutomationA programme that automates purchase and payment requisitions, speeding up a standard but critical business process

Building Maintenance App A mobile-enabled building management platform that streamlines operations and maintenance management

Operationally, our initiatives are saving the time of our employees; and streamlining and automating many business processes:


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CHAIRMAN’SSTATEMENT

DEAR STAKEHOLDERSIt is my honour to

present IOI Properties

Group Berhad’s

Integrated Annual

Report for the financial

year ended

30 June 2020

(“FY2020”).

Our response to the pandemic and the resulting MCO was based on ensuring that business would continue with minimal interruption and that we would be well-positioned for the recovery.

DATUK TAN KIM LEONGIndependent Non-Executive Chairman

THE ECONOMY IN FY2020 The global macroeconomic environment in FY2020 presented two distinctly different scenarios. Beginning with moderate economic growth in the second half of 2019, this rapidly changed into an economic crisis in the first half of 2020 on the back of an unprecedented pandemic that has caused severe disruptions to businesses and society all over the world.

The slowdown in economic growth in the first half of 2020 was a result of the imposition of varying degrees of containment measures to curb the spread of the COVID-19 virus. Economic activity contracted in the United States of America and Euro area, while the People’s Republic of China (“PRC”) registered positive growth of 3.20% in 2Q 2020 as it eased lockdown measures in 1Q 2020. The International Monetary Fund (“IMF”) is projecting world Gross Domestic Product (“GDP”) to contract by 4.90% in 2020, a significant decline compared to the 2.90% growth recorded in 2019.

Supply and demand disruptions arising from weak external demand and strict containment measures resulted in the Malaysian economy contracting by 17.10% in Q2 2020. During 2Q 2020, growth was weak across most economic sectors during the Movement Control Order (“MCO”) and the subsequent conditional and recovery phases of the MCO imposed by the Malaysian government. Bank Negara Malaysia (“BNM”) has projected economic growth of -3.50% to -5.50% in 2020 while the IMF forecasts a 3.80% contraction in Malaysia’s 2020 GDP.


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To counter the negative impact to the nation’s economy, the government announced economic stimulus packages worth RM295 billion, providing sizeable assistance to households and businesses. This was further supported by BNM’s four downward adjustments to the Overnight Policy Rate (“OPR”), bringing it to 1.75% from 3.00% between November 2019 and July 2020. Other measures deployed by BNM included reductions in the Statutory Reserve Requirement, a six-month deferment of loan and financing repayments for individuals and small medium enterprises (“SME”), daily market operations to ensure ample liquidity and allowing banks to utilise their regulatory buffers to ensure sustained financial intermediation.

HOW WE RESPONDED TO COVID-19For IOI Properties Group (“IOIPG”), our response to the pandemic and the resulting MCO was ensuring that business would continue with minimal interruption and that we would be well-positioned for the recovery. In this context, the Group ensured the well-being of our employees by implementing amongst others, social distancing measures in our offices and premises, providing face masks and hand sanitisers, staggered clock in time and lunch hours, and increased routine cleaning of offices and premises. We also provided food and accommodation to contract workers when construction activities were temporarily halted during the MCO period. When construction activities resumed, Standard Operating Procedures (“SOPs”) were adhered to which included health screening for workers.

For our customers, we sought to minimise the impact of the social distancing rules that were enforced during the various stages of the MCO by leveraging on digital communication platforms to connect with potential buyers. We used our website, social media and our customer relationship management application to showcase our properties, and enable buyers to connect with our sales personnel. Our website was an important component of the sales process during this period as it allowed buyers to view our properties through 3D virtual tours of show units, a feature that we have incorporated into our sales approach for a number of years now.

FINANCIAL RESULTS Amidst the backdrop of challenging market conditions due to the COVID-19 pandemic, the Group registered total revenue of RM2.12 billion and profit before taxation of RM897.09 million for the current financial year compared to RM2.20 billion and RM1.09 billion respectively for FY2019. The decline of 4% in revenue was mainly due to lower contribution from property investment and hospitality and leisure segments due to the MCO which began on 18 March 2020 in Malaysia. Profit before taxation declined by 17% when compared to FY2019, mainly attributable to assets written down valued at RM132.62 million based on the current market value. These write-downs are mainly attributable to the office sub-segment which faces a challenging market due to an oversupply of office space and the uncertainty caused by the COVID-19 pandemic.

The key driver of the Group’s revenue is the property development segment contributing 78% (RM1.64 billion), followed by 15% and 7% respectively from the property investment segment (RM320.80 million) and the hospitality & leisure and others segments (RM157.10 million). Year-on-year, revenue from the property development segment increased slightly by RM3.87 million due to higher sales contribution from Xiamen, PRC.

The Group registered

total revenue of

RM2.12 billion

and profit before taxation of

RM897.09million

for FY2020

During MCO by leveraging on

digital communication

platforms to connect with

potential buyers

South Beach, Singapore


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Sky Condominium, Bandar Puchong Jaya

Contribution to the property development segment’s revenue by geographical location was as follows: Xiamen, PRC at 48%, Klang Valley at 37%, Johor at 12% and others (collectively refers to Singapore, Penang and Negeri Sembilan) at 3%.

The performance of the property investment segment was impacted by the COVID-19 pandemic in the current financial year with a decrease in revenue and operating profit by 10% and 20% respectively. This is mainly attributable to loss of rental income due to the imposition of MCO as well as rental relief assistance valued at approximately RM31.53 million which was extended to non-essential tenants. The hospitality and leisure segment was also impacted by the COVID-19 pandemic which registered a 24% decline in revenue and recorded an operating loss of RM10.26 million in FY2020.

The Group’s financial position remains strong with total net assets of RM19.15 billion, cash and cash equivalents of RM1.47 billion and net gearing ratio of 0.50. Details of the Group’s performance are set out under the section “Management Discussion and Analysis” in this Annual Report.

For the financial year under review, an interim dividend of 1.50 sen per ordinary share, amounting to a total payout of approximately RM82.59 million, was declared on 28 August 2020 and is payable on 23 October 2020. This represents a distribution of approximately 18% of the Group’s net profit attributable to the shareholders.

SUSTAINABILITYAt IOIPG, we recognise the impact we have on our surroundings and stakeholders, as we strive to create sustainable value for the long-term. Our business model is thus built on ensuring that sustainability is embedded in all that we do. We look beyond short-term gains to champion the values that really matter, such as a strong respect for the environment and the empowerment of communities, in the realisation that we do not and cannot operate in silo.

With Board oversight and support, our sustainability initiatives continue to be implemented with success across the four strategic themes of Mindset Change, Urban Green, Young Urbanites and Inspiring Women. In addition, our IOI Connects to Earth campaign was carried out for the second consecutive year focusing on Biodiversity Appreciation, Waste Minimisation and Climate Change.

These efforts underscore our commitment to various United Nations Sustainable Development Goals (UN SDGs), such as SDG 4: Quality Education, SDG 7: Affordable and Clean Energy, SDG 11: Sustainable Cities and Communities, SDG 13: Climate Action and SDG 17: Partnerships for the Goals. Moving forward, the Board is cognisant of how crucial sustainability is to business continuity, as it contributes tangible and intangible value, to all that we impact. The Board remains supportive of the Group’s sustainability strategies and initiatives that will fulfil the core purpose of creating a sustainable future.

CHAIRMAN’S STATEMENT


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OUR PEOPLE AND CULTUREIn all that IOIPG wants to achieve, we believe that our People and Culture are the key enablers. By ensuring a culture of excellence, commitment and quality, permeates through the organisation, IOIPG is well-positioned to achieve our vision. Our vision, has just been refreshed to encapsulate our purpose into one word – Trusted. This resonates strongly with our core values which includes integrity, innovation and creativity, commitment and passion, amongst others. We expect our people to uphold these core values as we support them with an environment that is conducive for collaboration, innovation and teamwork, enabling them to excel and drive the Group forward in a sustainable way. Proof of IOIPG’s efforts is clear through measurable outcomes and recognition such as the Graduates’ Choice Award 2019 which places us in the Top 5 Most Attractive Employer in Real Estate/Property for a second consecutive year.

GOVERNANCEWe recognise the importance of good governance in supporting the long-term success and sustainability of our business. While we can deploy the best strategies, and employ the best people, it would all be for nothing if we do not hold ourselves to the highest standards of governance and ethical practices. In this aspect, over the last few years, we have worked hard to ensure that good governance is part of our way of thinking and working, and underpins how we conduct ourselves every day. The Group has also in place a Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy which, among others, sets out our zero-tolerance position and provides information and guidance to those working for the Group on how to recognise and deal with bribery and corruption issues.

OUTLOOKLooking ahead, the global outlook remains uncertain, with potential downside risks mainly due to COVID-19 and the possibility of countries re-imposing lockdown measures to contain a second or third wave of the pandemic, which can also elevate the risk of commodity supply shocks due to a drawback in demand.

Household spending and business investments are also likely to be impacted as the sentiment has shifted to a mindset of precautionary spending. Malaysia’s

economic prospects are similarly challenging due to these uncertainties, although the fiscal stimulus packages and monetary policy actions are expected to support economic growth.

In terms of the market landscape, property investment remains a good hedge against inflation. As the economy gradually transitions to normalcy, demand for properties is expected to remain resilient in the long-term, particularly for projects in attractive locations with good transportation infrastructure and access to amenities and facilities. Despite the ongoing headwinds, IOIPG will continue to be diligent in delivering sustainable financial performance in the coming financial year.

ACKNOWLEDGEMENTSDuring the financial year under review, the Group announced that its Chief Executive Officer (“CEO”), Mr Lee Yeow Seng was redesignated as Executive Vice Chairman with effect from 15 April 2020. With the new appointment, Mr Lee Yeow Seng relinquished his position as CEO. The Group also on the same date announced the appointment of Dato’ Voon Tin Yow as CEO effective 15 April 2020.

On behalf of the Board, I would like to take this opportunity to welcome both the redesignation and appointment of Mr Lee Yeow Seng as well as the appointment of Dato’ Voon Tin Yow, which will enhance the executive leadership of the IOIPG team and strengthen the Group’s position as one of the leading property developers in Malaysia. On behalf of the Board, I would like to take this opportunity to thank the management and staff for their dedication and hard work, and to our stakeholders, customers, business associates and financial institutions for their invaluable support during the year. I would also like to express my gratitude to my fellow board members for their counsel and guidance in steering the Group through this challenging period of time.


United Nations

Sustainable

Development

Goals

(UN SDGs)

Graduates’ Choice Award in 2019–Top 5 Most Attractive Employer in Real Estate/Property


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EXECUTIVE VICE CHAIRMAN’S STATEMENT

LEE YEOW SENGExecutive Vice Chairman

Dear Stakeholders, It has been an unprecedented year

globally as COVID-19 pandemic severely

impact economies worldwide.

Although the operating environment was challenging, especially in the second half of FY2020, the Group managed to record total sales of RM1.84 billion, about 5% less than FY2019’s total sales of RM1.93 billion which was mainly attributable to lower sales from Johor due to the timing of the release of our Bumiputera lots. This resilient performance was made possible through the swift execution of various strategies to mitigate the impact of the MCO. As our sales galleries were temporarily closed during the MCO, some of our strategies included leveraging on the Group’s digital marketing capabilities and the IOI eMarketplace platform to expedite property transactions during the MCO, producing encouraging results.

Malaysia continues to be the largest contributor to sales, contributing 61% with Klang Valley, Johor and smaller developments contributing 47%, 11% and 3% of total sales respectively. Our operations in China contributed 38% while Singapore rounded off the balance. For FY2020, a majority of our launches in Malaysia was priced below RM750,000, which is the more acceptable price range. In terms of construction activity, although Malaysia was affected, the Group managed to work with our contractors to screen all workers in our project sites so that we could quickly recommence construction activities.

In China, IOIPG launched products with a total GDV of RM934 million in both our developments in IOI Palm City, Jimei in Xiamen and IOI Palm International Parkhouse, Xiang An in Xiamen to capitalise on any potential pent-up demand. The strong demand for our products was demonstrated through the encouraging response to the Group’s

TOTAL SALES OF

RM1.84 billion


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launch of a high-rise condominium in IOI Palm City in April 2020 which achieved 85% take up to date. Looking ahead, we expect to launch town villas in IOI Palm City.

Singapore’s circuit breaker measures which were implemented from 7 April 2020 until 1 June 2020, to stem the COVID-19 outbreak, resulted in the halting of construction activities, thus disrupting the construction timeline for the Group’s Central Boulevard Towers development. The Group remains confident that with the gradual reopening of the economy, we will endeavour to catch up on lost time as we progress towards a more advanced stage of the construction. Our joint venture project with City Developments Ltd, the South Beach Residences, continued to register sales, achieving sales of more than 70% of the 190 units, of more than SGD3,000 per sq ft.

IOIPG’s property investment segment was also affected with our office towers and malls being impacted by the MCO. Mall closures during the MCO significantly affected our tenants and we moved to quickly assist them with rental rebates during this period. With the Recovery MCO now in effect since May 2020, coupled with the gradual reopening of the economy, we have seen footfall gradually increase to near pre-pandemic levels in our malls in Putrajaya, Puchong and Kulai.

As for the hospitality industry, it has been adversely affected by the movement restrictions and standard operating procedures that call for strict physical distancing and international border closures. The lockdowns have impacted tourism and its related industries such as lodging, F&B and air travel. While our hospitality segment has seen the cancellation of MICE activities and lower room occupancy, we will continue to carry out more advertisement and marketing activities to improve our visibility in order to drive sales within the domestic market.

THE YEAR AHEADAs we look ahead to what will be another challenging year, we are heartened that Malaysia has started taking small steps in its own economic recovery following the loosening of movement restrictions in May 2020. Although standard operating procedures such as physical distancing are still in effect, we have seen a return in economic activity and will continue to leverage on domestic demand to drive revenue while we manage our cost base to align to the new operating environment.

The property market is anticipated to be constrained by the uncertain economic outlook weighing on consumer sentiment due to COVID-19 and the lockdowns in various stages globally. However, the Group is positive on the PENJANA stimulus plan which was introduced in June 2020 and includes the reintroduction of the Home Ownership

Campaign and stamp duty exemption. In addition, the lowering of the Overnight Policy Rate to a historic low of 1.75% to help stimulate the economy is likely to give the property market a boost as buyers and investors look to take advantage of the lower interest rates.

For IOIPG, we expect to launch products that are innovative and suited to current market sentiment and demand, especially from our existing developments in Bandar Puteri Puchong, 16 Sierra, Bandar IOI Segamat, Warisan Puteri Sepang and IOI Resort City. The variety of properties available include terrace homes, service apartments, residences, shop offices and office suites, all located within strategically located townships with well-established commercial infrastructure and conveniently located amenities. We will also continue to leverage on our digital marketing capabilities to reach out to potential buyers and to enhance the property purchase process via digital platforms.

In the context of our hospitality & leisure business, we have participated in the government’s efforts to promote local tourism and this is expected to boost hotel occupancy. The timely introduction of promotional offers and the loyalty card programme at our golf courses are expected to enhance patronage of our golf courses and the food & beverage outlets at our hotels. We will also capitalise on marketing activities as well as to cross-sell our portfolio of leisure and hospitality brands to drive visitation and revenue.

One other recent and important change for IOIPG was the appointment of Dato’ Voon Tin Yow as the Group’s new Chief Executive Officer on 15 April 2020. We welcome him warmly to the Group and we appreciate the wealth of experience he brings, having played a key role in the success of major players in the construction and property development industry. I look forward to working with him to steer the Group towards new heights.

In closing, I would like to express my gratitude to all our management team and staff for their commitment and hard work in ensuring that the Group remained operationally ready during the MCO/RMCO period and prepared to face the challenging times ahead. I would also like to thank all our stakeholders for their continued support of the Group. I also look forward to the Group and management aggressively driving the new vision and mission, to deliver on our goals, aspirations and to cement our reputation as a developer that delivers quality, experience and value to our stakeholders.

Stay safe everyone.



16

CEO’S Q&A

IOIPG’s long-standing

market reputation as

an established

and reputable

developer with well

positioned landbanks

and our agility in

adapting to the market

has served us well over

the years in our ability

to offer and price our

products competitively.

DATO’ VOON TIN YOWChief Executive Officer

As an integrated developer, we are able to adapt our strategies for different market conditions and we are supported by a management team and workforce that is experienced and committed. IOIPG’s long-standing market reputation as an established and reputable developer with well positioned landbanks and our agility in adapting to the market has served us well over the years in our ability to offer and price our products competitively.

With our investment properties complementing our proactive town planning, that has given us a much broader market appeal as our products include residences, retail, offices, hotels and golf courses. The diversification to investment property also provides us with a more consistent income stream. In addition, our diversification strategy beyond Malaysia, into Singapore and Xiamen in the People’s Republic of China (“PRC”) will continue to hold the Group in good stead going forward.

1. WHAT ARE SOME OF THE KEY CHARACTERISTICS PRESENT IN IOIPG’S DNA THAT ENABLED THE GROUP TO REMAIN RESILIENT DESPITE THE CHALLENGES FACED IN FY2020?


17

The global outbreak of the pandemic and implementation of lockdown measures were unprecedented and disrupted businesses across all industries, altered consumer behaviour and impacted economies across the world as demand receded. The Group was not spared from the effects of the pandemic that continues to reverberate to this day. Nevertheless, the Group leveraged on its inherent strength to implement a number of initiatives during this pandemic period:

• Promotions and incentives during the MCO period, such as waiver of booking fees, legal fees, bank valuation fees and sale & purchase agreement revocation fee, and additional cash rebate.

• Leveraging on our digitalisation efforts to engage with and attract buyers during the MCO period. For example, IOIPG’s eMarketplace digital platform is a convenient and hassle-free platform for customers to experience our products and ultimately purchase properties from the comfort of their homes. This one-stop platform allows purchasers to keep track of every stage of their property purchase without having to physically visit our sales offices, thus prioritising the safety and the convenience of the customer.

• IOIPG also benefited from having a diversified portfolio in terms of geographical location as our PRC business was the first to be able to tap into growth as the country emerged from the lockdown at the time when Malaysia and Singapore were still under the MCO and circuit breaker, respectively.

• As part of our tenant retention strategy, we provided rental relief to ensure the long-term sustainability of our retails and office tenants.

• For our employees, we recognised the economic uncertainty created by the effects of the pandemic and as a caring employer, we ensured that there would be no pay cuts or retrenchment of our staff.

IOIPG provided food and accommodation to contract workers when construction activities were temporarily halted during the MCO period. For our office staff, we encouraged virtual meetings and postponement of company events to abide by physical distancing guidelines, and encouraged employees to sign-up for online learning courses during the MCO period. In addition, we staggered clock-in times and lunch time, and leveraged on our hotel to offer packed lunches delivered to the office at a discounted price. In terms of Standard Operating Procedures, we implemented:

• Digital temperature scanning at our offices, premises and malls.• Social distancing measures in our offices, premises and malls including lifts, office pantries

and public spaces.• Provision of face masks and hand sanitisers.• Higher frequency of routine cleaning of offices, premises and public spaces.

2. HOW DID IOIPG HANDLE THE IMPACT OF COVID-19 IN THE CONTEXT OF THE BUSINESS AND ITS EMPLOYEES?

IOIPG’s eMarketplace digital platform is a convenient and hassle-free platform for customers to experience our products and ultimately purchase properties from the comfort of their homes.

We encouraged virtualmeetings and postponement of company events to abide by physical distancing guidelines, and encouraged employees to sign-up for online learning courses during the MCO period.


18

CEO’S Q&A

3. WHAT IS BEING DONE TO BUILD GREATER RESILIENCE IN IOIPG TO ENABLE IT TO WEATHER DIFFICULT PERIODS?

As we move ahead against the backdrop of a new norm that has been precipitated by the pandemic, we are leveraging on various aspects of IOIPG’s business to build greater resilience. Key to this are three main thrusts which comprise digitalisation, introduction of innovative products and greater diversification into investment properties to ensure consistent income stream.

Therefore, we are looking to accelerate sales via our online platforms and adopt aggressive sales and marketing strategies for our products, in tandem with the expansion and enhancement of our digital marketing capabilities. IOIPG will also continue introducing innovative products that tap on the latest market trends to appeal to a wider market. A key example of this is our upcoming development Gems Residences in IOI Resort City, Putrajaya that targets multi-generational living and has assisted-living features for senior citizens.

We will also capitalise on the recent introduction of the Home Ownership Campaign, real property gains tax exemptions and upliftment of financing limit under the government’s PENJANA incentives to drive interest in home ownership during this period of time.

IOI City Mall Phase 2, Malaysia

To improve the resilience of our income stream, we have undertaken the development of Central Boulevard Towers, an office development in the new commercial centre of Singapore with an estimated net lettable area (“NLA”) of approximately 1.29 million square feet. We are also expanding IOI City Mall through a Phase 2 which will add an estimated NLA of approximately 1.00 million square feet to the existing approximately 1.47 million square feet. IOIPG has also refurbished our malls in terms of services and amenities so that it stays relevant and is able to attract tenants and encourage higher footfall.

In the more immediate term, we have rolled out a host of promotional offers, incentives and packages to increase visitor traffic to both our hotels and golf clubs. Our hotels that are managed by Marriott International Inc are participating in the hotel chain’s JomCutiBeRightBack holiday campaign that is aimed at encouraging domestic travel. As for our golf clubs, we have various promotional offers and Palm Garden Golf Club in Putrajaya has recently launched a new loyalty card programme to make golfing more accessible which also offers various discounts and special rates and access to activities in the club, IOI City Mall and our hotels.


19

The Group anticipates that over the next 3 to 5 years, it would continue to see contributions from its existing townships which will becoming increasingly vibrant over time as more developments are being undertaken there. As the economy gradually recovers from the pandemic, we are expecting to continue launching new developments which will enlarge our active development landbank and generate revenue stream.

We believe integrated developments with investment properties such as malls, offices and hotels is the way forward as illustrated by the success of our existing townships in IOI Resort City, Puchong and Johor. As we do this, we are also aware of the impact on the environment and will continue to adopt sustainable development practises to reduce carbon footprint and enhance biodiversity in our townships, where feasible.

Moving forward, contributions from the Group’s investment property and hospitality portfolio will be more significant as we add more net lettable area (NLA) to our existing NLA of approximately 6.59 million square feet of mainly retail and office space. The Group is currently increasing NLA to its retail malls and office space locally and abroad and expects total floor space to increase by approximately 65% and 50% respectively within 3-5 years with the on-going construction of IOI City Mall Phase 2, Central Boulevard Towers in Singapore, and offices and a new mall in Xiamen, PRC.

IOIPG will also be adding a new branded hotel to our line-up with the addition of the Sheraton Grand in Xiamen. The new 370-room hotel is positioned as a 5-star hotel managed by Marriott International Inc. This will bring the total number of hotels owned by the Group to five, offering more than 1,600 keys.

The Group’s geographical diversification and extensive and strategically located landbanks will continue to drive future growth, and we are always on the lookout for promising new developments and investment opportunities in the countries we operate in, and aim to enter into new ventures in Singapore and PRC when opportunities arise. Our landbank also holds vast development and investment potential due to their proximity to strategic growth corridors that will enable the Group to unlock significant value once developed.

Last but not least, IOIPG is fully cognisant that it will need the tools and capabilities to be able to drive the Group’s vision and supporting initiatives. Thus, we are fully embracing digitalisation, innovation and smart technologies and deploying it along the entire product lifecycle, while equipping our people with the relevant skills, to help us achieve our goals.


We create value and boost the potential of our employees by maintaining a healthy, safe and fair work culture, emphasising on employee engagement while embracing diversity and practising fair and equal employment opportunities. IOIPG also strongly believes in nurturing young talents and provides internships to support the development of undergraduates. As a property conglomerate that embraces sustainability, we believe having the right people and instilling the right culture will ensure the long-term sustainability of our business.

To meet the needs of our employees, we regularly engage with our employees through formal and informal activities, providing an avenue for employees to channel their thoughts and opinions that will ultimately enhance business sustainability. We also recognise the importance of talent development and invest in programmes and training to maintain our competitive edge. Our employees clocked over 81,000 training hours in FY2020 to enhance their professional and personal development. Every employee is recognised for their skills, knowledge, experience and performance, where they are appraised once a year and outstanding employees are accorded with due recognition.

Having established itself and persisted through various economic cycles in the industry for over three decades, the Group has charted a successful growth to become one of Malaysia’s leading property developers and we are proud of our achievements over the years.

With a reputable brand name and proven track record, the Group is committed to adapting our strategies in line with the market and continuing to build trust in our brand name through quality and innovation in our products and services to create long term shareholder value.

We believe the trust we have built with our customers, and the trust we seek to earn from prospective ones, is crucial if we are to continue to produce results that matter.

In the context of property development, we are committed to creating vibrant townships and developments by offering products in line with market demand that are close to good transportation facilities and modern-day conveniences.

4. HOW DOES IOIPG CULTIVATE THE POTENTIAL OF ITS EMPLOYEES?

5. HOW IS IOIPG CREATING FUTURE VALUE FOR STAKEHOLDERS IN THE NEAR, MID AND LONG-TERM?


20

Financial CapitalOur financial capital, grown and utilised through prudent financial management, enables the Group to capitalise on new opportunities to add value to other Capitals.

• Net Assets RM19.00 billion • Cash Holdings RM1.47 billion

Manufactured CapitalOur investments in retail, office, hospitality and leisure properties, and other physical assets such as our property developments ensure long-term profitability and productivity for our core business segments.

• NLA Retail 2.63 million • NLA Office 3.21 million • Total Hotel Rooms 1,241

Human CapitalOur Human Capital is driven by a corporate culture that values diversity, openness, trust and respect. A strong and committed workforce is the backbone of our dynamic operations, and adds value to all our other Capitals.

• 2,316 Employees

Intellectual CapitalWe continually invest to improve the Group’s knowledge and expertise as these intangibles serve to improve the overall efficiency and effectiveness of our business operations.

• 5-Year Digital Transformation Plan

Natural CapitalWe endeavour to mitigate the impact on our Natural Capital through the optimal use of our resources, prudent environmental management and efficient energy, water & waste management.

• Remaining Landbank approximately 10,000 acres • Solar Energy Generation 4,293MWh/year

Social & Relationship CapitalOur strong relationships with our communities, business associates, regulators, employees and partners enable us to build sustainable townships and manage properties that generate long-term value.

• Total Scholarship Granted: RM9.20 million (to date)• Universities, School Buildings and Facilities:

RM62.22 million (to date)

THESE ARE THE INPUTS WE PUT INTO BUSINESSES WHICH ARE DRIVEN BY

THE RISKS WE CONSIDER

Financial Risk Geopolitical Risk Health, Safety & Security Risk Cybersecurity Risk Project Management Risk Market Risk

Please refer to pages 46 and 47 for How We Manage Our Risks.

Safeguarded by Good Governance Practices across the Group

PROGRESSED THROUGH OUR STRATEGIC PILLARS:

People & Culture IOIPG’s unique culture of mutual trust and respect, showcased through our people, is central to our ability to create value. Guided by our core values, our people share a vision of integrity, quality, innovation and creativity, commitment and passion, cost effectiveness, people first and teamwork.

Integrated DevelopmentsOur integrated commercial and residential enclaves create signature urban spaces that foster social integration and sustainable lifestyle. By providing quality amenities and superior connectivity, we bring people together and strengthen the social fabric where we operate.

Sustainable Design Principles IOIPG integrates green building and township design into our developments to complement and not compete with surrounding ecosystems, conserving the urban biodiversity and enabling humans and nature to co-exist harmoniously.

Technology As digital convenience and options evolve with customer expectations, IOIPG continues to explore and implement leading-edge digitalisation and process improvement. These enhance the experiences of our customers and deliver the highest standards of service excellence.

OUR BUSINESS

Please refer to page 36 to 45 for Our Group Business Review.

Property Development

Property Investment

Hospitality & Leisure

Guided by our Vision

TRUSTED.Please refer to inner front cover for full version of Vision, Mission and Core Values.

HOW WE CREATE VALUE


21

Deliver Excellence

Care for the Environment

Create Value for Our Employees

Develop SustainableCommunities

WHICH ARE DRIVEN BY TO CREATE VALUETO GENERATE THESE OUTCOMES

Please refer to pages 34 to 35 for Group Financial Review.

Total launches 2,271 units

GDV RM2.27 billion

Net asset per share

RM3.45

Sales RM1.84 billion

IOI eMarketplace one-stop platform for purchasing property

Engaged local communities through various CSR

programmes and events,as well as through

social media

Food waste diverted from

landfill 32,103 kg

(to date)

Profit attributable to shareholdersRM455.69 million

Constituent of FTSE4GOOD

Index Series

IOIPG-PQSH appprovides real-time digitalised quality

inspection, safety and health assessment at

project sites

Leadership Development Programme

to drive high performance for Senior Leaders and Managers

IOI Connects to Earth A campaign to create awareness on

climate change mitigation and adaptation, biodiversity conservation and waste

minimisation

Think We Not Me Campaign A campaign to create awareness and community participation in navigating

the impact of COVID-19

Nurturing young talent

through internship and apprentice placements

Bargain Basement contributed more than

RM266,000 to various beneficiaries

(to date)

Employee engagement through regular townhall sessions, team building activities and festive

gatherings amongst others

Revenue RM2.12 billion

IOI Support System App

digitalised customer feedback management

Bandar Puteri Puchong Interchange benefitting

30,000 households and surrounding tenants

Reduction of carbon emissions from solar energy

2,979 tCO2

Ongoing long-term assets under construction

- Retail (NLA) 1.64 million

- Hotel (room) 370 Rooms

- Office (NLA) 1.60 million


22

MARKET LANDSCAPE

Subdued Property, Hospitality and Retail Market in Malaysia

Creating New Opportunities Through Digitalisation

Sustainability Concerns Driving Customer and Business Behaviour

Following a steady performance in the property development, hospitality and retail industries in the first half of FY2020, business sentiment deteriorated in the second half of FY2020 with the onset of the COVID-19 pandemic that disrupted the economy, businesses and consumer demand.

Digitalisation enables companies to rapidly adapt to changing consumer expectations and external environments. The onset of COVID-19 and the reality of a post-COVID-19 environment has accelerated this trend further as consumers are concerned about health, safety and convenience.

The greater awareness about sustainability issues and climate change is fundamentally changing how businesses operate, as customers become increasingly well-versed about such matters and translate it into how they spend their money, choosing where they want to live or places they want to rent.

MARKET SCENARIOS OVERVIEW


23

We will continue our long-term strategic approach by ensuring properties in our portfolio remain affordable to our target markets. We will maintain the quality that the market recognises us for, drive innovation and pursue value engineering to optimise cost throughout our operations. The hospitality and leisure segment will embrace the new norm as we continue to retain existing clientele segment and meet the new demands of an evolving market.

Aside from offering virtual showrooms on our website, we have launched the IOI eMarketplace application that brings together bankers, lawyers and purchasers with us on a one-stop platform for property purchasing. The platform enables booking and signing of sales related documents, without being physically present at the sales office. It also enables buyers to track the progress of the purchase every step of the way. We will continue to expand our digital ecosystem to deliver greater convenience for our customers.

IOIPG embeds sustainability in all that we do. We incorporate sustainable practices in the design and building of our residential and commercial spaces, management of our operations and use of natural resources. We further support this by advocating sustainable lifestyles, consistently engaging stakeholders and creating innovative products and services.

Most property sub-sectors are impacted negatively, with the retail, hospitality and leisure segments likely to remain challenging as the market grapples with dampened consumer and business sentiment. Although the residential market saw positive growth in the first half of FY2020, it is likely to remain flat throughout the rest of FY2020 as consumers postpone big-ticket purchases.

Many property players were quick to offer virtual showrooms to reach out to customers during the stricter stages of movement restriction and this development is expected to continue post-COVID-19. The property purchase process has also evolved with offline processes being moved online by leveraging on digital applications and technology, thereby making the process more efficient and more convenient for the consumer.

The property industry is actively embracing sustainability practices in terms of making their spaces greener, environmentally friendly and incorporating aspects of conservation in areas they impact. It has also resulted in the sustainable management of operations, better governance practices and the active participation in helping communities around them.

IMPACT OUR RESPONSES


24

MARKET SCENARIOS OVERVIEW

MARKET LANDSCAPE

Consumers Seek Practical and Affordable Housing

Growing Prominence of Online Retail Shopping

Effect of the COVID-19 Pandemic on Markets We Operate In

The consumer market has evolved, driven by changing demographics and a shift in working patterns, e.g. working from home, leading to consumers wanting affordable properties with good connectivity and convenience while also having access to all their lifestyle related needs.

The rise of e-commerce and online shopping has provided consumers with a relevant and viable alternative to the traditional shopping experience.

The COVID-19 pandemic and its effect on economies continues to be a concern. While the situation in Malaysia is largely under control, the few months of restricted movement has severely slowed economic activity especially in some of the markets we operate in, while the strength of recovery is prone to certain downside risks.


25

IMPACT OUR RESPONSES

The property industry has responded to this stay, work and play trend by building more integrated developments or transit-oriented developments with affordable properties as it seeks to capture market share for this demographic that continues to grow in importance.

The Group has always adopted a pro-active approach to the latest trends and has stayed ahead of the curve in respect to the creation of vibrant integrated developments as well as transit-oriented developments. We provide high quality amenities, excellent lifestyle offerings and superior connectivity in our integrated developments. We support this further with our innovative financing solutions.

These distribution channels experienced higher activity and volume with the on-set of the COVID-19 pandemic which forced consumers to adjust their behaviour and spending patterns to comply with movement restrictions. Looking ahead, physical locations will still have an important role and continue to complement their online counterparts, providing holistic online to offline experiences.

The recovery of our malls has been better than expected with footfall achieving more than 80% of pre-COVID-19 numbers. The positive recovery indicates that there is still a preference for traditional retail shopping. Nevertheless, the Group also sees opportunities to capitalise on the integration of offline and online retail and F&B dine-ins and takeaways into our business strategy in order to remain relevant in the retail marketplace.

The hospitality segment was disrupted by the pandemic due to the Movement Control Order (MCO) and the closure of international borders. The retail segment was also significantly affected as malls were partially closed at the onset of the MCO, and consumer sentiment is likely to remain muted for the rest of the year due to dampened demand and strict adherence to SOPs. In the office segment, businesses may downsize thus potentially leading to reduced demand. Meanwhile, there may still be opportunities in the residential space due to government-initiated stimulus packages.

The Group is committed to remain resilient and weather through this pandemic. Our hospitality segment will aggressively focus on the domestic market as well as meetings, incentives, conventions and exhibitions (MICE) sales; while our retail segment will continue initiating innovative strategies to increase footfall. The office segment remains relatively stable but will also need to be flexible and agile in response to the changing market landscape. The property development segment will be focusing on driving sales through the government’s HOC incentives and delivering quality and mid-priced range products.


26

FIVE-YEAR FINANCIALHIGHLIGHTS

2020 2019 2018 2017 2016

Financial Year Ended 30 June (RM’000) MFRS MFRS MFRS FRS FRS

RESULTSRevenue 2,116,346 2,197,514 2,668,745 4,185,361 3,024,940 Segment operating profit 897,168 850,351 803,659 1,305,610 1,073,653 Property development costs and inventories written down (27,855) - - - -Fair value and impairment (losses)/gain on investment properties (104,765) 93,356 160,695 56,231 145,405 Gain on bargain purchase - - - - 71,091 Share of result of an associate 19,622 2,005 3,193 3,264 (3,806)Share of results of joint ventures 93,217 103,174 (33,875) (1,001) 181,278 Profit before interest and taxation 877,387 1,048,886 933,672 1,364,104 1,467,621 Net interest income 49,995 68,936 52,440 51,873 57,078 Net foreign currency translation (loss)/gain on borrowings and deposits (30,289) (31,862) 29,495 20,648 -Profit before taxation 897,093 1,085,960 1,015,607 1,436,625 1,524,699 Taxation (437,677) (425,530) (237,493) (468,799) (424,440)Profit for the financial year 459,416 660,430 778,114 967,826 1,100,259 Attributable to:

Owners of the Company 455,693 661,290 753,636 920,870 1,080,018 Non-controlling interests 3,723 (860) 24,478 46,956 20,241

ASSETSProperty, plant & equipment 1,421,979 1,265,538 1,167,505 1,137,912 1,122,322 Land held for property development 4,847,658 4,642,164 4,508,568 4,560,892 4,591,032 Investment properties 14,334,703 13,672,410 12,891,488 12,804,095 4,024,219 Interests in joint ventures 4,476,409 5,012,119 4,951,641 5,126,081 4,820,518 Property development costs 3,172,133 3,567,548 3,467,800 4,014,666 4,156,329 Inventories 2,244,444 2,047,991 2,106,832 1,835,521 700,324 Cash and cash equivalents 1,471,985 1,576,885 2,683,320 2,376,233 2,086,985 Other assets 930,462 934,547 941,884 1,772,342 1,308,612 Total assets 32,899,773 32,719,202 32,719,038 33,627,742 22,810,341

EQUITY AND LIABILITIESTotal shareholders’ equity 18,995,073 18,834,461 18,309,595 18,227,961 15,885,085 Non-controlling interests 156,875 159,122 166,603 260,615 130,754 Total equity 19,151,948 18,993,583 18,476,198 18,488,576 16,015,839

Borrowings 10,895,176 11,326,461 11,953,066 12,494,506 4,262,032 Other liabilities 2,852,649 2,399,158 2,289,774 2,644,660 2,532,470 Total liabilities 13,747,825 13,725,619 14,242,840 15,139,166 6,794,502 Total equity and liabilities 32,899,773 32,719,202 32,719,038 33,627,742 22,810,341

FINANCIAL RATIOSBasic earnings per share (sen) 8.28 12.01 13.69 18.42 24.99 Diluted earnings per share (sen) 8.28 12.01 13.69 18.42 24.99 Interest cover (times) 2.98 2.82 3.02 5.71 9.97 Net dividend per share (sen) 1.50 3.00 5.00 6.00 8.00 Dividend payout ratio (%) 18.12 24.98 36.53 35.88 32.68

Net assets per share (RM) 3.45 3.42 3.33 3.31 3.60 Gross gearing ratio (times) 0.57 0.60 0.65 0.69 0.27 Net gearing ratio (times) 0.50 0.52 0.51 0.56 0.14 Return on average shareholders’ equity (%) 2.41 3.56 4.12 5.40 7.37 Return on average capital employed (%) 1.47 1.95 2.33 3.76 5.58

The above information from FY2018 to FY2020 have been prepared in accordance with MFRS, whereas information for FY2016 and FY2017 have been prepared in accordance with Financial Reporting Standard (“FRS”).


27

REVENUE (RM’000)

2,116,346

SHAREHOLDERS’ EQUITY (RM’000)

18,995,073

PROFIT BEFORE INTEREST AND TAXATION (RM’000)

877,387

NET ASSETS PER SHARE (RM)

3.45

2,116,346

18,995,073

877,387

3.45

2020

2020

2020

2020

2,197,514

18,834,461

1,048,886

3.42

2019

2019

2019

2019

2,668,745

18,309,595

933,672

3.33

2018

2018

2018

2018

4,185,361

18,227,961

1,364,104

3.31

2017

2017

2017

2017

3,024,940

15,885,085

1,467,621

3.60

2016

2016

2016

2016


28

KEYINDICATORS

IOI Properties Group Berhad FTSE Bursa Malaysia Bursa Malaysia Property

0

-10

-40

-30

-20

Net Assets Per Share

RM3.45RM3.42 (2019)

Share Price

RM0.98RM1.38 (2019)

Gross Dividend Per Share

1.50 sen3.00 sen (2019)

JUL 19 AUG 19 SEP 19 OCT 19 NOV 19 DEC 19 JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20

Profit Before Taxation

RM897.09 millionRM1.09 billion (2019)

Revenue

RM2.12 billionRM2.20 billion (2019)

Earnings Per Share

8.28 sen12.01 sen (2019)


29

2019(RM’000)

Total32,719,202

2019(RM’000)

Total32,719,202

2020(RM’000)

Total 32,899,773

GROUP FINANCIAL POSITION

2020(RM’000)

Total 32,899,773

Assets

Equity and Liabilities

1,421,979 Property plant and equipment

18,995,073 Total shareholders’ equity

18,834,461 Total shareholders’ equity

1,265,538 Property plant and equipment

8,019,791 Land held for property development and property development costs

8,209,712 Land held for property development and property development costs

2,244,444 Inventories

2,047,991 Inventories

14,334,703 Investment properties

156,875 Non-controlling

interests

159,122 Non-controlling

interests

10,895,176Borrowings

11,326,461 Borrowings

2,852,649 Other liabilities

2,399,158 Other liabilities

13,672,410 Investment properties

4,476,409 Interests in

joint ventures

5,012,119 Interests in

joint ventures

1,471,985 Cash and cash

equivalents

1,576,885 Cash and cash

equivalents

930,462 Other assets

934,547 Other assets


30

GROUP FINANCIAL AND SEGMENTALPERFORMANCE HIGHLIGHTS

2020 2019 2018 2017 2016In RM’000 unless otherwise stated MFRS MFRS MFRS FRS FRS

FINANCIAL PERFORMANCE

Revenue 2,116,346 2,197,514 2,668,745 4,185,361 3,024,940

Segment operating profit 897,168 850,351 803,659 1,305,610 1,073,653

Property development costs and inventories written down (27,855) - - - -

Fair value (loss)/gain and Impairment loss on investment properties (104,765) 93,356 160,695 56,231 145,405

Gain on bargain purchase - - - - 71,091

Share of result of an associate 19,622 2,005 3,193 3,264 (3,806)

Share of results of joint ventures 93,217 103,174 (33,875) (1,001) 181,278

Profit before interest and taxation 877,387 1,048,886 933,672 1,364,104 1,467,621

Net interest income 49,995 68,936 52,440 51,873 57,078

Net foreign currency translation (loss)/gain on borrowings and deposits (30,289) (31,862) 29,495 20,648 - Profit before taxation 897,093 1,085,960 1,015,607 1,436,625 1,524,699

Taxation (437,677) (425,530) (237,493) (468,799) (424,440)

Profit for the financial year 459,416 660,430 778,114 967,826 1,100,259

SEGMENT ANALYSIS

Property Development

Sales (unit) 2,270 2,126 2,128 2,296 2,368

Sales value 1,839,328 1,930,052 1,876,769 2,846,826 2,214,426

Revenue 1,638,453 1,634,582 2,141,272 3,714,204 2,613,666

Segment operating profit 738,866 612,986 571,349 1,158,839 909,134

Property Investment

Assets under management# 4,289,660 4,283,618 4,248,528 3,773,716 3,670,067

Net lettable area (‘000 sq ft)^ 6,495 6,481 6,696 5,682 5,573

Average occupancy rate (%) 63 60 59 65 77

Rental yield (%) 7 8 8 8 7

Revenue 320,796 354,960 326,214 302,119 271,872

Segment operating profit 165,671 207,877 195,060 126,482 141,361

Hospitality & Leisure

Number of hotels (unit)# 4 4 4 4 3

Number of rooms (key) 1,241 1,241 1,241 1,241 888

Occupancy rate (%) 51-78 65-81 61-92 49-77 50-74

Revenue 150,070 198,017 190,023 161,796 131,816

Segment operating (loss)/profit (10,260) 22,624 28,533 15,393 18,221

Other Operations

Revenue 7,027 9,955 11,236 7,242 7,586

Segment operating profit 2,891 6,864 8,717 4,896 4,937

# Excluded assets that are currently under construction.^ Excluded vacant lands and car parks.

The above information from FY2018 to FY2020 have been prepared in accordance with MFRS, whereas information for FY2016 and FY2017 have been prepared in accordance with Financial Reporting Standard (“FRS”).


31

SEGMENTALPERFORMANCE

Revenue Segment Operating Profit/(Loss)

PROPERTYDEVELOPMENT

PROPERTYINVESTMENT

HOSPITALITY & LEISURE

OTHER OPERATIONS

Sales (UNIT)

2,270

Sales Value (RM’000)

1,839,328

Revenue (RM’000)

1,638,453

Segment OperatingProfit (RM’000)

738,866

Revenue (RM’000)

320,796


165,671

Revenue (RM’000)

150,070

Segment OperatingLoss (RM’000)

(10,260)

Revenue (RM’000)

7,027


2,891

2020(RM’000)

Total 2,116,346

2020(RM’000)

Total 897,168

1,638,453 Property Development

738,866 Property Development

320,796 Property

Investment

165,671 Property

Investment

150,070 Hospitality &

Leisure

(10,260) Hospitality &

Leisure

7,027 Other Operations

2,891 Other Operations


32

GROUP QUARTERLYRESULTS

In RM’000 unless otherwise stated 30 Sep 2019 % 31 Dec 2019 % 31 Mar 2020 % 30 Jun 2020 %

Revenue 540,315 25.5 564,129 26.7 401,432 19.0 610,470 28.8

Operating profit 243,098 31.8 219,477 28.7 120,692 15.8 181,281 23.7

Share of result of an associate 502 2.6 267 1.4 (483) (2.5) 19,336 98.5

Share of results of joint ventures 48,347 51.9 29,399 31.5 17,490 18.8 (2,019) (2.2)

Profit before interest and taxation 291,947 33.3 249,143 28.4 137,699 15.7 198,598 22.6

Net interest income 15,827 31.7 11,802 23.6 12,419 24.8 9,947 19.9

Net foreign currency translation (loss)/gain on borrowings and deposits

(52,125) 172.1 25,356 (83.7) (10,829) 35.7 7,309 (24.1)

Profit before taxation 255,649 28.5 286,301 31.9 139,289 15.5 215,854 24.1

Taxation (119,145) 27.2 (85,422) 19.5 (66,801) 15.3 (166,309) 38.0

Profit for the financial year 136,504 29.7 200,879 43.7 72,488 15.8 49,545 10.8

Attributable to:

Owners of the Company 136,636 30.0 199,749 43.8 71,359 15.7 47,949 10.5

Non-controlling interests (132) (3.5) 1,130 30.3 1,129 30.3 1,596 42.9

136,504 29.7 200,879 43.7 72,488 15.8 49,545 10.8

Earnings per share (sen)

Basic 2.48 3.63 1.30 0.87

Diluted 2.48 3.63 1.30 0.87

SEGMENT REVENUE AND SEGMENT RESULTS

In RM’000 unless otherwise stated 30 Sep 2019 % 31 Dec 2019 % 31 Mar 2020 % 30 Jun 2020 %

Segment Revenue

Property development 398,906 24.3 410,876 25.1 284,100 17.4 544,571 33.2

Property investment 90,301 28.2 95,276 29.7 80,854 25.2 54,365 16.9

Hospitality and leisure 50,144 33.4 54,650 36.4 35,446 23.6 9,830 6.6

Others 964 13.7 3,327 47.3 1,032 14.7 1,704 24.3

540,315 25.5 564,129 26.7 401,432 19.0 610,470 28.8

Segment Results

Property development 222,579 27.4 172,048 21.1 103,308 12.7 315,557 38.8

Property investment 63,755 72.3 62,674 71.1 49,423 56.1 (87,701) (99.5)

Hospitality and leisure 5,354 (19.7) 13,133 (48.4) (15,125) 55.7 (30,509) 112.4

Others 259 9.0 1,288 44.5 93 3.2 1,251 43.3

291,947 33.3 249,143 28.4 137,699 15.7 198,598 22.6


33

FINANCIALCALENDAR

30 JUNE 2 0 2 0

Notice of AGM

30 SEPTEMBER 2020

AGM

28 OCTOBER 2020

FINANCIAL YEAR END GENERAL MEETING

ANNOUNCEMENT OF RESULTS

PAYMENT OF INTERIM DIVIDEND

1st Quarter

25 NOVEMBER 2019

2nd Quarter

25 FEBRUARY 2020

3rd Quarter

29 MAY 2020

4th Quarter

28 AUGUST 2020

Declaration

28 AUGUST 2020

Book Closure

14 OCTOBER 2020

Payment

23 OCTOBER 2020


34

MANAGEMENT DISCUSSION AND ANALYSIS

Group Financial Review

The Group recorded revenue of RM2.12 billion and profit before taxation (“PBT”) of RM897.09 million for the financial year ended 30 June 2020 (“FY2020”). The property development segment (“PD segment”) remained the key driver of our operations and accounted for 78% (FY2019: 74%) of the Group’s total revenue, whilst the revenue from property investment, hospitality & leisure and other segments accounted for the remaining 15% (FY2019: 16%) and 7% (FY2019: 10%) respectively. Revenue from Malaysia operation accounted for 62% (FY2019: 74%) of the total Group’s revenue and the remaining 37% (FY2019: 24%) and 1% (FY2019: 2%) respectively are contributed from People’s Republic of China (“PRC”) and Singapore operations.

The Group’s revenue in FY2020 was 4% lower than FY2019, mainly due to lower contribution from property investment, and hospitality & leisure segments due to the imposition of the Movement Control Order (“MCO”) by the government of Malaysia in response to the COVID-19 pandemic. Despite the challenging business environment resulting from the COVID-19 pandemic, the revenue contribution from property development segment remained strong at RM1.64 billion (FY2019: RM1.63 billion).

The Group’s PBT of RM1.06 billion in FY2020 (after excluding assets written down in value and net foreign currency translation loss on borrowings) was 4% higher than FY2019 of RM1.02 billion (excluding fair value gain on investment properties and net foreign currency translation loss on borrowings). Higher PBT is mainly attributable to higher profit contribution from property development segment and higher share of profit from the sale of land by an associate.

SEGMENT FINANCIAL HIGHLIGHTS

Property DevelopmentProperty development continues to be the key driver for both revenue and operating profit of the Group. The property development segment registered revenue of RM1.64 billion in FY2020, which was RM3.87 million higher than FY2019. Higher revenue in FY2020 was mainly due to higher contribution from PRC operations as a result of pent up demand following PRC’s recovery from the COVID-19 pandemic.

The development projects in Malaysia contributed 51% (FY2019: 64%) of the Group’s property development revenue, followed by 48% (FY2019: 33%) from development projects in Xiamen, PRC and the remaining balance of 1% (FY2019: 3%) from Singapore.

The revenue contribution from Malaysia operations in FY2020 was lower than FY2019 by RM217.38 million or 21%. This was mainly due to the disruption of construction works for ongoing projects arising from the imposition of MCO and lower sales from Johor operations as most of the remaining unsold units are Bumiputera lots pending release from the State authorities.

As for property development segment’s operating profit, the Group has recorded the sum of RM738.87 million in FY2020, which is RM125.88 million or 21% higher than FY2019. Higher operating profit was contributed by property development projects in PRC.

Property InvestmentThe property investment segment posted total revenue of RM320.80 million and operating profit of RM165.67 million. The key revenue and operating profit driver is from the retail segment which accounts for 79% of the Group’s total revenue of property investment segment.

The current year’s revenue is RM34.16 million or 10% lower than FY2019’s revenue of RM354.96 million, while operating profit was lower by RM42.21 million or 20% compared to FY2019’s performance of RM207.88 million. The weaker financial performance in the FY2020 was due to lower rental income arising from rental relief assistance extended to tenants as well as lower car park income as a result of the imposition of MCO and RMCO.

PROPERTY DEVELOPMENT

SEGMENT posted

revenue of

RM1.64 billion

in FY2020, which was RM3.87

million higher than FY2019.


35

Hospitality & LeisureThe hospitality & leisure segment registered total revenue of RM150.07 million, a decrease of RM47.95 million or 24% when compared with FY2019. Operating profit of RM22.62 million in FY2019 reversed to an operating loss of RM10.26 million in FY2020.

The lower financial performance in FY2020 is mainly attributable to the drop in occupancy rate and loss of revenue due to imposition of MCO which restricted domestic and inbound travel, group and corporate functions and events.

GROUP FINANCIAL POSITIONThe Group’s financial position as at 30 June 2020 registered total assets of RM32.90 billion and shareholders’ equity of RM19.00 billion. Total liabilities of the Group stood at RM13.75 billion in FY2020 out of which the Group’s gross borrowing stood at RM10.90 billion, which is a decrease of RM431.29 million when compared with FY2019. The Group has gross gearing ratio of 0.57 which improved from the 0.60 recorded in FY2019. In terms of net gearing ratio, the Group recorded a ratio of 0.50 in FY2020 which was slightly lower than the ratio of 0.52 in FY2019.

The Group’s net assets value per share of RM3.45 for FY2020 was slightly higher than RM3.42 per share recorded in FY2019.

The Group continues to maintain a healthy cash flow position with cash and cash equivalents of RM1.47 billion as at 30 June 2020. Net cash generated from operating activities was RM977.01 million in FY2020, which was RM220.41 million higher than FY2019. This was mainly due to higher tax payment in FY2019 following the completion of certain development projects of our China operations. The Group has total net cash outflows of RM70.80 million from investing activities in FY2020, which was mainly utilised for the construction of Central Boulevard, Singapore, shopping mall in IOI Palm City, PRC and Phase 2 of IOI City Mall in Malaysia. The Group’s cash outflow

from investing activities was RM169.67 million lower than FY2019, mainly due to higher repatriation of fund from joint venture arising from the sale of South Beach Residences in Singapore.

For financing activities, the Group was in a net cash outflow position of RM1.02 billion in FY2020, which was RM611.03 million lower than FY2019 mainly due to lower repayment of borrowings in FY2020.

Despite challenging business environment and commitments for the ongoing development and investment projects, the Group continues to maintain the payment of an annual dividend to our loyal shareholders. An interim single tier dividend of 1.50 sen per ordinary share amounting to RM82.59 million was declared in respect of FY2020. It equates to a dividend payout ratio of 18% out of total earnings attributable to the owners of the Company.

Pavilion Service Apartment, Bandar Puteri Puchong

HOSPITALITY & LEISURE SEGMENT Registered total revenue of

RM150.07 million

THE GROUP’S CASH HOLDINGS OF

RM1.47billion

THE GROUP’S SHAREHOLDERS’ EQUITY

RM19.00billion


36

Stellar Suites, Bandar Puteri Puchong

OUR AIM IS TO DELIVER

LONG-TERM AND SUSTAINABLE

RETURNS THROUGH

INVESTMENT PROPERTIES.

Group Business Review

OUR BUSINESSIOIPG’s business consists of three main segments, namely property development, property investment and hospitality & leisure. With a geographically diverse landbank of approximately 10,000 acres in Malaysia, Singapore and Xiamen, PRC, we also belong to a unique subset of integrated developers who build and manage our own portfolio of prime investment properties. As a Group, our aim is to deliver long-term and sustainable returns through these investment properties. Our investment portfolio includes retail and office spaces with a combined net lettable area of approximately 5.84 million sq ft, four-star and five-star hotels (excluding JV projects) with a total of 1,241 keys and two golf courses.

In Malaysia, our key investment properties include IOI City Mall, IOI Mall Puchong, IOI Mall Kulai, One and Two IOI Square, Puchong Financial Corporate Centre, IOI City Tower 1 and 2, and Conezión. The ongoing construction of IOI City Mall Phase 2 is expected to be completed by 2021. In Singapore, we have a 49.9% stake in South Beach, a fully integrated mixed-use property, and we are currently constructing Central Boulevard Towers, an iconic development in the Marina Bay financial and business district. While in China, our construction of IOI Palm City in Xiamen comprising a shopping mall, hotel, boutique offices, and shoplots continues to progress well.

Our hospitality & leisure segment leverages on our stable of world-class brand hotels and golf courses to provide superior customer experiences, bolstered by distinctive IOIPG-brand offerings that always puts the needs of our customers first. In the Klang Valley and Singapore, our portfolio of hotels includes the Putrajaya Marriott Hotel, Palm Garden Hotel, Le Méridien Putrajaya in IOI Resort City, Four Points by Sheraton Puchong in Puchong and a 49.9% stake in JW Marriott Hotel Singapore South Beach. Our golf courses comprise the Palm Garden Golf Club in IOI Resort City and the IOI Palm Villa Golf and Country Resort in Bandar Putra Kulai.



37

SEGMENT BUSINESS HIGHLIGHTS

Property DevelopmentMarket Landscape during FY2020The past financial year for property developers has been punctuated with various ups and downs, presenting itself in two contrasting halves, amid a generally subdued property market which is still facing an ongoing overhang issue. The first half of FY2020 was generally positive as noted by an increase in property sales volume and value buoyed by the Malaysian Government’s Home Ownership Campaign (“HOC”). The positive momentum going into the 2nd half of FY2020 was however rapidly disrupted by the unprecedented COVID-19 outbreak which was declared a pandemic by the World Health Organisation in March 2020.

Movement restrictions were enforced in countries where we operate to contain the outbreak, temporarily halting construction and disrupting economic activities, which dampened overall consumer and business sentiments. The property market as a whole has struggled since the lockdown began in China in January 2020 and the imposition of the MCO in Malaysia in March 2020, has led to economies around the world coming to a halt, leading to cautionary spending by consumers.

Segment Overview Although FY2020 was challenging as a whole, the Group has reacted swiftly with new strategies to address the sudden onset of challenges brought by the pandemic. We continue to find ways to improve our resilience and to quickly adapt to expectations of a prolonged recovery period.

Operationally, we are intensifying existing efforts to leverage on technology and digitalisation to improve efficiency and effectiveness not only in our internal processes but also in our approach towards managing customer experience. With our strong belief in delivering quality products and services, we have implemented new mobile applications for the entire product lifecycle, covering construction quality management, health and safety monitoring to defects management and customer relationship management (CRM), thus enabling our processes to be digitalised end-to-end and elevating our interactions with customers to a whole new level.

View of IOI City Towers from Palm Garden Hotel, IOI Resort City


38

The unprecedented COVID-19 pandemic proved to be a major challenge for the property industry as most social and economic activities came to a halt from January to March 2020 in China, between March to May 2020 in Malaysia, and from April to June 2020 in Singapore.

The Group responded quickly to this event by introducing attractive promotional packages, accelerating and increasing the use of digital technology, and responding to the changes in customer behaviour.

We offered attractive sales packages which were publicised and delivered through digital means. Customers were also able to view our properties through 3D virtual tours of show units, a feature that we have incorporated into our sales approach for a number of years now.

The government of Malaysia also responded positively to some of the property industry’s suggestions on how to stimulate the industry through its National Economic Recovery Plan (PENJANA) stimulus announcement in June 2020.

In Singapore, the government announced property tax rebate for qualifying commercial properties, such as hotels, tourist attractions and serviced apartments for the period of 1 January 2020 to 31 December 2020.

In terms of adherence to government guidelines during the MCO period, all IOIPG managed malls, hotels, offices, golf courses and sales galleries embraced the new normal in their daily business routine by enhancing precautionary hygiene measures and ensuring strict compliance to SOPs.

Read more about our response to COVID-19 on page 96 of the Sustainability Report.


Gems Residences,

IOI Resort City

As part of IOIPG DNA, value engineering and efficient management of our resources and materials continue to be a mainstay. We are committed to creating products that encourage sustainable living while minimising impact on the environment. Concerns about sustainability issues have gained ground over the years and is progressively influencing the investment decisions of young working adults and families, our primary target market.

In addition to the above, IOIPG continues to support home ownership efforts by increasing the supply of mid-priced housing, exemplified by the launch of the Alanis service apartments in Warisan Puteri Sepang in September 2019. These projects have been well-received and supported by the Government’s HOC and other flexible financing initiatives such as the IOI F.R.E.E Ownership campaign, the Rent2Own and Pay Later Buy Now initiatives.


39

Our Portfolio

Klang ValleyIn the year under review, IOIPG has been actively developing its property portfolio in Malaysia and beyond. In the Klang Valley, the expansion of IOI Resort City remains a focal point and we target for Phase 2 of IOI City Mall, which boasts approximately 1.00 million sq ft of total net lettable area, to be opened by November 2021. In addition to this, we have started construction work on the Gems Residences, an apartment development with 676 units built around a health and wellness theme which also caters to families spanning multiple generations. The Clio 2 Residences, with 550 units of service apartments are under construction, as are the Par 3 Condo and Condo Villa which features 207 units of condominiums and 18 units of condominium villas.

In Bandar Puteri Puchong, infrastructure upgrading works are underway via the widening of the Lebuh Puteri main road and the construction of a double-decked ingress and egress linking Rio City and Lebuh Puteri, following the completion and launch of the Bandar Puteri Puchong interchange in November 2019. The upgraded Lebuh Puteri main road will complement the interchange and enhance the connectivity of Bandar Puteri Puchong while improving the traffic flow between the Lebuhraya Damansara-Puchong and the township. In terms of development projects, construction is ongoing for The Cruise Residence, Stellar Suites, our first transit-oriented development (“TOD”) in Puchong and Phase 1 of the 100-acre Rio City, designed to have smart city features and amenities.

Besides road infrastructure, IOIPG has also invested in improving connectivity for pedestrians in Bandar Puteri Puchong. In this context, we have recently completed the construction of a pedestrian bridge and covered walkway that connects the commercial areas of Puteri 1 and Puteri 4. The addition of this infrastructure now provides a seamless link from these commercial areas to the Taman Perindustrian Puchong LRT station, further boosting the attractiveness of the nearby Puchong Financial Corporate Centre.

In Bandar Puteri Bangi, we are constructing The Strata which comprises 604 units of 1.5-storey link townhouses that comes with three themed gardens to foster community activities and quality family time. In Warisan Puteri Sepang, construction is underway for the Ayden townhouse development targeting growing families, and the Alanis development which is ideal for first-time home buyers, young couples and extended families. Rounding off our activities in the Klang Valley is the development of the Bukit Changgang Industrial Park that will feature a variety of industrial buildings designed to meet business owners’ requirements.

PenangIOIPG’s focus in Penang is to unlock the value of its inventory through the sales of the D’Zone Condominium, Stramax Residences terrace houses and Cypress Villa semi-detached houses.

Negeri SembilanIn Negeri Sembilan, IOIPG has launched another 47 units of our Areca project priced at about RM200,000. These new units were well received and we will continue with similar launches to take advantage of the HOC which ends on 31 May 2021.

JohorIn FY2020 we continued to launch mid-priced range landed properties due to strong demand, and included higher-end properties consisting of semi-detached houses for customers who planned to upgrade. Some launches were however deferred to next financial year due to the MCO. We have also successfully delivered vacant possession for 345 units of single-storey terrace units (Alena 1 & 2) at Bandar Putra Kulai, 37 units of double-storey terrace houses (Serene) at Lagenda Putra Kulai and 56 units of 1.5 storey terrace houses (Lavenda 1) at Bandar IOI Segamat right after the Conditional Movement Control Order (“CMCO”).

We have started construction work on

the Gems Residences, an apartment

development with 676 units built around a

health and wellness

theme which also caters to

families spanning multiple generations.


40


SingaporeDespite the COVID-19 pandemic and a generally uncertain economic climate, the South Beach Residences project has continued to garner sales, achieving more than 70% of total units sold at an average price of more than SGD3,000 per sq ft. The 190 units luxury apartments of South Beach Residences sit atop JW Marriott Hotel Singapore South Beach offering spectacular views of iconic Singapore landmarks, including Marina Bay Sands, Gardens by the Bay, Raffles Hotel, Singapore Flyer, Esplanade – Theatres on the Bay, National Gallery Singapore, The Padang, Singapore Indoor Stadium, as well as the New Downtown, Central Business District and Orchard Road area.

THE GROUP’S ONGOING PROPERTY DEVELOPMENT PROJECTS (EXCLUDING INVESTMENT-BASED DEVELOPMENT)

Year ofDevelopment's

Commencement

Original Development

Land Size

Remaining Development

Land SizeEstimated

Gross Value

Remaining Estimated

Gross Value

Township Acres Acres ’billion ’billion

Ongoing

Bandar Puchong Jaya, Selangor 1990 930 8 RM4.2 RM0.6

IOI Resort City, Putrajaya 1995 & 2016 358 303 RM17.4 RM15.0

Bandar Putra Kulai, Johor 1995 5,680 3,519 RM9.4 RM5.7

Bandar IOI Segamat, Johor 1995 607 96 RM1.8 RM0.6

Bandar Puteri Puchong, Selangor 2000 930 146 RM17.3 RM11.7

Taman Lagenda Putra, Kulai, Johor 2006 225 27 RM0.7 RM0.2

Taman Kempas Utama, Johor Bahru, Johor 2007 294 40 RM2.9 RM0.9

16 Sierra, Puchong, Selangor 2008 548 183 RM8.3 RM5.7

Desaria, Sungai Ara, Penang 2013 27 5 RM0.4 RM0.2

IOI Palm City, Xiamen, PRC 2014 21 2 RMB7.0 RMB1.6

Bandar IOI, Bahau, Negeri Sembilan 2014 283 30 RM0.6 RM0.2

Bandar Puteri Bangi, Selangor 2014 345 206 RM6.8 RM5.4

Warisan Puteri Sepang, Selangor 2014 206 103 RM2.5 RM1.8

i-Synergy, Senai, Kulai, Johor 2015 507 265 RM1.9 RM1.8

IOI Palm International Parkhouse, Xiamen, PRC

2018 6 1 RMB2.9 RMB2.1

China Sale proceeds from IOI Palm City in China have contributed significantly to Group revenue and we expect the demand for residential properties to normalise and the current positive sales trend for IOI Palm City to moderate in the coming financial year. The higher sales contribution was from the newly launched IOI Palm City town/link villas and high-rise condominium, each achieving take up rates of 60% and 85% respectively due to pent-up demand after the COVID-19 lockdown. IOI Palm International Parkhouse products were launched in July 2019 and the sales pace is subdued due to stiff competition from surrounding projects.


41

Year ofDevelopment’s

Commencement

Original Development

Land SizeEstimated

Gross Value Remaining

Unsold Value

Project Acres ’billion ’billion

Oversea completed projects

Seascape @ Sentosa Cove, Singapore 2008 4 SGD0.8 SGD0.5

Cape Royale @ Sentosa Cove, Singapore 2010 5 SGD1.3 SGD1.3

South Beach Residences, Beach Road, Singapore 2011 9 SGD1.2 SGD0.5

KEY INFORMATION – PROPERTY DEVELOPMENT SEGMENT (EXCLUDING JOINT VENTURE PROJECTS)

2020 2019 2018 2017 2016

MFRS MFRS MFRS FRS FRS

Units of property sold 2,270 2,126 2,128 2,296 2,368

Total sales (RM’000) 1,839,328 1,930,052 1,876,769 2,846,826 2,214,426

Revenue* (RM’000) 1,638,453 1,634,582 2,141,272 3,714,204 2,613,666

Operating profit (RM’000) 738,866 612,986 571,349 1,158,839 909,134

* Reclassification of plantation income from revenue to other operating income from FY2016 to FY2018 to conform with the presentation of information throughout the periods.

The above information from FY2018 to FY2020 have been prepared in accordance with MFRS, whereas information from FY2016 to FY2017 have been prepared in accordance with Financial Reporting Standard (“FRS”).

2020 2019

Price Range (RM’000) % (RM’000) %

Below RM250,000 32,165 2 18,306 1

Between RM250,000 and RM500,000 429,661 23 380,702 20

Between RM500,000 and RM750,000 265,742 14 339,202 17

Between RM750,000 and RM1,000,000 115,233 6 154,065 8

Between RM1,000,000 and RM1,500,000 139,919 8 115,952 6

Between RM1,500,000 and RM2,000,000 105,930 6 53,754 3

Above RM2,000,000 750,678 41 868,071 45

Total 1,839,328 100 1,930,052 100


42


IOI Mall Puchong

PHASE 2 EXPANSION OF IOI CITY MALLWILL ADD APPROXIMATELY 1.00 MILLION SQ FT, to the existing phase 1 of 1.47 million sq ft, which will see us welcoming more shoppers in tandem with the recovery of the retail industry.

Property InvestmentMarket landscape during FY2020The Malaysian retail industry faced a number of challenges in FY2020 arising from the COVID-19 outbreak. Consumer behaviour also changed during the final quarter of our FY2020 due to new SOPs introduced by the authorities to limit the transmission of COVID-19 which resulted in reduced capacity of restaurants and retail shops.

The office rental market had to grapple with the changes brought about by the pandemic which has exerted downward pressure on rental and occupancy levels in 2020, especially in the Klang Valley which already has an oversupply situation. Leasing activities and tenant movements are ongoing although it will likely continue at a slower pace as businesses delay or put their plans on hold.

Segment Overview

Klang ValleyAt IOIPG, we focus on managing our malls professionally, curating a diverse and solid tenant mix while developing strong advertising and promotion programmes to drive traffic and maintain market share.

We have supported these efforts further in FY2020 through the renovation and refurbishment of IOI Mall Puchong, enabling the introduction of new lifestyle, fashion and F&B tenants to the mall which has achieved a 93% occupancy. In addition, the Phase 2 expansion of IOI City Mall will add approximately 1.00 million sq ft to the existing Phase 1 of 1.47 million sq ft, which is nearing full capacity with its 96% occupancy rate and will see us welcoming more shoppers in tandem with the recovery of the retail industry. IOI Mall Kulai also saw its refurbishment being completed in December 2019.

In FY2020, IOIPG utilised a number of strategies to ensure its office segment remained resilient amidst the ongoing oversupply situation. IOIPG’s Grade A office spaces are strategically located within high growth areas such as Puchong and Putrajaya, and bolstered by TOD which continues to attract quality enquiries. Our strength in managing a wide portfolio of investment properties and our capability to uphold high standards of maintenance and upkeep gives us a competitive edge in tenant retention despite the overall oversupply situation.

To source for new tenants, we work closely with real estate agents, leverage on internet marketing channels to bring in shared service offices and representative offices belonging to multinational corporations. In addition, we offer flexible, strategic and competitive rental rates and packages which include fit-out options. The occupancy rates achieved thus far is largely due to the synergies that come from the integration of our wide array of design, and our expertise in building and managing commercial developments such as hotels, shopping malls and golf courses.

SingaporeIn Singapore, construction progress of the Central Boulevard Towers has slowed due to the COVID-19 pandemic which led to supply and manpower disruptions, suspension of construction work and movement restrictions at foreign worker dormitories. Thus, while Central Boulevard Towers was targeted to be completed by 2022, it is likely that this Grade A office development will only be completed in 2023, given the much more stringent health and safety measures imposed by the Singapore Government on construction sites.

Nevertheless, the Group remains optimistic about the prospects of this 1.29 million sq ft development as it is strategically located within the Marina Bay area, with seamless connections to Downtown, Raffles Place and the new Shenton Way MRT stations. As more firms are likely to reconsider their office space requirements against the backdrop of the working


43

from home phenomena, Central Boulevard Towers’ product offering of two office towers and two levels of ultra-large floor plates served by multiple lift lobbies will remain attractive to tenants looking for a flex-and-core or split-office strategy all accommodated within one building.

For our South Beach development, South Beach Tower which is the office component, has achieved approximately 96% occupancy and it continues to house international corporations like Facebook, Bain & Company, Lego and Expedia across its 510,000 sq ft of Grade A office space. Meanwhile, South Beach Avenue/Quarter, the retail component of the development with notable tenants such as Lady M, Black Cow, Caffe Cicheti, Vatos Urban Tacos and Wild Honey spans 32,000 sq ft across the basement, street level and conserved buildings.

ChinaIn China, the delivery of IOI Palm City’s commercial components remains on schedule as we target to complete construction of the 650,000 sq ft shopping mall by 2021, which will then be followed by the offices and hotel. The Group is progressing well in securing a diverse mix of tenants for the shopping mall, that is strategic and located in the commercial hub of Jimei with good accessibility to transportation facilities.

Hospitality & LeisureMarket landscape during FY2020The hospitality & leisure industry were the hardest hit by the COVID-19 pandemic as flights, tour packages and hotel bookings were cancelled due to the restriction on travel. With the cancellation of Visit Malaysia Year 2020, the industry had to refocus on domestic tourism to sustain its operations, although a number of hotels have since closed permanently or temporarily due to the reduction in the number of visitors.

Consumer behaviour has changed as people are more cautious about gathering in hotels, while physical distancing guidelines have also limited the number of guests who can attend social functions, banquets, large meetings, business events or exhibitions with such events now transitioning to virtual events and online platforms. While we believe that the overall industry will eventually return to normal, it is expected to be a slow recovery.

Segment Overview

Klang ValleyIn FY2020, we continued to uphold the quality of the IOIPG brand, ensuring excellent service across our hospitality & leisure assets while focusing on those sectors that can take full advantage of our various facilities. We targeted more corporate events and meetings, incentives, conventions and exhibitions (MICE) sales, in addition to marketing our venues for banquet events and driving growth via campaigns and promotions for F&B and luxury rooms. We also strengthened our quality of service and presence amongst clients in the institutional sector.

Palm Garden Hotel completed its renovation in August 2019 and immediately saw encouraging response to the new features that were introduced. Although business slowed during the MCO period, we believe that the hotel will rebound quickly on the back of our loyal clientele which we have nurtured over the years.

Prior to the COVID-19 pandemic, our hotels were performing well in both room occupancy and banqueting. However, the last quarter of FY2020 was challenging for our hotels due to the MCO and the fact that Malaysian borders remained closed. While this also had a significant effect on our corporate segment, it was mitigated by demand from domestic travellers when the MCO was relaxed.

IOI PALM CITYConstruction of shopping mall is targeted to be completed by

2021 .

OUR PORTFOLIO

MALLS• IOI City Mall – Net lettable

area: 1.47 million sq ft• IOI Mall Puchong – Net

lettable area: 893,000 sq ft• IOI Mall Kulai – Net lettable

area: 265,000 sq ft

OFFICES (NLA)• Puchong Financial Corporate

Centre (Four 12- to 21-storey purpose-built office buildings) 883,000 sq ft

• One IOI Square and Two IOI Square in IOI Resort City, Putrajaya (Two 12-storey purpose-built office towers) 434,000 sq ft

• IOI City Tower 1 and IOI City Tower 2 in IOI Resort City, Putrajaya (Two office towers) 968,000 sq ft

• Conezión in IOI Resort City, Putrajaya 925,000 sq ft


44


The Group has responded to the challenging landscape by continuing to promote our products and to engage closely with customers and loyalty programme members to retain the relationships we have built with our customers. In line with the Government’s domestic tourism drive, we have introduced attractive deals to enable our hotels to leverage on the demand from domestic travellers who are unable to travel overseas during the MCO.

Our hotels will also be focusing on the domestic market for both leisure and group business and strictly implementing SOPs for events and weddings held at our venues, while also providing virtual conference facilities for meetings organised at our meeting rooms. We have also optimised our approach to our corporate customers, as we move in tandem with the Government’s easing of the MCO, by ensuring that we are always in sync with market demand.

For our golf segment, we continued driving the business with attractive targeted golfing packages and expanded into new market segments to increase our customer base of corporate and institutional clients both domestically and overseas. We have also made inroads into segments such as corporate tournaments, tourist golfers and group travel. Given the competitive market, IOIPG has ensured its golf courses are well-maintained and that our F&B offerings are both contemporary and compelling.

Palm Garden Golf Club (“PGGC”), our premier public golf course, had in FY2020, strengthened its position as a preferred destination for corporate tournaments and the overseas golf tourism circuit. However, the pandemic had disrupted the scheduled arrival of thousands of overseas golfers to PGGC.

SingaporeJW Marriott Hotel Singapore South Beach has continued to outperform its peers in the first half of FY2020, both in terms of rates and revenue per available room (RevPAR), mainly driven by the Marriott Bonvoy loyalty programme which was launched in February 2019. The programme has helped the hotel to maintain its leading position as its attractive rewards led to increased bookings for the transient individual segment (corporate and retail) and MICE, in particular for conferences and exhibitions.

The strong momentum carried forward until early February 2020, and reversed dramatically due to negative impact from the COVID-19 pandemic on the hospitality industry. According to STR, a data benchmarking company, demand for room nights in Singapore fell by 90% during the Circuit Breaker (“CB”), which was implemented between April and June 2020 to contain the outbreak. Despite the reduction in demand for rooms and in line with CB guidelines, JW Marriott ran an innovative campaign to position its restaurants as the best options for “take-away” food.

HOSPITALITY & LEISURE to leverage on the demand

from domestic travellers.

We continued to uphold

THE QUALITY of the IOIPG brand, ensuring excellent service across our

hospitality & leisure assets while focusing on the sectors that can take full advantage

of our various facilities.

OUR PORTFOLIO

HOTELS & GOLF COURSES• Putrajaya Marriott Hotel

380 guest rooms73 executive rooms35 exclusive suites

• Four Points by Sheraton Puchong249 guest rooms

• Palm Garden Hotel151 guest rooms

• Le Méridien Putrajaya 353 guest rooms

• JW Marriott Hotel Singapore South Beach634 guest rooms (49.9% stake)

• Palm Garden Golf Club 18-hole golf course

• IOI Palm Villa Golf and Country Resort 18-hole golf course


45

OUTLOOK AND PROSPECTS

Property DevelopmentAs the world and the nation manages the challenges presented by the COVID-19 pandemic, IOIPG believes that we will be able to thrive as long as we continue to put the needs of the customer at the forefront of all that we do. Our developments will provide excellent accessibility and connectivity with transportation infrastructure and conveniently located amenities. Where possible, the Group will build TOD to capitalise on mass public transport systems. With a geographically diverse landbank, the Group is in a better position to strategically plan our developments by taking advantage of differing market conditions.

For instance, we will be focusing more on our China developments as its economy is recovering earlier than other parts of the world after its COVID-19 lockdown was lifted in April 2020. The Group will be advancing the development of IOI Palm City and IOI Palm International Parkhouse in Xiamen with the release of more town/link villas. We are optimistic about the long-term prospects of these projects as more transport infrastructure is being added on to this thriving economic hub, which will further boost connectivity, especially around IOI Palm International Parkhouse. These include MRT lines, an international airport and the Xiang An second link bridge that links to Xiamen Island.

In Malaysia, the Group will continue to focus on developing mid-priced range properties in high-growth areas to meet the current market demands. Overall, IOIPG is positive on Malaysia’s property market due to the country’s young demographic and the likelihood of lower construction costs going forward. Malaysians between the age of 15 and 39 years old make up more than 40% of Malaysia’s population and is likely to drive sustained demand for housing in the future as they start to settle down.

The Group will also continue to drive value engineering and ensure top-notch quality in its products while remaining committed to the reskilling and training of our employees. We are confident that once the pandemic has been contained, the Group will be well-positioned to meet the pent-up demand for excellent quality properties located in high-growth areas.

Property InvestmentAs we head into uncertain times, the Group will be fortifying its investment assets further with strategic asset enhancement initiatives carried out at opportune times to keep our retail offerings fresh, modern and updated with the latest facilities and amenities.

For the retail segment, we have seen an encouraging recovery in our malls since reopening with footfall achieving more than 80% of pre-pandemic numbers, despite market expectation that malls would remain empty post-MCO. This gives us confidence that the retail market will progressively recover to pre-MCO levels. From a consumer viewpoint, online shopping will certainly remain a feature of the retail landscape, and at the same time is recognised as an irreversible trend which complements the physical experience of conventional shopping. To leverage on this trend, the Group is on track to

launch our e-mall within the next financial year which will be supported by a cardless loyalty programme.

Our response going into FY2021 will centre around offering convenience and best-in-class experience for our retail mall customers. We will also focus on driving more footfall to our malls through the strategic management of our market positioning, tenant mix, rental structure, advertisements and promotions, as well as excellent customer service. In addition to this, we will aggressively manage our costs while implementing active and pragmatic tenant retention policies.

For the office segment, the post-pandemic demand for office space might be harder to predict as businesses are still evaluating if the work from home trend will remain a permanent feature, or if some hybrid form will eventually evolve going forward. In either scenario, this would have an effect on the demand for office space. Nevertheless, IOIPG will continue its aggressive marketing strategies, leveraging on real estate agencies and e-marketing channels while managing our costs effectively in order to continue delivering value to our stakeholders.

Hospitality & LeisureGoing forward, the hotel segment is aggressively marketing its offerings in anticipation of the post-pandemic scenario by targeting the public sector, corporates, MICE organisers, online travel agencies and domestic tourists. The Tourism, Arts and Culture Ministry expects the industry to start recovering by the second quarter of 2021, and thus we are preparing ourselves for this eventuality. We are maintaining the high standards of our hospitality services, for which we have been recognised for, while exercising prudent cost and financial management.

Our golfing segment will undertake a targeted focus on local golfers, groups, corporates and tournament organisers throughout FY2021. This has been further bolstered by the launch of the Palm Garden Golf Club 360 Golf Access Card loyalty programme, which offers golfers unlimited rounds of golf, F&B and room discounts and the use of the recreational facilities at Palm Garden for 360 days. We will also ensure high standards of maintenance and will continue to enhance our F&B and banquet offerings to unlock further value.


46


Effective risk

management is

crucial to the

long-term and

sustainable growth

of the Group. We

have identified the

key risks that are

common across all

business segments

and discussed

how we mitigate

and manage them.

A more detailed

discussion on our

risk management

approach, which is

governed by the

Board, can be seen

in our Statement on

Risk Management

and Internal Control

on page 153 to 158 of

this report. OU

R

RI

SK

SFINANCIAL RISK

GEOPOLITICAL RISK

HEALTH, SAFETY & SECURITY RISK

CYBERSECURITY RISK

PROJECT MANAGEMENT RISK

MARKET RISK

How We Manage Our Risks


47

How It Affects Us How We Manage Our Risks

The Group recognises the potential risk of cash flow liquidity, fluctuations in interest rates, foreign exchange risk because of international operations and credit risk exposure to external counter-parties.

The Group has put in place the financial risk management policies as disclosed in Note 40 to the financial statements on page 270 to manage the respective financial risks.

The Group recognises the risk of being impacted by injuries, deaths or ill-health to workers related to working conditions and safety. We are also aware of the risk of non-compliance with the government’s COVID-19 Standard Operating Procedures (SOPs) and the costs associated with health screening of workers.

The Group has developed extensive Health and Safety policies, while also increasing the monitoring of workplace safety compliance. The Group has also pro-actively monitored and updated its SOPs to be in line with the government’s policies, with improved work environment conditions and enhanced precautionary measures.

Potential risks to projects include unexpected variations to cost, defects or late delivery penalties and delays in acquiring regulatory approval. Additional compliance processes as a result of COVID-19 SOPs can also affect the timely delivery of projects.

The Group ensures a robust screening and selection process is carried out for qualified project managers, consultants and contractors, which is then followed by close monitoring of projects by the project team. The Group also enforces strict guidelines for raw material procurement and usage, ensuring the best quality and standards for our projects.

The Group recognises the risks from a variety of sources including economic volatility, foreign policy uncertainty, geo-political conflicts, persistent trade uncertainties and terrorism.

The Group closely monitors the various potential business and economic scenarios, as well as local, regional and global regulations and identifies appropriate strategies to mitigate such risks.

The Group recognises the risks arising from disruptions to information technology infrastructure, as well as the threat of cyber terrorism and information security breaches.

The Group has put in place extra protection for its IT infrastructure and systems, while also conducting random vulnerability tests to ensure the robustness of protection systems. Physical back-up facilities have also been established as part of business continuity management.

The Group recognises the potential market risks triggered by COVID-19, causing changes in purchasing behaviour, which may exacerbate the property overhang issue as consumers divert spending for more essential purposes. The Hospitality & Leisure sector will also be affected as international borders remain closed.

The Group has executed re-focusing initiatives of its products, and deployed innovative marketing strategies to mitigate the impact from COVID-19, using data analysis and technology to target specific customer segments.


48

CORPORATEINFORMATION

AUDIT COMMITTEE

-DATUK LEE SAY TSHINChairman-DATUK TAN KIM LEONGMember-DATUK DR TAN KIM HEUNGMember

GOVERNANCE, NOMINATING AND REMUNERATION COMMITTEE

-TAN SRI DATO’ SRI KOH KIN LIPChairman-DATUK TAN KIM LEONGMember-DATUK DR TAN KIM HEUNGMember

RISK MANAGEMENT COMMITTEE

-DATUK DR TAN KIM HEUNGChairman-TAN SRI DATO’ SRI KOH KIN LIPMember-DATUK LEE SAY TSHINMember

JOINT SECRETARIES

-CHEE BAN TUCK(SSM PC No. 202008001798)(MIA 24078)

- CHANG MEI YEE(SSM PC No. 201908000539) (MAICSA 7064078)

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

Level 29, IOI City Tower 2Lebuh IRC, IOI Resort City62502 PutrajayaWilayah Persekutuan (Putrajaya)Malaysia

T: +60 3 8947 8888F: +60 3 8947 8909

AUDITORS

PricewaterhouseCoopers PLT Chartered AccountantsLevel 10, 1 Sentral, Jalan RakyatKuala Lumpur SentralP O Box 1019250706 Kuala Lumpur

T: +60 3 2173 1188F: +60 3 2173 1288

REGISTRAR

Tricor Investor & Issuing House Services Sdn BhdUnit 32-01, Level 32, Tower AVertical Business SuiteAvenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur

T: +60 3 2783 9299F: +60 3 2783 9222

THE ADMINISTRATION AND POLLING AGENT

Boardroom Share Registrars Sdn Bhd11th Floor, Menara SymphonyNo. 5, Jalan Prof. Khoo Kay KimSeksyen 13, 46200 Petaling JayaSelangor Darul Ehsan

T: +60 3 7890 4700F: +60 3 7890 4670

LEGAL FORM AND DOMICILE

Public Limited Liability Company Incorporated and Domiciled in Malaysia

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

STOCK CODE

5249

WEBSITES

www.ioiproperties.com.mywww.myioi.com

BOARD OF DIRECTORS

-DATUK TAN KIM LEONGIndependent Non-Executive Chairman

-LEE YEOW SENGExecutive Vice Chairman

-TAN SRI DATO’ SRI KOH KIN LIPSenior Independent Non-Executive Director

-LEE YOKE HARExecutive Director

-DATO’ LEE YEOW CHORNon-Independent Non-Executive Director

-DATUK LEE SAY TSHINIndependent Non-Executive Director

-DATUK DR TAN KIM HEUNGIndependent Non-Executive Director


49

Sustaining Sustainability

Sustainability Report

2020# ioisustain

IOIPG continues its journey of sustainability by designing sustainable developments

that create shared values and positive impacts for its stakeholders.

We strive for innovative solutions in sustainable living as we continue

designing a better tomorrow, today.


50

OUR SUSTAINABILITY JOURNEY

Thus, sustainability is embedded in our business strategies as well as management and operational approach to risks and opportunities which is outlined by the Group’s Sustainability Policy and Framework. The quality and implementation of our sustainability initiatives are strengthened and aligned to ensure we deliver what we have promised as described in the Group’s new Vision and Mission*. To reflect its firm belief in Corporate Responsibility, the Group is committed to contributing towards both global and national goals as laid out in the United Nations Sustainable Development Goals and the 11th Malaysia Plan. IOIPG aspires to lead by example in sustainable living, advocating mindset change and catalysing behavioural change within its network of employees, customers and communities, driving sustainability as a collective mission.

Sustainability is at the

core of our business,

creating positive

impact on the economy

and society while

minimising impact on

the environment.

Embedding sustainability into its business operations is the cornerstone of IOI Properties Group’s (“IOIPG”) purpose as we continue to deepen our capabilities in integrated development. Backed by our clear vision to be trusted in all that we do, we know that we must create a positive impact on society, the economy and the environment in order to deliver progress in a meaningful and sustainable way. Our mission is not only to be trusted to safeguard our environment, but to build sustainable communities, and we do this by leveraging on our core values of integrity, quality, innovation and creativity, commitment and passion, cost effectiveness, people first and teamwork.

IOIPG welcomes our stakeholders to share opinions and feedback with us.

Please contact us at:

Group Corporate Sustainability DepartmentIOI Properties Group Berhad Level 29, IOI City Tower 2,Lebuh IRC, IOI Resort City, 62502, Putrajaya, Malaysia. Tel : +603-8947 8888 Fax : +603-8947 6634 Email : [email protected]

FEEDBACK

* Please turn to inner front cover to read more about our Vision, Mission and Core Values.

SCOPE OF REPORTINGThe IOIPG Sustainability Report 2020 covers the business and operations of property development, property investment, and hospitality & leisure within Klang Valley and Johor. Moving forward, we will include our business units in other geographical locations. The report communicates the Group’s development along its sustainability journey, keeping stakeholders abreast of its economic, environmental and social progress in FY2020. The report has been prepared in accordance with Bursa Malaysia Main Market Listing Requirements and with reference to Global Reporting Initiative (“GRI”) Standards 2020. Please refer to the GRI Content Index from pages 107 to 115 for the full list of disclosures referenced in this report.


51

SUSTAINABILITY GOVERNANCE The Board of Directors oversees IOIPG’s sustainability. The Sustainability Steering Committee is chaired by the Chief Executive Officer (“CEO”), assisted by the Head of Group Corporate Sustainability.

Consisting of senior management personnel of core business segments, the Sustainability Steering Committee steers the Group’s sustainability strategy, reviews policies and material sustainability matters; and monitors sustainability performance. The Committee is supported by the Sustainability Council, which helps to make informed decisions to embed the Group’s sustainability strategies into business operations. Comprising business unit heads and cross-function representatives who are heads of departments and subject matter experts, the Sustainability Council helps the Committee to implement initiatives to achieve the Group’s sustainability goals. SUSTAINABILITY GOVERNANCE STRUCTURE

Board oversight allows us to translate our sustainability strategies into effective execution of initiatives in respective business units and departments throughout our business segments. Our sustainability strategies complement policies, management systems, standard operating procedures as well as best practices that have been formulated and refined throughout the years.

Board

Group Corporate

Sustainability Head

OperationHeads

Committee Members

SubjectMatterExperts

SustainabilityCouncil

BusinessUnit Heads

Chairman (CEO)

SustainabilitySteering

Committee

Economic

Environment

Social

Economic• Code of Conduct and Business Ethics• Whistleblowing Policy• Sustainability Policy• Energy Policy• Waste Management Policy• Group Health and Safety Policy• Safety & Health Management System• Quality Management System• Quality Policy• Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy

Environment

Social

Policies & Management SystemsFocus Areas


52

Delivering product and service excellence by focusing on innovative business strategies, work processes, and responsible green products that have positive impacts on the environment and society.

Embracing green and environmental practices that focus on energy efficiency, water conservation, material management and resource use optimisation, reduction of greenhouse gas emissions, waste minimisation and pollution abatement.

Continuing our community initiatives and delivering our commitment towards community development through volunteerism activities, philanthropic activities, and collaborative programmes.

Creating awareness amongst our employees, customers and business partners on our commitment towards sustainability and encouraging them to support and participate in responsible environmental and socio-economic practices.

Striving to achieve a sustainable long-term balance between preserving nature and meeting business goals by minimising negative impacts towards biodiversity and climate change.

Cultivating a conducive work environment that focuses on building relations with our employees, ensuring a safe workplace and a healthy workforce, encouraging the growth of our employees, and providing fair and equal opportunity in employment for all employees.

Complying with applicable legislations, standards and codes of practices including work ethics, health and safety, and labour practices.

6

5

4

1

3

2

7

SUSTAINABILITY POLICY IOIPG’s commitment to sustainable development is manifested in our Sustainability Policy. Integrating corporate sustainability and responsibility into business strategies, the Policy enhances the social well-being of IOIPG’s employees and local communities, in accordance with the Group’s Vision, Mission and Core Values*, to stimulate the local economy and conserve the environment for present and future generations.


We are committed to:



53

STAKEHOLDER ENGAGEMENT & MATERIALITY ASSESSMENT Engaging with our stakeholders is vital to stimulate business growth and meet operational needs. It enables us to:

• Empathise with clients, tenants, guests and customers• Practise inclusive decision-making• Manage perceptions and address various requirements

We recognise that our decisions impact the Group as a corporate entity as well as our stakeholders. Stakeholders’ feedback is thus crucial for us to continue improving in delivering product quality and service excellence. The feedback is given across various platforms that influence our business decisions.

Including stakeholders’ feedback in our materiality assessment process enables us to translate our risks and opportunities into tangible and intangible values. We take the views of internal and external stakeholders on our sustainability matters into consideration in making informed decisions about emerging economic, environmental and social (“EES”) risks and opportunities to deliver quality products and services beyond customer expectations.

Our prioritised matters are continually monitored, reviewed and benchmarked against industry best standards and practices including GRI Standards and peer practices in similar sectors.

As a constituent of the FTSE4Good Index Series, we regularly review and enhance our ESG performance and disclosures. Our internal stakeholders, who are subject matter experts in our material sustainability matters, analyse identified gaps as well as feedback and information gathered from stakeholder engagements such as focus-group discussions, site visits and meetings before proposing new initiatives in areas of improvement.

In FY2020, we conducted an internal survey for the Group’s Johor business segments to assess their stakeholder prioritisation and material sustainability matters. It enabled us to further align the Group’s sustainability strategies and initiatives. The survey reflected the relevance of the stakeholder groups and material matters to the Group’s Klang Valley and Johor operations. The findings from the various stakeholder engagements demonstrate that the Group is on the right track – focusing on and managing our relevant material sustainability matters.

FTSE Russell (the trading

name of FTSE International

Limited and Frank Russell

Company) confirms that

IOI Properties Group

has been independently

assessed according to the

FTSE4Good criteria, and has

satisfied the requirements

to become a constituent

of the FTSE4Good Index

Series. Created by the

global index provider FTSE

Russell, the FTSE4Good

Index Series is designed to

measure the performance of

companies demonstrating

strong Environmental, Social

and Governance (“ESG”)

practices. The FTSE4Good

indices are used by a wide

variety of market participants

to create and assess

responsible investment

funds and other products.


54

STAKEHOLDERSAREAS OF INTEREST

OUR COMMITMENT

METHODS OF ENGAGEMENT

Investors • Group financial performance• Business strategies and

operational efficiency• Governance stability and

sustainability• Risk management

IOIPG endeavours to accomplish responsible commercial success through meeting customer needs, rewarding shareholders with sustainable long-term growth in volume and profitability, enriching society and preserving the environment in which we operate, and contributing towards the progress of our nation.

• Meetings• Annual General Meetings

(“AGMs”)• Financial reports and

announcements• Press releases and

advertisements

Customers/ Tenants

• Product affordability and quality• Support services• Engagement opportunities and

experience• Health, safety and security of

managed properties • Timely delivery of projects

IOIPG delivers a brand promise of excellent quality products and services with added long-term value. Customers’ and tenants’ experience and feedback is crucial for the continuous enhancement of product quality and service excellence. We implement various initiatives to minimise and mitigate safety and health risks at our managed properties.

• Public engagement events• IOIPG social media platforms• Loyalty programmes (IOI LiVO)• IOIPG digital community

engagement platforms• Customer feedback channels

and service hotlines• Customer/tenant satisfaction

surveys

Employees • Personal and professional capacity building

• Career advancement• Competitive remuneration benefits• Conducive work environment

for capacity building and talent retention

• Employee safety and health

IOIPG strives to provide rewarding careers to its employees by promoting a safe and healthy work environment, encouraging career and personal development as well as maintaining an open and inclusive spirit in our work culture. Onboarding sessions are held for new employees to ensure all employees adhere to the Group’s business principles and conduct.

• Meetings• Workshops and training• Employee appraisals• IOIPG internal engagement

platforms• Employee engagement

activities• Townhall sessions

Business Associates/ Vendors/ Consultants

• Cost effectiveness• Procurement practices• Payment schedule• Business ethics and compliance• Supply chain management

IOIPG continues to maintain strong relationships and trust with our suppliers, service providers and business partners. All business partners are expected to adhere to our standards of business principles and conduct such as our Code of Conduct and Business Ethics, and Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy.

• Meetings• Workshops and training• Performance appraisals

Authorities/ Regulators/ Government Agencies

• Regulatory compliance• Environmental management and

compliance• Security and safety management

IOIPG observes strict compliance with regulations related to our business and we strongly support government initiatives. We ensure the same principle is extended to our suppliers and business partners.

• Meetings• Emails and letters• Inspections

Media • Market presence• Reputation• Corporate responsibility

IOIPG aims to continue its healthy relationship with the media to communicate with the local community. We attest to our corporate responsibility by providing the right information and ensuring content validity.

• Press releases• Meetings• Public events• Networking sessions

Residents’ Associations/ JMBs

• Security measures at development projects

• Facilities management• Community investment

IOIPG stays true to its commitment to deliver excellent products and services by providing various communication channels such as a customer feedback management system and grievance mechanism. The platforms will ensure continual improvement, consequently satisfying customers’ and communities’ needs.

• Meetings• Public engagement events• IOIPG social media platforms• Customer feedback channels

and service hotlines

Local Communities/ Civil Society Organisations

• Economic investments for local welfare

• Infrastructure enhancement• Community programmes and

events for social development

IOIPG continues in its commitment to contribute towards improving community well-being and the development of sustainable communities.

• Surveys• Public events• IOIPG social media platforms• Strategic partnerships


STAKEHOLDER ENGAGEMENT METHODS


55

MaterialSustainability

Matters

ENERGY Efficient use and

consumption of electricity from business operations.

EMISSIONS Discharge of Greenhouse Gases (“GHG”) from business operations.

WATER Efficient use and

consumption of water from business operations.

LABOUR PRACTICES Recruitment of employees, fair

treatment in regard to terms and conditions of employment,

development of employees’ skills and knowledge.

WASTE & EFFLUENT Solid waste generated

includes recyclables e.g. paper, plastic, glass, aluminium cans, organic

waste and non-recyclables while effluents discharge from business operations includes

fat, oil and grease.

PRODUCTS & SERVICES RESPONSIBILITY (SOCIAL) Impact of products and services on social well-being, including quality lifestyles, safety and security.

PRODUCTS & SERVICES

RESPONSIBILITY (ENVIRONMENT)

Impact of products and services on the environment

through low carbon development and sensible

pollution abatement design.

MATERIAL Components used as inputs in our development to reduce use of virgin material and hence minimising waste generation in property development.

HEALTH, SAFETY & SECURITY

Anticipation and management of risks and hazards arising

from the workplace that could impair the health and

well-being of employees.

COMMUNITY INVESTMENT Voluntary contributions and infrastructure development to enhance socio-economic benefits to support communities in need and create positive social impact.


56

FRAMEWORK & STRATEGY

SUSTAINABILITY STRATEGIC FRAMEWORK

CREATING A SUSTAINABLE FUTURE

•Property Development

ECONOMY

•Property Investment

ENVIRONMENT

•Hospitality & Leisure

SOCIAL

Mindset Change

•Products & Services

Responsibility (Social)•

Products & ServicesResponsibility (Environment)

•Material

DeliveringExcellence

•Products & Services

Excellence

•Energy

•Water•

Emissions•

Waste & Effluent

Inspiring Women

•Green Efforts

Caring for the Environment

•Labour Practices

•Health, Safety &

Security (Workplace)

Young Urbanites

•Work Culture

Creating Value for Our Employees

•CommunityInvestment

Urban Green

•Community Initiatives

Developing SustainableCommunities

S U S T A I N A B I L I T Y P O L I C Y

I O I P G V I S I O N , M I S S I O N A N D C O R E V A L U E S

Core Purpose

StrategicThemes

MaterialMatters

Goals

Focus Areas

Policy

Pillars

Our Business

Vision, Mission and CoreValues



57

SUSTAINABILITY FRAMEWORK & STRATEGY IOIPG’s Sustainability Strategic Framework is anchored on the Group’s core purpose of Creating a Sustainable Future. The establishment of the framework was based on IOIPG’s Vision, Mission and Core Values that sets the basis of the governance and operations of all our business segments namely property development, property investment, and hospitality & leisure. Highlighting the key elements of sustainability administration and management, the robust framework crystallises the correlation between the material sustainability matters that fall within four key focus areas. These focus areas help to achieve the Group’s four Sustainability Goals and ultimately to realise the objective of addressing the three pillars of Sustainability: Economy, Social and Environment within the Group’s business segments.

We aim to realise these goals through the identification of our Material Sustainability Matters and aligning our activities and initiatives to the four Sustainability Strategic Themes.

Our Sustainability Policy guides us in mitigating adverse impacts while enhancing the positive impacts on the economy, environment and society from our business operations. The Policy highlights key courses of action entrenched with sustainability principles to organise business strategies for long-term sustainable business growth, ensuring value creation for stakeholders while shaping a future for the coming generations.

Our business strategy considers ESG-related risks and opportunities through the Group’s Enterprise Risk Management (“ERM”) as we strive to enhance business operations and mitigate negative impacts on the economy, the environment and society. This financial year, we carried out more engagement on the identification, monitoring and mitigation of ESG-related risks and opportunities across the Group, particularly on climate change and human capital as well as safety and health.

SUSTAINABILITY GOALS Although targeting different areas of focus, the Sustainability Goals are all bound by a common aspiration to achieve the Sustainability Core Purpose of Creating a Sustainable Future.

Delivering ExcellenceAchieve prominence in Product & Service Excellence in order to deliver our desired outcome of being Trusted; and deeply embed reliability, quality and sustainable growth into all aspects of our business.

Caring for the EnvironmentUphold environmental ethics through Green Efforts e.g. energy management, water conservation, emissions and waste reduction as well as care for the environment towards sustainability for future generations.

Creating Value for Our EmployeesMaintain a healthy, safe and fair Work Culture with emphasis on employee engagement; and to encourage employee participation in the organisation’s transformational journey of sustainability.

Developing Sustainable CommunitiesEnhance social well-being via Community Initiatives i.e. social responsibility commitments, community investments, employee volunteerism and community development programmes for positive long-term impacts to society.


58

SUSTAINABILITY STRATEGIC THEMES The Sustainability Strategic Themes are designed to align programmes and initiatives to four themes aimed at achieving the Sustainability Goals and Core Purpose:

Our Sustainability Strategic Framework is reviewed periodically and includes considerations from stakeholder expectations as well as local and global issues. The Sustainability Steering Committee also ensures sustainability initiatives with measurable indicators are materialised across all business units within the Group to effectively manage prioritised material sustainability matters, aside from bridging gaps and resolving issues through carefully planned strategic coordination.

MINDSET CHANGE

Create internal awareness to promote integration of sustainability principles into business strategies by highlighting the socio-economic and environmental

connectivity to business; and encourage the community to take ownership of sustaining the

environment for future generations.

Support and empower women such as young students, single mothers amongst others through programmes

that help to build capacity and chart career or entrepreneurial growth.

Groom young talents, introduce the spirit of sustainability and expose them to best practices in

socio-economic and environmental ethics.

Encourage a wide array of ecological friendly initiatives that advocate low carbon footprint principles,

responsible consumption of resources and waste minimisation which generate positive impacts on the

environment, society and economy.

INSPIRING WOMEN

YOUNG URBANITES URBAN GREEN



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IOI SUSTAIN SERIESThe IOI Sustain Series comprises activities that connect the targeted audience to socio-economic well-being and environmental ethics. It reinforces internal brand pride, creates sustainability awareness and instils sustainability ownership among our employees and the local communities. In the long run, the IOI Sustain Series is expected to create a collective impact on both mindset and behavioural change in relation to sustainable practices at work and at home. This is in line with the Mindset Change strategic theme of shifting perspectives from a reactive to proactive lifestyle bolstered by the determination to make a positive impact on the economy, the environment and society.

In FY2020, the IOI Connects to Earth campaign was highlighted prominently as part of the IOI Sustain Series to employees through our internal communication channel as well as to communities and the general public via Facebook and Instagram.

IOI CONNECTS TO EARTH IOI Connects to Earth is our strategic initiative that aims to create awareness and generate conversation on waste minimisation, biodiversity and climate change. The ongoing programme seeks to build capacity in our workforce to integrate sustainability initiatives in their business strategies and operations. The Group also collaborates with external parties in engaging the community to deliver long-term and short-term programmes that are aligned to our sustainability strategies. We continually create awareness with visuals located at high traffic areas such as our malls and offices.

In its second year in FY2020, some of the programmes and initiatives carried out for this financial year are:

• IOIPG Earth Hour 2020• IOIPG-SWCorp Food Waste Pilot Project• Park Therapy (Guided interactive walks in our urban park)• Project Gema Amal Insan 8.0 (Entrepreneurial skills for B40 women)• Save Our Tiger, Feel the Beat! (Tiger conservation event)• Social media fest i.e. #BiodiversityFest, #WasteMinimisation Fest, #ClimateChangeFest

Materials that advocate waste minimisation, create awareness on biodiversity conservation, and generate conversation on climate change mitigation and adaptation are available on our social media:

Facebook page: https://www.facebook.com/ioisustain

and

Instagram account: https://www.instagram.com/ioi_sustain/


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Notes:

11th Malaysia PlanST 1 : Enhancing inclusiveness towards an equitable societyST 2 : Improving well-being for allST 3 : Accelerating human capital development for an

advanced nationST 4 : Pursuing green growth for sustainability & resilienceST 5 : Strengthening infrastructure to support economic

expansionST 6 : Re-engineering economic growth for greater prosperity

UN SDGsSDG 1 : No PovertySDG 2 : Zero HungerSDG 3 : Good Health and Well-beingSDG 4 : Quality EducationSDG 5 : Gender EqualitySDG 6 : Clean Water and SanitationSDG 7 : Affordable and Clean EnergySDG 8 : Decent Work and Economic GrowthSDG 9 : Industry, Innovation and Infrastructure

SDG 10 : Reduced InequalitiesSDG 11 : Sustainable Cities and CommunitiesSDG 12 : Responsible Consumption and

ProductionSDG 13 : Climate ActionSDG 14 : Life Below WaterSDG 15 : Life on LandSDG 16 : Peace, Justice and Strong InstitutionSDG 17 : Partnerships for the Goals

CONTRIBUTING TOWARDS NATIONAL AND GLOBAL GOALSIOIPG is committed to contribute as a responsible corporate citizen towards Malaysia’s implementation of the 11th Malaysian Plan as well as ratification of the United Nations 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (“SDGs”).

Material Sustainability MattersContributing to

11th Malaysia Plan United Nations Sustainable Development Goals

Energy ST 4, ST 5, ST 6

Water ST 4, ST 6

Emissions ST 4, ST 5, ST 6

Waste & Effluent ST 4, ST 6

Material ST 4, ST 6

Products & Services Responsibility (Social) ST 1, ST 2, ST 5, ST 6

Products & Services Responsibility (Environment) ST 4, ST 6

Labour Practices ST 1, ST 3, ST 6

Health, Safety & Security ST 6

Community Investment ST 1, ST 2, ST 3, ST 4, ST 5, ST 6



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Achieve prominence in Product & Service Excellence in order to deliver

our desired outcome of being Trusted; and deeply embed reliability,

quality and sustainable growth into all aspects of our business.

Delivering Excellence

Exceeding Expectations

Resource Management

Developing Thriving Communities


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DELIVERING EXCELLENCE

IOIPG is driven to exceed expectations and deliver excellence across all our products and services, as we aim to create value for our communities, tenants and customers through the development of resilient and robust townships and properties. As a reputable developer committed to the adoption of sustainable practices and initiatives across all business segments, the Group incorporates environmental and social considerations into our business operations starting from design and supply chain management to construction and operations of our products and services. To uphold our customer-centric approach, the Group also provides multiple channels to engage with customers and communities, and has established grievance mechanisms for all stakeholders to reach out to us. Through this consistent approach that values excellence above all, industry and customers continue to recognise IOIPG’s efforts via a host of accolades and awards. The awards that IOIPG has won in FY2020 are detailed in the Awards section on pages 4 and 5.

EXCEEDING EXPECTATIONS

MANAGING PRODUCT QUALITY IOIPG is deeply committed to delivering excellent quality products and services that exceed customer expectations across the entire product and service lifecycle. As a responsible and reputable developer, we uphold high standards of Product Quality Management, strengthened by our implementation of the ISO 9001:2015 Quality Management System which demonstrates our commitment to continual improvements in our Quality Management System.

DESIGN – QUALITY REQUIREMENTS• Incorporate input and feedback from

customers and local communities• Ensure that the designs fulfil the

needs and functions of customers and communities

PRE-CONSTRUCTION – QUALITY SYSTEM• Ensure project quality requirements

are well communicated to the project management teams

• Assign the most suitable team of consultants and contractors through strict pre-selection processes

CONSTRUCTION STAGE – QUALITY CONTROL• Ensure quality inspection and audit at

all stages of construction from received materials to finishing details

• Enhance skills and workmanship through continuous technical training

PRE-HANDOVER – QUALITY ASSESSMENT• Conduct series of quality inspections and

assessments by both internal and external assessors to ensure products meet the IOI Quality Standards

AFTER SALE – CONTINUAL QUALITY IMPROVEMENT• Request for feedback, preferences and expectations from homebuyers through customer satisfaction surveys• Evaluate and incorporate valuable inputs for future products


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QLASSIC To support IOIPG’s pursuit of quality in property development, we benchmark ourselves against the Quality Assessment System in Construction (“QLASSIC”) certification by the Construction Industry Development Board (“CIDB”).

MANAGING OUR SUPPLY CHAIN Ensuring a robust supply chain that is aligned with IOIPG’s business principles and conduct is an important factor in delivering quality products and services. At IOIPG, all business partners are vetted against stringent pre-selection criteria covering areas of Quality, Health & Safety and Environmental Management, amongst others. We closely monitor their performance throughout the period of engagement and expect our suppliers and business partners to practise the same level of care and uphold the Group’s various policies and guidelines, which includes the Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy and Code of Conduct and Business Ethics.

These policies and guidelines cover issues such as work environment, human rights, employment, safety, health and security, environmental conservation and preservation, contributions, gifts and hospitality, kickbacks, conflict of interest and compliance.

As part of our contribution to the local economy, IOIPG is committed to providing opportunities to local business partners and suppliers. We are proud to share that in FY2020, 100% of newly awarded consultants and contractors in the Klang Valley and Johor were Malaysian-registered companies. The Group also strongly prefers to source materials and resources locally to reduce our contribution to GHG emissions and to minimise the risk of disruptions to our supply chain.

We constantly keep abreast with the latest developments and re-engineer current practices to adapt to the new norm. Due to the Movement Control Order (“MCO”) imposed by the Malaysian Government in the last quarter of FY2020, our supply chain management was impacted by delays in tender exercise. To mitigate this, we increased our adoption of digital platforms to deliver key agendas and information such as virtual meetings and implementation of softcopy circulation to tenderers during the tender and award process.

To find more information about these policies and guidelines, please visit https://www.ioiproperties.com.my/corporate-governance

In FY2020,

100% of newly awarded

consultants and contractors in the Klang

Valley and Johor were Malaysian-

registered companies.


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In FY2020, there were zero cases of human rights violation and zero cases of substantiated complaints recorded regarding breach of data privacy based on IOIPG’s managed customer and community feedback

and grievances channels. The Group will continue to protect our customers’ privacy and data security in compliance to Personal Data Protection Act 2010 (“PDPA”) in all our operational procedures. In support of this, IOIPG’s cybersecurity strategy is regularly reviewed through a periodic network security audit, to enhance readiness and improve our security posture.

As a customer-centric organisation, IOIPG prioritises the voice of the customer and recognises the importance of constructively engaging our customers, stakeholders and communities to understand their needs better. We form the basis of our approach through the IOI Branded Customer Experience to ensure the delivery of excellent product quality and services.

To collect feedback and opinions about our products and services, we have an established customer feedback management system and grievance mechanism, which also allows for human rights related feedback at business units. These feedback, enquiries, complaints and grievances are collected through multiple platforms to accommodate our various stakeholder groups. All feedback received is duly verified and channelled to relevant departments for urgent action and prompt resolution. Feedback and grievances from customers and stakeholders play an important role in identifying existing and potential gaps as well as opportunities for improvements.

In addition, the Group has an established whistleblowing mechanism which allows both internal and external stakeholders to raise any concerns anonymously, including those related to human rights, without fear of retaliation. Further details on the Whistleblowing Policy can be obtained from the IOIPG website.

MANAGING OUR CUSTOMER RELATIONS AND GRIEVANCE MECHANISM

For non-defect related feedback from homebuyers, response and resolution timings are shown as below:

human rights violation & substantiated complaints

Emergency complaints: Immediate

ZER0C A S E S

MANAGING CUSTOMER EXPECTATIONS AND SATISFACTION IOIPG strives to exceed customer expectations at all times; and to know how to continue to best serve them, and whether we are meeting their expectations, the Group conducts customer satisfaction surveys, collecting useful and relevant feedback from new property owners, tenants, mall visitors and hotel guests. The surveys help us evaluate customers’ consumer behaviour and satisfaction towards our products and services, and enable us to further improve our future business strategies, planning and development.

In FY2020, the guest satisfaction score for our managed hotels ranged from 4.1 to 4.5 on a scale of 1 to 5, based on reviews across various online travel platforms.

Putrajaya Marriott Hotel was also recognised with the Loved by Guest Award 2020 from Hotels.com as it garnered a high rating of 8.4/10. Le Méridien Putrajaya was also named as a winner of the 2020 Travellers’ Choice Award by Tripadvisor. For our malls, the customer satisfaction score for IOI City Mall and IOI Mall Puchong were 83% and 80% respectively for FY2020, while the overall customer satisfaction score amongst new houseowners has improved, achieving 85% in FY2020.

85%

FY2020

83%

FY2019

79%

FY2018

Customer Satisfaction Score Amongst New Houseowners


Verbal complaints: 2 days

Written complaints: 2 days


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IOIPG recognises that creating positive socio-economic and environmental impact is an integral part of sustainable township development as we balance the preservation of nature while still meeting business objectives. Thus, we endeavour to build developments that enable communities to STAY, WORK & PLAY while providing the spaces and infrastructure required to foster the well-being and vibrancy of the community. For IOIPG, distinctive communal spaces in our developments are key features, with our lush gardens, parks and recreational spaces facilitating closer community bonds and a greater appreciation of nature. Some of these green parks include Central Park in 16 Sierra, themed parklands in Warisan Puteri Sepang, Oasis Park in Bandar Puteri Bangi and Bandar Puteri Town Park in Bandar Puteri Puchong. For FY2020, the development of Oasis Park in Bandar Puteri Bangi was completed with a recreational playground, a viewing deck overlooking the wetland and boardwalk that allows the local community to enjoy moments of relaxation in the 3.75-acre area.

Much of what we do in this context is very important to IOIPG. Apart from being highly focused on the quality of our products and services, we always ensure that we consider the impact of our business operations on society and the environment. We discuss in detail our approach to the environment, biodiversity and our support of a low carbon lifestyle in the Caring For The Environment section on page 69.

DEVELOPING THRIVING COMMUNITIES

ENGAGING CUSTOMERS AND COMMUNITIES IOIPG strives to integrate sustainability awareness in all our customer engagement activities in line with the Group’s Sustainability Strategic Themes: Mindset Change, Inspiring Women, Young Urbanites, and Urban Green. Our social and environmental related events are designed to reach out to the younger generation, aiming to raise greater awareness, generate conversations and inspire them to take action and create positive impacts towards society and the environment. Besides direct engagement through our community and customer engagement events, we also carried out activities on social media and online platforms. To increase awareness and instil sustainability ownership for new homebuyers, we have included the “Urban Sustainable Living Kit” that highlights the green features of respective properties in the IOI Community App.

Central Park, 16 Sierra

Oasis Park, Bandar Puteri Bangi


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EASING ACCESSIBILITY INTO OUR BUILDINGS At IOIPG, we have designed and built all our properties in accordance with the Uniform Building By-Law 34A and other relevant regulations and statutory requirements for the provision of access and facilities for disabled persons.

At our malls, in addition to ramps and walkways, parking bays and washrooms for the disabled are conveniently located to improve access for wheelchairs and strollers. In FY2020, additional lifts were installed in IOI City Mall to provide extra accessibility for our customers especially for the elderly and those in wheelchairs and strollers.

OFFERING PEACE OF MIND AT OUR DEVELOPMENTSIOIPG prioritises safety and security in the design and planning of our residential developments to ensure homebuyers continue to enjoy peace of mind. Our security efforts are backed by a comprehensive suite of security features that includes perimeter fencing, CCTV surveillance, card access control, digital internal security features and security screening at guarded entrances. IOIPG’s commitment towards safety and security is also notable with the contribution of police stations in our developments.

At our managed properties, IOIPG has a team of 430 security personnel led by the Auxiliary Police who are entrusted to maintain a safe and secure environment for customers, tenants and guests. There are patrol cars in IOI Resort City and Puchong Financial Corporate Centre (“PFCC”), and facilities such as CCTV surveillance cameras, car park panic buttons and security escorts to provide increased security.

EMBRACING TRANSIT-ORIENTED DEVELOPMENT (“TOD”)As part of our approach to advocating a low carbon lifestyle and enhancing convenience for our customers, IOIPG strives to integrate the connectivity of its residential and commercial developments with transportation hubs. Thus, in collaboration with local councils, we support the use of public transport infrastructure by making provisions for bus stops and planning our developments to be in proximity to rail and bus lines.

Examples of this would include Bandar Puteri Puchong and Bandar Puchong Jaya, which are located within public transit nodes and corridors such as the Sri Petaling Light Rail Transit (“LRT”) line, with multiple bus lines and pedestrian walkways connecting commuters to their end destinations.


The provision of pedestrian walkways and cycling pathways in our developments has also enhanced short distance travel connectivity between neighbourhoods, lowering the dependency on motorised vehicles, improving air quality and reducing our carbon footprint. In this context, a new pedestrian bridge and covered walkway have been built in Bandar Puteri Puchong to enhance the connectivity between the commercial areas of Puteri 1 and Puteri 4, providing the community a safer and more comfortable walking environment within the development. The new infrastructure also connects PFCC and the surrounding commercial areas to the Taman Perindustrian Puchong LRT station, making access to transit facilities safe and convenient.

At our malls, IOI Mall Puchong offers shuttle buggy services to ferry shoppers from the IOI Puchong Jaya LRT station to the mall. Shuttle bus services to the Kuala Lumpur International Airport (“KLIA”) and KLIA 2 airport terminals are also available in IOI Mall Puchong, effectively turning the mall into a mini-transport hub for all communities in surrounding areas. IOI City Mall provides a bus terminal with an indoor air-conditioned waiting area, further enhancing the comfort level for tenants and shoppers. In terms of rail, the key transit stations such as the Serdang Keretapi Tanah Melayu (“KTM”) Komuter station and the Kajang Mass Rapid Transit (“MRT”) station are connected to IOI Resort City by shuttle bus services. IOI Resort City has also received a connectivity boost to a few strategic locations in its vicinity following the recent launch of the Smart Selangor Coaster Bus service by the Majlis Perbandaran Sepang (“MPSepang”).

We are also excited about the ongoing construction of the 16 Sierra MRT station which is anticipated to significantly enhance the connectivity of the Group’s 16 Sierra development once construction is completed, given the station’s strategic location within the development. The Group has also launched Stellar Suites, the first transit-oriented Small Office and Versatile Office (“SOVO”) development in Puchong which is located 50 metres away from the Bandar Puteri LRT station.


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DRIVING DIGITALISATION AND INNOVATIONTo continue exceeding customer expectations, IOIPG leverages on digital technology and innovation to produce a range of tools and applications that improves customer experiences.

IOI eMarketplaceThe start of the customer journey involves the purchasing process. At IOIPG, our IOI eMarketplace app is a one-stop platform for purchasers to keep track of every stage of their property purchase(s) from booking, signing all sales related documents and loan release without being physically present at IOIPG’s sales offices. Purchasers are updated through notifications on the app as well as by email, which improves convenience for our customers.

With the participation of our appointed panel bankers and solicitors on this platform, this app serves as a useful tool for all parties to track or follow up on the progress of a purchase within the ecosystem, and to expedite and smoothen an otherwise complicated process. In the era of a post-COVID-19 world which values safety and contactless interactions, this capability proves to be an important and unique value proposition by IOIPG.

IOI Support SystemOnce a property is handed over, the customer’s seamless experience continues into the IOI Support System (“IOISS”) which is a digital mobile platform for customer feedback and defects submission.

IOI LiVO The IOI LiVO app is an exclusive loyalty programme for customers who have purchased IOIPG properties. Members are given special discounts and offers when they purchase a subsequent property or when patronising at participating outlets in our malls, hotels and golf course.

IOI Community AppThe IOI Community app is an online community engagement platform that facilitates the communication between homeowners and the property management team, enabling prompt customer service. Homeowners are able to book facilities, pre-register visitors, sign up for events, receive building management announcements, obtain technical information regarding their residential units as well as keep track on their billings and make payments via the payment gateway in the app. As an added security feature, the app has a panic button that is connected to the respective property’s security team. The app is in use at Pavilion Service Apartment, Sky Condominium, Palmyra Residence, Conezión Residences, The Clio Residences, Avens, Zentro Residences, N’Dira and Sierra 6. Going forward, the app will be expanded to new IOIPG stratified properties.

Building Maintenance AppTo improve tenant and customer satisfaction, our malls use a mobile-enabled building management platform to streamline its operations and maintenance management. This is aligned with the Group’s direction of embracing digitalisation to deliver excellent products and services.


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RESOURCE MANAGEMENTWe adopt system formwork and prefabricated components in the construction of all our high-rise buildings. System formwork is usually made of aluminium or steel, which has a high content of recycled materials, thus reducing the use of virgin materials. In addition, prefabricated components promote material efficiency as these components are produced in controlled factory environment, reducing material wastages. Percentage of system formwork utilisation for each project:

Projects Utilisation of System Formwork

The Clio 2 Residences, IOI Resort City 100%

Alanis, Warisan Puteri Sepang 100%

The Cruise Residence, Bandar Puteri Puchong 96%

• Ongoing projects and projects completed in FY2020.• Projects exceeding 10 storeys.• Total formwork area for typical high-rise floors is for tower blocks; which excludes Podium levels, Facility

levels, Basement levels and Standalone structures such as guard house, refuse centre etc.

Production of construction materials also contributes to embodied carbon emissions. IOIPG recognises its related environmental impacts and hence we are committed to tracking and monitoring the use of some of our major construction materials since FY2019.

Some of the major construction materials purchased by the Group are listed as below:

Materials Unit FY2019* FY2020**

Steel tonnes 53,749 8,617

Concrete m3 420,990 95,404

Tiles m2 335,926 310,058

* FY2019 data is inclusive of Klang Valley only.** FY2020 data is inclusive of Klang Valley and Johor.

As part of our initiatives, the Group encourages the use of environment-friendly materials, such as those with high levels of recycled content, low content of volatile organic compounds (“VOC”) and materials that are green certified.

Other initiatives include:

• Reuse materials to build wooden Christmas trees at Le Méridien Putrajaya hotel

• Using Forest Stewardship Council (“FSC”) certified office papers at IOIPG HQ and project offices

• Using e-backdrops and reusing physical backdrops

• Providing water dispensers in all meeting rooms to replace bottled water

• Setting up stationery stations for sharing and providing stationery on an as-needed basis

For our property investment segment, we are committed to reducing unnecessary draperies and to reuse decorative materials without compromising on our service quality and customer experience. For example, Icescape, an ice-skating rink managed by IOIPG is using 100% recycled rubber tiles, produced from recycled tyres as the rink’s flooring material. This is in line with IOIPG’s Sustainability Policy and Waste Management Policy pertaining to responsible use of resources and waste minimisation.



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Uphold environmental ethics through Green Efforts e.g. energy management,

water conservation, emissions and waste reduction as well as care for the environment

towards sustainability for future generations.

Caring for the Environment

Energy Water Emissions Waste & Effluent

Developing Sustainable Living Environment


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CARING FOR THE ENVIRONMENT

Caring for the Environment is one of our four Sustainability Goals, where we uphold environmental ethics through Green Efforts such as energy management, water conservation, emissions and waste reduction as well as care for the environment towards sustainability for future generations. This section describes our initiatives in conserving the environment through various awareness programmes and initiatives as we strive to instil the importance of environmental sustainability in society.

To contribute to environmental conservation, we adopt the Low Carbon Cities Framework (“LCCF”) criteria in our developments to reduce emissions, work towards green building achievements and ensure efficient natural resources and waste management. An important component of our conservation efforts is ensuring the continued vitality of urban biodiversity and is aimed at advocating the appreciation of flora, fauna and ecosystems. In FY2020, IOIPG recorded zero cases of fines for environmental non-compliance.

IOIPG is committed to minimising any negative impacts from its operations on biodiversity. As part of this commitment, the Group conducts Environmental Impact Assessment (“EIA”) for new projects, including biodiversity and ecological studies before the commencement of the project, where applicable.

In addition, we are committed to retaining the urban biodiversity of our developments and adjacent areas through the provision of urban parks and landscaping. These green spaces in the form of pocket parks and town parks support the habitat of many flora and fauna with ecological functions and provide ecosystem services such as temperature regulation, improvement to air quality, reduction in surface runoff, oxygen production and carbon sequestration.

One key example is the mature Bandar Puteri Town Park which sits on IOIPG’s signature township development of Bandar Puteri Puchong. It has a thriving ecosystem supporting both aquatic and terrestrial life forms. It also serves as an ideal venue for local communities and nature organisations to carry out activities such as bird-sighting, insect-spotting and herping. Frequently referred to as a manicured wilderness, the rich biodiversity of Bandar Puteri Town Park continues to thrive and remain protected and preserved amidst human activities. The town park is currently undergoing refurbishment to include a boardwalk and walking paths for the purpose of community interactions and biodiversity appreciation.

DEVELOPING SUSTAINABLE LIVING ENVIRONMENT CONSERVING URBAN BIODIVERSITY


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List of Vulnerable, Endangered or Critically Endangered Species in Our Landscaping

Species Common Name Status in IUCN Red List

Araucaria heterophylla Norfolk Island pine Vulnerable D2 ver 3.1

Dracaena draco Dragon tree Vulnerable A1abcde ver 2.3

Dypsis leptocheilos Redneck palm Critically Endangered B1ab(iii,v) + 2ab(iii,v); C2a(i,ii); D ver 3.1

Eucalyptus deglupta Rainbow gum Vulnerable A2c ver 3.1

Hopea odorata* Merawan siput jantan Vulnerable A2cd ver 3.1

Lagerstroemia langkawiensis* Langkawi bungor Endangered B1+2c ver 2.3

* Native species.

912 trees were transplanted by IOIPG in Klang Valley and Johor in FY2020, bringing the

total number to 3,969 trees to date.

In FY2020, 947 trees out of a total of 14,317 trees planted in Klang Valley and Johor are listed in the IUCN Red List as VU, EN or CR.

Baya Weaver (Ploceus philippinus)

Slender Skimmer (Orthetrum sabina)

Yellow-striped Flutterer (Rhyothemis phyllis)

Great Eggfly (Hypolimnas bolina)

Mallotus Shield Bug (Cantao ocellatus)

Chestnut Angle (Odontoptilum angulata)

Asian Common Toad (Duttaphrynus melanostictus)

IOIPG has been engaging with local governments and environmental societies such as the Society of Wilderness Malaysia (“SOWM”) to support the conservation and preservation of urban biodiversity at Bandar Puteri Town Park. Such ongoing engagements enable us to gain better insights on future planning for the park as well as other urban parks in our developments.

Urban Wildlife Highlights [#IOIConnectstoEarth – #AppreciateBiodiversity] was a weekly online series of urban wildlife introduction initiated by IOI Sustain, our social media page focused on sustainability. The series featured birds, butterflies, dragonflies and other interesting species which can be found in our urban parks.

Urban Wildlife Highlights in Bandar Puteri Town Park

To further support our commitment to plant species conservation, we included a number of International Union for Conservation of Nature (“IUCN”)-listed Vulnerable (“VU”), Endangered (“EN”) or Critically Endangered (“CR”) species in the landscaping of our developments and within our urban parks.


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Park Therapy and Park CrawlingIOIPG collaborated with SOWM in November 2019 to organise Park Therapy at Bandar Puteri Town Park, a guided interactive walk that enabled the community to experience and observe biodiversity in an urban setting while raising awareness on the importance of urban biodiversity.

Project Park Crawl is an internal initiative that was started in FY2019 to monitor the condition and biodiversity of IOIPG’s managed park. As an added measure to biodiversity conservation, bio-monitoring and tree-tagging are conducted regularly for documentation and building species inventories for the parks. In FY2020, we expanded Project Park Crawl to Oasis Park in Bandar Puteri Bangi.

We also launched #BiodiversityFest during the Conditional Movement Control Order (“CMCO”) in conjunction with International Day of Biological Diversity 2020 and World Environment Day 2020. It was a virtual biodiversity challenge comprising various educational and interactive activities to increase public awareness on biodiversity.

Park Therapy at Bandar Puteri Town Park in November 2019.

INTEGRATING GREEN FEATURES INTO OUR DEVELOPMENTSAs an eco-conscious developer, IOIPG subscribes to the LCCF to reduce GHG emissions. IOIPG is also among Majlis Perbandaran Subang Jaya (“MPSJ”)’s selected few developers to adopt LCCF criteria in our developments. As part of our efforts in promoting low carbon lifestyle, we support TOD* such as in Bandar Puchong Jaya and Bandar Puteri Puchong.

We believe incorporating environment-friendly designs and green technologies will create sustainable homes for our customers. With sustainable features, the impact of urbanisation on the environment will be reduced and the comfort level of occupants enhanced. The Group acknowledges that climate change is happening and will continue to build climate-resilient developments that include mitigation and adaptation functions to future-proof and mitigate climate change.

* To know more about our efforts in supporting TOD, please refer to Embracing Transit-Oriented Development (“TOD”) in page 66 in the Delivering Excellence section.



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We strive to reduce carbon footprint by integrating passive and active designs in IOIPG developments to encourage low carbon and sustainable lifestyles. We actively source for construction materials and products locally to reduce carbon emissions; and to further ensure our developments are sustainable, water and energy efficient appliances are preferred, such as LED lights and dual flush water cisterns. We also aim to harness natural light and adopt North-South orientation and cross ventilation designs wherever possible.

Commercial High-Rise Buildings• Green Building Index (“GBI”) or Green Mark

Certification• Building orientation facing North-South direction• Energy management modules in Building

Management System (“BMS”)• Low VOC paint• Photovoltaic cells at rooftop

• Motion sensor lights at staircase areas• Water-saving toilet cisterns• Sensor taps in public toilets• Natural light harnessing features• Reduction of mechanical ventilation at carpark

Residential Buildings• Cross ventilation designs• Natural ventilation features at bathrooms without the

use of exhaust fans• Natural lighting and ventilation feature e.g. open

concept and high ceiling• North-South building orientation• Vertical plantings

• Solar water heating systems• Rainwater harvesting for irrigation purpose• Reduction of mechanical ventilation at carpark of

high-rise residential projects• Replacement of Conventional High-Pressure Sodium

(“HPS”) Light to LED Compound Lighting

• Chiller retrofitting• Room Temperature Control Practices through Air

Conditioning and Mechanical Ventilation (“ACMV”)• Replacement of Conventional HPS Light to LED

Compound Lighting• Alternative looping for lighting circuits at the car

park and staircase areas which allow the flexibility of reducing 50% use of lights during non-peak hours

• Waste management system at construction site• Recyclable metal formwork used at high-rise

development• Upcycling used cooking oil• Organic waste decomposition of garden waste• Electric Vehicle (“EV”) Charging Stations at our

managed properties and development• Electric buggies at Palm Garden Golf Club and

IOI Palm Villa Golf and Country Resort

Environment-Friendly Operational InitiativesIn striving to efficiently manage the Group’s investment assets and to reduce environmental impact, low energy consumption and energy saving features have been introduced into our business operations. Some of the green initiatives include:


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1 Daylighting and Natural Ventilation Natural sunlight and air movement can reduce usage of electricity

by reducing the duration that lights are switched on, as well as the illuminance needed overall, and potentially removing the need for mechanical ventilation. Natural sunlight and ventilation also reduce air humidity and prevent mould growth.

2 Solar Water Heater Using solar water heaters can greatly reduce electricity

consumption and consequently carbon emissions.

3 Water Efficient Fittings and Rainwater Harvesting Water efficient fittings and rainwater harvesting for landscape

irrigation will significantly reduce the demand for potable water and help address seasonal water scarcity.

4 Energy Efficient Lighting LED compound lightings are installed in our developments

as they consume significantly less energy compared to conventional fluorescent lighting.

5 N-S Orientation North-South orientation reduces heat gain of buildings compared

to those facing East and West.

6 Cycling and Pedestrian Pathway Cycling and pedestrian pathways encourage a healthier lifestyle

for our residents and local communities, and reduce dependency on motorised vehicles. These pathways interlinking nearby neighbourhoods also promote larger community interactions.

2

5

6

3

4

1

One of our various approaches to integrating green features in our buildings is by optimising natural ventilation and daylighting through the incorporation of passive designs. Our efforts are evident in our high-rise buildings where we design for natural ventilation at above ground car parks and bathrooms.

For projects which have been constructed without any mechanical ventilation in car parks:

Note:For ongoing projects and projects completed in FY2020.

Estimated

6,544 MWhof energy will be saved yearly

Estimated

4,542 tCO2

of avoided carbon emissions yearly

REALISING GREEN BUILDING INDEX DESIGNED BUILDING All office buildings built by IOIPG for our investment portfolio such as PFCC Tower 4 & 5, and IOI City Tower 1 & 2 are designed to achieve GBI certification. In addition, PJ Midtown, a joint-venture mixed development project managed by IOIPG was designed to achieve GBI Gold certification for both its commercial and residential components.


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Operational data for Energy, Water, Emissions and Waste & Effluent sections of this report was impacted by the restricted movement, which was imposed by the Malaysian Government in the final quarter of FY2020 in response to the COVID-19 pandemic. Hence, a corresponding reduction in the operational data will be reflected in this report.

Effective energy management reduces operational costs, energy consumption and subsequently GHG emissions. The Group’s Energy Policy outlines our commitment to improve energy efficiency and energy conservation practices in our operations for managed buildings. Some of the efforts implemented include continuous monitoring and verification of energy consumption and ensuring optimum conditions of energy systems in buildings. Energy audits are also carried out when necessary to identify non-compliance and improve energy efficiency management. The energy intensity reduction target from FY2021 to FY2025 is set at 8% with FY2020 as the base year.

ENERGY

# Excluding consumption from tenants for office and retail buildings and inclusion of managed properties under Johor. This will be used as baseline starting from FY2020.

Electricity Consumption Intensity of Corporate Office at IOI City Tower 2 in FY2020: 20.3 kWh/m2/year

Electricity Consumption (MWh/year)

FY2020# 108,954

FY2019 144,074

FY2018 143,783

Electricity Consumption Intensity in FY2020

Business SegmentsElectricity Consumption Intensity

(kWh/m2)

Office Buildings* 75.20

Conezión Shops and Retail 14.68

Retail Malls** 148.27

Hotels*** 174.98

Golf Clubs 75.97

Sales Gallerias 107.98

• The normalisation factor used in the intensity is gross floor area of the managed buildings.

* PFCC provides chilled water to other managed buildings.** IOI City Mall provides chilled water to other managed buildings.*** Putrajaya Marriott Hotel provides chilled water to other managed buildings.

Notes:1. The data presented is from IOIPG’s business operations and managed buildings in Klang Valley and Johor operations.2. The data presented is from the total amount of purchased electricity only.3. The data presented is from electricity bills or direct meter reading.4. For FY2020, the data for office buildings, shops and retail malls include energy consumption in common areas and air-conditioning systems but exclude leased areas.5. For FY2020, the data for hotels and golf clubs include energy consumption for all common areas, air-conditioning systems, rooms and tenanted areas.

We will continue to implement various energy saving initiatives across the Group to optimise energy consumption. In addition, energy consumption in FY2020 decreased due to the imposition of the MCO and Recovery Movement Control Order (“RMCO”).


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Energy Management Flowchart

Energy Planning

Checking& Verification

Initial Implementation

& Operation

Non-compliances,

Corrective andEnhancement

Measures

Energy Policy

BUILDING MANAGEMENT SYSTEMBMS monitors and optimises energy consumption of building facilities. The system optimises the performance of operating parameters and minimises human errors besides expediting the response time of facility management teams. With BMS, real-time optimisation in full automation mode can be achieved, empowering further advances in facilities management such as in the area of chilled water plant automation systems.

ENERGY SAVING INITIATIVES

Centralised Cooling SystemThe implementation of centralised cooling systems in our malls, hotels and office buildings contributes to more efficient management of cooling demand, scale, operations and maintenance of the chiller plants as well as minimises the amount of refrigerants used.

Cooling Design of Data CentreThe Group’s data centre is designed with the focus on sustainability and efficiency in energy utilisation. As a result, our data centre consistently maintains a lower Power Usage Efficiency (“PUE”) rating which indicates high cooling capacity with lower power consumption.

Upgrading of the BMS Controls for OptimisationThe BMS has been upgraded in IOI City Mall, with progressive upgrading works for optimisation purposes in all our managed properties which is estimated to save 537,503 kWh/year; equivalent to approximately 373 tCO2 saved per year.

Chilled Water TemperatureRegulates the chilled water temperatures to enhance chiller system efficiency without compromising the comfort of building occupants.

Sensor Control LightingThe sensor control lightings which are being progressively installed in IOI City Tower is estimated to save around 3,225 kWh/year.

LED Conversion Conversion of fluorescent lamps to LED lighting in IOI Mall Kulai is an ongoing initiative; and this is estimated to save around 32,250 kWh/year.

Energy Saving PracticesDaily energy saving practices observed by all employees and operations include:• Maintaining optimum energy efficiency for all

equipment and machinery, especially chiller systems. • Maintaining room temperatures of office buildings

and hotels at an optimum level. • Switching off lights and other unnecessary

receptacle loads after office hours and if possible, during lunch hour.

RENEWABLE ENERGY The Group embarked on a renewable energy initiative in FY2020 by installing solar panels at IOI City Mall. It is estimated to generate 4,293 MWh/year of energy to reduce emissions by 2,979 tonnes of CO2. This is equivalent to an estimated savings of RM1.5 million annually. The initiative underscores IOIPG’s commitment to mitigate climate change by reducing CO2 emissions.

AuditCommittee

Review

Monitoring,Measurement

& Analysis


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Water security is both a global and national concern. IOIPG acknowledges the impact of water security on our business operations and is committed to reducing water wastage and conserving water resources. Our Group-wide water management approach involves the cooperation of various stakeholders including employees, tenants and customers, focusing on monitoring of water consumption performance, identifying risks and opportunities of water security and implementing innovative water saving initiatives in all managed properties across the Group. The water intensity reduction target for FY2021 to FY2025 is set at 10% with FY2020 as the base year.

WATER

Water Consumption Intensity in FY2020

Business SegmentsWater Consumption Intensity

(m3/m2)

Office Buildings 0.66


Retail Malls 1.91

Hotels 3.00

Golf Clubs 2.99



Notes:1. The data presented is from IOIPG’s business operations and managed buildings in Klang Valley and Johor operations.2. Data presented is from water bills or direct meter readings.3. The source of water is from municipal potable water.

The water consumption in FY2020 decreased due to the completion of major renovation works at one of the managed buildings in FY2019 as well as the imposition of the MCO and RMCO.

In FY2020, an estimated 9,409 m³ of rainwater was harvested while around 2,000 m3 was harvested in FY2019. The data collected in FY2020 includes managed properties in Klang Valley and Johor with rainwater harvesting system. Harvested rainwater is used for irrigation and cleaning purposes.

+ Data is inclusive of Klang Valley and Johor managed properties for FY2020

Water Consumption (m3/year)

FY2020+ 1,470,669

FY2019 1,876,296

FY2018 1,780,327


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WATER SAVING INITIATIVES

Water Taps• Basin taps with lower flow rate are installed at our managed properties. • Taps with aerators are preferred in contrast to conventional water taps. • Water sensors and self-closing taps are installed at our malls.

Water Saving PracticesOur employees are encouraged to practise the following water saving habits:• Minimise the wastage of water in our pantries and washrooms.• Turn off water taps when not in use.• Avoid repeated or unnecessary flushing if possible.• Minimise water wastage during irrigation and cleaning of common area.• Avoid over-irrigation if possible.• Avoid repeated cleaning and overflow of water if possible. • Prompt response of repair works.

Rainwater Harvesting• Rainwater harvesting tank is installed at suitable locations for the purpose of irrigation and cleaning at common

areas. • The incorporation of eco-toilets in the ongoing expansion of IOI City Mall will utilise rainwater for flushing instead of

potable water and has an effective tank capacity of 137.7 m3.

Hotels• Our hotels provide their guests with an option to not change their towels and bed linens daily. This helps to reduce

water consumption and detergent usage.


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In line with Malaysia’s ratification of the Paris Agreement that aims to keep the increase in global average temperature to below 2°C above pre-industrial levels, we are committed to reduce carbon emissions from our business operations as an effort to mitigate climate change and global warming.

The Scope 2 carbon emissions intensity reduction target from FY2021 to FY2025 is set at 15% with FY2020 as the base year.

The carbon emission factor used in emissions calculations for purchased electricity is obtained from Sustainable Energy Development Authority (“SEDA”) Malaysia guidelines. Carbon emission factor for direct emission for company vehicles is derived from MYCarbon GHG Reporting Guidelines published by the Ministry of Natural Resources and Environment Malaysia in partnership with United Nations Development Programme (“UNDP”). Carbon emission factor for direct emission from fuel combustion from our investment properties is derived from the Greenhouse Gas Protocol published by the World Resources Institute.

EMISSIONS

Scope 2 Carbon Emissions Intensity in FY2020

Business SegmentsScope 2 Carbon Emissions Intensity

(tCO2/m2)

Office Buildings* 0.05


Retail Malls** 0.10

Hotels*** 0.12

Golf Clubs 0.05



* PFCC provides chilled water to other managed buildings.** IOI City Mall provides chilled water to other managed buildings.*** Putrajaya Marriott Hotel provides chilled water to other managed buildings.

Notes:1. The data presented is from IOIPG’s business operations and managed buildings in Klang Valley and Johor.2. The Scope 2 carbon emissions data presented is derived from the consumption of electricity (electricity which is sourced from the local electricity grid distribution).3. For FY2020, the data for office buildings, shops and retail malls include carbon emissions from electricity consumption in common areas and air-conditioning systems

but exclude leased areas.4. For FY2020, the data for hotels and golf clubs include carbon emissions from electricity consumption for all common areas, air-conditioning systems, rooms and

tenanted areas.

Scope 2 carbon emissions decreased slightly; reflecting lower electricity consumption due to the imposition of the MCO and RMCO during this pandemic.

Scope 1 emissions from company vehicles at project sites in Klang Valley was 31.3 tCO2 in FY2018. In FY2019, the scope was expanded to include all company vehicles across the Group in Klang Valley with 132.4 tCO2. In FY2020, the emissions from all company vehicles in the Group was 242.5 tCO2 in Klang Valley and Johor operations. Meanwhile, Scope 1 emissions from the fuel consumption in kitchen usage in our hotels and golf clubs in Klang Valley and Johor operations in FY2020 was 106.8 tCO2.

# Excludes carbon emissions from tenants for office and retail buildings and includes managed properties under Johor. This will be used as baseline starting from FY2020.

Carbon Emission Intensity of Corporate Office at IOI City Tower 2 in FY2020: 14.1 kg CO2/m2/year

Scope 2 Carbon Emissions(tCO2/year)

FY2020# 75,614

FY2019 99,987

FY2018 99,785


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GHG EMISSIONS MITIGATION INITIATIVESIOIPG continuously strives to improve and introduce various green initiatives to reduce GHG emissions.

Trees• More than 14,300 trees were planted in Klang Valley and Johor.

Pedestrian Walkways and Cycling Paths • Pedestrian walkways and cycling pathways are designed in IOIPG’s developments to enable residents and

communities to walk or cycle to nearby amenities.

Electric Vehicles• Electric motorbikes for security personnel.• 238 electric buggies are available at our golf clubs.• 10 electric vehicle charging stations.

Vehicle Sharing • We encourage car-pooling among our employees.• Shuttle bus services are provided to facilitate first and last mile travel connections:

– between IOI City Mall and Serdang KTM Komuter station– between IOI City Mall and Kajang MRT station– within IOI Resort City, connecting IOI City Mall, Putrajaya Marriott Hotel, Palm Garden Hotel– between IOI Mall Puchong and Four Points by Sheraton Puchong


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The improper management or disposal of waste will create various environmental issues. Reducing waste generation will mitigate environmental pollution and thus it is essential in environmental protection. Therefore, IOIPG formulated the Group’s Waste Management Policy to encourage waste minimisation at source as well as responsible management and disposal of waste, adopting the principles of waste segregation at source as well as reduce, reuse and recycle.

RECYCLABLESEmployees of IOIPG are encouraged to minimise the generation of all types of waste at source in order to reduce environmental pollution. The segregated recyclable waste will be sent to recycling vendors for recycling and upcycling, as an input to other products that require recycled content.

The increase in amount of waste recycled is due to renovations as well as a higher recycling rate in our malls and hotels. The inclusion of our Johor operations has also contributed to the increase in the amount of recyclable waste in FY2020.

WASTE & EFFLUENT

Paper Waste Paper waste is the most typical waste generated in office buildings. Our employees are required to practise the following waste minimisation at source to reduce paper consumption.

• Advocate the use of softcopies for data archival and data presentation purposes.• Minimise the printing of e-mails or documents.• Choose double-sided printing and photocopying if possible. • Print and photocopy only exact copies required.• Limited paper supply is provided at the common printer and photocopier.• Access company policies, administration documents and application forms via the Group’s intranet.

Waste Minimisation at Source

In FY2020, IOIPG will not be distributing CD-ROMs of our annual report to shareholders, in line with one of the strategic initiatives of minimising waste under IOI Connects to Earth. This initiative will help to halt the production of approximately 19,000 CD-ROMs which are made of non-biodegradable materials, thereby minimising impact on the environment.

Digital Transformation to Save Resources

IOIPG has embarked on various digitalisation efforts to reduce paper consumption at the workplace in line with the Group’s Waste Management Policy on waste minimisation. Some examples of the digital transformation initiatives include IOI LiVO, IOIPG-PQSH, IOI eMarketplace, Enterprise Content Management (“ECM”) system and automated payment processes, amongst others. IOI eMarketplace has since managed to save an estimated 10,000 paper copies of documents.

Estimated Waste Recycled in our Managed Properties (kg)

FY2020 532,239

FY2019 30,043

FY2018 42,365


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The cleaning enzymes produced by Puteri Mart.

SCHEDULED WASTE The improper management of scheduled waste will negatively impact our environment. To manage scheduled waste by our contractors, IOIPG implemented stringent procedures that include proper management of used engine oil at our project sites.

Year FY2019 FY2020

Estimated amount of properly managed used engine oil (Litres) 41,898 18,283

The decrease in estimated used engine oil is due to the imposition of the MCO and RMCO which disrupted construction works; and gradual completion of structural works at project sites in FY2020.

ORGANIC WASTE IOIPG continuously implements various initiatives to divert organic waste from the landfill. In FY2020, IOIPG continues to collaborate with Perbadanan Pengurusan Sisa Pepejal dan Pembersihan Awam (“SWCorp”), an agency under the Ministry of Housing and Local Government, in a food waste management pilot project researching biogas generation. As part of this project, food waste from hotels and golf club in IOI Resort City are segregated from conventional disposal and sent to the biogas generation plant.

This initiative also increased the awareness on food waste segregation amongst the stewards and kitchen staff. As a result of the project, an estimated 32,103 kg of food waste was diverted from landfill since its commencement in FY2019.

Puteri Mart continues to upcycle fruit peels from its wet market into cleaning enzymes, which minimises the dependence on chemical detergents as a cleaning agent. An estimated 270 kg of fruit peels has been upcycled under these efforts and approximately 877 L of cleaning enzymes have been distributed to the general public for domestic usage in this financial year.

Palm Garden Golf Club remains committed to composting its landscape waste such as branches, fallen leaves, trimmed grass and dried plants to enhance soil composition and water penetration in the golf course. The Group’s Landscape Department also uses a mulching machine in its nursery to shred garden waste into mulch to be used as soil additives.

Love the Food Not the Waste Giveaway IOIPG rolled out the Love the Food Not the Waste Giveaway via the Group’s social media account, IOI Sustain, in line with its waste minimisation strategic theme. The campaign aims to engage with the community to raise awareness on food waste minimisation.

Cleaning Enzymes GiveawayIn conjunction with World Environment Day 2020, we gave out cleaning enzymes for free to communities in IOI City Mall and IOI Mall Puchong as well as to our employees via IOI Sustain’s social media campaign.



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Caring for EmployeesStrengthening Health, Safety

and Security PracticesTalent Development and

Capacity Building

Creating Value for Our Employees

Maintain a healthy, safe and fair Work Culture with emphasis on

employee engagement; and to encourage employee participation in the organisation’s

transformational journey of sustainability.

Group Human Resource Policy and Practices

Nurturing Young TalentsEmbracing Diversity at

the Workplace Engaging Employees


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CREATING VALUE FOR OUR EMPLOYEES

GROUP HUMAN RESOURCE POLICY AND PRACTICESIOIPG recognises our people as the champions of the Group’s value creation journey. Our human capital is the backbone of our organisation and is essential for the Group’s continued success. While we are invested in ensuring continuous professional and personal development of our people, we are also aware of labour practice risks that exist within the Group. To mitigate and eliminate these risks, our policies are aligned to good employment practices to ensure the rights of both employee and employer are respected and protected. We are a member of the Malaysian Employers Federation (“MEF”), an affiliate of the International Organisation of Employees (“IOE”), and we uphold labour practice standards in our business operations.

IOIPG is compliant to local laws and has a code of conduct in place to prevent child labour and forced labour. Across our business segments, we do not condone the economic exploitation of minors.

To further strengthen our commitment to good business ethics and employment practices, the Group has aligned its practices to international guidelines by adopting the Ten Principles of the United Nations Global Compact with due diligence to human rights and anti-corruption. We are also mindful of the rights of our employees as accorded in the Malaysia Employment Act, the Universal Declaration of Human Rights, the National Action Plans on Business and Human Rights as per the UN “Protect, Respect and Remedy” Framework and we remain in compliance to all statutory requirements. The principles of Freedom of Association and Collective Bargaining are respected and applied fairly across all levels. The Group’s policies and procedures are communicated to employees globally and translated to local languages, where necessary. As a Group, we are committed to ensuring a work environment where openness, trust and respect are integral to its corporate culture, as stated in our Code of Conduct and Business Ethics.

We ensure anti-corruption training is conducted for managers and employees. The Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy was committed in FY2019 and by the end of FY2020, managers and employees across the Group received a collective 2,500 hours of training that ensured every employee understood the policy and the consequences of non-compliance. The training covered various types of bribery that exist and the consequences of corruption for all parties involved.

All of our Auxiliary Police undergo formal training that prepares them to carry out their duties in compliance with national regulations. The Auxiliary Police undergo training at the Royal Malaysia Police Training Centre where their training includes human rights. In ensuring this practice is accorded in all areas of security, our third-party security teams in the Klang Valley also undergo training in their respective agencies to cover the laws of arrest, proper search techniques and appropriate use of force.


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IOIPG STRATEGIC HUMAN RESOURCE MANAGEMENT FOCUS In ensuring a high-performance workforce, the Group is committed to nurturing and supporting our employees to achieve their professional and personal aspirations. We focus on the following key strategies to empower our people and ensure sustainable growth of our organisation:

Increase Talent PipelineIOIPG embarked on a Leadership Development Programme anchored around critical leadership competencies of driving a high performing organisation. The programme is a 12-month journey for Senior Leaders and a 6-month journey for Managers. It consists of modules relating to:

Leading SelfThe capabilities, style and self-awareness needed to become a more effective leader

Leading OthersThe capabilities, tools, mindset and behaviours needed to coach and lead a team

Leading ChangeThe capabilities, tools and mindset required to adapt to and manage change

Leading BusinessThe capabilities, frameworks, behaviours and mindset required to lead a business

Employee EngagementThe Group conducted a Voice of Employee survey in its aspiration to achieve a comprehensive overview of its strengths and areas of improvement.

The Future of LearningThe Group conducted a comprehensive study to effectively implement a Learning Management System with built-in learning modules. This learning platform that comes with data analytics identifies employee learning trends and monitors learning progress, is aimed at elevating job competency levels and equipping our employees with skills needed to thrive in a digital era.

Board Diversity Policy

Code of Conduct and Business Ethics

Whistleblowing Policy

Group Health and Safety Policy

Training Policy & Procedures

Grievance Procedures

Business Ethics, Compliance, Anti-

Corruption and Anti-Money Laundering

Policy

Recruitment Policy &

Procedure

HUMAN RESOURCE POLICIES AND PROCEDURES Some of the following IOIPG Human Resource Policies and Procedures are available online, whereas those meant for internal consumption are available on the Group’s intranet. Some of these policies are extended to our supply chain, where applicable.


86

Note:Including operations outside the Klang Valley and Johor as at 28 August 2020.

Age Profile at IOIPG

20-29yrs 30-39yrs 40-49yrs 50-59yrs 60-69yrs >70yrs

64.7%Employees aged <40

< 20yrs

31.7%0.1% 0.1%32.9% 22.3% 11.7% 1.1%

EMBRACING DIVERSITY AT THE WORKPLACE We recognise embracing diversity and inclusivity as the way forward in our organisation as we strive to empower our people. To create a dynamic work environment, we subscribe to the basic philosophy of providing fair and equal employment opportunities to all job applicants and employees regardless of race, colour, religion, sex, age, national origin, physical ability or social status. To further demonstrate good corporate responsibility and attest to our inclusive philosophy, we also offer employment opportunities to underprivileged groups.

Gender Profile at IOIPG

Gender diversity is apparent throughout all levels of employment across the Group as we strive to be more inclusive and to develop a comprehensive and integrated work environment. Employment opportunities are offered to the local community and a predominantly local workforce with diverse backgrounds and experiences continues to create value in contributing to the sustainable growth of the Group.

MALE FEMALE

39%

36%

40%

61%

64%

60%

61%

60%

65%

39%

35%

40%

2020 2019

Employees

Managerial

Non-managerial



87

IOIPG wins the Graduates’ Choice Award 2019.

NURTURING YOUNG TALENTSAt IOIPG, we believe in nurturing young talents to develop a sustainable succession pipeline and the Group maintains a healthy percentage of youth within its workforce. We are proud to note that IOIPG was voted as one of the Top 5 Most Attractive Employer in the Real Estate/Property category at the Graduates’ Choice Award 2019 for the second consecutive year.

We continue to support the development of young talents by offering internships to undergraduates in all our business units, providing them with invaluable experiences that goes beyond academics. All interns at IOIPG are given the opportunity to experience overall operations and the specific tasks of the departments they are attached to, ultimately providing them valuable insights into a formal working environment. Subject to the interns’ respective course requirements, an internship programme usually lasts for three to six months. In FY2020, 440 interns and apprentices joined the various business units within the Group. Providing internships proves to be a rewarding exercise for both the youth and the Group, as it enriches undergraduates in terms of knowledge and skills; while interns bring a fresh perspective and new ideas to complement the expert knowledge and skills of our employees.

Interns at IOIPG.


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I would absolutely recommend an internship with IOIPG because of the conducive learning environment! My colleagues have been most accommodating of my learning journey here and are always happy to share their knowledge and expertise with me.

This internship has given me a lot of confidence in my preparation for my final year project and working life. Although my major is in civil engineering, I had a chance to explore the inner workings of architecture, mechanical and electrical engineering.

Wan Ahmad Faiz bin Wan Mohd Fauzi Project Department

I will definitely recommend an internship opportunity with IOIPG, as the working environment in IOIPG is suitable for students like me who wants to gain experience in a trusted and successful company. Although the workload can be heavy, it has certainly given me the opportunity to learn new skills and knowledge that will better prepare me for working life.

Sun WeihanGroup Corporate Communication Department

I have gained confidence communicating with people since my colleagues here are very friendly. Other than that, I gained hands-on experience in accounting and am able to put in practice what I have learnt at university.

Syazwani Binti Ajisman Accounts Department



89

Unveiling of the refreshed Vision, Mission and Core Values. Top management shares their thoughts with employees during the townhall sessions.

Employees engaging the top management during an interactive session.

ENGAGING EMPLOYEES Continual employee engagement is essential in ensuring sustainable business growth as it allows the Group to meet the needs of employees and enhance working environment. We continue to engage with employees through various programmes and activities such as townhall meetings, focus groups, team building and formal engagement activities led by business unit heads and attended by C-level senior management.

With constant engagement, employees are able to share their views and thoughts with the senior management, thus increasing mutual respect and enabling collaboration and teamwork towards shared goals, as stated in the Group’s Vision and Mission*. Empathetic and inclusive practices allow employees to generate valuable ideas and contribute to improving business sustainability. As such, we ensure constructive feedback from employees are translated into actions to enhance business strategies and daily operations, as we drive the organisation to achieve higher performance. In striving towards internalising the Group’s brand and embedding sustainability within the organisation’s culture, employee engagement efforts are further facilitated and supported by the Group Corporate Communication Department spanning across the business units within the Group.

IOIPG recently held group-wide townhall sessions with all IOIPG employees from the Klang Valley and Johor, whereby the Group’s CEO Dato’ Voon Tin Yow unveiled the refreshed Vision, Mission and Core Values. The Group’s employees from all business segments attended the sessions at Putrajaya Marriott Hotel, Le Méridien Putrajaya, Four Points by Sheraton Puchong and IOI Palm Villa Golf & Country Resort, where attendees had the opportunity to engage with the top management.

Note:



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International Women’s Day by Putrajaya Marriott Hotel

In conjunction with International Women’s Day, the Group organised a high-tea event that featured a motivational talk by Senior General Manager, Mr Simon Yong and inspirational guest speaker, Ms Saliza Abdullah. The event was in line with our Sustainability Strategic Theme of Inspiring Women. Employees who were present were also able to attend health talks and basic health screenings.

Johor Sustainability Stakeholder Engagement with the Group Corporate Sustainability Team in November 2019.

This financial year, the Group Corporate Sustainability Team expanded their scope of engagement to our Johor business operations.

The engagement which included heads of departments and business unit heads, was aimed at creating sustainability awareness, building capacity and instilling sustainability ownership amongst IOIPG’s Johor employees.

Online employee quiz.

In the Group’s continued effort to engage employees and promote awareness about environmental issues such as biodiversity loss and climate change, we organised an online quiz in conjunction with International Day of Biological Diversity 2020 and World Environment Day 2020. Employees were invited to participate during their lunch hour to stand a chance to win cleaning enzymes from Puteri Mart.

#BiodiversityFest



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TALENT DEVELOPMENT AND CAPACITY BUILDINGThe Group believes in the need to be a ‘learning organisation’ to remain competitive and relevant by matching competencies to the demands of the Group’s business. We recognise every employee for their skills, knowledge, experience and performance, which are vital to the growth of the organisation. Thus, the Group’s talent development programmes and assistance are based on the Training Needs Analysis (“TNA”) conducted during the annual employee performance appraisal. Due recognition is also accorded to employees with outstanding performance at work such as Best Employee Award, IOIPG Quality Awards and IOI Customer Service Hero Award amongst others. Employees transitioning into management role are also given adequate assistance to ensure they are able to perform their duties effectively.

By the end of FY2020, a total of 81,801 training hours were attended by our employees to enhance their knowledge at work or to contribute to their self-development. These included training on soft skills, functional/technical skills and general skills as well as training on anti-corruption and human rights policies and procedures. Our Training Policies & Procedures encourage career advancement of employees through training and development internally and externally.

During the MCO, IOIPG acknowledged the importance of personal growth and organised learning engagement activities such as Lunch and Learn talks and Work From Home Learning.

Training Hours by Skills

CARING FOR EMPLOYEES The Group is committed to recruiting, developing, engaging and retaining the best talents to drive excellence in performance. We have in place a company culture with a positive work environment that drives high performance.

As a caring employer, we go beyond abiding by the national regulations regarding working hours and minimum wage. Accommodation facilities are provided for employees who work on shifts and are from out of town. With minimum notice periods in place, our employees are allowed sufficient time to make necessary adaptations through formal memos and internal email communication system for any operational changes that may disrupt the existing work environment.

We also take great care to ensure a safe and inclusive environment where all forms of harassment and discrimination are considered disruptive and thus the Whistleblowing Policy aims to deter such incidences.

If there are incidents of harassment or discrimination, every employee can access the Group’s grievance procedures and approach managers who are well- equipped with the knowledge and skills that are necessary to effectively handle employee grievances. To further ensure this, our HR Managers undergo training in managing bullying and harassment at the workplace.

The Group believes that the quality of our benefits package for full-time employees is a key factor in employee retention. Our employees enjoy a competitive package that includes standard entitlement (i.e. leaves, medical and insurance coverage, dental and optical benefits) and incentives to credit their contributions among many other benefits. IOIPG employees also enjoy special discounts covering dining, shopping and even sporting activities at the various business units within the Group. Full-time staff benefits are also provided to part-time staff on a prorated basis. In the year under review, contract staff constituted only 1% of our workforce in various positions across the Group; and it is reassuring that we are able to continue to support the majority of our workforce with permanent employment. Despite the challenging pandemic, we have retained our workforce with no pay cuts or retrenchment.

General Skills

14,589Number of Hours

Functional/Technical Skills


Soft Skills



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STRENGTHENING HEALTH, SAFETY AND SECURITY PRACTICES

In line with the Group’s Health and Safety policy, IOIPG places great importance on improving the safety and health management at our business operations and workplace for the benefit of employees, customers, tenants and contractors.

CONDUCIVE WORK SPACES DRIVES INNOVATIONA healthy working environment is key to the well-being of our employees. To facilitate this, the Group provides conducive work spaces that include exercise stations, breakout areas and vegetable racks that promote healthy lifestyles amongst our employees.


Breakout Areas Breakout areas provide an alternative space for our employees to have informal meetings and discussions. Strategically located at the corners of the headquarters’ office floors, these areas are also designed as a space for employees to unwind during

short breaks from work.

Farm to Table Programme Now in its third year, the Farm to Table Programme continues to encourage employees to adopt a plant-based diet as part of healthy living. The programme advocates the advantages of a plant-based diet, which is a source of nutrients and reduces risks of chronic diseases, besides contributing to lower carbon

emissions.

Exercise Stations Exercise stations are placed in the breakout areas to encourage employees to exercise as a way to refresh themselves and refocus their thoughts. Shower facilities are also available for employees to freshen

up after the workouts.


93

CEO of IOIPG

IOIPG Safety & Health Management Structure

IOIPG Safety & Health Committees

The safety and health performance of our business operations is undertaken by the respective Safety and Health Committees in compliance with applicable Safety and Health Act and Regulations.

For project sites, a Safety and Health Committee is chaired by an authorised Manager and comprises representatives from the main contractors and subcontractors as well as a secretary.

For managed properties, the Safety and Health Committees are chaired by the respective heads of business units and consist of employer and employee representatives as a two-way engagement platform to safety and health management. Further to that, a monthly Operations Meeting is chaired by the Chief Operating Officer (Property Investment) with the heads of business units.

The outcomes of the above discussions by respective committees are reported to the top management to ensure that safety and health practices are continuously enhanced and effectively implemented in the Group.

The role of the Safety and Health Committees are to:

Study, report and recommend corrective action on trends of accident,

near miss accident, dangerous occurrence, occupational poisoning or

occupational disease

Review the effectiveness of safety and health programmes

Assist in the development of safety and health rules and systems at

work

COO Property Development

Individual Business Units

COO Property Investment

Individual Business Units

UPHOLDING OCCUPATIONAL SAFETY AND HEALTH IOIPG is committed to Zero Fatality target across the Group for both our employees and contractors. To achieve this, we implement robust safety and health practices and management systems that strictly adhere to statutory and regulatory requirements across all of the Group’s property development sites and managed properties. The Group further references the Safety and Health Management System ISO 45001 as a framework and guideline to strengthen the safety and health practices.


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ENSURING HEALTH, SAFETY AND SECURITY AT MANAGED PROPERTIES At our managed properties, the Group is committed to implementing comprehensive initiatives to minimise and mitigate safety and health risks, in compliance with relevant act and regulations while inculcating a culture of safety in the workplace. The following are key programmes implemented under our safety and health management systems:

1. A monthly Operations Meeting chaired by the Chief Operating Officer (Property Investment) and attended by business units heads discuss OSHA and crisis/emergency management. Key strategies to enhance safety and health at all properties are also discussed and determined for implementation.

2. OSHA Committee meetings chaired by the respective business unit heads are regularly organised at our managed properties to execute and monitor the implementation progress of OSHA programmes.

3. Safety and health inspections are conducted regularly at workplaces and common areas such as the main facilities of buildings, F&B tenants, kitchen and stewarding, laundry, housekeeping, storage areas, banquets as well as front and back offices.

4. Site Safety Supervisors (“SSS”) from renovation contractors regularly inspect building renovation sites to ensure compliance with in-house building rules.

5. Periodic inspection to assess applicable building machinery and facilities, including escalators, lifts, LPG/natural gas storage piping and systems are conducted to ensure compliance with local authorities’ requirements (Department of Occupational Safety and Health (“DOSH”) and Bomba). Furthermore, regular servicing and periodic preventive measures are conducted for the machines in order to ensure the renewal of Certificate of Fitness (“CF”) can be carried out following DOSH inspections.

6. The maintenance and testing of the automated fire detection and protection system is conducted by our fire safety services contractors to ensure compliance with the Annual Fire Certificate (“FC”) inspection by Bomba at respective buildings.

7. As part of the Crisis/Emergency response management, Crisis Command Centres (“CCC”) at our managed properties have been reviewed and are continuously enhanced to ensure command centres have necessity-of-basis facilities in place to function effectively in responding to a crisis or emergency situation.

8. Chemical Health Risk Assessments (“CHRA”) have been conducted in our hotel operations departments which require the handling and usage of chemicals. The purpose of this assessment is to control and minimise risk to ensure the well-being of employees who are exposed to the usage of chemicals.

STRENGTHENING SAFETY AND HEALTH PRACTICES AT PROJECT SITES Safety and health at project sites are one of most important factors that ensures smooth daily operations. The Group continues to strengthen safety and health practices at our project sites and has in place a holistic and robust safety and health management system that goes beyond minimising risks at project sites. The system includes:

To enhance the safety and health inspection and assessment journey at project sites, the Group has leveraged on digital technology and has deployed the IOIPG – Project Quality, Safety and Health Management System (“IOIPG-PQSH”) App for our Klang Valley-based projects. The app is a cloud-based management system which was inspired by the CIDB’s Safety and Health Assessment System in Construction (“SHASSIC”) practice.

The IOIPG-PQSH App essentially digitalises the inspection and assessment of safety and health aspects at project sites and also provides data and analytics for tracking and monitoring of site safety practices. The app enables paperless processes, a reduction in time spent to conduct inspections and assessments, completeness of information and better adherence to deadlines. In practice, this will elevate the effectiveness and accuracy of safety management for internal and external stakeholders.


Implementation of safety and health control measures

Routine safety and health assessment system

Hazard identification and risk assessment at workplaces and new project sites

Routine inspections to ensure correction and prevention of unsafe acts and unsafe conditions

Incident investigation and reporting to identify the root cause of incidents

Training and briefing on high risk work, Occupational Safety and Health Act (“OSHA”) and Regulations, and safety and health inspection

Total Health, Safety and Security Training Hours Attended by Employees:

10,746 hours

Total Safety and Health Training and Activities Attended by Contractors:

7,477 hours


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Training and awareness activities are carried out frequently to ensure safety practices are implemented at all times. These include:

• Relevant safety and health training programmes, such as safety and health induction for new employees, basic fire prevention and fire extinguisher usage training, road safety and traffic management training, kitchen safety training for F&B related personnel, safe chemical handling, and safe work procedure/toolbox briefing for contractors prior to commencing work.

• OSHA awareness campaigns at hotel operations to enhance safety and health awareness among employees. The activities of the awareness campaign include OSHA talks by various agencies and local authorities as well as interactive activities such as seminars on life and fire safety, safe manual handling/lifting, driving safety and first aid response demonstrations.

• Annual fire and emergency evacuation drills at hotels, retail malls and office towers are conducted for the purpose of ensuring smooth evacuation during the emergency response processes. This includes regular internal Crisis/Emergency Response Standard Operating Procedures (“SOP”) training at managed properties jointly organised with Bomba.

• Other related Emergency Rescue Team (“ERT”)training such as fire extinguisher usage, first aid and CPR training to enhance the skills of ERT members to respond and promptly help during emergency situations.

The respective safety and health representatives at our managed buildings track and compile safety and health performance statistics into a monthly report. Information recorded in the reports include but are not limited to:

• Suggestions for improvement• Key programmes carried out to improve safety

and health awareness and in compliance with legal requirements

• Occupational safety and health related statistics• Safety and health inspections/audits carried out

by internal and external parties• Status of crisis/emergency/general safety training

programmes

Safety and health training and activities are also organised at project sites to enhance the awareness on safety and health practices among contractors. The total number of training and activities organised in this financial year was 7,477 hours, majority of which are COVID-19 related programmes.

BUILDING CAPACITY ON HEALTH, SAFETY AND SECURITY PRACTICESIOIPG conducted various training programmes to improve employees’ awareness and knowledge on matters relating to health, safety and security. In FY2020, 591 employees attended safety and health training totalling 5,198 hours. Additionally, 5,548 security training hours were clocked by employees.

Some of the health, safety and security training programmes include:

Occupational First Aid & CPR

Coronavirus: Reducing the

Risk of Infection

COVID-19: Heightened Sanitation Practices

Risk management on

safety and security issues

Crime Scene Awareness Fire Safety

Training for heat stress awareness

Fire Drill

COVID-19 SOP training

Electrical safety

Falling object from height

Crane and lifting safety management


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We have also implemented preventive measures at our project sites to curb the spread of COVID-19 as required by the Ministry of International Trade and Industry (“MITI”) and DOSH. The measures are but not limited to:

• Providing hand sanitisers in public areas.

• Increasing frequency of periodic sanitisation and disinfection of common areas and toilets.

• Placing notices and posters advocating constant hand washing and hygiene.

• Conducting daily temperature checks on staff before starting work.

• Temperature screening for visitors, staff and contractors.

• Prohibiting visitors, staff and contractors with COVID-19 symptoms from entering workplaces and advising them to seek medical treatment immediately. Management would be informed immediately in the event of any suspected cases.

• Conducting temperature checks on guests, customers, and suppliers/visitors/contractors prior to entering our managed properties.

• Ensuring staff wear masks. • Providing masks to hotel guests

upon request and encouraging tenants to wear masks.

• Using mobile app QR code for easy registration and contact tracing purpose.

• Visitors, staff and contractors to wash their hands frequently at handwash facilities that are provided at the workplace for their convenience.

• Ensuring signages are placed at project sites to raise awareness on COVID-19 infection and the importance of maintaining good personal hygiene and cleanliness.

• Encouraging physical distancing at the workplace, common areas and food and beverage outlets.

• Ensuring regular sharing and communication to employees on the latest updates and preventive measures.

• Facilitating arrangements to the nearest hospital for any suspected cases.

• New workers to pass swab test and undergo quarantine for 14 days at Centralised Labour Quarter (“CLQ”)before commencement of work.

• Providing masks and sanitisers to staff at project sites.

• Cleaning and disinfecting of used equipment.

• Ensuring physical distancing at the workplace.

SAFETY AND HEALTH PERFORMANCE DATA The Group recorded lost-time injury frequency rate of 1.89 cases for every one million man hours worked among employees and contractors. The Group will strive to continuously enhance our safety and health management by implementing initiatives to monitor the progress of Group’s safety and health performance.

OUR RESPONSE TO COVID-19 In view of the COVID-19 pandemic, IOIPG has taken preventive measures across our managed properties to safeguard our employees, tenants and guests, and they include, but not limited to the following:



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Advocating a Circular EconomyInvesting in Infrastructure

Unearthing Young Talents Volunteering Towards Achieving a Higher Purpose

Yayasan Tan Sri Lee Shin Cheng – Investing in Our Future Engaging Local Communities

Developing Sustainable Communities

Enhance social well-being via Community Initiatives i.e. social responsibility

commitments including community investments, employee volunteerism and

community development programmes for positive long-term impact to society.


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ALIGNING STRATEGIC ACTIONSAs one of the leading property developers that strongly promotes sustainable living, IOIPG is committed to actively supporting social projects and investing in infrastructure and facilities that improve the well-being of local communities. True to our new vision and mission statement*, we build sustainable communities by supporting and empowering communities in everything that we do – through positive impacts, responsible actions and sustainable management of our operations.

Enriching our communities, especially the marginalised and the underserved, is our way of giving back to the community through programmes and activities that are aligned to the Group’s Sustainability Strategic Themes of Mindset Change, Inspiring Women, Young Urbanites and Urban Green. By anchoring our programmes and activities on these themes, we can encourage more sustainable lifestyle choices and complement the sustainability direction of the Group.

DEVELOPING SUSTAINABLECOMMUNITIES

Total Scholarship Granted


Student Adoption Programme


Young Achievers’ Awards

RM624,885 (to date)

Universities, School Buildings and Facilities


Mindset ChangeAs part of our efforts to develop a sustainable community, our initiatives are geared towards Mindset Change by integrating sustainability principles into business strategies across all levels of operations. We aim to create positive impact on the well-being of communities, as we educate the community to take ownership in sustaining the environment for future generations.

Urban Green IOIPG supports the conservation of the environment in urban areas through Urban Green programmes and activities that are aimed at enabling sustainable community living. One of our most impactful initiatives is ensuring provisions of pocket gardens and green spaces in our developments, which benefits the local community and society as a whole. To read more about our Urban Green initiatives, please turn to page 69 in the Caring for the Environment section.

Inspiring WomenIOIPG strives for equal participation of men and women in leadership roles in the workforce and within the local community. We organise programmes and events that are aimed at Inspiring Women and to break gender stereotypes.

Young UrbanitesThe Group believes in nurturing the youth to act for positive impact in building a sustainable community. We invest in impactful Young Urbanites programmes and aim to future-proof the younger generation as we shape them to become leaders of tomorrow.

Contributions in cash to various charity activities including non-profit organisations


Contributions from IOI Putra Charity Run to non-profit organisations

RM634,000 (to date)

COVID-19 Relief Assistance

RM31.53 million

Note:



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IOI Properties Group officially opened the new Bandar Puteri Puchong Interchange along Lebuhraya Damansara-Puchong in November 2019.

IOIPG completed the first phase of the upgrading and enhancement of roads in Bandar Puteri Puchong and officially opened the Bandar Puteri Interchange on 16 November 2019. The road enhancement benefits an estimated population of 30,000 households and business owners, four blocks of office towers at PFCC and Four Points by Sheraton Puchong. It will reduce traffic congestion and improve accessibilityand connectivity in Bandar Puteri Puchong, contributing to greater property value appreciation for the 1,000-acre township. The second phase will include the widening of the existing Lebuh Puteri dual carriageway, tunnels and the diamond interchange with an underpass and U-turns. In line with the Group’s commitment to reduce its carbon footprint by leveraging on and promoting public transportation, IOIPG completed the construction of a RM1.23 million pedestrian bridge at Bandar Puteri Puchong that connects the PFCC in Puteri 1 to Puteri 2; with a 360m long walkway that leads to the Taman Perindustrian Puchong LRT station. The infrastructure investment of RM87.41 million will enhance connectivity in Bandar Puteri Puchong.

URBAN REGENERATION AND GREEN SPACESIOIPG continues to invest in maintaining the amenities in our developments for the benefit of the local community and businesses. The enhancement and refurbishment of the Bandar Puteri Town Park is currently underway with an estimated RM728,000 being invested to date. This urban regeneration aims to improve the green space and recreational facilities for the local community.

To fulfil our corporate responsibility, we have provided public green spaces in our developments namely Oasis Park in Bandar Puteri Bangi, Central Park in 16 Sierra and Hutan Bandar Kulai in Johor.

SJK(C) SHIN CHENG (HARCROFT) BUILDING EXTENSIONSIOIPG has invested RM12.65 million to date to improve SJK(C) Shin Cheng’s facilities. In FY2020, the Group further redeveloped SJK(C) Shin Cheng by installing a covered walkway linking the school block to the multipurpose hall and furnishing the music room, the personal development centre and the seminar room. Refurbishment plans are in the pipeline for the multipurpose hall to further benefit the stakeholders of the school.

INVESTING IN INFRASTRUCTUREIOIPG continues to enhance the living quality of the local community by upgrading the surrounding infrastructure and amenities to embed sustainability as much as possible. Our initiatives are holistic in nature as they benefit various communities across all segments of society, aiming to create sustainable developments. In FY2020, we completed infrastructure projects that positively impact society and enhanced the learning environment of schools to benefit the students and teachers.

BANDAR PUTERI PUCHONG TRAFFIC ENHANCEMENTS


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In October 2019, about 100 people helped clean the beach and audit the waste at Pantai Bagan Lalang, Sepang.

Youths from six countries participated in the UTAR IYLC in October 2019.

BEAUTY AND THE BEACH WITH UTAR UNDERGRADUATESWe believe empowering youth encompasses inculcating civic consciousness and instilling good social responsibility. We worked with undergraduates from Universiti Tunku Abdul Rahman (“UTAR”) to raise awareness on the impact of plastic on the marine environment through a beach clean-up activity, an event aimed at contributing to the global effort of improving the coastal and ocean ecosystem. With a host of activities that included a beach audit, an exhibition as well as workshops and talks by NGOs, the event provided exposure to the young participants on event management and collaboration with private corporations.

GEMA AMAL INSAN 8.0 WITH UKMIOIPG partnered Universiti Kebangsaan Malaysia (“UKM”) through the Faculty of Pharmacy to deliver a social entrepreneurship project which included a workshop to make soap from used cooking oil. The project focused on women in the B40 community. This collaboration with UKM also saw several other workshops that were organised as part of our effort to develop thriving communities and to help unleash the participants’ entrepreneurial potential and increase their income to improve their economic well-being. The positive environmental impact from the upcycling of used cooking oil into a useful product was also a key factor in our decision to support this project.

UTAR INTERNATIONAL YOUTH LEADERSHIP CONFERENCE 2019The UTAR International Youth Leadership Conference (“IYLC”) 2019 involved the participation of undergraduates from six countries: Brunei, China, Indonesia, Malaysia, Philippines and Taiwan. The two-day annual conference aimed to inspire and empower young leaders in realising SDGs by gathering various stakeholders to share and exchange ideas while moving forward to more inclusive and sustainable communities. The conference also featured a competition for social innovation projects where “WASTE.D” – a community project enabled by IOIPG was among the nominees for this competition.

UKM Pharmacy students conducting the upcycling workshop on 7 March 2020.

WORLD KINDNESS DAY WITH HERIOT-WATT UNIVERSITY MALAYSIAEmpowering young children with knowledge is one of the Group’s initiatives in giving back to society. In conjunction with World Kindness Day, IOIPG and its hotel, Four Points by Sheraton Puchong organised a visit to Rumah Shalom, a shelter home for children aged five to eighteen in November 2019. The event, which included the participation of Heriot-Watt University, enabled the university’s undergraduates to interact with the children and talk to them about motivation and overcoming challenges. They also encouraged the children to visualise their future-self and strive for their dreams and hopes.

UNEARTHING YOUNG TALENTS IOIPG believes in investing in youths who will play a significant role in leading the society in the future. We are committed to supporting young people, and giving them an opportunity to realise their potential. This commitment is in line with our sustainability strategic theme of Young Urbanites, which seeks to future-proof the young generation and empower them to create positive impact for society. The Group continues to support youth organisations that work towards the SDGs through strategic collaborations and impactful initiatives that will inspire youths to enrich the lives of others.

DEVELOPING SUSTAINABLE COMMUNITIES

IOIPG employees and Heriot-Watt University Malaysia students with the children from Rumah Shalom.


101

YAYASAN TAN SRI LEE SHIN CHENG – INVESTING IN OUR FUTURE Yayasan Tan Sri Lee Shin Cheng (“Yayasan TSLSC”) is a charity arm of IOIPG that has touched many lives and enriched various communities besides uplifting society on the whole. To date, Yayasan TSLSC has contributed about RM47 million in education, medical aid, welfare and charity. More than 2,500 students have also benefitted from scholarships and grants awarded by Yayasan TSLSC. In the year under review, the foundation contributed over RM405,000 to enhance the learning environment in various schools.

STUDENT ADOPTION PROGRAMME (“SAP”)IOIPG continues to invest in educational and human capital development programmes as every child deserves equal access to education which serves as a platform for a brighter future.

Through the SAP, Yayasan TSLSC has contributed over RM4.55 million to more than 1,033 students to date.

SCHOLARSHIP AWARDSYayasan TSLSC recognises the importance of obtaining a degree in today’s highly competitive job market. The foundation offers undergraduate scholarships to students with outstanding academic achievements to enable them to pursue full-time studies that are related to the Group’s nature of business. The foundation has granted scholarships worth more than RM9.20 million to more than 283 students. The scholarship awards will improve the economic capacity of the future generation, empowering them to excel in their future careers.

YOUNG ACHIEVERS’ AWARDSStudents who excel in their studies are also given the Young Achievers’ Awards that were introduced in 1999 to motivate young students to strive for academic excellence. Comprising cash, plaques and certificates, the Awards are given out annually to primary, upper secondary and pre-university level students who excel academically, possess high leadership qualities and are actively involved in extracurricular activities. A total of 1,626 students have received more than RM624,000 since the inception of the Awards.

ADVOCATING A CIRCULAR ECONOMYA circular economy is a regenerative approach that eliminates waste and promotes the continual use of resources, creating a synergy between economic growth and environmental preservation.

An initiative of Yayasan TSLSC, Bargain Basement, is a retail store based on the concept of circular economy that promotes recycling and continual use of resources to minimise waste. Bargain Basement accepts donations of pre-loved and unused items from the public, which are then sold with net proceeds channelled to charity organisations. This reduces waste disposal at its source while generating revenue for those in need through the reselling of the pre-loved items.

The social enterprise also carries a mission to positively impact society by promoting clutter-free homes and offices, providing low-priced items for the community, encouraging buying of pre-used items, reducing consumerism and supporting local charities. To date, more than RM266,000 from the store’s proceeds has benefitted 20 beneficiaries and various organisations including Lighthouse Children Welfare Home Association, Rumah Kanak-Kanak Triniti and the Dignity for Children Foundation.

Inspired by the motto “Give to Inspire Others to Give”, Bargain Basement was first started in IOI City Mall on 1 June 2016. Following the success of the first outlet, the shop opened its second outlet in IOI Mall Puchong on 1 October 2017.


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The Edge Kuala Lumpur Rat Race 2019 that contributed to educational projects.

Employees from Le Méridien Putrajaya volunteered 168 hours collectively to make buns for four charity homes and a hospital during challenging times.

In its commitment to build sustainable communities, the Group supports running events that contribute towards a noble cause. In FY2020, we showed our support by funding our employees’ participation in runs such as The Edge Kuala Lumpur Rat Race 2019, Bursa Bull Charge 2019 and Run to Give 2019.

Run To Give 2019 , by the Marriott KL Cluster properties raised funds for the National Kidney Foundation.

Bursa Bull Charge 2019 benefitted the underprivileged community and environment conservation efforts.

The Group recognise our role in giving back to the community as part of our corporate responsibility and encourage our employees to be involved in community programmes. Our employees have reached out to the underserved communities such as the low-income community, women and children, youths, and senior citizens. To facilitate and encourage volunteerism among employees, the Group supports their philanthropic partnerships with charitable partners and constantly engages with employees through an effective internal communication structure managed by the Group Corporate Communication Department spanning across the business units within the Group.

VOLUNTEERING TOWARDS ACHIEVING A HIGHER PURPOSE



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ENGAGING LOCAL COMMUNITIESTHINK WE NOT ME CAMPAIGN

In support of national efforts during the pandemic period, IOIPG embarked on the Think We Not Me campaign through various platforms, including social media, to raise awareness in the communities we operate in and to encourage them to take part in combatting COVID-19. The Think We Not Me campaign successfully touched the lives of various communities during the pandemic. When the MCO was announced, the Group organised the “Think WE Not ME Profile Frame Giveaway” contest on social media which encouraged both our employees and

Think We Not Me contest Grand Prize Winner Staff Category

Think We Not Me contest Grand Prize Winner Public Category

the public to observe the order through the hashtag #StayAtHome. By the third extension of the MCO, the campaign evolved to its second phase – #DontStressLah which focused on maintaining self-hygiene, leading a healthy lifestyle and coping with the stress of a prolonged MCO. Through phase three of the campaign, contributions were made to underprivileged families and individuals, frontliners and hospitals. We also provided rental relief and free parking to our tenants as part of our support for their business continuity.


104

TREASURING COMMUNITY RELATIONS


In our continued effort to support programmes that leave positive impacts on communities, IOI City Mall sponsored venues in support of runs such as Pinktober, the GC Rainbow Run and the Zero Apathy Run amongst others that were to raise awareness and funds for various noble causes.

In Kulai, Johor, the IOI Putra Charity Run has contributed over RM630,000 to 12 non-profit organisations and attracted over 42,000 participants since it started in 2005. Among the beneficiaries were Pertubuhan Kebajikan Vision Kulaijaya, Kiwanis Centre Kulai and Persatuan Perlindungan dan Peliharaan Haiwan Terbiar Skudai.

IOI Putra Charity Run in July 2019.

Women’s Day and Health 2020Women’s Day and Health 2020 was held at IOI Mall Kulai from 6 to 8 March 2020 in line with our Strategic Theme of Inspiring Women. The event was held in collaboration with the District Office of Kulai and local NGOs such as Puspanita Cawangan Kulai, Yayasan Pembangunan Keluarga Darul Ta’zim and the Majlis Kanser Nasional (“MAKNA”).


105

IOI-ACTIVE CITIZENS PROGRAMME

Activating Internal AmbassadorsEnriching communities is part of our efforts in building an inclusive and sustainable society. We continue to collaborate with the British Council through its Active Citizens programme, a global effort that motivates members of communities to deliver a social action plan that will benefit and make a difference to the community. In FY2018, we initiated the first phase of IOI-Active Citizens Programme with a workshop to encourage our employees’ active participation in creating positive impacts within local communities.

Mobilising Active Citizens among Residents/Customers/Local CommunitiesWaste to Treasure, a campaign launched in November 2018, is the second phase of the IOI-Active Citizens and has seen positive impacts in local communities. Since its inception, customised recycling bins have been placed at five different locations around our developments. Various community activities were hosted by the Customer Relations Unit to educate and encourage the community about waste minimisation.

One of the successful activities was the IOI-Active Citizens Bargain Basement Competition, where Puchong residents competed through their Residents Associations (“RAs”) and local organisations to encourage the purchase and donation of pre-loved items with the aim of diverting waste from going to landfills. The Yayasan TSLSC then matched the amount spent and donate all proceeds from the competition to the charity homes selected by the RAs.

In FY2020, the RAs and organisations that took part were Persatuan Penduduk Bandar Puteri 8, Persatuan Penduduk Bandar Puteri 12, Persatuan Penduduk Tempua and KPMC Puchong Specialist Centre. Over RM4,000 was donated to Pertubuhan Kebajikan Pusat Jagaan Lotus Malaysia, Rumah Shalom and Suriana Welfare Society.

Creating Public AwarenessIOIPG embarked on the third phase of the IOI-Active Citizens Programme through an event to create awareness about sustainability and to encourage the public to take ownership of sustainability matters. Held at IOI Mall Puchong to garner maximum visibility, the event also saw children from charity homes, and the public, participating in a series of exciting activities. The IOI-Active Citizens Bargain Basement Competition also came to an end during this event, marked by a cheque presentation ceremony to the chosen charity homes.

Creating public awareness through the IOI-Active Citizens Programme in August 2019.


106

#AppreciateBiodiversityon IOI Sustain social media.

ENGAGING THE COMMUNITY ON SOCIAL MEDIAAs a leading integrated developer that encourages sustainable lifestyles, we leverage on social media to reach out to our communities as a means to advocate sustainable lifestyle choices.

To promote our efforts and ensure that they are easily found on social media by our employees and target audience, we tag our posts with #ioisustain and #IOIConnectstoEarth. Since the start of our social media journey two years ago, we have successfully organised various interactive activities to inculcate sustainable lifestyle such as promoting the appreciation of biodiversity, advocating a low carbon lifestyle to adapt to climate change and raising awareness on waste minimisation at source.

In the year under review, our IOI Sustain social media accounts continued to spread the message on sustainability, featuring the themes of biodiversity, climate change and waste minimisation. #IOIConnectstoEarthThursday and #AppreciateBiodiversity have been initiated to share sustainability-related facts and promote the rich urban biodiversity across our townships. Various social media fests with engaging activities and giveaways were also organised such as the #BiodiversityFest, #WasteMinimisation Fest and #ClimateChangeFest.

CONNECTING TO EARTHIn our pursuit to preserve the environment for current and future generations, we encourage our employees and community to actively participate in activities that contribute positively to nature, and is in line with the Group’s IOI Connects to Earth Campaign*. Among the activities held in IOI Mall Puchong and IOI City Mall to inspire our local communities to connect to earth were the Green Bazaar Charity and Project Denim Angels that promoted waste minimisation; and a WWF Awareness Campaign and the Malayan Tiger Run that encouraged appreciation of biodiversity.

Note:• To read more about IOI Connects to Earth, please turn to page 59 in the Our Sustainable

Journey section.

REACH OUT COMMUNITY NEWSLETTER – PROMOTING SUSTAINABLE LIFESTYLEIOIPG continues to engage the communities in which we operate, building bridges and creating positive social impacts. To better communicate with the stakeholder group, Reach Out, the nation’s first non-commercialised community newsletter was launched in 2003. Prior to the digitalisation in November 2016, about 40,000 copies were printed and distributed annually. This move was in support of the Group’s waste minimisation policy. The newsletter has since been available on the Group’s corporate website and serves as an engagement platform, highlighting local community news and efforts.


Save Our Tiger, Feel the Beat!This fun Zumba workout was held in conjunction with the Malaysia Day celebration on 16 September 2019 to raise awareness on the plight of Malayan tigers. Attended by individuals from corporates, government agencies and local universities, the event was aimed at supporting and promoting tiger conservation, and successfully raised funds for Zoo Negara. The Zumba workout was co-organised by our hospitality & leisure business units – Putrajaya Marriott Hotel, Palm Garden Hotel and Palm Garden Golf Club in support of biodiversity conservation.

IOI Sustain For more stories that inspire people to embrace sustainability, scan me.


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Indicators Location Page

GENERAL DISCLOSURE

Organisation Profile

102-1 Name of the organisation About This Report (ii)

102-2 Activities, brands, products, and services Management Discussion and Analysis 34-47

102-3 Location of headquarters Corporate Information 48

102-4 Location of operations Our Group Operations 2-3

102-5 Ownership and legal form Corporate Information 48

102-6 Markets served Management Discussion and Analysis 34-47

102-7 Scale of the organisation Management Discussion and Analysis 34-47

102-8 Information on employees and other workers Creating Value for Our Employees: Embracing Diversity at the Workplace; Corporate Governance Overview Statement

86, 140

102-9 Supply chain Delivering Excellence: Exceeding Expectations 63

102-10 Significant changes to the organisation and its supply chain

Directors’ Report: Principle Activities 163

102-11 Precautionary Principle or approach Our Sustainability Journey: Sustainability Framework and Strategy

56-57

102-12 External initiatives Developing Sustainable Communities:Yayasan Tan Sri Lee Shin Cheng – Investing in Our Future

101

102-13 Membership of associations Creating Value for Our Employees: Group Human Resource Policy and Practices

84

Strategy

102-14 Statement from senior decision-maker Chairman’s Statement; Executive Vice Chairman’s Statement; CEO’s Q&A

10-19

102-15 Key impacts, risks, and opportunities Management Discussion and Analysis: How We Manage Our Risks; Corporate Governance Overview Statement: Statement on Risk Management and Internal Control

46-47, 153-158

Ethics and Integrity

102-16 Values, principles, standards, and norms of behavior

Corporate Governance Overview Statement 135-144

102-17 Mechanisms for advice and concerns about ethics

Corporate Governance Overview Statement 135-144

Governance

102-18 Governance structure Our Sustainability Journey: Sustainability Governance; Corporate Governance Overview Statement: Governance Framework

51, 136

102-19 Delegating authority Corporate Governance Overview Statement: Governance 136, 138

Note:This content index shows our referral to good sustainability reporting practices.

CONTENTINDEX


108


Governance

102-20 Executive-level responsibility for economic, environmental, and social topics

Our Sustainability Journey: Sustainability Governance; Corporate Governance Overview Statement: Governance Framework

51, 136

102-21 Consulting stakeholders on economic, environmental, and social topics

Management Discussion and Analysis; Our Sustainability Journey: Stakeholder Engagement and Materiality

34-47, 53-55

102-22 Composition of the highest governance body and its committees

Corporate Governance Overview Statement: Board Leadership and Effectiveness

137-139

102-23 Chair of the highest governance body Corporate Governance Overview Statement: Board Leadership and Effectiveness

137-139

102-24 Nominating and selecting the highest governance body


139

102-25 Conflicts of interest Corporate Governance Overview Statement: Board Leadership and Effectiveness

139

102-26 Role of highest governance body in setting purpose, values, and strategy


137-144

102-27 Collective knowledge of highest governance body


137-144

102-29 Identifying and managing economic, environmental, and social impacts

Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

53-55

102-30 Effectiveness of risk management processes Corporate Governance Overview Statement: Statement on Risk Management and Internal Control

153-158

102-31 Review of economic, environmental, and social topics

Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

53-55

102-32 Highest governance body’s role in sustainability reporting

Our Sustainability Journey: Sustainability Governance; Corporate Governance Overview Statement: Governance Framework

51, 136

102-33 Communicating critical concerns Corporate Governance Overview Statement: Statement on Risk Management and Internal Control

153-158

102-34 Nature and total number of critical concerns Corporate Governance Overview Statement: Statement on Risk Management and Internal Control

153-158

102-35 Remuneration policies Corporate Governance Overview Statement: Board Leadership and Effectiveness

142-143

102-36 Process for determining remuneration Corporate Governance Overview Statement: Board Leadership and Effectiveness

142

102-37 Stakeholders’ involvement in remuneration Corporate Governance Overview Statement: Board Leadership and Effectiveness

143

Stakeholder Engagement

102-40 List of stakeholder groups Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

54

102-41 Collective bargaining agreements Creating Value for Our Employees: Group Human Resource Policy and Practices

84

102-42 Identifying and selecting stakeholders Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

53-54


CONTENT INDEX


109


Stakeholder Engagement

102-43 Approach to stakeholder engagement Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

53-54

102-44 Key topics and concerns raised Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

53-55

102-45 Entities included in the consolidated financial statements

Financial Statements 297-302

Reporting Practice

102-46 Defining report content and topic Boundaries Our Sustainability Journey: Scope of Reporting 50

102-47 List of material topics Our Sustainability Journey: Stakeholder Engagement and Materiality Assessment

55-56, 60

102-55 GRI content index Content Index 107-115

ECONOMIC

Economic Performance

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey: Sustainability Governance; Developing Sustainable Communities

50,55, 98-106

103-2 The management approach and its components Our Sustainability Journey: Sustainability Governance; Developing Sustainable Communities

51-52, 55-58, 98-106

201-1 Direct economic value generated and distributed Developing Sustainable Communities: Investing in Infrastructure, Advocating a Circular Economy, Engaging Local Communities

99, 101, 103-106

201-2 Financial implications and other risks and opportunities due to climate change

Our Sustainability Journey: Sustainability Framework and Strategy; Caring for the Environment: Developing Sustainable Living Environment, Emissions

57, 72-74, 79-80

Indirect Economic Impacts

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Developing Sustainable Communities 50,55, 98-106

103-2 The management approach and its components Our Sustainability Journey; Developing Sustainable Communities 51-52, 55-58, 98-106

203-1 Development and impact of infrastructure investments and services supported

Developing Sustainable Communities: Investing in Infrastructure, Investing in Our Future, Engaging Local Communities

98-99, 101, 104-105

203-2 Significant indirect economic impacts, including the extent of impacts

Developing Sustainable Communities: Unearthing Young Talents, Investing in Our Future, Volunteering Towards a Higher Purpose, Engaging Local Communities

100-106



110

CONTENT INDEX


Procurement Practices

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Exceeding Expectations

50, 55, 63

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Exceeding Expectations

51-52, 55-58, 63

204-1 Proportion of spending on local suppliers Delivering Excellence: Exceeding Expectations 63

Anti-Corruption

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policies and Practices

50, 55, 84

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policies and Practices

51-52, 55-58, 84 -85

205-2 Communication and training about anti-corruption policies and procedures

Creating Value for Our Employees: Group Human Resource Policies and Practices; Delivering Excellence: Exceeding Expectations

63, 85-85, 91

ENVIRONMENTAL

Materials

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Resource Management

50, 55, 68

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Resource Management

51-52, 55-58, 68

301-2 Percentage of materials used that are recycled input materials

Delivering Excellence: Resource Management 68

Energy

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Caring for the Environment: Energy 50, 55, 75-76

103-2 The management approach and its components Our Sustainability Journey; Caring for the Environment: Energy 51-52, 55-58, 75-76

302-1 Energy consumption within the organisation Caring for the Environment: Energy 75

302-3 Energy intensity Caring for the Environment: Energy 75

302-4 Reduction of energy consumption Caring for the Environment: Energy 76

302-5 Reductions in energy requirements of products and services

Caring for the Environment: Energy 76

CRE-1 Building energy intensity Caring for the Environment: Energy 75



111


Water and Effluents

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Caring for the Environment: Water 50, 55, 77-78

103-2 The management approach and its components Our Sustainability Journey; Caring for the Environment: Water 51-52, 55-58, 77-78

303-3 Water Withdrawal Caring for the Environment: Water 77

303-5 Water Consumption Caring for the Environment: Water 77

Biodiversity

103-1 Explanation of the material topic and its Boundary Caring for Environment: Conserving Urban Biodiversity 50, 55, 70-72

103-2 The management approach and its components Caring for Environment: Conserving Urban Biodiversity 51-52, 55-58, 70-72

304-3 Habitats protected or restored Caring for Environment: Conserving Urban Biodiversity 70-72

304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations

Caring for Environment: Conserving Urban Biodiversity 71

Emissions

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Caring for the Environment: Emissions 50, 55, 79-80

103-2 The management approach and its components Our Sustainability Journey; Caring for the Environment: Emissions 51-52, 55-58, 79-80

305-1 Direct (Scope 1) GHG emission Caring for the Environment: Emissions 79

305-2 Energy indirect (Scope 2) (GHG) emissions Caring for the Environment: Emissions 79

305-4 GHG emissions intensity Caring for the Environment: Emissions 79

305-5 Reduction of GHG emissions Caring for the Environment: Emissions 76, 80

CRE-3 Greenhouse gas emissions intensity from buildings Caring for the Environment: Emissions 79

Waste

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Caring for the Environment: Waste & Effluent

50, 55, 81-82

103-2 The management approach and its components Our Sustainability Journey; Caring for the Environment: Waste & Effluent

51-52, 55-58, 81-82

306-1 Waste generation and significant waste-related impacts

Caring for the Environment: Waste & Effluent 82

306-2 Management of significant waste related impacts Caring for the Environment: Waste & Effluent 81-82

306-4 Waste diverted from disposal Caring for the Environment: Waste & Effluent 81-82



112


Compliance

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Caring for the Environment 50, 55, 70

103-2 The management approach and its components Our Sustainability Journey; Caring for the Environment 51-52, 55-58, 70

307-1 Non-compliance with environmental laws and regulations

Caring for the Environment 70

SOCIAL

Employment

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Caring for Employees

50, 55, 91

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Caring for Employees

51-52, 55-58,91

401-2 Benefits provided to full-time employees that are not provided to temporary or part time employees, by significant locations of operation

Creating Value for Our Employees: Caring for Employees 91

Occupational Health and Safety

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Strengthening Health, Safety and Security Practices

50, 55, 92-96

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Strengthening Health, Safety and Security Practices

51-52, 55-58, 92-96

403-2 Hazard Identification, risk assessment and incident investigation

Creating Value for Our Employees: Strengthening Health, Safety and Security Practices

94

403-4 Worker participation, consultation and communication on occupational health and safety


93-94

403-5 Worker training on occupational health and safety Creating Value for Our Employees: Strengthening Health, Safety and Security Practices

95

403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships


93-96

403-9 Work-related injuries Creating Value for Our Employees: Strengthening Health, Safety and Security Practices

96


CONTENT INDEX


113


Training and Education

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Talent Development and Capacity Building

50, 55, 91

103-2 The management approach and its components Creating Value for Our Employees: Talent Development andCapacity Building

51-52, 91

404-2 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

Creating Value for Our Employees: Talent Development and Capacity Building

91

404-3 Percentage of employees receiving regular performance and career development reviews

Creating Value for Our Employees: Talent Development and Capacity Building

91

Diversity and Equal Opportunity

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Embracing Diversity at the Workplace; Corporate Governance Overview Statement

50, 55, 86, 140

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Embracing Diversity at the Workplace; Corporate Governance Overview Statement

51-52, 55-58, 86, 140

405-1 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity

Creating Value for Our Employees: Embracing Diversity at the Workplace; Corporate Governance Overview Statement

86, 140

Non-discrimination

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Embracing Diversity at the Workplace

50, 55, 86, 91

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Embracing Diversity at the Workplace

51-52, 55-58, 86, 91



114

CONTENT INDEX


Freedom of Association and Collective Bargaining

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practices

50, 55, 84

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practices

51-52, 55-58, 84

407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

Creating Value for Our Employees: Group Human Resource Policy and Practice

84

Child Labour

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practice

50, 55, 84-85

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practice

51-52, 55-58, 84-85

408-1 Operations and suppliers at significant risk for incidents of child labor


84-85

Forced Labour

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practice

50, 55, 84-85

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practice

51-52, 55-58, 84-85

409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor


84-85

Security Practices

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities; Creating Value for Our Employees: Group Human Resource Policy and Practice

50, 55, 66, 84

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities; Creating Value for Our Employees: Group Human Resource Policy and Practice

51-52, 55-58, 66, 84

410-1 Security personnel trained in human rights policies or procedures

Delivering Excellence: Developing Thriving Communities; Creating Value for Our Employees: Group Human Resource Policy and Practice

66, 84



115


Human Rights Assessment

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practices, Talent Development and Capacity Building

50, 55, 84, 91

103-2 The management approach and its components Our Sustainability Journey; Creating Value for Our Employees: Group Human Resource Policy and Practices, Talent Development and Capacity Building

51-52, 55-58, 84, 91

412-2 Employee training on human rights policies or procedures

Creating Value for Our Employees: Group Human Resource Policy and Practices, Talent Development and Capacity Building

84, 91

Local Communities

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities; Developing Sustainable Communities: Engaging Local Communities

50, 55, 65, 103-106

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities; Developing Sustainable Communities: Engaging Local Communities

51-52, 55-58, 65, 103-106

413-1 Operations with local community engagement, impact assessments, and development programs

Delivering Excellence: Developing Thriving Communities; Developing Sustainable Communities: Engaging Local Communities

65, 103-106

Customer Health and Safety

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities

50, 55, 66

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Developing Thriving Communities

51-52, 55-58, 66

416-1 Assessment of the health and safety impacts of product and service categories

Delivering Excellence: Delivering Excellence: Developing Thriving Communities

66

Customer Privacy

103-1 Explanation of the material topic and its Boundary Our Sustainability Journey; Delivering Excellence: Exceeding Expectations

50, 55, 64

103-2 The management approach and its components Our Sustainability Journey; Delivering Excellence: Exceeding Expectations

51-52, 55-58, 64

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

Delivering Excellence: Exceeding Expectations 64



116

BOARD OF DIRECTORS



TAN SRI DATO’ SRI KOH KIN LIPSenior Independent Non-Executive Director


117

LEE YOKE HARExecutive Director

DATO’ LEE YEOW CHORNon-Independent Non-Executive Director

DATUK LEE SAY TSHIN Independent Non-Executive Director

DATUK DR TAN KIM HEUNGIndependent Non-Executive Director


118

Directorship of other Listed Issuers/ Public Companies

Listed Issuer• None

Public Companies• Chairman of Amoy Canning Corporation

(Malaya) Berhad• Director of KL Industrial Services Berhad

Non-Profit Public Company• Trustee of Yayasan Tan Sri Lee Shin

Cheng


Qualification• Fellow Member of the Institute of Chartered

Accountants, Australia• Fellow Member of the Malaysian Institute of Chartered

Secretaries and Administrators• Member of the Malaysian Institute of Accountants

Working Experience• Chartered Accountant with more than 50 years of

experience in auditing, accounting and consulting• Served as the Executive Chairman of BDO Binder,

Malaysia from 1987 to 2009• He was the Chairman of the Board of Gul Technologies

Singapore Limited and MCIS Insurance Berhad• He was a Director of RHB Capital Berhad and RHB

Investment Bank Berhad• He was a Director of Malaysia-China Business Council

(MCBC)• He was a Senior Independent Non-Executive Director of

IGB Berhad

PROFILE OF DIRECTORS

Committee Membership Key:

Audit CommitteeACommittee Chairman

Date of Appointment1 June 2013

NationalityMalaysian

Age81

GenderMale

Membership of Board Committeesin IOIPG

7/7 100%

No. of Board Meeting Attended for FY2020

A G

Risk Management CommitteeRGovernance, Nominating and Remuneration CommitteeG


119


Qualification• LLB (Honours), King’s College, London• Barrister-at-law from Bar of England and Wales, Inner

Temple

Working Experience• Involved in corporate affairs and general management

within IOI Group prior to the demerger and listing of IOIPG

• Served at the London and Singapore offices of a leading international financial services group for approximately two (2) years


Listed Issuer• Non-Independent Non-Executive

Director of IOI Corporation Berhad

Public Company• None

Date of Appointment25 February 2013


Age42

GenderMale

7/7 100%



120


TAN SRI DATO’ SRI KOH KIN LIPSenior Independent Non-Executive Director

Qualification• Higher National Diploma in Business Studies,

Plymouth Polytechnic (now known as Plymouth University), United Kingdom

• Council’s Diploma in Management Studies

Working Experience• Has begun his career in Standard Chartered Bank,

Sandakan in 1977 as a trainee assistant• In 1978, he joined his family business and was

principally involved in administrative and financial matters

• In 1985, he assumed the role as Chief Executive Officer of his family business

• In 1987, he was pivotal and instrumental in the formation of Rickoh Holdings Sdn. Bhd., the flagship company of the family businesses

• He was also an Independent Non-Executive Director of Daya Materials Berhad from December 2008 until January 2019


Listed Issuers• Non-Independent Non-Executive

Director of NPC Resources Berhad• Senior Independent Non-Executive

Director of Cocoaland Holdings Berhad• Independent Non-Executive Director

of T7 Global Berhad


Date of Appointment2 January 2016


Age71

GenderMale


7/7 100%


RG


121

LEE YOKE HARExecutive Director

Qualification• LLB (Honours), King’s College, London• Diploma in Finance and Accounting

Working Experience• Joined IOI Group as a Legal Executive in 1996 and

was subsequently transferred to the property division to take charge of implementing the International Organisation for Standardisation (ISO) quality management systems

• Held various positions in IOI Properties Group and was promoted to Senior General Manager, Marketing and Business Development in 2010 before appointing as an Executive Director of IOIPG

• Responsible for managing and implementing the marketing and sales strategies of Klang Valley projects and overseeing the product design development department




Date of Appointment1 July 2017


Age49

GenderFemale

7/7 100%



122


Listed Issuers• Group Managing Director and Chief

Executive of IOI Corporation Berhad• Non-Independent Non-Executive

Director of Bumitama Agri Ltd

Public Companies• Director of IOI Oleochemical Industries

Berhad• Director of Unico-Desa Plantations

Berhad• Director of Dynamic Plantations Berhad

Non-Profit Public Company• Trustee of Yayasan Tan Sri Lee Shin

Cheng

DATO’ LEE YEOW CHORNon-Independent Non-Executive Director

Qualification• LLB (Honours), King’s College, London• Bar Finals, Gray’s Inn, London• Postgraduate Diploma in Finance and Accounting,

London School of Economics

Working Experience• Chairman of the Malaysian Palm Oil Association• Chairman of the Malaysian Palm Oil Council from 2009

to March 2020• Served in the Malaysia Attorney General’s Chambers

and the Malaysia Judiciary Service for four (4) years from 1990 to 1994, last posting was as a Magistrate

• Board Member of Central Bank of Malaysia from 2015 to 2018

• Board Member of Malaysian Green Technology Corporation from 2011 to 2013

• Served on the National Council of the Real Estate and Housing Developers’ Association (“REHDA”) Malaysia as its Secretary General from 2002 to 2006


Date of Appointment25 February 2013


Age54

GenderMale

86%


6/7


123

DATUK LEE SAY TSHINIndependent Non-Executive Director

Qualification• Bachelor of Economics (Honours), University

of Malaya

Working Experience• An accomplished banker with over 42 years of

experience in the banking industry. His last position held in HSBC Bank Malaysia Berhad was as the Managing Director of Strategic Business Development prior to his retirement in 2013

• Vice Chairman, Strategic Initiatives for HSBC Bank Malaysia Berhad

• Independent Director of Bos Wealth Management Malaysia Berhad (formerly known as Pacific Mutual Fund Bhd) from November 2014 to November 2019

• Appointed to the advisory board of the Entrepreneurship Development Advisory Council (“EDAC”) in the Ministry of Entrepreneurship from July 2018 to February 2020

• Advisor to the advisory board of the Secretariat for the Advancement of Malaysian Entrepreneurs (“SAME”) in the Prime Minister’s Department from April 2015 to May 2018


Listed Issuer• Independent Non-Executive Chairman of

CJ Century Logistics Holdings Berhad

Public Company• Director of Malaysia-China Business

Council

Date of Appointment22 August 2013


Age67

GenderMale


7/7 100%


RA


124


Qualification• Doctorate of Medicine/ Cardiology (London)• Bachelor of Medicine and Surgery (London) (Honours),

Middlesex and University College Hospital Medical School, London

• Member of the Royal College of Physicians (United Kingdom)

• Member of the Academy of Medicine Malaysia• Fellowship of the Royal College of Physicians (London)• Fellow of the American College of Cardiology

Working Experience• Cardiologist at Cardiac Vascular Sentral (Kuala Lumpur),

Malaysia• Cardiologist at Sunway Medical Centre, Malaysia• Professor of Medicine and Head of Cardiology at the

University Malaya Medical Centre in Kuala Lumpur, Malaysia

• Cardiologist at Guy’s Hospital, London, United Kingdom

Additional Information of the Directors:1. Dato’ Lee Yeow Chor, Lee Yeow Seng and Lee Yoke Har are members of the immediate family. They are deemed in conflict of interest with IOI Properties Group by virtue of their

interests in certain privately-owned companies which are involved in similar business of property investment, property development and hospitality. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for day-to-day operations of IOI Properties Group which are disclosed in the note 38 to audited financial statements, there are no other business arrangements with the Company in which they have personal interests.

2. Save as disclosed in item (1) above, none of the Directors has:i) Any family relationship with any directors/major shareholders of the Company; andii) Any conflict of interest with the Company.

3. None of the Directors has any conviction for offences within the past five years other than traffic offences.4. None of the Directors has any public sanction or penalty imposed by the relevant regulatory bodies during the financial year ended 30 June 2020.




DATUK DR TAN KIM HEUNGIndependent Non-Executive Director

Date of Appointment1 June 2013


Age58

GenderMale


7/7 100%


GAR


125

SENIORMANAGEMENT TEAM

CORPORATE

PROPERTY DEVELOPMENT

PROPERTY INVESTMENT

Financial ControllerMICHELLE SHEN YAN CHAO

General Manager, Group Corporate Communication & SustainabilityKRISTINE NG MEE YOKE

Joint SecretariesCHEE BAN TUCK CHANG MEI YEE

Senior General ManagersTAN KENG SENGHO KWOK WINGCHUNG NYUK KIONG

General ManagersALBERT LEE WEN LOONGWONG PEEN FOOKPOR SENG GUAN

Senior General Manager, Mall OperationsCHRIS CHONG VOON FOOI

Senior General Manager, HotelsSIMON YONG

Cluster General Manager, Four Points by Sheraton, Puchong and Le Méridien, PutrajayaRASHEED KUMAR RENOO

Head of Group Internal AuditJIMMY YEE YOKE SENG

Head of Digital TransformationLOW SIEW PENG

Risk Management ManagerABDUL RAZAK BIN ABU BAKAR

General Manager, SingaporeLEE YEAN PIN (LI YANPING)

Deputy General ManagerLIM CHEOK LENG

Asst. General Manager, Xiamen, People’s Republic of ChinaOOI WOOI YAW

General Manager, Facilities ManagementTOH BOON CHIEW

General Manager, Xiamen, People’s Republic of ChinaZHENG WEN LIANG

Head of Leasing (Offices)JOANNE ANG CUI XIA

Executive Vice Chairman

LEE YEOW SENG

Executive Director

LEE YOKE HAR

Chief Executive Officer

DATO’ VOON TIN YOW

Chief Operating Officers

TEH CHIN GUANLIM BENG YEANG


126

The management team is headed by our Executive Vice Chairman and he is assisted by Executive Director and the following senior management personnel:


TEH CHIN GUANChief Operating Officer, Property Development (Central Region)

Date of Appointment15 April 2020

Skills and ExperienceDato’ Voon Tin Yow holds a Master of Science in Engineering and a Bachelor of Science in Civil Engineering from The University of Texas at Austin, United States.

He has thirty-five (35) years of working experience in the construction and property development industry, which includes 3 years in construction site management and 32 years in management of property development. He began his career in 1984 in Kimali Construction Sdn Bhd as a site engineer and went on to become the development engineer in Juru Bena Tenaga Sdn Bhd in 1986. In 1990, he joined Syarikat Kemajuan Jerai Sdn Bhd as Project Manager and was subsequently appointed as the General Manager in 1994.

Dato’ Voon was previously an Executive Director at S P Setia Berhad (“S P Setia”) and held the post of Chief Operating Officer from 1996 to 2014, during which he also acted as the Acting President and Chief Executive Officer from 1 May 2014 until 31 December 2014. During his tenure in S P Setia, he oversaw the development of the entire eco-system to establish the company’s policies and procedures. He played a key role in leading the Malaysian consortium comprising S P Setia and Rimbunan Hijau Group to jointly develop the China-Malaysia Qinzhou Industrial Park in the People’s Republic of China with a Chinese consortium.

Dato’ Voon joined Eco World Development Group Berhad in 2015 as an Executive Director. He was also a Non-Independent Non-Executive Director of EcoWorld International Berhad since 2017. He resigned from the board of both companies in February 2020.


Skills and ExperienceMr Teh Chin Guan holds a Bachelor of Engineering (Honours) degree from Universiti Teknologi Malaysia. He is currently a member of the Harvard Club of Malaysia.

Before joining IOI Group’s property division in year 2006, Mr Teh had held various senior positions in Berjaya Land Bhd and he brings with him many years of experience from the property and construction industry. He joined the organisation in August 2006 as an Assistant General Manager in the property division and was promoted to General Manager in July 2009.

Mr Teh was subsequently promoted to Property Director on 2 July 2012 and redesignated to his current position as Chief Operating Officer of IOI Properties Group in 2014 after the de-merger of the property division. He has since played a major role in contributing towards the Group’s property development in the growth corridor of the Klang Valley.

Malaysian MalaysianMale MaleAge 63 Age 54

PROFILE OF SENIOR MANAGEMENT TEAM


127

LIM BENG YEANGChief Operating Officer, Property Development (Southern Region)


Skills and ExperienceMr Lim Beng Yeang holds a Bachelor of Science (Honours) in Housing Building & Planning from Universiti Sains Malaysia.

He has over thirty-four (34) years of experience in areas such as township planning, designs development, contracts administration, project management and construction, building management services and sales marketing. He is presently responsible for the Group’s property development business in Johor.

Prior to joining IOI Group, he was a Senior Construction Manager and he has also worked in Indonesia during his tenure with MBf Property Services Sdn Bhd.

MalaysianMaleAge 58

MICHELLE SHEN YAN CHAOFinancial Controller

Date of Appointment11 September 2017

Skills and ExperienceMs Michelle Shen holds a Bachelor of Business, majoring in Accounting from Charles Sturt University, Australia. She is a member of CPA Australia as well as member of Malaysian Institute of Accountant (MIA).

Ms Michelle Shen has more than sixteen (16) years of experience in auditing and finance in Property Development, Property Investment and Leisure & Hospitality industries. Prior to joining IOI Properties Group in 2011 as Finance Manager, she had worked in one of the big 5 audit firms for several years. Ms Michelle Shen is responsible for the full spectrum of financial management including financial reporting, accounting and tax compliance and corporate treasury management of the Group.

MalaysianFemaleAge 38

KRISTINE NG MEE YOKEGeneral Manager, Group Corporate Communication & Sustainability

Date of Appointment25 May 2016

Skills and ExperienceMs Kristine Ng Mee Yoke holds a Bachelor of Arts (Honours) Degree from University of Malaya.

She has more than twenty-five (25) years of experience in the property industry, holding various senior and general management positions with expertise in the areas of corporate communication, strategic brand management, customer experience, stakeholder engagement, sustainability management, township management; and training & development. She is experienced in strategic leadership, building cross organisational relationships for strategic partnerships aligned with business strategies.

She currently oversees the Group’s Corporate Communication functions; and is responsible for the strategic management of sustainability across the various business segments of the Group.



128


CHEE BAN TUCKCompany Secretary and Deputy General Manager, Corporate Finance

CHANG MEI YEECompany Secretary


Skills and ExperienceMr Chee Ban Tuck is a member of the Malaysian Institute of Accountants (MIA). He has over twenty-two (22) years of experience in financial management, corporate planning, corporate finance and treasury. Mr Chee is currently responsible for the treasury and corporate finance functions as well as investors relations in IOI Properties Group. He was appointed as the joint Company Secretary of IOI Properties Group Berhad in April 2018 and was subsequently promoted to Deputy General Manager, Corporate Finance in 2019. Prior to joining IOI Group in 2008, he was attached with other public listed companies listed on Bursa Malaysia Securities Berhad.


Skills and ExperienceMs Chang Mei Yee is an Associate member of the Malaysian Institute of Chartered Secretaries & Administrators (MAICSA). She has seventeen (17) years of working experience in corporate secretarial practice. Prior to joining IOI Group in March 2011, she was a Corporate Secretarial Senior in a secretarial service provider firm in Singapore where she was responsible in attending to all aspects of corporate secretarial and advisory work of local companies, multi-national companies and representative office.

Malaysian MalaysianMale FemaleAge 54 Age 42

JIMMY YEE YOKE SENGHead of Group Internal Audit


Skills and ExperienceMr Yee Yoke Seng holds a Bachelor of Accounting Degree from University of Malaya. He is a member of the Institute of Internal Auditors Malaysia.

He has more than nineteen (19) years of external and internal auditing experience. Prior to joining IOI Properties Group in 2015, he was attached to few public listed companies in various industries, where he was responsible for the internal audit and enterprise risk management function.

Currently, he oversees the internal audit function covering various activities within the Group, and also include the area of enterprise risk management review and whistleblowing activities.

MalaysianMaleAge 44


129

LOW SIEW PENGHead of Digital Transformation

ABDUL RAZAK BIN ABU BAKARRisk Management Manager


Skills and ExperienceMs Low Siew Peng holds a Degree in Computing and Information Systems from University of London Guildhall, United Kingdom. She brings with her more than eighteen (18) years of experience in implementing various IT projects and initiatives in line with digital transformation roadmap to improve operation efficiency.

She is currently responsible for charting and implementing a digital transformation roadmap for the Group to enhance business process efficiency and to meet changing business and market requirement.

Date of Appointment:2 January 2018

Skills and Experience: Encik Abdul Razak bin Abu Bakar holds a Master of Business Administration from Irish International University (IIU) in Dublin, Ireland as well as Bachelor’s Degree in Business and Public Administration majoring in Management from Edith Cowan University in Western Australia. He brings with him 13 (thirteen) years of experience in implementation and development of risk management framework, corporate risk planning and strategy in various listed as well as government linked companies.

He is currently responsible in overseeing the risk management function of IOI Properties Group.

Malaysian MalaysianFemale MaleAge 41 Age 48

TAN KENG SENGSenior General Manager


Skills and ExperienceAfter completing his secondary school education at the Royal Military College, Mr Tan Keng Seng went on to earn a Bachelor Degree in Civil Engineering from McGill University, Canada.

He worked for six (6) years before enrolling in and completing a two-year Master programme at the Massachusetts Institute of Technology (MIT) of Cambridge, USA. Since then, he has worked in the banking, manufacturing and property development sectors.

He joined IOI Group, property division in 2011 and is responsible for the Group’s development projects at Ayer Keroh (Melaka) and Bahau (Negeri Sembilan).

MalaysianMaleAge 65


130


HO KWOK WINGSenior General Manager


Skills and ExperienceMr Ho Kwok Wing holds a Master and a Bachelor Degree of Science in Civil Engineering from Oklahoma State University in the United States of America.

Upon graduation he worked as a consulting structural engineer in California, USA from 1991 to 1992. He subsequently joined Bina Goodyear Berhad as a Project Engineer in 1992. He left as a Senior General Manager and joined IOI Group, property division in 2012 as a General Manager.

He is responsible for the overall property development in IOI Resort City.

MalaysianMaleAge 55

CHUNG NYUK KIONGSenior General Manager


Skills and ExperienceMr Chung Nyuk Kiong holds a Master of Science in Construction Project Management from Heriot Watt University and Master of Business Administration from University of Newcastle. He is also a Member of Royal Institution of Chartered Surveyors.

Prior to joining IOI Properties Group in 2014 as a General Manager, he had worked with public listed property developers and construction companies locally and abroad which entail mixed development, office, commercial and residential buildings. He was promoted to Senior General Manager in July 2017.

He is responsible for the overall property development projects in Puchong Jaya and Bandar Puteri Puchong.

MalaysianMaleAge 57

ALBERT LEE WEN LOONGGeneral Manager

Date of Appointment20 January 2005

Skills and ExperienceMr Albert Lee Wen Loong graduated from Universiti Sains Malaysia in 1986 with a Bachelor of Science (Hons) Housing Building & Planning with over thirty-four (34) years of experience in property development and construction industries. He is currently responsible for the planning, implementation and construction of Bandar Puteri Klang, Bandar Putera 2 and Bukit Changgang Industrial Park at Banting.

Prior to joining IOI Group, property division, he was the General Manager of Soon Seng Group’s Property Development and Construction Division.

MalaysianMaleAge 60


131

WONG PEEN FOOKGeneral Manager


Skills and ExperienceMr Wong Peen Fook holds a Certificate in Civil Engineering from Politeknik Ungku Omar, Ipoh, Perak.

He started his career with Bandar Sunway Sdn Bhd as a Site Supervisor and joined IOI Properties Group in 1990 as a clerk of work for four (4) years before being promoted to various positions. He was promoted to Senior Project Manager in 2013, subsequently promoted to Assistant General Manager, then to General Manager.

He is responsible for planning, executing, controlling and coordinating property development projects in Bangi and Sepang.

MalaysianMaleAge 53

POR SENG GUANGeneral Manager


Skills and ExperienceMr Por Seng Guan graduated from University of Malaya with a Bachelor of Engineering (1st Class Honours).

Upon graduation, Mr Poh has worked with several Malaysia public-listed companies as well as Singapore-based companies for the property development projects in Malaysia and overseas (Vietnam, Thailand and Cambodia). He has over 23 years of property development experience in areas such as township planning, project design development, contracts management, project implementation, quality and township management.

He is responsible for planning, executing, controlling and coordinating property development projects in IOI Resort City and Melaka.

MalaysianMale Age 48

LEE YEAN PIN (LI YANPING)General Manager

Date of Appointment1 March 2012

Skills and ExperienceMs Lee Yean Pin holds a Master of Science (Real Estate Development) from Massachusetts Institute of Technology (MIT) of Cambridge, USA and a Bachelor of Science (Estate Management) from National University of Singapore.

She has more than nineteen (19) years of experience in urban planning, real estate development and place management in Singapore and has held various appointments in Singapore’s national land use planning and conservation authority before joining IOI Group, property division in March 2012.

She is responsible for overall planning, execution and coordination of the property development projects in Singapore under her charge.

SingaporeanFemaleAge 47


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LIM CHEOK LENGDeputy General Manager

Date of Appointment17 October 2012

Skills and ExperienceMs Lim Cheok Leng holds a Bachelor of Science (Honours) in Housing Building & Planning from Universiti Sains Malaysia.

Upon graduation, she had joined IOI Group, property division as Project Assistant in the contract department for five (5) years before being promoted to Sales and Administration Manager to lead the Sales and Marketing department. She has over twenty-nine (29) years of experience in property development business. In 2012, she was promoted to Deputy General Manager, responsible for the Penang branch’s operations in areas such as design, layout and building approvals, contracts management, construction activities, estate management, sales administration and marketing.


OOI WOOI YAW Assistant General Manager


Skills and ExperienceMr Ooi Wooi Yaw holds a Bachelor of Environmental Design from University of Tasmania, Australia and a Diploma in Architecture from Institute Technology Pertama, Kuala Lumpur.

He has more than seventeen (17) years of experience in the property and shopping mall development sector. He has held several management positions in various organisations such as Jaya Jusco Stores Bhd (as assistant project manager) and The Store Corporation Berhad (as design manager) prior to joining IOI Group, property division in 2010 as project manager. He was subsequently promoted to Assistant General Manager in 2013.

He is responsible for the overall planning, execution, controlling and coordinating of the property development project in Xiamen, PRC.

MalaysianMale Age 45

CHRIS CHONG VOON FOOISenior General Manager, Mall Operations


Skills and ExperienceMr Chris Chong Voon Fooi holds a Bachelor of Arts (Honours) in International Business Administration from Northumbria University of Newcastle.

He has more than twenty-one (21) years of experience in shopping mall development and management. Prior to joining IOI Group, property division, he had worked for a leading shopping mall developer in Kuala Lumpur holding various roles in development, leasing, marketing, operations and procurement over the span of eleven (11) years. He joined IOI Group, property division in 2011 as Head of Marketing and Leasing for IOI City Mall and promoted to General Manager in 2014. He was subsequently promoted to Senior General Manager in 2020 where he is responsible for the overall operations of Retail Malls.

MalaysianMaleAge 41



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RASHEED KUMAR RENOOCluster General Manager, Four Points by Sheraton, Puchong and Le Méridien, Putrajaya


Skills and ExperienceMr Kumar Renoo obtained a Diploma in Business Management from Universiti Teknologi Malaysia and has continuously complemented his core skills with specialist training programmes at the Starwood/Marriott Group of hotels in a range of disciplines including Food and Beverage Yield Management, and Leadership and Strategic Planning.

Prior to managing the successful opening of Le Méridien Putrajaya, Mr Kumar Renoo spearheaded the opening of Four Points by Sheraton Puchong as the General Manager. In his previous role, he held the challenging position as dual General Manager for Sheraton Langkawi Beach Resort and Four Points by Sheraton Langkawi Resort concurrently.

Mr Kumar Renoo is presently responsible for the general operations of Four Points by Sheraton, Puchong and Le Méridien, Putrajaya.

During his career, Mr Kumar Renoo served in a number of departmental management roles, beginning as Director of Food & Beverage at the former Sheraton Subang Hotel & Towers.

MalaysianMaleAge 53

TOH BOON CHIEWGeneral Manager, Facilities management


Skills and ExperienceMr Toh Boon Chiew holds a Bachelor’s Degree in Mechanical Engineering (hons) from University of Newscastle, Australia. He has more than twenty-nine (29) years of experience in mechanical, and electrical design, project and facilities management for various property developments and investments. Prior to joining IOI Properties, he held a variety of key management roles in several public-listed companies.

He is responsible for the facilities management of property investment.

MalaysianMaleAge 53

SIMON YONGSenior General Manager, Hotels

Date of Appointment10 October 2018

Skills and ExperienceMr Simon Yong has an Executive Master in Business Administration, Open University Malaysia.

He has a total of thirty-three (33) years of hotel operations experience and exposure. With his extensive working experience and training in the hospitality industry, he brings hands-on leadership in sales and marketing, rooms division and finance divisions. Prior to re-joining IOI Properties Group in 2018 as Senior General Manager, he had worked with Palm Garden Hotel as a General Manager in 2007 and subsequently promoted to Senior General Manager, Putrajaya Marriott Hotel in 2012, and also worked as Cluster General Manager for ACCOR – Pullman Hotels.

He is responsible for the overall operations and profitability of Putrajaya Marriott Hotel, Palm Garden Hotel and Palm Garden Golf Club in Putrajaya.

MalaysianMaleAge 50


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JOANNE ANG CUI XIA Head of Leasing (Offices)


Skills and ExperienceMs Joanne Ang Cui Xia holds a Bachelor of Business from The University of South Australia. She is a registered Property Manager with the Board of Valuers, Appraisers, Estate Agents and Property Managers. She brings with her more than fourteen (14) years of experience in corporate leasing. Prior to joining IOI Properties Group, she was attached with several public listed property developers, holding key roles in marketing, leasing and management of prime purpose-built office buildings within Klang Valley.

She will be responsible for the overall leasing and marketing of office premises in Klang Valley and Singapore.


ZHENG WEN LIANGGeneral Manager

Date of Appointment12 November 2018

Skills and ExperienceMr Zheng Wen Liang has a university degree in economics and management, and he is currently responsible for IOI Xiamen’s commercial, hotel and office buildings. Mr Zheng Wen liang had worked in government department for more than 30 years and has extensive work experience in economics, finance, project construction and administrative management.

Date of Appointment12 November 2018

Skills and ExperienceMr Zheng Wen Liang holds a degree in economic management. He is currently responsible for the operations of IOI Properties Xiamen’s mall, hotel and office developments. Mr Zheng had over 30 years of extensive experience in government departments involving economics, finance, project construction, and administrative management.

ChineseMaleAge 56

Notes:Save as disclosed above, none of the above senior management members has:a. any directorship in public companies and listed issuers;b. any family relationship with any directors and/or major shareholders of the Company;c. any conflict of interest with the Company;d. any conviction for offences (other than traffic offences) within the past five (5) years; ande. any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.


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CORPORATE GOVERNANCE OVERVIEW STATEMENT

We would like to take this opportunity to provide you with some insights into the corporate governance practices of IOIPG Group under the leadership of our Board of Directors (the “Board”) during the financial year ended 30 June 2020 (“FY2020”). This Corporate Governance Overview Statement (“Statement”) sets out the principles and features of IOIPG Group’s corporate governance framework and highlights main areas of focus and priorities for the Board during 2020/2021.

At IOIPG Group, we continue to practise a governance framework that goes beyond an interest in governance for its own sake or the need to simply comply with regulatory requirements. In the same spirit, we do not see governance as just a matter for the Board. Good governance is also the responsibility of senior management. To ensure there is an integrated Group-wide approach towards upholding high governance standards, efforts have been made to strengthen the governance structures and processes of IOIPG’s subsidiaries.

The cornerstone principles of corporate governance at IOIPG Group are guided by Vision IOIPG whereby responsible and balanced commercial success are to be achieved by addressing the interests of all stakeholders. A set of Core Values guides our employees at all levels in the conduct and management of the business and affairs of IOIPG Group. We believe that good corporate governance results in quantifiable and sustainable long-term success and value for shareholders as well as all other stakeholders, as reflected by our performance and track record over the years.

We will continue evaluating our governance practices in response to evolving best practices and the changing needs of IOIPG Group. The Board is pleased to present this Statement and explain how IOIPG Group has applied the following three (3) principles as set out in the Malaysian Code on Corporate Governance (the “CG Code”):

(a) Board leadership and effectiveness;(b) Effective audit and risk management; and(c) Integrity in corporate reporting and meaningful relationship

with stakeholders.

How our governance supports the delivery of our strategyAll Directors are collectively responsible for the success of IOIPG Group. The Non-Executive Directors exercise independent, objective judgement in respect of Board decisions, and scrutinise and challenge management. They also have various responsibilities concerning the integrity of financial information, internal controls and risk management.

The Board is responsible for setting our strategy and policies, overseeing risk and corporate governance, and monitoring progress towards meeting our objectives and annual plans. It is accountable to our shareholders for the proper conduct of the business and our long-term success, and represents the interests of all stakeholders. The Board conducts a review of the IOIPG Group’s overall strategy. The Executive Vice Chairman, Chief Executive Officer (“CEO”), Executive Director, Chief Operating Officers (“COOs”) and senior management team take the lead in developing our strategy, which is then reviewed, constructively challenged and approved by the Board.

The role of the Board is to create long-term sustainable value for the benefit of our shareholders and our wider stakeholders. To achieve this, it is vital that we have a robust corporate governance framework, which provides systems of checks and controls to ensure accountability and promotes sound decision making.Our corporate governance framework is a value-based governance framework that takes into consideration the CG Code, Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), Vision IOIPG and IOIPG Group’s corporate culture and values. The framework shows an interaction between the stakeholders and the Board, demonstrates how the Board Committee structure facilitates the interaction between the Board, Executive Vice Chairman and the CEO, and also illustrates the flow of delegation from stakeholders. We have established a process to ensure the delegation flows through the Board and its committees to the Executive Vice Chairman, CEO and management committees and into the organisation. At the same time, accountability flows back upwards from the Company to stakeholders.

Engagement,Reporting andAccountability

Engagement

Board Oversight, Engagement, Delegated Authority and Accountability

Engagement


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GOVERNANCE FRAMEWORK

Vision IOIPG and IOIPG’s Corporate Culture and Values

Group Sustainability Steering Committee

Group Integrated Reporting Committee

Risk Management Committees of All Business Operating Units

Leisure and Hospitality Division

Management Committee

Property InvestmentDivision


Property Development Division


CEO

Enterprise Risk Management Framework

STAKEHOLDERS

Executive Vice Chairman


Risk Management Committee

(“RMC”)

Audit Committee (“AC”)

Governance, Nominating and Remuneration

Committee (“GNRC”)

BOARD OF DIRECTORS


137

ADOPTION OF CG CODEThe Board considers that the Company has adopted the CG practices and applied the main principles of the CG Code for FY2020 except:

• Practice 4.5 (The Board must have at least 30% women Directors)

• Practice 7.2 (The Board discloses on a named basis the top five (5) senior management’s remuneration in bands of RM50,000)

• Practice 12.2 (All directors attend General Meetings. The Chair of the Audit, Nominating, Risk Management and other committees provide meaningful response to questions addressed to them)

• Practice 12.3 (Leveraging technology to facilitate voting in absentia and remote shareholders’ participation at general meetings)

Details of how we applied the CG Code principles and complied with its practices are set out in the Corporate Governance (“CG”) Report which is available on the Company’s website at https://www.ioiproperties.com.my/publication/annual-report. The explanation for departure is further disclosed in the CG Report.

BOARD COMPOSITION

Change to the Composition of the Board during FY2020Lee Yeow SengBecame the Executive Vice Chairman with effect from 15 April 2020

BOARD LEADERSHIP AND EFFECTIVENESS

Board Leadership, Roles and ResponsibilitiesOur Board is responsible for the overall leadership of IOIPG Group, including establishing the Group’s purpose, values and strategy, and satisfying ourselves as to the alignment of IOIPG’s culture to the Group’s purpose, values and strategy. An effective Board is key to the establishment and delivery of a company’s strategy and we therefore continually seek to improve the effectiveness of our Board.

Effective management and good stewardship are led by the Board. Our Board is currently composed of an Independent Non-Executive Chairman, our Executive Vice Chairman, an Executive Director and four Non-Executive Directors (“NEDs”). The composition of our Board ensures that no individual or small group of Directors can dominate the decision-making process and that the interests of shareholders are protected. Independent NEDs form a majority of

Board Composition

(As at 28 August 2020)

Gender Diversity


Ethnic Diversity


Tenure of Independent

Non-Executive Directors


Executive Directors

Independent Non-Executive Directors

Non-Independent Non-Executive Director

Male

Female

Chinese

Bumiputera

Up to 5 years

More than 5 years and up to 9 years

29%

14%

14%

25%

57%

86%

86%

75%

14%


138

our Board. The Board considers each of our current Independent NEDs to be independent in character and judgement. In reaching this determination of independence, the Board has concluded that each of them provides objective challenge to management, is willing to stand up and defend his or her own beliefs and viewpoints in order to support the ultimate good of the Company and that there are no business or other relationships likely to affect, or which could appear to affect the judgement of the Independent NEDs.

The Board members have a diverse range of skills and experience which enables them to provide effective oversight, strategic guidance and constructive challenge, examine proposals on strategy and empower the CEO to implement the strategy approved by the Board. The Senior Independent Non-Executive Director acts as a sounding board for the Chairman and as an intermediary for the other Directors when necessary and is available to shareholders if they have concerns that have not been addressed through the normal channels.

Directors’ Core Areas of ExpertiseThe following table sets out the composition of skills and experience of our Board:

Effective operation of the Board relies on clarity of the various roles and responsibilities of the individual Board members. In line with the principles of the CG Code, a clear division of responsibilities has been established. The Chairman is responsible for leading and managing the work of the Board. The Executive Vice Chairman provides strategic oversight over the business and marketing plans that include operational and financial goals, strategies and performance measures for all aspects of IOIPG Group’s operations, while responsibility for the day-to-day management of IOIPG Group has been delegated to the CEO. The CEO is supported in this role by the senior management team and has executive responsibility for running our business. The diligent way in which the Chairman of the Board Committees and their members carry out their Committee duties enables us to discharge our responsibilities efficiently and effectively.

The Board discharges its responsibilities through a programme of meetings that includes regular reviews of financial performance and critical business issues, annual budget and strategy review.

The Board has a schedule of matters specifically reserved to it for decision and has approved the written terms of reference of the various Committees to which it has delegated its authority in certain matters. Further details on the work of the AC, RMC and GNRC are provided in the respective sections of our Integrated Annual Report 2020. The terms of reference of each of the Board Committees are also available on our website.

The Company Secretaries, through the Chairman, are responsible for advising the Board on all governance matters and for ensuring that Board procedures are followed, applicable rules and regulations are complied with, and that due account is taken of relevant codes of best practices. The Company Secretaries are responsible for ensuring effective communication flows between the Board and its Committees, and between senior management and NEDs. The Company Secretaries also facilitate the communication of key decisions and policies between the Board, Board Committees and senior management. In ensuring the uniformity of Board conduct and effective boardroom practices throughout IOIPG Group, the Company Secretaries have oversight on overall corporate secretarial functions of IOIPG Group, both in Malaysia and the region where IOIPG Group operates.

100% 43%

86% 43%

71% 43%

29%57%

71%

Corporate Governance

Breadth of Business Experience

Real Estate Experience

Stakeholders Engagement

Human Capital Experience

Legal & Regulatory

Accounting & Financial

Environmental & Sustainability

Technology Experience



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Board Evaluation Our Board conducted an internal Board evaluation during FY2020 which covered, among others:

• Performance of the Board and its Board Committees • Processes which underpin the Board’s effectiveness

(including consideration of the balance of skills, experience, independence and knowledge of the Board members)

• Individual performance (giving consideration to whether each Director continues to contribute effectively and show commitment)

Board Effectiveness Review Cycle

The results of the Board evaluation were presented to the Board in September 2020 where the Board noted the findings and areas that necessitated further improvements. The Board was satisfied with the evaluation results which indicated that each of the Directors continues to discharge their respective duties and responsibilities effectively, and that the Board as a whole and its Committees have been effective in discharging their oversight responsibilities and continue to operate effectively. As the average rating of the Board evaluation was relatively high, no apparent shortcoming had been identified. Key areas of focus arising from the report to be addressed in the year ahead include strategy planning, Board dynamics and succession planning. The Board will look into increasing the woman representation in the Board.

Appointment to the Board, Succession Planning and DiversityThe GNRC and where appropriate, the full Board, review the composition of our Board and the status of succession of both senior executive management and Board-level positions. Our Board has adopted a Board Diversity Policy, which supports the GNRC in its approach to succession planning. The said Policy can be found on the Company’s website at https://www.ioiproperties.com.my/corporate-governance.

We recognise that the Board sets the tone for inclusion and diversity across the Group and believe we should have a diverse leadership team to support good decision-making. Diversity is integrated across our Code of Conduct and Business Ethics and associated workforce policy, and we promote a culture of diversity, respect, and equal opportunity, where individual success depends only on personal ability and contribution. We strive to treat our employees with fairness, integrity, honesty, courtesy, consideration, respect, and dignity, regardless of gender, race, nationality, age, or other forms of diversity. Our Board is focused on creating an inclusive culture in line with IOIPG Core Values, which we believe will lead to greater diversity both on our Board and throughout the Company.

FY2019

Internal performance review – progress against external

review

FY2020

Internal performance review

FY2018

Independent, externally facilitated

review

FY2021

Independent, externally facilitated

review

Board Evaluation Process

Completion of questionnaires on effectiveness of the Board and its Committees and individual Directors

Collation of results and preparation of findings & actions

Deliberations in the GNRC and Board meetings

Key areas identified & action plan prepared & approved by the Board

In line with CG Code’s best practice of having externally facilitated Board evaluation periodically by engaging professional independent consultant, the Board will continue with its three (3)-year External Board Effectiveness Review Cycle, depicted as follows:


140

Employees’ Gender Diversity Disclosure

Employees' Ethnic Diversity Disclosure

Indian Others Bumiputera Chinese

For all employees

(except those in management position

and directors on the Board)

65%22%

9%4%

Management(Managers & above)

23%

8%2%

67%

Management(Managers & above)

Male Female

65%

Meeting Attendance in FY2020Our Board and Board Committees members have discharged their roles and responsibilities in FY2020, through their attendance at the meetings as set out in the table below:

Number of meetings held in year

Board AC RMC GNRC

Executive Directors

Lee Yeow Seng* 7/7 (100%)

- - -

Lee Yoke Har* 7/7 (100%)

- - -


Datuk Tan Kim Leong*• 7/7(100%)

6/6

(100%)

- 2/2

(100%)

Tan Sri Dato’ Sri

Koh Kin Lip*• 7/7

(100%)

- 2/2

(100%)

2/2

(100%)

Datuk Lee Say Tshin*• 7/7(100%)

6/6

(100%)

2/2

(100%)

-

Datuk Dr Tan Kim Heung• 7/7 (100%)

6/6

(100%)

2/2

(100%)

2/2

(100%)

Dato’ Lee Yeow Chor 6/7 (86%)

- - -

• Chairman or Committee Chairman * In his or her capacity as Director, and he or she attended (by invitation) all

relevant Board Committee meetings.

All Directors have more than adequately complied with the minimum requirements on attendance at the Board meetings as stipulated under the Listing Requirements. The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Board and/or Board Committee members.


61%

39% 35%

Employees

Further information on IOIPG Group’s diversity outcomes is included in the Sustainability Report which is also available on the Company’s website.


141

Board and GNRC Activities in FY2020 Our Board has an agenda that ensures strategic, budget, sustainability, risk management and internal control, operational, financial performance and CG matters are discussed at the appropriate time at the Board meetings. Our Board debated and provided input to management on the execution of the overall strategy of IOIPG Group, and reflected on that strategy with longer-term views on what could be done to build our strengths as an integrated property company, enhance financial resilience and deliver consistent and stronger returns through business cycles.

The Board agenda has strong links to the strategic objectives for the business. Key highlights of our Board’s FY2020 activities and priorities are summarised as follows:

Principal matters considered by our Board in FY2020

Strategic Matters Governance, Assurance & Risk Management Financial & Management Performance

Sustainability strategy Reports from Board Committees Quarterly results announcements

Group's overall business strategy Year-end governance report, sustainability report, AC report, RMC report & Statement on Risk Management and Internal Control

Expenditure approvals & revision of Contract/Investment/Capital Expenditure Policy

Dividend decision Annual Board evaluation and effectiveness

The Group’s annual budget, forecasts and key performance targets & indicators

Group’s digitalisation plan Risk management & internal control

Business actions plan in managing the effect of COVID-19 pandemic

Board diversity

Revisited and refreshed IOIPG’s vision, mission and core values

Board Charter amendments

Changes in executive leadership Remuneration Policy and Procedures for Directors and Senior Management amendments.

Business Ethics, Compliance, Anti-Corruption and Anti-Money Laundering Policy together with Gifts and Hospitality Guidelines

Looking ahead to FY2021During FY2021, our Board will focus on: Refining our strategic propositions Senior management succession planning Group’s digitalisation implementation Sustainability material matters and stakeholders engagements


142

Board DevelopmentIn order to continue to contribute effectively to the Board and Board Committee meetings, Directors are regularly provided with the opportunity to take part in ongoing training and development and can also request specific training that they may consider necessary or useful. The diagram below shows the key learning areas/topics attended by the Directors. The details of training attended by our Directors in FY2020 can be found in our website at https://www.ioiproperties.com.my/corporate-governance:

Directors Remuneration The Company has in place a Remuneration Framework for Directors and senior management which sets out the criteria applied in recommending their remuneration packages.

The Board has delegated responsibility for the consideration and approval of the remuneration of the Chairman, Executive Vice Chairman, Executive Director, NEDs and CEO to the GNRC. The Board as a whole considers the fees paid to NEDs.

Each of the Directors receives a base fixed Director’s fee and meeting allowance for each Board, Board Committee and general meetings that they attend. The structure of the fees payable to Directors of the Company for FY2021 is as follows:

AppointmentPer Annum

(RM)

Board of Directors

- Base fee 125,000- Board Chairman’s fee 60,000

Audit Committee - AC Chairman’s fee 45,000- AC Member’s fee 35,000

Risk Management Committee- RMC Chairman’s fee 35,000- RMC Member’s fee 20,000

Governance, Nominating and Remuneration Committee- GNRC Chairman’s fee 35,000- GNRC Member’s fee 15,000

GNRC Activities & Focus in FY2020

Strategic Governance

Oversight of Board and Senior Management succession

Review Board evaluation and effectiveness

Review NED’s independence

Board diversity

Review of Board Charter

Remuneration Nomination

Review Directors’ remuneration and benefits payable

Review & recommend Directors standing for re-election at the AGM

Review of remuneration policy and procedures for Directors and Senior Management

Deliberate & recommend to the Board on the re-designation of Executive Vice Chairman

Deliberate & recommend to the Board on the appointment of Chief Executive Officer

During FY2020, the GNRC focused on the size and composition of the Board, which has led to the commencement of a succession board planning discussion for Independent NEDs, which will strengthen the existing capability and good dynamics of the Board. The GNRC believes that the Board continues to have the appropriate skills, knowledge and experience to oversee the effective delivery of our strategy.

Looking ahead to FY2021During FY2021, our GNRC will continue to focus on: Monitoring senior management succession

planning and developing of talent pipeline Reviewing Board size and composition and

Board gender diversity Engaging external independent consultant

to facilitate the Board Effectiveness Evaluation, and Board and Senior Management Remuneration review

Corporate Governance

Risk Management & Internal Control

Economic, Finance and Business

Leadership & Management

Sustainability

Technology


19%

15%

36%

9%

9%

12%

Key LearningAreas/Topics


143

The details of the remuneration of Directors of the Company comprising remuneration received/receivable from the Company and subsidiary companies during FY2020 are as follows:

Company SubsidiariesGroup

Total

Directors

FeesBenefits

in-kind Others^Company

TotalSalaries & Bonus

Benefitsin-kind Others^

Subsidiaries Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Executive Directors

Lee Yeow Seng 125 - 18 143 9,058+ 121 1 9,180 9,323

Lee Yoke Har 125 - 10 135 1,703 39 1 1,743 1,878

Total 250 - 28 278 10,761 160 2 10,923 11,201


Datuk Tan Kim Leong 235 - 16 251 - - - - 251

Tan Sri Dato’ Sri Koh Kin Lip 180 - 16 196 - - - - 196

Dato’ Lee Yeow Chor 125 49 7 181 - - - - 181

Datuk Lee Say Tshin 190 - 16 206 - - - - 206

Datuk Dr Tan Kim Heung 210 - 18 228 - - - - 228

Total 940 49 73 1,062 - - - - 1,062

Notes:^ Comprises meeting allowances.+ The salary (Executive Vice Chairman: RM3 million) is inclusive of Employer Provident Fund and social security welfare contributions.

Number of Directors whose remuneration falls into the following bands:

Number of Directors

Range of Remuneration ExecutiveNon-

Executive

RM150,001 to RM200,000 - 2

RM200,001 to RM250,000 - 2

RM251,001 to RM300,000 - 1

RM300,001 to RM1,850,000 - -

RM1,850,001 to RM1,900,000 1 -

RM1,900,001 to RM9,300,000 - -

RM9,300,001 to RM9,350,000 1 -

Effective Audit, Risk Management and Internal ControlThe members of the AC possess the financial knowledge and commercial experience to meet the needs of the Board and the Group’s business. Our AC assists the Board in overseeing, monitoring and assessing the reliability and quality of the Group’s financial statements, management of financial risk processes, financial reporting practices and system of internal controls. This is to ensure that our Board dispenses its fiduciary responsibility to present to the shareholders, investors and stakeholders a clear, balanced and meaningful evaluation of the Group’s financial position, performance and prospects.

Our Board acknowledges its overall responsibility in maintaining a sound system of internal control and risk management that provides reasonable assurance of effective and efficient operations, compliance with laws and regulations, as well as internal procedures and guidelines. Our Group has a comprehensive system of internal controls in place, designed to ensure that risks are mitigated and that the Group’s objectives are attained. The RMC supports the Board by overseeing the Group’s risk management framework and regularly assessing the framework to ascertain its adequacy and effectiveness.


144

During FY2020, the Directors continued to review the effectiveness of our system of controls, risk management and high-level internal control processes. These reviews included an assessment of internal controls and, in particular, financial, operational and compliance controls, and risk management and their effectiveness, supported by management assurance of the maintenance of controls reports from the Head of Group Internal Audit, Risk Management Manager as well as the external auditors on matters identified in the course of their statutory audit work. Our Board is of the view that the system of internal control and risk management in place are sound and sufficient to safeguard the Group’s assets as well as shareholders’ investments and the interests of stakeholders.

More information about the above activities and its effectiveness is set out in the AC Report, RMC Report and Statement on Risk Management and Internal Control.

Anti-Bribery and Corruption Our core values and behaviours drive our culture and conduct throughout the Group. We have a zero-tolerance approach to misconduct of any kind and will take disciplinary action, up to and including dismissal, in the event of a breach.Our Business Ethics, Compliance, Anti-Corruption & Money Laundering Policy (the “Policy”) is clear in our commitment not to tolerate bribery or corruption of any form. Our Policy is managed by the compliance office and our compliance manager oversee the progress of implementation and compliance of the Policy.

Directors’ Responsibility for Preparing the Annual Audited Financial StatementsOur Directors are required by the Companies Act 2016 (the “Act“) to prepare financial statements for each financial year which give a true and fair view of IOIPG Group and of the Company’s state of affairs, results and cash flows. Our Directors are of the opinion that IOIPG Group uses appropriate accounting policies that are consistently applied and supported by reasonable as well as prudent judgements and estimates, and that the financial statements have been prepared in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Act and the Listing Requirements of Bursa Malaysia.

Our Directors are satisfied that IOIPG Group and the Company keep accounting records which disclose with reasonable accuracy the financial position of IOIPG Group and of the Company and enable proper financial statements to be prepared. They have also taken the necessary steps to ensure that appropriate systems are in place to safeguard the assets of IOIPG Group, and to detect and prevent fraud as well as other irregularities. The systems, by their nature can only provide reasonable and not absolute assurance against material misstatements, loss and fraud.

Stakeholders EngagementStakeholder relations are critical for the sustainable growth of our business and therefore we seek to maintain an open, permanent, and transparent dialogue with our stakeholders. This is due to both the influence they have on the business and the impacts they have on our operations and organisational strategy. A variety of engagement initiatives including direct meetings and dialogues with community are constantly conducted to learn about their welfare needs.

In our quarterly, half-yearly and annual financial reports to shareholders and other interested parties, we aim to present a balanced and understandable assessment of our strategy, financial position and prospects. We make information about the Group available to shareholders through a range of media, including our corporate website, http://www.ioiproperties.com.my, which contains a wide range of data of interest to institutional and private investors. We consider our website to be an important means of communication with our shareholders.

Our Investor Relations team acts as the main point of contact for investors throughout the year. We have frequent discussions with current and potential shareholders on a range of issues, including in response to individual ad hoc requests from shareholders and analysts.

With an eye towards establishing closer proximity to our stakeholders and also to promote a conscious and interactive dialogue between parties, we participated in forums and sector meetings, as well as held various events during the year with them.

Further details on the stakeholders’ engagement activities are available in our Sustainability Report.


Malaysian Substantial Shareholders

Malaysian Body Corporate and Individuals

Government and other Government-Related Agencies*

Foreigners

This Statement was approved by our Board on 14 September 2020.

Note:* Negligible

69.02%

6.97%

24.01%*

Composition of Shareholders

as at 28 August 2020


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AUDIT COMMITTEE REPORT

The Board of IOIPG is pleased to present the report on the Audit Committee (“AC” or the “Committee”) of the Board for FY2020.

Our AC was established on 29 May 2013 in line with the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

For effective risk management and internal control framework, the Board had on 15 September 2017 delegated the oversight role of risk management of IOIPG Group to a separate Board Committee, called the “Risk Management Committee”. As a result, the Audit and Risk Management Committee was decoupled into 2 separate Board Committees, i.e. Audit Committee and Risk Management Committee.

A MEMBERS The Committee consists of three (3) members, with all of

them being Independent Directors, whom each satisfies the “independence” requirements contained in the Listing Requirements of Bursa Malaysia. The biography of each of the following member of the Committee is set out in the Profile of Directors section:

Datuk Lee Say Tshin Chairman Independent Non-Executive Director

Datuk Tan Kim Leong Member Independent Non-Executive Chairman

Datuk Dr Tan Kim Heung Member Independent Non-Executive Director

Datuk Tan Kim Leong is a fellow member of the Institute of Chartered Accountants, Australia and a member of the Malaysian Institute of Accountants (“MIA”). This complies with paragraph 15.09(1)(c) of the Listing Requirements of Bursa Malaysia.

The Executive Vice Chairman, Chief Executive Officer, Executive Director, Financial Controller, certain senior management, the Company’s internal and external auditors are normally invited to attend the AC meetings. There is a standing agenda item facilitating the opportunity for the Company’s external auditors to meet with the AC without management presence. The Company Secretaries act as secretaries to the AC.

B SUMMARY OF KEY SCOPE OF RESPONSIBILITIES Our AC operates under a written Terms of Reference

containing provisions that address requirements imposed by Bursa Malaysia. The full Terms of Reference of the AC is posted on the Corporate Governance section of the Company’s website at http://www.ioiproperties.com.my/corporate-governance or it can be obtained from the Company Secretaries.

The Terms of Reference prescribes the AC’s oversight of financial compliance matters in addition to a number of other responsibilities that the AC performs. Those key responsibilities include, among others:

• Oversee the financial reporting process and integrity of the Group’s financial statements

• Evaluate the independence of external auditors• Review and evaluate the operation and effectiveness

of the Company’s internal audit function and external auditors

• Oversee the Group’s system of disclosure controls and system of internal controls that management and the Board have established

• Review conflict of interest situations and related party transactions of the Group

• Review the appropriateness of accounting policies and significant financial reporting issues or significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed

C HOW OUR AC SPENT ITS TIME DURING FY2020 The diagram below provides an overview of how our AC

spent its time in FY2020:

8%

21%21%

50%

Governance

Internal Audit

Financial Reporting

External Audit


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D SUMMARY OF WORK OF OUR AC The AC Report provides an overview of the work that our AC

carried out during FY2020, including the significant issues considered in relation to the financial statements and how the AC assessed the effectiveness of the external auditors.

The AC has a responsibility to oversee the Group’s internal control systems. The AC continues to monitor and review the effectiveness of the Group’s internal control systems with the support of the Group Internal Audit function.

The AC has an annual work plan, developed from its Terms of Reference, with standing items that the AC considers at each meeting, in addition to any matters that arise during the year. The summary of work and the main matters that the AC considered during FY2020 are described below:

1. Financial reporting The AC maintained its focus during the year on monitoring

the integrity of financial reporting and ensuring suitable accounting policies were adopted and applied consistently. The AC monitored the financial reporting processes for the Group, which included reviewing reports from, and discussing these with, management and the external auditors, PricewaterhouseCoopers PLT (“PwC”). The AC had reviewed the unaudited quarterly financial results and audited financial statements of the Group before recommending them for our Board’s approval.

The AC assessed whether appropriate accounting policies had been adopted throughout the accounting period and whether management had made appropriate estimates and judgements over the recognition, measurement and presentation of the financial results.

The AC also received and considered regular updates from management on the status and implications for the Group on financial reporting developments, including updates on discussions by the Malaysian Accounting Standards Board on the development of the Malaysian Financial Reporting Standards (“MFRSs”). There were new or amended MFRSs adopted by the Group in FY2020, details of which are disclosed in Note 4 to the audited financial statements.

The AC’s role is to assess whether the judgements or estimations made by management in preparing the financial statements are reasonable and appropriate. Meeting on audit status, as well as findings on areas of significant external auditors’ attention were held during FY2020. For FY2020, PwC identified two (2) Key Audit

Matters (“KAM”) of the Group, they were (i) revenue recognition from property development activities and (ii) valuation of investment properties, which were of key significance in PwC’s audit of the financial statements of the Group due to:

(a) significant judgements by management were involved in developing and monitoring the total budgeted property development costs, for which inherent uncertainties may arise.

(b) the determination of the fair value of the investment properties involved significant judgments in estimating the underlying assumptions to be applied in the valuation methodologies used by the valuers.

The revenue and cost are recognised by reference to the stage of completion of development activities at the end of each reporting period. This is measured based on the proportion of property development costs incurred up to the end of the reporting period as a percentage of total estimated costs for the property development.

In addressing the significant judgements and assumptions underpinning the revenue recognition as well as valuations, PwC has performed various procedures and did not identify any material exceptions. The AC reviewed and challenged the reasonableness of evidence to support judgements and estimates regarding revenue recognition through regular discussions with executive management. The external auditors also challenged management on the key drivers of revenue recognition on the property development and reported their findings to the AC.

Other areas of discussion include the accounting and auditing consideration in relation to COVID-19 pandemic, adoption of MFRS 16 “Leases”, capitalisation of borrowing costs in accordance with the Group’s accounting policy, overseas development projects (Singapore and Xiamen, People’s Republic of China), unsold inventories and impairment assessment of hotel properties. For all the mentioned areas, the AC received input from management and considered PwC’s comments prior to reaching its conclusion.



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Having considered PwC’s comments, the AC was satisfied that the accounting treatments applied under the financial reporting standards, the significant judgement and key assumptions used in the preparation of the financial statements and conclusions reached are appropriate.

As part of the year-end reporting process, the AC reviewed external auditors’ reports on accounting and financial reporting matters, and there were no significant and unusual events or transactions highlighted by the management as well as external auditors during FY2020.

2. Going concern assessment The AC reviewed the going concern basis for preparing

the Group’s consolidated financial statements, including the assumptions underlying the going concern statement and the period of assessment. The AC also took note of the principal risks and uncertainties, the existing financial position, the Group’s financial resources, and the expectations for future performance and capital expenditure. The AC’s assessment was based on various analysis from management regarding the Group’s capital and liquidity position prior to recommendation to the Board that the financial statements should continue to be prepared on the going concern basis.

3. Internal audit The Internal Audit function provides independent and

objective assurance and advisory services designed to add value and improve the operations of the Group. Its scope encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the Group’s governance, risk management and internal control processes in relation to the Group’s defined goals and objectives. The AC approved the Internal Audit function’s charter, which sets out its role, scope, accountability and authority.

The Head of Group Internal Audit, who is a member of the Institute of Internal Auditors (“IIA”) Malaysia, reports functionally to the AC, and the AC reviewed and approved the annual Internal Audit plan and budget for activities undertaken during 2020/2021. The AC considered factors such as the results of previous audits, both external and internal, the self-assessment questionnaire, system changes and the views of executive management. The AC also reviewed the adequacy of the scope, functions, competency and resources of the Internal Audit function during the year.

The Group’s Internal Audit Department performs routine audits and reviews all operating units within the Group, with emphasis on principal risk areas. Internal Audit adopts a risk-based approach towards the planning and conduct of audits, which is partly guided by the Group’s Enterprise Risk Management (“ERM”) framework. Impact on “Vision IOIPG” is taken into consideration in determining the risk level as a holistic approach in contributing to the achievement of the Group’s objectives and in enhancing shareholders’ value.

A total of 37 audit assignments (including 4 special audit assignments and 7 follow-up audit assignments) were completed during the financial year on various operating units of the Group covering property development, property investment, hospitality and leisure segments. Audit reports were issued to the AC and Board every quarter incorporating findings, recommendations to improve on the weaknesses noted in the course of the audits and management’s comments on the findings. An established system has been put in place to ensure that all remedial actions have been taken on the agreed audit issues and recommendations highlighted in the audit reports. Certain significant issues and operational matters unsatisfactorily resolved by management had been highlighted to the AC and it was also agreed that management would expedite resolving the outstanding audit issues.

At each meeting, the AC considered the results of the audits undertaken and considered the adequacy of management’s response to matters raised, including time taken to resolve such matters. In these instances, the AC challenged management as to what actions it was taking to minimise the chances of lapses and ensure that the material findings are adequately addressed by management.

The tasks, responsibilities, and goals of the AC and internal auditing are closely intertwined in many ways. Certainly, as the magnitude of the “corporate accountability” issue increases, so does the significance of the internal auditing and audit committee relationship. The AC had a private session (without management presence) with the Head of Group Internal Audit during FY2020 in assuring that the mechanisms for corporate accountability are in place and functioning. Additionally, the AC Chairman also met three (3) times privately with the Head of Group Internal Audit prior to the AC meetings to allow the AC Chairman to gain insights into issues that would need to be highlighted or bought to the attention of the AC at its meetings.


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The total costs incurred for the internal audit function of the Group for FY2020 was RM1,166,025 (FY2019: RM963,504). The increase in the internal audit function cost was mainly attributed tothe increase inheadcount.

4. Assessing the effectiveness of external audit process The AC places great importance on ensuring that there

are high standards of quality and effectiveness in the external audit carried out by PwC. Audit quality is reviewed by the AC throughout the year which includes reviewing and approving the annual audit plan to ensure that it is consistent with the scope of the audit engagement.

The AC met with PwC at various stages during the audit process, including without management presence, to discuss their remit and any issues arising from the audit to ensure they are able to operate effectively and to satisfy itself that management is responsive to their findings and recommendations. During FY2020, the AC met privately three (3) times with PwC without management presence.

PwC’s audit partners were present at the AC meetings to ensure full communication of audit related affairs and they remain fully appraised of all matters considered by the AC.

In reviewing the audit plan, the AC discussed the significant and elevated risk areas identified by PwC most likely to give rise to a material financial reporting error or those that are perceived to be of higher risk and requiring additional audit emphasis. The AC also considered the audit scope and materiality threshold.

The AC concluded that the effectiveness of the external audit process remains strong.

5. Auditors’ re-appointment review During FY2020, the AC assessed the effectiveness of PwC

as the external auditors. As part of the assessment, the AC considered:

Quality of planning, delivery and execution of the audit

Quality and knowledge of the audit team

Effectiveness of communications between management and the audit team

Robustness of the audit, including the audit team’s ability to challenge management as well as demonstrate professional scepticism and independence

performance evaluation and review by management

(i) Auditor’s effectiveness The AC considered the quality of reports from PwC

and the additional insights provided by the audit team, particularly at the partner level. The AC also considered how well the auditors assessed key accounting and audit judgements and the way they applied constructive challenge and professional scepticism in dealing with management.

The AC remains satisfied with the effectiveness of PwC based on improvements implemented following the previous year’s statutory audit review, the quality of the presentations received, management commentary on the robustness of the challenge provided, their technical insights and their demonstration of a clear understanding of the Group’s business and key risks.

(ii) Independence and objectivity The AC reviews the work undertaken by PwC and

each year assesses its independence, objectivity and performance. In doing so, it takes into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non-audit services. The AC also monitors PwC’s compliance with relevant regulatory, ethical and professional guidance on the rotation of partners, as well as assessing annually its qualifications, expertise, resources and the effectiveness of the audit process, including presentation from the external auditor on their own internal quality procedures.

Under the revised By-Laws adopted by Malaysian Institute of Accountants and PwC firm policy, the audit engagement partner is required to be rotated every seven (7) years with cooling-off period of three (3) years. Subsequently, effective from 15 December 2023, the cooling-off period will be extended to five (5) years. Moving forward, under the revised By-Laws adopted by MIA, the audit engagement partner is required to rotate every seven (7) years with cooling-off period of five (5) years.



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The new audit engagement partner in-charge of PwC had been assigned in FY2020 following the retirement of the outgoing audit engagement partner. As part of the independence review process, PwC has formally confirmed their independence to the AC. PwC reported to the AC that it had considered its independence in relation to the audit, and confirmed to the AC that it complies with professional requirements and that its objectivity is not compromised. The AC concluded that it continues to be satisfied with the performance of PwC and that PwC continues to be objective and independent in relation to the audit.

(iii) Non-audit work carried out by the external auditors during the period

Our Suitability and Independence External Auditors Policy includes a clearly defined pre-approval process for non-audit services to help protect external auditors’ objectivity and independence. The provision of non-audit services which are not prohibited and approved in line with our Policy, is also reviewed to ensure that the total fees for non-audit services will not exceed the defined thresholds.

Fees paid to PwC for audit related and non-audit services during FY2020 are set out in Note 8 to the audited financial statements.

PwC also provided in its engagement letter, the specific safeguards put in place for each piece of non-audit work confirming that it was satisfied that neither the extent of the non-audit services provided nor the size of the fees charged had any impact on its independence as statutory auditors. The AC was satisfied with the quantum of the non-audit fees in relation to the audit fees (being approximately 42.4% of the total audit fees on a group basis payable to PwC Malaysia) and the AC concluded that the auditors’ independence from the Group was not compromised as the non-audit fees complied mainly the yearly statutory tax compliance (62%), tax advisory services (10%) and one-off corporate exercise of IOIPG (28%). The AC was satisfied that the advisory services rendered by PwC were in circumstances where they were best qualified and suitable to provide given their comprehensive knowledge of the Group’s operations system and process.

(iv) Audit fees The AC was satisfied that the level of audit fees (on a

group basis) payable in respect of the audit services provided by PwC Malaysia, being RM927,475 for FY2020 (RM1,088,000 for FY2019) was appropriate and that an effective audit could be conducted for such a fee. The existing authority for the AC to determine the current remuneration of the external auditors (i.e. PwC Malaysia) is derived from the shareholders’ approval granted at the Company’s Annual General Meeting (“AGM”) in 2019.

Recommendation to re-appointment Following its consideration, the AC recommended to

the Board that PwC be offered for re-appointment as external auditors at the forthcoming AGM. The Board has accepted this recommendation and a resolution for PwC’s re-appointment for a further year will be put forward for the shareholders’ approval at the AGM.

6. Other matters considered by the Committee The AC also:

(i) Reviewed whistleblowing activities to monitor the actions taken by the Group in respect of whistleblowing reports received.

(ii) Reviewed the Group’s compliance with the relevant provisions set out under the CG Code for the purpose of preparing the Statement on Risk Management and Internal Control pursuant to the Listing Requirements of Bursa Malaysia.

(iii) Reviewed the related party transactions including annual assurance review.


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E ATTENDANCE

Number of Meetings and Details of Attendance Six (6) meetings were held during FY2020. The attendance

record of each member was as follows:

Total Number of Meetings

Number ofMeetings Attended

Members

Datuk Lee Say Tshin 6 6

Datuk Tan Kim Leong 6 6

Datuk Dr Tan Kim Heung 6 6

Two (2) meetings were held subsequent to the financial year end to the date of Directors’ Report and were attended by the following members:


Number of Meetings

Attended

Members


Datuk Tan Kim Leong 2 2


F ANNUAL REVIEW AND PERFORMANCE EVALUATION As required by its Terms of Reference, the AC conducted an

annual performance evaluation in an effort to continuously improve its processes.

The AC considers that it has adopted a balanced work approach during the year in terms of focus, objectives and means utilised to obtain the necessary assurance, believes that it has retained appropriate standing within the Company and has maintained appropriate relations with management, and external auditors, while remaining independent at all times. In FY2020, the AC received the expected full support from the management, internal and external auditors of the Company, enabling it to discharge its responsibilities effectively.

LOOKING AHEAD TO FY2021In addition to our routine business, the AC has two (2) focus areas for FY2021:• Enhancing the analysis, management and reporting of

financial risk.• will continue to monitor and review the effectiveness of the

Group’s internal control framework in order that appropriate assurance can be provided to the Board.



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RISK MANAGEMENT COMMITTEE REPORT

The Board of IOIPG is pleased to present the report on the Risk Management Committee (the “Committee” or “RMC”) of the Board for FY2020.

For an effective risk management and internal control framework, our RMC was set up on 15 September 2017 to take charge the oversight role of risk management of IOIPG Group pursuant to step-up practice 9.3 of the CG Code.

A MEMBERS Our RMC’s membership comprises three (3) of the following

members, whom each satisfies the “independence” requirements contained in the Listing Requirements of Bursa Malaysia. The biography of each member of our RMC is set out in the Profile of Directors section:

Datuk Dr Tan Kim Heung Chairman Independent Non-Executive Director

Tan Sri Dato’ Sri Koh Kin Lip Member Senior Independent Non-Executive Director

Datuk Lee Say Tshin Member Independent Non-Executive Director

The Executive Vice Chairman, Executive Director, CEO, Financial Controller, Risk Management Manager and relevant senior management are normally invited to attend the RMC meetings. There is a standing agenda item facilitating the opportunity for the Company’s Risk Management Manager to meet the RMC without management presence. The Company Secretaries act as secretaries to the RMC.

B SUMMARY OF KEY SCOPE OF RESPONSIBILITIES Our RMC operates under a written Risk Management

Terms of Reference containing provisions that addresses the requirements imposed by Bursa Malaysia. The full Terms of Reference of the RMC is posted on the Corporate Governance section of the Company’s website at www.ioiproperties.com.my/corporate-governance or it can be obtained from the Company Secretaries.

The Terms of Reference prescribes the RMC’s oversight of risk management matters and the key responsibilities which include, among others, assessing the Group’s approach on managing its risks, processes and effectiveness of internal controls put in place to mitigate any loses.

C SUMMARY OF WORK OF OUR COMMITTEE Our RMC has the responsibility to oversee the Group’s

internal control and risk management methodologies. It continues to monitor and review the effectiveness of the “Three Line of Defense” approach with the support of Risk Management Department.

Our RMC has an annual work plan, developed from its Terms of Reference and the summary of scope of work and the arising matters that our RMC had considered during FY2020 are described below.

Our Risk Management Charter (the “Charter”) defines the role of the Risk Management Manager’s functional reporting relationship with our Board and RMC by having full authorised access to records, personnel and physical properties relevant to the performance of engagements, and also defines the relevant scope of all risk management initiatives.

The Group acknowledges the “Three Lines of Defense” model as a way of defining the relationship between these functions and acts as a guideline to the responsibilities and accountabilities of each functional department/Business Unit:

1st Line of Defence functions that own and manage risk.

functions that oversee or specialise in risk management and compliance.

2nd Line of Defence

functions that provide independent assurance by Group Internal Audit.

3rd Line of Defence


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The Group maintains and archives a compilation of risk registers, which contains the key risks faced by the Group, including its respective likelihood, impact and velocity as well as the controls and procedures in place to mitigate these risks. Our RMC on a regular basis will receive the Group’s key risk summary reports prepared by the Risk Management team, highlighting risk exposures and threats which allows our RMC to assess the appropriateness of management’s action plans and to ensure our Board’s risk appetite threshold are not breached under any circumstances. Both the Enterprise Risk Management (“ERM”) framework and the Charter can be found in our website.

The RMC formally reviews its principal Group and business unit risks every six (6) months (half yearly) in a financial year i.e. June and December each year. During FY2020, our RMC provided its overview on the risks relating to the Group’s strategy. Our RMC’s assessment was reviewed based on risk reports consolidated from business units to produce an overall key risks profiles for the Group. These risk reports, listing imminent and emerging risks (including anti-corruption risks) were reviewed, amended and finalised with our RMC along with the appropriate mitigation measures to ensure the Group’s operations remain resilient. In addition, in February 2020, our RMC had also deliberated and reviewed the Business Continuity Management Framework of the Group, and the outbreak of COVID-19 pandemic has called for re-evaluation and enhancement of the Framework in order to future-proof the business against any kind of threat. The RMC had performed COVID-19 risk assessment facilitated through all business unit heads to ensure clear guidance to the workforce and other relevant stakeholders on limiting the risk of infection, and to make risk-informed decisions about the operations of our businesses. Facilitating effective management of risks in these core areas within the agreed Board’s risk appetite thresholds will ensure the Group’s long term sustainability and resilience whilst enhancing overall shareholders’ value at the same time.

Risk management activities are practised throughout the Group to support our RMC in its corporate governance responsibilities, while working with the business units to proactively and effectively manage significant risks that may affect the Group’s operations, reputation and financial earnings. The details relating to risk management is reported separately under “Statement on Risk Management and Internal Control” on pages 153 to 158.

D ATTENDANCE

Number of Meetings and Details of Attendance Two (2) meetings were held during FY2020. The attendance

record of each member was as follows:


Number of Meetings

Attended

Members


Tan Sri Dato’ Sri Koh Kin Lip 2 2


One (1) meeting was held subsequent to the financial year end to the date of Directors’ Report and was attended by the following members:


Number of Meetings

Attended

Members


Tan Sri Dato’ Sri Koh Kin Lip 1 1


E ANNUAL REVIEW AND PERFORMANCE EVALUATION The last review of the Terms of Reference of our RMC was

carried out in FY2018 and the RMC has planned to review the Terms of Reference in FY2021.

Our RMC also conducted an annual performance evaluation in an effort to continuously improve its processes pursuant to the Terms of Reference of RMC.

LOOKING AHEAD TO FY2021Our RMC will continuously focus to:

(a) Build a risk resilient culture by further enhancing and developing appropriate internal controls in core functional areas within the Group;

(b) Re-evaluate the Group’s Business Continuity Management Framework effectiveness; and

(c) Review and enhance the ERM framework.

RISK MANAGEMENT COMMITTEE REPORT


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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTIONThis Statement of Risk Management and Internal Control is in line with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and the Malaysian Code on Corporate Governance 2017.

BOARD RESPONSIBILITIES & ACKNOWLEDGEMENTThe Board of Directors of the Group (referred as “Board”) in discharging its responsibilities, is fully committed to articulating, implementing and reviewing a sound risk management and internal control environment. The Board is responsible for determining the group’s level of risk tolerance, actively identifying, assessing and monitoring key business risks in order to safeguard shareholders’ investments and the Group’s assets. The risk management and internal control systems are specifically designed to manage risks that may impede the achievement of the Group’s overall business objectives and strategies. They can only provide reasonable although not absolute assurance against fraud, material misstatement or loss. This is achieved through a combination of foresight, preventive, detective and corrective measures.

RISK MANAGEMENT CULTUREThe Chief Executive Officer has the ultimate responsibility and accountability for ensuring that risk is managed across the business units. He is supported by the Chief Operating Officer of the respective Property Development & Property Investment division, leisure and hospitality as well as Corporate Services.

The Chief Executive Officer and the Senior Management Leadership Team provide governance leadership, agree on the strategic direction and risk appetite whilst promoting the culture of ‘tone from the top’, to ensure the best outcome for the Group, staff and stakeholders. lt actively considers risks during strategic and tactical decision-making processes as with all levels of management and will determine the level of residual risk/appetite the Group is willing to accept. The Group takes on a risk-based approach to managing its internal, external, operational and strategic risks: i.e. risks are managed and monitored according to severity and financial risks by identifying the quantum of each risk involved and its impact.

RISK MANAGEMENTThe Group adopts an Enterprise Risk Management (“ERM”) framework which is consistent with the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers, Bursa Malaysia’s Corporate Governance Guide, and is in line with ISO 31000, Risk Management – Principles and Guidelines (which is a standard relating to risk management codified by the International Organisation for Standardisations. ISO 31000 provides a standard on the implementation of risk management).

All risks are considered and managed by every individual, including executive staff and senior management, staff, partners and related stakeholders. The Group is committed to promoting an organisational culture where risk management is embedded in all activities and business processes and undertakes proactive risk management. It is also good practice for the Group to understand the strategic and operational risks as well as opportunities faced in order to make better informed decisions and meet organisational and strategic goals.

The ERM Framework is designed to provide the architecture for a common platform for all risk management activities undertaken by IOI Properties Group Berhad, from individual functional, process or project-based assessments to organisation-wide evaluation, with the aim of enabling comparative analysis and prioritisation.

FRAMEWORK METHODOLOGY & OBJECTIVESThe primary objective of the ERM framework is to support the achievement of the Group’s strategic objectives, safeguard the Group’s resources, people, finance, property, knowledge and reputation through:

• Provision of a structured and consistent approach to identifying, rating, mitigating, managing as well as monitoring risks;

• Assisting decision makers to make sound management decisions within an environment of tolerable strategic and business risk limits, including leveraging on any opportunities;

• Risk profiling activities that will be used to challenge strategic decisions;

• An environment in which staff understand and assume responsibility for managing the risks they are responsible for as well as the controls to mitigate them;

• The provision of relevant, timely information across clear reporting structures; and

• Independent audit activities to provide feedback to management that sufficient internal controls are in place and are effective.


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The Board conducts periodic reviews on the adequacy and integrity of the Group’s ERM framework and policies, particularly in relation to the approach for principal risks identification, assessment, response and control, communication and monitoring.

The Group’s activities expose it to a variety of risks, including operational and financial risks. The Group’s overall risk management objective is to ensure that the Group creates value for its shareholders whilst minimising potential adverse effects on its performance and positions. The Group operates within an established risk management framework with clearly defined policies and guidelines that are approved by the Board.

Under the Group’s ERM Three-Tier Defense model, the Group protects itself from threats with relevant guidelines on risk reporting and disclosure which cover the following principal risks:

I) OPERATIONAL RISK• The Group’s policy is to assume operating risks that

are within its core businesses and competencies to manage. Operating risk management ranges from managing strategic operating risks to managing diverse day-to-day operational risks.

• The management of the Group’s day-to-day operational risks (such as those relating to health and safety, quality, marketing and statutory compliance) is mainly decentralised at the business unit level and guided by approved standard operating procedures. Operational risks that cut across the organisation (such as those relating to procurement, integrated systems and reputation) are coordinated centrally.

II) FINANCIAL RISK• The Group is exposed to various financial risks

relating to credit, liquidity, interest rates, and foreign currency exchange fluctuations. The Group’s risk management objectives and policies coupled with the required quantitative and qualitative disclosures relating to its financial risks are set out in the Group’s Financial Statements.

BOARD OF DIRECTORS

(IOIPG)

Executive Leadership

1st Line of Defence

Head of

Business Units

2nd Line of Defence

Risk

Management

3rd Line of Defence

InternalAudit

Risk Management Committee

• Identifying, rating, managing & reporting risks

• Managing compliance obligations & key controls

• Training & Awareness of Risks to staff

• Managing compliance in High Risk areas

Satisfactory control of risks & compliance obligations Monitoring & Reporting

Design and Monitoring of risk & confirmation of compliance of risk & controls

Assurance & Oversight through system & process audits

• Design Risk & control compliance framework

• Monitor Adherence to framework

• Provide advice and guidance on identified risk

• Assess control mechanisms & activities

• Review framework, implementation & design

• Provide independent oversight of 1st & 2nd lines of defense

• Conduct compliance review and tests on framework

Outcomes

Three-TierDefense

Model

KeyActivities

Read more about How We Manage Our Risks on pages 46 and 47.

III) HEALTH & SAFETY RISK• With the outbreak of the COVID-19 pandemic that has impacted

the Group’s business & operations across the board with the implementation of the Movement Control Order (“MCO”) by the government, the Group had taken swift action in complementing the government’s directives to ensure that standard operating procedures are in place and health protocols are being taken by every staff within the Group. This is to break the chain of infection and reduce the risk of infection amongst the staff and public at large. The leisure and hospitality division (Hotels & Golf) had initiated its Disaster Management actions to ensure that the Group remains resilient during the outbreak.



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Outcomes

1st Line of Defense – Head of Business UnitsEach Business Unit is responsible for the ownership and management of their respective risks. They are also responsible for implementing corrective actions to address process deficiencies. Each Business Unit naturally serves as the 1st line as controls are designed into business processes under their guidance. There are adequate managerial and supervisory controls in place to ensure compliance and to highlight control breakdown, inadequate processes and unexpected events.

2nd Line of Defense – Risk Management DepartmentThe risk management and compliance functions in a way to ensure that the framework is fully embedded, operational and monitor the 1st line controls are being effectively managed. It is a risk management function that facilitates and monitors the implementation of effective risk aversion practices in assisting risk owners by targeting risk exposure and reporting adequate risk-related information throughout the organisation. Each of these functions has some degree of independence from the first line of defense.

3rd Line of Defense – Internal AuditInternal audit (IA) provides independent assurance on the effectiveness of governance, risk management and internal controls, including the manner in which the 1st and 2nd line of defenses achieve its control objectives. IA provides the Board and senior management with comprehensive assurance based on the highest level of independence and objectivity.

Risk Rating Min. Mitigation Action Description

High Reject & Avoid or Mitigate Immediate action required in consultation with Management to either avoid the risk entirely or to reduce the risk to a low, medium or significant rating.

Significant Accept & Mitigate These risks need to be mitigated with actions as required and managers need to be assigned these risks

Moderate Accept Manage by specific monitoring or response procedures.

Low Accept Managed by routine procedures.

Risk AppetiteThe risk management controls and actions are established to bring the exposure level within the accepted range by considering:

• Emerging risks,• Risks that might be outside the Group’s control

(i.e. pandemic outbreak, political change and climate);

• Where best to allocate scarce resources; and• Where the Group might want to take on

additional risk to pursue a strategic objective or expectation of above average returns.

Risk appetite thresholds are in place for each individual strategic risk and tolerance levels agreed, using relevant performance indicators which are monitored through the monthly enterprise reports. For operational risks, the Group’s risk appetite in the annual risk processes, controls and assurance activities are generally defined as follows:


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CONTROL ENVIRONMENTThe Group’s corporate culture is embedded in its core values of integrity, quality, innovation and creativity, commitment and passion, cost effectiveness, people first and teamwork – to achieve the Group’s vision and support the business objectives, risk management and internal control system.

• The Code of Conduct and Business Ethics reinforces the Group’s core value on integrity by providing guidance on moral and ethical behaviour that is expected from all staff in following the laws, policies, standards and procedures.

• Board committees such as the Audit Committee (“AC”), Risk Management Committee (“RMC”) and Governance, Nominating and Remuneration Committee (“GNRC”) are established by the Board, and they are governed by clearly defined terms of reference (“TOR”) and authority for areas within their scope.

• The Group has an organisational structure that is aligned with its business and operational requirements, with clearly defined lines of responsibility and authority levels.

The Board and Management have established numerous processes for identifying, evaluating and managing the significant risks faced by the Group. These include periodic testing of the effectiveness and efficiency of the internal control procedures as well as updating the system of internal controls when there are changes to the business environment or regulatory guidelines. These processes have been in place for the financial year ended 30 June 2020 and up to the date of approval of this Statement on Risk Management and Internal Control.

CONTROL ACTIVITIES• Policies and procedures have been established for key

business processes and support functions. The Group has put in place a system to ensure that there are adequate risk management, financial and operational policies, procedures and rules relating to the delegation and segregation of duties.

• Annual business plans and operating budgets are prepared by business and operating units, which is approved by the Board. Actual performance and significant variances against budget are monitored on an ongoing basis.

• To monitor and assess the status of each respective Business Unit’s Risks, risk reviews are done frequently to identify changes in Risk Ratings, risk owners as well as control actions to ensure identified threats are addressed accordingly to reduce impact on the Group’s objectives and goals:

Report Name Submission By

Report Recipient Frequency

Business Unit Risk Registers

All Business Unit General Managers/Asst, General Managers/Managers

Risk Management Committee (“RMC”)/ Group Risk Management Department

Half-yearly

The Group adopts several approaches to its control activities to ensure holistic coverage of threats and mitigation strategies:

• Directive Controls designed to establish desired outcomes.• Preventive Controls designed to discourage errors or

irregularities from occurring.• Detective Controls designed to find errors or irregularities after

they have occurred.• Corrective Controls are intended to limit the extent of any

damage caused by an incident.• Transfer the risk are intended to enable transferring of the

identified risks to a third party in order to reduce the impact.• Eliminate the risk; some risks may only return to acceptable

levels if the activity is terminated.• Accept the risk; when the probability or consequences of the

risk is low or minor.

To understand the extent to which the likelihood and impact of a risk occurring is being mitigated, the full set of controls currently in place is documented and assessed for effectiveness of design and operation. The assessment process only assesses controls that are currently in operation, not those that are planned.

Where controls are operated by an external third party, discussions with the risk owner should take place to ensure there is an appropriate assessment, taking into consideration the views of those involved.



157

INFORMATION AND COMMUNICATION PROCESSESCommunication and consultation with internal as well as external stakeholders are important elements at each step of the risk management process. Effective communication is essential to ensure that those responsible for implementing risk management and those with a vested interest understand the basis on which risk management decisions are made describing why particular actions are required.

Key direction is set through the adoption of the IOI Properties Group Berhad Corporate Plan and policies, which are reviewed annually to ensure they continually reflects important priorities. The Group is dependent on the framework to be used at the strategic and departmental business unit level to improve performance by the organisation in the achievement of its strategies and actions as detailed in the business plan.

The Management and the Board receive timely, relevant and reliable reports which are reviewed on a regular basis.

• The Group has in place an Information System that captures, compiles, analyses and reports relevant data, which enables management to make sound business decisions in an accurate and timely manner.

• A whistleblowing policy is established to provide appropriate communication and feedback channels which facilitate whistleblowing, in a transparent and confidential manner. It outlines the Group’s commitment to encourage its staff and stakeholders to raise genuine concerns about possible improprieties in matters of financial reporting, compliance, suspected violations of the Group’s Code of Conduct and Business Ethics, and to disclose any improper conduct or other malpractices within the Group (i.e. whistleblowing) in an appropriate way.

MONITORING AND REPORTING• The Group’s procedural policies are reviewed and revised periodically to

meet changing business environment needs while at the same time comply with regulatory requirements.

• Board meetings are held at least once in a quarter with a formal agenda on matters for discussion. In addition, regular management and operation meetings are conducted by senior management which comprises the CEO and divisional heads.

• The Group’s Risk Management Department reports to the Chief Executive Officer & the Risk Management Committee (“RMC”), and its main functions are to facilitate process of identifying, measuring and treating property, liability, income, and personnel exposures to loss. The ultimate goal of risk management is the preservation of the physical and human assets of the organisation for the successful continuation of its operations.

• The Group’s Internal Audit function reports to the AC and is guided by an Internal Audit Charter that is approved by the Board. The Internal Audit function monitors compliance with the Group’s procedural policies, business environment, operation needs and regulatory requirements which provides independent assurance on the effectiveness of risk management and internal control system by conducting regular audits in addition to continuous assessment. Significant audit findings and recommendations for improvement are highlighted to senior management as well as the AC, with periodic follow-up reviews of the implementation of corrective action plans.

As the external and internal environment in which we operate is fluid, therefore the influences on the Group’s objectives continue to ebb and flow.

In addition, assumptions are made in relation to both the quality of response strategies which are already in place and the implementation and quality of proposed responses. As a result, the risk management process is iterative subject of a structured monitoring and review process.

RISK REVIEW FOR FINANCIAL YEAR AND SCOPEA review on the adequacy and effectiveness of the risk management and internal control system has been undertaken for the financial year under review. Each business unit, cutting across all geographic areas, via its respective Risk Management Committees and workgroups comprising personnel at various levels carried out the Risk Mitigation and Analysis areas of work.

Risk and the effectiveness of control measures to manage them accordingly is monitored on an ongoing basis to ensure changing circumstances or risk appetite do not alter the evaluation profiles and adequacy of assessments. New risks or deficiencies in existing mitigation strategies may be identified via a number of sources:

• Changes in the strategic objectives;• Regular review of the identified risks and mitigation strategies;• Internal Audit exercise;


158

• Ongoing monitoring by various Committees, AC, RMC and GNRC;

• New legislation;• New accounting standards, guidelines or directives from the

respective regulators;• Complaints;• Regulatory/Compliance breaches;• Incidents;• External Audit;• Project & internal policy changes.

The Risk Assessment Process includes the following:

• Regular Risk Audit review and periodic discussions with the AC.

• Half yearly Reviews compiled by the respective units’ Risk Management Committees, and annual presentation and discussion with the RMC, the Board, internal auditors, as well as external auditors.

• Deliberation of respective divisional risks and ratings with Chief Operating Officers (“COO”) for property investment and property development for the same period.

Risks are monitored and reviewed by the responsible manager/officer on an ongoing basis and reported to committees at least half yearly. Demonstrating the effectiveness of risk responses is constantly monitored.

For risk assessments associated with the whole of IOI Properties Group Berhad or individual departments, the review is built into the business planning process. Output from the Strategic Risk and Business Unit Assessments are used as input for appropriate risk response plans.

To ensure that the identified strategic risks and measures that are in place remain aligned to the Group’s objectives, any change to the overall plan will trigger a review of the risk assessment exercise.

REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS As required by Paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Audit and Assurance Practice Guide (“AAPG”) 3 issued by the Malaysian Institute of Accountants. AAPG 3 does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management internal control systems of the Group.

Based on the procedures performed, nothing had come to their attention that caused them to believe the Statement on Risk Management and Internal Control set out above was not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Guidelines for Directors of Listed Issuers, nor was it factually inaccurate.

CONCLUSION The Board is satisfied with the adequacy and effectiveness of the Group’s risk management and internal control system. The Board has received assurance from the CEO, COO and Financial Controller that the Group’s risk management, in all material aspects, is operating adequately and effectively. For the financial year under review, despite the impact of COVID-19 outbreak and global trade war between China and the United States which resulted in volatile economic fluctuations across the world including Malaysia, there were no material failures or adverse compliance events that have directly resulted in any material loss to the Group as a whole.

This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated 14 September 2020.



159

STATEMENT OF DIRECTORS’ INTERESTSIN THE COMPANY AND ITS RELATED CORPORATIONS AS AT 28 AUGUST 2020

(Based on the Register of Directors’ Shareholdings)

No. of ordinary shares

Name of Directors Direct % Indirect %

The Company

Datuk Tan Kim Leong 13,125 * 84,6291 *

Tan Sri Dato’ Sri Koh Kin Lip 1,094,041 0.02 44,486,4482 0.81

Lee Yeow Seng 100,000 * 3,499,872,7413 63.56

Dato’ Lee Yeow Chor 6,837,500 0.12 3,500,264,1164 63.57

Datuk Lee Say Tshin - - 125,0005 *

Datuk Dr Tan Kim Heung 28,606,000 0.52 - -

Lee Yoke Har 856,018 0.02 90,0006 *

Ultimate Holding Company, Vertical Capacity Sdn Bhd

Lee Yeow Seng 662,076,993 - - -

Dato’ Lee Yeow Chor 192,215,901 - - -

By virtue of Lee Yeow Seng and Dato’ Lee Yeow Chor’s interests in the ordinary shares of the Company and its holding company, they are also deemed to be interested in the shares of all the subsidiaries of the Company and its holding company to the extent that the Company and its holding company have an interest.

Notes:1 Deemed interested by virtue of his interest in E. P. H. Holdings Sendirian Berhad and Tan Kang Hai Holdings Sdn Berhad under Section 8 of Companies Act 2016

(the “Act”) as well as shares held by his son, Tan Enk Purn under Section 59(11)(c) of the Act.2 Deemed interested by virtue of his interest in Rickoh Corporation Sdn Bhd and Rickoh Holdings Sdn Bhd under Section 8 of the Act.3 Deemed interested by virtue of his interest in Vertical Capacity Sdn Bhd (“VC”) under Section 8 of the Act.4 Deemed interested by virtue of his interest in VC under Section 8 of the Act and also interest in share of his spouse, Datin Joanne Wong Su-Ching under Section

59(11)(c) of the Act.5 Deemed interested by virtue of the interest in shares of his spouse, Datin Tan Sok Ing under Section 59(11)(c) of the Act.6 Indirect interest – interest in shares of her spouse, Lor Ching San by virtue of Section 59(11)(c) of the Act.

* Negligible


160

SHAREHOLDINGS OF SENIOR MANAGEMENT TEAM

Based on the Record of Depositors as at 28 August 2020, the details of shareholdings of our senior management team are as follows:

Name


Direct % Indirect %

1 Dato’ Voon Tin Yow - - - -

2 Teh Chin Guan - - - -

3 Lim Beng Yeang 40,000 * - -

4 Michelle Shen Yan Chao 30,000 * - -

5 Kristine Ng Mee Yoke 17,500 * - -

6 Chee Ban Tuck - - - -

7 Chang Mei Yee - - - -

8 Jimmy Yee Yoke Seng - - - -

9 Low Siew Peng - - - -

10 Abdul Razak bin Abu Bakar - - - -

11 Tan Keng Seng 13,800 * - -

12 Ho Kwok Wing - - - -

13 Chung Nyuk Kiong - - - -

14 Albert Lee Wen Loong 150,000 * - -

15 Wong Peen Fook 4,800 * - -

16 Por Seng Guan - - - -

17 Lee Yean Pin (Li Yanping) 29,625 * - -

18 Lim Cheok Leng - - - -

19 Ooi Wooi Yaw 395,000 * - -

20 Chris Chong Voon Fooi - - - -

21 Simon Yong - - - -

22 Rasheed Kumar Renoo - - - -

23 Toh Boon Chiew - - - -

24 Zheng Wen Liang - - - -

25 Joanne Ang Cui Xia - - - -

Note:* Negligible


161

OTHER INFORMATION

MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTSThere were no material contracts entered into by the Company and its subsidiaries which involved Directors’ and major shareholders’ interests either still subsisting at the end of the financial year ended 30 June 2020 or entered into since the end of the previous financial year.

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)The ESOS of the Company which was established on 8 May 2015 for a period of 5 years for the benefit of the eligible employees and Executive Directors (“Eligible Persons”) of IOIPG Group, had expired on 8 May 2020 pursuant to the By-Laws of the ESOS. None of the ESOS had been exercised by the Eligible Persons since its commencement until its expiration. All outstanding share options offered to the Eligible Persons pursuant to the ESOS had automatically lapsed upon the expiry of the ESOS.

The movements of the share options in the Company are set out in the table below:

Description

Number of Share Options as at 8 May 2020

TotalExecutive Vice Chairman

and Executive Director

Total options granted and accepted 24,605,839 7,403,532

Lapsed^ (24,605,839) (7,403,532)

Total outstanding options Nil Nil

^ Due to resignation or retirement and expiry of ESOS on 8 May 2020 pursuant to the By-Laws of the ESOS.

Percentage of share options applicable to the Directors and senior management under the ESOS are as follows:

Directors and Senior Management

During the Financial Year 2020

(%)

Since Commencement ofthe ESOS up to 8 May 2020*

(%)

Aggregate maximum allocation - 0.31

Actual granted and accepted - 0.31

* Based on the total number of shares with voting rights of 5,506,145,375 as at 8 May 2020.

The Company did not grant any options over the ordinary share pursuant to the ESOS to the Non-Executive Directors.

AUDIT AND NON-AUDIT FEESThe amount of audit and non-audit fees incurred for services rendered by the external auditors, PricewaterhouseCoopers PLT and their affiliated companies or firms to the Company and the Group for the financial year ended 30 June 2020 are as follows:

Fees Company

(RM)Group

(RM)

Audit Fees 148,000 1,148,000

Non-Audit Fees 4,000 412,000

Total 152,000 1,560,000

FINANCIAL REPORT

163 Directors’ Report

FINANCIAL STATEMENTS

170 Statements of Profit or Loss

171 Statements of Comprehensive Income

172 Statements of Financial Position

174 Statements of Changes in Equity

177 Statements of Cash Flows

183 Notes to the Financial Statements

305 Statement by Directors

305 Statutory Declaration

306 Independent Auditors’ Report

SECTION 1

SECTION 2


163

DIRECTORS’ REPORT

The Directors of IOI Properties Group Berhad have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2020.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries, associate and joint ventures are set out in Note 44 to the financial statements.

There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.

FINANCIAL RESULTS

The audited financial results of the Group and of the Company for the financial year ended 30 June 2020 are as follows:

GroupRM’000

CompanyRM’000

Profit/(Loss) for the financial year 459,416 (368,117)

Attributable to:

Owners of the Company 455,693 (368,117)

Non-controlling interests 3,723 -

459,416 (368,117)

DIVIDENDS

Dividend declared and paid since the end of the previous financial year was as follows:

CompanyRM’000

In respect of the financial year ended 30 June 2019:

Interim single tier dividend of 3.0 sen per ordinary share, paid on 27 September 2019 165,184

On 28 August 2020, the Directors had declared an interim single tier dividend of 1.5 sen per ordinary share, amounting to RM82,592,181 in respect of the financial year ended 30 June 2020. The dividend will be payable on 23 October 2020 to shareholders whose names appear in the Record of Depositors and Register of Members of the Company at the close of business on 14 October 2020.

The Directors do not recommend any payment of final dividend in respect of the current financial year.


164

ISSUE OF SHARES AND DEBENTURES

There was no issue of new shares or debentures by the Company during the financial year.

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

The ESOS of the Company which was established on 8 May 2015 for a period of 5 years, had expired on 8 May 2020 pursuant to the By-Laws of the ESOS. All outstanding share options offered to the eligible persons pursuant to the ESOS had automatically lapsed upon the expiry of the ESOS. As a result thereof, the ESOS Committee was dissolved on 8 May 2020.

The movements of the share options over the unissued ordinary shares in the Company granted and lapsed under the ESOS during the financial year are as follows:

Number of options over ordinary shares

Date of offerOption

priceAs at

1.7.2019Granted and

accepted Exercised Lapsed*As at

30.6.2020

23 May 2016 RM2.07 24,605,839 - - (24,605,839) -

Note:* Due to the resignation or retirement of employees and expiry of ESOS on 8 May 2020 pursuant to the By-Laws of the ESOS.

RESERVES AND PROVISION

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the notes to the financial statements.

DIRECTORS

The Directors who have held office during the financial year until the date of this report are as follows:

Datuk Tan Kim LeongLee Yeow SengTan Sri Dato’ Sri Koh Kin LipDato’ Lee Yeow ChorLee Yoke HarDatuk Lee Say TshinDatuk Dr Tan Kim Heung

DIRECTORS’ REPORT


165

DIRECTORS’ INTERESTS

The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares and options over ordinary shares of the Company and of its related corporations during the financial year ended 30 June 2020 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 59 of the Companies Act 2016 are as follows:

As at 1.7.2019 Acquired Disposed

As at 30.6.2020

The Company

Direct Interest


Datuk Tan Kim Leong 13,125 - - 13,125

Lee Yeow Seng 100,000 - - 100,000

Tan Sri Dato’ Sri Koh Kin Lip 1,094,041 - - 1,094,041

Dato’ Lee Yeow Chor 6,837,500 - - 6,837,500

Lee Yoke Har 456,018 400,000 - 856,018

Datuk Dr Tan Kim Heung 28,606,000 - - 28,606,000

Indirect Interest


Datuk Tan Kim Leong 84,629 - - 84,629

Lee Yeow Seng 3,400,357,841 95,526,700 - 3,495,884,541

Tan Sri Dato’ Sri Koh Kin Lip 44,486,448 - - 44,486,448

Dato’ Lee Yeow Chor 3,400,769,216 95,526,700 (20,000) 3,496,275,916

Lee Yoke Har - 87,000 - 87,000

Datuk Lee Say Tshin 125,000 - - 125,000

Ultimate Holding CompanyVertical Capacity Sdn. Bhd. (“VCSB”)

Direct Interest


Lee Yeow Seng 106,786,612 555,290,381 - 662,076,993

Dato’ Lee Yeow Chor 106,786,612 85,429,289 - 192,215,901

By virtue of Lee Yeow Seng’s and Dato’ Lee Yeow Chor’s interests in the ordinary shares of the Company and its ultimate holding company, they are also deemed to be interested in the shares of all the subsidiaries of the Company and its ultimate holding company to the extent that the Company and its ultimate holding company have an interest.


166

DIRECTORS’ INTERESTS (CONTINUED)

The movements of the options over the unissued ordinary shares in the Company granted under the ESOS to the Directors in office at the end of the financial year are as follows:

No. of options over ordinary shares

Option price

As at 1.7.2019

Granted and accepted Expired*

As at 30.6.2020

The Company

Direct Interest

Lee Yeow Seng RM2.07 5,443,774 - (5,443,774) -

Lee Yoke Har RM2.07 1,959,758 - (1,959,758) -

Note:* ESOS expired on 8 May 2020 pursuant to the By-Laws of the ESOS.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive any benefit (other than the benefits as disclosed in Note 38 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director, or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except for any benefits which may be deemed to have arisen by virtue of the significant related party transactions as disclosed in Note 38 to the financial statements.

During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects of enabling the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

DIRECTORS’ REMUNERATION

Details of Directors’ remuneration as required by the Fifth Schedule of the Companies Act 2016 are set out in Note 38 to the financial statements.

INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS

The Company maintains a corporate liability insurance for the Directors and officers of the Group throughout the financial year, which provides appropriate insurance cover for the Directors and officers of the Group. The total amount of indemnity coverage and insurance premium paid by the Company for the financial year ended 30 June 2020 amounted to RM50,000,000 and RM36,100 respectively.

DIRECTORS’ REPORT


167

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise their book values in the ordinary course of business of the Group and of the Company have been written down to an amount which the current assets might be expected so to realise.

As at the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent;

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and

(c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

As at the date of this report, there does not exist:

(a) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; and

(b) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve (12) months after the end of the financial year, which in the opinion of the Directors, will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

OTHER STATUTORY INFORMATION

As at the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company that would render any amount stated in the financial statements misleading.

In the opinion of the Directors:

(a) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(b) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made.


168

DIFFERENT FINANCIAL YEAR END OF SUBSIDIARIES

Due to local requirements of the following five (5) indirect subsidiaries (“Foreign Subsidiaries”) of the Company, the Foreign Subsidiaries are adopting 31 December as their statutory financial year end, which do not coincide with that of IOI Properties Berhad, the holding company of the Foreign Subsidiaries, which in turn, is a 99.9% owned subsidiary of the Company. The Directors of IOI Properties Berhad have been granted approvals under Section 247(3) of the Companies Act 2016 by the Companies Commission of Malaysia for the Foreign Subsidiaries to have different financial year end from that of IOI Properties Berhad for the financial year ended 30 June 2020:

1. IOI (Xiamen) Business Management Co. Ltd.;2. IOI (Xiamen) Properties Co. Ltd.;3. Xiamen Double Prosperous Real Estate Development Co. Ltd.;4. Xiamen Palm City Management Services Co. Ltd.; and5. Xiamen Palm Kaiyue Real Estate Development Co. Ltd.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 42 to the financial statements.

AUDIT COMMITTEE

The Directors who serve as members of the Audit Committee are as follows:

Datuk Lee Say Tshin (Chairman)Datuk Tan Kim LeongDatuk Dr Tan Kim Heung

RISK MANAGEMENT COMMITTEE

The Directors who serve as members of the Risk Management Committee are as follows:

Datuk Dr Tan Kim Heung (Chairman)Tan Sri Dato’ Sri Koh Kin LipDatuk Lee Say Tshin

GOVERNANCE, NOMINATING AND REMUNERATION COMMITTEE

The Directors who serve as members of the Governance, Nominating and Remuneration Committee are as follows:

Tan Sri Dato’ Sri Koh Kin Lip (Chairman)Datuk Tan Kim LeongDatuk Dr Tan Kim Heung

ULTIMATE HOLDING COMPANY

The ultimate holding company is Vertical Capacity Sdn. Bhd., a company incorporated in Malaysia.

DIRECTORS’ REPORT


169

LIST OF DIRECTORS OF SUBSIDIARIES

Pursuant to Section 253 of the Companies Act 2016, the list of Directors of the subsidiaries during the financial year and up to the date of this report is as follows:

Cheah Wing Choong^ Lee Yoke HarChia Yi Li Lim Beng YeangChong Voon Fooi Lim Cheok LengChung Nyuk Kiong Lou Fu Leong^

Dato’ Lee Yeow Chor Masaya OhtaDato’ Voon Tin Yow* Shen Yan Chao*Ho Kwok Wing Tan Keng SengHsieh Yu-Ting Tan Kun SinJiro Mearashi Teah Chin Guan @ Teh Chin GuanLee Beng Hong Wang Wei*Lee Cheng Leang Wong Peen FookLee Yean Ping (Li YanPing) Zheng Wen Liang*Lee Yeow Seng

^ Resigned during the financial year.* Appointed during the financial year and up to the date of this report.

SUBSIDIARIES

Details of subsidiaries are set out in Note 44 to the financial statements.

AUDITORS’ REMUNERATION

Details of auditors’ remuneration are set out in Note 8 to the financial statements.

AUDITORS

The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors.

LEE YEOW SENG LEE YOKE HARDirector Director

Putrajaya14 September 2020


170

STATEMENTS OF PROFIT OR LOSSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

Revenue 7 2,116,346 2,197,514 11,000 889,847

Cost of sales (920,985) (1,009,390) - -

Gross profit 1,195,361 1,188,124 11,000 889,847

Other operating income 51,756 153,053 51,740 51,933

Marketing and selling expenses (58,717) (69,182) (13) (28)

Administration expenses (156,487) (206,083) (4,081) (4,185)

Other operating expenses (267,365) (122,205) (411,227) (63,084)

Operating profit/(loss) 8 764,548 943,707 (352,581) 874,483

Share of result of an associate 19,622 2,005 - -

Share of results of joint ventures 93,217 103,174 - -

Profit/(Loss) before interest and taxation 877,387 1,048,886 (352,581) 874,483

Interest income 10 50,140 68,936 25,554 37,764

Interest expense 11 (145) - (43,240) (41,940)

Net foreign currency translation (loss)/gain on:

- borrowings (35,025) (53,073) - -

- deposits 4,736 21,211 1,805 1,596

Profit/(Loss) before taxation 897,093 1,085,960 (368,462) 871,903

Taxation 12 (437,677) (425,530) 345 (2,979)

Profit/(Loss) for the financial year 459,416 660,430 (368,117) 868,924

Profit/(Loss) attributable to:

Owners of the Company 455,693 661,290 (368,117) 868,924

Non-controlling interests 3,723 (860) - -

459,416 660,430 (368,117) 868,924

Earnings per ordinary share attributable to owners of the Company

Basic earnings per share (sen) 13 8.28 12.01

Diluted earnings per share (sen) 13 8.28 12.01

The attached notes form an integral part of the financial statements.


171

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Profit/(Loss) for the financial year 459,416 660,430 (368,117) 868,924

Other comprehensive income/(loss) that will be reclassified subsequently to profit or loss, net of tax

Exchange differences on translation of foreign operations, net of tax 31,206 202,390 - -

Net change in cash flow hedge (161,105) (65,417) 876 2,471

Other comprehensive (loss)/income for the financial year, net of tax (129,899) 136,973 876 2,471

Total comprehensive income/(loss) for the financial year 329,517 797,403 (367,241) 871,395

Total comprehensive income/(loss) attributable to:

Owners of the Company 325,772 800,012 (367,241) 871,395

Non-controlling interests 3,745 (2,609) - -

329,517 797,403 (367,241) 871,395



172

STATEMENTS OF FINANCIAL POSITIONAS AT 30 JUNE 2020


Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

ASSETS

Non-Current Assets

Property, plant and equipment 15 1,421,979 1,265,538 - -

Prepaid lease payments 16 - 55,542 - -

Land held for property development 17 4,847,658 4,642,164 - -

Investment properties 18 14,334,703 13,672,410 - -

Goodwill on consolidation 19 11,472 11,472 - -

Interests in subsidiaries 20 - - 18,841,891 19,700,802

Investment in an associate 21 109,523 99,313 - -

Interests in joint ventures 22 4,476,409 5,012,119 - -

Amount due from a subsidiary 20 - - - 232,853

Deferred tax assets 23 152,114 133,854 - -

25,353,858 24,892,412 18,841,891 19,933,655

Current Assets

Property development costs 24 3,172,133 3,567,548 - -

Inventories 25 2,244,444 2,047,991 - -

Trade and other receivables 26 392,487 357,910 236 224

Contract assets 27 220,259 216,591 - -

Amounts due from subsidiaries 20 - - 232,853 20

Amount due from a joint venture 22 481 560 - -

Current tax assets 44,126 59,305 24,156 21,862

Short term funds 30 80,588 41 80,588 41

Deposits with financial institutions 29 479,891 455,086 315,014 235,797

Cash and bank balances 28 911,506 1,121,758 94,554 432,541

7,545,915 7,826,790 747,401 690,485

TOTAL ASSETS 32,899,773 32,719,202 19,589,292 20,624,140


173

Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

EQUITY AND LIABILITIES

Equity

Share capital 31 18,514,233 18,514,233 18,514,233 18,514,233

Reserves 32 (367,397) (225,701) (1,075) 9,824

Retained earnings 9,288,389 8,986,081 420,976 954,277

Reorganisation debit balance (8,440,152) (8,440,152) - -

Equity attributable to owners of the Company 18,995,073 18,834,461 18,934,134 19,478,334

Non-controlling interests 20 156,875 159,122 - -

TOTAL EQUITY 19,151,948 18,993,583 18,934,134 19,478,334

Liabilities

Non-Current Liabilities

Borrowings 33 9,713,761 10,150,209 - 221,276

Lease liabilities 34 2,037 - - -

Derivative financial liabilities 35 128,764 43,514 - 3,581

Trade and other payables 36 30,704 29,709 - -

Deferred tax liabilities 23 1,037,769 801,155 - -

Amount due to a subsidiary 20 - - 270,763 -

10,913,035 11,024,587 270,763 224,857

Current Liabilities

Borrowings 33 1,181,415 1,176,252 224,571 224,539

Lease liabilities 34 1,453 - - -

Derivative financial liabilities 35 90,527 14,167 1,754 5,783

Trade and other payables 36 1,076,055 1,025,111 2,366 1,216

Contract liabilities 27 348,096 341,508 - -

Amounts due to subsidiaries 20 - - 155,704 689,411

Current tax liabilities 137,244 143,994 - -

2,834,790 2,701,032 384,395 920,949

TOTAL LIABILITIES 13,747,825 13,725,619 655,158 1,145,806

TOTAL EQUITY AND LIABILITIES 32,899,773 32,719,202 19,589,292 20,624,140



174

STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Attributable to owners of the Company

Group

Sharecapital

RM’000

Foreigncurrency

translationreserveRM’000

Cashflow

hedgereserveRM’000

Share-based

paymentreserveRM’000

Reorgani-sationdebit

balanceRM’000

RetainedearningsRM’000

TotalRM’000

Non-controlling

interestsRM’000

Totalequity

RM’000

As at 1 July 2019 18,514,233 (186,259) (51,217) 11,775 (8,440,152) 8,986,081 18,834,461 159,122 18,993,583

Profit for the financial year - - - - - 455,693 455,693 3,723 459,416

Exchange differences on translation of foreign operation, net of tax - 31,174 - - - - 31,174 32 31,206

Net change in cash flow hedge (Note 32.2) - - (161,095) - - - (161,095) (10) (161,105)

Total comprehensive income/(loss) - 31,174 (161,095) - - 455,693 325,772 3,745 329,517

Changes in equity interests in subsidiaries - - - - - 24 24 (40) (16)

Employee share options lapsed - - - (11,775) - 11,775 - - -

Dividend paid (Note 14) - - - - - (165,184) (165,184) - (165,184)

Dividend paid to non-controlling interests - - - - - - - (5,952) (5,952)

Total transactions with owners - - - (11,775) - (153,385) (165,160) (5,992) (171,152)

As at 30 June 2020 18,514,233 (155,085) (212,312) - (8,440,152) 9,288,389 18,995,073 156,875 19,151,948



175


Group

Sharecapital

RM’000

Foreigncurrency

translationreserveRM’000

Cashflow


Share-based


Reorgani-sationdebit

balanceRM’000


TotalRM’000

Non-controlling

interestsRM’000

Totalequity

RM’000

As at 1 July 2018 18,514,233 (390,398) 14,200 15,604 (8,440,152) 8,596,108 18,309,595 166,603 18,476,198

Profit for the financial year - - - - - 661,290 661,290 (860) 660,430

Exchange differences on translation of foreign operation, net of tax - 204,139 - - - - 204,139 (1,749) 202,390

Net change in cash flow hedge (Note 32.2) - - (65,417) - - - (65,417) - (65,417)

Total comprehensive income/(loss) - 204,139 (65,417) - - 661,290 800,012 (2,609) 797,403

Issuance of preference share to non-controlling interests in a subsidiary - - - - - - - 13,371 13,371

Changes in equity interests in subsidiaries - - - - - 161 161 (259) (98)

Employee share options lapsed - - - (3,829) - 3,829 - - -

Dividend paid (Note 14) - - - - - (275,307) (275,307) - (275,307)

Dividend paid to non-controlling interests - - - - - - - (17,984) (17,984)

Total transactions with owners - - - (3,829) - (271,317) (275,146) (4,872) (280,018)

As at 30 June 2019 18,514,233 (186,259) (51,217) 11,775 (8,440,152) 8,986,081 18,834,461 159,122 18,993,583



176


Company

Sharecapital

RM’000

Cashflow


Share-based



Totalequity

RM’000

As at 1 July 2019 18,514,233 (1,951) 11,775 954,277 19,478,334

Loss for the financial year - - - (368,117) (368,117)

Net change in cash flow hedge (Note 32.2) - 876 - - 876

Total comprehensive income/(loss) - 876 - (368,117) (367,241)

Employee share options lapsed - - (11,775) - (11,775)

Dividend paid (Note 14) - - - (165,184) (165,184)

Total transactions with owners - - (11,775) (165,184) (176,959)

As at 30 June 2020 18,514,233 (1,075) - 420,976 18,934,134

As at 1 July 2018 18,514,233 (4,422) 15,604 356,831 18,882,246

Profit for the financial year - - - 868,924 868,924

Net change in cash flow hedge (Note 32.2) - 2,471 - - 2,471

Total comprehensive income - 2,471 - 868,924 871,395

Employee share options lapsed - - (3,829) 3,829 -

Dividend paid (Note 14) - - - (275,307) (275,307)

Total transactions with owners - - (3,829) (271,478) (275,307)

As at 30 June 2019 18,514,233 (1,951) 11,775 954,277 19,478,334


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020


177

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

CASH FLOWS FROM OPERATING ACTIVITIES


Adjustments for:

Amortisation of prepaid lease payments - 2,115 - -

Bad debts written off 20 130 - -

Depreciation of property, plant and equipment 15 42,873 38,731 - -

Dividend income - - (11,000) (889,847)

Fair value loss/(gain) on investment properties 18 54,386 (93,356) - -

Gain on:

- disposal of land from compulsory acquisitions (206) (752) - -

- disposal of property, plant and equipment (214) (129) - -

- redemption of redeemable preference shares in subsidiaries - - (50,107) (39,679)

- subscription of redeemable preference shares in subsidiaries - - (636) -

Loss on subscription of ordinary shares in a subsidiary - - 18 -

Impairment losses on:

- receivables 2,523 1,156 - -

- interests in subsidiaries - - 410,603 60,083

- investment properties 50,379 - - -

Interest expense 11 145 - 43,240 41,940

Interest income 10 (50,140) (68,936) (25,554) (37,764)

Inventories written down 3,100 - - -

Inventories written off 1 9 - -

Property development costs written down 24 24,755 - - -

Property, plant and equipment written off 15 2,615 1,023 - -

Reversal of impairment losses on receivables (138) (2,504) - -

Share of result of an associate (19,622) (2,005) - -

Share of results of joint ventures (93,217) (103,174) - -

Transaction costs on borrowing - - - 344

Unrealised loss/(gain) on foreign currency translations 12,179 48,903 (295) (7,831)

Operating profit/(loss) before working capital changes 926,532 907,171 (2,193) (851)



178


Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED)

Operating profit/(loss) before working capital changes (continued) 926,532 907,171 (2,193) (851)

Increase in property development costs (8,674) (233,009) - -

Decrease in inventories 264,813 401,118 - -

(Increase)/Decrease in contract assets (3,668) 69,740 - -

Increase in trade and other receivables (51,042) (75,336) (8) (219)

Increase in contract liabilities 6,588 228,724 - -

Increase/(Decrease) in trade and other payables 55,523 (62,040) (282) (17)

Cash generated from/(used in) operations 1,190,072 1,236,368 (2,483) (1,087)

Tax paid (232,958) (487,320) (1,949) (4,820)

Tax refunded 19,898 7,547 - -

Net cash from/(used in) operating activities 977,012 756,595 (4,432) (5,907)



179

Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received 9,412 4,509 11,000 330,831

Interest received 41,043 58,944 25,550 38,735

Proceeds from disposal of:

- investment properties 2,859 7,250 - -

- land from compulsory acquisitions 206 2,070 - -

- property, plant and equipment 383 194 - -

Additional investments in subsidiaries - - (284,702) (829,958)

Additional investment in a joint venture - (11,453) - -

Redemption of redeemable preference shares of a joint venture 620,923 67,236 - -

Redemption of redeemable preference shares of subsidiaries - - 973,525 251,687

Repayment from joint ventures 30,427 158,534 - -

Additions to:

- property, plant and equipment 15.2 (148,727) (125,949) - -

- land held for property development (110,777) (71,168) - -

- investment properties (516,545) (330,634) - -

Equity contribution to subsidiaries - - (182,783) (529,138)

Repayments from subsidiaries - - 20 468,331

Net cash (used in)/from investing activities (70,796) (240,467) 542,610 (269,512)



180


Group Company

Note2020

RM’0002019

RM’0002020

RM’0002019

RM’000

CASH FLOWS FROM FINANCING ACTIVITIES

Consideration paid for acquisition of additional shares from non-controlling interests (16) (98) (16) (98)

Advances from subsidiaries - - 583,004 2,398,542

Payments of lease interest (145) - - -

Payments of lease liabilities (1,575) - - -

Interest paid (387,187) (395,059) (44,786) (41,945)

Dividend paid (165,184) (275,307) (165,184) (275,307)

Dividend paid to non-controlling interests (5,952) (17,984) - -

Banking facilities fees paid (9,020) (7,828) - -

Drawdown of borrowings 1,213,587 1,573,995 - -

Repayment of borrowings (1,661,057) (2,508,490) (225,000) (200,000)

Proceeds from issuance of preference shares to non-controlling interests in a subsidiary - 4,371 - -

Repayment of advances to non-controlling interests - (1,180) - -

Repayment to subsidiaries - - (864,419) (1,261,352)

Net cash (used in)/from financing activities (1,016,549) (1,627,580) (716,401) 619,840

Net (decrease)/increase in cash and cash equivalents (110,333) (1,111,452) (178,223) 344,421

Cash and cash equivalents at beginning of financial year 1,576,885 2,683,320 668,379 323,958

Effect of exchange rate changes 5,433 5,017 - -

Cash and cash equivalents at end of financial year 37 1,471,985 1,576,885 490,156 668,379



181

RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES:

A reconciliation between the opening and closing balance in the financial position for liabilities arising from financing activities is as follows:

Group

Lease liabilities

RM’000Borrowings

RM’000

Amounts due to non-controlling

interestsRM’000

At 1 July 2019, as previously reported - 11,326,461 -Effect on adoption of MFRS 16 (Note 45) 1,694 - -At 1 July 2019, as restated 1,694 11,326,461 -

Cash flows:Drawdown of borrowings - 1,213,587 -Repayment - (1,661,057) -Banking facilities fees paid - (9,020) -Interest paid - (387,187) -Payment of lease interest (145) - -Payment of lease liabilities (1,575) - -

Non-cash changes:Foreign currency translation differences 4 25,882 -Interest expense capitalised (Note 11) - 382,560 -Interest expense 145 - -New leases 3,367 - -Others - 3,950 -At 30 June 2020 3,490 10,895,176 -

At 1 July 2018 - 11,953,066 9,934

Cash flows:Drawdown of borrowings - 1,573,995 -Repayment - (2,508,490) (1,180)Banking facilities fees paid - (7,828) -Interest paid - (395,059) -

Non-cash changes:Foreign currency translation differences - 300,711 -Interest expense capitalised (Note 11) - 393,537 246Amortisation of banking facilities fees - 10,212 -Issuance of redeemable preference shares to non-controlling interests

in a subsidiary - - (9,000)Others - 6,317 -At 30 June 2019 - 11,326,461 -



182


RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES: (CONTINUED)

A reconciliation between the opening and closing balance in the financial position for liabilities arising from financing activities is as follows: (continued)

CompanyBorrowings

RM’000

Amounts due to subsidiaries

RM’000

At 1 July 2019 445,815 689,411

Cash flows:

Advances from subsidiaries - 583,004

Repayment (225,000) (864,419)

Interest paid (19,001) (25,785)

Non-cash changes:

Foreign currency translation differences 6,822 (295)

Interest expense 17,455 25,785

Equity contribution - 18,766

Others (1,520) -

At 30 June 2020 224,571 426,467

At 1 July 2018 637,921 373,927

Cash flows:

Advances from subsidiaries - 2,398,542

Repayment (200,000) (1,261,352)

Interest paid (28,896) (13,049)

Non-cash changes:

Foreign currency translation differences 8,984 -

Interest expense 28,891 13,049

Equity contribution - 50,301

Dividend - (872,963)

Others (1,085) 956

At 30 June 2019 445,815 689,411



183

1 CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

Both the registered office and principal place of business of the Company are located at Level 29, IOI City Tower 2, Lebuh IRC, IOI Resort City, 62502 Putrajaya, Wilayah Persekutuan (Putrajaya), Malaysia.

The ultimate holding company is Vertical Capacity Sdn. Bhd., which is incorporated in Malaysia.

2 PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries, associate and joint ventures are set out in Note 44 to the financial statements.

There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.

3 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

3.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the provisions of the Companies Act 2016 in Malaysia.

3.2 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.

The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Group’s and Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5 to the financial statements.

3.3 Presentation currency

The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency and all financial information presented in RM are rounded to the nearest thousand (RM’000), except where otherwise stated.

NOTES TO THE FINANCIAL STATEMENTS30 JUNE 2020

184



4 ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs

4.1 Standards, amendments to published standards and interpretations that are effective

The Group and the Company have applied the following amendments for the first time for the financial year beginning on 1 July 2019:

• MFRS 16 ‘Leases’• Amendments to MFRS 9 ‘Prepayment Features with Negative Compensation’• Amendments to MFRS 119 ‘Plan Amendment, Curtailment or Settlement’• Amendments to MFRS 128 ‘Long Term Interests in Associates and Joint Ventures’• Amendments to MFRS 3 and MFRS 11 ‘Previously Held Interest in a Joint Operation’• Amendments to MFRS 112 ‘Income Tax Consequences of Payment on Financial Instruments Classified as Equity’• Amendments to MFRS 123 ‘Borrowing Costs Eligible for Capitalisation’• IC Interpretation 23 ‘Uncertainty Over Income Tax Treatments’

The adoption of the new MFRSs and amendments to MFRSs did not have any significant impact to the Group’s and the Company’s results and financial position except for MFRS 16. The impacts arising from the adoption is disclosed in Note 45 to the financial statements.

4.2 New MFRSs that have been issued but not yet effective and applicable to the Group and to the Company

A number of new standards and amendments to standards and interpretations are effective for financial year beginning after 1 July 2020. None of these is expected to have a significant effect on the financial statements of the Group and of the Company.

4.3 IFRIC Agenda Decision

In March 2019, the IFRS Interpretation Committee (‘IFRIC’) published an agenda decision on borrowings costs confirming, receivables, contract assets and inventories for which revenue is recognised over time are non-qualification assets. On 20 March 2019, the Malaysian Accounting Standard Board announced that an entity shall apply the change in accounting policy as a result of this Agenda Decision to financial statements of annual periods beginning on or after 1 July 2020.

The Group is assessing the impact on the change in accounting policy pursuant to IFRIC agenda decision on borrowing costs incurred on property under construction where control is transferred over time.


185

5 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:

5.1 Revenue and cost recognition from property development activities Revenue is recognised as and when the control of the asset is transferred to the customers and it is probable that the Group

will collect the consideration to which the Group will be entitled in exchange for the asset that will be transferred to the customer. Control of the asset may transfer over time or at a point in time depending on the terms of the contract and the applicable laws governing the contract.

If control of the asset transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of a performance obligation based on the physical proportion of contract work-to-date certified by professional consultants.

Significant judgement is required in determining the progress towards complete satisfaction of a performance obligation based on the certified work-to-date corroborated by the level of completion of the construction based on actual costs incurred to-date over the estimated total property development costs to completion. The estimated total property development costs to completion are based on approved budgets, which require assessment and judgements to be made on changes in, for example, work scope, costs and costs to completion.

In making these judgements, management relies on past experience and the work of specialists.

5.2 Taxation

The Group is subject to income taxes of different jurisdictions. Significant judgement is required in determining the estimated taxable income, capital allowances and deductibility of certain expenses based on the interpretation of the tax laws and legislations during the estimation of the provision for income taxes. The Group recognised liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome is different from the amounts that were initially recorded, such differences would impact the income tax and deferred income tax provisions, where applicable, in the period in which such determination is made.

5.3 Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unutilised tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit would be available against which the unutilised tax losses and unabsorbed capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that could be recognised, based upon the likely timing and level of future taxable profits.

5.4 Fair value of investment properties

The valuations of the Group’s completed investment properties were performed by independent external valuers.

There are complexities in determining the fair value of the completed investment properties, which involve significant estimates and judgements in determining the appropriate valuation methodologies and estimating the underlying assumptions to be applied. The list of significant unobservable inputs and its sensitivity analysis are disclosed in Note 18 to the financial statements.

186



6 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements by the Group’s entities, unless otherwise stated.

6.1 Basis of consolidation

6.1.1 Subsidiaries

Subsidiaries are entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss (see Note 6.4 on goodwill).

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the carrying amount of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date, any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.


187

6 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

6.1 Basis of consolidation (continued)

6.1.1 Subsidiaries (continued)

Inter-company transactions, balances and unrealised gains on transactions between entities of the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of non-wholly owned subsidiaries are presented separately in the consolidated statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of financial position respectively.

6.1.2 Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in equity attributable to owners of the Group.

6.1.3 Disposal of subsidiaries

When the Group ceases to consolidate because of a loss of control, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Gains or losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the sold subsidiaries.

188





6.1.4 Joint ventures

A joint venture is a joint arrangement whereby the joint ventures have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the joint operators have rights to the assets and obligations for the liabilities, relating to the arrangement.

Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated statement of financial position. Under the equity method, the investment in a joint venture is initially recognised at cost inclusive of goodwill, if any, and adjusted thereafter to recognise the Group's share of the post-acquisition results and other changes in the net assets of the joint venture based on their latest audited financial statements. Dividends received or receivable from a joint venture are recognised as a reduction in the carrying amount of the investment. Where necessary, adjustments are made to the financial statements of joint ventures used by the Group in applying the equity method to ensure consistency of accounting policies with those of the Group. When the Group's share of losses in a joint venture equals or exceeds its interests in the joint venture, including any long-term interests that, in substance, form part of the Group's net investment in the joint venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.

The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. An impairment loss is recognised for the amount by which the carrying amount of the joint venture exceeds its recoverable amount. The Group presents the impairment loss adjacent to ‘share of results of joint ventures’ in the statement of profit or loss.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When the Group ceases to equity account its joint venture because of a loss of joint control, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a financial asset. In addition, any amount previously recognised in other comprehensive income in respect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a joint venture is reduced but joint control is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.


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6.1.5 Associates

Associates are entities over which the Group has significant influence, which the Group has the power to participate in the financial and operating policy decisions but not control over those policy.

Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment in an associate is initially recognised at cost, and adjusted thereafter to recognise the Group's share of the post-acquisition results and other changes in the net assets of the associate based on their latest audited financial statements. Dividends received or receivable from an associate are recognised as a reduction in the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interests in the associate, including any long-term interests that, in substance, form part of the Group's net investment in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. The Group’s investment in associate includes goodwill identified on acquisition.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. An impairment loss is recognised for the amount by which the carrying amount of the associate exceeds its recoverable amount. The Group presents the impairment loss adjacent to ‘share of results of associates’ in the statement of profit or loss.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When the Group ceases to equity account its associate because of a loss of significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a financial asset. In addition, any amount previously recognised in other comprehensive income in respect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

Dilution gains and losses arising in investments in associates are recognised in profit or loss.

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6.1.6 Investments in subsidiaries, joint ventures and associates in separate financial statements

In the Company’s separate financial statements, investments in subsidiaries, joint ventures and associates are carried at cost less accumulated impairment losses. On disposal of investments in subsidiaries, joint ventures and associates, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

The amounts due from subsidiaries, joint ventures and associate of which the Company does not expect repayment in the foreseeable future are considered as part of the Company’s net investments in the respective investees.

6.2 Property, plant and equipment and depreciation

Property, plant and equipment are initially stated at cost less accumulated depreciation and impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Cost also includes borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (refer to Note 6.13.2 on borrowing costs).

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred.

Freehold land is not depreciated as it has an infinite life. Other property, plant and equipment are depreciated on the straight-line method to allocate the cost to their residual values over their estimated useful lives, summarised as follows:

Golf course development expenditure 2%Plantation expenditure 4% - 8%Buildings and improvements 2% - 10%Plant and machinery 4% - 20%Motor vehicles 10% - 20%Furniture, fittings and equipment 5% - 33%

Assets under construction are only depreciated when the assets are ready for their intended use.

Accounting policy applied from 1 July 2019

On 1 July 2019, leased assets (including leasehold land) were reclassified to right-of-use assets and it is presented within property, plant and equipment in the statement of financial position (refer to Note 6.6 on leases).

Accounting policy applied until 30 June 2019

Leasehold land classified as finance lease is amortised in equal instalments over the respective lease periods. Leasehold land is depreciated on the straight-line method to allocate the cost to their residual values over their estimated useful lives, summarised as follows:

Leasehold land 2%


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6.2 Property, plant and equipment and depreciation (continued)

At the end of the reporting period, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. See accounting policy Note 6.5 on impairment of non-financial assets.

Gain and losses on disposals are determined by comparing net disposal proceeds with carrying amount and are included in profit or loss.

6.3 Investment properties

Investment properties, comprising principally freehold land and buildings and leasehold land, are held for long term rental yields or for capital appreciation or both, and are not occupied by the Group.

Investment property is measured initially at its cost, including related transaction costs.

After initial recognition, investment property is carried at fair value. Investment properties of the Group are measured at fair value except for investment properties under construction which are measured at cost until either the fair value becomes reliably determinable or when construction is completed, whichever is earlier. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods, such as recent prices on less active markets or discounted cash flow projections. Valuations are performed as of the reporting date by professional valuers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the investment property being valued.

The fair value of investment property reflects, among other things, rental income from current leases and other assumptions that market participants would make when pricing the property under current market conditions.

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

Changes in fair values are recognised in profit or loss. Investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use.

Where the Group disposes of a property at fair value in an arm’s length transaction, the carrying amount immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in profit or loss as a net gain/loss from fair value adjustment on investment property.

If a property undergoes a change in use and becomes an investment property, any difference resulting between the carrying amount of the property and the fair value of such investment property at the date of transfer is recognised in accordance with the applicable MFRS. Its fair value at the date of reclassification becomes its cost for subsequent accounting purposes.

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6.4 Goodwill

Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed on the acquisition date. If the fair value of consideration transferred, the amount of non-controlling interest and the fair value of previously held interest in the acquiree are less than the fair value of the net identifiable assets of the acquiree, the resulting gain is recognised in profit or loss.

Goodwill is not amortised but it is tested for impairment annually and whenever there is an indication that it might be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at operating segment level. The carrying amount of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

6.5 Impairment of non-financial assets

Assets that have an indefinite useful life, for example goodwill or intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the non-financial asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For purposes of impairment testing, cash generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

The impairment loss is charged to profit or loss. Impairment loss on goodwill is not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in profit or loss.


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6.6 Leases

Accounting policies applied from 1 July 2019

(a) Accounting by lessee

From 1 July 2019, leases are recognised as right-of-use (“ROU”) assets and a corresponding liability at the date on which the leased assets are available for use by the Group.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of properties for which the Group is a lessee, it has elected the practical expedient provided in MFRS 16 not to separate lease and non-lease components. Both components are accounted for as a single lease component and payments for both components are included in the measurement of lease liability.

Lease term

In determining the lease term, the Group considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options are only included in the lease term if the lease is reasonably certain to be extended.

The Group reassesses the lease term upon the occurrence of a significant event or change in circumstances that is within the control of the Group and affects whether the Group is reasonably certain to exercise an option not previously included in the determination of lease term, or not to exercise an option previously included in the determination of lease term. A revision in lease term results in remeasurement of the lease liabilities.

ROU assets

ROU assets are initially measured at cost comprising the following:

• the amount of the initial measurement of lease liability;• any lease payments made at or before the commencement date less any lease incentive received; and• any initial direct costs.

ROU assets that are not investment properties are subsequently measured at cost, less accumulated depreciation and accumulated impairment. The ROU assets are generally depreciated over the shorter of the lease term on a straight-line basis.

The lease term of the right-of-use assets are determined as follows:

Leasehold land 40 - 99 yearsBuildings and improvements 1 - 6 yearsPlant and machinery 2 - 4 years

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6.6 Leases (continued)

Accounting policies applied from 1 July 2019 (continued)

(a) Accounting by lessee (continued)

If the Group is reasonably certain to exercise a purchase option, the ROU asset is depreciated over the underlying asset’s useful life. In addition, the ROU assets are adjusted for certain remeasurement of the lease liabilities.

The Group presents ROU assets that meet the definition of investment property in the statement of financial position as investment property. ROU assets that are not investment properties are presented within property, plant and equipment in the statement of financial position.

The Group applies the fair value model to ROU assets that meet the definition of investment property of MFRS 140 consistent with those investment property owned by the Group (refer to Note 6.3 on investment properties).

Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments that are not paid at that date. The lease payments include the following:

• fixed payments, including in-substance fixed payments;• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the

commencement date;• the exercise price under a purchase option that the Group is reasonably certain to exercise; and• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing is used. This is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the ROU in a similar economic environment with similar term, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The Group presents the lease liabilities as a separate line item in the statement of financial position. Finance cost on the lease liability is presented within the interest expense in profit or loss.

Reassessment of lease liabilities

The Group is also exposed to potential future increases in variable lease payments that depend on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is remeasured and adjusted against the ROU assets.


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Accounting policies applied from 1 July 2019 (continued)

(a) Accounting by lessee (continued)

Short term leases and leases of low value assets

Short term leases are leases with a lease term of 12 months or less. Low value assets comprise office equipment and office furniture. All short term leases and low value assets are recognised on a straight-line basis as an expense in profit or loss.

(b) Accounting by lessor

As a lessor, the Group determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset to the lessee. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

Finance leases

The Group classifies a lease as a finance lease if the lease transfers substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee.

The Group derecognises the underlying asset and recognises a receivable at an amount equal to the net investment in a finance lease. Net investment in a finance lease is measured at an amount equal to the sum of the present value of lease payments from lessee and the unguaranteed residual value of the underlying asset. Initial direct costs are also included in the initial measurement of the net investment. The net investments is subject to MFRS 9 impairment (refer to Note 6.22 on impairment of financial assets and financial guarantee contracts). In addition, the Group reviews regularly the estimated unguaranteed residual value.

Lease income is recognised over the term of the lease using the net investment method so as to reflect a constant periodic rate of return. The Group revises the lease income allocation if there is a reduction in the estimated unguaranteed residual value.

When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method so as to reflect a constant periodic rate of return on the balance outstanding.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease classification of a sublease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.

Operating leases

The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “revenue”.

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Accounting policies applied until 30 June 2019

(a) Accounting by lessee

Finance lease

Assets acquired under a finance lease which transfer substantially to the Group all the risks and rewards incidental to ownership are recognised initially at amounts equal to the lower of its fair value and the present value of the minimum lease payments of the leased assets. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases if this is practicable to determine; if not, the incremental borrowing rate of the Group is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations, net of finance charges, are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets as disclosed in Note 6.2 to the financial statements.

The minimum lease payments are allocated between finance expenses and the reduction of the outstanding liability. The finance expenses are recognised in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining finance lease obligations.

Operating leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on the straight-line basis over the lease period.

Initial direct costs incurred by the Group in negotiating and arranging operating leases are capitalised as prepayments and recognised in profit or loss over the lease term on a straight-line basis.

The lump-sum upfront lease payments made represent prepaid lease payments and are amortised over the lease term on a straight-line basis, except for leasehold land that is classified as an investment property or an asset held under property development.

(b) Accounting by lessor

Operating leases

When assets are leased out under an operating lease, the asset is included in the statement of financial position based on the nature of the asset. Lease income is recognised over the term of the lease on a straight-line basis.


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6.7 Inventories

6.7.1 Land held for property development

Land held for property development consist of land on which no significant development work has been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is carried at the lower of cost and net realisable value.

The cost of land held for property development consists of cost associated with the acquisition of land. These costs include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Land held for property development is transferred to property development costs under current assets when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

6.7.2 Property development costs

Property development costs comprise costs associated with the acquisition of land and all costs directly attributable to development activities less cumulative amounts recognised as expense in the profit or loss for property under development are carried in the statement of financial position as property development costs. The property development cost is subsequently recognised as an expense in profit or loss as and when the control of the asset is transferred to the customer.

Property development cost of unsold unit is transferred to completed development properties once the development is completed.

6.7.3 Completed development properties

The cost of completed development properties is stated at the lower of cost and net realisable value. Cost includes cost associated with the acquisition of land, all related costs incurred subsequent to the acquisition necessary to prepare the land for its intended use, related development costs to projects, direct building costs and other costs of bringing the development properties to their present location and condition.

6.7.4 Finished goods, raw materials and consumable stores

Finished goods, raw materials and consumable stores are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Cost comprises the original cost of purchase plus the cost of bringing the inventories to their intended location and condition. The cost of produce and finished goods includes the cost of raw materials, direct labour and a proportion of production overheads.

Net realisable value is the estimated selling price in the ordinary course of business, less costs to completion and the estimated costs necessary to make the sale.

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6.8 Trade and other receivables

Trade receivables are amounts due from customers for properties and merchandise sold or services performed in the ordinary course of business. Other receivables generally arise from transactions outside the usual operating activities of the Group and of the Company. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment (refer to Note 6.22 on impairment of financial assets and financial guarantee contracts).

6.9 Contract assets and contract liabilities

Contract asset is the right to consideration for goods or services transferred to the customers. In the context of property development and construction contracts, contract asset is the excess of cumulative revenue earned over the billings to date. Contract asset is stated at cost less accumulated impairment.

Contract liability is the obligation to transfer goods or services to the customer for which the Group has received the consideration or billed the customer. In the context of property development and construction contracts, contract liability is the excess of the billings to date over the cumulative revenue earned. Contract liabilities include club membership fees, down payments received from customers and other deferred income where the Group and the Company have billed or collected the payment before the goods are delivered or services are provided to the customers.

6.10 Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments and short-term funds, which are readily convertible to cash and which are subject to an insignificant risk of changes in value.

6.11 Share capital

6.11.1 Classification

Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity.

6.11.2 Share issue costs

Costs directly attributable to the issue of new shares or options are deducted against equity.

6.11.3 Dividend distribution

Liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period.

Distributions to holders of an equity instrument is recognised directly in equity.


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6.11 Share capital (continued)

6.11.4 Purchase of own shares

Where any company within the Group purchases the Company’s equity instruments as a result of a share buy-back, the consideration paid, including any directly attributable costs, net of tax, is deducted from equity attributable to the owners of the Company as treasury shares until the shares are cancelled, reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable transaction costs and the related tax effects, is included in equity attributable to the owners of the Company.

6.11.5 Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; and

• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year and excluding treasury shares.

Diluted earnings per share

Diluted earnings per share adjusts the figures in the determination of basic earnings per share to take into account:

• the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and

• the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

6.12 Trade payables

Trade payables represent liabilities for goods or services provided to the Group and the Company prior to the end of financial year which are unpaid. Trade payables are classified as current liabilities when the Group and the Company expect to settle the liability in its normal operating cycle and the Group and the Company have no unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

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6.13 Borrowings and borrowing costs

6.13.1 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss within interest expense.

Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

6.13.2 Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the assets for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.


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6.14 Current and deferred tax

Tax expense for the period comprises current and deferred tax. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group’s subsidiaries, joint ventures and associates operate and generate taxable income.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. This liability is measured using the single best estimate of the most likely outcome.

Deferred tax is recognised using the liability method, providing for temporary differences between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.

Current and deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Unutilised investment tax allowance, being tax incentive that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against which the unutilised tax incentive can be utilised.

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6.15 Employee benefits

6.15.1 Short term employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as trade and other payables in the statement of financial position.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

6.15.2 Defined contribution plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees benefits relating to employee service in the current and prior periods. The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and its foreign subsidiaries make contributions to their respective countries’ statutory pension schemes.

The Group’s contributions to defined contribution plans are charged to profit or loss in the period to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

6.15.3 Share-based payments

Employee options

The Group operates an equity-settled, share-based compensation plan under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the options granted in exchange for the services of the employees are recognised as employee benefit expense with a corresponding increase to share option reserve within equity. The total amount to be expensed is determined by reference to the fair value of the options granted:

• including any market performance conditions (for example, an entity’s share price);• excluding the impact of any service and non-market performance vesting conditions (for example, profitability,

sales growth targets and remaining an employee of the entity over a specified time period); and• including the impact of any non-vesting conditions (for example, the requirement for employees to save or

holding of shares for a specific period of time).

Non-market vesting conditions and service conditions are included in assumptions about the number of options that are expected to vest.


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6.15 Employee benefits (continued)

6.15.3 Share-based payments (continued)

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of the reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to share option reserve in equity.

In circumstances where employees provide services in advance of the grant date, the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date.

When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital. When options are not exercised and lapsed, the share option reserve is transferred to retained earnings.

In its separate financial statements of the Company, the grant by the Company of options over its equity instruments to the employees of subsidiary in the Group is treated as a capital contribution to the subsidiary. The fair value of options granted to employees of the subsidiary in exchange for the services of the employees to the subsidiary are recognised as investment in subsidiary, with a corresponding credit to equity of the Company.

6.16 Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be

received and the Group will comply with all attached conditions. Under the capital approach, government grants relating to investment properties are credited to investment properties when the costs for which the benefit of the grant is intended to compensate are incurred.

Government grants relating to development costs are netted against its relevant development expenditure when the benefit of the grant is intended to compensate are incurred.

204




6.17 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

Where the Group expects a provision to be reimbursed by another party, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as finance cost.

6.18 Contingent assets and liabilities

The Group does not recognise contingent assets and liabilities other than those arising from business combinations, but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare case where there is a liability that cannot be recognised because it cannot be measured reliably. However, contingent liabilities do not include financial guarantee contracts.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.


205


6.19 Revenue recognition

6.19.1 Revenue from contracts with customers

Revenue which represents income arising in the course of the Group’s and the Company’s ordinary activities is recognised by reference to each distinct performance obligation promised in the contract with customer when or as the Group and the Company transfer the control of the goods and services promised in a contract and the customer obtains control of the goods or services. Depending on the substance of the respective contract with customer, the control of the promised goods or services may transfer over time or at point in time.

A contract with customer exists when the contract has commercial substance. The Group, the Company and the customer have approved the contract and intend to perform their respective obligations, the Group’s, the Company’s and the customer’s rights regarding the goods or services to be transferred and the payment terms can be identified, and it is probable that the Group and the Company will collect the consideration to which it will be entitled to in exchange of those goods or services.

(a) Revenue from property development and construction contracts

Property development, comprising residential and commercial properties are specifically identified by its plot, lot or parcel number as set out in the sale and purchase agreement.

Contracts with customers include multiple promises to customers and therefore accounted for as separate performance obligations. In this case, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. When these are not directly observable, they are estimated based on expected cost plus margin.

Revenue is recognised as and when control of the asset is transferred to the customer and it is probable that the Group would collect the consideration to which it will be entitled in exchange for the asset that would be transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the performance of the Group does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If control of the asset transfers over time, revenue is recognised over the period of the contract using the input method by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset.

The Group recognise revenue over time using the input method, which is based on the actual cost incurred to date on the property development project as compared to the budgeted cost for the respective development projects.

206




6.19 Revenue recognition (continued)

6.19.1 Revenue from contracts with customers (continued)

(b) Sales of completed development properties

The Group recognises sales at a point in time for the sale of completed development properties, when the control of the properties has been transferred to the purchasers, being when the properties have been completed and delivered to the customers and it is probable that the Group will collect the considerations to which it would be entitled to in exchange for the assets sold.

(c) Hotel operations

Hotel revenue represent income derived from room rentals, sales of food and beverage and other hotel related income are recognised net of discount upon delivery of products and customer acceptance, if any, or performance of services.

(d) Club subscription fees

Club subscription fees, which are not refundable, are recognised over time as income when earned.

(e) Sales of goods, services and rights of enjoyment

Revenue from sale of goods is recognised based on invoice value of goods sold and revenue from services is recognised net of discounts as and when services are performed.

Entrance fees collected for rights of enjoyment of facilities are recognised when services are rendered.

(f) Others

Others revenue comprises of management fees, building maintenance fees, landscaping services and sales of plantation produce. Revenue are recognised when services are rendered or upon delivery of products and customer acceptance.

6.19.2 Lease income

Lease income from operating leases is recognised on a straight-line basis over the lease term. The aggregate cost of incentives provided to the lessee is recognised as a reduction of rental income over the lease term on a straight-line basis.

6.19.3 Dividend income

Dividend income is recognised when shareholder’s right to receive payment is established.

6.19.4 Interest income

Interest income is recognised using the effective interest method.


207


6.20 Foreign currencies

6.20.1 Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

6.20.2 Translation and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. However, exchange differences are deferred in other comprehensive income when they arose from qualifying cash flow or net investment hedges or are attributable to items that form part of the net investment in a foreign operation.

6.20.3 Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

• income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

• all resulting exchange differences are recognised as a separate component of other comprehensive income.

208




6.20 Foreign currencies (continued)

6.20.3 Group companies (continued)

Goodwill and fair value adjustments arising on the acquisitions of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income.

On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the exchange differences relating to that foreign operation recognised in other comprehensive income and accumulated in the separate component of equity are reclassified to profit or loss, as part of the gain or loss on disposal. In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in associates or joint ventures that do not result in the Group losing significant influence or joint control) the proportionate share of the accumulated exchange difference is reclassified to profit or loss.

6.21 Financial instruments

6.21.1 Financial assets

(a) Classification

The Group and the Company classify its financial assets in the following measurement categories:

(i) those be measured subsequently at fair value (either through other comprehensive income or through profit or loss); and

(ii) those to be measured at amortised costs

The Group and the Company reclassify debt investments when and only when its business model for managing those assets changes.

(b) Recognition and initial measurement

Regular way purchases and sales of financial assets are recognised on trade date, the date on which the Group and the Company commit to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group and the Company have transferred substantially all the risks and rewards of ownership.


209


6.21 Financial instruments (continued)

6.21.1 Financial assets (continued)

(c) Measurement

At initial recognition, the Group and the Company measure a financial asset at its fair value plus, in the case of financial asset not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s and the Company’s business model for managing the asset and the cash flow characteristics of the asset. The Group reclassified debt investments when and only when its business model for managing those assets changes.

The Group classifies its debt instruments at amortised cost. Assets that are held for collection of contractual cash flows where those cash flows represent solely payment of principal and interest are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate method. Any gain or loss arising from derecognition is recognised directly in profit or loss together with foreign currency exchange gains or losses. Impairment losses are recognised in the statement of profit or loss.

Equity instruments

The Group and the Company subsequently measure all equity investments at fair value. Where the Group’s and the Company’s management have elected to present fair value gains or losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s and the Company’s right to receive payments is established. Other net gains and losses are recognised in other comprehensive income.

Changes in the fair value of financial assets at FVTPL are recognised in profit or loss as applicable.

210





6.21.2 Financial liabilities

Financial liabilities are initially recognised at fair value plus directly attributable transaction costs. The Group and the Company classify financial instruments as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into other financial liabilities after initial recognition for the purpose of subsequent measurement:

(i) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as fair value through profit or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process.

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Any difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

All financial liabilities of the Group and of the Company are measured at amortised cost except for financial liabilities at fair value through profit or loss, which are held for trading (including derivatives) or designated at fair value through profit or loss upon initial recognition.

At the end of each reporting period, the Group and the Company shall assess whether its recognised insurance liabilities are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss.

6.21.3 Financial guarantee contracts

The Group and the Company designate corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in MFRS 4 ‘Insurance Contracts’. The Group and the Company recognise these insurance contracts as insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.


211



6.21.4 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy.

6.21.5 Derivative and hedging activities

(i) Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group and the Company designate certain derivatives as hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).

The Group and the Company document at the inception of the hedging transaction, the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group and the Company also document its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

A derivative financial instrument is carried as an asset when the fair value is positive and as a liability when the fair value is negative. The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than twelve (12) months, and as a current asset or liability when the remaining maturity of the hedged item is less than twelve (12) months.

(ii) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in cash flow hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.

212




6.22 Impairment of financial assets and financial guarantee contracts

The Group and the Company recognise loss allowance for expected credit losses on financial assets measured at amortised cost, debt investments measured at fair value through other comprehensive income, contract assets, financial guarantee contracts. Expected credit losses (“ECL”) are probability-weighted estimate of credit losses.

ECL represent a probability-weighted estimate of the difference between present value of cash flow according to contract and present value of cash flows that the Group and the Company expect to receive, over the remaining life of the financial instrument. For financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Group and the Company expect to receive from the holder, the debtor or any other party.

The measurement of ECL reflects:

• An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;• The time value of money; and• Reasonable and supportable information that is available without undue cost or effort at the reporting date about past

events, current conditions and forecasts of future economic conditions.

(a) General 3-stage approach for other receivables, amounts due from subsidiaries, amounts due from joint ventures and amount due from associate

At each reporting date, the Group and the Company measure ECL through loss allowance at an amount equal to 12 months ECL if credit risk on a financial instrument or a group of financial instruments has not increased significantly since initial recognition. For all other financial instruments, a loss allowance at an amount equal to lifetime ECL is required.

(b) Simplified approach for trade receivables and contract assets

The Group and the Company apply the MFRS 9 simplified approach to measure ECL which uses a lifetime ECL for all trade receivables and contract assets.

The Group and the Company measure loss allowances at an amount equal to lifetime expected credit loss, except for debt securities that are determined to have low credit risk at the reporting date, cash and bank balance and other debt securities for which credit risk has not increased significantly since initial recognition, which are measured at 12-month expected credit loss. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime expected credit loss.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit loss, the Group and the Company consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s and the Company’s historical experience and informed credit assessment and including forward-looking information, where available.


213


6.22 Impairment of financial assets and financial guarantee contracts (continued) Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected

life of the asset, while 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within the 12 months after the reporting date. The maximum period considered when estimating expected credit losses is the maximum contractual period over which the Group and the Company are exposed to credit risk.

An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of debt investments measured at fair value through other comprehensive income is recognised in other comprehensive income and the allowance account is recognised in other comprehensive income.

At each reporting date, the Group and the Company assess whether financial assets carried at amortised cost and debt securities at fair value through profit or loss are credit impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The gross carrying amount of a financial asset is written off (either a portion or entirety) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group or the Company determine that the debtors do not have assets or source of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s or the Company’s procedures for recovery amounts due.

6.23 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the Board of Directors that makes strategic decisions.

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segments provide products or services that are subject to risk and returns that are different from those of other business segments.

Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expenses, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process.

214




6.24 Fair value measurements

The fair value of an asset or a liability, (except for lease transactions) is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

The Group measures the fair value of an asset or a liability by taking into account the characteristics of the asset or liability if market participants would take these characteristics into account when pricing the asset or liability. The Group has considered the following characteristics when determining fair value:

(a) The condition and location of the asset; and

(b) Restrictions, if any, on the sale or use of the assets.

The fair value measurement for a non-financial asset takes into account the ability of the market participant to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The fair value of a financial or non-financial liability or an entity’s own equity instrument assumes that:

(a) A liability would remain outstanding and the market participant transferee would be required to fulfil the obligation. The liability would not be settled with the counterparty or otherwise extinguished on the measurement date; and

(b) An entity’s own equity instrument would remain outstanding and the market participant transferee would take on the rights and responsibilities associated with the instrument. The instrument would not be cancelled or otherwise extinguished on the measurement date.

6.25 Reorganisation debit reserve

Reorganisation debit reserve arose from the reverse acquisition of the Company by IOI Properties Berhad in the previous financial years pursuant to MFRS 3.


215

7 REVENUE

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Revenue from contracts with customers (Note 7.1) 1,795,550 1,842,554 - -

Revenue from other sources

- Lease income 320,796 354,960 - -

- Dividend income - - 11,000 889,847

Total revenue 2,116,346 2,197,514 11,000 889,847

7.1 Disaggregation of revenue from contracts with customers

Revenue from contracts with customers is disaggregated in the table below by primary geographical market, major products and service lines and timing of revenue recognition.

Group

2020RM’000

2019RM’000

Primary geographical markets

Malaysia 990,879 1,259,095

People’s Republic of China 789,402 531,818

Singapore 15,269 51,641

Revenue from contract with customers 1,795,550 1,842,554

Major products and service lines

Revenue from property development

- Ongoing development properties 1,125,617 943,117

- Completed development properties 512,836 691,465

1,638,453 1,634,582

Revenue from hospitality and leisure

- Hotel and hospitality services 126,883 167,455

- Leisure 23,187 30,562

150,070 198,017

Others

- Management fees 5,007 8,925

- Others 2,020 1,030

7,027 9,955


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7 REVENUE (CONTINUED)

7.1 Disaggregation of revenue from contracts with customers (continued)

Group

2020RM’000

2019RM’000

Timing of revenue recognition

- Over time 1,130,624 952,042

- Point in time 664,926 890,512


8 OPERATING PROFIT/(LOSS)

Group Company

2020 RM’000

2019RM’000

2020RM’000

2019RM’000

Operating profit/(loss) has been arrived at after charging:

Auditors’ remuneration - statutory audit

- PricewaterhouseCoopers PLT 927 1,088 148 188

- Member firms of PricewaterhouseCoopers International Limited 221 160 - -

- Firms other than member firms of PricewaterhouseCoopers International Limited 57 36 - -

Non-audit services

- PricewaterhouseCoopers Malaysia 393 513 4 209

- Member firms of PricewaterhouseCoopers International Limited 19 317 - -

- Firms other than member firms of PricewaterhouseCoopers International Limited 45 78 - -

Bad debts written off 20 130 - -

Amortisation of prepaid lease payments (Note 16) - 2,115 - -

Depreciation of property, plant and equipment (Note 15) 42,873 38,731 - -

Fair value loss on investment properties (included in other operating expenses) (Note 18) 54,386 - - -


217

8 OPERATING PROFIT/(LOSS) (CONTINUED)

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Operating profit/(loss) has been arrived at after charging: (continued)

Inventories written down 3,100 - - -

Inventories written off 1 9 - -

Impairment losses on:

- interests in subsidiaries - - 410,603 60,083

- investment properties 50,379 - - -

- receivables (Note 26) 2,523 1,156 - -

Property development costs written down (Note 24) 24,755 - - -

Property, plant and equipment written off (Note 15) 2,615 1,023 - -

Property development costs* 752,392 761,410 - -

Realised loss on foreign currency translations 92 3,350 - -

Unrealised loss on foreign currency translations 283 - - -

Management fees to:

- a subsidiary - - 1,056 872

- affiliates 8,980 6,321 - -

* The cost of inventories of the Group recognised as an expense during the financial year amounted to RM255,176,000 (2019: RM401,733,000) was

included in property development costs of the Group.

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Operating profit/(loss) has been arrived at after crediting:

Bad debts recovered 24 24 - -

Dividend income from subsidiaries in Malaysia - - 11,000 889,847

Fair value gain on:

- investment properties (included in other operating income) (Note 18) - 93,356 - -

- short term funds 717 1,316 717 1,316

Gain on disposal of:

- land from compulsory acquisitions 206 752 - -

- property, plant and equipment 214 129 - -

218



8 OPERATING PROFIT/(LOSS) (CONTINUED)

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Operating profit/(loss) has been arrived at after crediting: (continued)

Property project management services from:

- affiliates 826 3,797 - -

- a joint venture 634 1,397 - -

Management fees from:

- affiliates - (3) - -

Reversal of impairment losses on receivables (Note 26) 138 2,504 - -

Realised gain/(loss) on foreign currency translations:

- redemption of redeemable preference shares of subsidiaries - - 50,107 39,679

- subscription of redeemable preference shares in subsidiaries - - 636 -

- subscription of ordinary shares in a subsidiary - - (18) -

- others - - 4 2,581

Unrealised gain on foreign currency translations - 4,170 295 7,831

9 STAFF COSTS

The staff costs of the Group and of the Company are as follows:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Wages, salaries and others 153,584 194,286 1,282 1,358

Defined contribution plan 16,227 17,265 - -

169,811 211,551 1,282 1,358

Included in staff costs are remuneration of the key management personnel of the Group and of the Company as disclosed in Note 38.3 to the financial statements.


219

10 INTEREST INCOME

Group Company2020

RM’0002019

RM’0002020

RM’0002019

RM’000

Interest income from: - Deposits with financial institutions 9,554 17,369 4,973 336 - Short term funds 14,469 24,715 7,979 18,332 - Subsidiaries - - 12,188 18,404 - Joint ventures 10,514 10,993 - - - Housing development accounts 3,151 3,931 - - - Current accounts 7,813 7,329 414 692 - Stakeholders 3,210 3,529 - - - Others 1,429 1,070 - -

50,140 68,936 25,554 37,764

11 INTEREST EXPENSE

Group Company2020

RM’0002019

RM’0002020

RM’0002019

RM’000

Interest expenses on: - Borrowings - - 17,110 28,891 - Lease liabilities 145 - - - - Subsidiaries - - 25,785 13,049Amortisation of banking facilities fee - - 345 -

145 - 43,240 41,940 The Group’s total interest expense charged by the banks and non-controlling interests of RM382,560,000 and Nil

(2019: RM393,537,000 and RM246,000) respectively have been capitalised as part of the costs of qualifying assets as disclosed in Notes 15, 17, 18 and 24 to the financial statements.

12 TAXATION

Group Company2020

RM’0002019

RM’0002020

RM’0002019

RM’000

Current year tax expense - Malaysian income taxation 123,346 133,310 - 2,790 - Foreign taxation 65,643 253,977 - - - Deferred taxation (Note 23) 235,198 77,089 - -

424,187 464,376 - 2,790Prior years - Malaysian income taxation 1,706 2,056 (345) 189 - Foreign taxation 30,108 35,861 - - - Deferred taxation (Note 23) (18,324) (76,763) - -

13,490 (38,846) (345) 189 437,677 425,530 (345) 2,979

220



12 TAXATION (CONTINUED)

A numerical reconciliation between the tax at applicable tax rate to tax expense of the Group and of the Company are as follows:

Group Company2020

RM’0002019

RM’0002020

RM’0002019

RM’000


Tax calculated at the Malaysian tax rate of 24% 215,302 260,630 (88,431) 209,257

Tax effects in respect of:

Non-allowable expenses 37,974 50,974 107,014 22,792Non-taxable income (4,520) (8,061) (18,583) (229,259)Different tax rates arising from loss/(gain) from real

property investments 7,614 (13,069) - -Different tax rates in foreign jurisdictions 189,297 95,369 - -Unused tax losses and unabsorbed capital allowances

not recognised in loss-making subsidiaries 8,266 746 - -Utilisation of previously unutilised tax losses and

unabsorbed capital allowances (144) - - -Tax incentives and allowances (2,521) (150) - -Revision of real property gain tax rate - 103,180 - -Share of post-tax result of an associate (4,709) (481) - -Share of post-tax results of joint ventures (22,372) (24,762) - -

424,187 464,376 - 2,790Under/(Over) provision in prior years 13,490 (38,846) (345) 189

437,677 425,530 (345) 2,979

Malaysian income tax is calculated at the statutory tax rate of 24% (2019: 24%) of the estimated assessable profit for the financial year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Deferred tax is calculated on temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements using tax rates that are expected to apply when the related deferred tax is settled.

13 EARNINGS PER SHARE

(a) Basic

The basic earnings per ordinary share for the financial year is calculated based on the profit for the financial year attributable to owners of the Company divided by the weighted average number of ordinary shares in issue during the financial year, after taking into consideration of treasury shares held by the Company.

Group

2020RM’000

2019RM’000

Profit attributable to owners of the Company 455,693 661,290


221

13 EARNINGS PER SHARE (CONTINUED)

(a) Basic (continued)

The adjusted weighted average number of ordinary shares for the computation of earnings per ordinary share is arrived at as follows:

Group2020’000

2019’000

Weighted average number of ordinary shares in issue after deducting the treasury shares 5,506,145 5,506,145Basic earnings per ordinary share (sen) 8.28 12.01

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares. The Group’s ESOS had expired on 8 May 2020. The ESOS was not dilutive as the exercise price was higher than the current market price.

Group2020

RM’0002019

RM’000

Profit attributable to owners of the Company 455,693 661,290

The adjusted weighted average number of ordinary shares for the computation of dilutive earnings per ordinary share is arrived at as follows:

Group2020’000

2019’000

Adjusted weighted average number of ordinary shares in issue after deducting the treasury shares 5,506,145 5,506,145Diluted earnings per ordinary share (sen) 8.28 12.01

14 DIVIDENDS

Dividends declared and paid by the Company are as follows:

Company2020

RM’0002019

RM’000

Interim single tier dividend in respect of financial year ended 30 June 2019 of 3.0 sen per ordinary share, paid on 27 September 2019 165,184 -

Interim single tier dividend in respect of financial year ended 30 June 2018 of 5.0 sen per ordinary share, paid on 28 September 2018 - 275,307

165,184 275,307

On 28 August 2020, the Directors have declared an interim single tier dividend of 1.5 sen per ordinary share, amounting to RM82,592,181 in respect of the financial year ended 30 June 2020. The dividend will be payable on 23 October 2020 to shareholders whose names appear in the Record of Depositors and Register of Members of the Company at the close of business on 14 October 2020.

222



15 PROPERTY, PLANT AND EQUIPMENT

Group

Freeholdland

RM’000

Leaseholdland

RM’000

Golf coursedevelopmentexpenditure

RM’000

2020

At Cost

At beginning of financial year, as previously reported 130,379 1,488 78,565

Effect on adoption of MFRS 16 - (1,488) -

At beginning of financial year, as restated 130,379 - 78,565

Additions - - 518

Transfer to investment properties (Note 18) - - -

Written off - - (3,849)

Disposals - - -

Foreign currency translation differences - - -

At end of financial year 130,379 - 75,234

Group

Leaseholdland

RM’000


RM’000

Plantationexpenditure

RM’000

2020

Accumulated Depreciation

At beginning of financial year, as previously reported 69 14,268 300

Effect on adoption of MFRS 16 (69) - -

At beginning of financial year, as restated - 14,268 300

Current year depreciation charge - 1,676 173

Transfer to investment properties (Note 18) - - -

Written off - (1,283) -

Disposals - - -


At end of financial year - 14,661 473


223


RM’000

Buildingsand

improvementsRM’000

Plant and

machineryRM’000

MotorvehiclesRM’000

Furniture,fittings

andequipment

RM’000

Right-of-use

assetsRM’000

Construction-in-progress

RM’000Total

RM’000

2,591 924,303 83,457 15,691 85,545 - 146,924 1,468,943

- - - - - 71,041 - 69,553

2,591 924,303 83,457 15,691 85,545 71,041 146,924 1,538,496

1,453 13,656 1,411 125 5,205 3,367 127,177 152,912

- (231) (12,985) - (1,768) - - (14,984)

- - (538) (127) (1,399) - - (5,913)

- - - (1,630) (1,375) - - (3,005)

- 58 - 10 12 402 305 787

4,044 937,786 71,345 14,069 86,220 74,810 274,406 1,668,293

Buildingsand


Plant and

machineryRM’000


Furniture,fittings

andequipment

RM’000

Right-of-use

assetsRM’000

TotalRM’000

80,192 49,527 12,119 46,930 - 203,405

- - - - 12,386 12,317

80,192 49,527 12,119 46,930 12,386 215,722

23,265 4,786 1,269 7,957 3,747 42,873

(106) (5,452) - (687) - (6,245)

- (534) (127) (1,354) - (3,298)

- - (1,506) (1,330) - (2,836)

8 - 9 2 79 98

103,359 48,327 11,764 51,518 16,212 246,314

224



15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Group

Freeholdland

RM’000

Leaseholdland

RM’000


RM’000

2019

At Cost

At beginning of financial year 118,074 1,488 78,056

Additions - - 509

Transfer from investment properties (Note 18) 12,305 - -

Written off - - -

Disposals - - -


At end of financial year 130,379 1,488 78,565

Group

Leasehold land

RM’000


RM’000


RM’000

2019


At beginning of financial year 54 12,871 -

Current year depreciation charge 15 1,397 300

Written off - - -

Disposals - - -


At end of financial year 69 14,268 300


225


RM’000

Buildingsand


Plant and

machineryRM’000


Furniture,fittings

andequipment

RM’000

Construction-in-progress

RM’000Total

RM’000

2,554 915,974 80,377 14,656 80,614 45,319 1,337,112

37 8,900 3,216 2,327 9,037 101,923 125,949

- - - - - - 12,305

- (492) (122) (392) (3,935) - (4,941)

- - (14) (870) (162) - (1,046)

- (79) - (30) (9) (318) (436)

2,591 924,303 83,457 15,691 85,545 146,924 1,468,943

Buildingsand


Plant and

machineryRM’000


Furniture,fittings

andequipment

RM’000Total

RM’000

58,943 43,653 11,847 42,239 169,607

21,448 5,984 1,523 8,064 38,731

(193) (109) (392) (3,224) (3,918)

- (1) (836) (144) (981)

(6) - (23) (5) (34)

80,192 49,527 12,119 46,930 203,405

226




Group

2020RM’000

2019RM’000

Carrying Amount

Freehold land 130,379 130,379

Leasehold land - 1,419

Golf course development expenditure 60,573 64,297

Plantation expenditure 3,571 2,291

Buildings and improvements 834,427 844,111

Plant and machinery 23,018 33,930

Motor vehicles 2,305 3,572

Furniture, fittings and equipment 34,702 38,615

Right-of-use assets 58,598 -

Construction-in-progress 274,406 146,924

1,421,979 1,265,538

15.1 Right-of-use assets

Group

Leasehold land

RM’000

Buildings and


Plantand

machineryRM’000

TotalRM’000

2020

At Cost

At beginning of financial year, as previously reported - - - -

Effect on adoption of MFRS 16 69,347 1,358 336 71,041

At beginning of financial year, as restated 69,347 1,358 336 71,041

Additions - 3,075 292 3,367

Foreign currency translation differences 394 8 - 402

At end of financial year 69,741 4,441 628 74,810


At beginning of financial year, as previously reported - - - -

Effect on adoption of MFRS 16 12,386 - - 12,386

At beginning of financial year, as restated 12,386 - - 12,386

Current year depreciation charge 2,122 1,405 220 3,747

Foreign currency translation differences 77 2 - 79

At end of financial year 14,585 1,407 220 16,212

Carrying amount 55,156 3,034 408 58,598


227


15.2 Additions of property, plant and equipment

Group

2020RM’000

2019RM’000

Additions 152,912 125,949

Financed by lease liabilities (3,367) -

Interest expenses capitalised (818) -

Total cash outflow 148,727 125,949

16 PREPAID LEASE PAYMENTS

Group

2020RM’000

2019RM’000

At beginning of financial year, as previously reported 55,542 58,394

Effect on adoption of MFRS 16 (55,542) -

At beginning of financial year, as restated - 58,394

Amortisation during the financial year - (2,115)

Foreign currency translation differences - (737)

At end of financial year - 55,542

As at 1 July 2019, the Group’s prepaid lease payments of RM55,542,000 has been reclassified as right-of-use assets following the adoption of MFRS 16 as disclosed in Note 45 to the financial statements.

228



17 LAND HELD FOR PROPERTY DEVELOPMENT

Group

Freeholdland

RM’000

Long termleasehold

landRM’000

Development costs

RM’000Total

RM’000

2020

At Cost

At beginning of financial year 2,937,233 574,436 1,130,495 4,642,164

Additions - - 245,997 245,997

Transfer to property development costs (Note 24) (11,948) (1,584) (26,971) (40,503)

At end of financial year 2,925,285 572,852 1,349,521 4,847,658

2019

At Cost

At beginning of financial year 3,106,259 432,156 970,153 4,508,568

Additions - - 224,798 224,798

Reclassifications (144,259) 145,447 (1,188) -

Disposals (972) - (346) (1,318)

Transfer to property development costs (Note 24) (23,795) (3,167) (62,922) (89,884)

At end of financial year 2,937,233 574,436 1,130,495 4,642,164

Included in additions to land held for property development of the Group are interest expense capitalised and reversal of provision relates to affordable housing (as disclosed in Note 36.3 to the financial statements) during the financial year amounting to RM161,405,000 and RM26,185,000 (2019: RM157,753,000 and Nil) respectively.

Included in land held for property development of the Group are plantation land of RM666,775,000 (2019: RM656,852,000), which are intended to be used for property development. Currently, the subsidiaries are harvesting oil palm crops from the said land.

Certain titles of freehold land amounting to RM417,070,000 (2019: RM417,357,000), whereby the Group is the beneficiary owner, are registered under the name of the affiliate. The Group is in the midst of perfecting the land titles.


229

18 INVESTMENT PROPERTIES

Group

Freeholdland andbuildings

RM’000

Leasehold land andbuildings

RM’000Total

RM’000

2020

At beginning of financial year 4,287,343 9,385,067 13,672,410

Additions 127,292 569,073 696,365

Disposal (2,859) - (2,859)

Impairment loss - (50,379) (50,379)

Transfer from property, plant and equipment (Note 15) 8,739 - 8,739

Transfer from inventories - 23,840 23,840

Fair value adjustments (54,386) - (54,386)

Foreign currency translation differences - 40,973 40,973

At end of financial year 4,366,129 9,968,574 14,334,703

2019

At beginning of financial year 4,264,359 8,627,129 12,891,488

Additions 61,183 451,706 512,889

Disposal - (7,250) (7,250)

Transfer to property, plant and equipment (Note 15) (12,305) - (12,305)

Transfer to inventories (91,000) - (91,000)

Fair value adjustments 65,106 28,250 93,356

Foreign currency translation differences - 285,232 285,232

At end of financial year 4,287,343 9,385,067 13,672,410

Included in the above are:

Group

2020RM’000

2019RM’000

At fair value:

Freehold land and buildings 4,163,820 4,181,618

Leasehold land and buildings 125,840 102,000

4,289,660 4,283,618

At cost:

Investment properties under construction 10,045,043 9,388,792

At end of financial year 14,334,703 13,672,410

230



18 INVESTMENT PROPERTIES (CONTINUED)

Included in additions to investment properties of the Group were interest expense capitalised during the financial year amounting to RM179,820,000 (2019: RM182,255,000).

During the financial year, the Group has recognised impairment loss amounting to RM50,379,000 due to the recoverable amount (categorised as Level 3 in the fair value hierarchy) of the investment property being lower than its carrying amount as a result of challenging market conditions caused by the COVID-19 pandemic.

Right-of-use assets included in investment properties are leasehold land and buildings amounting to RM9,968,574,000.

Rental income generated from and direct operating expenses incurred on investment properties are as follows:

Group

2020RM’000

2019RM’000

Rental income 320,796 354,960

Direct operating expenses 91,589 100,431

The fair values of the above investment properties were estimated based on valuations by independent registered valuers, which were based on:

(i) market evidence of transaction prices for similar properties for certain properties in which the values are adjusted for differences in key attributes such as property size, location and quality of interior fittings under the comparison method.

(ii) receipts of contractual rentals, expected future market rentals, current market yields, void periods and maintenance requirements and approximate capitalisation rates under the investment method.

(iii) aggregate amount of the value of land component by comparison method, and the gross replacement cost of the buildings and other site improvements, allowing for depreciation under cost method.

The Group uses assumptions that are mainly based on market conditions existing at the end of each reporting period. The valuation updates by independent registered valuers are endorsed by the Board of Directors on an annual basis.

Fair value is determined through various valuation methodologies using Level 3 inputs (defined as unobservable inputs for asset or liability) in the fair value hierarchy of MFRS 13 Fair Value Measurement. Changes in fair value are recognised in the statement of profit or loss during the reporting period in which they are reviewed.

The Level 3 inputs or unobservable inputs include:

Term yield - the rate of return that the investment properties are expected to generate based on current passing rental including revision upon renewal of tenancies during the financial year;

Reversion yield - the rate of return that the investment properties are expected to generate upon expiry of term rental; and

Price per square foot (psf)

- estimated price psf for which a property should exchange on the date of valuation between a willing buyer and a willing seller.


231

18 INVESTMENT PROPERTIES (CONTINUED)

Significantunobservable inputs

Inter-relationship between significant unobservable inputs and fair value measurement

Impact of changesin key inputs to fair value*

2020RM’000

2019RM’000

Term and reversion yield Higher term and reversion yield rates, lower fair value 265,861 292,675

Price per square foot Higher price per square foot, higher fair value 72,460 77,760

* Changes in term and reversion yield rates by 50 basis points (2019: 50 basis point) and price per square foot by 10% (2019: 10%) are used as these are the key inputs subjected to changes in market conditions.

The fair value measurements as at 30 June 2020 and 30 June 2019 are as follows:

Significant unobservable inputs

Group Valuation methodologyFair value

RM’000Term yield

%Reversion yield

%Price per sq foot

RM/psf

2020

Completed investment properties

Malls Investment method 2,183,870 6.25 - 6.50 6.75 - 7.00 -

Office buildings Investment method 1,240,000 5.00 - 6.25 5.50 - 6.50 -

Others Comparison method 586,330 - - 18 - 670

Investment method 131,060 4.50 - 6.00 5.00 - 7.50 -

Cost method 148,400 - - 3 - 330

4,289,660

2019

Completed investment properties

Malls Investment method 2,096,300 6.25 - 6.50 6.75 - 7.00 -

Office buildings Investment method 1,313,000 5.00 - 6.00 5.50 - 6.50 -

Others Comparison method 610,560 - - 18 - 1,700

Investment method 107,158 4.50 - 6.00 5.00 - 7.50 -

Cost method 156,600 - - 3 - 330

4,283,618

232



19 GOODWILL ON CONSOLIDATION

Group

2020RM’000

2019RM’000

At beginning/end of financial year 11,472 11,472

For the purpose of impairment testing, goodwill is allocated to the Group’s CGUs identified according to the operating segments as follows:

Group

2020RM’000

2019RM’000

Property development 3,802 3,802

Hospitality and leisure 7,670 7,670

11,472 11,472

Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount of the CGUs based on value-in-use. Value-in-use is determined by discounting the cash flows projections based on the financial budgets approved by the management. The discount rate used is 4.1% (2019: 5.9%) per annum.

20 SUBSIDIARIES

Company

2020RM’000

2019RM’000

At Cost

Unquoted shares in Malaysia (Note 20.1) 14,876,298 15,222,575

Unquoted shares outside Malaysia (Note 20.1) 3,496,002 3,787,807

Equity contribution (Note 20.2) 953,784 764,010

19,326,084 19,774,392

Less: Accumulated impairment losses (Note 20.3) (484,193) (73,590)

18,841,891 19,700,802


233

20 SUBSIDIARIES (CONTINUED)

20.1 Interests in subsidiaries

Unquoted shares include redeemable preference shares (“RPS”) issued by subsidiaries (some of which are also issued to non-controlling interests), which are redeemable at the option of issuer and entitle the Company to receive dividend out of profits of the issuer at a rate to be determined by the issuer.

Details of the subsidiaries are set out in Note 44 to the financial statements.

2020

During the financial year, the Company acquired and subscribed for additional shares in its subsidiaries as follows:

Acquisition of new subsidiary

On 13 February 2020, the Company acquired 2 ordinary shares of IOI LiVO Loyalty Sdn. Bhd. (formerly known as Progressive Glory Sdn. Bhd.) (“ILL”) for a nominal sum of RM2 only, representing the entire share capital of ILL (the “Acquisition”). Following the Acquisition, ILL has become a wholly-owned subsidiary of the Company. The intended principal activity of ILL is to manage and operate IOI Group’s loyalty programme.

Subscriptions of additional shares

Company Type of sharesNo. of shares

’000AmountRM’000

Fortune Premiere Sdn. Bhd. (“FPSB”) RPS at an issue price of RM1.00 each 60 60

IOI Business Hotel Sdn. Bhd. (“IBH”) RPS at an issue price of RM1.00 each 4,603 4,603

IOI Properties Empire Sdn. Bhd. (“IOIPE”) RPS at an issue price of RM1.00 each 319 319

Progressive View Pte. Ltd. (“PVPL”) Ordinary shares at an issue price of SGD1.00 each

650 1,964

Wealthy Link Pte. Ltd. (“WLPL”) RPS at an issue price of SGD1.00 each 91,300 278,374

The above subscriptions were settled by cash and had no impact on the Group’s financial statements. Accordingly, the Company had recorded a realised foreign exchange gain on subscription of RM618,000.

During the financial year, the Company also acquired 4,000 ordinary shares in IOI Properties Berhad (“IOIPB”) at an average price of RM4.00 per IOIPB share for cash consideration of RM16,000.

234




20.1 Interests in subsidiaries (continued)

2020 (continued)

Redemption of shares



Commercial Wings Sdn. Bhd. (“CWSB”) RPS at a redemption price of RM1.00 each 30,200 30,200

IOI City Hotel Sdn. Bhd. (“IOICH”) RPS at a redemption price of RM1.00 each 1,750 1,750

IOI City Tower Two Sdn. Bhd. (“IOICT2”) RPS at a redemption price of RM1.00 each 3,200 3,200

IOI Consolidated (Singapore) Pte. Ltd. (“IOIConso”)

RPS at a redemption price of SGD1.00 each 204,220 572,143

IOI Harbour Front Sdn. Bhd. (“IOIHarbour”) RPS at a redemption price of RM1.00 each 6,029 6,029

IOI Lavender Sdn. Bhd. (“IOILav”) RPS at a redemption price of RM1.00 each 13,547 13,547

IOI Medini Sdn. Bhd. (“IOIMedini”) RPS at a redemption price of RM1.00 each 42,411 42,411

IOI Mulberry Sdn. Bhd. (“IOIMulberry”) RPS at a redemption price of RM1.00 each 67,516 67,516

IOI Prima Property Sdn. Bhd. (“IOIPP”) RPS at a redemption price of RM1.00 each 73,863 73,863

IOIP Capital Management Sdn. Bhd. (“IOIPCM”)

RPS at a redemption price of RM1.00 each 84,446 84,446

Nusa Properties Sdn. Bhd. (“NPSB”) RPS at a redemption price of RM1.00 each 12,160 12,160

Palmex Industries Sdn. Bhd. (“Palmex”) RPS at a redemption price of RM1.00 each 11,400 11,400

Property Skyline Sdn. Bhd. (“PSSB”) RPS at a redemption price of RM1.00 each 53 53

Resort Villa Development Sdn. Bhd. (“RVD”) RPS at a redemption price of RM100.00 each 47 4,700

The above redemption of shares was redeemed at RM973,525,000 by cash. Accordingly, the Company had recorded a realised foreign exchange gain on redemption of RM50,107,000.


235


20.1 Interests in subsidiaries (continued)

2019

The Company acquired or subscribed for additional shares in its subsidiaries as follows:

Incorporation of new subsidiaries

On 17 October 2018, the Company had incorporated a wholly-owned subsidiary, namely IOI Business Hotel Sdn. Bhd. (“IBH”). IBH was incorporated in Malaysia as a private limited company under Section 14 of the Companies Act 2016 with 100 ordinary issued shares. The principal activity of IBH is provision of hotel and hospitality services.

Subscriptions of additional shares



IBH RPS at an issue price of RM1.00 each 12,646 12,646

PMX Bina Sdn. Bhd. (“PMX Bina”) RPS at an issue price of RM1.00 each 100 100

IOIPE RPS at an issue price of RM1.00 each 2,603 2,603

IOIConso RPS at an issue price of SGD1.00 each 222,000 673,681

WLPL RPS at an issue price of SGD1.00 each 46,100 140,928

The above subscriptions were settled by cash and had no impact on the Group’s financial statements.

The Company also acquired 24,400 ordinary shares in IOI Properties Berhad (“IOIPB”) at an average price of RM4.00 per IOIPB share for cash consideration of RM98,000.

Redemption of shares



PSSB RPS at a redemption price of RM1.00 each 1,060 1,060

RVD RPS at a redemption price of RM100.00 each 71 7,141

NPSB RPS at a redemption price of RM1.00 each 2,057 2,057

Palmex RPS at a redemption price of RM1.00 each 3,900 3,900

IOIConso RPS at a redemption price of SGD1.00 each 78,500 197,850

The above redemption of shares was redeemed at RM251,687,000 by cash. Accordingly, the Company had recorded a realised foreign exchange gain on redemption of RM39,679,000.

236




20.2 Equity contribution

Equity contribution mainly represents advances to subsidiaries for their working capitals and repayment of loans, and discount on advances to a subsidiary.

20.3 Accumulated impairment losses

The Company performed impairment assessment on investments in subsidiaries as at 30 June 2020. The recoverable amounts of these investments in subsidiaries, which are involved in the property investment, hospitality and leisure businesses, are derived based on either the fair value less costs to sell or value in use methods. These recoverable amounts are categorised as Level 3 in the fair value hierarchy. Based on the assessments performed, impairment loss amounting to RM410,603,000 (2019: RM60,083,000) had been recognised in profit or loss during the current financial year due to challenging market conditions caused by the COVID-19 pandemic.

20.4 Amounts due from/(to) subsidiaries

The current amounts due from subsidiaries represent outstanding amounts arising from advances. In the previous financial year, these amounts were classified as non-current amount due from a subsidiary. These amounts are unsecured, bear interest rates ranging from 5.18% to 5.26% (2019: 5.16% to 5.18%) per annum and payable on 26 January 2021 in cash and cash equivalents or on demand upon one month written notice from the Company.

The non-current amount due to a subsidiary represents advances which are unsecured, bear interest ranging from 5.04% to 5.21% per annum (2019: Nil) and is repayable on 30 June 2024.

The current amounts due to subsidiaries represent advances and payments made on behalf, which are unsecured, bear interest ranging from 2.76% to 3.83% (2019: 3.05% to 3.95%) per annum except for RM35,154,000 (2019: RM50,308,000) which is non-interest bearing and is payable upon demand in cash and cash equivalents. This non-interest bearing amount is related to discount on advances from a subsidiary in compliance to MFRS 9.

20.5 Material non-controlling interests

As at 30 June 2020, the total non-controlling interests are RM156,875,000 (2019: RM159,122,000), of which RM86,180,000 (2019: RM87,203,000), and RM29,710,000 (2019: RM31,583,000) are attributable to PINE MJR Development Sdn. Bhd. (“PINE MJR”) and Legend Advance Sdn. Bhd. (“Legend”) respectively. The other non-controlling interests are not material to the Group.


237


20.5 Material non-controlling interests (continued)

Set out below are the summarised financial information for PINE MJR and Legend that has non-controlling interests that are material to the Group. The below financial information is based on amounts before inter-company eliminations.

PINE MJR Legend

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Proportion of ordinary shares held by non-controlling interests (%) 45.1% 45.1% 30.1% 30.1%

Summarised statements of comprehensive income:

Revenue - - 17,338 33,010

(Loss)/Profit and total comprehensive (loss)/income for the financial year (2,271) (629) 3,743 7,513

(Loss)/Profit and total comprehensive (loss)/income attributable to non-controlling interests (1,023) (283) 1,127 2,261

Dividend paid to non-controlling interests - - 3,000 3,000

Summarised statements of financial position:

Current assets 196,945 123,016 62,211 69,628

Current liabilities (10,223) (4,607) (2,495) (3,736)

Non-current assets - - 35,885 37,859

Non-current liabilities - - (3,574) (5,467)

Net assets 186,722 118,409 92,027 98,284

Summarised cash flows:

Cash flows (used in)/from operating activities (79,187) (7,572) 13,185 16,972

Cash flows from investing activities 246 273 1,058 1,229

Cash flows from/(used in) financing activities 70,584 9,714 (11,900) (18,085)

Net (decrease)/increase in cash and cash equivalents during the financial year (8,357) 2,415 2,343 116

Cash and cash equivalents at beginning of the financial year 14,371 11,956 4,225 4,109

Cash and cash equivalents at end of the financial year 6,014 14,371 6,568 4,225

There was a dividend of RM2,952,000 (2019: RM14,984,000) paid to immaterial non-controlling interests during the financial year.

238



21 ASSOCIATE

Group

2020RM’000

2019RM’000

Unquoted shares, at cost 23,601 23,601

Share of post-acquisition results and reserves 32,852 22,642

56,453 46,243

Redeemable preference shares 53,070 53,070

109,523 99,313

21.1 Investment in an associate

The redeemable preference shares (“RPS”) issued by the associate confer on the holders the right to receive out of the profits of the associate, a cumulative preference dividend at a rate of 900% per annum. Such dividend is calculated on the amount being paid-up from the date of subscription up to 30 April 2015. These cumulative RPS (“CRPS”) are redeemable at RM0.01 plus a premium of RM0.99 per share in accordance with the Articles Association of the associate. The maturity of the CRPS had expired on 30 April 2015 and had not been extended. The holders have agreed not to demand or make any claims whatsoever against the associate for the redemption of the CRPS or payment of the cumulative dividends for the next twelve (12) months after the reporting date.

The associate of the Group is accounted for using the equity method in the consolidated financial statements. Details of the associate is set out in Note 44 to the financial statements.

21.2 Summary of financial information of the associate is as follows:

GLM Emerald Industrial Park (Jasin) Sdn. Bhd.

2020RM’000

2019RM’000

Assets and liabilities

Total current assets 120,794 37,889

Total non-current assets 235,574 275,613

Total current liabilities (12,829) (1,938)

Total non-current liabilities (1,280) (1,212)

Results

Revenue 14,076 13,549

Profit and total comprehensive income for the financial year 61,319 6,266

During the financial year, the Company received dividend of RM9,412,000 (2019: Nil) from associate.


239

21 ASSOCIATE (CONTINUED)

21.3 The reconciliation of net assets of the associate to the carrying amount of the investment in an associate is as follows:

Group

2020RM’000

2019RM’000

Net assets as at 30 June 176,416 144,509

Share of net assets of the Group/Carrying amount in the statement of financial position 56,453 46,243

Share of profit of the Group 19,622 2,005

22 JOINT VENTURES

Group

2020RM’000

2019RM’000


Redeemable preference shares (“RPS”) (Note 22.2) 3,451,987 4,074,372

Share of post-acquisition results and reserves 50,458 (55,178)

3,912,295 4,429,044

Amounts due from joint ventures (Note 22.3) 564,114 583,075

4,476,409 5,012,119

The joint arrangements of the Group are regarded as joint ventures pursuant to the contractual rights and obligations of the joint venture agreements that provide the Group with the rights to the net assets of the joint ventures. The joint ventures are accounted for using the equity method in the consolidated financial statements. Details of the joint ventures are set out in Note 44 to the financial statements.

240



22 JOINT VENTURES (CONTINUED)

22.1 Financial information of joint ventures

Set out below is the summarised financial information for joint ventures that are material to the Group, which are accounted for using the equity method.

(i) Summarised statements of financial position:

ScottsdaleProperties

Pte. Ltd.RM’000

Pinnacle(Sentosa)Pte. Ltd.RM’000

2020

Non-current:

Non-current assets 7,612,837 4,767

Current:

Cash and cash equivalents 243,580 6,969

Other current assets 1,122,988 3,966,666

Total current assets 1,366,568 3,973,635

Total assets 8,979,405 3,978,402

Non-current:

Financial liabilities (excluding trade and other payables and provisions) - 1,679,059

Other liabilities (including trade and other payables and provisions) 61,708 -

Total non-current liabilities 61,708 1,679,059

Current:

Financial liabilities (excluding trade and other payables and provisions) 4,190,681 -

Other liabilities (including trade and other payables and provisions) 292,505 21,426

Total current liabilities 4,483,186 21,426

Total liabilities 4,544,894 1,700,485

Net assets 4,434,511 2,277,917


241


22.1 Financial information of joint ventures (continued)

Set out below is the summarised financial information for joint ventures that are material to the Group, which are accounted for using the equity method. (continued)

(i) Summarised statements of financial position: (continued)


Pte. Ltd.RM’000


2019

Non-current:

Non-current assets 7,655,995 4,747

Current:

Cash and cash equivalents 425,786 8,628

Other current assets 2,053,035 3,965,019

Total current assets 2,478,821 3,973,647

Total assets 10,134,816 3,978,394

Non-current:

Financial liabilities (excluding trade and other payables and provisions) 4,232,298 1,690,390

Other liabilities (including trade and other payables and provisions) 24,134 -

Total non-current liabilities 4,256,432 1,690,390

Current:

Other liabilities (including trade and other payables and provisions) 383,249 19,882

Total current liabilities 383,249 19,882


Net assets 5,495,135 2,268,122

242






(ii) Summarised statements of comprehensive income:


Pte. Ltd.RM’000


2020

Revenue 1,597,104 84,993

Depreciation and amortisation 29,073 -

Interest income 3,279 81

Interest expense (108,068) (39,747)

Profit before taxation 199,295 2,732

Taxation (26,987) -

Profit and total comprehensive income for the financial year 172,308 2,732

2019

Revenue 1,504,541 76,501

Depreciation and amortisation (53,890) -

Interest income 3,608 42


Profit/(Loss) before taxation 276,650 (62,300)

Taxation (29,685) -

Profit/(Loss) and total comprehensive income/(loss) for the financial year 246,965 (62,300)

There was no dividend paid by the joint ventures in both the financial years.


243




(iii) Reconciliation of the summarised information presented to the carrying amounts of interest in joint ventures is set out below:


Pte. Ltd.RM’000


2020

Net assets:

As at 1 July 2019 5,495,135 2,268,122

Profit for the financial year 172,308 2,732

Movement in share capital (1,247,263) -

Movement in other reserves - (2,466)

Foreign currency translation differences 14,331 9,529

As at 30 June 2020 4,434,511 2,277,917

Interest in joint ventures as at year end 49.9% 65.0%


Redeemable preference shares 1,248,994 2,182,993


Total investments in joint ventures 2,212,821 1,480,646

2019

Net assets:

As at 1 July 2018 4,269,473 2,249,646

Profit/(Loss) for the financial year 246,965 (62,300)

Movement in share capital 811,309 8,881

Movement in other reserves - (6,078)

Foreign currency translation differences 167,388 77,973

As at 30 June 2019 5,495,135 2,268,122

Interest in joint ventures as at year end 49.9% 65.0%

244






(iii) Reconciliation of the summarised information presented to the carrying amounts of interest in joint ventures is set out below: (continued)


Pte. Ltd.RM’000


2019 (continued)


Redeemable preference shares 1,871,379 2,182,993


Total investments in joint ventures 2,742,072 1,474,279

Set out below are the summarised information of all individually immaterial joint ventures on an aggregate basis.

2020RM’000

2019RM’000

Unquoted shares, redeemable preference shares and share of post-acquisition results and reserves 218,828 212,693

Amounts due from joint ventures 564,114 583,075

Total interests in joint ventures 782,942 795,768

Share of joint ventures’ profits and total comprehensive income 5,459 20,433

There was no dividend paid (2019: RM4,509,000) by immaterial joint venture during the financial year.


245


22.2 Redeemable preference shares

RPS issued by joint ventures, which are redeemable at the option of issuer and entitle the Group to receive dividend out of profits of the issuer at a rate to be determined by the issuer. The RPS rank pari passu without any preference or priority among themselves and in priority over the ordinary shares in respect of,

(a) Payment of the preference dividend (when, as and if declared); and

(b) In the event of a winding up of or return of capital by the joint venture, payment of any preference dividend that has accrued to holder of preference shares and is unpaid (whether or not then due) as well as the subscription price paid for the preference shares.

During the financial year, a joint venture has redeemed total RPS amounting to RM620,923,000. In the previous financial year, an amount of RM630,660,000 had been capitalised as RPS and joint venture redeemed RM216,138,000, of which RM67,236,000 was settled by cash and an amount of RM148,902,000 was offsetted with the repayment from a joint venture.

22.3 Amounts due from joint ventures

The non-current amounts due from joint ventures mainly represent outstanding amounts arising from the Group’s subsidiaries’ proportionate share in the advances and working capital to the joint ventures for the acquisition of land and its development properties in Singapore. The amounts due from joint ventures are unsecured, interest bearing at rates ranging from 1.50% to 4.87% (2019: 1.65% to 5.05%) per annum.

The current amount due from a joint venture represents interest receivable on advances to a joint venture.

23 DEFERRED TAXATION

Group

2020RM’000

2019RM’000

At beginning of financial year (667,301) (669,663)

Recognised in the profit or loss (Note 12):

- Current year (235,198) (77,089)

- Prior years 18,324 76,763

(216,874) (326)

Foreign currency translation differences (1,480) 2,688

At end of financial year (885,655) (667,301)

246



23 DEFERRED TAXATION (CONTINUED)

The following amounts, determined after appropriate offsetting, are shown in the consolidated statement of financial position:

Group

2020RM’000

2019RM’000

Deferred tax assets 152,114 133,854

Deferred tax liabilities (1,037,769) (801,155)

(885,655) (667,301)

23.1 The amount of the deferred tax income or expenses recognised in the consolidated statement of profit or loss during the financial year are as follows:

Group

2020RM’000

2019RM’000

At beginning of financial year (667,301) (669,663)

Recognised in profit or loss (Note 12):

Temporary differences on:

- Capital allowances (9,236) (12,676)

- Fair value adjustment on investment properties 5,439 (111,784)

- Profit from sales of development properties (233,868) 122,095

- Accruals and provisions 10,184 13,894

- Deferred revenue - 7,154

- Development properties 3,639 (4,731)

- Unabsorbed capital allowances (3,183) (4,493)

- Unrealised profits 14,061 (25,214)

- Unutilised investment tax allowance 1,336 -

- Unutilised tax losses 771 1,917

- Other deductible temporary differences (6,017) 13,512

(216,874) (326)

Foreign currency translation differences (1,480) 2,688

At end of financial year (885,655) (667,301)


247


23.2 The components of deferred tax liabilities and assets at the end of the reporting period comprise the tax effects of:

Group

2020RM’000

2019RM’000

Deferred tax assets

Accruals and provisions 49,247 39,063

Unutilised tax losses 2,839 2,068

Unabsorbed capital allowances 2,919 6,102

Unrealised profits 55,548 41,487

Unutilised investment tax allowance 40,957 39,621

Other deductible temporary differences 10,191 15,914

Deferred tax assets (before off-setting) 161,701 144,255

Off-setting (9,587) (10,401)

Deferred tax assets (after off-setting) 152,114 133,854

Deferred tax liabilities

Fair value adjustment on investment properties 225,364 230,670

Capital allowances 102,546 93,310

Profit from sales of development properties 368,045 132,536

Development properties* 351,401 355,040

Deferred tax liabilities (before off-setting) 1,047,356 811,556

Off-setting (9,587) (10,401)

Deferred tax liabilities (after off-setting) 1,037,769 801,155

* Comprises mainly of deferred tax adjustments on temporary differences arising from land held for property development, property development costs and inventories.

The following are the unutilised tax losses and unabsorbed capital allowances for which deferred tax assets have not been recognised, at gross:

Group

2020RM’000

2019RM’000

Unutilised tax losses 45,625 11,781

Unabsorbed capital allowances 25 27

45,650 11,808

248




Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profit of the subsidiaries will be available against which the deductible temporary differences can be utilised.

The unutilised tax losses of the Malaysian subsidiaries will only be available for carry forward for a period of 7 consecutive years. Upon expiry of the 7 years, the unutilised losses will be disregarded.

Group

2020RM’000

2019RM’000

Unutilised tax losses expire in year of assessments

2025 14,228 14,228

2026 13,229 13,229

2027 10,454 -

37,911 27,457


249

24 PROPERTY DEVELOPMENT COSTS

Group

Freehold land

RM’000

Long termleasehold

landRM’000

Development costs

RM’000

Accumulatedcost charged

to profit or lossRM’000

TotalRM’000

2020

At Cost

At beginning of financial year 246,122 1,764,692 1,937,261 (380,527) 3,567,548

Costs incurred 438 - 545,969 - 546,407

Written down - - (24,755) - (24,755)

Transfer from land held for property development (Note 17) 11,948 1,584 26,971 - 40,503

Transfer to inventories (9,783) (5,188) (457,404) - (472,375)

Foreign currency translation differences - 10,185 2,979 (1,143) 12,021

Recognised as part of cost of sales in profit or loss - - - (497,216) (497,216)

Completed projects (3,096) (3,938) (167,580) 174,614 -

At end of financial year 245,629 1,767,335 1,863,441 (704,272) 3,172,133

2019

At Cost

At beginning of financial year 248,796 1,868,968 1,917,234 (567,198) 3,467,800

Costs incurred - - 646,461 - 646,461

Transfer from land held for property development (Note 17) 23,795 3,167 62,922 - 89,884

Transfer to inventories (550) (19,026) (230,528) - (250,104)

Foreign currency translation differences - (23,116) (5,198) 1,498 (26,816)

Recognised as part of cost of sales in profit or loss - - - (359,677) (359,677)

Completed projects (25,919) (65,301) (453,630) 544,850 -

At end of financial year 246,122 1,764,692 1,937,261 (380,527) 3,567,548

Included in costs incurred in property development of the Group are interest expense charged by banks and non-controlling interests during the financial year amounting to RM40,517,000 and Nil (2019: RM53,529,000 and RM246,000) respectively.

250



25 INVENTORIES

Group

2020RM’000

2019RM’000

At Cost

Completed development properties 2,240,138 2,043,772

Others 4,306 4,219

2,244,444 2,047,991

26 TRADE AND OTHER RECEIVABLES

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Trade receivables (Note 26.1) 222,656 192,087 - -

Other receivables, deposits and prepayments (Note 26.2) 161,042 161,487 236 224

Lease receivables 3,677 - - -

Amounts due from contract customers (Note 26.3) - 963 - -

Contract costs (Note 26.4) 5,112 3,373 - -

392,487 357,910 236 224

26.1 Trade receivables

Group

2020RM’000

2019RM’000

Trade receivables 227,551 195,644

Less: Accumulated impairment losses (4,895) (3,557)

222,656 192,087

(a) Included in trade receivables of the Group are amounts due from affiliates of RM2,377,000 (2019: RM2,024,000) for property project management services, provision of landscaping services and related costs provided by subsidiaries, which are unsecured and payable within the credit period in cash and cash equivalents.

(b) The normal trade credit terms granted by the Group range from 7 to 90 days (2019: 7 to 90 days) from date of invoice and progress billing. They are recognised at their original invoiced amounts, which represent their fair values on initial recognition.


251

26 TRADE AND OTHER RECEIVABLES (CONTINUED)

26.1 Trade receivables (continued)

(c) The reconciliation of movements in provision for impairment losses on trade receivables are as follows:

Group

2020RM’000

2019RM’000

At beginning of financial year 3,557 5,473

Charge for the financial year 1,497 521

Reversal (138) (2,504)

Written off (21) -

Foreign currency translation differences - 67

At end of financial year 4,895 3,557

26.2 Other receivables, deposits and prepayments

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Other receivables 112,121 100,007 170 169

Less: Accumulated impairment losses (3,245) (2,246) - -

108,876 97,761 170 169

Deposits 34,732 39,455 15 5

Prepayments 17,434 24,271 51 50

161,042 161,487 236 224

Included in other receivables of the Group are receivable of RM4,700,000 (2019: RM9,872,000) in relation to a government grant for the infrastructure costs of certain development projects undertaken by the Group.

Included in deposits of the Group is an amount of RM2,774,000 (2019: RM2,774,000) paid for new land acquisitions.

252



26 TRADE AND OTHER RECEIVABLES (CONTINUED)

26.2 Other receivables, deposits and prepayments (continued)

(a) The reconciliation of movements in provision for impairment losses on other receivables are as follows:

Group

2020RM’000

2019RM’000

At beginning of financial year 2,246 1,672

Charge for the financial year 1,026 635

Written off (27) (61)

At end of financial year 3,245 2,246

26.3 Amounts due from contract customers

Group

2020RM’000

2019RM’000

Aggregate costs incurred to date - 3,193

Recognised profit - 88

- 3,281

Progress billings - (2,318)

Amounts due from contract customers - 963

26.4 Contract costs

Group

2020RM’000

2019RM’000

Cost to obtain a contract 5,112 3,373

Cost to obtain a contract primarily comprises incremental sales commission fees paid to intermediaries as a result of obtaining property development contracts and they are recoverable.

Capitalised sales commission fees are amortised when the related revenue are recognised. During the current financial year, the amount of amortisation was RM10,224,000 (2019: RM6,056,000).

The Group applies the practical expedient in paragraph 94 of MFRS 15 and recognises the incremental costs of obtaining contracts as an expense when incurred if the amortisation period of the assets that the Group otherwise would have recognised is one year or less.


253

27 CONTRACT ASSETS AND CONTRACT LIABILITIES

Group

2020RM’000

2019RM’000

Contract assets

- Property development contracts 164,994 113,924

- Stakeholder sums 55,265 102,667

220,259 216,591

Contract liabilities

- Property development contracts (348,096) (341,508)

(127,837) (124,917)

(a) Property development contracts and stakeholder sums

Contracts assets and contracts liabilities represent the timing differences in revenue recognition and the milestone billings. The milestone billings are structured and/or negotiated with customers to reflect physical completion of the contracts.

Contract assets are transferred to trade receivables when the rights to economic benefits become unconditional. This usually occurs when the Group issues billing to the customer. Contract liabilities are recognised as revenue when performance obligations are satisfied.

Stakeholder sums which are payable upon expiry of defect liability period of up to 24 months (2019: 18 to 24 months).

(b) The movements in the contract assets and contract liabilities from property development contracts are as follow:

Group

2020RM’000

2019RM’000

Balance as at 1 July (227,584) 47,209

Net property development revenue recognised 1,125,617 943,117

Net progress billing during the financial year (1,080,253) (1,221,669)

Foreign currency translation differences (882) (3,759)

Balance as at 30 June (183,102) (227,584)

254



27 CONTRACT ASSETS AND CONTRACT LIABILITIES (CONTINUED)

(c) The movement of stakeholder sums

Group

2020RM’000

2019RM’000

Balance as at 1 July 102,667 126,338

Additions 9,137 55,301

Amount transferred to trade receivables (56,539) (78,972)

Balance as at 30 June 55,265 102,667

(d) Unsatisfied performance obligations

The following table shows revenue from performance obligations that are unsatisfied (or partially unsatisfied) at the reporting date.

Group

2020RM’000

2019RM’000

Revenue from property development activities

- Within one year 560,545 284,946

- More than one year 175,310 175,079

735,855 460,025

28 CASH AND BANK BALANCES

Included in the Group’s cash and bank balances are amounts of:

(i) RM118,599,000 (2019: RM123,132,000) held under the Housing Development Account pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 in Malaysia, as amended by the Housing Developers (Housing Development Account) (Amendment) Regulation, 2002 in Malaysia, which can only be used for property development activities.

(ii) RMB232,035,000 (2019: RMB189,198,000), equivalent to approximately RM140,613,000 (2019: RM113,992,000) held under Housing Developers (Project Account) Rules, Fujian Province, Administration of Pre-sale of Commodity Premises Regulations (Revised), in PRC, which can only be used for property development activities.


255

29 DEPOSITS WITH FINANCIAL INSTITUTIONS

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Deposits with financial institutions 479,891 455,086 315,014 235,797

As at 30 June 2020, the effective interest rates of the Group's and of the Company's short term deposits range from 0.08% to 3.28% and 0.08% to 1.09% per annum (2019: 0.99% to 3.95% and 1.30% to 1.86% per annum) respectively. All short term deposits have average maturity less than three (3) months.

30 SHORT TERM FUNDS

Group and Company

2020RM’000

2019RM’000

Investments in fixed income trust funds in Malaysia 80,588 41

Investments in fixed income trust funds represent investments in highly liquid money market instrument and deposits with financial institution in Malaysia with maturity of less than three (3) months. These short term funds are subject to an insignificant risk of changes in value. The distribution income from these funds is tax exempted.

31 SHARE CAPITAL

Group and Company

2020 2019

Numberof shares


Numberof shares


Issued and fully paid-up:

Ordinary shares with no par value

At beginning/end of financial year 5,506,145 18,514,233 5,506,145 18,514,233

256



31 SHARE CAPITAL (CONTINUED)

31.1 Employees’ Share Option Scheme (“ESOS”)

An ESOS was established on 8 May 2015 for the benefit of the eligible executives and Executive Directors of the Group for a duration of five (5) years.

The ESOS was expired on 8 May 2020 pursuant to the By-Laws of the ESOS. All outstanding share options of 24,605,839 offered to the Eligible Persons pursuant to the ESOS had automatically lapsed upon the expiry of the ESOS.

The movements of the share options over the unissued ordinary shares in the Company granted under the ESOS during the financial year are as follows:

Date of offerOption

price

Number of options over ordinary shares

As at 1.7.2019

Granted and

accepted Exercised Lapsed*As at

30.6.2020

23 May 2016 RM2.07 24,605,839 - - (24,605,839) -

Note:* Due to the resignation or retirement of employees and expiry of ESOS on 8 May 2020 pursuant to the By-Laws of the ESOS.

32 RESERVES

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Foreign currency translation reserve (Note 32.1) (155,085) (186,259) - -

Cash flow hedge reserve (Note 32.2) (212,312) (51,217) (1,075) (1,951)

Share-based payment reserve (Note 32.3) - 11,775 - 11,775

(367,397) (225,701) (1,075) 9,824

32.1 Foreign currency translation reserve

The foreign currency translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.


257

32 RESERVES (CONTINUED)

32.2 Cash flow hedge reserve

The cash flow hedge reserve represents the deferred fair value gains/(losses) relating to derivative financial instruments used to hedge floating rate and certain foreign currency denominated borrowings of the Group.

Movement in the cash flow hedge reserve during the financial year is as follows:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

At beginning of financial year (51,217) 14,200 (1,951) (4,422)

Fair value (loss)/gain on derivatives (161,412) (56,659) 7,610 10,026

Reclassifications to/(from) profit and loss

- Interest rate differences 5,683 49 88 1,429

- Foreign exchange rate differences (5,366) (8,807) (6,822) (8,984)

317 (8,758) (6,734) (7,555)

At end of financial year (212,312) (51,217) (1,075) (1,951)

32.3 Share-based payment reserve

The share-based payment reserve represents the fair value of the equity-settled share options granted to employees. This reserve is made up of the cumulative value of services received from employees recorded on the grant date of share options. During the financial year, the Group has transferred the share-option reserve to retained earnings following the expiry of the ESOS on 8 May 2020 as disclosed in Note 31.1 to the financial statements.

258



33 BORROWINGS

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Non-current liabilities

Unsecured

Term loans 7,473,761 8,145,209 - 96,276

Revolving credit - 125,000 - 125,000

Sukuk Murabahah 2,240,000 1,880,000 - -

9,713,761 10,150,209 - 221,276

Current liabilities

Unsecured

Term loans 1,056,415 649,184 99,571 97,393

Revolving credit 125,000 127,146 125,000 127,146

Sukuk Murabahah - 399,922 - -

1,181,415 1,176,252 224,571 224,539

Total borrowings 10,895,176 11,326,461 224,571 445,815

The range of contractual interest rate per annum as at 30 June 2020 for borrowings are as below:

Group Company

2020 2019 2020 2019

Term loans 0.99% to 5.08% 2.75% to 5.08% 2.19% 3.78%

Revolving credit 4.82% 4.82% 4.82% 4.82%

Sukuk Murabahah 3.90% to 5.05% 4.65% to 5.05% - -


259

33 BORROWINGS (CONTINUED)

The maturity profile of term loans is as follows:

Group

Fixed interest rate Floating interest rate

TotalRM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

2020

Unsecured:

Term loans denominated in:

- Ringgit Malaysia (“RM”) - - - - - 56,345 56,602 - - - 112,947

- Singapore Dollar (“SGD”)* - - - - - 615,040 - 6,225,890 - - 6,840,930

- US Dollar (“USD”)* - - - - - 383,819 285,154 - - - 668,973

- Renminbi ("RMB") - - 841,878 - - 1,212 4,848 59,388 - - 907,326

- - 841,878 - - 1,056,416 346,604 6,285,278 - - 8,530,176

Revolving credit denominated in:

- RM 125,000 - - - - - - - - - 125,000

Sukuk Murabahah denominated in:

- RM - - 350,000 530,000 1,360,000 - - - - - 2,240,000

125,000 - 1,191,878 530,000 1,360,000 1,056,416 346,604 6,285,278 - - 10,895,176

* Included borrowing of RM99,571,000 (equivalent to USD23.3 million), which the Group has entered into a cross currency interest rate swap, and interest rate swap for borrowings of RM571,362,000 (equivalent to USD133.3 million) and RM4,987,974,000 (equivalent to SGD1.6 billion) to hedge against fluctuation in exchange rate and interest rate.

260




The maturity profile of term loans is as follows: (continued)

Group


TotalRM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

2019

Unsecured:


- RM - - - - - 58,166 56,345 56,602 - - 171,113

- SGD* - - - - - 8,194 612,460 - 6,315,258 - 6,935,912

- USD* - - - - - 582,779 578,555 482,279 - - 1,643,613

- RMB - - - - - 45 1,205 4,820 37,685 - 43,755

- - - - - 649,184 1,248,565 543,701 6,352,943 - 8,794,393


- RM 127,146 125,000 - - - - - - - - 252,146

Sukuk Murabahah denominated in:

- RM 399,922 - - 350,000 1,530,000 - - - - - 2,279,922

527,068 125,000 - 350,000 1,530,000 649,184 1,248,565 543,701 6,352,943 - 11,326,461

* Included borrowing of RM193,669,000 (equivalent to USD46.6 million), which the Group has entered into a cross currency interest rate swap, and interest rate swap for borrowings of RM828,700,000 (equivalent to USD200.0 million) and RM3,062,300,000 (equivalent to SGD1.0 billion) to hedge against fluctuation in exchange rate and interest rate.


261


The maturity profile of term loans is as follows: (continued)

Company


TotalRM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

2020

Unsecured:


- USD* - - - - - 99,571 - - - - 99,571


- RM 125,000 - - - - - - - - - 125,000

125,000 - - - - 99,571 - - - - 224,571

* Included borrowings of RM99,571,000 (equivalent to USD23.3 million), which the Company has entered into a cross currency interest rate swap to hedge against fluctuation in exchange rate and interest rate.

Company


TotalRM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

< 1year

RM’000

1 – 2years

RM’000

2 – 3years

RM’000

3 – 4years

RM’000

> 4years

RM’000

2019

Unsecured:


- USD* - - - - - 97,393 96,276 - - - 193,669


- RM 127,146 125,000 - - - - - - - - 252,146

127,146 125,000 - - - 97,393 96,276 - - - 445,815

* Included borrowings of RM193,669,000 (equivalent to USD46.6 million), which the Company has entered into a cross currency interest rate swap to hedge against fluctuation in exchange rate and interest rate.

262



34 LEASE LIABILITIES

Group

2020RM’000


Due later than 1 year 2,037

Current liabilities

Due not later than 1 year 1,453

3,490

The underlying assets of the lease liabilities are included in property, plant and equipment in Note 15 to the financial statements. Lease contracts are typically entered for fixed periods and the terms are negotiated on an individual basis and contains a wide range of different terms and conditions. The maturity periods of the lease liabilities are disclosed in Note 40.4.2 to the financial statements.

34.1 Leases not included in lease liabilities

Lease liabilities do not include leases of low-value assets and short-term leases. Details of these leases which are charged to profit or loss and included in cash flows from operating activities in the current financial year are as follows:

Group

2020RM’000

Short-term leases 50

Leases of the low-value assets 155

205


263

35 DERIVATIVE FINANCIAL LIABILITIES

The Group’s and the Company’s derivative financial liabilities are as follows:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Derivative designated in hedging relationship


- CCIRS as cash flow hedge on a USD denominated borrowing - (3,581) - (3,581)

- IRS as cash flow hedge on a USD denominated borrowing (2,241) (721) - -

- IRS as cash flow hedge on a SGD denominated borrowing (126,523) (39,212) - -

(128,764) (39,933) - -

(128,764) (43,514) - (3,581)

Current liabilities

- CCIRS as cash flow hedge on a USD denominated borrowing (1,754) (5,783) (1,754) (5,783)

- IRS as cash flow hedge on a USD denominated borrowing (6,247) 2,569 - -

- IRS as cash flow hedge on a SGD denominated borrowing (82,526) (10,953) - -

(88,773) (8,384) - -

(90,527) (14,167) (1,754) (5,783)

264



35 DERIVATIVE FINANCIAL LIABILITIES (CONTINUED)

The details of the CCIRS are set out as below:

Commencement/Maturity date

Contract/Notional amount

Exchange rate Interest rate2020

RM’0002019

RM’000

27 January 2016/26 January 2021 100,000 200,000 The Group and the Company pay RM in exchange for receiving USD at predetermined exchange rate of RM4.295/USD according to the scheduled principal and quarterly interest repayment of the USD borrowing as disclosed in Note 33 to the financial statements.

The Group and the Company pay a fixed interest rate of 4.78% per annum in exchange for receiving LIBOR plus a spread on the outstanding principal amount.

The details of the IRS are set out as below:



Interest rate2020

RM’0002019

RM’000

18 May 2017/1 December 2021 571,362 828,700 The Group pays a fixed interest rate of 2.95% per annum in exchange for receiving LIBOR plus a spread on the outstanding principal amount as disclosed in Note 33 to the financial statements.

3 December 2018/8 March 2023 1,537,600 1,531,150 The Group pays a fixed interest rate of 3.00% per annum in exchange for receiving SOR plus a spread on the contract amount as disclosed in Note 33 to the financial statements.

7 December 2018/8 March 2023 615,040 612,460 The Group pays a fixed interest rate of 2.98% per annum in exchange for receiving SOR plus a spread on the contract amount as disclosed in Note 33 to the financial statements.

9 January 2019/8 March 2023 922,560 918,690 The Group pays a fixed interest rate of 2.88% per annum in exchange for receiving SOR plus a spread on the contract amount as disclosed in Note 33 to the financial statements.

13 December 2019/8 March 2023 1,537,600 - The Group pays a fixed interest rate of 2.28% per annum in exchange for receiving SOR plus a spread on the contract amount as disclosed in Note 33 to the financial statements.


265

35 DERIVATIVE FINANCIAL LIABILITIES (CONTINUED)

The details of the IRS are set out as below: (continued)



Interest rate2020

RM’0002019

RM’000

13 March 2020/8 March 2023 375,174 - The Group pays a fixed interest rate of 2.28% per annum in exchange for receiving SOR plus a spread on the contract amount as disclosed in Note 33 to the financial statements.

The settlement dates of the CCIRS and IRS coincide with the dates on which principal and interest are payable on the underlying borrowing and settlement.

36 TRADE AND OTHER PAYABLES

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Non-current

Trade payables (Note 36.1) 30,704 29,709 - -

Current

Trade payables and accruals (Note 36.1) 923,291 847,928 - -

Other payables and accruals (Note 36.2) 152,764 135,793 2,366 1,216

Provisions (Note 36.3) - 41,390 - -

1,076,055 1,025,111 2,366 1,216

36.1 Trade payables and accruals

Group

2020RM’000

2019RM’000

Current

Trade payables 365,682 409,250

Accruals 498,939 374,976

Deposits 58,670 63,702

923,291 847,928

The Group’s non-current trade payables are in relation to deposits received from tenants. The discounting impact is immaterial.

Included in trade payables of the Group are retention monies of RM223,685,000 (2019: RM217,067,000). The retention monies are repayable upon expiry of the defect liability period of 12 to 24 months (2019: 6 to 24 months).

266



36 TRADE AND OTHER PAYABLES (CONTINUED)

36.2 Other payables and accruals

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Current

Other payables 38,094 51,028 - 160

Accruals 114,670 84,765 2,366 1,056

152,764 135,793 2,366 1,216

36.3 Provisions

Group

2020RM’000

2019RM’000

As at 1 July 41,390 45,996

Reversal during the financial year (26,185) (4,123)

Utilisation during the financial year (15,205) (483)

As at 30 June - 41,390

The provision was in relation to the present obligation to provide affordable housing where the unavoidable costs of meeting the obligation exceed the economic benefits expected to be recovered from the purchasers of the affordable housing.

During the financial year, the Group has reversed its provision for statutory development following the issuance of an Addendum to FRSIC Consensus 17 - Development of Affordable Housing by the Malaysian Institute of Accountants.

37 CASH AND CASH EQUIVALENTS

Cash and cash equivalents at end of financial year comprise:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Cash and bank balances (Note 28) 911,506 1,121,758 94,554 432,541

Deposits with financial institutions (Note 29) 479,891 455,086 315,014 235,797

Short term funds (Note 30) 80,588 41 80,588 41

1,471,985 1,576,885 490,156 668,379


267

38 SIGNIFICANT RELATED PARTY DISCLOSURES

38.1 Identities of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Related parties of the Group include:

i. Vertical Capacity Sdn. Bhd. (“VCSB”) is the ultimate holding company;ii. Direct and indirect subsidiaries as disclosed in Note 44 to the financial statements;iii. Direct and indirect subsidiaries of the ultimate holding company;iv. Associate and joint ventures as disclosed in Note 44 to the financial statements;v. Key management personnel which is the Directors and officers of the Company whom having authority and responsibility

for planning, directing and controlling the activities of the Group and of the Company directly or indirectly; andvi. Affiliates, companies in which the Directors who are also the substantial shareholders of the Company have substantial

shareholdings interest, including IOI Corporation Berhad and its subsidiaries.

38.2 Significant related party transactions

In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had undertaken the following transactions with related parties during the financial year:

Group

2020RM’000

2019RM’000

Affiliates

Management services income - (3)

Property project management services 826 3,797

Rendering of building maintenance services - 102

Rental income 5,187 5,204

Sales of plant and landscaping services 547 598

Sales of palm products 29,132 27,005

Agency fees expense (1,603) (1,484)

Management services fee (8,980) (6,321)

Rental expenses (165) (72)

Associate

Dividend income 9,412 -

268



38 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)

38.2 Significant related party transactions (continued)

In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had undertaken the following transactions with related parties during the financial year: (continued)

Group

2020RM’000

2019RM’000

Joint ventures

Interest income 10,514 10,993

Property project management services 634 1,397

Sales of plant and landscaping services 14 -

Dividend income - 4,509

Key management personnel

Sales of property - 8,800

Company

2020RM’000

2019RM’000

Subsidiaries

Dividend income 11,000 889,847



Management fees (1,056) (872)

The related party transactions described above were carried out on terms and conditions negotiated and agreed between the parties.

Information regarding outstanding balances arising from related party transactions as at 30 June 2020 are disclosed in Notes 20.2, 20.4, 21.2, 22.3 and 26.1 to the financial statements.


269

38 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)

38.3 Key management personnel compensation

The remuneration of key management personnel during the financial year is as follows:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Directors

Fees 1,190 1,245 1,190 1,255

Salaries and bonuses 9,711 29,866 101 103

Defined contribution plan 1,153 1,411 - -

Estimated monetary value of benefits-in-kind 208 205 - -

12,262 32,727 1,291 1,358

Officers

Salaries and bonuses 2,716 1,954 - -

Defined contribution plan 323 232 - -

Estimated monetary value of benefits-in-kind 54 39 - -

3,093 2,225 - -

15,355 34,952 1,291 1,358

270



39 CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that entities of the Group are able to continue as going concern while maximising the return to shareholders through the optimisation of the debt and equity mix.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. Capital of the Group comprises equity and borrowings. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial years ended 30 June 2020 and 30 June 2019.

The Group and the Company use the gearing ratio to assess the appropriateness of its debt level. The ratio is calculated as total debt divided by equity attributable to owners of the Company.

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Borrowings (Note 33) 10,895,176 11,326,461 224,571 445,815

Less: Cash and cash equivalents (Note 37) (1,471,985) (1,576,885) (490,156) (668,379)

Net debt/(Net cash) 9,423,191 9,749,576 (265,585) (222,564)

Equity 18,995,073 18,834,461 18,934,134 19,478,334

Gearing ratio 0.50 0.52 * *

* Not applicable as the Company’s cash and cash equivalents exceeds its borrowings.

The Group and the Company are subject to certain externally imposed requirements in the form of loan covenants. The Group and the Company monitor gearing ratios and compliance with loan covenants based on the terms of the respective loan agreements. The Group and the Company have complied with loan covenants during and as at the financial year.

40 FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

The Group’s activities expose it to a variety of financial risks such as market risk (including foreign currency exchange risk and interest rate risk), credit risk and liquidity and cash flow risk. The Group’s overall financial risk management objective is to ensure that the Group creates value for its shareholders whilst minimising potential adverse effects on the financial performance of the Group. Financial risk management is carried out through risk reviews, internal control systems, insurance programmes and adherence to the Group’s financial risk management policies. The management regularly reviews these risks and approves the treasury policies, which covers the management of these risks.


271

40 FINANCIAL INSTRUMENTS (CONTINUED)

40.1 Foreign currency risk

The Group operates internationally and is exposed to various currencies, mainly Singapore Dollar (“SGD”), US Dollar (“USD”) and Renminbi (“RMB”). Foreign currency denominated assets and liabilities give rise to foreign currency exposures.

The Group’s foreign currency risk management objective is to minimise foreign currency exposure that gives rise to economic impact, both at transaction and reporting period translation levels.

40.1.1 Risk management approach

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country, in which the property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

CCIRS is used to hedge the volatility in the cash flow attributable to variability in the foreign currency denominated borrowings from the inception to maturity of the borrowings.

Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

40.1.2 Foreign currency risk exposure

The Group and the Company are not exposed to significant foreign currency risk as the majority of the Group’s and the Company’s transactions, assets and liabilities are denominated in the functional currencies of the respective entities within the Group except for the SGD deposits, USD borrowings and intercompany advances.

As defined by MFRS 7 ‘Financial Instruments: Disclosure’, currency risks arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency.

272




40.1 Foreign currency risk (continued)

40.1.2 Foreign currency risk exposure (continued)

As at 30 June 2020, the Group’s and the Company’s net monetary (liabilities)/assets are as tabled below.

The effects to the Group’s and the Company’s profit before tax, had these foreign currencies denominated net monetary (liabilities)/assets strengthened by 5% against RM, are as follows:

Group Company

2020RM’000

2019RM’000

2020RM’000

2019RM’000

Net monetary (liabilities)/assets denominated in

- USD (562,853) (1,358,320) 128 91

- SGD 326,320 236,266 315,344 236,059

(Decrease)/Increase in profit or loss if the currency had strengthened by 5% (2019: 5%)

- USD (28,143) (67,916) 6 5

- SGD 16,316 11,813 15,767 11,803

Net exposure (11,827) (56,103) 15,773 11,808

Except as disclosed above, other foreign currency exchange risks exposures are not material and did not have any significant impact on the financial statements of the Group and of the Company as at 30 June 2020, hence sensitivity analysis is not presented.

40.2 Interest rate risk

The Group’s interest rate risk arises from its interest-bearing financial instruments that could impact fair value and future cash flows due to fluctuation in market interest rates.

The Group’s objective on interest rate risk management is to achieve a balance in repricing risks and the optimisation of its cost of funds whilst ensuring sufficient liquidity to meet funding needs.


273


40.2 Interest rate risk (continued)


The Group actively reviews its debt portfolio, taking into account the nature and requirements of its businesses as well as the current business and economic environment. This strategy allows it to achieve an optimum cost of capital whilst locking in long term funding rates for long term investments.

Funds held for liquidity purposes and temporary surpluses are placed in short term interest-bearing financial instruments.

40.2.2 Interest rate risk exposure

The Group’s fixed interest bearing assets are primarily cash held in Housing Development Accounts, short term deposits with financial institutions and investments in fixed income trust funds. The Group considers the risk of significant changes to interest rates on those deposits to be unlikely.

The exposure of the Group and of the Company to interest risk arises primarily from their borrowings and loans. The Group and the Company manage their interest rate exposure by monitoring a mix of fixed and floating rate borrowings. The Group and the Company also entered into CCIRS and IRS to hedge the floating rate interest payable on borrowings as disclosed in Note 33 to the financial statements.

As at 30 June 2020, after taking into account the effect of the CCIRS and IRS, the borrowings of the Group of RM2,054,720,000 (2019: RM4,730,465,000) are at floating interest rates.

As at 30 June 2020, the net amounts due to subsidiaries of the Company of RM158,460,000 (2019: net amounts due to subsidiaries of RM406,250,000) are at floating interest rates.

40.2.3 Sensitivity analysis

Sensitivity analysis on interest rate is applied on floating rate financial instruments only, as the carrying amount of fixed rate financial instruments are measured at amortised cost.

A 50 basis points movement in interest rates of the borrowings would increase or decrease the additions to land held for property development, property development costs, property, plant and equipment and investment properties arising from capitalised borrowing costs of the Group by approximately RM10,274,000 (2019: RM23,653,000). The interest expense would be charged to profit or loss based on percentage of completion method. The interest rate risk exposure to the profit or loss is deemed immaterial to the Group, hence sensitivity analysis is not presented.

A 50 basis points movement in interest rates of the net amounts due to subsidiaries would decrease or increase the profit or loss of the Company by approximately RM792,000 (2019: RM2,031,000).

274




40.3 Credit risk

The Group’s credit risk exposure is mainly related to external counter-party credit risk on monetary financial assets and trade credits. Credit risk is managed at the business unit level, but macro group-wide policies on the granting of credit and credit control are issued and monitored centrally, such as those relating to credit risk concentration, adequacy of formal credit rating and evaluation of counter parties, credit impairment and unit level credit control performance.

The Group’s objective on credit risk management is to avoid significant exposure to any individual customer or counter party and to minimise concentration of credit risk.


Credit risk or financial loss from the failure of customers or counter parties to discharge their financial and contractual obligations from trade credits is managed through the application of credit approvals, credit limits, insurance programmes and monitoring procedures on an on-going basis. If necessary, the Group may obtain collateral from counter parties as a mean of mitigating losses in the event of default.

The Group’s credit risk varies with the different classes of counter-parties as outlined below:

(i) Property

Generally, property units sold are progressively invoiced and settled by end-buyers’ financiers posing minimal credit risk. Property investment, hospitality and leisure segments for which sales are generally cash settled; and the rental property sub-segment which poses a certain degree of collection risk in correlation with the macroeconomic environment.

Policies and procedures

(a) Tail-end progress billings on property units sold that serve as retention sum are closely monitored and claimed upon expiry of defect liability period;

(b) Credit granted for corporate clients in the hospitality segment are duly assessed and selectively approved with established limits;

(c) All tenants of its investment properties are subjected to deposits requirement averaging one (1) to five (5) months rental; and

(d) Credit exposure is monitored on limits and aging, managed and reviewed periodically. Debtors with emerging credit problems are identified early and remedial actions are taken promptly to minimise further exposure and to restore past due status.


275


40.3 Credit risk (continued)

40.3.1 Risk management approach (continued)

(i) Property (continued)

Collateral and credit enhancement

In general, a combination of:

(a) Title retention and conveyance on clearance for property development;

(b) Security deposits for rental segment; and

(c) Cash deposits/advance for hospitality segment.

(ii) Financial institutions and exchanges

The Group places its working capital and surplus funds in current accounts, money market, time-deposits with financial institutions; and investment in fixed income trust fund managed by licensed financial institutions. Beyond the minimal deposit guarantee offered by certain sovereign nation’s deposit insurance schemes, the Group is exposed to a degree of counter-parties’ credit risk in times of severe economic or financial crisis.

Policies and procedures

(a) Funds are mainly placed with licensed financial institutions with credit rating of “A- and above”; and

(b) Funds placements are centrally monitored, and where applicable are spread out based on location need.

Collateral and credit enhancement

In general, a combination of:

(a) National deposit insurance; and

(b) Fidelity guarantee.

In general, all business units of the Group have a comprehensive policy that governs the need for formal credit rating system and evaluation on counter parties prior to any contractual arrangement that would result in credit risk exposure. Besides exposure amount, credit risk is also measured and monitored by way of credit quality segregation, past due aging analysis, and limits breach alerts.

276





40.3.2 Credit risk exposures and concentration

(i) Exposure to credit risk – trade and other receivables and contract assets

The Group does not have any significant credit risk from its property development activities as sale of development properties are made to large number of property purchasers with end financing facilities from reputable end-financiers, and the ownership and rights to the properties revert to the Group in the event of default.

Credit risk arising from the Group’s property investment segment is limited as all tenants of its investment properties are subjected to security deposits requirement averaging one (1) to five (5) months rental.

The other receivables and contract assets impairment are assessed individually to determine whether there was objective evidence that an impairment had been incurred but not yet identified. The Group’s other receivables mainly comprise of deposits placed with utilities companies and local authorities. The Group applies the 3-stage approach, which utilises three (3) categories (performing, under-performing and non-performing) to reflect the credit risk and how loss allowance is determined for each of the categories. The Group has determined that the other receivables are performing, and there is no indication that the amounts are not collectible and therefore the ECL allowance is immaterial.

(ii) Exposure to credit risk - cash and cash equivalents

Credit risk from cash and cash equivalents is generally low as the counter-parties involved are reputable financial institutions.

(iii) Exposure to credit risk – related party balances

Credit risk with respect to amounts due from joint ventures, an associate and subsidiaries are assessed to be low as the significant amounts due are from companies which have sufficient liquid assets to repay the loan if demanded. Hence, the impact of ECL is immaterial.

At the end of the reporting period, the maximum exposure of the Group and of the Company to credit risk is represented by the carrying amount of each class of financial assets recognised on the statement of financial position.

Credit risk concentration profile

Concentrations of credit risk with respect of trade and other receivables are limited due to the Group’s large number of customers, who are dispersed over a broad spectrum of industries and businesses.


277



40.3.2 Credit risk exposures and concentration (continued)

The credit risk concentration of the Group is mainly in the “receivables” class of assets, except for non-refundable deposits, prepayments, contract costs, good and services tax and value added tax, and this is further analysed below to reveal the credit risk concentration by geographic location and business segment.

Propertydevelopment

Property investment

Hospitality & leisure and others Total

Group RM’000 % RM’000 % RM’000 % RM’000 %

2020

Malaysia 103,998 40 24,176 99 10,881 93 139,055 47

Asia (excluding Malaysia) 156,424 60 262 1 850 7 157,536 53

260,422 100 24,438 100 11,731 100 296,591 100

2019

Malaysia 142,205 64 16,674 98 33,120 100 191,999 71

Asia (excluding Malaysia) 78,568 36 268 2 - - 78,836 29

220,773 100 16,942 100 33,120 100 270,835 100

278






The following table provides information about the Group’s and Company’s exposure of credit risk and expected credit losses for trade and other receivables (excluding non-refundable deposits, prepayments, contract costs, goods and services tax and value added tax) and contract assets as at 30 June 2020 which are grouped together as they are expected to have similar risk nature.

Group

Not past dueRM’000

Past due

Less than90 daysRM’000

Between 91to 120 days

RM’000

More than120 days

RM’000Total

RM’000

2020

Trade and other receivables 232,680 37,506 846 33,699 72,051

Contract assets 220,259 - - - -

Amounts due from joint ventures 564,595 - - - -

Interest in redeemable preference shares in an associate 53,070 - - - -

1,070,604 37,506 846 33,699 72,051

Individual impairment - - - (8,140) (8,140)

Net total 1,070,604 37,506 846 25,559 63,911

2019

Trade and other receivables 238,440 20,409 898 16,891 38,198

Contract assets 216,591 - - - -

Amounts due from joint ventures 583,635 - - - -

Interest in redeemable preference shares in an associate 53,070 - - - -

1,091,736 20,409 898 16,891 38,198

Individual impairment - - - (5,803) (5,803)

Net total 1,091,736 20,409 898 11,088 32,395


279




The following table provides information about the Group’s and Company’s exposure of credit risk and expected credit losses for trade and other receivables (excluding non-refundable deposits, prepayments, contract costs, goods and services tax and value added tax) and contract assets as at 30 June 2020 which are grouped together as they are expected to have similar risk nature. (continued)

Company

2020RM’000

2019RM’000

Not past due

Trade and other receivables 185 174

Amounts due from subsidiaries 232,853 232,873

Net total 233,038 233,047

280




40.4 Liquidity and cash flow risk

Liquidity and cash flow risk arise when financial resources are insufficient to meet financial obligations as and when they fall due, or have to be met at excessive cost.

The Group’s liquidity risk management objective is to ensure that all foreseeable funding commitments can be met as and when due in a cost-effective manner.


The Group leverages on IOI Properties Group Berhad (“IOIPG”) as the public listed parent company whereby treasury related activities are centralised and where the optimal weighted average costs of funds is managed. The Company, as a parent company plays a central liquidity management role where the Group’s longer term funding requirements are managed based on business and liquidity needs, whilst the day-to-day operational liquidity needs are decentralised at the business unit level. The Group practises an arm’s-length market based policy with regard to funding costs.

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure all operating, investing and financing needs are met. To mitigate liquidity risk, management measures and forecasts its cash commitments, monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations and investment activities. In addition, the Group strives to maintain available banking facilities at a reasonable level against its overall debt position. As at 30 June 2020, the Group has undrawn banking facilities of RM10,330,716,000 (2019: RM5,017,683,000).

The Group manages its liquidity risk with a combination of the following methods:

(i) Maintain a balanced contractual maturity profile of financial assets to meet financial liabilities (particularly on near and immediate term maturity);

(ii) Maintain a diversified range of funding sources with adequate back-up facilities;

(iii) Maintain debt financing and servicing plan; and

(iv) Maintain medium to long term cash flow planning incorporating funding positions and requirements of all its subsidiaries.

As a group’s policy, all business units conform to the following processes in ensuring its liquidity profiles are balanced and that all its obligations can be met when due:

(i) Perform annual cash flow budgeting and medium term cash flow planning, in which the timing of operational cash flows and its resulting surplus or deficit are reasonably determined. The aggregation of these allows for an overview of the Group’s forecast cash flow and liquidity position, which in turn facilitates further consolidated cash flow planning;

(ii) Manage contingent liquidity commitment and exposures;

(iii) Monitor liquidity ratios against internal thresholds;

(iv) Manage working capital for efficient use of funds and optimise cash conversion cycle; and

(v) Manage concentration and maturity profile of both financial and non-financial liabilities.


281


40.4 Liquidity and cash flow risk (continued)

40.4.2 Liquidity risk exposure

The following table details the maturity profile of the Group’s and of the Company’s financial liabilities at the end of the reporting period based on contractual undiscounted repayment obligations:

Group

Less than 1 year

RM’000

1 - 2years

RM’000

2 - 3years

RM’000

3 - 4years

RM’000

More than 4 yearsRM’000

TotalRM’000

2020

Financial liabilities

Trade and other payables* 1,075,524 30,704 - - - 1,106,228

Borrowings 1,413,632 560,610 7,672,586 602,995 1,442,606 11,692,429

Lease liabilities 1,560 1,424 536 67 67 3,654

Derivative financial liabilities 90,637 78,764 50,655 - - 220,056

2,581,353 671,502 7,723,777 603,062 1,442,673 13,022,367

2019


Trade and other payables* 983,231 29,709 - - - 1,012,940

Borrowings 1,540,879 1,699,784 829,477 6,954,729 1,639,285 12,664,154

Derivative financial liabilities 16,958 20,916 14,974 8,590 - 61,438

2,541,068 1,750,409 844,451 6,963,319 1,639,285 13,738,532

* Includes retention monies of RM223,685,000 (2019: RM217,067,000) which are repayable within the normal operating cycle i.e. upon expiry of the defect liability period of 12 to 24 months (2019: 6 to 24 months).

282




40.4 Liquidity and cash flow risk (continued)

40.4.2 Liquidity risk exposure (continued)

The following table details the maturity profile of the Group’s and of the Company’s financial liabilities at the end of the reporting period based on contractual undiscounted repayment obligations: (continued)

Company

Less than 1 year

RM’000

1 - 2years

RM’000

2 - 3years

RM’000

3 - 4years

RM’000

More than 4 yearsRM’000

TotalRM’000

2020


Amounts due to subsidiaries 159,051 13,646 13,646 284,409 - 470,752

Trade and other payables 2,366 - - - - 2,366

Borrowings 229,747 - - - - 229,747

Derivative financial liability 1,761 - - - - 1,761

392,925 13,646 13,646 284,409 - 704,626

2019


Amounts due to subsidiaries 708,904 - - - - 708,904

Trade and other payables 1,216 - - - - 1,216

Borrowings 240,150 227,091 - - - 467,241

Derivative financial liability 5,875 3,737 - - - 9,612

956,145 230,828 - - - 1,186,973

Financial liabilities contractual maturity periods exceeding 12 months are within comfortable levels, and should be well covered by its annual free cash flow to be generated from its operations.


283


40.5 Fair values

(a) Methods and assumptions used to estimate fair value

The fair values of financial assets and financial liabilities are determined as follows:

(i) Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value.

Except as otherwise disclosed, the carrying amounts of the current financial assets and liabilities are disclosed at reasonable approximation of its fair value due to their short term nature.

(ii) Fixed rate borrowings

The fair value of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of borrowing at the end of each reporting period.

(b) Fair value hierarchy

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).

284




40.5 Fair values (continued)

(b) Fair value hierarchy (continued)

The following tables set out the financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statement of financial position.

Fair value of financial instrumentscarried at fair value

Fair value of financial instrumentsnot carried at fair value

Total fair

valueRM’000

CarryingamountRM’000Group

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

2020

Financial assets

Amortised cost

- Interest in redeemable preference shares in an associate - - - - - 53,070 - 53,070 53,070 53,070

- Amounts due from joint ventures - - - - - 564,114 - 564,114 564,114 564,114

Fair value through profit or loss

- Short term funds 80,588 - - 80,588 - - - - 80,588 80,588

80,588 - - 80,588 - 617,184 - 617,184 697,772 697,772


Other financial liabilities carried at amortised costs

- Borrowings - - - - - 11,018,411 - 11,018,411 11,018,411 10,895,176

- Lease liabilities - - - - - 3,490 - 3,490 3,490 3,490

- Trade and other payables - - - - - 30,704 - 30,704 30,704 30,704


- Derivative financial liabilities - 219,291 - 219,291 - - - - 219,291 219,291

- 219,291 - 219,291 - 11,052,605 - 11,052,605 11,271,896 11,148,661


285




The following tables set out the financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statement of financial position. (continued)



Total fair

valueRM’000

CarryingamountRM’000Group

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

2019

Financial assets

Amortised cost

- Interest in redeemable preference shares in an associate - - - - - 53,070 - 53,070 53,070 53,070

- Amounts due from joint ventures - - - - - 583,075 - 583,075 583,075 583,075


- Short term funds 41 - - 41 - - - - 41 41

41 - - 41 - 636,145 - 636,186 636,186 636,186



- Borrowings - - - - - 11,339,065 - 11,339,065 11,339,065 11,326,461

- Trade and other payables - - - - - 29,709 - 29,709 29,709 29,709


- Derivative financial liabilities - 57,681 - 57,681 - - - - 57,681 57,681

- 57,681 - 57,681 - 11,368,774 - 11,368,774 11,426,455 11,413,851

286









Total fair

valueRM’000

CarryingamountRM’000Company

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

2020

Financial assets

Amortised cost

- Amount due from a subsidiary - - - - - 232,853 - 232,853 232,853 232,853


- Short term funds 80,588 - - 80,588 - - - - 80,588 80,588

80,588 - - 80,588 - 232,853 - 232,853 313,441 313,441



- Borrowings - - - - - 225,166 - 225,166 225,166 224,571

- Amount due to a subsidiary - - - - - 270,763 - 270,763 270,763 270,763


- Derivative financial liability - 1,754 - 1,754 - - - - 1,754 1,754

- 1,754 - 1,754 - 495,929 - 495,929 497,683 497,088


287







Total fair

valueRM’000

CarryingamountRM’000Company

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

Level 1RM’000

Level 2RM’000

Level 3RM’000

TotalRM’000

2019

Financial assets

Amortised cost

- Amount due from a subsidiary - - - - - 232,853 - 232,853 232,853 232,853


- Short term funds 41 - - 41 - - - - 41 41

41 - - 41 - 232,853 - 232,853 232,894 232,894



- Borrowings - - - - - 441,261 - 441,261 441,261 445,815


- Derivative financial liability - 9,364 - 9,364 - - - - 9,364 9,364

- 9,364 - 9,364 - 441,261 - 441,261 450,625 455,179

288




40.6 Classification of financial instruments

The financial assets and liabilities are classified into the following categories after initial recognition for the purpose of subsequent measurement:

Financial assets

Amortisedcosts

RM’000

Fair valuethrough

profit or lossRM’000

TotalRM’000

Group

2020

Trade and other receivables, net of goods and services tax, non-refundable deposits and prepayments 296,591 - 296,591

Amounts due from joint ventures 564,595 - 564,595

Interest in redeemable preference shares in an associate 53,070 - 53,070

Short term funds - 80,588 80,588

Deposits with financial institutions 479,891 - 479,891

Cash and bank balances 911,506 - 911,506

2,305,653 80,588 2,386,241

2019

Trade and other receivables, net of goods and services tax, non-refundable deposits and prepayments 270,835 - 270,835

Amounts due from joint ventures 583,635 - 583,635

Interest in redeemable preference shares in an associate 53,070 - 53,070

Short term funds - 41 41


Cash and bank balances 1,121,758 - 1,121,758

2,484,384 41 2,484,425


289


40.6 Classification of financial instruments (continued)

The financial assets and liabilities are classified into the following categories after initial recognition for the purpose of subsequent measurement: (continued)

Financial assets

Amortisedcosts

RM’000

Fair valuethrough

profit or lossRM’000

TotalRM’000

Company

2020

Trade and other receivables, net of prepayments 185 - 185

Amount due from a subsidiary 232,853 - 232,853

Short term funds - 80,588 80,588



642,606 80,588 723,194

2019

Trade and other receivables, net of prepayments 174 - 174

Amounts due from subsidiaries 232,873 - 232,873

Short term funds - 41 41



901,385 41 901,426

290




40.6 Classification of financial instruments (continued)

The financial assets and liabilities are classified into the following categories after initial recognition for the purpose of subsequent measurement: (continued)


Otherfinancial

liabilities atamortised

costsRM’000

Fair value

throughprofit and

lossRM’000

TotalRM’000

Group

2020

Borrowings 10,895,176 - 10,895,176

Trade and other payables* 1,106,228 - 1,106,228

Derivative financial liabilities - 219,291 219,291

12,001,404 219,291 12,220,695

2019

Borrowings 11,326,461 - 11,326,461

Trade and other payables* 1,012,940 - 1,012,940

Derivative financial liabilities - 57,681 57,681

12,339,401 57,681 12,397,082

Company

2020

Borrowings 224,571 - 224,571

Trade and other payables 2,366 - 2,366

Amounts due to subsidiaries 426,467 - 426,467

Derivative financial liability - 1,754 1,754

653,404 1,754 655,158

2019

Borrowings 445,815 - 445,815

Trade and other payables 1,216 - 1,216

Amounts due to a subsidiaries 689,411 - 689,411

Derivative financial liability - 9,364 9,364

1,136,442 9,364 1,145,806

* Excludes provisions and goods and services tax.


291

41 COMMITMENTS

41.1 Capital commitments

Group

2020RM’000

2019RM’000

Authorised capital expenditure not provided for in the financial statements

- Contracted

Additions of land held for property development 81,359 81,359

Additions of property, plant and equipment 324,189 211,582

Additions of investment properties 1,805,647 2,009,568

2,211,195 2,302,509

41.2 Operating lease commitments

41.2.1 The Group as lessor

The future minimum lease payments receivable under operating leases contracted for as at end of reporting period but not recognised as receivables are as follows:

Group

2020RM’000

2019RM’000

Not later than one (1) year 215,368 262,241

One (1) year to two (2) years 129,445 160,885

Two (2) years to three (3) years 83,505 62,736

Three (3) years to four (4) years 58,004 17,999

Four (4) years to five (5) years 38,532 15,532

More than five (5) years 168,076 121,433

692,930 640,826

The Group entered into non-cancellable operating lease agreements on its investment properties and unsold properties. These leases have remaining non-cancellable lease terms of between one (1) to twenty (20) years (2019: one (1) to seventeen (17) years).

42 SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

There was no significant event during the financial year.

292



43 SEGMENTAL INFORMATION

The Group has four (4) reportable operating segments that are organised and managed separately according to the nature of products and services, specific expertise and technological requirements, which require different business and marketing strategies. The reportable segments are summarised as follows:

Property development Development of residential, commercial and industrial properties

Property investment Investments in shopping malls, office buildings, office complexes and other properties

Hospitality and leisure Management and operation of hotels, resorts, golf course and amusement park

Other operations Project and building services management, landscape services and other operations which are not sizeable to be reported separately

The Group’s chief operating decision maker monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain aspects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group’s financing (including interest expense) and income taxes are managed on a group basis and are not allocated to operating segments.

The transactions between segments are carried out on terms and conditions negotiated and agreed between the parties.

Segment assets exclude current tax assets, deferred tax assets, derivative financial assets and assets used primarily for corporate purposes such as goodwill on consolidation, short term funds and deposits with financial institutions.

Segment liabilities exclude current tax liabilities, deferred tax liabilities, borrowings and derivative financial liabilities that are managed under centralised treasury function.

Details are provided in the reconciliations from segment assets and liabilities to the Group position.


293

43 SEGMENTAL INFORMATION (CONTINUED)

2020

Propertydevelopment

RM’000

Propertyinvestment

RM’000

Hospitality & leisure

RM’000

Otheroperations

RM’000Elimination

RM’000Total

RM’000

Revenue

External 1,638,453 320,796 150,070 7,027 - 2,116,346

Inter-segment 66,237 4,304 163 95,397 (166,101) -

Total revenue 1,704,690 325,100 150,233 102,424 (166,101) 2,116,346

Results

Segment operating profit/(loss) 738,866 165,671 (10,260) 2,891 - 897,168

Property development costs written down (24,755) - - - - (24,755)

Inventories written down (3,100) - - - - (3,100)

Fair value loss on investment properties - (54,386) - - - (54,386)

Impairment loss on investment properties - (50,379) - - - (50,379)

Share of result of an associate 19,622 - - - - 19,622

Share of results of joint ventures 82,859 27,245 (16,887) - - 93,217

Segment results 813,492 88,151 (27,147) 2,891 - 877,387

Included in the Group’s share of results of joint ventures is fair value and impairment losses on the properties in Singapore of RM20,958,000 (2019: RM12,743,000).

2020

Propertydevelopment

RM’000

Propertyinvestment

RM’000


RM’000

Otheroperations

RM’000Total

RM’000

Assets

Operating assets 11,829,304 14,902,469 805,548 8,329 27,545,650

Investment in an associate 109,523 - - - 109,523

Interests in joint ventures 2,219,126 1,635,177 622,106 - 4,476,409

Segment assets 14,157,953 16,537,646 1,427,654 8,329 32,131,582

Liabilities

Segment liabilities 1,030,797 403,104 21,581 2,863 1,458,345

Other information

Capital expenditure 251,142 798,441 45,543 148 1,095,274

Depreciation and amortisation 6,956 9,747 26,132 38 42,873

Non-cash items other than depreciation and amortisation 28,772 105,465 2,621 (3) 136,855

294




2019

Propertydevelopment

RM’000

Propertyinvestment

RM’000


RM’000

Otheroperations

RM’000Elimination

RM’000Total

RM’000

Revenue

External 1,634,582 354,960 198,017 9,955 - 2,197,514

Inter-segment (3,592) 4,260 615 152,503 (153,786) -

Total revenue 1,630,990 359,220 198,632 162,458 (153,786) 2,197,514

Results

Segment operating profit 612,986 207,877 22,624 6,864 - 850,351

Fair value gain on investment properties - 93,356 - - - 93,356

Share of result of an associate 2,005 - - - - 2,005

Share of results of joint ventures 50,824 63,365 (11,015) - - 103,174

Segment results 665,815 364,598 11,609 6,864 - 1,048,886

2019

Propertydevelopment

RM’000

Propertyinvestment

RM’000


RM’000

Otheroperations

RM’000Total

RM’000

Assets

Operating assets 11,973,819 14,143,517 821,103 9,573 26,948,012

Investment in an associate 99,313 - - - 99,313

Interests in joint ventures 2,763,057 1,615,644 633,418 - 5,012,119

Segment assets 14,836,189 15,759,161 1,454,521 9,573 32,059,444

Liabilities

Segment liabilities 1,133,718 232,336 27,950 2,324 1,396,328

Other information

Capital expenditure 232,267 585,661 45,681 27 863,636

Depreciation and amortisation 6,687 10,105 24,004 50 40,846

Non-cash items other than depreciation and amortisation 26,232 (92,712) 439 21 (66,020)


295


Reconciliation of reportable segment revenue, profit or loss, assets and liabilities to the Group’s corresponding amounts are as follows:

Group

2020RM’000

2019RM’000

Profit or loss

Segment results 877,387 1,048,886


Interest expense (145) -

Net foreign currency translation (loss)/gain on:

- borrowings (35,025) (53,073)

- deposits 4,736 21,211

Profit before taxation 897,093 1,085,960

Taxation (437,677) (425,530)

Profit after taxation 459,416 660,430

Assets

Segment assets 32,131,582 32,059,444

Unallocated corporate assets 768,191 659,758

Total assets 32,899,773 32,719,202

Liabilities

Segment liabilities 1,458,345 1,396,328

Unallocated corporate liabilities 12,289,480 12,329,291


296




Geographical segments

The Group’s major businesses operate in the following principal geographical areas:

Malaysia Development of residential, commercial and industrial properties.

Investments in shopping mall, office building and other properties.

Management and operation of hotels, resorts, golf course and amusement park.

Project and building management services, landscape services and other operations.

Singapore Development of residential and commercial properties.

Investments in retail, hotel and office building.

PRC Development of residential and commercial properties.

Investments in shopping mall, hotel and office building.

MalaysiaRM’000

PRCRM’000

SingaporeRM’000

TotalRM’000

2020

Revenue from external customers by location of customers 1,311,675 789,402 15,269 2,116,346

Segment operating profit 404,725 488,160 4,283 897,168

Non-current assets^ 10,130,397 937,502 13,505,189 24,573,088

2019

Revenue from external customers by location of customers 1,614,055 531,818 51,641 2,197,514

Segment operating profit 546,053 280,072 24,226 850,351

Non-current assets^ 9,760,218 640,050 13,710,673 24,110,941

^ Excluding financial assets, deferred tax assets and goodwill on consolidation.

There is no single external customer from which the revenue generated exceeded 10% of the Group’s revenue.


297

44 LIST OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES

The subsidiaries, associate and joint ventures incorporated in Malaysia except otherwise stated, are as follows:

Name of Company

Effective Group Interest

Principal Activities2020

%2019

%

Direct Subsidiaries

Bukit Kelang Development Sdn. Bhd. 100.0 100.0 Property development and cultivation of plantation produce

Fortune Growers Sdn. Bhd. 100.0 100.0 Property development and cultivation of plantation produce

Fortune Premiere Sdn. Bhd. 100.0 100.0 Provision of treasury services

IOIPG Capital Sdn. Bhd. 100.0 100.0 Provision of treasury management services

IOI Business Hotel Sdn. Bhd. 100.0 100.0 Provision of hotel and hospitality services

IOI City Mall Sdn. Bhd. 100.0 100.0 Property investment, property management and investment holding

IOI Consolidated (Singapore) Pte. Ltd.* (Incorporated in Singapore)

100.0 100.0 Investment holding

IOI LiVO Loyalty Sdn. Bhd. (formerly known as Progressive Glory Sdn Bhd)

100.0 - Provision of management of loyalty programme services

IOI Properties Berhad 99.9 99.9 Property development, property investment and investment holding

IOI Properties Capital (L) Berhad^^ (Incorporated in Labuan)

100.0 100.0 Provision of treasury management services

IOI Properties Empire Sdn. Bhd. 100.0 100.0 Property development and property investment

IOIP Capital Management Sdn. Bhd. 100.0 100.0 Provision of treasury management services

Mayang Development Sdn. Bhd. 100.0 100.0 Property development, property investment and investment holding

Nice Skyline Sdn. Bhd. 99.9 99.9 Property development, investment holding and cultivation of plantation produce

Novel Vortex Limited** (Incorporated in the British Virgin Islands)

100.0 100.0 Provision of treasury services

Nusa Properties Sdn. Bhd. 100.0 100.0 Property development and property investment

Palmex Industries Sdn. Bhd. 100.0 100.0 Property development

PMX Bina Sdn. Bhd. 100.0 100.0 General contractor for the construction of real estate

Progressive View Pte. Ltd.* (Incorporated in Singapore)


298



44 LIST OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES (CONTINUED)

The subsidiaries, associate and joint ventures incorporated in Malaysia except otherwise stated, are as follows: (continued)

Name of Company



%2019

%

Direct Subsidiaries (continued)

Resort Villa Development Sdn. Bhd. 100.0 100.0 Property investment and provision of hotel and hospitality services

Resort Villa Golf Course Berhad 100.0 100.0 Property investment and management of a golf club known as Palm Garden Golf Club

Resort Villa Golf Course Development Sdn. Bhd.

100.0 100.0 Provision of hotel and hospitality services

Wealthy Link Pte. Ltd.* (Incorporated in Singapore)

100.0 100.0 Property investment

Emerald Property Services Sdn. Bhd. 100.0 100.0 Provision of management services

Dynamism Investments Limited* (Incorporated in Hong Kong)


Vital Initiative Limited* (Incorporated in Hong Kong)


Subsidiaries of IOI Properties Berhad

Cahaya Kota Development Sdn. Bhd. 99.9 99.9 Property development, property investment and investment holding

Commercial Wings Sdn. Bhd. 99.9 99.9 Property investmentDynamic Management Sdn. Bhd. 99.9 99.9 Property development, investment holding

and provision of management services

Flora Development Sdn. Bhd. 99.9 99.9 Property development and property investment

Flora Horizon Sdn. Bhd. 99.9 99.9 Property development and cultivation of plantation produce

Future Link Properties Pte. Ltd.^ (Incorporated in Singapore)

- 99.9 Investment holding

Hartawan Development Sdn. Bhd. 99.9 99.9 Property development and cultivation of plantation produce

IOI Harbour Front Sdn. Bhd. 99.9 99.9 Property development and property investment

IOI Landscape Services Sdn. Bhd. 99.9 99.9 Landscape services, sale of ornamental plants and turfing grass

IOI Land Singapore Pte. Ltd.* (Incorporated in Singapore)



299



Name of Company



%2019

%

Subsidiaries of IOI Properties Berhad (continued)

IOI Lavender Sdn. Bhd. 99.9 99.9 Property development and property investment

IOI Medini Sdn. Bhd. 99.9 99.9 Property development and property investment

IOI Medini Management Sdn. Bhd. 99.9 99.9 Provision of management services

IOI Mulberry Sdn. Bhd. 99.9 99.9 Property development and property investment

IOI PFCC Hotel Sdn. Bhd. 99.9 99.9 Provision of hotel and hospitality services

IOI Prima Property Sdn. Bhd. 99.9 99.9 Property development and property investment

IOI Properties (Singapore) Pte. Ltd.* (Incorporated in Singapore)

99.9 99.9 Property investment and investment holding

Jutawan Development Sdn. Bhd. 79.9 79.9 Property development and property investment

Knowledge Vision Sdn. Bhd. 99.9 99.9 Property development and property investment

Kumpulan Mayang Sdn. Bhd. (Dissolved)

- 99.9 Property development

Multi Wealth (Singapore) Pte. Ltd.* (Incorporated in Singapore)


Palmy Max Limited* (Incorporated in Hong Kong)

99.9 99.9 Investment holding and provision of consultancy services

Paska Development Sdn. Bhd. 99.9 99.9 Property development and property investment

Pilihan Teraju Sdn. Bhd. 99.9 99.9 Property development and property investment

Pine Properties Sdn. Bhd. 99.9 99.9 Property development and property investment

Property Skyline Sdn. Bhd. 99.9 99.9 Provision of management services and investment holding

Speed Modulation Sdn. Bhd. 99.9 99.9 Property investment

300





Name of Company



%2019

%

Subsidiaries of IOI City Holdings Sdn. Bhd.

IOI City Hotel Sdn. Bhd. 100.0 100.0 Provision of hotel and hospitality services

IOI City Park Sdn. Bhd. 100.0 100.0 Car park operator and provision of car park management services

IOI City Tower One Sdn. Bhd. 100.0 100.0 Property management and property investment

IOI City Tower Two Sdn. Bhd. 100.0 100.0 Property management and property investment

Subsidiaries of Cahaya Kota Development Sdn. Bhd.

IOI Building Services Sdn. Bhd. 99.9 99.9 Building maintenance services

Lush Development Sdn. Bhd. 99.9 99.9 Property development and property investment

Riang Takzim Sdn. Bhd. 99.9 99.9 Investment holding

Tanda Bestari Development Sdn. Bhd. 99.9 99.9 Property development and property investment

Subsidiaries of Dynamic Management Sdn. Bhd.

Legend Advance Sdn. Bhd. 69.9 69.9 Property development and property investment

Paksi Teguh Sdn. Bhd. 99.9 99.9 General contractor for the construction of real estate

Pilihan Megah Sdn. Bhd. 99.9 99.9 Property development, property investment and provision of management services

Subsidiary of IOI City Mall Sdn. Bhd.

IOI City Holdings Sdn. Bhd. 100.0 100.0 Investment holding and property investment

Subsidiary of Multi Wealth (Singapore) Pte. Ltd.

Clementi Development Pte. Ltd.* (Incorporated in Singapore)

87.9 87.9 Property development


301



Name of Company



%2019

%

Subsidiaries of Property Skyline Sdn. Bhd.

Nice Frontier Sdn. Bhd. 99.9 99.9 Property development, property investment and cultivation of plantation produce

Property Village Berhad 99.9 99.9 Property development, golf club and recreational services and investment holding

Trilink Pyramid Sdn. Bhd. 99.9 99.9 Property development and provision of management services

Wealthy Growth Sdn. Bhd. 99.9 99.9 Property development

Subsidiary of Property Village Berhad

Baycrest Sdn. Bhd. 99.9 99.9 General contractor

Subsidiaries of Palmy Max Limited

IOI (Xiamen) Business Management Co. Ltd.# (Incorporated in the People’s Republic of China)

99.9 99.9 Business management, property management and procurement of construction materials

IOI (Xiamen) Properties Co. Ltd.# (Incorporated in the People’s Republic of China)

99.9 99.9 Property development, property investment and provision of hotel and hospitality services

Prime Joy Investments Limited* (Incorporated in Hong Kong)


Subsidiary of Prime Joy Investments Limited

Xiamen Double Prosperous Real Estate Development Co. Ltd.# (Incorporated in the People’s Republic of China)

99.9 99.9 Property development and property management services

Subsidiary of IOI (Xiamen) Properties Co. Ltd.

Xiamen Palm City Management Services Co. Ltd.# (Incorporated in the People’s Republic of China)

99.9 99.9 Provision of management services

Xiamen Palm Kaiyue Real Estate Development Co. Ltd.# (Incorporated in the People’s Republic of China)

99.9 99.9 Property development, property management and car park management

302





Name of Company



%2019

%

Subsidiary of Pine Properties Sdn. Bhd.

PINE MJR Development Sdn. Bhd. 54.9 54.9 Property development

Subsidiary of Nice Skyline Sdn. Bhd.

Jurang Teguh Sdn. Bhd. (Dissolved)

- 99.9 General contractor

Associate of IOI Properties Berhad

GLM Emerald Industrial Park (Jasin) Sdn. Bhd.# 32.0 32.0 Property development and operation of oil palm estate

Joint Venture of IOI Consolidated (Singapore) Pte. Ltd.

Scottsdale Properties Pte. Ltd.# (Incorporated in Singapore)


Joint Venture of IOI Land Singapore Pte. Ltd.

Seaview (Sentosa) Pte. Ltd.#

(Incorporated in Singapore)49.9 49.9 Property development

Joint Venture of IOI Properties Berhad

PJ Midtown Development Sdn. Bhd. 49.9 49.9 Property development

Joint Venture of IOI Properties (Singapore) Pte. Ltd.

Pinnacle (Sentosa) Pte. Ltd.#


Joint Venture of Multi Wealth (Singapore) Pte. Ltd.

Mergui Development Pte. Ltd.#


# Audited by a firm other than member firm of PricewaterhouseCoopers International Limited and PricewaterhouseCoopers PLT.* Audited by member firm of PricewaterhouseCoopers International Limited which is a separate and independent legal entity from PricewaterhouseCoopers

PLT.** The subsidiary is not required by their local laws to appoint statutory auditors.^ Struck off pursuant to Section 344A of the Singapore Companies Act, Cap. 50.^^ Struck off from the register of Labuan Financial Services Authority under Section 151 of the Labuan Companies Act 1990 with effective from 14 July 2020.


303

45 ADOPTION OF MFRS 16 ‘LEASES’

MFRS 16 ‘Leases’ supersedes MFRS 117 ‘Leases’ and the related interpretations. MFRS 16 eliminates the classification of leases by the lessee as either finance leases or operating leases. MFRS 16 introduces a single accounting model, requiring the lessee to recognise the right-of-use (“ROU”) of the underlying asset and the lease liability reflecting future lease payment liabilities in the statement of financial position. The right-of-use asset is depreciated in accordance with the principles in MFRS 116 ‘Property, Plant and Equipment’ and the lease liability is accreted over time with interest expense recognised in the statement of profit or loss. For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as either operating leases or finance leases and account for them differently.

The Group has adopted MFRS 16 using the modified retrospective method and has not restated the comparatives. The reclassifications and adjustments arising from the new leasing rules are therefore recognised in the opening balance of statement of financial position as at 1 July 2019.

As permitted by the exemptions under the standard, the Group has applied the principles of MFRS 16 to short term leases (leases with lease terms of 12 months or less from dates of commencement) and leases for which the underlying assets are of low value.

The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Group relied on its assessment made by applying MFRS 117 and IC Interpretation 4 “Determining whether an Arrangement contains a Lease”.

In applying MFRS 16 for the first time, the Group has applied the following practical expedients:

• the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;• reliance on previous assessments on whether leases are onerous;• the accounting for operating leases with remaining lease terms of less than 12 months as short term leases as at the date of

initial application; and• the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application.

304



45 ADOPTION OF MFRS 16 ‘LEASES’ (CONTINUED)

Upon application as at 1 July 2019, the Group recognised lease liabilities of RM1,694,000.

(a) Impact on consolidated statement of financial position

As at30 June 2019

RM’000

Effect onadoption of

MFRS 16RM’000

As at1 July 2019

RM’000

Group

NON-CURRENT ASSETS

Property, plant and equipment 1,265,538 57,236 1,322,774

Prepaid lease payments 55,542 (55,542) -

NON-CURRENT LIABILITIES

Lease liabilities - 684 684

CURRENT LIABILITIES

Lease liabilities - 1,010 1,010

(b) The reconciliation between the operating lease commitments disclosed applying MFRS 117 at 30 June 2019 to the lease liabilities recognised at 1 July 2019 is as follows:

Group

RM’000

Operating lease commitments as at 30 Jun 2019 2,513

Discounted operating lease commitments as at 1 July 2019 2,345

Less:

Commitments relating to short term leases (493)

Commitments relating to leases of low-value assets (158)

Lease liabilities as at 1 July 2019 1,694

46 AUTHORISATION FOR ISSUE

The financial statements of the Group and of the Company for the financial year ended 30 June 2020 were authorised for issue by the Board of Directors on 14 September 2020.


305

STATEMENT BY DIRECTORS PURSUANT TOSECTION 251(2) OF THE COMPANIES ACT 2016

In the opinion of the Directors, the financial statements set out on pages 170 to 304 have been drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and the provisions of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2020 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

LEE YEOW SENG LEE YOKE HARDirector Director


STATUTORY DECLARATION PURSUANT TOSECTION 251(1) OF THE COMPANIES ACT 2016

I, Shen Yan Chao (MIA No. 31632), being the officer primarily responsible for the financial management of IOI Properties Group Berhad, do solemnly and sincerely declare that the financial statements set out on pages 170 to 304 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared )by the abovenamed )at Puchong, Selangor Darul Ehsan )this 14 September 2020 )

Before me

NG SAY JINCOMMISSIONER FOR OATHSNo. B195


306

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF IOI PROPERTIES GROUP BERHAD(Incorporated in Malaysia)[Company No. 201301005964 (1035807-A)]

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion

In our opinion, the financial statements of IOI Properties Group Berhad (“the Company”) and its subsidiaries (“the Group”) give a true and fair view of the financial position of the Group and of the Company as at 30 June 2020, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

What we have audited

We have audited the financial statements of the Group and of the Company, which comprise the statements of financial position as at 30 June 2020 of the Group and of the Company, and the statements of profit or loss, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 170 to 304.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Our audit approach

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements of the Group and of the Company. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and controls, and the industry in which the Group and the Company operate.


307

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters How our audit addressed the key audit matters

1. Revenue recognition from property development activities

Total revenue recognised for the Group on sale of development properties amounted to RM1,638.5 million for financial year ended 30 June 2020, of which RM1,125.6 million relates to ongoing projects.

The Group recognises revenue from ongoing property development projects in the statements of profit or loss by using the percentage of completion method. The percentage of completion is measured by reference to the property development costs incurred up to the end of the reporting period as a percentage of total estimated costs for the property development project.

Given the nature of property development projects, we focused on this area as significant estimates and judgements are required in:

• Determining the extent of property development costs accruals to reflect work performed up to the reporting date;

• Determining the estimated total property development costs to completion; and

• Determining the common costs allocation to the project phases from the total budgeted common costs attributable to the respective property development projects.

Refer to Note 5.1 (Significant Accounting Estimates and Judgements – Revenue and Cost Recognition from Property Development Activities), Note 6.19 (Significant Accounting Policies – Revenue Recognition), Note 7 (Revenue) and Note 24 (Property Development Costs)

We have performed the following procedures:

• Reviewed the terms and conditions of the major sales transactions to determine that revenue recognised conforms with the Group policies and the requirements of MFRS 15 “Revenue from contracts with customers”;

• Tested the key controls in respect of the budgeting process of total property development costs;

• Tested controls over monitoring of costs incurred for work performed to date;

• Assessed the reasonableness of samples of estimated total property development costs on the property development projects by comparing to contracts, quotations from contractors and cost estimates from quantity surveyors for newly launched projects;

• Assessed sample of revision of estimated total property development costs to supporting documentations such as quotation from contractors and variation orders received and approved by management for ongoing projects;

• Evaluated variances between actual costs incurred and budgeted property development costs to assess whether total estimated costs to completion have been properly updated;

• Assessed the reasonableness of allocation of total budgeted common costs to the project phases by comparing the budget to the approved master layout plan;

• Tested samples of actual sales of development properties to signed sales and purchase agreements;

• Tested samples of costs incurred to date to supporting documentations such as contractors’ claim certificates or suppliers invoices. Where costs have not been billed or certified, assessed the adequacy of management’s accruals of such costs by reviewing subsequent contractors’ claims certificates, supplier invoices or approved architect’s certificates; and

• Recomputed percentage of completion by computing the proportion of property development costs incurred for work performed to date to the estimated total property development costs.

Based on our work done, we did not identify any material exceptions.


308


Key audit matters (continued)

Key audit matters How our audit addressed the key audit matters

2. Fair value of completed investment properties

As at 30 June 2020, the Group’s completed investment properties, which are carried at fair value, amounted to RM4,289.7 million.

The valuations of the Group’s completed investment properties were performed by independent external valuers.

We focused on this area due to complexities in determining the fair value of the investment properties, which involved significant estimates and judgements in determining the appropriate valuation methodologies and estimating the underlying assumptions to be applied.

Refer to Note 5.4 (Significant Accounting Estimates and Judgements - Fair Value of Investment Properties), Note 6.3 (Significant Accounting Policies - Investment Properties) and Note 18 (Investment Properties)

External valuations

We obtained and read the valuation reports obtained by management from independent external valuers. Based on these reports, we discussed the valuation methodologies and assumptions used in the valuation with the independent external valuers.

We noted that the valuers have considered factors related to the properties’ overall condition and demand as a whole in arriving at the fair values.

We have assessed the independent external valuers’ competency, capabilities and objectivity by checking the valuers’ qualification and their registration to the respective boards of each country.

Valuation methodologies

We noted that the valuations of the Group’s completed investment properties were primarily based on Investment Method and Comparison Method.

We carried out the following procedures to assess the inputs underpinning the valuation of the properties:

• Agreed rental rates, rental periods, net lettable area and outgoing expenses to the underlying tenancy agreements where applicable, and held discussions with valuers to understand the factors they have considered in adjusting the inputs, including any market factors;

• Benchmarked the term yield, reversion yield and allowance for void used by the valuers to comparable properties; and

• Discussed with valuers to understand the basis of adjustments made to transacted price per square foot of comparable peers by considering factors related to the characteristics of each individual property, such as location, accessibility to the location, size, tenure and comparable transaction dates; and

• Challenged the valuers on certain key inputs and estimates used in consideration of the current market condition.

We have also assessed the sensitivity analysis prepared by management on the yields and price per square foot underpinning the valuation, where applicable.

Based on the above procedures performed, we did not identify any material exceptions.

There are no key audit matters to report for the Company.



309


Information other than the financial statements and auditors’ report thereon

The Directors of the Company are responsible for the other information. The other information comprises the Directors’ Report and contents in the 2020 Annual Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the financial statements

The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


310


Auditors’ responsibilities for the audit of the financial statements (continued)

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.



311


Auditors’ responsibilities for the audit of the financial statements (continued)

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 44 to the financial statements.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

PRICEWATERHOUSECOOPERS PLT NG GAN HOOILLP0014401-LCA & AF 1146 02914/04/2021 JChartered Accountants Chartered Accountant

Kuala Lumpur14 September 2020


312

DEVELOPMENT PROPERTIES

Location Tenure

2020 Remaining Land Area

(Acres) UsageYear of

Acquisition

Carrying Amount as at 30 June 2020

RM’000

MALAYSIA

Klang Valley

IOI Resort City, PutrajayaVarious parcels of land inDengkil, SepangSelangor Darul Ehsan

Freehold and 99 years leasehold

369 On-going mix development and future development land

1990, 1994and 2016

2,127,247

Bandar Puteri BangiVarious parcels of land in BeranangMukim of Ulu LangatSelangor Darul Ehsan

Freehold 206 On-going mix development

2013 528,859

Bandar Puteri, PuchongVarious parcels of land in Puchong, PetalingSelangor Darul Ehsan


1990 445,307

Warisan Puteri, SepangVarious parcels of land inMukim of DengkilDengkil, SepangSelangor Darul Ehsan


2012 293,374

16 Sierra, PuchongVarious parcels of land inDengkil, SepangSelangor Darul Ehsan

99 years leasehold

183 On-going mix development and future development land

2001 and 2002

231,814

BC Industrial Park, BantingVarious parcels of land inDaerah Kuala Langat,Selangor Darul Ehsan

Freehold 325 Future development land

2017 155,308

Negeri Sembilan Darul Khusus

Bandar IOI, BahauVarious parcels of land inMukim of Rompin, JempolNegeri Sembilan Darul Khusus

Freehold 781 On-going mix development and future development land

1990 and 2014

174,414

GROUP’S MATERIAL PROPERTIES


313

DEVELOPMENT PROPERTIES (CONTINUED)

Location Tenure

2020 Remaining Land Area

(Acres) UsageYear of

Acquisition


RM’000

Johor Darul Takzim

Bandar Putra KulaiVarious parcels of land inSenai Kulai, Johor BahruJohor Darul Takzim

Freehold 3,519 On-going mix development and future development land

1988 and 2012

310,738

Bandar IOI, SegamatVarious parcels of land inMukim Sungai SegamatMukim Pagoh, District of SegamatJohor Darul Takzim

Freehold 1,289 On-going mix development and future development land

2014 275,146

i-Synergy Various parcels of land in Senai, KulaiJohor BahruJohor Darul Takzim

Freehold 265 On-going commercial development

2015 250,959

Various parcels of land in PlentongJohor Darul Takzim

Freehold 20 On-going mix development and future development land

2011and 2013

237,624

Various parcels of land inMukim of PulaiJohor Darul Takzim


2013 194,421

Taman Kempas UtamaVarious parcels of land in TebrauJohor BahruJohor Darul Takzim


2006 170,580

Various parcels of land inNusa Jaya, JohorJohor Darul Takzim

129 yearsleasehold

7 Future development land

2013 159,813

A parcel of Land inKulai JayaJohor Darul Takzim


2014 147,895

OVERSEAS

The People's Republic of China

IOI Palm International ParkhouseXiang An District13-15 Xiang An New TownXiamen, Fujian Province

70 yearsleasehold

1 On-going mix development

2017 1,615,133

IOI Palm CityJimei Main RoadJimei New TownZone 11-12, Jimei DistrictXiamen, Fujian Province

70 yearsleasehold

2 On-going mix development

2012 356,425


314

INVESTMENT PROPERTIES

Location Tenure

Net Lettable Area

(‘000 sq ft) (Approximately) Usage

Age of Building (Years)


RM’000

RETAILS

IOI City MallLebuh IRCIOI Resort City Putrajaya

Freehold 1,471 4-storey shopping mall together with car park

5 1,748,188^

IOI City Mall (Phase 2)Lebuh IRCIOI Resort City Putrajaya

Freehold 1,000 6-storey shopping malltogether with car park

* 412,162^

IOI Palm City Mall, XiamenXinglin Bay Road and Jimei Main RoadJimei New Town Zone 11-12Jimei District, XiamenFujian ProvinceThe People’s Republic of China

40 years leasehold

643 6-storey shopping malltogether with car park

* 747,662

IOI MallBandar Puchong JayaPuchong Selangor Darul Ehsan

Freehold 637 3-storey shopping malltogether with car park

23 409,000

IOI Mall (new wing) Bandar Puchong JayaPuchong Selangor Darul Ehsan

Freehold 256 4-storey shopping malltogether with car park

11 230,000

OFFICES

Central Boulevardwithin Marina Bay areaOpposite Telok Ayer MarketSingapore

99 yearsleasehold

1,289 Integrated mixed development includingoffice towers and retailpodium

* 9,016,121

IOI City Tower 1 and IOI City Tower 2Lebuh IRCIOI Resort City Putrajaya

Freehold 968 2 blocks of purpose-built office building together withcar park

5 363,000

Puchong Financial CorporateCentre (“PFCC”) Towers 1 and 2Bandar Puteri Puchong Selangor Darul Ehsan


11 148,000



315

INVESTMENT PROPERTIES (CONTINUED)

Location Tenure

Net Lettable Area

(‘000 sq ft) (Approximately) Usage



RM’000

PFCCTowers 4 and 5Bandar Puteri Puchong Selangor Darul Ehsan

Freehold 504 2 blocks of purpose-built office building together with car park

6 239,000

ConeziónIOI Resort City Putrajaya

Freehold 925 Stratified shop and office lots together with car park

3 322,000

One IOI Square and Two IOI Square IOI Resort City Putrajaya


17 168,000

OTHERS

Lot PT 92Pekan Bukit BisaSepangSelangor Darul Ehsan

Freehold - A parcel of commercial land N/A 394,000

Bungalow (Beverly Row)IOI Resort CityPutrajaya

Freehold 268 37 units of residential bungalow

15-23 122,000

* The investment properties are currently under construction.^ Included purpose-built car park which classified as property, plant and equipment with carrying amount of RM471,472,000.


316

HOSPITALITY AND LEISURE PROPERTIES

Location TenureLand Area

(Acres)

Built-up Area

(‘000 sq. ft.) Usage



RM’000

MALAYSIA

Klang Valley

Palm Garden Golf ClubIOI Resort City Putrajaya

Freehold 146 171 18-hole golf course and club house

8 199,617

Le Méridien PutrajayaLebuh IRCIOI Resort City Putrajaya

Freehold 37 (part of)

326 353-room hotel 4 191,341

Putrajaya Marriott Hotel IOI Resort City Putrajaya


1,521 488-room hotel 17 151,600

Four Points by Sheraton PuchongBandar Puteri PuchongSelangor Darul Ehsan


242 249-room hotel 5 106,442

Palm Garden Hotel IOI Resort City Putrajaya

Freehold 3 140 151-room hotel 27 57,003

OVERSEAS

The People’s Republic of China

Sheraton GrandJimei DistrictXiamen, Fujian Province

40 years leasehold

7 (part of)

581 370-room hotel * 119,798

* The hotel is currently under construction.



317

Type of shares : Ordinary shares Voting rights : One vote per shareholder on a show of hands One vote per ordinary share on a pollNumber of shareholders : 22,876

ANALYSIS OF SHAREHOLDINGS


Size of holdings No. of holders Total holdings %

1 - 99 1,395 43,590 *

100 - 1,000 5,522 3,221,501 0.06

1,001 - 10,000 11,661 46,510,000 0.84

10,001 - 100,000 3,741 104,050,450 1.89

100,001 - 275,307,267 555 1,569,855,261 28.51

275,307,268 and above 2 3,782,464,573 68.70

Total 22,876 5,506,145,375 100.00

Note:* Negligible.

LIST OF TOP 30 SHAREHOLDERS(without aggregating securities from different securities accounts belonging to the same person)

NameNo. of

shares held %

1. Vertical Capacity Sdn Bhd 1,459,989,841 26.51

2. Vertical Capacity Sdn Bhd 1,330,174,400 24.16

3. Vertical Capacity Sdn Bhd 569,652,700 10.35

4. Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board

422,647,632 7.68

5. AmanahRaya Trustees BerhadAmanah Saham Bumiputera

247,163,985 4.49

6. RHB Nominees (Tempatan) Sdn BhdExempt Authorised Nominee for RHB Securities Singapore Pte Ltd

115,357,000 2.10

7. AnnHow Holdings Sdn Bhd 102,338,400 1.86

8. AMSEC Nominees (Tempatan) Sdn Bhd Pledged Securities Account – Ambank Islamic Berhad for Vertical Capacity Sdn Bhd

87,808,100 1.60

9. HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Vertical Capacity Sdn Bhd

52,247,700 0.95

10. Lai Ming Chun @ Lai Poh Lin 40,000,000 0.73

11. AmanahRaya Trustees BerhadAmanah Saham Malaysia

39,088,950 0.71

SHAREHOLDERS’ INFORMATIONAs at 28 August 2020


318

LIST OF TOP 30 SHAREHOLDERS (CONTINUED)(without aggregating securities from different securities accounts belonging to the same person)

NameNo. of

shares held %

12. AmanahRaya Trustees BerhadAmanah Saham Malaysia 2 – Wawasan

39,000,000 0.71

13. Cartaban Nominees (Tempatan) Sdn BhdPAMB for Prulink Equity Fund

36,894,128 0.67

14. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (Affin-Hwang)

35,899,200 0.65

15. Citigroup Nominees (Asing) Sdn BhdExempt Authorised Nominee for UBS AG Singapore

33,166,431 0.60

16. Amanahraya Trustees BerhadAmanah Saham Malaysia 3

31,524,893 0.57

17. HSBC Nominees (Asing) Sdn BhdJPMCB NA for Vanguard Total International Stock Index Fund

29,898,995 0.54

18. Citigroup Nominees (Asing) Sdn BhdCBNY for Norges Bank

27,222,541 0.49

19. CGS-CIMB Nominees (Tempatan) Sdn BhdPledged Securities Account for Rickoh Holdings Sdn Bhd

26,119,999 0.47

20. HSBC Nominees (Asing) Sdn BhdJPMCB NA for Vanguard Emerging Markets Stock Index Fund

25,570,580 0.46

21. HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Datuk Dr Tan Kim Heung

20,480,700 0.37

22. Citigroup Nominees (Tempatan) Sdn BhdGreat Eastern Life Assurance (Malaysia) Berhad

19,383,756 0.35

23. CIMSEC Nominees (Tempatan) Sdn BhdCIMB for Chan Cha Lin

17,261,600 0.31

24. Pertubuhan Keselamatan Sosial 15,991,900 0.29

25. CIMSEC Nominees (Tempatan) Sdn BhdCIMB for Lai Ming Chun @ Lai Poh Lin

14,674,000 0.27

26. Amanahraya Trustees BerhadAmanah Saham Bumiputera 3 – Didik

14,310,819 0.26

27. Cartaban Nominees (Tempatan) Sdn BhdPBTB for Takafulink Dana Ekuiti

13,535,138 0.25

28. Kumpulan Wang Persaraan (Diperbadankan) 13,303,800 0.24

29. Koon Kok Meng 13,049,625 0.24

30. Maybank Investment Bank Berhad 12,962,900 0.23

Total 4,906,719,713 89.11

SHAREHOLDERS’ INFORMATIONAs at 28 August 2020


319

SUBSTANTIAL SHAREHOLDERS(Based on the Register of Substantial Shareholders as at 28 August 2020)


Name of substantial shareholders Direct % Indirect %

Lee Yeow Seng 100,000 ^ 3,499,872,741* 63.56

Dato’ Lee Yeow Chor 6,837,500 0.12 3,499,872,741* 63.56

Vertical Capacity Sdn Bhd (“VCSB”) 3,499,872,741 63.56 - -

Employees Provident Fund Board 475,045,932 8.63 - -

Notes:* Deemed interested by virtue of his interest in VCSB pursuant to Section 8 of the Companies Act 2016.^ Negligible


320

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting (“8th AGM”) of the Company will be conducted virtually through live streaming from the broadcast venue at Millennium Ballroom 1 (Level 1), Le Méridien Putrajaya, Lebuh IRC, IOI Resort City, 62502 Putrajaya, Malaysia on Wednesday, 28 October 2020 at 10:00 am for the following purposes:

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 30 June 2020 and the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors retiring by rotation pursuant to Article 91 of the Company’s Constitution:

(i) Dato’ Lee Yeow Chor (ii) Lee Yoke Har

3. To approve the payment of Directors’ fees (inclusive of Board Committees’ fees) of RM1,190,000 for the financial year ending 30 June 2021 payable quarterly in arrears after each month of completed service of the Directors during the financial year.

4. To approve the payment of Directors’ benefits (other than Directors’ fees) of up to RM350,000 for the

period from 28 October 2020 until the next Annual General Meeting.

5. To re-appoint PricewaterhouseCoopers PLT, the retiring Auditors for the financial year ending 30 June 2021 and to authorise the Audit Committee to fix their remuneration.

6. As special business, to consider and if thought fit, to pass the following Ordinary Resolution:

Proposed Renewal of Existing Share Buy-Back Authority

“THAT subject to compliance with applicable laws, regulations and the approval of all relevant authorities, approval be and is hereby given to the Company to utilise up to the aggregate of the Company’s latest audited retained earnings, to purchase, from time to time during the validity of the approval and authority under this resolution, such number of ordinary shares in the Company as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad (“Bursa Securities”) upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of shares to be purchased and/or held by the Company pursuant to this resolution does not exceed ten percent (10%) of the total number of issued shares of the Company at the time of purchase (“Proposed Purchase”);

THAT at the discretion of the Directors of the Company, the shares of the Company to be purchased are to be cancelled and/or retained as treasury shares which may be distributed as dividends and/or resold on Bursa Securities and/or be dealt with by the Directors in the manners allowed by the Companies Act 2016;

THAT the Directors of the Company be and are hereby empowered generally to do all acts and things to give effect to the Proposed Purchase with full powers to assent to any condition, modification, revaluation, variation and/or amendment (if any) as may be imposed by the relevant authorities and/or do all such acts and things as the Directors may deem fit and expedient in the best interest of the Company;

Resolution 1Resolution 2

Resolution 3

Resolution 4

Resolution 5


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AND THAT such authority shall commence immediately upon passing of this resolution until:

(i) the conclusion of the next Annual General Meeting of the Company at which time the authority shall lapse unless by ordinary resolution passed at a general meeting, the authority is renewed either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next Annual General Meeting after that date is required by law to be held; or

(iii) revoked or varied by ordinary resolution of the shareholders of the Company in a general meeting,

whichever is the earlier but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and, in any event, in accordance with the provisions of the Main Market Listing Requirements of Bursa Securities or any other relevant authorities.”

7. To transact any other business of which due notice shall have been given.

By Order of the Board,

Chee Ban Tuck (SSM PC No. 202008001798) (MIA 24078)Chang Mei Yee (SSM PC No. 201908000539) (MAICSA 7064078)Joint Secretaries


Resolution 6

Notes

A. Remote Participation and Electronic Voting

1. As a precautionary measure in light of the Covid-19 pandemic, the Board of Directors (“Board”) of the Company has decided that the 8th AGM of the Company will be held virtually through live streaming and online remote voting using Lumi AGM facilities. With Lumi AGM facilities, shareholders may exercise their rights as a member to participate (including to pose questions to the Board and/or Management of the Company) and vote at the 8th AGM, safely from their home. Please refer to the Administrative Guide for the detailed steps on remote participation and electronic voting.

The main and only venue for the 8th AGM is the broadcast venue which is strictly for the purpose of complying with Section 327(2) of the Companies Act 2016 that requires the Chairman of the meeting to be at the main venue. No Shareholder(s)/Proxy(ies)/Corporate Representative(s) from the public should be physically present at the broadcast venue on the day of the 8th AGM.

2. For all the above resolutions which are proposed as ordinary resolutions, more than half the votes cast must be in favour of the resolutions. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), all resolutions will be put to vote by way of a poll.

3. Only shareholders whose names appear in the Record of Depositors and Register of Members as at 21 October 2020 shall be eligible to participate and vote at the 8th AGM or appoint proxy to participate and vote on his or her behalf.


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B Appointment of Proxy

1. A shareholder may appoint any person to be his or her proxy and there shall be no restriction as to the qualification of the proxy.

2. If an instrument appointing a proxy is submitted in hard copy, it must be in writing under the hand of the appointor or of his or her attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of two (2) authorised officers, one (1) of whom shall be a director, or of its attorney duly authorised in writing.

3. A shareholder of the Company [including an authorised nominees as defined under the Securities Industry (Central Depositories) Act 1991 and Exempt Authorised Nominees who hold ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“Omnibus Account”)] may appoint more than one (1) proxy, provided that the shareholder specifies the proportion of his or her shareholdings to be represented by each proxy. When two (2) or more valid but differing appointments of proxy are delivered or received for the same share for use at the same meeting, the one which is last validly delivered or received (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which appointment was last validly delivered or received, none of them shall be treated as valid in respect of that share.

4. An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the resolution except as specified in the instrument.

5. The proxy form may be made in hard copy or by electronic means, not less than forty-eight (48) hours before the time for holding the 8th AGM or any adjournment thereof, as follows:

(i) In hard copy form

The proxy form must be deposited at Boardroom Share Registrars Sdn Bhd, 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan.

(ii) By electronic means

The proxy form can also be lodged electronically through Boardroom Smart Investor Online Portal at www.boardroomlimited.my by logging in and selecting “E-PROXY LODGEMENT” or email to [email protected]. Please follow the procedures provided in the Administrative Guide for the 8th AGM in order to deposit the proxy form electronically.

6. Any corporation which is a shareholder can appoint one (1) or more corporate representatives who may exercise on its behalf all of its power as a shareholder in accordance with the Companies Act 2016 (the “Act”).



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C Explanatory Notes to the Agenda

To help make things clearer, we have explained each resolution here. The Directors consider all the resolutions to be in the best interests of the Company and our shareholders as a whole. They unanimously recommend that shareholders vote in favour of them.

1. To receive Audited Financial Statements for the financial year ended 30 June 2020

This Agenda item is meant for discussion only as under the provision of Section 340(1)(a) of the Act, the audited financial statements do not require a formal approval of the shareholders. Hence, this resolution will not be put forward for voting.

The Chairman will give shareholders an opportunity to ask questions about, and make comments on the financial statements and reports and IOI Properties Group’s performance in accordance with the mode of communication as provided in the Administrative Guide.

Shareholders will also be given an opportunity to ask the representative(s) of the Company’s Auditors, PricewaterhouseCoopers PLT (“PwC PLT”), questions relevant to audit matters, including the Auditors’ Report.

2. Re-election of Directors

Dato’ Lee Yeow Chor and Lee Yoke Har, who retire in accordance with Article 91 of the Company’s Constitution, are standing for re-election as Directors of the Company and being eligible, have offered themselves for re-election at the 8th AGM.

The Company’s Constitution states that at each AGM of the Company, one-third (1/3) of the Directors or if their number is not three (3) or a multiple of three (3), then the number nearest to one-third (1/3) must retire from office, provided always that all Directors shall retire from office once at least in each three (3) years, but shall be eligible for re-election and it further states that a Director appointed by the Board to fill a casual vacancy or as an additional Director, shall hold office until the conclusion of the next AGM of the Company and shall be eligible for re-election.

Each of the Directors standing for re-election has undergone a performance evaluation and has demonstrated that he or she remains committed to the role and continues to be an effective and valuable member of the Board.

Detailed profile of each Director, including their career history, competencies and experience can be found from pages 118 to 124 of the Integrated Annual Report 2020.

3. Directors’ fees and benefits payable

The Governance, Nominating and Remuneration Committee (“GNRC”) and the Board have reviewed the Directors’ fees after taking into account fee levels and trends for similar positions in the market and time commitment required from the Directors. The payment of Directors’ fees (inclusive of Board Committees’ fees) for the financial year ending 30 June 2021 shall be payable quarterly in arrears after each month of completed service of the Directors during the financial year.

The Directors’ benefits (other than Directors’ fees and Board Committees’ fees) comprise attendance allowances, insurance coverage and golf privilege benefit to Independent Non-Executive Directors. In determining the estimated total amount of Directors’ benefits, the Board has considered various factors, among others, the estimated number of meetings for the Board and its Committees, estimated proportionate paid and payable insurance premium and the estimated usage of golf facilities based on the limits provided by the Company during the relevant period.


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4. Re-appointment of Auditors

The Company’s external Auditors, PwC PLT must offer themselves for re-appointment at each AGM at which Audited Financial Statements are presented. The performance and effectiveness of PwC PLT have been evaluated by the Audit Committee (“AC”), which included an assessment of PwC PLT’s independence and objectivity. The AC having satisfied with the performance, suitability and independence of PwC PLT, had recommended to the Board that PwC PLT be re-appointed and its remuneration be determined by the AC. The representatives of PwC PLT will be participating at the 8th AGM.

5. Proposed Renewal of Existing Share Buy-Back Authority

Ordinary Resolution 6 is to seek a renewal of the authority granted at the 7th AGM of the Company held on 6 November 2019, which will lapse at the conclusion of the 8th AGM to be held on 28 October 2020. The resolution authorises the Company to make market purchases of its own ordinary shares as permitted by the Act.

The Board seeks authority to purchase up to ten percent (10%) of the Company’s total number of issued shares, should market conditions and price justify such action.

The Directors only intend to use this authority to make such purchases if to do so could be expected to lead to an increase in net asset value per share for the remaining shareholders and would be in the best interests of the Company generally, having due regard to appropriate gearing levels, alternative investment opportunities and the overall financial position of the Company.

Any purchases of ordinary shares would be by means of market purchases through Bursa Securities. Any shares purchased under this authority may either be cancelled or held as treasury shares by the Company. Treasury shares may subsequently be cancelled or resold for cash or distributed as dividends or be dealt with by the Directors in the manners allowed by the Act. The Company did not purchase any ordinary shares during FY2020.

Please refer to the explanatory information in the Share Buy-Back Statement dated 30 September 2020.

PERSONAL DATA PRIVACY:

By registering for the remote participation and electronic voting meeting and/or submitting an instrument appointing a proxy(ies) and/or representative(s) to participate and vote at the 8th AGM and/or any adjournment thereof, a shareholder of the Company (i) consents to the collection, use and disclosure of the shareholder’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the 8th AGM (including any adjournment thereof), and the preparation and compilation of the attendance lists and other documents relating to the 8th AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing requirements, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the shareholder discloses the personal data of the shareholder’s proxy(ies) and/or representative(s) to the Company (or its agents), the shareholder has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the shareholder will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the shareholder’s breach of warranty.



325

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETINGPURSUANT TO PARAGRAPH 8.27 (2) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

(i) Details of individuals who are standing for election as Directors (excluding Directors standing for a re-election)

No individual is seeking election as a Director at the forthcoming 8th AGM of the Company.

(ii) Directors standing for re-election

The Directors retiring by rotation and standing for re-election pursuant to Article 91 of the Constitution of the Company are as follows:

• Dato’ Lee Yeow Chor• Lee Yoke Har

The profiles of the above-named Directors are set out in the section entitled “Profile of Directors” on pages 121 to 122 of the Integrated Annual Report 2020.

Their shareholdings in the Company and its related corporations are set out in the section entitled “Statement of Directors’ Interests” on page 159 of the Integrated Annual Report 2020.

PROXY FORM

Notes:

1. Only shareholders whose names appear in the Record of Depositors and Register of Members as at 21 October 2020 shall be eligible to participate and vote at the 8th AGM or appoint proxy to participate and vote on his or her behalf.

2. A shareholder may appoint any person to be his or her proxy and there shall be no restriction as to the qualification of the proxy.

3. If an instrument appointing a proxy is submitted in hard copy, it must be in writing under the hand of the appointor or of his or her attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of two (2) authorised officers, one (1) of whom shall be a director, or of its attorney duly authorised in writing.

4. A shareholder of the Company [including an authorised nominees as defined under the Securities Industry (Central Depositories) Act 1991 and Exempt Authorised Nominees who hold ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“Omnibus Account”)]may appoint more than one (1) proxy, provided that the shareholder specifies the proportion of his or her shareholdings to be represented by each proxy. When two (2) or more valid but differing appointments of proxy are delivered or received for the same share for use at the same meeting, the one which is last validly delivered or received (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which appointment was last validly delivered or received, none of them shall be treated as valid in respect of that share.

5. An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the resolution except as specified in the instrument.

6. The proxy form may be made in hard copy or by electronic means, not less than forty-eight (48) hours before the time for holding the 8th AGM or any adjournment thereof, as follows:

I/We ............................................................................................................................................................................................................................................(full name in block letters)

NRIC/Passport/Company No. ................................................................................................. Mobile Phone No. .....................................................................

of ................................................................................................................................................................................................................................................(full address)

being a member(s) of IOI Properties Group Berhad, hereby appoint

Full Name (in block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address Email Address

and/or

Full Name (in block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address Email Address

or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Eighth Annual General Meeting (“8th AGM”) of the Company which will be conducted virtually through live streaming from the broadcast venue at Millennium Ballroom 1 (Level 1), Le Méridien Putrajaya, Lebuh IRC, IOI Resort City, 62502 Putrajaya, Malaysia on Wednesday, 28 October 2020 at 10:00 am or any adjournment thereof.

My/our proxy/proxies shall vote as follows:

(Please indicate with an “X” or “√” in the space provided as to how you wish your votes to be cast. If you do not do so, the proxy/proxies will vote, or abstain from voting on the resolutions as he/she/they may think fit)

Signature of Shareholder/Common Seal(i) In hard copy form

The proxy form must be deposited at Boardroom Share Registrars Sdn Bhd, 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan.

(ii) By electronic means

The proxy form can also be lodged electronically through Boardroom Smart Investor Online Portal at www.boardroomlimited.my by logging in and selecting “E-PROXY LODGEMENT” or email to [email protected]. Please follow the procedures provided in the Administrative Guide for the 8th AGM in order to deposit the proxy form electronically.

7. Any corporation which is a shareholder can appoint one (1) or more corporate representatives who may exercise on its behalf all of its power as a shareholder in accordance with the Companies Act 2016.

Personal Data Privacy By registering for the remote participation and electronic voting meeting and/or submitting an instrument appointing a proxy(ies) and/or representative(s) to participate and vote at the 8th AGM and/or any adjournment thereof, a shareholder of the Company (i) consents to the collection, use and disclosure of the shareholder’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the 8th AGM (including any adjournment thereof), and the preparation and compilation of the attendance lists and other documents relating to the 8th AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing requirements, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the shareholder discloses the personal data of the shareholder’s proxy(ies) and/or representative(s) to the Company (or its agents), the shareholder has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the shareholder will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the shareholder’s breach of warranty.

IOI PROPERTIES GROUP BERHAD [Company Registration No. 201301005964 (1035807-A)](Incorporated in Malaysia)

Dated this ________________ day of __________________ 2020 No. of Shares held : CDS A/C No :

No. Ordinary ResolutionsFirst Proxy Second Proxy

For Against For Against1. To re-elect Dato’ Lee Yeow Chor as a Director

2. To re-elect Lee Yoke Har as a Director

3. To approve Directors’ fees for the financial year ending 30 June 2021 payable quarterly in arrears

4. To approve the payment of Directors’ benefits for the period from 28 October 2020 until the next AGM

5. To re-appoint PricewaterhouseCoopers PLT as Auditors and to authorise the Audit Committee to fix their remuneration

6. To approve the proposed renewal of existing share buy-back authority

1st fold here

2nd fold here

STAMP

The Administration and Polling Agent of

IOI PROPERTIES GROUP BERHADBoardroom Share Registrars Sdn Bhd11th Floor, Menara SymphonyNo. 5, Jalan Prof. Khoo Kay KimSeksyen 1346200 Petaling JayaSelangor Darul Ehsan

IOI PROPERTIES GROUP BERHAD201301005964 (1035807-A)

Level 29, IOI Ci ty Tower 2, Lebuh IRC, IOI Resort Ci ty ,62502 Putrajaya, Malaysia.

www.ioiproperties.com.my

Building Trust Inspiring Lives - IOI Properties

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