LIFESTYLE ANNUAL REPORT Property Development. Leisure & Hospitality. Property Investment

LIFESTYLE I n f l u e n c e r Property Development Property Investment Leisure & Hospitality ANNUAL REPORT

OUR VISION is to be a leading corporation in our core businesses by providing products and services of superior values and by sustaining consistent long-term growth in volume and profitability. We shall strive to achieve responsible commercial success by satisfying our customers needs, giving superior performance to our shareholders, providing rewarding careers to our people, cultivating mutually beneficial relationship with our business associates, caring for the society and the environment in which we operate and contributing towards the progress of our nation. www.ioiproperties.com.my

OUR CORE VALUES In our pursuit of Vision IOI, we expect our people to uphold, at all times, the IOI Core Values which are expressed as follows: 01 INTEGRITY which is essential and cannot be compromised COMMITMENT as we do what we say we will do 02 03 LOYALTY is crucial because we are one team sharing one vision EXCELLENCE IN EXECUTION as our commitments can only be realised through actions and results 04 05 SPEED OR TIMELINESS in response is important in our ever changing business environment INNOVATIVENESS to provide us additional competitive edge 06 07 COST EFFICIENCY is crucial as we need to remain competitive

CONTENTS Our Vision Our Core Values Facts at a Glance Key Indicators CREATING A SUSTAINABLE FUTURE 65 Sustainability 75 - Delivering Excellence 5th Annual General Meeting IOI PROPERTIES GROUP BERHAD (1035807-A) DATE 27 October, Friday TIME 10:00 a.m. BUSINESS REVIEW 6 Chairman s Statement 12 Five-Year Financial Highlights 14 Group Financial Position 15 Group Performance Highlights 16 Segmental Performance 18 Group Quarterly Results 19 Financial Calendar 20 Management Discussion and Analysis 20 - Group Financial Review 23 31 35 - Group Business Review - Property Development - Group Business Review - Property Investment - Group Business Review - Leisure and Hospitality 40 Corporate Information 87 - Caring for the Environment 97 - Creating Value for Our Employees 107 - Developing Sustainable Communities 120 - Content Index VENUE Putrajaya Ballroom I (Level 3), Putrajaya Marriott Hotel, IOI Resort City, 62502 Sepang Utara, Malaysia. 42 Regional Presence 43 Location of Operations in Malaysia 44 Corporate Calendar 54 Our Social Responsibility Calendar WHO GOVERNS US 122 Board of Directors 124 Profile of Directors 134 Senior Management Team 135 Profile of Senior Management

HOW WE ARE GOVERNED 143 Corporate Governance Report 143 - Corporate Governance Overview Statement 174 - Audit Committee Report 181 - Statement on Risk Management and Internal Control 184 Statement of Directors Interests 185 Shareholdings of Senior Management Team 186 Other Information FINANCIAL REPORTS 190 Directors Report 200 Financial Statements 332 Group s Material Properties SHAREHOLDERS INFORMATION 337 Shareholders Information We re a LIFESTYLE I n f l u e n c e r NOTICE 340 Notice of Annual General Meeting 345 Statement Accompanying Notice of Annual General Meeting Proxy Form We aspire to create a sustainable future. Thus, every element of our developments is aligned to create lifestyle spaces for stay, work and play. We look into every detail, from planning to design and putting the final touches for a vibrant and lively environment of urban contemporary living with accessibility to modern lifestyle amenities amidst sprawling greens and chic urban spaces. We inspire lifestyles that are full of zest within our living spaces crafted in architectural chic, coloured with the vibrant hues and textures of lush greens and foliage; crafting homes that warms the heart and work space that ignites passion to succeed. It is this exacting ideal that drives the sustainability of our business in property development, property investment and leisure & hospitality spanned across Malaysia, Singapore and Xiamen in People s Republic of China.

IOI PROPERTIES GROUP BERHAD (1035807-A) FACTS AT A GLANCE PROFIT BEFORE TAXATION EARNINGS PER SHARE RM1.44 billion 18.42 sen RM1.52 billion (2016) 24.99 sen (2016) GROSS DIVIDEND PER SHARE NET ASSETS PER SHARE 6.00 sen RM3.31 8.00 sen (2016) 3.60 sen (2016) SHARE PRICE MARKET CAPITALISATION RM2.20 as at 30 June RM12.11 billion 2.35 sen (2016) RM10.37 billion (2016)

ANNUAL REPORT KEY INDICATORS % 20 15 10 5 0-5 -10-15 -20 JUL 16 AUG 16 SEPT 16 OCT 16 NOV 16 DEC 16 JAN 17 FEB 17 MAR 17 APR 17 MAY 17 JUN 17 IOI PROPERTIES GROUP BERHAD FTSE BURSA MALAYSIA INDEX BURSA MALAYSIA PROPERTY

IOI PROPERTIES GROUP BERHAD (1035807-A) CHAIRMAN S STATEMENT TAN SRI DATO LEE SHIN CHENG Executive Chairman DEAR SHAREHOLDERS, On behalf of the Board of Directors and the management, it gives me great pleasure to present to you the Annual Report of IOI Properties Group Berhad ( IOIPG ) for the financial year ended 30 June ( FY ). GROUP PERFORMANCE For the financial year under review, the Group recorded a revenue of RM4,185 million and profit before taxation ( PBT ) of RM1,437 million compared to the previous financial year of RM3,025 million and RM1,525 million respectively. The increase in revenue of approximately 38% was mainly attributable to increased contributions from the Group s business segments of property development, property investment and leisure & hospitality. Group revenue was mainly driven by our property development segment with revenue contribution of RM3,714 million, followed by RM302 million from property investment, RM162 million from leisure & hospitality and RM7 million from other operations. In terms of revenue contribution in the property development segment, it was largely from our projects in Singapore at 47%, Klang Valley at 27%, People s Republic of China ( PRC ) at 13%, Johor at 10%, and others (Penang, Melaka and Negeri Sembilan) at 3%. For our property investment segment, increase in revenue was mainly from IOI City Mall due to higher rental income attributable to increased occupancy rate. Meanwhile, the opening of Le Méridien Putrajaya hotel in August 2016 has contributed to an increase in revenue contribution to the leisure & hospitality segment. For the financial year under review, the Group achieved total sales of RM2,847 million (2,296 units), an increase of 29% from the previous financial year of RM2,214 million (2,368 units). The Group s overseas projects in Singapore and PRC accounted for 46% and 15% respectively of total sales. Sales from our overseas projects are attributable to the Trilinq project in Singapore and IOI Palm City project in the PRC. Domestic sales from the Klang Valley which accounted for 29% of total sales were mainly attributable to projects in IOI Resort City, 16 Sierra and Warisan Puteri Sepang. 6

ANNUAL REPORT CHAIRMAN S STATEMENT REVENUE FROM THE GROUP S OPERATING SEGMENTS South Beach, Singpore PROPERTY DEVELOPMENT RM3,714 million PROPERTY INVESTMENT RM302 million LEISURE & HOSPITALITY RM162 million As at 30 June, the Group s financial position remained strong with total assets at RM33,628 million, an increase of 47% from the previous financial year of RM22,810 million and cash in hand at RM2,376 million. Meanwhile, the Group s net assets per share stood at RM3.31. A more detailed analysis of the Group s performance is available under the section Management s Discussion and Analysis in this Annual Report. Le Méridien Putrajaya OPERATING ENVIRONMENT In the second quarter of, the global economy expanded by 3.1% attributable to improved economic conditions in advanced economies and robust economic growth in emerging and developing economies. Meanwhile, the US economy expanded by 2.1% due to strong domestic and external demand. The PRC s economy expanded by 6.9% supported by growth of 8.2% in real estate investment as property sales and investment remained strong in lower-tier cities. 7

IOI PROPERTIES GROUP BERHAD (1035807-A) CHAIRMAN S STATEMENT Malaysia s economy posted a strong growth of 5.8% in the second quarter of supported by improved external sector and domestic demand which expanded by 5.7%, attributable to robust private sector activities. Private sector spending grew by 7.1% due to increased disposable income driven by stable employment conditions and improved export earnings. In the first half of, the residential property market remained challenging. Continued tight lending conditions have impacted sales volume and values of residential properties. The Trilinq, Singapore Singapore s economy grew by more than 2% in the second quarter of driven by the manufacturing sector. Private home sales increased in the second quarter of driven by secondary sales market, in line with improved market sentiments following the relaxation of certain property cooling measures for example, the easing of the sellers stamp duty in the first quarter of. Meanwhile, the primary sales market continued to perform with increase of 4.3%. Improvement in property sales and lower inventory of unsold units in the second quarter of may signal that the residential property market has bottomed out. Property cooling measures have continued in many cities in the PRC in the first half of, with banks imposing more stringent lending policy and increased interest rate on property mortgages, which have impacted transaction volumes and property prices in the first and second tier cities. Even though the impact of cooling measures may persist in the short term, value of properties is expected to continue to hold in first and second tier cities in the longer term. As the Group holds a long term view on the PRC which it considers as having vast development and investment potential, we will continue to monitor developments in the property market in the PRC. BUSINESS DEVELOPMENTS Avista in Warisan Puteri Sepang comprising 182 freehold units of two-storey terrace houses was launched in September 2016. The development is the second residential phase at the 206-acre Warisan Puteri Sepang township which is strategically located next to the fast growing Bandar Baru Salak Tinggi and well connected by major highways such as the Maju Expressway and Putrajaya-Cyberjaya Expressway. An upcoming interchange at ELITE Highway is expected to further enhance connectivity in the township. Warisan Puteri Sepang is also close to the Kuala Lumpur International Airport, Express Rail Link ( ERL ) Salak Tinggi station, KIP Mall, Xiamen University as well as an upcoming shopping destination, Horizon Village Outlets (formerly known as Kuala Lumpur International Outlet). Palmyra Residence in Bandar Puteri Bangi comprising 588 units of serviced apartments with gross development value ( GDV ) of RM239 million was launched in November 2016. The development is complemented by a commercial hub of lifestyle commercial developments developed by the Group such as Kubica Square, Enigma Square and Kompleks Kubica Square, as well as Tesco hypermarket, a 10-acre Oasis parkland and public amenities such as the Bangi Komuter station. Within IOI Resort City, the second phase of Conezion comprising 663 units of serviced apartments with a GDV of RM391 million was launched in October 2016. Meanwhile, Par 3 comprising 207 units of condominiums and 18 units of condo villa with total GDV of RM267 million was launched in May. IOI Resort City is one of our major integrated mixed developments spanning close to 800 acres. IOI Resort City is strategically located in the southern Klang Valley and fronting the entrance to Putrajaya with good connectivity to major urban centres within a 30-minute radius via major highways. Developments within IOI Resort City is complemented by existing 8

ANNUAL REPORT CHAIRMAN S STATEMENT completed developments which include amongst others, IOI City Mall, 5-star Le Méridien Putrajaya hotel and IOI City Towers 31-storey Grade A Green Building Index ( GBI ) certified corporate office towers with approximately one million square feet of net lettable area. IOI Palm City s residences in Xiamen, PRC recorded a favourable take-up rate with sales of RM368 million for FY. Its remaining residential components of high rise residences and town villas are expected to be launched within the next financial year. Construction on IOI Palm City s commercial components comprising a shopping mall, hotel and boutique offices has commenced in the first quarter of and is expected to be completed in 2021. IOI Palm City is an integrated development consisting of residences, boutique offices, a shopping mall and hotel with an estimated gross built-up area of approximately 7.1 million square feet. For the Group s newly acquired Xiang An land in Xiamen, PRC, construction work is expected to commence in the fourth quarter of. The land is intended for mixed development comprising condominiums, town villas and commercial units within the new Xiang An central business district in Xiamen which is proposed to be a new integrated eco-city. Key future developments in the vicinity include schools, a hospital and a new international airport which is expected to be completed in year 2020. The land is about 25km from the Xiamen Gaoqi International Airport and is connected to the Xiang An undersea tunnel providing easy access to the island of Xiamen and other commercial hubs such as Wanda Plaza and Langham Place hotel. The land is connected to other districts in the mainland of Xiamen via Shen Hai highway and Xiang An Avenue and is in close proximity to the upcoming Yang Tang station (city subway line 3) and Peng Cuo Bei station (city subway line 4) when completed in year 2020 and 2022. The Group s Trilinq project in Singapore obtained its temporary occupation permit in April and continued to record a favourable take-up rate with sales of 307 units for FY. For the South Beach in Singapore, an integrated development which is a joint venture with City Developments Limited, an official opening of the 634-room JW Marriott Hotel Singapore South Beach was held on 24 March. The hotel operations is expected to pick up with the recent opening of its spa services in May and its re-modelled ballroom in September and with more food & beverage outlets expected to be opened between the second half of and early 2018, as well as the Singapore Formula 1 event in September. South Beach Office Tower and retail spaces at South Beach Avenue are both fully leased. South Beach Avenue offers a wide spectrum of dining and service outlets and its connection to the extensive MRT network is expected to enhance vibrancy and footfall for the retail area. The launch of South Beach s 190-unit residences will be dependent on market conditions. With the mixed used components in place, the entire South Beach development is anticipated to contribute positively to the future prospects of the joint venture partners. IOI Palm City, Xiamen, PRC 9

IOI PROPERTIES GROUP BERHAD (1035807-A) CHAIRMAN S STATEMENT CORPORATE DEVELOPMENTS The Company s wholly-owned subsidiary, Wealthy Link Pte Ltd had on 11 November 2016 successfully tendered for a parcel of land in Central Boulevard in Singapore measuring approximately 1.09 hectares for a tender bid price of SGD2.57 billion. Subsequently on 12 June, the Company announced the signing of a memorandum of agreement with Hongkong Land International Holdings Limited ( HKL ) for a joint development and management of the Central Boulevard development in Singapore. A proposed rights issue of up to 1,111,178,800 rights shares at an issue price of RM1.38 to be implemented on a renounceable basis of one (1) rights share for every four (4) existing IOIPG shares held ( Rights Issue ) was announced on 18 November 2016. The Rights Issue was completed following the listing and quotation of 1,101,629,075 rights shares on the Main Market of Bursa Malaysia Securities Berhad on 28 March. A total gross proceeds of approximately RM1.52 billion was raised for the purpose of repayment of borrowings obtained to fund the parcel of land in Central Boulevard. On 25 January, the Company s 99.9% owned subsidiary, Pine Properties Sdn Bhd entered into a shareholders agreement with MJR Investment Pte Ltd ( MJRI ) for a joint development of a highrise luxury condominium known as the Gems on a 9.7 acre freehold land in IOI Resort City. MJRI is a member of Mitsubishi Estate Group which is a leading Japanese real estate developer with a diverse spectrum in the real estate industry including residential, office, retail and hotel businesses. DIVIDEND For FY, an interim dividend of 6 sen per ordinary share amounting to a total payout of approximately RM330 million was declared and subsequently paid on 8 September. This represents approximately 36% distribution of the Group s net profit attributable to shareholders. GROUP PROSPECTS The Malaysian economy is expected to expand at a faster rate in with economic expansion driven by robust domestic demand and strengthening exports. Although the property market is expected to remain challenging in the year ahead due to continued uncertainties in the external environment and prevailing market sentiments, demand for residential properties in strategic locations with good transportation infrastructure and close proximity to amenities and economic activities are expected to continue to draw prospective buyers. Phase 1 of the MRT which commenced in December 2016 and the recent opening of Phase 2 in July are anticipated to support transit oriented developments ( TOD ) in prime and suburban areas located along these routes as they will provide better connectivity and convenience. With the construction of the MRT 2 (Sungai Buloh-Serdang-Putrajaya) line which is expected to commence service by 2022, a MRT station is proposed within our 16 Sierra township. IOI City Mall, IOI Resort City Putrajaya These mass public transportation systems are expected to enhance the visibility of 16 Sierra township but also our other established townships in Bandar Puchong Jaya and Bandar Puteri Puchong where there are four LRT stations located within its vicinity. It also augurs well on the marketability of our future projects in Puchong and 16 Sierra as they are located in close proximity to the existing LRT stations and the proposed MRT 2 line station respectively. In addition, the mass public transportation systems also provide ease of connectivity for existing residents in these townships in addition to allowing the Group to maximise its product portfolio with the option of considering TODs on our land banks located along or in the vicinity of MRT and LRT lines. 10

ANNUAL REPORT CHAIRMAN S STATEMENT In IOI Resort City, we are positive on the prospects of the Gems as the Group will be collaborating with an established Japanese real estate developer. Construction is expected to commence during the fourth quarter of. The development will comprise eight blocks of residences with an estimated GDV of RM600 million, set in close proximity to our existing completed developments such as our hotels, shopping mall, office towers and golf course, with easy access to clubhouse, dining and entertainment facilities and amenities. IOI Resort City is master planned to be the pulse of the Southern Klang Valley with its residential and commercial components integrated with leisure and entertainment facilities, and its location fronting the entrance to Putrajaya with easy access to major urban centres such as Cyberjaya, Puchong and Kuala Lumpur City Center via an established network of highways. Residences surrounding the 18-hole championship Palm Garden golf course are Puteri Palma Residences, Clio Residences and Conezion. IOI City Mall is the anchor of IOI Resort City with its attraction of visitors from neighbouring townships in Kajang, Bangi, Banting, Serdang and Puchong. IOI City Towers which is GBI certified offer approximately 1,000,000 square feet of Grade A leasable space whilst our 5-star Le Méridien Putrajaya and Putrajaya Marriott hotels offer quality accommodation for business and leisure clienteles. With the addition of the Gems, it is anticipated that the increased residential population will not only support the components in IOI Resort City but also enhance the vibrancy and visibility of IOI Resort City as a preferred residential and commercial destination. Xiamen is the second largest city and main commercial hub in the Fujian province and has one of the busiest ports in the PRC. The Xiamen North Railway Station is a key stop on the high-speed coastal route of the China Rail Network, linking Xiamen to other major cities within the Fujian province, as well as cities such as Guangzhou and Shenzhen. Xiamen s Gaoqi International Airport is a main air hub in the eastern part of the PRC with flights to domestic and international destinations. Overall, Xiamen is ideally located which makes it an attractive hub for economic activity. As the Group holds a long term view on the PRC which it considers as having development and investment potential, we remain optimistic on the prospects of our existing land bank in Xiamen. The recently acquired Central Boulevard land, which is intended for Grade A office development is situated in a prime and strategic location within the Marina Bay financial and business district in Singapore. Marina Bay has been established as a major business and financial precinct to complement the existing central business district of Singapore and is home to many major local and international companies as well as financial institutions. Notable developments in the immediate surrounding area include Asia Square I & II, Marina Bay Financial Centre, One Raffles Quay and Marina Bay Sands Integrated Resort. Central Boulevard is directly linked to the surrounding developments at One Raffles Quay and Marina Bay Financial Centre, as well as, office clusters at Raffles Place and Shenton Way via an extensive network of pedestrian links and also seamlessly connected to the Downtown and Raffles Place MRT stations, offering easy access to the rail network. The land is also in close proximity to East Coast Parkway, Marina Coastal Expressway, Ayer Rajah Expressway, Central Expressway and Nicoll Highway. The proposed development at Central Boulevard is envisaged to comprise two office towers with an estimated 1,260,000 square feet of leasable space and an estimated 30,000 square feet retail podium. The Group is optimistic on the proposed joint venture and collaboration with HKL, a member of Jardine Matheson Group for the joint management and development of Central Boulevard into a landmark development in the central business district of Singapore. As our retail, hospitality and office developments are situated in urban and strategically located areas, these investment properties such as IOI City Mall, IOI Mall in Puchong and IOI Boulevard are expected to continue to enjoy healthy occupancies and generate good rental yields. ACKNOWLEDGEMENTS On behalf of the Board of Directors, I would like to take this opportunity to express my sincere appreciation to our stakeholders, including shareholders, bankers, customers and business associates for their continued support of the Group. I would also like to extend my appreciation to my fellow Board members, management team and employees for their dedication, support and commitment to the success of the Group. Meanwhile, I am pleased to welcome Ms. Lee Yoke Har to the Board with her appointment as an Executive Director effective from 1 July. I am confident that Ms. Lee Yoke Har s appointment will bring invaluable insights and contributions to the Group. In closing, we look forward to another successful year ahead with the continued support from all stakeholders. TAN SRI DATO LEE SHIN CHENG Executive Chairman 11

IOI PROPERTIES GROUP BERHAD (1035807-A) FIVE-YEAR FINANCIAL HIGHLIGHTS FINANCIAL YEAR ENDED 30 JUNE (RM 000) 2016 2015 2014 2013* (pro forma) RESULTS Revenue 4,185,361 3,024,940 1,906,491 1,454,445 1,323,259 Profit before interest and taxation 1,384,752 1,467,621 1,079,635 1,132,898 903,641 Net interest income/(expense) 51,873 57,078 50,691 (12,494) 1,118 Profit before taxation 1,436,625 1,524,699 1,130,326 1,120,404 904,759 Taxation (468,799) (424,440) (229,729) (216,662) (191,156) Profit for the financial year 967,826 1,100,259 900,597 903,742 713,603 Attributable to: Owners of the parent 920,870 1,080,018 890,702 889,918 693,621 Non-controlling interests 46,956 20,241 9,895 13,824 19,982 ASSETS Property, plant & equipment 1,137,912 1,122,322 1,120,101 1,047,300 991,431 Land held for property development 4,560,892 4,591,032 2,894,104 3,011,711 2,282,478 Investment properties 12,804,095 4,024,219 3,388,152 2,765,489 1,993,810 Interests in joint ventures 5,126,081 4,820,518 4,155,262 3,855,746 3,575,449 Other non-current assets 279,350 303,640 313,431 243,387 203,496 Current assets 9,719,412 7,948,610 6,568,448 3,801,442 2,936,568 Total assets 33,627,742 22,810,341 18,439,498 14,725,075 11,983,232 EQUITY AND LIABILITIES Total shareholders equity 18,227,961 15,885,085 13,427,197 11,202,530 10,335,384 Non-controlling interests 260,615 130,754 110,957 98,677 26,855 Total equity 18,488,576 16,015,839 13,538,154 11,301,207 10,362,239 Borrowings 12,494,506 4,262,032 2,799,010 2,057,230 502,420 Other non-current liabilities 1,065,346 916,614 422,438 300,716 246,054 Other current liabilities 1,579,314 1,615,856 1,679,896 1,065,922 872,519 Total liabilities 15,139,166 6,794,502 4,901,344 3,423,868 1,620,993 Total equity and liabilities 33,627,742 22,810,341 18,439,498 14,725,075 11,983,232 FINANCIAL RATIOS Basic earnings per share N1 (sen) 18.42 24.99 25.83 27.47 21.41 Diluted earnings per share N1 (sen) 18.42 24.99 25.83 27.47 21.41 Interest cover (times) 5.71 9.97 10.12 23.28 21.93 Dividend per share (sen) 6.00 8.00 6.00 8.00 N/A Dividend payout ratio (%) 35.88 32.68 25.37 29.12 N/A Net assets per share (RM) 3.31 3.60 3.56 3.46 3.19 Gross gearing ratio (%) 68.55 26.83 20.85 18.36 4.86 Net gearing ratio (%) 55.51 13.69 6.62 12.85 0.59 Return on average shareholders equity (%) 5.40 7.37 7.23 8.26 6.71 Return on average capital employed (%) 3.76 5.58 6.02 6.07 6.75 * The Group s financial performance and financial positions are prepared on the assumption that the business combinations had taken place from the beginning of each financial year. This is to provide a meaningful comparison of the financial performance of the Group. N1 Basic earnings per share for 2013 and FY2014 were calculated by dividing net profit attributable to owners of the Company by the number of ordinary shares outstanding at the end of FY2014 i.e. 3,239,014,726 throughout each financial year. This is to provide a meaningful comparison of the financial performance of the Group. Basic and diluted earnings per share for FY2016 had been adjusted, due to adjustment made for bonus elements of rights issue. 12

ANNUAL REPORT FIVE-YEAR FINANCIAL HIGHLIGHTS Revenue RM 000 Profit Before Interest and Taxation RM 000 1,323,259 1,454,445 1,906,491 3,024,940 4,185,361 903,641 1,132,898 1,079,635 1,467,621 1,384,752 2016 2016 2015 2015 2014 2014 2013 2013 Shareholders Equity RM 000 Net Assets Per Share RM 10,335,384 11,202,530 13,427,197 15,885,085 18,227,961 3.19 3.46 3.56 3.60 3.31 2016 2016 2015 2015 2014 2014 2013 2013 13

IOI PROPERTIES GROUP BERHAD (1035807-A) GROUP FINANCIAL POSITION As at 30 June RM 000 Assets Equity and Liabilities Current assets 9,719,412 Property plant and equipment 1,137,912 Land held for property development 4,560,892 Non-controlling interest 260,615 Borrowings 12,494,506 Total shareholders equity 18,227,961 Other non-current assets 279,350 Interests in joint ventures 5,126,081 Investment properties 12,804,095 Other current liabilities 1,579,314 Other non-current liabilities 1,065,346 As at 30 June 2016 RM 000 Assets Current assets 7,948,610 Property plant and equipment 1,122,322 Land held for property development 4,591,032 Equity and Liabilities Non-controlling interest 130,754 Borrowings 4,262,032 Total shareholders equity 15,885,085 Other non-current liabilities 916,614 Other non-current assets 303,640 Interests in joint ventures 4,820,518 Investment properties 4,024,219 Other current liabilities 1,615,856 14

ANNUAL REPORT GROUP PERFORMANCE HIGHLIGHTS In RM 000 unless otherwise stated 2016 2015 2014 2013* (pro forma) FINANCIAL PERFORMANCE Revenue 4,185,361 3,024,940 1,906,491 1,454,445 1,323,259 Segment operating profit 1,326,258 1,073,653 689,260 565,487 643,296 Fair value gain on investment properties 56,231 145,405 316,586 305,307 162,573 Gain on bargain purchase - 71,091 197,966 8,326 Share of results of associates 3,264 (3,806) 1,716 3,494 6,989 Shares of results of joint ventures (1,001) 181,278 72,073 60,644 82,457 Profit before interest and taxation 1,384,752 1,467,621 1,079,635 1,132,898 903,641 Net interest income/(expense) 51,873 57,078 50,691 (12,494) 1,118 Profit before taxation 1,436,625 1,524,699 1,130,326 1,120,404 904,759 Taxation (468,799) (424,440) (229,729) (216,662) (191,156) Profit for the financial year 967,826 1,100,259 900,597 903,742 713,603 SEGMENT ANALYSIS Property Development Sales value 2,846,826 2,214,426 1,778,457 1,966,806 1,703,979 Sales (unit) 2,296 2,368 1,750 2,667 2,485 Revenue 3,714,204 2,613,666 1,592,174 1,274,255 1,116,490 Segment operating profit 1,179,487 909,134 575,831 480,271 550,685 Property Investment Occupancy rate (%) 65 77 75 74 74 Rental yield (%) 8 7 6 6 6 Revenue 302,119 271,872 192,633 104,894 106,421 Segment operating profit 126,482 141,361 97,515 66,575 65,632 Leisure and Hospitality Occupancy rate (%) 49-77 50-74 49-52 54-56 53-59 Revenue 161,796 131,816 110,778 58,317 87,205 Segment operating profit/(loss) 15,393 18,221 10,143 4,377 16,655 Others Revenue 7,242 7,586 10,906 16,979 13,143 Segment operating profit 4,896 4,937 5,771 14,264 10,324 * The Group s financial performance and financial positions are prepared on the assumption that the business combinations had taken place from the beginning of each financial year. This is to provide a meaningful comparison of the financial performance of the Group. 15

IOI PROPERTIES GROUP BERHAD (1035807-A) SEGMENTAL PERFORMANCE PROPERTY DEVELOPMENT PROPERTY INVESTMENT SALES VALUE (RM 000) REVENUE (RM 000) 2,846,826 302,119 SALES (UNIT) 2,296 126,482 REVENUE (RM 000) 3,714,204 SEGMENT OPERATING PROFIT (RM 000) 1,179,487 SEGMENT OPERATING PROFIT (RM 000) Others 7,242 Revenue (RM 000) Leisure & Hospitality 161,796 Property Investment 302,119 Property Development 3,714,204 16

ANNUAL REPORT SEGMENTAL PERFORMANCE LEISURE AND HOSPITALITY OTHERS REVENUE (RM 000) REVENUE (RM 000) 161,796 7,242 SEGMENT OPERATING PROFIT (RM 000) 15,393 4,896 SEGMENT OPERATING PROFIT (RM 000) Others 4,896 Segment Operating Profit (RM 000) Leisure & Hospitality 15,393 Property Investment 126,482 Property Development 1,179,487 17

IOI PROPERTIES GROUP BERHAD (1035807-A) GROUP QUARTERLY RESULTS In RM 000 unless otherwise stated 31 Sep 2016 % 31 Dec 2016 % 31 Mar % 30 Jun % Revenue 899,515 21.5 1,194,725 28.5 895,824 21.4 1,195,297 28.6 Operating profit 270,356 19.6 393,595 28.5 183,300 13.2 535,238 38.7 Share of results of an associate 382 11.7 718 22.0 1,139 34.9 1,025 31.4 Share of results of joint ventures 3,747 (374.3) (5,709) 570.3 1,299 (129.8) (338) 33.8 Profit before interest and taxation 274,485 19.8 388,604 28.1 185,738 13.4 535,925 38.7 Interest income 14,975 28.9 7,621 14.7 15,591 30.0 13,686 26.4 Profit before taxation 289,460 20.1 396,225 27.6 201,329 14.0 549,611 38.3 Taxation (89,539) 19.1 (107,780) 23.0 (87,235) 18.6 (184,245) 39.3 Profit for the financial year 199,921 20.7 288,445 29.8 114,094 11.8 365,366 37.7 Attributable to: Owners of the parent 189,568 20.6 273,530 29.7 121,136 13.1 336,636 36.6 Non-controlling interest 10,353 22.0 14,915 31.8 (7,042) (15.0) 28,730 61.2 199,921 20.7 288,445 29.8 114,094 11.8 365,366 37.7 Earnings per share (sen) Basic 4.30 6.20 2.72 5.79 Diluted 4.29 6.20 2.72 5.79 SEGMENT REVENUE AND SEGMENT RESULTS Segment Revenue Property development 793,572 21.4 1,068,251 28.8 777,182 20.9 1,075,199 28.9 Property investment 71,332 23.6 77,490 25.7 75,864 25.1 77,433 25.6 Leisure and hospitality 32,511 20.1 47,473 29.3 40,928 25.3 40,884 25.3 Others 2,100 29.0 1,511 20.9 1,850 25.5 1,781 24.6 899,515 21.5 1,194,725 28.5 895,824 21.4 1,195,297 28.6 SEGMENT RESULTS Property development 232,103 19.4 344,726 28.8 132,890 11.1 487,873 40.7 Property investment 53,796 23.6 54,076 23.8 59,589 26.2 60,017 26.4 Leisure and hospitality (13,303) 29.4 (10,939) 24.2 (8,032) 17.8 (12,940) 28.6 Others 1,889 38.6 741 15.1 1,291 26.4 975 19.9 274,485 19.8 388,604 28.1 185,738 13.4 535,925 38.7 18

FINANCIAL CALENDAR ANNUAL REPORT FINANCIAL YEAR END 30 JUNE PAYMENT OF DIVIDEND DECLARATION 15 AUGUST ANNOUNCEMENT OF RESULTS INTERIM BOOK CLOSURE 30 AUGUST PAYMENT 8 SEPTEMBER 1 ST QUARTER 22 NOVEMBER 2016 2 ND QUARTER 21 FEBRUARY GENERAL MEETINGS 3 RD QUARTER 23 MAY 4 TH QUARTER 28 AUGUST NOTICE OF EXTRAORDINARY GENERAL MEETING 26 JANUARY EXTRAORDINARY GENERAL MEETING 13 FEBRUARY NOTICE OF ANNUAL GENERAL MEETING 29 SEPTEMBER ANNUAL GENERAL MEETING 27 OCTOBER 19

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP FINANCIAL REVIEW Notwithstanding the challenges faced, the Group remained focus and continued on delivering sustainable long term shareholders value. The Group s revenue surged to a record high of RM4.2 billion for the financial year ended 30 June ( FY ), which is 38% higher than the previous financial year. The increase in revenue was mainly attributable to the property development segment whereby it registered an increase of RM1.1 billion revenue to RM3.7 billion, which amounted to 89% of Group s total revenue. Property Investment, Leisure and Hospitality, and other segment contributed to the remaining 11%. Dumalis, 16 Sierra >> The Group s Profit Before Interest and Tax ( PBIT ), after excluding the fair value gain from investment properties of RM56.2 million and share of results of joint ventures and associate of RM2.3 million (similarly excluding the fair value gain of RM145.4 million, the one off gain of RM71.1 million arising from the bargain purchase on the acquisition of subsidiaries and share of results of joint ventures and associates of RM177.5 million, for which the share of results was mainly attributable to the fair value gain arisen from the office tower and retail components in an investment property in Singapore), has improved 23.5% to RM1.3 billion. 20

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP FINANCIAL REVIEW La Thea Residences, 16 Sierra The Group s PBIT (after excluding the fair value gain as mentioned) of RM1.3 billion is mainly derived from property development segment, whereby the Group s overseas development projects in Xiamen, PRC are progressing well, with the completion of Trilinq project in Singapore and together with the enhanced performance of our development projects in Klang Valley, all have contributed significantly to the increase. For FY, the Group has invested total of RM8.8 billion, out of which RM8.3 billion was for the acquisition of a prime Central Business District land measuring approximately 1.1 hectares located within Marina Bay in the Republic of Singapore, RM329.5 million on acquisition of development land and common infrastructure for property development projects, RM138.6 million for property investment projects in Singapore, and RM109.1 million for Capital Expenditures ( CAPEX ) comprised largely enhancement and expansion of hotel facilities. The Group s Shareholders Equity as of 30 June stood at RM18.2 billion, an increase of RM2.3 billion or 15% over the previous financial year. The said increase was mainly due to issuance of ordinary share capital of RM1.5 billion, foreign currency gain on translation of foreign operations of RM262.6 million, and total earnings of RM920.9 million offset by a total dividend payment of RM352.9 million for the financial year. The Group s gross borrowing as of 30 June stood at RM12.5 billion, an increase of RM8.2 billion when compared with the previous financial year. The said increase was mainly due to additional financing for the acquisition of a prime Central Business District land measuring approximately 1.1 hectares located within Marina Bay in the Republic of Singapore. THE GROUP SHAREHOLDERS EQUITY RM18.2 billion DIVIDEND 6.0 sen per ordinary share 21

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP FINANCIAL REVIEW Palms Cafe, Palm Garden Hotel THE GROUP S DIVIDEND EQUATES TO A DIVIDEND PAYOUT OF 36% OUT OF TOTAL EARNINGS ATTRIBUTABLE TO THE OWNERS OF THE PARENT. The Group s Net Interest Cover was 5.71 times (FY2016: 9.97 times). The decrease was due mainly to increase in Group s borrowings for investment activities that resulted in higher gross interest costs increased from RM147.2 million to RM242.4 million. The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions and optimises debt and equity mix to provide value to shareholders. The Group actively monitors its operating cash flows, debt maturing profile, and the availability of funding against its overall debt position so as to ensure all operating, investing and financing requirements as well as the loan covenants imposed by the financial institutions are met. An interim single tier dividend of 6% or 6 sen per ordinary share amounting to total payout of RM330.4 million was declared and paid in respect of financial year ended 30 June. It equates to a dividend payout of 36% out of total earnings attributable to the owners of the parent, with a dividend yield of 2.83% (based on share price of RM2.12 per share as at dividend declaration date of August 15, ). The Group has yet to formalise its dividend policy. However, based on the Group s dividend records for the two (2) financial years 2016 &, the dividend payout is at least 33% of the total Group s earnings attributable to the owners of the parent. 22

Seri Puteri Hills MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW PROPERTY DEVELOPMENT CREATING LIVING SPACES FOR STAY, WORK & PLAY Contemporary urban lifestyle where stay, work and play takes centre-stage inspires our development strategies. With that in mind, we aim to create living spaces which offers peace of mind in an environment of lush greenscapes with the convenience of value-added amenities that are conducive for personal and professional development. The long-standing popularity of our integrated sustainable townships of residential enclaves, commercial hubs, offices, hotels, shopping malls and golf courses demonstrates the recognition of our development value.

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT IOI Properties Group Berhad (IOIPG) continues to maintain its repute as a leader in the industry, consistently delivering results through its creation of sustainable communities of vibrant residential enclaves and thriving commercial hubs that influence lifestyles. With its substantial and geographically diverse land bank, the Group remains steadfast in its commitment to create value through all of its property development undertakings, whilst aiming for sustainable growth and operational excellence across its various developments along high growth corridors within the Klang Valley such as Bandar Puteri Puchong, 16 Sierra, IOI Resort City, Bandar Puteri Bangi, Warisan Puteri at Sepang; and in well-established growth areas of the Northern and Southern Regions of Malaysia, notably Desaria in Penang and Bandar Putra Kulai in Johor. With its forward-looking business strategies and global business outlook, IOIPG continues to expand its property businesses in Singapore and the People s Republic of China; leveraging on its resilience and an excellent track record. OPERATIONS REVIEW Property development continues to be the key driver in both revenue and segmental operating profit of the Group. The property development segment registered an increase of RM1.1 billion in revenue or 42% growth to RM3.7 billion and RM270.4 million increases or 30% growth in segmental operating profit to RM1.2 billion for the financial year ended 30 June. The development projects in Singapore contributed 47% of Group s revenue, followed by 40% from Malaysia and balance of 13% from its development projects in Xiamen, PRC. Seri Puteri Hills, Bandar Puteri Puchong Par 3, IOI Resort City 24

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT Klang Valley During FY2016, the Group recorded an increase in transaction for properties within the price range of RM400,000 to RM650,000. With its vast and strategic land banks within high growth corridors across different geographical regions, the Group was able to develop properties that addressed the current needs of customers targeting affordable medium cost properties in its comprehensive integrated townships that are well complemented with urban facilities and lifestyle amenities. These are well-connected too via a comprehensive network of convenient infrastructure and are highly accessible via major highways. (a) In Bandar Puchong Jaya, IOIPG completed a regeneration and rejuvenation project at Capitol Square which includes a retail and carpark complex. The new Ampang LRT extension line serving the vicinity bodes well for this development. (b) IOIPG also saw the completion and handover of Seri Puteri Hills townvilla and condo in Bandar Puteri Puchong to purchasers. (c) Bandar Puchong Jaya welcomed new home owners of Park Ville condo completed and handed over by IOIPG. (d) In our new township of Bandar Puteri Bangi complete with the newly opened Tesco hypermarket, proud property owners of the township s maiden batch of development received their keys to the newly completed link houses Teresse 1 and Teresse 2; as well as Kubica shop offices. (e) The Group also completed and handed over its newly completed double-storey linkhouses of 196 units of Evira and 182 units of Avista in its new township of Warisan Puteri Sepang. The Group is embarking on Transit Oriented Developments ( TOD ) and Low Carbon City Development that provides convenience of connectivity to visitors and to the communities within its township developments. In Bandar Puteri Puchong, a thriving mature township is an excellent showcase of the Group s highly accessible and wellconnected developments. Interconnecting roads link this township to its neighbouring developments; and its infrastructure is supported by public transportation via two LRT stations, Stesen Taman Perindustrian Puchong and Stesen Bandar Puteri. The township is connected too to the LDP at three main points namely at the township interchange itself, and at two other intersections into Puchong Perdana and Puchong Utama respectively. It is this excellent network of infrastructure that appeals to international and MSC status companies as well as multinational corporate firms that have set up their base in the various commercial hubs of Bandar Puteri Puchong namely Puchong Financial Corporate Centre PFCC, the Puteri 2 commercial centre and the boutique offices at The Cube amongst others. With the entry of the millennials into the job market and ultimately making its mark in the demographics of the urban population, the Group has positioned its current and future developments to capture the imagination of this young and highly lifestyle-conscious target market. Therefore, the Group is embarking on an all-new, exciting lifestyle development to further jazz up the already vibrant commercial hubs along Lebuh Puteri, the main spine of vitality that extends into the exclusive residential enclaves of Bandar Puteri Puchong. Enjoying the best of both worlds, the Rejuvenated, Innovative and Original of RIO at IOI RIO City, located in Bandar Puteri Puchong is an 80-acre urban hub of contemporary living spaces; with secure work spaces that inspires; retail and hotel components that offer a whole new world of discovery with the allure of exclusivity; and all these are well-connected with landscaped walkways interlaced with green spaces. Meanwhile, Warisan Puteri Sepang continues its significant contribution towards the Group s revenue with its leverage on the student and tech customer segments of the nearby academic hubs of Xiamen University and Cyberjaya Technology City as well as its connectivity via highways and the ERL. In IOI Resort City Putrajaya, the Group via its 99.9% owned subsidiary, Pine Properties Sdn Bhd has entered into a strategic collaboration of a JV venture with Mitsubishi Jisho Residence Investments Pte Ltd, a wholly owned subsidiary of Mitsubishi Estate Co. Ltd on The Gems condominium development. The Gems is to be developed on a freehold land measuring approximately 9.6 acres in IOI Resort City, Putrajaya. Consisting of eight blocks of highend residential units with sizes ranging from 1,250 sq ft 1,750 sq ft, the development of The Gems is scheduled to commence in FY2018 and is expected to be completed in the course of 4 years. In the face of the current market challenges, the Group intensified its advertising and promotion campaigns with strong focus on its digital marketing strategy; amongst which includes search engine optimisation and content marketing via social media and online platforms. In striving to drive efficiency and profits, the Group leverages on data analytics, anticipating customer behaviour of targetted market segments for the construction of highly effective and focused campaigns to unlock potential sales. It is currently embarking on the utilisation of the Industrial Building System (IBS) which is a sustainable alternative that minimises construction time and cost; simultaneously reducing the use of timber and diverting a substantial amount of timber waste from landfills. 25

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT Other Regions At Bandar IOI Bahau, the Group delivered 90 units of semidetached, 151 units of terraced houses and 62 units of shop offices. Also handed over were one unit of detached, 32 units of semi-detached and 63 units of terraced light industry. In this financial year, the Group will launch 50 units of Mampu Milik Type A and 60 units of Mampu Milik Type B, the price of which is fixed by the State Government at RM80,000, and RM250,000 per unit respectively. Whimsical Garden at Seri Puteri Hills, Bandar Puteri Puchong The key themes that shape demand for space are rising customer expectations, the integration of work and leisure time and the transforming impact of technology. This is where the Group sees the need to intensify its focus on where its expertise can enhance value, attracting a broader range of customers. A strong record of take up rates for the year is solid evidence that the Group s properties are delivering what the customers want. In a rapidly changing world, sustainable properties are becoming increasingly sought after and continue to create value as they are both resilient and well positioned to respond to the highly dynamic nature of evolving customer expectations. In view of the current challenging market with intense competition from other developments offering similar products, the Group acknowledges that there is a necessity to mitigate the risk of unsold inventory by designing attractive packages with low entry cost for instance the IOI Group Buy campaign, Buy Now, Pay Later campaign and implementing introducer fees whereby these initiatives have been well-received by the customers. The Group will continue with its strong advocacy for product quality and customer service excellence as a brand differentiator for the IOIPG brand to stand out among the crowd. We will also be embarking on a branding campaign that aims to reinforce brand affinity amongst existing customers and to realise potential by extending our reach to the younger customer segment. Meanwhile in the Northern Region, the Group s Penang development of Cypress Villa comprising 48 units of semi-detached and 3 units bungalow was completed and handed over to purchasers in FY. Another development of Stramax Residences comprising 107 units of terraced houses is nearing completion and the units are expected to be handed over to new house owners in the second half of FY2018. The Group has also completed and delivered D Summit Phase 1 in Taman Kempas Utama, Clover 3A04 comprising 130 units in Bandar Putra Kulai and 6 units of Eminence in Bandar Putra Kulai, Johor. Meanwhile, at Taman Lagenda Putra, Kulai; the Group handed over double storey semi-d, JADEN, in FY. International On the international front, the development projects in Singapore and Xiamen, People s Republic of China ( PRC ) contributed positively to the Group s results. In Singapore, Trilinq obtained the Temporary Occupational Permit during the financial year and the development project generated a total sales value of approximately SGD411 million with 307 units sold. IOI Palm City in Xiamen, PRC, achieved robust sales of approximately RMB594 million for the current financial year. Significant contribution was derived from the sales of super highrise condominiums. Apart from the above, the Group mitigates the risk of cyclical fluctuation of building and material cost through continual sourcing of alternative sustainable building materials, increasing supplier base, direct purchase from local manufacturers and incorporating sustainable designs that consider reduction in construction costs. 26

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT As at 30 June the Group s ongoing property development projects (excluding investment-based development) are as follows:- Original Development Land Size (Acres) Remaining Development Land Size (Acres) Remaining Estimated Gross Value billion Projects Year of Development s Commencement Estimated Gross Value billion Ongoing Bandar Puchong Jaya, Selangor 1990 930 8 RM4.2 RM0.6 IOI Resort City, Putrajaya 1995 & 2016 354 274 RM19.5 RM18.1 Bandar Putra Kulai, Johor 1995 5,680 3,556 RM9.1 RM5.8 Bandar Putra Segamat, Johor 1995 489 53 RM0.9 RM0.3 Bandar Puteri Puchong, Selangor 2000 930 153 RM15.8 RM11.5 Taman Lagenda Putra, Kulai, Johor 2006 225 29 RM0.7 RM0.2 Taman Kempas Utama, Johor Bahru, Johor 2007 294 48 RM3.3 RM0.9 16 Sierra, Puchong South, Selangor 2008 535 186 RM6.8 RM4.6 The Platino, Tebrau, Johor 2012 5 - RM0.5 RM0.04 Desaria, Sungai Ara, Penang 2013 32 15 RM0.5 RM0.3 IOI Palm City, Xiamen, PRC 2014 21 14 RMB6.7 RMB4.6 Bandar IOI, Bahau, Negeri Sembilan 2014 283 30 RM0.8 RM0.4 Bandar Puteri Bangi, Selangor 2014 345 221 RM3.7 RM2.6 Bandar Puteri Warisan, Sepang 2014 336 128 RM3.9 RM3.6 i-synergy, Senai, Kulai, Johor 2015 500 482 RM2.0 RM1.8 Original Development Land Size (Acres) Remaining Development Land Size (Acres) Remaining Estimated Gross Value billion Oversea Projects Year of Development s Commencement Estimated Gross Value billion Completed Seascape @ Sentosa Cove, Singapore 2008 4 - SGD0.8 SGD0.5 Cape Royale @ Sentosa Cove, Singapore 2010 5 - SGD1.4 SGD1.4 Cityscape @ Farrer Park, Singapore 2011 2 - SGD0.4 SGD0.02 South Beach, Beach Road, Singapore 2011 9 - SGD1.0 SGD1.0 IOI Park Bay, Xiamen, PRC 2012 8 - RMB1.8 - The Trilinq @ Jalan Lempeng, Singapore 2013 6 - SGD1.0 SGD0.2 The table below sets forth key information with respect to the performance of IOIPG s property development business excluding joint ventures:- 2016 2015 2014 2013* Units of property sold 2,296 2,368 1,750 2,667 2,485 Total sales (RM 000) 2,846,826 2,214,426 1,778,457 1,966,806 1,703,979 Revenue (RM 000) 3,714,204 2,613,666 1,592,174 1,274,255 1,116,490 Operating profit (RM 000) 1,179,487 909,134 575,831 480,271 550,685 * The Group s financial performance and financial positions are prepared on the assumption that the business combinations had taken place from the beginning of each financial period. This is to provide a meaningful comparision of the financial performance of the Group. 27

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT The property sales mix by price range is as follows:- 2016 PRICE RANGE (RM 000) % (RM 000) % Below RM250,000 28,783 1 21,631 1 Between RM250,000 and RM500,000 188,586 7 247,913 11 Between RM500,000 and RM750,000 591,303 21 437,530 20 Between RM750,000 and RM1,000,000 107,173 4 141,343 6 Between RM1,000,000 and RM1,500,000 153,165 5 140,941 6 Between RM1,500,000 and RM2,000,000 30,672 1 709,525 32 Above RM2,000,000 1,747,144 61 515,543 24 Total 2,846,826 100 2,214,426 100 OUTLOOK AND PROSPECTS Malaysia The year has proven to be a challenging one for most industries across the board. The property market has seen its fair share of hurdles, with home buyers facing affordability issues, banks tightening loan approvals, a high percentage of loan rejection rates due to high household debt, a post-effect of the GST and the depreciation of the ringgit alongside the strengthening of the US dollar. However, Malaysia s strong GDP growth in 1H and improved oil prices helped to ease the downward trend and strengthened the disposable income of the average Malaysian household. Looking at the young demographics and an expanding middleincome category, the Group is confident that there will be continual demand for properties, particularly those designed for multigenerational living amidst the rejuvenating and relaxing elements of nature. Sky Condominium in Bandar Puchong Jaya, Seri Puteri Hills TownVilla and Condo in Bandar Puteri Puchong; as well as Conezion and Par 3 in IOI Resort City showcase developments that are able to appeal to both the multi-generational market segment and the young customer segment in terms of chic architectural design, practical layout as well as facilities and amenities that define contemporary and trendy lifestyles. Aside from the practicality in layout and architectural aesthetics, a foremost concern on a property buyer s mind is safety and security which the Group continually addresses in its planning and design of its properties. Its premium urban lifestyle living spaces are complemented by a multi-tier security system of perimeter fencing, card access and security screening at guarded entrance, CCTV surveillance, card-access to restricted residents-only areas, digital internal security features within each property unit. As both work and leisure become increasingly connected, properties that are surrounded by lush greenery complete with facilities and amenities that allow for peace of mind, healthy lifestyle and the presence of retail and leisure offerings within easy reach; are highly sought after. 16 Sierra and Bandar Puteri Puchong developments are designed and developed on the concept of green living in buildings planned with sustainability in mind; amidst abundant greenery and surrounded by the elements of nature. In a resort city development such as IOI Resort City, customers are able to enjoy easy accessibility to convenience and to contemporary urban lifestyles comprising fun entertainment, a multitude of dining choices, shopping, facilities and amenities, amongst many other lifestyle options desired by young professionals and families. Meanwhile, the Group s business plans will include planning of sustainable townships within the Klang Valley with developments that focuses on TOD and affordability to meet the urban lifestyle expectations of the young market segment. In Puchong Jaya, the Group will focus on rejuvenation projects, TOD and collaborate with the Local Council on the new initiative of Low Carbon City developments. For its 16 Sierra development with the MRT2 within its vicinity, the Group will continue to focus on TOD and provide a sustainable healthy lifestyle with green living features of bicycle paths and walkways to complement the signature thematic gardens of 16 Sierra. Mid-range and affordably-priced properties will take centre-stage in Bandar Puteri Bangi and Warisan Puteri at Sepang which are located in established growth corridors and are well-connected via highways. 28

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT Seri Puteri Hills Townvilla In Johor, the property market has remained sluggish in the past year and is expected to continue its flattish trend this year. With an increasing supply of apartments with many projects due to be completed and handed over this year, challenges are expected in the secondary and rental market. Commercial properties, shops and industrial developments are expected to face similar challenging situations. Nevertheless, the market is likely to recover within the next two years. For the medium term to long term, the Group will continue to develop products that are able match the dynamic market demand in terms of price, design, quality and lifestyle features whilst remaining sensitive to market changes and focusing on delivering excellent service; as well as creating value for customers. Going forward, the Group will focus on affordability, with landed properties within gated and guarded communities and apartments priced below RM600,000. Bank Negara Malaysia recently reported that the overall loan approval rate for the purchase of properties remained high and this bodes well for the property industry providing assurance that the demand for properties in Malaysia remains positive going forward. With the Group s sizeable land bank in strategic locations both in Malaysia and overseas, coupled with strong track record of delivery, IOIPG is well-positioned to adapt to market demand. The Group continues to look forward with cautious optimism whilst maintaining sensitivity and flexibility to respond to market changes. In the current business landscape, the Group strongly advocates hands-on management, applying knowledge of the business, being sensitive to market changes and focused on delivering value to home buyers. The Group s results show that its space offerings continue to be attractive to home owners, entrepreneurs and investors alike. This reflects the continuing effective execution of the Group s strategy, providing space that responds to changing lifestyles and exceeding the expectations of its customers. The Group also expects the property market to scale up to firmer ground, barring any surprises on the international and domestic front. 29

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY DEVELOPMENT Pavillion Service Apartments, Bandar Puteri Puchong PRC Property cooling measures may continue to impact the market in the short term but property values is expected to continue to hold in first and second tier cities in the longer term. The Group s existing projects and future development land bank are situated in Xiamen, which is an attractive economic hub given that it has an established transportation network that connects to other major cities and destinations in the PRC and abroad. The Group remains optimistic on the prospects of its property developments in the PRC as the above mentioned will enhance the visibility of our projects and attract prospective buyers. IOI Palm City s remaining residential components of high rise residences and town villas are expected to be launched in the next financial year. Singapore Market sentiments have improved in the second quarter of as evidenced by increase of sales and lower inventory of unsold units following the relaxation of certain property cooling measures, for example, the easing of the sellers stamp duty in the first quarter of. The residential property market outlook is anticipated to be optimistic as increase in sales is expected to continue its momentum attributable to improving market sentiments and pent up demand from buyers. As such, the Group remains optimistic that property projects in established locations with amenities are anticipated to continue to draw prospective buyers. Meanwhile, construction on the newly acquired Xiang An land in Xiamen, PRC is expected to commence in the fourth quarter of. The mixed development consists of condominiums, town villas and commercial units within the new Xiang An central business district in Xiamen which is proposed to be a new integrated eco-city. Future developments that will complement the project include schools, a hospital and a new international airport. The land is ideally located with easy connectivity to the Xiamen Gaoqi International airport, main island of Xiamen and other commercial hubs via an undersea tunnel and will be linked to upcoming subway lines. During the financial year under review, the Group s Trilinq project in Singapore obtained its temporary occupation permit in April and continued to record a favourable take-up rate with sales of 307 units at sales value of RM1,310 million for FY. 30

IOI City Towers MANAGEMENT DISCUSSION AND ANALYSIS PROPERTY INVESTMENT CREATING SUSTAINABLE GROWTH THROUGH STRATEGIC INVESTMENTS Aspirations to achieve sustainable growth is what motivates the Group s investment strategies. The Group is committed to deliver sustainable value creation and long-term return through its impressive portfolio of investment properties. The prime investment assets now thriving and growing under IOIPG is proof of its success in delivering innovative investment strategies that enhance value and deliver sustainable growth for the Group.

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY INVESTMENT Our property investment arm is a strategic part of the Group through which we aim to create added value for our customers, generate better returns to our shareholders and provide a steady stream of revenue and profits to the Group in the long term. We have achieved good returns and a stable and recurring income through our prime property investment interests which comprise a range of property assets of shopping malls, commercial/ retail space and office space. Value-added amenities complete our integrated township development and create contemporary urban lifestyles. As at 30 June, our existing property investment portfolio has an approximate total of 5.6 million sq ft of lettable space, of which about 2.6 million sq ft is retail space and another 2.5 million sq ft as office space with the balance comprised of residential properties. Puchong Financial Corporate Centre IOIPG s major investment properties are:- (a) IOI City Mall in IOI Resort City, Putrajaya with 380 retail shop lots with a total net lettable area ( NLA ) of about 1.5 million sq ft; (b) IOI Mall Puchong owns more than 353 retail shop lots with a total NLA of approximately 856,000 sq ft; (c) Four blocks of 12-storey to 21-storey purposebuilt office buildings in Puchong Financial Corporate Centre ( PFCC ) with a total NLA of approximately 886,000 sq ft; (d) IOI Mall Kulai in Johor with more than 258 retail shop lots with a total NLA of approximately 242,000 sq ft; (e) One IOI Square and Two IOI Square located in IOI Resort City, Putrajaya with a total of two blocks of 12-storey purpose built office towers with approximately 441, 000 sq ft of total NLA; (f) IOI City Tower 1 and IOI City Tower 2 situated in IOI Resort City, Putrajaya comprising two 31-storey office towers with approximately 1 million sq ft of NLA; and (g) IOI Boulevard in Puchong comprising 68 units of office and retail lots with a total NLA of approximately 229,000 sq ft. OPERATIONS REVIEW The Group posted total revenue of RM302.1million, representing an improvement of RM30.2 million or 11% when compared with the previous financial year. The key revenue driver was from the retail sector whereby it accounts for 82% of the Group s total revenue in property investment segment. It recorded revenue and operating profit of RM248.6 million and RM97.5 million respectively. The improved revenue performance was mainly due to higher occupancy and rental rates from both retail and office segments. The overall market in FY has been challenging financially and economically for the property investment sector as well as all the segments in the industry - Office, Hotel and Retail. However, in view of the various properties strategic location in growth corridors, good connectivity, modern and appealing designs and backed by a strong management and marketing team, the Group s investment properties were able to weather through 2016 fairly well. 32

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY INVESTMENT Malaysia Retail Retail malls in the Klang Valley maintained strong occupancy despite market news of an increasingly competitive retail mall environment, largely due to an oversupply of retail space, along with a weakened consumer market arising from GST implementation and a weaker oil price as compared to the period when crude oil hovered at around USD100 per barrel. Capitalising on the strong infrastructure connectivity over a large regional catchment (for instance IOI City Mall) plus a matured township (for example IOI Mall Puchong), both the Group s Klang Valley malls have fared well. In the year under review, the Group s flagship IOI City Mall was awarded the coveted FIABCI-Malaysia Property Award 2016 for the Retail Category. The winner of this award is selected based on the development s overall concept, design and architecture, environmental impact, safety and maintenance, and its benefits to the community, amongst others. IOI City Mall, as one of the stateof-the-art architectural landmarks in IOI Resort City and the largest regional mall in southern Klang Valley with a 1.5 million sq ft of net lettable area achieved an occupancy of 98%. Complemented by world class hotel brands and an award-winning premier golf course, IOI City Mall not only caters to the local market segment but enjoys patronage from the entire Southern Region of Kuala Lumpur, Selangor and Negeri Sembilan. Meanwhile, IOI Mall Puchong has continued to maintain its high occupancy of over 95% and its customer footfall has benefitted from the new ( LRT ) stations connecting Puchong to multiple high growth areas which commenced operations in the year under review. While the Group s malls located in the Klang Valley have almost 100% occupancy, it must ensure that the malls maintain their appeal with fresh and fun ways to attract existing and new customers. The shopping experience must be maintained at a high-level with a popular and trendy tenant-mix that reflects dynamic and changing customer profiles and expectations. The Group will continue its high level performance in the implementation of its marketing proposals aimed at filling the existing occupancy gaps. We are improving our tenant mix with an increase in F&B offerings to enhance the shopping experience of its customers with new food attractions such as the recently completed Food Street in IOI Puchong Mall with a variety of choices from Swensen to Go Noodles and many more. The ground floor has been repositioned as a lifestyle, fashion-oriented shopping level with trendy and renown brands such as Cotton On and Charles & Keith amongst others that appeal to the young demographics of today s shoppers. Transforming the tenant mix to provide a modern trendy shopping experience is a move in the IOI City Mall, IOI Resort City right direction in order to cater to shopping preferences of the young population which makes up a high percentage of urban shoppers. The Group remains perceptive to changing customer needs and experiences, and hence continually adapts accordingly to accommodate appropriate changes to enrich the customer shopping experience. Looking forward, the Group plans to embark on renovation and expansion of its pioneer mall namely IOI Mall Puchong for a fresh new mall experience and contemporary lifestyle ambience for its customers. Thereafter, a rebranding of the mall will be in the pipeline to reflect its contemporary lifestyle brand that continues to serve its surrounding vibrant neighbourhoods in the Puchong vicinity. Meanwhile, expansion works of IOI City Mall has been planned with another 1 million sq ft poised to wow its customers once it is completed. The additional lettable area will leverage on the high growth corridor of the Southern Klang Valley region and the increased footfall it will generate for the mall. Offices Although the overall office market in Klang Valley remains to be in oversupply, the Group s effective marketing and pricing strategies coupled with a strong property management and leasing team was able to attract appropriate tenants to Puchong and Putrajaya where most of its offices are located, with some offices enjoying more than 90% occupancy. The enhanced network of connectivity and accessibility has benefitted these two growth areas. The Group will continue to actively engage various marketing channels to implement aggressive campaigns and offer competitive rental rates that reach out to proposed, existing and new tenants; and has received generally positive feedback. PFCC with its high connectivity and accessibility as a result of its location within close proximity to the ( LRT ) system and the Group s hotel, Four Points by Sheraton Puchong has been able to attract Multinational Corporations ( MNCs ), effectively increasing its overall occupancy. With a well-planned integrated resort city development that has since become a signature landmark in the southern growth corridor of the Klang Valley, interest in office space within IOI Resort City is scaling upwards. Apart from the Group s new corporate office which will be located at IOI City Tower 2 in IOI Resort City, the office tower will welcome too its new tenant Hewlett-Packard with a take-up office area of approximately 80,000 sq ft spanning across 5 levels; while the entire tower of Two IOI Square which is also located in IOI Resort City will be occupied by a foreign-based enterprise. 33

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW PROPERTY INVESTMENT Despite the challenging market situation for office leasing, the Group will persevere to ensure that its portfolio of investment properties is well-occupied at the best competitive rates to generate a steady stream of recurring revenue for the Group and to create value for its stakeholders. The Group has identified some key risks that may be challenging for its Leisure & Hospitality business segment. These are market risks which include a highly competitive corporate office market, oversupply of retail space, and a slowdown of consumer spending. The Group s short to long-term strategies are designed to mitigate these risks such as aggressive marketing focusing on targeted market segments and effective pricing strategies; and ensuring operational excellence with high standards of property management and facility management of our property investment assets. In order to mitigate the risks of oversupply retail space and slow consumer spending, the Group s mitigation plan includes studying and understanding market trends and its competition and enhancing tenant mix to offer new unique shopping experiences for its customers. The Group will continue to collaborate with tenants to enhance value proposition of a retail property or mall as a destination of choice; and creating a conducive environment to evoke a lifestyle ambience that positively influences consumer behaviour. The Group operates within an established risk management framework whereby risk review covers principal risk. The respective Risk Management Committees and workgroups of each business unit conduct quarterly reviews to monitor and update on the emerging and principal risks, evaluate adequacy of internal control systems and establish response and actionable programmes to manage the risks. The review also includes annual presentation to and discussion with the Audit Committee and the Board. Regional Investment Properties South Beach, a joint venture development between IOIPG and City Developments Limited ( CDL ) is a fully integrated mixed used development comprising a luxury hotel managed by JW Marriott, 190 units of luxury residences, with total net lettable area of 510,000 sq ft of Grade A office space and 30,000 sq ft of retail space. The completion of the MRT link in May 2016 provides the viral link to the Esplanade and City Hall MRT stations and enhances the vibrancy and footfall to the retail area. In respect of South Beach Office Tower, its 510,000 sq ft of Grade A office space for lease is currently occupied by renowned multinational corporations such as Sanofi-Aventis, Tableau Asia Pacific, Facebook and LEGO, to name a few. OUTLOOK & PROSPECTS Malaysia Despite the growing prominence of internet retailing and the challenges faced with an oversupply of malls, the Group believes that the average Malaysian consumer will continue to patronise large, well-managed malls. Hence, plans for proposed expansions to improve long-term value for the properties and its stakeholders are in the right direction. Malls and their respective expansions will continue to serve their purpose so long as they are strategically located and well-connected to population growth corridors where families can enjoy all the conveniences that come with a mall in the vicinity. The Group will also further tap on the synergies that come from the increased integration of commercial developments within the existing IOI developments as the Hotels, Offices and Shopping Malls cross-sell and leverage on each other s businesses. While the outlook for the office market remains challenging as the take-up rates are relatively slow, the Group will maintain its competitiveness in attracting and retaining more tenants by ensuring its investment assets are well-managed, facilities wellmaintained and service levels exceed expectations. Singapore An increase in the supply of premium and Grade A office space in the Central Business District ( CBD ) is expected by end of. However, market outlook may improve given that there have been progressive commitments to upcoming developments as tenants relocate to better value propositions in newer buildings. South Beach Office Tower and retail spaces at South Beach Avenue are both fully leased and are expected to continue to perform well with its prime location and connectivity to an extensive MRT network, major roads and expressways linking to the CBD and airport, and with South Beach Avenue offering a wide spectrum of dining and service outlets. The newly acquired land in Central Boulevard is proposed for a Grade A development of two office towers with an estimated 1,260,000 sq ft of leaseable space and an estimated 30,000 sq ft of retail podium. Central Boulevard is located in a prime and strategic location within the Marina Bay financial and business district. PRC Xiamen is a main commercial hub in the Fujian province. Xiamen s ideal location with established transportation networks covering land, sea and air, linking to other major cities within the PRC and beyond will serve to enhance the visibility of our investment properties. IOI Palm City s commercial components comprising a shopping mall, hotel and boutique offices has commenced construction in the first quarter of and is expected to be completed in 2021. 34

Le Méridien Putrajaya MANAGEMENT DISCUSSION AND ANALYSIS LEISURE AND HOSPITALITY BUILDING RELATIONSHIPS THROUGH SERVICE EXCELLENCE Our leisure and hospitality portfolio comprising an impressive hotels of world class brands and award-winning premier golf courses is well-known in the industry for its customer-centric appeal and strong brand recognition. With the addition of new hotels in the local and international front, we are on course towards strengthening and elevating our reputation in the leisure and hospitality industry.

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW LEISURE & HOSPITALITY Understanding customers and meeting their expectations is the motivation that drives the Group s leisure and hospitality business. For over three decades, IOI Properties Group Berhad ( IOIPG ) has achieved success and recognition not just for its property development and property investment portfolios, but also for its exclusively designed hotels, resorts and golf courses under its leisure and hospitality portfolio. IOIPG aims to be a leading player in the leisure and hospitality circle with its signature collection of world class hotels, new and exciting ventures into the international leisure and hospitality scene. Appreciation of service and hospitality is a motivation for brand excellence in the Group s leisure and hospitality business. The Group is committed to delivering the highest standards of service upon which positive experiences are created and longterm relationships are built. In its mission to influence lifestyles as it develops more integrated townships, the Group constantly offers its best ideas to create a cache of lifestyle elements that complements the distinctive features of the architectural structures in the townships developed, and appeals to the urban communities within each development. The Group s integrated developments and townships make up a perfect blend of residential, commercial as well as leisure and hospitality elements; allowing each to complement the other and leverage on the unique features and services that each has to offer. These synergies are strategically embedded in the master-planned integrated developments of IOI Resort City and Bandar Puteri Puchong. View from Le Méridien Putrajaya 36

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW LEISURE & HOSPITALITY Palm Garden Golf Club Apart from being an award-winning top property developer, IOIPG is proud to be one of the few integrated property developers that builds and manages its own investment properties such as hotels, golf courses, shopping malls and office buildings. To date, the Group has under its wings the following hotels, resorts and golf courses in Klang Valley, Johor and Singapore:- (a) Putrajaya Marriott Hotel, a five-star hotel located in IOI Resort City, houses 380 spacious guest rooms, 73 executive rooms and 35 exclusive suites. Set amidst lush greeneries of a resort environment, this opulently designed hotel has received numerous awards; (b) Four Points by Sheraton Puchong, strategically located in the heart of Puchong, is a four-star business hotel that features 249 stylish and contemporary guestrooms and suites; (c) Palm Garden Hotel, a four-star hotel located within IOI Resort City comes with 151 tastefully furnished rooms; (d) Palm Garden Golf Club ( PGGC ), located in IOI Resort City is a renowed award winning golf course which has won the Par Golf People s Choice Awards and Superbrands Awards. (e) Palm Villa Golf and Country Resort, located in the township of Bandar Putra Kulai, Johor, is a 27-hole golf course which comes with a comprehensive range of club facilities. (f) Le Méridien Putrajaya, a five-star world class brand located in IOI Resort City. (g) JW Marriott Hotel Singapore South Beach, a 634-room luxury hotel located on Beach Road bordering Singapore Central Business District. The Group registered total revenue of RM161.8 million, an increase of RM30.0 million or 23% when compared with previous financial year. The hospitality sub-segment accounts for 81% of the total revenue in leisure and hospitality segment. It recorded a revenue and operating profit of RM130.2 million and RM10.8 million respectively. The improved revenue performance was primarily contributed by Le Méridien, Putrajaya which commenced its business in August 2016. 37

IOI PROPERTIES GROUP BERHAD (1035807-A) MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW LEISURE & HOSPITALITY Palm Garden Hotel OPERATIONS OVERVIEW The hotel sector remains competitive with many new hotel completions. The Group succeeded in maintaining market share for existing hotels, with Four Points by Sheraton Puchong doing fairly well, reaching out to a large client base of corporate firms and manufacturing enterprises within the Puchong vicinity. The new 5-star hotel, Le Méridien Putrajaya which commenced operations in August 2016, was able to attract new markets and perform reasonably well with occupancy rates up to 70%. With effective marketing strategies and high standards of customer service excellence, Le Méridien was able to maintain its customer base and develop new markets encompassing the public and private sector as well as corporate firms. The Group will continue its aggressive marketing strategies targeting the right market segment in order to further increase occupancy rate. This will include its medium to long-term strategy aimed at enhancing customer experience through refurbishment of its hotels. The recently completed refurbishment of Putrajaya Marriott Hotel added a touch of modernity while maintaining the signature opulence of its interior. Meanwhile, the ongoing renovation at Palm Garden Hotel at IOI Resort City has since enhanced its interior particularly for its Palm Café, with its facelift giving it a fresh contemporary ambience; and the upgraded rooms enhancing its customers hotel stay experience. The refurbishment exercise at both hotels has improved overall occupancy rate and received good customer feedback. For long-term growth prospects, the Group will build hotels when the need arises for such a leisure component to complement its integrated lifestyle township developments and to create value for its stakeholders. 38

ANNUAL REPORT MANAGEMENT DISCUSSION AND ANALYSIS GROUP BUSINESS REVIEW LEISURE & HOSPITALITY actionable programmes to manage the risks. The review also includes annual presentation to and discussion with the Audit Committee and the Board. International IOIPG welcomes JW Marriott Hotel Singapore South Beach to its South Beach integrated development located nearby the Central Business District and Marina Bay. This internationally-acclaimed hotel offers luxury stay experiences in immaculately appointed rooms with contemporary designer interiors and breathtaking views of Singapore. It officially opened its doors in March and it has been enjoying a good occupancy rate up to more than 70%. OUTLOOK & PROSPECTS Malaysia Putrajaya Marriott Hotel The PGGC remains strong and competitive as a highly preferred premier golf course in the country with its consistent and effective maintenance of the golf course and greens. The high standards of PGGC complements the IOI Resort City development as a city for stay, work and play. Loyal customers who continue to play at PGGC is evident of its commitment in maintaining the high standards of the golf course. Its popularity amongst discerning golfers has won it multiple accolades in the year under review namely ParGolf People s Choice Awards where it was voted Malaysia s Top Three Best Greens and Superbrands Awards. For long-term sustainable business growth, PGGC continues to break into new market segments and to increase its customer base to encompass foreign and local golfers as well as institutional and corporate clients. For cost efficient management of its supply chain, the leisure and hospitality business segment face the risk of price fluctuation of its imported goods resulting from economic factors that may impact the local currency. Therefore, sourcing of alternative products that are manufactured locally is able to provide more options of equally high quality and cost efficient options is encouraged; simultaneously supporting the local economy as a sustainability initiative. To effectively manage and mitigate identified risks such as the above, the Group operates within an established risk management framework that reviews on the adequacy and effectiveness of risk management whereby each business unit via its respective Risk Management Committees and workgroups conduct quarterly reviews and updates on the emerging and principal risks, evaluate adequacy of internal control systems and establish response and While the Group is aware that the outlook for the hotel segment remains challenging in an increasingly competitive market with new hotels envisaged to be opened coupled with an expectedly slower market due to government spending being affected, it will continue to maintain and strengthen its hotel service levels to uphold its strong presence in the institutional sector but further expand into new markets within the corporate and tourism sectors. For PGGC, as a non-membership premier golf club, it will differentiate itself from the crowd; not to mention its unique signature high lipped bunkers and challenging greens with average speed of 10.5 on the stimp meter makes it one of the most challenging golf courses in the country as it puts the mind, skill and dexterity of any player to the test. As a leisure component within the development of IOI Resort City that attracts both local and international golfers, PGGC is expected to continue its popularity streak amongst discerning players and place IOI Resort City on the map as the choice destination for stay, work and play. Singapore The tourism sector improved in the first quarter of with higher international visitor arrivals and increased tourism receipts. The hospitality sector is expected to remain resilient as Singapore is a global and regional transit hub with a well-established tourism infrastructure and efficient transportation network. An official opening of the 634-room JW Marriott Hotel Singapore South Beach was held on 24 March. Hotel operations is expected to perform well with the recent opening of its spa services in May, the unveiling of its remodelled ballroom in September and with more food and beverage outlets expected to be opened between the second half of and early 2018, as well as the Singapore Formula 1 event in September. 39

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE INFORMATION BOARD OF DIRECTORS Tan Sri Dato Lee Shin Cheng PSM, DPMS, JP Executive Chairman Lee Yeow Seng Chief Executive Officer Dato Lee Yeow Chor DSAP Non-Independent Non-Executive Director Datuk Lee Say Tshin DMSM, SDK Independent Non-Executive Director Tan Sri Dato Sri Koh Kin Lip PSM, SSAP, JP Senior Independent Non-Executive Director Lee Yoke Har Executive Director Datuk Tan Kim Leong @ Tan Chong Min PMC, JP Independent Non-Executive Director Datuk Dr Tan Kim Heung PMW Independent Non-Executive Director 40

ANNUAL REPORT CORPORATE INFORMATION AUDIT COMMITTEE Datuk Tan Kim Leong @ Tan Chong Min* PMC, JP Chairman Datuk Lee Say Tshin* DMSM, SDK Datuk Dr Tan Kim Heung* PMW RISK MANAGEMENT COMMITTEE Datuk Lee Say Tshin* DMSM, SDK Chairman Tan Sri Dato Sri Koh Kin Lip* PSM, SSAP, JP Datuk Dr Tan Kim Heung* PMW * Independent Non-Executive Directors GOVERNANCE, NOMINATING AND REMUNERATION COMMITTEE Tan Sri Dato Sri Koh Kin Lip* PSM, SSAP, JP Chairman Datuk Tan Kim Leong @ Tan Chong Min* PMC, JP Datuk Dr Tan Kim Heung* PMW EMPLOYEES SHARE OPTION SCHEME COMMITTEE Tan Sri Dato Lee Shin Cheng PSM, DPMS, JP Chairman Lee Yeow Seng Dato Lee Yeow Chor DSAP COMPANY SECRETARY Tan Sin Yee (MAICSA 7060514) REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS Two IOI Square IOI Resort 62502 Putrajaya Tel +60 3 8947 8888 Fax +60 3 8947 8909 AUDITORS PricewaterhouseCoopers Chartered Accountants Level 10, 1 Sentral Jalan Rakyat Kuala Lumpur Sentral P O Box 10192 50706 Kuala Lumpur Tel +60 3 2173 1188 Fax +60 3 2173 1288 REGISTRAR Tricor Investor & Issuing House Services Sdn Bhd Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur Tel +60 3 2783 9299 Fax +60 3 2783 9222 THE ADMINISTRATION AND POLLING AGENT Boardroom Corporate Services (KL) Sdn Bhd Lot 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan Tel +60 3 7720 1188 Fax +60 3 7720 1111 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.my www.myioi.com 41

IOI PROPERTIES GROUP BERHAD (1035807-A) REGIONAL PRESENCE 3 1 2 1 2 3 MALAYSIA Penang Selangor Negeri Sembilan Malacca Johor SINGAPORE Cape Royale, Sentosa Cove Cityscape @ Farrer Park Seascape, Sentosa Cove South Beach The Trilinq THE PEOPLE S REPUBLIC OF CHINA IOI Park Bay @ Xiamen IOI Palm City @ Xiamen The Trilinq @ Xiamen 42

LOCATION OF OPERATIONS IN MALAYSIA ANNUAL REPORT Main Airport North-South Expressway East Coast Expressway PENANG 1 Penang International Airport PENANG 1 / Desaria, Sungai Ara SELANGOR 2 / Bandar Puchong Jaya & Bandar Puteri Puchong 3 / 16 Sierra, Puchong South 4 / IOI Resort City, Putrajaya 5 / Bandar Puteri Bangi 6 / Warisan Puteri Sepang NEGERI SEMBILAN 7 / Bandar IOI, Bahau MALACCA 8 / Ayer Keroh JOHOR 9 / Bandar IOI Segamat 10 / Taman Lagenda Putra 11 / Bandar Putra Kulai 12 / Taman Kempas Utama 13 / The Platino SELANGOR 2 3 6 4 5 7 KLIA NEGERI SEMBILAN MALACCA 8 9 JOHOR 10 11 Senai International Airport 12 13 43

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE CALENDAR 08 AUGUST 2016 IOI (Xiamen) Properties Co Ltd signed an agreement with Mango International Studio as the latter will be opening it s first flagship store in Xiamen IOI Mall and will be taking up a lease area approximately 5,176m 2, with 10 theatre halls which includes a double screen theatre, IMAX huge screen hall and DMAX huge screen hall. 11 AUGUST 2016 IOIPG won the Best Mid-Range Condo Development (Central Malaysia) for Sky Condominium at the South East Asia Property Awards (Malaysia) 2016. 18 AUGUST 2016 Le Méridien Putrajaya, a five-star hotel owned by IOIPG officially opened its doors for business. 44

ANNUAL REPORT CORPORATE CALENDAR 25 AUGUST 2016 Tesco opened its door at the fast-developing township of Bandar Puteri Bangi. This popular hypermarket definitely adds another dimension of convenience to the township. 26 AUGUST 2016 IOI (Xiamen) Properties Co Ltd an indirect 99.9% owned subsidiary of IOIPG successfully tendered for a parcel of land in Xiamen, PRC, through a competitive bidding for approximately RM1.4bil. 18 SEPTEMBER 2016 IOIPG launched Avista, a 2 storey terrace home which is part of a well-planned 206 acre freehold land at Warisan Puteri Sepang. 45

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE CALENDAR 02 OCTOBER 2016 The launch of the final blocks of Conezion Residence service apartments received overwhelming response. 20 OCTOBER 2016 IOIPG announced its RM20 million plans in the upgrading and expansion of Bandar Puteri Puchong Interchange. 11 NOVEMBER 2016 IOIPG won its bid for a prime Central Business District land located within Marina Bay in Singapore via Wealthy Link Pte Ltd, a wholly owned subsidiary of the Group. 46

ANNUAL REPORT CORPORATE CALENDAR 17 NOVEMBER 2016 Multi-award winning IOI City Mall, which houses the world s first indoor apocalypse-themed action park, District 21; and Malaysia s first Olympic sized ice-skating rink, Icescape; added another feather on its cap by clinching the prestigious FIABCI Malaysia Property Awards 2016 - Retail Category. 25 JANUARY Pine Properties Sdn Bhd ( PPSB ), a 99.9% owned subsidiary of IOIPG signed a shareholders agreement with MJR Investment Pte Ltd, a wholly owned subsidiary of Mitsubishi Estate Co., Ltd. 47

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE CALENDAR 13 MARCH Group Executive Chairman Tan Sri Dato Lee Shin Cheng and Mr Lee Yeow Seng, CEO of IOIPG officially handed over a 7,000 sq ft multi-purpose hall at Bandar Puteri Puchong to Subang Jaya Municipal Council ( MPSJ ). 21 MARCH IOIPG bagged three awards in the annual StarProperty.my Awards namely The All-Star Top Ranked Developers of the Year ; The Starter Home Award (Best Affordable Home): Honours for Palmyra Residence, Bandar Puteri Bangi; and The Family-Friendly Award (The Best Family-Centric Development): Merit for Seri Puteri Hills, Bandar Puteri Puchong. 48

ANNUAL REPORT CORPORATE CALENDAR 24 MARCH JW Marriott Hotel Singapore South Beach had a Grand Opening Party with over 800 invited guests turning up to mark the occasion. 29 MARCH PPSB, 99.9% owned subsidiary of IOIPG, announced its collaboration with Mitsubishi Jisho Residence Investment Pte Ltd, a wholly-owned subsidiary of Mistsubishi Estate Co Ltd to jointly develop The Gems at IOI Resort City. 31 MARCH PGGC was voted Malaysia s top three BEST GREENS in ParGolf People s Choice Award for the second consecutive year. 49

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE CALENDAR 15 APRIL IOIPG launched Celeste, double-storey terrace houses at Bandar Putra Kulai, Johor. 26 APRIL PGGC was awarded its first Superbrands award. 27 APRIL PGGC organised its 5 th Anniversary Cup which attracted the participation of 109 golfers. 50

ANNUAL REPORT CORPORATE CALENDAR 12 MAY IOIPG was named BCI Asia Top Ten Developer for the seventh consecutive year. 12 JUNE IOIPG and Hongkong Land Pte Limited officially marked their collaboration to jointly develop and manage a prime Central Business District land located within Marina Bay in Singapore. 14 JUNE Max Fashion; one of the largest retail conglomerates with headquarters in Dubai and one of the largest value fashion brands across the Middle East and India; opened its first Southeast Asia store in IOI City Mall. 51

IOI PROPERTIES GROUP BERHAD (1035807-A) CORPORATE CALENDAR 19 JUNE An opening ceremony of the new Mahsan-Rompin Bypass and upgraded Jalan Bandar IOI-Mahsan by IOIPG was officiated by YAB Menteri Besar of Negeri Sembilan, Datuk Seri Utama Haji Mohamad bin Haji Hasan and Group Executive Chairman, Tan Sri Dato Lee Shin Cheng. 01 JULY IOIPG appoints Lee Yoke Har to the Board as Executive Director. 03 AUGUST 52 A graduation ceremony for Auxiliary Police of IOIPG was graced by Deputy OCPD IPD Sepang Supt Baharudin bin Haji Mat Taib.

ANNUAL REPORT CORPORATE CALENDAR 17 AUGUST IOIPG received the Highly Commended Awarded at the PropertyGuru Asia Property Awards (Malaysia) for Sierra 6 located within its 16 Sierra township development. 18 AUGUST Le Méridien Putrajaya celebrated its first anniversary with business associates. 53

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 16 JULY 2016 30 JULY 2016 Kelab Keluarga IOI donated essential items to Pertubuhan Kebajikan Cahaya Permata Hati in Semenyih. Putrajaya Marriott Hotel and Palm Garden Hotel collaborated with Kumpulan Media Karangkraf and Gana Creations to celebrate Hari Raya with three charitable organisations. 13 AUGUST 2016 The IOI Putra Charity Run 2016 held at IOI Mall Kulai attracted more than 3,900 participants and a total of RM66,000 funds generated from the run was channelled to Kiwanis Down Syndrome and Amitabha Centre Kulai. 54

ANNUAL REPORT OUR SOCIAL RESPONSIBILITY CALENDAR 08 SEPTEMBER 2016 IOIPG participated in Bursa Bull Charge 2016 to support Bursa Malaysia s aim in fostering a sustainable and inclusive marketplace. 21 SEPTEMBER 2016 26 SEPTEMBER 2016 Putrajaya Marriott Hotel supported the Chicken Dance For Charity event organised by The Marriott Millennials Business Council Malaysia to help raise funds for Malaysian AIDS Foundation. IOI Xiamen staff extended a helping hand to those affected by Typhoon Meranti hit at Xiamen. 55

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 01 OCTOBER 2016 Bargain Basement supported a fundraising effort organised by the newly established SJKC Kheng Chee Puchong. 01 OCTOBER 2016 IOIPG supported MPSJ s Rejuvenation Program to spruced up the backlane of Jalan Kenari 5 in Bandar Puchong Jaya with murals decorating walls along the walkway. 22 OCTOBER 2016 Yayasan TSLSC awarded RM424,000 worth of scholarships to 12 outstanding students pursuing higher education at local institutions of higher learning. 56

ANNUAL REPORT OUR SOCIAL RESPONSIBILITY CALENDAR 04 NOVEMBER 2016 Putrajaya Marriott Hotel and Palm Garden Hotel teamed up with Traxx FM and held a charity dinner for 60 underprivileged children and ten single mothers in celebration of Deepavali. 06 NOVEMBER 2016 Bargain Basement supporting the charity bazaar organised by Living Hope. 57

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 10 NOVEMBER 2016 IOIPG announced its sponsorship to teenagers from House of Joy and Rumah Shalom to participate in IOIPG Obstacle Run 2016. 13 NOVEMBER 2016 Four Points by Sheraton Puchong organised its second annual charity drive in partnership with UNICEF and successfully raised RM9,700. 04 DECEMBER 2016 More than 700 participants gathered to conquer 10 challenging obstacles in IOIPG Obstacle Run 2016 held at Bandar Puteri Puchong. 58

ANNUAL REPORT OUR SOCIAL RESPONSIBILITY CALENDAR 06 DECEMBER 2016 Bargain Basement donated RM50,000 to five underprivileged homes. 19 DECEMBER 2016 A Christmas Charity Dinner was co-organised by Putrajaya Marriott Hotel and Palm Garden Hotel at Putrajaya Marriott Hotel s Ballroom for 105 children from Shelter Home for children in Old Klang Road and Shepherd s Home in Semenyih. 59

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 12 JANUARY IOI City Mall celebrated Chinese New Year with 38 senior citizens from Persatuan Rumah Amal Murni Kajang and Persatuan Kebajikan Rumah Victory Malaysia. The senior citizens were treated to a prosperity dinner, a movie ang pows to usher the new year. 15 JANUARY A Neighbourhood Gotong Royong was organised by IOIPG at Taman Lagenda Putra. The event which was attended by residents, local authorities and IOIPG employees was aimed at encouraging volunteerism in doing their part to keep the neighbourhood surroundings clean and to build a sense of togetherness. 04 FEBRUARY IOI Mall Puchong invited underprivileged children from Kampung Broga Semenyih, Kampung Baru Semenyih, Kampung Cempaka and senior citizens from Kim Loo Ting Temple for a charitable event in conjunction with Chinese New Year. 60

ANNUAL REPORT OUR SOCIAL RESPONSIBILITY CALENDAR 04 FEBRUARY Putrajaya Marriott Hotel and Palm Garden Hotel held a Chinese New Year Corporate and Charity Luncheon for 150 invitees, including 60 senior citizens from Lovely Nursing Home, Petaling Jaya and Persatuan Amal Murni, Kajang as well as clients, business partners and associates of the hotels. 07 FEBRUARY Yayasan TSLSC collaborated with Chumbaka Sdn Bhd and Agensi Inovasi Malaysia to sponsor ten schools in Puchong for the IOI-Puchong STEM Programme, an after school programme which focuses on Science, Technology, Engineering and Mathematics (STEM). 22 FEBRUARY Yayasan TSLSC awarded RM230,600 to 341 needy students from 23 primary and 7 secondary schools via its Student Adoption Programme (SAP). 61

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 19 MARCH IOI City Mall organised the IOI City Mall Run which attracted over 1,000 participants including 100 disabled participants. 25 MARCH 27 MAY RM33,900 cash was awarded to 68 deserving students via the Young Achievers Awards by Yayasan TSLSC. In support of the worldwide movement earth hour, activities were organised throughout IOIPG business segments to encourage responsible use of Earth s nonrenewable resource for a sustainable future. 62

ANNUAL REPORT OUR SOCIAL RESPONSIBILITY CALENDAR 30 MAY Putrajaya Marriott Hotel and Palm Garden Hotel teamed up with Muzik-Muzik Raya to spice up the Majlis Meriakan Anak-Anak Yatim & Asnaf for 100 underprivileged children. 07 JUNE Teenagers from House of Joy visited Le Méridien Putrajaya and tried their hands at making signature Le Méridien eclairs. The familiarisation trip was part of the Group s sustainability efforts in preparing the young for the future under the Young Urbanites - Discovery programme. 09 JUNE A field trip was conducted at Four Points by Sheraton Puchong for the teenagers from House of Joy and they had fun learning about housekeeping and pastry decoration. It was a sustainability initiative under the Young Urbanites - Discovery programme. 63

IOI PROPERTIES GROUP BERHAD (1035807-A) OUR SOCIAL RESPONSIBILITY CALENDAR 19 JUNE IOI City Mall feted children from Muhammad Al-Fateh Home to a complimentary movie at Golden Screen Cinema and a Hari Raya shopping spree at LOL. 25 JULY IOIPG supported the The Edge KL Rat Race which was in support of The Edge Education Foundation. 22 JULY IOIPG was one of the Platinum sponsor at the Frost The Trail My Mercy Run. 14 SEPTEMBER IOIPG sent two teams to The Bursa Bull Charge in support of Bursa Malaysia s charity fundraising event. 64