Growingwith
ANNUAL REPORT 2016
IVORY PROPERTIES GROUP BERHAD (673211-M) Ivory Tower @ Penang Times Square 81-11-1, Jalan Dato’ Keramat 10150 George Town, Penang, Malaysia Tel : (604) 2108000 Fax : (604) 2270000 www.ivory.com.my with GrowingIVORY
CONTENTS
03 32 61 Corporate Chairman's Financial Structure Message Statements
Growingwith
04 35 148 ANNUAL REPORT 2016 Corporate Board of Group Information Directors Properties
05 38 150 ON THE COVER:
Projects Key Senior Analysis of The tree is a symbol that Management Shareholdings many can identify with easily; and that is what IVORY aims 16 to be - an organisation 41 153 that identifies with its Awards and shareholders, employees Achievements Corporate Analysis of and the people. Resilient Governance Warrantholdings and resourceful, IVORY Statement has built strong roots on solid ground. The trunk 18 represents our core values 156 Calendar and strengths while the 54 branches signify our of Events Notice of Annual diversification upward Audit General Meeting and outward. Lush leaves Committee and new buds are the new 22 Report products that we continually Enclosed seek to offer. Like a tree, Corporate Social IVORY speeds up growth Responsibility 57 Proxy in the right conditions, and Form blooms with hard work. Statement on Risk 30 Management and Just as a tree responds to its Internal Control surroundings, IVORY is swift Media to react when opportunities Highlights are present and prudent in times of adversity. The 60 colour of the tree on the Additional cover reflects the colour of IVORY and stands for the Compliance sustainability of our growth Information year after year. 02 IVORY PROPERTIES GROUP BERHAD (673211-M)
Ivory Properties Group Berhad is a company listed on the Main Market of Bursa Malaysia Securities Berhad since 28 July 2010. Ivory Properties Group Berhad and its subsidiaries ("The Group"), which is principally involved in property development, was established in 1999 and has since grown into an established and reputable property developer in Penang and Northern Malaysia.
The Group’s project portfolio includes medium to high- end apartments, luxury condominiums, semi-detached and bungalows, boutique gated communities, retail and commercial units.
Having won various awards in recognition of the Group’s effort, the Group has been continuing its winning streak until today. The recent awards are the CSR Malaysia Awards 2016 - Company of the Year Award under Sustainability Excellence Category, the Asia Pacific Property Awards which Ivory Tower received the Highly Commended award under the Office Achitechture for Malaysia Category, the StarProperty. my Awards 2016 where Moonlight Bay earned the Excellence prize in The Niche & Unique Award Category, the South East Asia Property Awards where The Latitude located at Mount Erskine received the Highly Commended award under the category of Best Mid-Range Condo Development (North Malaysia) while Tropicana Bay Residences was awarded Highly Commended award under the category of Best Luxury Condo Development (North Malaysia).
The Group took the time and effort to nurture a vertically- integrated range of in-house expertise and capabilities including architecture, engineering, construction, interior design, model making, sales and marketing, graphics and multimedia and property management.
The vertical-integration enables the Group to effectively control the construction process, thus ensuring cost control and efficient use of resources. The Group establishes a dominant reputation and branding as a premium property developer that consistently delivers the best for its customers. annual report 2016 03
CORPORATE STRUCTURE as at 27 June 2016
IVORY PROPERTIES GROUP BERHAD (673211-M)
Investment holding and provision of management and marketing services
100% 100% 100% 100% 100% Ivory Associates Ivory Gleneary Ivory Meadows Ivory Square Ivory Villas Sdn Bhd (485576-P) Sdn Bhd (548788-M) Sdn Bhd (492123-A) Sdn Bhd (510587-P) Sdn Bhd (553323-V) Property development and Property development Property development Property development and Property development construction activities construction activities
100% 20% Tanjong George Town Bids Tokong Garden Sdn Bhd (1000980-M) Development Provision of management Sendirian and regeneration activities for George Town business (85510-X) Berhad improvement district Property development
100% 100% 100% 100% 100% Ivory Utilities Ivory Indah Ivory Furniture G & A Consultancy Ivory Property Sdn Bhd (834590-A) Sdn Bhd (593357-M) & Interior Sdn Bhd (527624-W) Management Investment holding Property development Sdn Bhd (629320-D) Engineering and Services Interior designer and architectural consultancy Sdn Bhd (517654-M) services contractor in interior Property management decoration and furnishing services 45% Tropicana Ivory Sdn Bhd (962237-X) Property development
100% 100% 100% 100% 100% Ivory Times Square Ivory Media Ivory View Ivory Residence Ivory World City Sdn Bhd (791405-M) Sdn Bhd (919038-D) Sdn Bhd (925024-H) Sdn Bhd (924702-T) Sdn Bhd (1156733-X) Tenancy management Advertising services Property development and Dormant Dormant services, sub-letting of and sub-letting construction activities properties and provision of of properties utilities services
100% 100% 100% G Ivory TTG Holdings Sunlink Properties Sdn Bhd (1157380-T) Sdn Bhd (332545-U) Sdn Bhd (836156-U) Dormant Investment holding Operation of entertainment, food and beverage outlets
70% 49% 45% Ivory Place Ivory Continental Park Vue Realty Sdn Bhd (924705-K) Sdn Bhd (490558-K) Sdn Bhd (93359-H) Dormant Property development Investment holding 04 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE INFORMATION
BOARD OF DIRECTORS
Dr Asairinachan @ Aravinachan A/L Kunjamboo Chairman/Independent Non-Executive Director
Dato’ Low Eng Hock Group Chief Executive Officer
Dato’ Ooi Chin Loo Executive Director
Ooi Choi Kiat Non-Independent Non-Executive Director
Loh Chye Teik Independent Non-Executive Director
Lim Hock Siu Independent Non-Executive Director
JOINT COMPANY SECRETARIES SHARE REGISTRAR
Tai Yit Chan (MAICSA 7009143) AGRITEUM Share Registration Services Sdn Bhd Ong Tze-En (MAICSA 7026537) 2nd Floor, Wisma Penang Garden 42 Jalan Sultan Ahmad Shah 10050 Penang PRINCIPAL PLACE OF BUSINESS Malaysia
Ivory Tower @ Penang Times Square Tel : 604-2282321 81-11-1, Jalan Dato' Keramat Fax : 604-2272391 10150 George Town, Penang Malaysia AUDITORS Tel : 604-2108000 Fax : 604-2270000 / 2108008 KPMG (AF 0758) Email : [email protected] Level 18, Hunza Tower Website : www.ivory.com.my 163E Jalan Kelawei 10250 Penang Malaysia REGISTERED OFFICE
Suite 16-1 (Penthouse Upper) PRINCIPAL BANKERS Menara Penang Garden 42-A Jalan Sultan Ahmad Shah Bank Islam Malaysia Berhad 10050 Penang Standard Chartered Bank Malaysia Berhad Malaysia Malaysia Building Society Berhad CIMB Islamic Bank Berhad Tel : 604-2294390 Fax : 604-2265860 STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad Stock Code : 5175 Stock Name : Ivory annual report 2016 05
PENANG WORLDCITY Bayan Mutiara, Penang
Owning a piece of this swanky haven, the Penang WorldCity would be a dream come true for many. With a total Gross Development Value ("GDV") of RM10 billion, this comprehensive development boasts a long list of exciting amenities and conveniences including retail outlets, alfresco space, convention centres, international school, hotel chains and the like. The master plan covers 41.5ha land area in Bayan Mutiara with high-rise residences which offers scenic beauties of the aquamarine ocean and green hills. All these exclusive features are set to catapult this once-hidden gem of The Pearl of The Orient into a real world-class settlement. 06 IVORY PROPERTIES GROUP BERHAD (673211-M)
TROPICANA BAY RESIDENCES On-Going Project Bayan Mutiara, Penang
Longing for a green residential enclave? Then allow Tropicana Bay Residences to put your mind at peace. Strategically positioned atop a terraced slope surrounded by lush greenery, this residence development upholds the Green City initiative launched by the state government. Comprising 6 luxury residential condominium towers, units are available ranging from 400 sq ft to 1,945 sq ft. Tropicana Bay Residences was highly commended at the South East Asia Property Awards Malaysia 2015 for the Best Luxury Condo Development. The GDV for Tropicana Bay Residences is recorded at RM933 million. annual report 2016 07
CITY RESIDENCE & CITY MALL On-Going Project Tanjung Tokong, Penang
How would you like the idea of indulging in the best retail therapy with a myriad of retail outlets and having the luxury of superior living at the same spot? City Residence & City Mall is an architectural marvel, covering a 0.98ha of prime freehold land in Tanjung Tokong with residential units ranging from 490 sq ft to 7,882 sq ft above a retail mall. Its GDV is RM321 million. 08 IVORY PROPERTIES GROUP BERHAD (673211-M)
PENANG TIMES SQUARE George Town, Penang Status: Birch The Plaza & Commercial (Phase 1) – Completed Birch Regency & Commercial (Phase 2) – Completed The Wave & Commercial (Phase 3) – Ongoing The Central, Hotel & Commercial (Phase 4) – Upcoming Phase 5 – Future Development
Proudly standing in the heart of George Town, the multi-phase development Penang Times Square is a marvelous feast for visitors’ sights and senses with its melting pot of architectural styles. If you yearn for a high quality urban life with ease of various amenities and facilities, then this is the one for you. With a GDV of RM1.79 billion, the phases are built to accommodate both retail and residential use. Phase 1 and Phase 2 consist of a shopping mall as well as the Entertainment City which are significant features of the development. Both Phase 3 and Phase 4 consist of commercial podiums with a total retail sellable area of 341,971 sq ft while Phase 5 features an upcoming commercial project. annual report 2016 09
THE WAVE & COMMERCIAL On-Going Project Penang Times Square, Penang
The Wave is an award-winning building at the recent Asia Pacific Property Awards 2014/2015 that is poised to become Penang isle’s next iconic landmark. This entire upscale building features elegant sun protection stripes that form a wave-like pattern, hence the name. Summed up to RM560 million in GDV, there are 4 types of spacious suites ranging from 1,205 sq ft to 2,905 sq ft at The Wave. 10 IVORY PROPERTIES GROUP BERHAD (673211-M)
THE CENTRAL, HOTEL & COMMERCIAL Upcoming Project Penang Times Square, Penang
The CENTRAL, Hotel & Commercial, a Phase 4 Development of Penang Times Square, is a new masterpiece that epitomises city living on a grand scale. True to its name, this pulse of the city is set to become a new icon of George Town that is spectacular on the outside and luxurious on the inside. Attached to an upmarket hotel, the upscale development welcomes residents with its sleek porte-cochere and sophisticated lobby akin to a hotel setting. The projected GDV for this project is RM410 million. annual report 2016 11
BIRCH THE PLAZA & COMMERCIAL Completed Project Penang Times Square, Penang
With a myriad of exciting facilities that make your head spin, Birch the Plaza is the ideal residence for you if you are looking for an elegant abode with utmost ease where you need not go out and get stuck in traffic to enjoy fine dining and leisure activities. Birch the Plaza & Commercial’s GDV is RM348 million.
BIRCH REGENCY & COMMERCIAL Completed Project Penang Times Square, Penang
Birch Regency is the epitomisation of tranquility with high-end condominiums that make up a luxe self-contained urban village. With a GDV of RM372 million, the comprehensive facilities fulfil residents’ need of leisure activities, like swimming, singing karaoke, working out at the gymnasium, playing chess, and even kids can get in on the fun at a playground designed for mini people. 12 IVORY PROPERTIES GROUP BERHAD (673211-M)
ISLAND RESORT Batu Ferringhi, Penang Status: Club house (Phase 1) – Ongoing 10 Island Resort (Phase 2) – Completed Phase 3 & Phase 4 – Future Development
The 4-phase Island Resort at Batu Ferringhi’s Miami Beach is a perfect residential development especially for aspiring globetrotters. Built to exceed the expectations of a luxury getaway, this extravagant development project features a recreational club with food and beverage outlets, spa and sports facilities, just to name a few. With accumulated GDV of RM336.6 million for Phase 2 and Phase 3, the project comprises of 3 blocks of 33-storey buildings and 11 semi-detached villas known as 10 Island Resort in its second phase, while more residential units are planned in the third and fourth phases. Island Resort Bungalows received the Highly Commended Award for Best Housing Development at the South East Asia Property Awards 2014. annual report 2016 13
THE LATITUDE Completed Project Mount Erskine, Penang
Wouldn’t it be a wonderful experience to feel the world under your feet? The Latitude is a high-rise condominium at Mount Erskine, Tanjung Tokong where tranquility and world excitement strike a perfect balance. These 1,500 sq ft and 1,600 sq ft residential units are served by a commercial area which are perfect for food and beverage outlets. There are commercial units with sizes ranging from 1,390 sq ft to 2,880 sq ft. The Latitude is also strategically located: close to hospitals, schools, colleges and shopping malls. For two years consecutively, The Latitude was commended at South East Asia Property Awards 2014 and 2015. The project totaled up to RM192 million in GDV.
THE PEAK RESIDENCES Completed Project Mount Erskine, Penang
The Peak Residences is the perfect place to call home if you have always been longing to take in the mesmerising aerial view of the Pearl of the Orient by day and its stunningly illuminated skyline while being enveloped by luxury-comfort by night. This development complete with commercial units ranging from 940 sq ft to 1,581 sq ft is an ideal combination of unorthodox architectural design and impeccable hospitality. It also boasts an ultra-luxurious condominium as well as a myriad of services and facilities exclusively for residents. This development recorded a GDV of RM244 million. 14 IVORY PROPERTIES GROUP BERHAD (673211-M)
Completed Projects MOONLIGHT BAY Batu Ferringhi, Penang
Nothing else is able to surpass the experience of waking up to beautiful sunrise and gentle breeze every morning at Penang’s version of Southern European hillside home - Moonlight Bay. The project’s GDV is recorded at RM181 million. Secluded from the bustling city, this heavenly sanctuary features 70 villa and 20 condo- villa units on freehold land that spans 6ha at about 30m above sea level. It was also commended as Best Leisure Development at the Asia Pacific Property Awards 2011 and winner of TheStarProperty. my Awards 2016 under The Niche & Unique Development Award category.
ASTON VILLA Bukit Mertajam, Penang
A serene enclave with city connections, Aston Villa is the maiden project of Ivory on the mainland launched right in the middle of the central business district at Bukit Mertajam amid a boisterous downtown atmosphere. Totaling RM64 million in GDV, the gated and round-the-clock guarded community spanning 6.5ha of freehold land comprises of 3-storey terraces, semi-detached houses and 4-storey shoplots showcasing modest yet modern architecture as well as expansive commercial space.
ZEN @ THE VIEW Batu Uban, Penang
With a GDV of RM14 million, Zen @ The View is the quintessential luxury living amidst a bustling metropolis meant for city dwellers who yearn to enrich their lifestyle. It consists of tailor-made 3-storey bungalows with rooftop terraces and spectacular views. Its monochrome minimalism is complemented by a spacious layout that seems to expand when the light hits every corner of the bungalow. annual report 2016 15
Completed Projects THE VIEW TWIN TOWERS Batu Uban, Penang
The twin towers of The View are set off the road and other residential areas, offering peace, seclusion and privacy for residents. Inspired by the Petronas Twin Towers, its arresting building style often deludes people travelling across the bridge from the mainland to the island into thinking they have somehow made their way to Kuala Lumpur to see the world’s tallest twin structure. The View Twin Towers GDV at RM108 million.
PALACE HILL Bukit Gambier, Penang
Palace Hill, as its name suggests, is a residential development where each palace-like residence boasts charming architecture with distinctive Georgian features. As a beautiful oasis of serenity and exclusivity, Palace Hill with a GDV of RM38 million, is no doubt one of Penang’s safest residential communities with its low density of only 4 bungalows and 36 semi-detached houses surrounded by landscaped street and park.
PLAZA IVORY Bukit Gambier, Penang
Plaza Ivory is the ideal residence which offers new heights of comfort, leisure activities, dining and more, all within an amazing spot. With a GDV of RM86 million, Plaza Ivory consists of 2 condominium towers backed by greeneries and offers a spectacular view of the Penang Bridge and the scenic coastline of the island as well as a commercial area with 28 shop houses and 56 double-storey retail lots.
TANJUNG PARK Tanjung Tokong, Penang
Inspired by classical French architecture, Tanjung Park with a GDV of RM102 million, is a high-end development featuring spacious units in two 25-storey blocks and townhouses atop a podium that gives a mesmerising view of one of the island’s most famous tourist spots, Gurney Drive. 16 IVORY PROPERTIES GROUP BERHAD (673211-M)
AWARDS AND ACHIEVEMENTS
Established in 1999, Ivory Properties Group Berhad is a full-fledged property development consortium with exceptional design-build-property management capabilities and international real estate advisory services.
We have a highly professional and dedicated team of landscape architects, planners, interior designers, architectural technologists and multimedia artists as well as an innovative construction team with robust backgrounds. Leading them is a prudent project management team which has over 30 years of invaluable experience and is known for their shrewd business acumen.
Through solid teamwork and our longstanding commitment to deliver excellent services, our projects are prestigious and are a resounding success. The company’s awards and achievements received over the years are a testimony to our rock-solid foundation which is built on top-notch innovation, commitment and hard work demonstrated by every Ivorian. 2016
StarProperty.my Awards 2016 - Asia Pacific Property Awards CSR Malaysia Awards 2016 - Excellence prize in The Niche 2016 in association with Company of the Year Award & Unique Award Category - The Telegraph - Ivory Tower under Sustainability Excellence Moonlight Bay won Highly Commended Award Category for Office Architecture. 2015
HIGHLY COMMENDED
Best Luxury Condo Development (North Malaysia)
Tropicana Bay Residences by Tropicana Ivory Sdn Bhd
Kwong Wah Yit Poh Centennial South East Asia Property South East Asia Property The Golden Eagle Awards 2015 – Dr Sun Yat-sen Awards Malaysia 2015 – Highly Awards Malaysia 2015 – Highly Award 2015 – Eminent Outstanding Enterprise Award Commended for Best Luxury Commended for Best Mid- Eagle category (Winner) Condo Development (North Range Condo Development Malaysia) – Tropicana Bay (North Malaysia) – The Latitude Residences 2014 2013
South East Asia Property South East Asia Property Asia Pacific Property Awards The Golden Eagle Award 2014 The Asset Triple A Transaction Awards Malaysia 2014 – Highly Awards Malaysia 2014 – Highly in association with Maybank – Eminent Eagle Category Banking Awards 2013 Commended for Best Mid- Commended for Best Housing – Highly Commended for Range Condo Development Development (North Malaysia) – Best Residential High-Rise (North Malaysia) – The Latitude Island Resort Bungalows Architecture Malaysia (The Wave) 2012 2011
INPenang Awards 2012 INPenang Awards 2012 NST Property - SC Cheah’s International Standard Quality Asia Pacific Property Awards - Top F&B Hubs - Top Developers Choice Awards 2011 - Best (ISQ) Awards - Quality Property 2011 in association with Penang Developer Developer & Contractor Bloomberg Television - Highly Commended for Best Leisure Development (Moonlight Bay) annual report 2016 17
AWARDS AND ACHIEVEMENTS
2011 2010
The Edge Malaysia - Top Asia Pacific Property Kwong Wah Yit Poh Centennial Trane Energy Efficiency Leader The Edge Malaysia - Top Property Developers Awards Awards in association with Awards 2010 - Award 2010 for Environmental Property Developers Awards - Ivory Associates Sdn Bhd Bloomberg Television - Highly Dr Sun Yat-sen Outstanding Sustainability, Energy and - Ivory Associates Sdn Bhd ranked in Top 30 under Commended for Best Mixed Enterprise Award Winner Operational Efficiency ranked in Top 30 List under Qualitative Attributes for Use Development Qualitative Attributes for Product Product Quality, Innovation & (Penang Times Square) Quality, Innovation & Creativity, Creativity, Value Creation for Value Creation for Buyers, Image Buyers, Image and Expertise and Expertise
2009 2008 2007
ISO 9001:2008 Ivory Property The Malaysian Construction Asia Pacific Super Excellent 1st Top 50 Enterprise Awards Penang International Expo 2007 Management Services Sdn Bhd Industry Excellence Awards Brand 2008 Winner Malaysia 2007 - Best Decorated Booth (6962) 2008 (CIDB) - Platinum Award Winner
2007 2006
The Golden Bull Award 2007 In Penang My Preferred 2nd The International Real Estate ISO 9001:2008 G & A ISO 9001:2008 Ivory Associates - Malaysia 100 outstanding Home Property 2007 by Market Federation (FIABCI) Malaysian Consultancy Sdn Bhd (3733) Sdn Bhd (3732) SMEs (Top 100 Winners) Source Publishing Winner Chapter
2006 2005
Business Superbrands Malaysia The Golden Bull Award 2006 The Golden Bull Award 2005 The Enterprise 50 Award 2005 4th Asia Pacific/Malaysia Status 2006 - Malaysia 100 outstanding - Malaysia 100 outstanding (Top 50 Winners) e-Entrepreneur Excellence SMEs (3rd Runner-up) SMEs (Top 50 Winners) Award 2005 Winner
2004 2003
The Golden Bull Award 2004 SME Business of the Year Keris Award 2004 Winner Penang State Landscape The Golden Bull Award 2003 - Malaysia 100 outstanding Award 2004 Winner Competition 2004 1st Runner-up - Malaysia 100 outstanding SMEs (1st Runner-up) SMEs (Top 100 Winners) 18 IVORY PROPERTIES GROUP BERHAD (673211-M)
CALENDAR OF EVENTS
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CALENDAR OF EVENTS
2 April - 5 April 2015 1 My Property Fair Penang WorldCity was featured at the property fair at Queensbay Mall, Penang. Eager purchasers flocked the exhibition booth for more information about the units which they were eyeing as their next residence or investment.
23 April - 26 April 2015 2 Home And Investment Fair By iProperty Leeching on the household name of property sub-sale giant iProperty, our team participated in the fair at Gurney Plaza, Penang for more exposure on the latest market trends and to reach out to potential purchasers.
30 April - 4 May 2015 3 Labour Day Roadshow Our sales team’s efforts proved fruitful during the extended Labour Day weekend at Gurney Plaza, Penang. Our team successfully engaged the shoppers and closed numerous sales at the site.
9 July - 12 July 2015 4 The Star Property Fair The property fair was organised at Gurney Plaza, Penang during Hari Raya to attract the "balik kampung" crowd. Our team witnessed massive turnout of home shoppers from across the region.
16 Aug 2015 5 Poolside Party @ The Latitude Organised to celebrate the completion of The Latitude, the poolside party was also an occasion to appreciate our staff’s involvement throughout the construction of the project. Everyone from the site to the management and staffs from all departments had the opportunity to attend the party. The management also took the opportunity to honour long serving staffs for their loyalty towards our company through awards presentation.
30 July - 2 Aug 2015 6 2015 Property Fair by Kenlink The exhibition held at Queensbay Mall, Penang achieved a good number of sales when shoppers visited our booth to enquire about projects they were eyeing for their next purchase.
27 Aug - 1 Sept 2015 7 Merdeka Roadshow Our sales team managed to grab the attention of the National Day crowd and received an awesome response from buyers who returned to this beautiful island for the National Day holiday. 20 IVORY PROPERTIES GROUP BERHAD (673211-M)
CALENDAR OF EVENTS
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CALENDAR OF EVENTS
17 Sept 2015 8 Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”) Chaired by Ivory Properties Group Berhad ("Ivory") Chairman and Independent Non- Executive Director, Dr K. Asairinachan @ Aravinachan, Ivory obtained unanimous approval for all the resolutions during the AGM and EGM.
1 Oct - 4 Oct 2015 9 The Star Property Fair Our sales team received an overwhelming response from readers of The Star who thronged the Star Property Fair at Queensbay Mall, Penang.
25 Nov 2015 10 Extraordinary General Meeting During the EGM, Ivory Properties Group Berhad obtained unanimous approval from its Shareholders to dispose of a piece of freehold land located in Penang.
24 Dec 2015 11 Christmas Countdown The Christmas Countdown Party themed "Snow Party", was held at Chin Ho Plaza, Penang Times Square. Many patrons came dressed according to the theme to celebrate this joyous occasion. Along with dazzling performances by talented artistes, it was indeed a "Merry Christmas"!
31 Dec 2015 12 New Year’s Eve 2016 Countdown Within a few hours of the new year, thousands of people gathered at Chin Ho Plaza, Penang Times Square to catch stellar performances by talented artistes and to count down to the new year!
31 Dec 2015 - 1 Jan 2016 13 New Year Roadshow 2016 Our sales team helped home buyers clear their pending resolutions from year 2015, by exploring the Group’s unique projects and answering their questions about getting a new house.
8 Feb - 14 Feb 2016 14 Chinese New Year Roadshow 2016 In welcoming the year of the Monkey, roadshows were held at Gurney Plaza, Penang, M Mall O2O @ Penang Times Square and the sales galleries at Ivory Tower and Penang WorldCity to attend to the Chinese New Year crowd coming in from different parts of the island and country. 22 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE SOCIAL RESPONSIBILITY
Persatuan Kebajikan Ivory, Pulau Pinang (“Ivorycares”) is a charitable arm of Ivory Properties Group Berhad (“Ivory”) established on Nov 30, 2006 under the Societies Act 1966, Malaysia. Comprising a purely voluntary staff force, Ivorycares extends its assistance in undertaking all charitable activities and projects planned throughout the year. Serving as a platform for employees of Ivory to lend a helping hand to the needy amidst their work commitment, Ivorycares operates without funding from Ivory in order to allow the arm to run free from any business interest. Its fundamental mission is to light up the lives of the less fortunate by offering help and friendship as well as contributing towards their day-to-day living needs. Over the years, Ivorycares has carried out various noble activities, hence serving as one of the channels for Ivory to fulfil its social obligations. Emphasis is also placed on environmental sustainability where employees are encouraged to go green in an effort to conserve the environment. Its effort in doing good and contributing to the society has also earned a prestigious recognition when Ivorycares won the CSR Malaysia Awards 2016 - Company of the Year Award under Sustainability Excellence Category.
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CORPORATE SOCIAL RESPONSIBILITY
26 April 2015 1 Saving lives at no cost Ivorycares and Allianz General Insurance Company (Malaysia) Berhad joined hands to organise a blood donation campaign in conjunction with World Health Day. Themed “A Drop of Blood Forms an Ocean of Love”, the event at Penang Times Square saw blood donors turning up in a bid to help the Penang Hospital blood bank overcome its blood supply shortage.
8 May 2015 2 Ivorycares “goes blue” in beach clean-up A beach clean-up programme themed “To Laut with Love” was jointly organised by Universiti Sains Malaysia (“USM”) Scuba Diving Club and Ivorycares. The event, which was part of the club’s Ocean Awareness Outreach campaign, was supported by the Penang Island City Council. The volunteers from USM and Ivorycares, combed the beach in Kampung Nelayan, Teluk Kumbar for rubbish which was then sorted into different categories such as clothes, plastic, glass and metal.
11 May 2015 3 Thoughtful gifts for single mums Ivorycares presented hampers to single mothers in conjunction with Mother’s Day celebration. The mothers, together with their children were beaming with excitement when they received their gifts as well as red packets.
13 June 2015 4 Badminton competition to celebrate Father’s Day An in-house badminton tournament was held for the staff of Ivory Properties Group in conjunction with Father’s Day celebration. Organised by Ivorycares, the sporting event aimed to promote a healthy work-life balance and the spirit of camaraderie among fellow Ivorians. 24 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE SOCIAL RESPONSIBILITY
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CORPORATE SOCIAL RESPONSIBILITY
30 June - 15 July 2015 5 Adopting plants for a good cause A fundraising project called "Adopt Me" was carried out for fellow Ivorians to adopt a plant. The proceeds were donated to the Sabah Social Services Council Fund in aid of the disaster victims in Sabah.
10 July 2015 6 "Jamuan Buka Puasa" for poor families during Ramadan Ivorycares volunteers and the Penang Times Square management team jointly organised a "Jamuan Buka Puasa" to treat needy families during the holy month of Ramadan. At the event held at Masjid Kampung Jawa, the families were given goodie bags filled with daily essential items and festive delicacies, as well as green packets.
7 Aug 2015 7 Movie night for Ivorians Ivorycares members were treated to a subsidised movie night outing in appreciation of their participation in charitable activities throughout the year. A dinner gathering was also held before the movie to establish a close-knit relationship amongst colleagues.
21 Aug 2015 8 Ivorycares Bowling Championship A bowling competition was organised by Ivorycares to encourage social interactions amongst Ivorians while achieving results through strategy planning and team support.
13 Sept 2015 9 Penang Starwalk Over 20,000 participants took part in the annual Penang Starwalk event organised by The Star. The 7km walk was flagged off in front of Penang Times Square. Ivorycares volunteers together with the volunteers of various NGOs walked alongside underprivileged children and disabled folk in the 1km charity walk. After the walk, the participants from the charitable homes enjoyed an appetising breakfast prepared by Ivorycares members and received goodie bags containing daily essential items.
9 Oct 2015 10 Health screening for Ivorians A free health screening programme was organised by Ivorycares in collaboration with the Penang Adventist Hospital to promote a healthy lifestyle. 26 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE SOCIAL RESPONSIBILITY
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31 Oct 2015 11 World Children’s Day 2015 Ivorycares organised a fun World Children’s Day event for children to engage with nature at Taman Kuari, Penang Botanical Garden. It aimed to bring the younger generation closer to nature while having fun without any electronic gadgets. Apart from the exciting outdoor activities, the children were also treated to a sketch inspired by Disney’s animated movie Frozen performed by Ivorycares volunteers.
2 Nov 2015 12 Rangoli-making for Deepavali In conjunction with the Deepavali festival, Ivorycares organised a special activity for non- Hindu Ivorians to have a hands-on experience in making the rangoli, a traditional form of Indian art. A six-foot motif and coloured rice was placed at the Ivory Sales Gallery’s centre court for Ivorians to try their hand in completing the rangoli.
19 Dec 2015 13 Summer Christmas Party and Charity Car Boot Sale Children from Penang Shan Children’s Home, St Joseph’s Home and House of Hope were all smiles when they received Christmas presents from their Secret Santas at the Summer Christmas Party held at Chin Ho Plaza, Penang Times Square. Held concurrently with the event was the Charity Car Boot Sale that aimed to promote recycling, reduce waste and space, as well as drive stock clearance.
22 Dec 2015 14 A gift of gratitude In conjunction with the Christmas celebrations, Ivorycares played Secret Santa to the staff at Ivory Headquarters by hanging Christmas socks containing token gifts on the door of every department. The gesture was to thank the staff for their generous contributions, active support and keen participation in the activities held throughout the year. 28 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE SOCIAL RESPONSIBILITY
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23 Jan 2016 15 Celebrating Thaipusam On the eve of Thaipusam, Ivorycares volunteers smashed coconuts and gave out packs of vegetarian food and drinks to devotees who lined the roads to pay obeisance to Lord Muruga. It is the 10th year that Ivory has contributed towards this vibrant and colourful festive occasion.
16 Feb 2016 16 Chinese New Year steamboat treat for the elderly In conjunction with Chinese New Year, Ivorycares treated the elderly residents of Gan En Zhi Jia (Home for the Senior Citizens) to a scrumptious steamboat dinner. Ivorycares volunteers visited the home to hand over daily essential items while "ang pao" was also distributed to the residents.
22 Feb - 29 Feb 2016 17 Flower sale for charity The Ivorycares charity flower sale was held once again in conjunction with International Women’s Day. All proceeds were channelled to Ivorycares for future charitable activities.
3 Mar - 4 Mar 2016 18 "Pledge for Parity" to accelerate gender equality To commemorate International Women’s Day and to celebrate the achievements of women, Ivorycares encouraged all Ivorians to pledge their support to help achieve gender equality. Every pledge was posted on the International Women’s Day website. 30 IVORY PROPERTIES GROUP BERHAD (673211-M)
MEDIA HIGHLIGHTS annual report 2016 31
MEDIA HIGHLIGHTS 32 IVORY PROPERTIES GROUP BERHAD (673211-M)
CHAIRMAN'S MESSAGE
Our Valued Shareholders, subsidiary of Ivory and Jesselton Peak Sdn Bhd. The disposal was seen as a strategic move, enabling Ivory On behalf of the Board of Directors of Ivory to realise and unlock the value of the property which Properties Group Berhad (“Ivory” or “the was not generating any income. Company”), it gives me great pleasure to present to you our fiscal year 2016 Annual Report and the The net gain from the disposal was estimated at RM38 Audited Financial Statements of our Company. million which will be recognised upon completion. The deal is currently in progress pending fulfilment of the THE YEAR IN REVIEW conditions precedent stated under the agreement.
A challenging year had been anticipated for financial year 2016, with the weakening of the Ringgit and implementation of the Goods and Services Tax (“GST”) on April 1, 2015. There was also a slow demand of residential property in Malaysia in 2015 due to stringent approval measures. The local market was also affected by the high bank rejection rate as well as certain measures set by Bank Negara to reduce the debt ratio.
Things however were looking up towards the end of the year when the Ringgit bounced back to open higher against the United States Dollar, and the price of crude A new mall called M Mall O2O located at the second oil got steadier. phase of Penang Times Square opened its doors to the public in December 2015. With carefully designed themed streets and a wax museum at the four-storey mall, M Mall O2O is poised to be a major tourist attraction in Penang.
Ivory also celebrated the opening of a new Marrybrown outlet at The Latitude Commercial in January 2016. It is Ivory’s second Marrybrown outlet in Penang at the moment.
This year, the Board has selected the symbol of a tree on the cover page of this Annual Report to represent our Group. Signifying growth, the tree is a reflection of our Ivory team leading the ever growing Group to be an organisation that identifies with its shareholders, Despite the turbulent events of the year, Ivory continued employees and the community. As resilient and to garner strong interest among investors and home resourceful as a tree, Ivory has established strong roots buyers, for its projects - Tropicana Bay Residences at on solid ground. Penang WorldCity in Bayan Mutiara, City Residence in Tanjung Tokong and The Latitude in Mount Erskine. The trunk represents our core values and strengths while the branches signify our diversification upward In January 2015, Ivory made a strategic decision to and outward. Lush leaves and new buds are the new dispose of a piece of land measuring approximately products that we continually seek to offer. Like a tree, 21.77ha with freehold title in George Town (off Jalan Ivory speeds up growth in the right conditions, and Kebun Bunga) at RM150 million. The deal was entered blooms with hard work. Just as a tree responds to its between Ivory Indah Sdn Bhd,which is a wholly-owned surroundings, Ivory is swift to react when opportunities are present and prudent in times of adversity. annual report 2016 33
CHAIRMAN'S MESSAGE
FINANCIAL PERFORMANCE under the Residential High-rise Architecture Malaysia category at the Asia Pacific Property Awards 2014/2015. In the midst of challenging property market conditions, our Group effectively strategised its marketing efforts to It was a double win for Ivory at the South East Asia generate a substantial revenue of RM423 million for the Property Awards (Malaysia) 2015 when The Latitude financial year ended March 31, 2016. won the Highly Commended Award for Best Mid-Range Condo Development (North Malaysia), and Tropicana The property development and construction divisions Bay Residences won the Highly Commended Award for were the main contributors to the Group’s revenue, Best Luxury Condo Development (North Malaysia). registering RM231.10 million and RM122.39 million respectively, primarily attributed to the Group’s existing projects, namely City Residence and City Mall at Tanjung Tokong and integrated development at Penang Times Square together with the construction contract at Penang WorldCity.
Total sales locked in for the financial year was approximately RM700 million, giving our Group a total unbilled sales of RM900 million as at March 31, 2016. These unbilled sales, followed by steady construction progress of the development, will contribute positively to our Group’s performance in the near future. Moonlight Bay, one of Ivory’s highly praised developments in Batu Ferringhi also snagged The Our Group reported a pre-tax profit of RM17.75 million Niche and Unique Award at the inaugural StarProperty. and profit after tax of RM10.39 million, while basic my Awards 2016. Shortly after, Ivory took home the earnings per share attributable to shareholders was Highly Commended Award in the Office Architecture 2.37 sen. Net tangible assets per share as at March 31, Malaysia category for its Ivory Tower project at the Asia 2016 was RM0.93. Pacific Property Awards 2016/2017.
During the financial year, our Group successfully handed over vacant possession of 218 units of condominium and 20 units of commercial lots of our project at Mount Erskine, The Latitude condominium and its commercial component with 98% sales to-date. Our Group is expected to commence work for phase 4 of Penang Times Square in 2017, comprising a service suites tower, a hotel tower and a commercial and retail podium.
ACCOMPLISHMENTS
As a Group that develops a wide range of lifestyle Last but not least, Ivory was recognised as the “Company and premium upscale projects in Penang, Ivory is of the Year” by winning the CSR Malaysia Awards 2016 highly regarded as among the top developers around. under the Sustainability Excellence category for the I am pleased to note that Ivory won 7 awards since the wide range of community services work it carries out. last financial year. These prestigious and recognised industry awards are At the Golden Eagle Awards 2015 organised by a testament to our Group’s innovation and commitment Nanyang Siang Pau, Ivory won the Eminent Eagle in developing distinguished and sustainable projects Award. Ivory’s The Wave project at Penang Times and its positive impact and interaction with the Square was also recognised as Highly Commended environment and community. 34 IVORY PROPERTIES GROUP BERHAD (673211-M)
CHAIRMAN'S MESSAGE
PROSPECTS AND OUTLOOK The completion of Phase 3’s and Phase 4’s commercial components together with Phase 2 of Penang Times There are challenges lying ahead for all industries but we Square will make Penang Times Square one of the take it as an opportunity for greater growth. We anticipate biggest malls in northern Malaysia. the Penang Transport Master Plan (“PTMP”) to improve the public transportation system and for the policies on When completed, Penang Times Square will comprise getting higher density to be granted. of a cineplex, hotels, residential towers, commercial podium and mall, making it a truly comprehensive The PTMP will be a boost for Penang to become an development. international city. Once it kicks off, it will address the issue of traffic congestion for a more vibrant Penang. APPRECIATION
With the PTMP, we foresee a higher demand for homes On behalf of the Board, I extend my sincere thanks to from foreigners who seek to relocate or retire in Penang. business partners, shareholders, regulatory authorities, We will thus shift our focus on building homes suitable the media and financiers for their trust, support and for them, and also hotels to cater to the growing throng confidence in our Group. I also thank our customers for of tourists. supporting our projects. Your continued patronage is a vital part of our growth. Over the years, we have carved a reputation of building high-end homes offering comfort and luxury. To my fellow Directors, I am grateful for your counsel, In view of the local property market outlook, we are guidance and support. I am also deeply appreciative exploring possibilities of offering homes of more of Ivory’s management and staff who were none other affordable values to prospective homeowners. than dedicated, efficient and committed to upholding our Group’s standards and vision to build a better world Among the projects in the pipeline is the Penang for our future generations. WorldCity mega mixed development that will encompass retail and residential development, The unwavering support and commitment to excellence affordable housing, hotel, medical centre, transportation from all are essential for us to achieve greater heights and hub, market, food centre and more. It also includes prosper as one of the leading developers in the country. developments of a school and other education institutions, places of worship along with public amenities – garden, waterfront promenade and bicycle track.
Development plans are underway for prime locations Dr Asairinachan @ Aravinachan A/L Kunjamboo in Batu Ferringhi with proposed development along the Chairman/Independent Non-Executive Director tourist belt, which will include a condominium and hotel. 25 July 2016 annual report 2016 35
BOARD OF DIRECTORS
Dr Asairinachan @ Aravinachan A/L Kunjamboo Dato’ Low Eng Hock
Chairman/Independent Non-Executive Director Group Chief Executive Officer
Dr Asairinachan @ Aravinachan A/L Kunjamboo, Dato’ Low Eng Hock, a Malaysian, male, aged 53, was a Malaysian, male, aged 68, was appointed as appointed as the Group Chief Executive Officer (“CEO”) an Independent Non-Executive Director of our of our Company on 12 March 2010. Company on 12 March 2010 and on 8 February 2013, Dr Asairinachan was appointed as our Company’s Dato' Low is also a Member of the Remuneration Chairman. Dr Asairinachan is also a Member of the Audit Committee. As founder and Group CEO, he is instrumental Committee. in charting the growth, success and development of our Group. Dato’ Low has more than 30 years of experience He obtained his Bachelor of Science Honours Degree in property development, building and construction from Universiti Sains Malaysia in 1972, holds a Master industries. Presently, Dato’ Low oversees general business of Science from Imperial College, London and a Doctor management and the implementation of our Group’s of Business Administration from the University of strategic policies. South Australia. Additionally, he also holds postgraduate qualifications in Management (Diploma from Malaysian He obtained his Bachelor Degree in Engineering with Institute of Management) and Accounting and Finance Distinction from Concordia University, Montreal, Canada (Certified Diploma from ACCA). in 1985. He is also a member of the Institution of Engineers, Malaysia. Upon his graduation, he joined Low Theon & Dr Asairinachan is an Environmental Consultant by Sons Sendirian Berhad, a civil engineering contracting profession with over 40 years of extensive experience. He company. He was then in charge of Timah Tasoh Dam in started his career in 1972 with Dewan Bandaraya Kuala Perlis, Kerian-Sg Manik Integrated Development Project Lumpur (“DBKL”) as Manager and served for 22 years in Perak under the Drainage and Irrigation Department in DBKL. Thereafter, he joined Indah Water Konsortium and several other large scale infrastructure projects, all Sdn Bhd from 1994 to 2000 as an Executive Director. of which were completed successfully. He began his Presently, he is the Managing Director and Shareholder career in property development through his participation of Waste Stream Management Sdn Bhd, a company in the Penang Gold Coast mixed development adjacent providing consultancy and training in waste water to Queensbay, Penang. management. In 1999, he established Ivory Associates Sdn Bhd, Dr Asairinachan does not have any conflict of interest the first company in our Group. Since then, under his with our Company and he has no family relationship with progressive vision, pragmatic approach and proven any Director and/or major shareholder of our Company. leadership, our Group has grown into a major property Dr Asairinachan does not hold any directorship in public developer in Malaysia. companies and public listed companies. He has no conviction for any offences within the past five years. Dato’ Low is also a member of the International Council of Shopping Centers since 2004.
Dato’ Low does not have any conflict of interest with our Company. Other than Ooi Choi Kiat, who is his brother in-law, Dato’ Low has no other family relationship with any Director and/or major shareholder of our Company. Dato’ Low does not hold any directorship in public companies and public listed companies. He has no conviction for any offences within the past five years. 36 IVORY PROPERTIES GROUP BERHAD (673211-M)
BOARD OF DIRECTORS
Dato’ Ooi Chin Loo Ooi Choi Kiat
Executive Director Non-Independent Non-Executive Director
Dato’ Ooi Chin Loo, a Malaysian, male, aged 64, was Ooi Choi Kiat, a Malaysian, male, aged 59, was appointed appointed as an Executive Director of our Company on as a Non-Independent Non-Executive Director of our 1 May 2012. Company on 12 March 2010. He is also a member of the Audit and Nominating Committees. He graduated from Universiti Sains Malaysia in 1976 with a Bachelor of Social Science (Honours) Degree. Following Mr Ooi graduated in 1983 with a Bachelor of Housing, his graduation, Dato’ Ooi joined the Municipal Council of Building and Planning from Universiti Sains Malaysia, Penang Island (“Municipal Council”) as an Administrative Penang. He has extensive experience in infrastructure Officer. During his service with the Municipal Council, he projects including highway and bridge construction, served various sections of the Secretariat Department earthworks, waterworks and telecommunications facilities with increasing responsibilities until his promotions as mainly in the Klang Valley. Principal Assistant Secretary in 2001 and thereafter as Municipal Secretary in 2002. As Municipal Secretary, he He started his career in 1983 as a Project Manager with was responsible for the overall operational management a construction company, Unisoon Development (M) Sdn of the Municipal Council to ensure that the functions of Bhd. In 1989, he left to establish Mawar Abadi (M) Sdn the Municipal Council as a local authority were carried Bhd, a building contractor company where he is the out effectively. Managing Director.
After serving the Council for 31 years, he retired from Mr Ooi does not have any conflict of interest with our public service and joined our Group as Senior Project Company. Other than Dato’ Low Eng Hock, who is his and Planning Manager in August 2008. He has brought brother in-law, Mr Ooi has no family relationship with with him more than 30 years of invaluable experience any Director and/or major shareholder of our Company. and helpful contacts to lead the Planning Department Mr Ooi does not hold any directorship in public companies as well as to oversee the operations of the Technical, and public listed companies. He has no conviction for Engineering, Property Management and Construction any offences within the past five years. Departments of our Group. Dato’ Ooi was promoted to the position of Chief Operating Officer in 2010 where he was responsible for the overall smooth and successful implementation of projects and proper management of our Group’s properties before assuming his current position as Executive Director.
Dato’ Ooi does not have any conflict of interest with our Company and he has no family relationship with any Director and/or major shareholder of our Company. Dato’ Ooi does not hold any directorship in public companies and public listed companies. He has no conviction for any offences within the past five years. annual report 2016 37
BOARD OF DIRECTORS
Loh Chye Teik Lim Hock Siu
Independent Non-Executive Director Independent Non-Executive Director
Loh Chye Teik, a Malaysian, male, aged 57, was Lim Hock Siu, a Malaysian, male, aged 60, was appointed as an Independent Non-Executive Director of appointed as an Independent Non-Executive Director our Company on 12 March 2010. He is the Chairman of of our Company on 12 March 2010. He is the Chairman the Audit Committee and a member of the Nominating of the Nominating and Remuneration Committees and a and Remuneration Committees. member of the Audit Committee.
He graduated from University of Malaya, Kuala Lumpur He started his career in 1978 with Syarikat Soon Theam with a Bachelor of Accounting (Honours) in 1984. (now known as Kenanga Investment Bank Berhad) after obtaining his Higher School Certificate. He is presently a Partner of UHY Chartered Accountants, Partner of UHY Loh Chartered Accountants and the In 1980, he joined Expandite Sdn Bhd (“Expandite”), Managing Director of Interesources Tax Advisory Sdn a global company involved in the supply of specialty Bhd. He is a member of both the Malaysian Institute of chemicals to the construction industry. Accountants and the Chartered Tax Institute of Malaysia. Following the merger of Expandite with Fosroc Sdn He started his career as an Auditor in a firm of chartered Bhd (“Fosroc”), a world leader in the delivery of tailored accountants in Penang in 1985. In 1994, he set up his construction solutions for construction projects, own audit and accounting firm, Tan & Loh Chartered Mr Lim served in various capacities and seniority until Accountants where he held the position of Managing he assumed the position of Regional Sales Manager Partner. Presently, he also sits on the Board of other of Fosroc in 2004. He was the Northern Region Branch public listed companies namely JHM Consolidation Manager of Fosroc from 2005 until his resignation in Berhad and Olympia Industries Berhad as Independent 2009. Non-Executive Director. He does not have any conflict of interest with our Mr Loh does not have any conflict of interest with our Company and he has no family relationship with any Company and he has no family relationship with any Director and/or major shareholder of our Company. Director and/or major shareholder of our Company. He Mr Lim does not hold any directorship in public companies has no conviction for any offences within the past five and public listed companies. He has no conviction for years. any offences within the past five years. 38 IVORY PROPERTIES GROUP BERHAD (673211-M)
KEY SENIOR MANAGEMENT
Goh Chin Heng Yeong Siew Yan
Chief Operating Officer Deputy Chief Operating Officer
Goh Chin Heng, aged 39, a Malaysian, male, is the Chief Yeong Siew Yan, aged 39, a Malaysian, male, was Operating Officer of our Group since 8 February 2013. appointed as Deputy Chief Operating Officer of our He graduated with a Bachelor of Engineering (Civil) from Group on 15 May 2013. He graduated with a Bachelor of Universiti Putra Malaysia in year 2001 and obtained his Science (Honours) in Urban and Regional Planning from Master of Civil Engineering (Specialisation in Concrete Universiti Sains Malaysia in year 2001 and subsequently Structures) from the Imperial College of Science, Technology obtained his Master of Science in Planning 2 years later. and Medicine, University of London, a year later. He is currently a qualified Town Planner as a corporate member of the Malaysian Institute of Planner and the Upon graduation, he commenced his career as Civil and Board of Town Planners Malaysia. Structural (“C&S”) Engineer with Arup Jurunding Sdn Bhd in year 2002. He was the Structural Design Engineer for He joined our Group in year 2004 as Assistant Project Bayswater Resort Condominium project and The Palazzo Planner and was subsequently promoted to Project Condominium project, both in Penang. In addition to Planner in the following year to monitor and follow up on structural analysis, substructure and superstructure authorities’ approvals. In year 2007, he was promoted to (Reinforced Concrete) design, he was also involved in the position of Assistant Manager of our Development prestressed-concrete analysis and steelwork design. Planning Department and thereafter to Project Director (Development and Design) in year 2010 to oversee In year 2005, he joined our Group as C&S Engineer. development planning, as well as the graphic and His job scope included layout plan scheming, multimedia design teams of our Group. structural system analysis, providing substructure and superstructure design support, preparation and review of shop drawing and providing structural solutions utilising Two years later, Mr Yeong was promoted to the position a variety of design, software and integrated material- of Deputy General Manager (Property Development) to structural engineering techniques. oversee the Penang WorldCity project under Tropicana Ivory Sdn Bhd and moved on to become its General In year 2007, he was promoted to Senior Project Manager in year 2012. Coordinator of our Planning Department, responsible for monitoring and coordinating overall planning His present position as the Deputy Chief Operating and submission of plans to relevant authorities and Officer of our Group is to assist the Chief Operating ensuring clearance and approval are obtained from Officer in overseeing daily operations of our Group and relevant authorities within the targeted time frame. He to develop strategies for all aspects, including future was promoted to Operations Director in year 2010 and development of our Group. was responsible for overseeing the operations of the Technical, Engineering, Property Management and Mr Yeong does not have any conflict of interest with Construction Departments of our Group. He was also the our Company and he has no family relationship with liaison party between government officials and our Group any Director and/or major shareholder of our Company. to ensure a well implementation of development projects, Mr Yeong does not hold any directorship in public ensuring strict adherence to Municipality Regulations companies and public listed companies. He has no and Guidelines up to the completion of the projects. In conviction for any offences within the past five years. June 2011, he was promoted from Operations Director to Deputy Chief Operating Officer assisting the Chief Operating Officer in ensuring proper management as well as smooth and successful implementation of all projects.
Mr Goh is a Graduate member of the Board of Engineers Malaysia and the Institution of Engineers Malaysia since years 2004 and 2006 respectively. He is also a member of the International Council of Shopping Centers since December 2009.
Mr Goh does not have any conflict of interest with our Company and he has no family relationship with any Director and/or major shareholder of our Company. Mr Goh does not hold any directorship in public companies and public listed companies. He has no conviction for any offences within the past five years. annual report 2016 39
KEY SENIOR MANAGEMENT
Wong Siew Chong, Ben Ju Siew Lee, Grace
Chief Development Officer Chief Financial Officer
Wong Siew Chong, Ben, a Malaysian, male, aged 49, is Ju Siew Lee, Grace, aged 46, a Malaysian, female, joined the Chief Development Officer of our Group. He joined our Group as Group Financial Controller in September our Group in his current position on 16 April 2013 to 2015. As Group Financial Controller, Ms Ju is responsible oversee all development projects from conceptual for our Group's financial and management reporting, design to project handover. treasury, risk management and internal control system and procedures, corporate finance, governance and He has 18 years of experience in architectural design and regulatory compliance. She was promoted to Chief real estate activities. Mr Wong has directed, managed Financial Officer on 1 February 2016. and led multi-disciplinary international consortium for intricate world-renowned projects in Malaysia and the Ms Ju is a qualified Management Accountant of The United Arab Emirates. Chartered Institute of Management Accountants, United Kingdom and a Chartered Accountant of the Malaysian Mr Wong pursued his architectural study at Tunghai Institute of Accountants. University, Taiwan and started his career as a design architect in Taiwan in year 1995. He returned to Malaysia She started her career in year 1994 with an accounting in year 1996 and joined Penas Realty Sdn. Bhd as a firm in Singapore. She returned to Malaysia in year 1997 Design Architect. In year 1998, due to expansion, few and joined a software solution company in Kuala Lumpur departments were consolidated under PPM Solution Sdn as an Internal Auditor before she took up the role as Bhd (“PPMS”). Since then, Mr Wong has played multiple Accountant of that Company. For career advancement, roles in envisioning, implementing and completing she left the company to join Asia Pacific Land Berhad mega projects undertaken by PPMS. Mr Wong travelled (“AP Land”) formerly a public listed company, as the frequently to the Middle East to explore business Accountant in charge of their leasing & mall management opportunities in the property business for PPMS. division. She subsequently took charged of the property development division when AP Land launched its In year 2005, he joined Tamouh Investments LLC, a maiden project in Rawang, Selangor. In year 2001, she business incorporated in Abu Dhabi, the United Arab joined Malton Berhad (“Malton”) a property developer Emirates. As a pioneer employee and Deputy Project company listed on Bursa Malaysia Securities Berhad, Director, he led multi-disciplinary international consortium as an Accountant. She was promoted to the position of to deliver the first master plan and urban guideline for Senior Accountant before her further promotion to Group a multi-billion dollar island development project in Abu Financial Controller, a position she held for more than Dhabi. After delivering the master plan in year 2006, he 6 years. She left Malton in year 2012 following a family concentrated on the first property development project commitment and moved to Qingdao, China before on the island, ie, Marina Square Abu Dhabi, which is returning to Malaysia in August 2015. a mixed development comprising office tower, hotel, residential towers and waterfront shopping mall facing Having vast experience in property development the marina. He returned to Malaysia in year 2012 upon companies, she brought with her a robust knowledge of completion of the projects. the industry in relation to statutory reporting requirements and compliances to our Group. Mr Wong does not have any conflict of interest with our Company and he has no family relationship with any Ms Ju does not have any conflict of interest with our Director and/or major shareholder of our Company. Company and she has no family relationship with any Mr Wong does not hold any directorship in public Director and/or major shareholder of our Company. companies and public listed companies. He has no Ms Ju does not hold any directorship in public companies conviction for any offences within the past five years. and public listed companies. She has no conviction for any offences within the past five years. 40 IVORY PROPERTIES GROUP BERHAD (673211-M)
KEY SENIOR MANAGEMENT
Lee Chin Aik Ching Ai Hooi
Personal Assistant to Group Chief Executive Officer General Manager (Business Development)
Lee Chin Aik, aged 46, a Malaysian, male, is the Personal Ching Ai Hooi, a Malaysian, aged 37, female, is the Assistant to our Group Chief Executive Officer. He joined General Manager (Business Development) of our Group. our Group in June 2011 as a Financial Controller, and She graduated from the Institute Perkim Goon as an was later promoted to the position of Chief Financial affiliate member of the Association of Chartered Certified Officer in September 2011, before assuming his current Accountants (“ACCA”), United Kingdom, in year 2000. position on 1 May 2013. Her career started in year 2000 when she joined Ernst & Young’s Assurance and Advisory Business Services A Chartered Accountant of Malaysian Institute of unit and gained experience in auditing both local and Accountant since year 1999, Mr Lee graduated with a multinational companies’ operations. Bachelor of Accountancy from Universiti Utara Malaysia. He began his career in year 1995 with an international Ms Ching joined our Group in year 2004 as Finance accounting firm, Arthur Andersen & Co. In June 2000, he Officer and was subsequently promoted to the position joined Gold Bridge Engineering & Construction Berhad, a of Senior Finance Officer the same year. She was public listed company involved in property development, promoted to Management Accountant in year 2007 and as its Group Accountant and was subsequently promoted thereafter to Senior Management Accountant in year to the position of Financial Controller. 2010. Ms Ching took up the challenge to set up our Group’s Internal Audit Department when Ivory Properties In November 2006, he joined a veteran shipbuilding Group Berhad was listed on Bursa Malaysia Securities company, Nautica Nova Shipbuilding & Engineering Sdn Berhad in year 2010. Her role changed again in year Bhd (formerly Hong Leong Lurssen Shipyard Sdn Bhd) 2014 when she was promoted to the position of General as its Financial Controller cum Director handling financial Manager (Business Development) on 1 Feb 2014 to matters and operations management prior to joining our analyse, assess and improve our Group’s financial and Group. operational performance. Her responsibilities include developing, implementing and monitoring our Group’s Mr Lee does not have any conflict of interest with our business units’ targets. Ms Ching is currently a member Company and he has no family relationship with any of the Malaysian Institute of Accountants and the ACCA. Director and/or major shareholder of our Company. Mr Lee does not hold any directorship in public companies Ms Ching does not have any conflict of interest with and public listed companies. He has no conviction for our Company and she has no family relationship with any offences within the past five years. any Director and/or major shareholder of our Company. Ms Ching does not hold any directorship in public companies and public listed companies. She has no conviction for any offences within the past five years. annual report 2016 41
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (“the Board”) of Ivory Properties Group Berhad (“Ivory”) recognises the importance of adopting the principles and recommendations of the Malaysian Code on Corporate Governance (Revised 2012) (“the Code”) for long term sustainable business growth and to protect and enhance shareholders’ values. Accordingly, the Board supports the principles laid out in the Code.
The Board is pleased to disclose below the manner in which it has applied the principles and recommendations of good corporate governance set out in the Code and except as stated otherwise, its compliance with the same as well as the relevant provisions in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”).
Principle 1 Establish Clear Roles and Responsibilities
1.1 Clear Functions of the Board and Management
The Board leads and controls the Group. To ensure effective discharge of its leadership role and as part of initiative to enhance accountability, the Board delegates specific powers to the Board Committees, the Chairman, the Group Chief Executive Officer (“CEO”) and the Management. The Company has adopted a Board Charter which clearly sets out the role, duties, functions and responsibilities of the Board. The demarcation of roles established in the Board Charter is the reference point (in relation to the Directors and Board's roles, powers, duties and functions) to guide Board activities and help to reinforce the supervisory role of the Board.
The Board assumes the following responsibilities for the Group: determining strategic direction, overseeing the proper conduct of the Group’s business, identifying principal risk and ensuring the implementation of systems to manage risks, succession planning, developing investor relations programme, reviewing the adequacy and integrity of the Group’s internal control systems and management information systems, establishing goals for management and monitoring the achievement of these goals.
The Audit Committee, Remuneration Committee and Nominating Committee (“Committees” or “Board Committees”) operate within defined terms of reference that have been drawn up in accordance with the best practices prescribed by the Code. The Committees function primarily to assist the Board in the execution of its duties and responsibilities in order to enhance business and operational efficiency as well as efficacy. Deliberation and decisions at Committee level are recorded. The Committee Chairman will report to the Board on the outcome of the Committees’ meetings and the minutes of meetings are circulated to the Board. The Board reviews the Committees’ authority and terms of reference from time to time to ensure its relevance and to enhance its efficacy. The terms of reference of the Board Committees are available at the Group’s website at www.ivory.com.my.
The Board retains full responsibility for the direction and control of the Company and the Group. The ultimate decision on all matters lies with the Board.
1.2 Clear Roles and Responsibilities
The Board is collectively responsible for oversight and overall management of the Group. It is charged with leading and managing the Company in an effective and responsible manner. Each Director has a legal duty to act in the best interest of the Company. The Group CEO assisted by the Executive Director and key senior management are responsible for the day-to-day operational management of the Group to ensure high level of work efficiency and optimum productivity and represent Management to the Board. The presence of the Independent Non-Executive Directors (“INEDs”), who are not engage in the daily management of the Group, brings objectivity and independence to any evaluation of strategic, performance or resources related issues. In this manner, the INEDs fulfill a crucial corporate accountability role as they provide independent and objective views, opinions and judgment on issues being deliberated.
The Executive Directors work within their position descriptions and key performance indicators have been adopted for which the Group CEO and the Executive Director are responsible to meet. 42 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 1 Establish Clear Roles and Responsibilities
1.2 Clear Roles and Responsibilities (cont'd)
It is the practice of the Board to deliberate on significant matters that concerned the overall Group business strategy, acquisition or divestment policy, approval of major capital expenditure, consideration of significant financial matters and review of the financial and operating performance of the Group.
1.3 Formalise Ethical Standards through a Code of Conduct and Ethics
The Group’s Handbook for Employees (“Handbook”) continues to govern the standards of ethics and good conduct expected of Directors and employees. In addition, the Directors are also governed by a Code of Conduct and Ethics which includes principles relating to their duties, conflict of interest and dealings in securities. For employees, the Handbook covers the general employment terms and conditions, compensation and benefits, proprietary information, conflict of interest, indulging in private businesses, acceptance of gifts and sexual harassment.
Through the Code of Conduct and Ethics and the Handbook, the Board sets the tone for proper ethical behavior expected of the Board members and the employees. The Code of Conduct and Ethics is available at the Company’s website at www.ivory.com.my.
The Board is of the view that there is no necessity to establish a separate whistleblowing policy at the moment in light of the Whistleblower Protection Act which came into effect in 2010.
1.4 Strategies Promoting Sustainability
The Board reviews the Group’s strategic project development and operational progress to-date on quarterly basis with due regard to changing business environment and risk factors such as competition, commodities and changes to governmental policies. At the same meeting, the Board received and ratified reports on capital expenditures.
The Board is aware of the importance of business sustainability in general and vis a vis the environment, governance and social context. There is an internal guideline which emphasises good quality designs and sub-contracting work to protect our development value and ultimately, the investors and homeowners. The many accolades received by the Group over the years reflect the Group’s commitment to quality and responsible business management practices.
The Board actively encourages management and staff participation at community events. The set-up of Ivorycares, the charitable arm of the Group, evidences the Group’s commitment towards social uplifting activities within the communities where the Group operates.
The Group continuously strive to improve the welfare and benefits provided to its employees. Recruits undergo induction program to familiarise themselves with the Group’s background, policies and structure, products and services. The Group has in place performance review process to reward deserving employees with competitive remuneration packages, increment and bonus. In addition, confirmed employees are entitled to medical and hospitalisation benefits and senior executives enjoy regular health screening programme at the Group’s expense. The Group believes that healthy employees are a boon to the Group.
There is emphasis on employees’ training and professional development. Management organises workshops and study tours from time to time for eligible employees to enhance their skills and knowledge. Interest free study loans are also made available to employees to encourage them to further their education. annual report 2016 43
CORPORATE GOVERNANCE STATEMENT
Principle 1 Establish Clear Roles and Responsibilities
1.4 Strategies Promoting Sustainability (cont'd)
On a social note, company dinners are organised to foster greater relationship amongst employees and management. 5-year and 10-year long service awards are conferred to employees as a token of appreciation for their dedication, loyalty and contribution to the Group.
All the projects undertaken by the Group are properly sanctioned with its progress monitored by the various legislating authorities.
The Board is committed to promoting sustainability in all the Group’s activities and a Sustainability Policy will be addressed in due course.
1.5 Access to Information and Advice
All Directors are supplied with full and timely information with Board papers distributed at least 7 days in advance of meetings or a shorter time period where unavoidable, in order for the Directors to be properly briefed and to allow the Directors time to deliberate on issues to be raised and discussed at each meeting. Information given is inclusive of agenda and reports relevant to the issues of the meeting covering areas of financial, operational and regulatory compliance. In the event where convening of physical meeting is not conducive owing to timeliness, conference calls are set up to facilitate the Board’s understanding of any proposals and to receive their approval for the same.
Meeting papers on issues or corporate proposals which are deemed confidential and sensitive would only be presented to the Directors during the meeting itself. Minutes of previous Board and Committees meetings are also circulated to the Board for their information. Verbal explanations and briefings are also provided by Executive Directors, management and external consultants to enhance understanding of matters in relation to the Group’s business and operations.
The Directors may seek advice from the Management on issues under consideration. The Directors may also interact with the Management or request further clarifications or information on the Group’s operations or business concerns. The Directors review and approve corporate announcements, including the announcement of the quarterly financial reports and audited financial statements, prior to releasing them to Bursa Malaysia Securities Berhad (“Bursa Securities”). All Directors have access to the advice and service of the Company Secretaries who are responsible to ensure that all Board procedures are followed and that applicable rules and regulations are complied with.
The Board of Directors, whether as a full board or in their individual capacity, may upon approval of the Board of Directors, seek independent professional advice if required, in furtherance of their duties, at the Group’s expense.
1.6 Qualified and Competent Company Secretaries
The current Company Secretaries are suitably qualified, well experienced, competent and can support the Board in carrying out its roles and responsibilities. The Company Secretaries are Associate and Fellow members of the Malaysian Association of the Institute of Chartered Secretaries and Administrators. The Company Secretaries play advisory role to the Board with regards to its constitution, compliance with regulatory requirements, codes, guidance and legislations. The Company Secretaries kept themselves abreast with regulatory changes and updated company secretarial practices by attending relevant training programmes regularly. The Articles of Association specifies that the removal of the Company Secretaries is a matter for the Board as a whole. 44 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 1 Establish Clear Roles and Responsibilities
1.6 Qualified and Competent Company Secretaries (cont'd)
The Company Secretary or her representative is present at meetings to record deliberations, issues discussed and conclusions in discharging her duties and responsibilities and also advises on issues relating to the relevant rules and regulations that govern the Company.
1.7 Board Charter
The Board Charter (“Charter”) guides the Board activities as recommended by the Code. The Charter has been formalised to clearly define the roles of the Board, Board Committees and Management so that there is a structured guide with regard to the various responsibilities including the need for Directors to carry out their leadership and supervisory role and in discharging their duties towards the Group and the Board. The Charter will be reviewed from time to time to ensure its compliance with relevant rules and regulations and remains relevant and effective.
Principle 2 Strengthen Composition
2.1 Nominating Committee
The Nominating Committee, which was established by the Board on 9 July 2010, comprises the following:
• Lim Hock Siu - Chairman (INED) • Loh Chye Teik - Member (INED) • Ooi Choi Kiat - Member (Non-INED)
The Nominating Committee is chaired by an INED and the Committee consists entirely of Non-Executive Directors, a majority of whom are independent. The Committee meets at least once a year. Additional meetings are convened as and when the need arises.
2.2 Develop, Maintain and Review Criteria for Recruitment and Annual Assessment of Directors
The Nominating Committee operates within defined terms of reference that has been drawn up in accordance with the best practices prescribed by the Code. The terms of reference is available at the Group’s website at www.ivory.com.my.
The Nominating Committee is empowered by the Board to, amongst others, identify and recommend to the Board suitable candidates for appointment to the Board and Board Committees, re-election and re-appointment of Directors, review the independence of Directors as well as the Board structure, size and composition and determining the impact of the number on its effectiveness as well as considering the Board’s succession planning and training programmes. The Board is responsible for succession planning of Board members including Group CEO and overseeing the identification and development of executive talent. The Board, with the assistance of the Nominating Committee and working with the Group CEO and Human Resources department, oversees executive officer development and corporate succession plan for the Group CEO to provide for continuity in senior management. The succession plan covers identification of internal candidates, development plans for internal candidates, and appropriate identification of external candidates if necessary. The succession plan will be regularly reviewed and updated to ensure the Group re-assess the hiring needs and determine the development progress of selected candidates. annual report 2016 45
CORPORATE GOVERNANCE STATEMENT
Principle 2 Strengthen Composition
2.2 Develop, Maintain and Review Criteria for Recruitment and Annual Assessment of Directors (cont'd)
The Nominating Committee also assesses the effectiveness of the Board, the Committees of the Board and contribution of each individual Director on an annual basis. Additionally, the Committee also reviews the required mix of skills, experience, character, integrity, time commitment and other qualities, including core competencies of the members of the Board. The Board Members have attended a diverse range of training programmes during the financial year to enhance their knowledge and skills in specific areas. All assessments and evaluations carried out by the Nominating Committee in the discharge of all its functions were documented. The Company Secretary will ensure that all appointments are properly effected with the necessary legal and regulatory obligations duly met.
A meeting was held during the financial year ended 31 March 2016 and it was attended by all members. The Committee conducted annual assessment on each individual Director, Board as a whole and Board Committees. The Committee also reviewed the independence of the Independent Non-Executive Directors and was satisfied with the level of independence demonstrated by the respective Directors. The INEDs have satisfied the test of independence as defined under paragraph 1.01 and Practice Note 13 of the Listing Requirements.
The Board acknowledges the recommendation of the Code on gender diversity. However, the Board believes it is not necessary to adopt a formal gender diversity policy as the Group is committed to provide fair and equal opportunities and nurturing diversity, be it race, age, ethnicity or gender, within the Group. The evaluation of the suitability of candidates is based on the candidates’ competency, character, time commitment, integrity, performance and experience to bring value and expertise to the Board. The Nominating Committee will, however, continue to take steps to ensure suitable women candidates are sought as part of its recruitment exercise.
The Board, together with Nominating Committee, will also formalise a guide to be used during annual assessment and recruitment process of Directors.
The Committee meets at least once a year. Additional meetings are convened as and when the need arises.
2.3 Remuneration Policies
The Remuneration Committee, which was established by the Board on 9 July 2010, comprises the following:
• Lim Hock Siu - Chairman (INED) • Loh Chye Teik - Member (INED) • Dato’ Low Eng Hock - Member (Group CEO)
The Remuneration Committee is chaired by an INED and consists mainly of INEDs.
The Committee meets at least once a year. Additional meetings are convened as and when the need arises. A meeting was held during the financial year ended 31 March 2016, which was attended by all members, to consider remuneration package and employment related matters of the Executive Directors. The Remuneration Committee also discussed and adopted key performance indicators for the Executive Directors which shall be used as a basis for performance assessment.
The Remuneration Committee is responsible for, inter alia, recommending to the Board the policy framework and remuneration structure for Directors as well as the remuneration packages for Executive Directors. 46 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 2 Strengthen Composition
2.3 Remuneration Policies (cont'd)
The Executive Directors did not participate in any way in determining their individual remuneration. The Board, as a whole, determines the remuneration of NEDs with individual Directors abstaining from decisions in respect of their individual remuneration.
The current practice is for Directors’ remuneration to be based upon individual contributions, experience, responsibilities and core competencies with the quantum sufficient to attract, retain and motivate Directors of the quality required to manage the businesses of the Group and to align the interest of the Directors with those of the shareholders. Internal reviews were carried out on remuneration of directors of other public listed companies of similar size and industry with the Group for comparison and guidance to ensure that the Directors’ remuneration stay competitive and reflect the prevalent market rate.
All NEDs are paid fixed annual fees which are determined by the Board as a whole. In addition to the fixed annual fees, all NEDs are paid meeting allowances for attending meetings. The Directors’ fees are approved annually by the shareholders. The details of the remuneration received by the Directors for the financial year ended 31 March 2016 are as follows:
Other Salaries Fees Emoluments Total Directors RM’000 RM’000 RM’000 RM’000
Executive 1,891 - 949 2,841 Non-Executive - 195 25 200
The number of Directors, whose remuneration falls into the following bands, comprises:
Number of Directors
Range of Remuneration (RM) Executive Non-Executive
50,000 and below - 3 50,001 - 100,000 - 1 300,000 – 350,000 1 - 2,500,001 – 2,550,000 1 -
The Board is of the opinion that the above disclosure is sufficient as it considers the disclosure of each Director’s remuneration will not add significantly to the understanding and evaluation of the Group's governance process. None of the Directors has rendered any services to the Company or any companies within the Group during the financial year.
Principle 3 Reinforce Independence
3.1 Annual Assessment of Independent Directors
The Board, through the Nominating Committee, assesses the INEDs annually. Based on the assessment carried out annually, the Nominating Committee and the Board are satisfied with the level of independence demonstrated by the INEDs and their ability to act in the best interest of the Company in decision-making. annual report 2016 47
CORPORATE GOVERNANCE STATEMENT
Principle 3 Reinforce Independence
3.2 Tenure of Independent Directors
The tenure of an INED should not exceed a cumulative term of nine (9) years. The Board may, in exceptional cases and subject to the assessment of the Nominating Committee on an annual basis, recommend for an INED who has served a consecutive or cumulative term of 9 years to remain as an INED subject to shareholders’ approval. However, an INED may continue to serve the Board subject to his re-designation as a Non-INED. As at to-date, none of the INEDs has exceeded the cumulative term of 9 years.
3.3 Shareholders’ Approval for Retaining INEDs
The Board must justify and seek shareholders’ approval in the event that it retains a Director as an INED, a person who has served in that capacity for more than 9 years. As at to-date, none of the INEDs has served for more than 9 years.
3.4 Separation of Positions of Chairman and CEO
There is a clear division of responsibilities at Board level to ensure balance of authority and power so that there is no one individual with unfettered power over decision-making. The Board is helmed by an Independent Non-Executive Director while the Executive Director & Group CEO led the management team.
The distinct and separate roles of the Chairman and CEO promote accountability and facilitate division of responsibilities between them. The Group CEO focuses on the day-to-day operations and management of the Group while the Independent Non-Executive Chairman leads the Board in the oversight of management.
3.5 Composition of the Board
As at to-date, the Board comprises six (6) members; three (3) INEDs, one (1) Non-INED and two (2) Executive Directors, which is in compliance with the Listing Requirements which requires a Board to have at least two (2) Independent Directors or 1/3 of the Board of the Directors, whichever is higher to be Independent Directors. Brief profile of each Board member is presented in this Annual Report under Profile of Directors. The Directors, with their different background and specialisations, collectively bring with them a wide range of experience and expertise in areas ranging from finance, corporate affairs, project development, marketing to general management and operations. The Executive Directors are responsible for implementing the policies and decisions of the Board, overseeing business operations as well as coordinating the development and implementation of business and corporate strategies. The INEDs bring to bear objective and independent judgment to the decision making of the Board and provide a capable check and balance to the Executive Directors.
The Board, through the Nominating Committee, conducts annual assessment on the effectiveness of the Board as a whole, the Board Committees and contribution of each individual Director. The assessment also considered the qualifications, contribution and performance of Directors and Chief Financial Officer in meeting the needs of the Group based on the criteria - competency, character, time commitment, integrity and experience as set out under paragraph 2.20A of the Listing Requirements. The evaluation process is a mix of self and peer review and these were duly documented. Evaluation forms were provided to the Directors and the Nominating Committee in advance for their assessment. The assessment and comments were summarised and discussed at Nominating Committee meeting before they were presented to the Board. The Nominating Committee also discussed and reviewed key performance indicators set for the Executive Directors for each financial year. 48 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 3 Reinforce Independence
3.5 Composition of the Board (cont'd)
The Articles of Association of the Company provides that at least one-third of the Board is subject to retirement by rotation at each Annual General Meeting (“AGM”) and all Directors shall retire from office once at least in every three (3) years. A retiring Director is eligible for re-election. This provides an opportunity for shareholders to renew their mandates. The re-election of each Director is voted on separately at the AGM. There is no Director who will be standing for election at the forthcoming AGM of the Company.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. However, none of the Directors of the Company is over 70 years of age.
Principle 4 Foster Commitment
4.1 Time Commitment
The Board meets at least once every financial quarter with urgent and important matters resolved by way of circular resolutions and convening of additional meetings as and when the need arises. During the financial year ended 31 March 2016, the Board met on six (6) occasions, where it deliberated upon and considered various matters including financial and business performance, major investments and divestments, major acquisitions and disposals, appointment and retirement of Directors, capital expenditure, financial forecast, related party transactions and recurrent related party transactions, terms of office and performance of the Audit Committee and its members and re-appointment of Auditors as well as reviewed and approved the Annual Report and Circular to Shareholders.
The Directors’ attendance at Board Meetings held during the financial year ended 31 March 2016 is as follows:
Directors Attendance
Dr Asairinachan @ Aravinachan A/L Kunjamboo 6/6 Dato’ Low Eng Hock 6/6 Dato’ Ooi Chin Loo 5/6 Ooi Choi Kiat 6/6 Loh Chye Teik 6/6 Lim Hock Siu 6/6
Board Meetings for the whole year are scheduled ahead at the end of each calendar year to enable the Directors to plan and adjust their schedule to ensure good attendance and the expected degree of attention given to the Board agenda. Members of the Management team and external advisors are invited as and when required to attend the Board of Directors’ and the Committees’ Meetings to present and advise the members with information and clarification on certain items in the agenda to enable them to arrive at a considered decision. Directors and principal officers of the Group are also notified on closed periods for dealings in securities of the Company based on the targeted announcement dates of the quarterly financial results. annual report 2016 49
CORPORATE GOVERNANCE STATEMENT
Principle 4 Foster Commitment
4.1 Time Commitment (cont'd)
All proceedings of the Board and Committee meetings are recorded and the minutes thereof signed by the Chairman of the respective meetings.
A Director accepting new directorships in other companies will notify the Board of his new appointment. A Director shall limit his directorship of companies to a number which is in compliance with the Listing Requirements and at such number that he can best devote his time and effectiveness to the Group. In general, any new Board appointment would be given background information on the Group and its activities with site visits arranged as deemed necessary.
4.2 Training
All Directors have attended and successfully completed the Mandatory Accreditation Programme.
As part of the initiative to enhance their knowledge and acquire sound understanding of current issues and developments to effectively discharge their duties, the Directors have attended the following seminars, workshops and courses during the financial year ended 31 March 2016:
Directors Seminars/Workshops/Courses
Dr Asairinachan • Risk Management and Internal Control for Audit Committee @ Aravinachan • Board Chairman Series Part 2: “Leadership Excellence from the Chair” A/L Kunjamboo • Corporate Governance Breakfast Series with Directors: “The Board’s Response in Light of Rising Shareholder Engagements” Dato’ Low Eng Hock • 2016 Budget Updates and Recent Developments on Tax / Post Goods and Services Tax Dato’ Ooi Chin Loo • 2016 Budget Updates and Recent Developments on Tax / Post Goods and Services Tax • Strata Management Workshop Ooi Choi Kiat • 1st Half Market Outlook Loh Chye Teik • Malaysia Goods and Services Tax Compliance Conference: Unraveling Post-Implementation Complexities • Goods and Services Tax Latest Developments and The Way Forward • Understanding Goods and Services Tax Risks • National Tax Conference 2015 • Quality Control • Companies Commission of Malaysia National Conference 2015 on Modernising the Companies Act. Creating Synergy in Malaysian Business Landscape • Malaysian Institute of Accountants International Accountants Conference 2015 • Seminar Percukaian Kebangsaan 2015 • Addressing the Top 5 Internal Audit Challenges • Goods and Services Tax in Practice: A Year and Beyond. The Implementation of Goods and Services Tax in Retrospect and the Practical Issues and Solutions Moving On Lim Hock Siu • 2016 Budget Updates and Recent Developments on Tax / Post Goods and Services Tax 50 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 4 Foster Commitment
4.2 Training (cont'd)
The Company communicates and facilitates the organisation of training programmes for Directors and maintains a record of the trainings attended by the Directors. On the recommendation of the Nominating Committee, the Directors will endeavor to attend more trainings in relation to the Listing Requirements and property development industry. In addition, the Directors are regularly updated by the Company Secretaries on any changes to the statutory, corporate and regulatory requirements relating to Directors' duties and responsibilities or the discharge of their duties as Directors. The external auditors have also briefed the Board on changes to the Malaysian Financial Reporting Standards that affect the Group's financial statements.
Principle 5 Uphold Integrity in Financial Reporting
5.1 Compliance with Applicable Financial Reporting Standards
The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s financial performance and prospects, primarily through the annual and quarterly financial statements to Shareholders as well as the Chairman’s Message in the Annual Report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes, ensures its compliance with applicable financial reporting standards and regulatory requirements as well as the quality of its financial reporting. The financial statements are reviewed by the Audit Committee prior to recommending them to the Board for announcement and issuance to shareholders.
The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and of the results of their operations and cash flows for the year ended on that date. The Directors have ensured that the financial statements of the Group and of the Company are drawn up in accordance with the requirements of the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965.
In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgment and estimates. The Directors also have a general responsibility for taking reasonable steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
5.2 Assessment of Suitability and Independence of External Auditors by the Audit Committee
During the financial year ended 31 March 2016, the Independent Directors held two (2) dialogue sessions with the external auditors in the absence of the Executive Directors and Management to discuss issues of concern to the external auditors. The issues discussed were highlighted by the Committee Chairman to the Board.
The Group maintains a close and transparent relationship with its external auditors in seeking professional advice and ensuring compliance with the relevant accounting and financial reporting standards. The external auditors have an obligation to bring to the attention of the Audit Committee, the Board and the management any significant defects in the Group's system of reporting, internal control, compliance with approved accounting standards as well as legal and regulatory requirements. annual report 2016 51
CORPORATE GOVERNANCE STATEMENT
Principle 5 Uphold Integrity in Financial Reporting
5.2 Assessment of Suitability and Independence of External Auditors by the Audit Committee (cont'd)
The Audit Committee also undertook an assessment of suitability and independence of the external auditors through a performance and independence checklist. The checklist includes inter alia, the external auditors’ quality of service, audit team, independence and objectivity, scope of audit and planning, audit fees, non- audit services provided by the external auditors to the Group and the fees and audit communications. The Company also has in place an External Auditors Policy which outlines the guidelines and procedures for the Committee to assess and monitor the external auditors. The Chief Financial Officer, Group Accountant and other employees involved were also invited to share their views and any issues in respect of the performance of the external auditors during the financial year. In addition, the external auditors also provided written assurance of their independence throughout the term of their audit engagement in accordance with the terms of the relevant professional and regulatory requirements including the bye-laws of the Malaysian Institute of Accountants. The lead audit engagement partner responsible for the Company’s financial statements is subject to a maximum five year rotation period and rotation has taken place twice since the Company’s initial engagement of the external auditors. The Committee was satisfied with the technical competency and independence of the external auditors during the financial year ended 31 March 2016 and recommended their re-appointment to the Board.
Principle 6 Recognise and Manage Risks
6.1 Sound Framework to Manage Risks
The Board is updated on the Group’s internal controls system which encompasses risk management practices as well as financial, operational and compliance controls on a quarterly basis. Ongoing reviews are performed throughout the year on a quarterly basis to identify, evaluate, monitor and manage significant risks affecting the business and ensure that adequate and effective controls are in place. Such continuous review processes are conducted by independent professional firm of consultants. The findings of the internal audit function are regularly reported to the Audit Committee. An overview of the state of internal controls and risk management within the Group is spelt out in this Annual Report under the Statement on Risk Management and Internal Control.
6.2 Internal Audit Function
The function of internal audit is outsourced to an independent professional firm of consultants to assist the Audit Committee in discharging its roles and responsibilities. Details of the Group’s internal control system and risk management framework are set out under the Statement on Risk Management and Internal Control and Audit Committee Report in this Annual Report.
Principle 7 Ensure Timely and High Quality Disclosure
7.1 Corporate Disclosure Policy
The Board is mindful of the requirement for prompt dissemination of information to shareholders, investing community and authorities to ensure clear and complete information of the Group’s position and financial performance are given in a timely manner within the bounds of practicality and regulatory framework governing release of material and price sensitive information. 52 IVORY PROPERTIES GROUP BERHAD (673211-M)
CORPORATE GOVERNANCE STATEMENT
Principle 7 Ensure Timely and High Quality Disclosure
7.1 Corporate Disclosure Policy (cont'd)
The Board will review through and endorse all announcements prior to release to the public through Bursa Securities. In addition, all financial related announcements are pre-approved by the Chief Financial Officer before these are submitted to the Board for endorsement.
Following increased awareness for greater accountability and transparency in disclosure, the Board has formalised its current disclosure practice into a policy in line with the provisions of Listing Requirements, to enable comprehensive, timely and accurate disclosure to the regulators, shareholders and other stakeholders. The policy also sets out the spokespersons authorised to communicate with the regulatory bodies, investment analysts, potential investors, media or other parties on behalf of the Group. The Corporate Disclosure Policy is available at the Group’s website at www.ivory.com.my.
7.2 Leverage on Information Technology for Effective Dissemination of Information
The Company’s website, www.ivory.com.my, provides an avenue for comprehensive information dissemination with dedicated sections on corporate information including announcements to Bursa Securities, financial information, annual reports, governance, press releases and news and events related to the Group. Moving forward, in accordance with paragraph 9.21(2)(b) of the Listing Requirements, the Company will be publishing a summary of the key matters discussed at the Company’s AGM as soon as practicable after the conclusion of the AGM for the benefit of shareholders who were unable to attend the AGM.
Any queries or concerns regarding the Group may be directed to Investor Relations via its dedicated email address at [email protected].
Principle 8 Strengthen Relationship between Company and Shareholders
8.1 Shareholders’ Participation at General Meetings
General meetings are the key platform for the Board to meet the shareholders and for the Board to provide an overview of the Group’s progress to-date and respond to questions from shareholders concerning the Group’s business, operations and prospects. Every notice convening general meeting specifying the place, day and hour of meeting is given to all members at least 14 days before meeting or at least 21 days before the meeting where any special resolution is to be proposed or where it is an AGM.
Shareholders may also obtain the Group’s latest announcements through its corporate website at www.ivory.com.my or Bursa Securities’ website at www.bursamalaysia.com.
The Board will consider adopting electronic voting, within the bound of practicability, in the future to facilitate greater shareholder participation at general meetings.
8.2 Poll Voting
The Company will ensure that all resolutions set out in the notice of general meetings, or in any notice of resolution which may properly be moved and is intended to be moved at any general meeting, is voted by poll. Poll voting will reflect shareholders’ views more accurately and fairly by ensuring that every vote is recognised in accordance with the principle of “one share one vote”. annual report 2016 53
CORPORATE GOVERNANCE STATEMENT
Principle 8 Strengthen Relationship between Company and Shareholders
8.3 Effective Communication and Proactive Engagement
The Board acknowledges the need for shareholders to be kept informed of all material business matters affecting the Group. Shareholders are provided with an overview of the Group’s performance and operations through timely release of financial results on yearly and quarterly basis as well as various other announcements.
The general meetings also provide a useful forum for shareholders to engage directly with the Board and senior management. The shareholders are at liberty to raise questions or seek clarification on the agenda of the meeting from the Board and the senior management.
Press conferences are also held to brief members of the media on key events involving the Group. In addition, throughout the year, the Group has programmes for meetings or interviews with the investment community and the media. The Group also issues press releases to the media, as part of its corporate initiative to promote wider publicity and dissemination of public information, on significant corporate developments and business initiatives to keep the investment community and shareholders updated on the progress and development of the Group.
Whilst the Group endeavors to provide as much information as possible to the shareholders and stakeholders, the Board is mindful of the legal and regulatory framework governing the release of material and price- sensitive information. Such material and price-sensitive information are not released until announced or made public through the proper channels.
Compliance with the Principles and Recommendations of the Code
For the financial year ended 31 March 2016 and until todate, the Group has complied substantially with the Principles and Recommendations of the Code insofar as applicable and described herein.
This statement is issued in accordance with a resolution of the Directors dated 25 July 2016. 54 IVORY PROPERTIES GROUP BERHAD (673211-M)
AUDIT COMMITTEE REPORT
The Audit Committee of the Company which comprises of majority Independent Non-Executive Directors, was established on 9 July 2010 to assist the Board in the effective discharge of its fiduciary responsibilities:-
Chairman Loh Chye Teik - Independent Non-Executive Director
Members Dr Asairinachan @ Aravinachan A/L Kunjamboo - Chairman / Independent Non-Executive Director Lim Hock Siu - Independent Non-Executive Director Ooi Choi Kiat - Non-Independent Non-Executive Director
AUDIT COMMITTEE MEETING
During the financial year ended 31 March 2016, a total of five (5) meetings were held, ie, on 28 May 2015, 30 July 2015, 27 August 2015, 26 November 2015 and 23 February 2016 and the Committee Members attended all the meetings. Minutes of the Committee meetings were circulated to the Board of Directors.
SUMMARY OF WORK OF AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in fulfilling its overseeing responsibilities. The Committee’s overall responsibilities encompass the processes of audit, corporate accounting, financial reporting, system of internal control, risk management, regulatory and legal compliances and risk management practices and procedures of the Group.
The work of the Audit Committee for the financial year ended 31 March 2016 is summarised as follows:-
Financial Reporting
• Reviewed the quarterly unaudited financial reports for the financial quarters ended 31 March 2015, 30 June 2015, 30 September 2015 and 31 December 2015 and the annual audited financial statements of the Group and its related notes to financial statements for the financial period ended 31 March 2015 as well as appropriate announcements to Bursa Malaysia Securities Berhad (“Bursa Securities”) and Securities Commission (“SC”) before recommending to the Board of Directors for approval.
• In the review of the quarterly unaudited financial reports and annual audited financial statements, the Committee discussed with management and the external auditors, amongst others, the major accounting principles and policies that were applied and the reasonableness of their judgments and estimations made in connection with the preparation of the financial statements and the clarity of disclosures of the same.
• Confirmed with management and the external auditors that the Company’s and Group’s annual audited financial statements have been prepared in compliance with applicable Financial Reporting Standards.
External Audit
• Reviewed and endorsed the audit plan presented by the external auditors which comprised amongst others, the engagement team, audit strategy, audit methodology, audit materiality, preliminary audit risk assessment, general extent of the auditors’ audit examinations, timetable and scope of the audit work for the year.
• Considered and reviewed, where applicable, the significant impact on the Group’s financial statements as a result of new accounting standards issued by the Malaysian Accounting Standards Board as highlighted by the external auditors.
• Reviewed the findings of the external auditors’ reports, particularly the issues raised in the management letter and the response from the management to ensure where appropriate, the necessary corrective actions had been taken by management. annual report 2016 55
AUDIT COMMITTEE REPORT
• Considered and reviewed the external auditors evaluations of the Group’s internal control to ensure effective and efficient processes and controls were in place for the overall quality of the Group’s financial reporting. The Committee took into consideration the external auditor’s view on method used to account for significant or unusual transactions where the accounting treatment is open to interpretation or requires certain judgments when assessing the reasonableness of the management judgments and estimates in adopting the appropriate accounting treatment.
• Met with the external auditors without the presence of the Executive Directors and management staff on 28 May 2015 and 23 February 2016 to discuss issues of concern to the auditors. The issues discussed were then highlighted by the Committee Chairman to the Board.
• Reviewed and considered the performance and independence of the external auditors for the financial year through a performance and independence checklist. The checklist includes inter alia, the external auditors’ quality of service, audit team, independence and objectivity, scope of audit and planning, audit fees, non-audit services provided by the external auditors to the Group and the fees and audit communications. The Chief Financial Officer, Group Accountant and other employees involved were also invited to share their views and any issues in respect of the performance of the external auditors during the financial year. In addition, the external auditors also provided written assurance that they have been independent throughout the term of their audit engagement in accordance with the terms of the relevant professional and regulatory requirements including the bye-laws of the Malaysian Institute of Accountants. The lead audit engagement partner responsible for the Company’s financial statements is subject to a maximum five year rotation period and rotation has taken place twice since the Company’s initial engagement of the external auditors. The Committee was satisfied with the performance and independence of the external auditors and recommended their re-appointment to the Board.
Subsequent to the financial year, a policy on external auditors was established to outline the guidelines and procedures for the Committee to assess the suitability and independence of the external auditors and monitor the performance of the external auditors based on quality of service, sufficiency of resources, communication and interaction and professional skepticism.
• Considered the audit fees and non-audit fees to be paid to the external auditors for the financial year. The Committee was presented with an internal review and comparison of the external auditors fees against the audit fees of other public listed companies of similar size and nature with the Group. The non-audit fees comprised of recurring fees on corporate tax compliance, annual review of the Statement on Risk Management and Internal Control (“SORMIC”), compliance of Housing Development (Control and Licensing) Act 1966, review of realised and unrealised profit and limited review of quarterly financial reports while the non-recurring fee was for the consultancy services on Goods and Services Tax related issue.
• Recommended the proposed audit fee and the external auditors’ reappointment for Board’s approval.
Internal Audit and Risk Management
• Reviewed and evaluated the performance and functions of the internal auditors for the financial year through an evaluation checklist which includes inter alia the scope and functions of the internal auditors, internal auditors understanding of the Group’s business and its industry, manpower, budget, competency and performance of the internal auditors and collaboration of the internal auditors with the external auditors.
• Subsequent to the financial year, assessed the adequacy and effectiveness of the Enterprise Risk Management (“ERM”) framework, the systems of internal controls and the appropriateness of management’s responses to key risk area and proposed recommendations for improvements to be implemented.
• Reviewed and approved the annual audit plan proposed and recommended by SORMIC Committee to ensure the adequacy of the scope and coverage of work.
• Reviewed the ERM reports, internal audit reports, the audit issues therein, recommendations and management’s response before proposing that those control weaknesses be rectified and recommendations for improvements be implemented. The ERM reports, internal audit reports, audit issues, recommendations and management’s response were discussed at the SORMIC Committee Meeting prior to circulation and review by the Committee. The SORMIC Committee comprises of an Executive Director, Chief Financial Officer, Chief Operating Officer, Group Accountant, Personal Assistant to the Group Chief Executive Officer and General Manager (Business Development). 56 IVORY PROPERTIES GROUP BERHAD (673211-M)
AUDIT COMMITTEE REPORT
• Reviewed and recommended for approval of the Board of Directors the SORMIC and the Audit Committee Report.
• Reviewed the recurrent related party transactions of a revenue or trading nature and other related party transactions entered into by the Group. The Directors provide and update the Group on quarterly basis all persons connected with them to assist the Group in monitoring and identifying any potential related party transactions or conflict of interest situations within the Group. Lists of all recurrent related party and other related party transactions containing details of the related parties, date of transactions, nature of transactions and amount of transactions were compiled and provided to the Committee on quarterly basis to assist the Committee in the review of the transactions. In reviewing related party transactions, the Committee ensured that the transactions are fair and were conducted on terms not more favourable to the related parties than those generally available to the public, and are not to the detriment of the minority shareholders. The Committee also considered if the actual value of recurrent related party transactions entered into by the Company, exceed the estimated value of the recurrent related party transactions disclosed in the circular to shareholders by 10% or more, where immediate announcement is required. The Committee sought explanations and clarifications on the transactions where necessary during the Meetings.
As additional monitoring measure for the Group, the adopted Code of Conduct and Ethics of Directors provides inter alia, that a Director should seek to avoid engaging in any business or work which may be in competition or in conflict directly or indirectly with the business of the Group. Full and prior disclosure of any conflict or potential conflict must be made to the Board. Where an actual or potential conflict does arise, a Director should refrain from participating in the debate and/or vote on the matter, and in the extreme case of continuing material conflict of interest, should resign from the Board.
• Discussed and approved draft circular to shareholders in relation to proposed renewal of shareholders’ mandate for recurrent related party transactions of a revenue or trading nature and disposal of land.
INTERNAL AUDIT
During the financial year ended 31 March 2016, the Company had engaged the services of an independent firm of consultants, BDO Governance Advisory Sdn Bhd, to carry out the internal audit function of the Group in order to assist the Audit Committee in discharging its duties and responsibilities. The internal audit function is independent of the activities or operation of the Group. The principal role of the internal audit function is to undertake independent, regular and systematic reviews of the system of internal control to provide reasonable assurance that such system continues to operate satisfactorily and effectively.
The summary of internal audit activities is delineated as follows:-
• Reviewed the existing system of internal controls and governance processes of the Group;
• Conducted audit reviews of the Group’s system of internal controls on reliability and integrity of financial and operational information, safeguarding of assets, efficiency of operations, compliance with established policies as well as procedures and statutory requirements;
• Provided recommendations to the management to assist the operations management and Group in improving and accomplishing its internal control requirements;
• Issued internal audit reports incorporating audit recommendations and management’s responses in relation to audit findings on internal control weaknesses to the Audit Committee and the respective operations management;
• Performed follow-up reviews to ensure that corrective actions were implemented effectively; and
• Presented the internal audit report to the Audit Committee on a quarterly basis.
The total cost incurred for the internal audit function of the Group for the financial year ended 31 March 2016 is RM35,200.00.
Further details of the activities of the internal audit are set out in the Statement on Risk Management and Internal Control in this Annual Report. annual report 2016 57
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTRODUCTION
The Malaysian Code of Corporate Governance 2012 requires listed companies to maintain a sound risk management and system of internal controls to safeguard shareholders’ investment and the Group’s assets.
Guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Public Listed Companies, the Board of Directors of Ivory Properties Group Berhad is pleased to present the Statement on Risk Management and Internal Control which is prepared in accordance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
RESPONSIBILITY FOR RISK MANAGEMENT AND INTERNAL CONTROL
The Board recognises its overall responsibility for the Group’s systems of internal control and for reviewing the adequacy and integrity of those systems. In view of the limitations that are inherent in any systems of internal control, the systems of internal control are designed to manage risk within tolerable levels rather than eliminate the risk of failure to achieve business objectives. Hence, such system by its nature can only provide reasonable and not absolute assurance against material misstatement, error or losses.
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced, or potentially exposed to, by the Group in pursuing its business objectives. This process has been in place throughout the financial year and up to the date of approval of the annual report. The adequacy and effectiveness of this process have been continually reviewed by the Board and are in accordance with the Internal Control Guidance.
RISK MANAGEMENT
The Group has in place an Enterprise Risk Management (“ERM”) system as an integral part of the Group’s daily operations and long term strategic management practice. This ERM system is a continuous and systematic method to identify, assess, respond and monitor significant risks affecting the Group’s business and achievement of its objectives. Risks may be associated with a variety of internal or external factors including control breakdowns, disruption in information systems, competition, natural catastrophe and regulatory requirements. Existing and planned controls are also considered in the ERM exercise.
The Group’s Statement on Risk Management and Internal Control (“SORMIC”) Committee is chaired by an Executive Director and includes representatives from management. The SORMIC Committee meets regularly to review the effectiveness of the risk management process and reports arising from risk management activities.
To foster greater ownership and effective management of risks, the respective Heads of Departments are primarily responsible for the identification, evaluation and management of major risks affecting their own business units including the design and implementation of suitable controls on a continuous basis.
With the assistance of an independent professional accounting and consulting firm, the entire ERM process is reviewed by the top management in which significant risks which may inflict the Group in the ensuing 12 months are re-evaluated according to their likelihood of occurrence and severity of consequence. The ERM process encompasses the processes for the identification, assessment, management and monitoring of risks which could impact the objectives of the Group. Existing controls to mitigate and manage these risks are then re-assessed and strengthened.
Risk management is integrated into the Group’s daily operations and a risk based evaluation is taken into consideration for the Group’s decision making and strategic planning. 58 IVORY PROPERTIES GROUP BERHAD (673211-M)
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTERNAL AUDIT
The Board outsourced its internal audit function to an independent professional accounting and consulting firm, BDO Governance Advisory Sdn Bhd as part of its efforts to provide adequate and effective internal control systems. The performance of internal audit function is carried out as per the annual audit plan approved by the Audit Committee.
On a quarterly basis, the internal auditors report to the Audit Committee on internal audit findings and recommend remedial action plans for possible improvement for the audited areas. The highlighted internal audit findings are followed-up by the internal auditors as well to ensure the control weaknesses, if any, are properly identified and addressed by the management.
During the financial year, the internal audit function reviewed the internal controls in the key activities of the Group’s businesses on the basis of an annual internal audit plan approved by the Audit Committee. The internal audit adopted a risk-based approach and prepared its plan based on the risk profiles of the major business units in the Group. Opportunities for improvement to the system of internal control were identified and presented to the Audit Committee via internal audit reports, whilst Management formulated the relevant action plans to address the issues noted.
A total of 4 internal audit reviews were conducted by BDO Governance Advisory Sdn. Bhd. for the financial year ended 31 March 2016. The details of the said review can be delineated as follows:-
Internal Follow-Up Audit Visits Audit Period Names of Auditees Audited Areas Reviews
1st Visit in 1 October 2014 – Ivory Associates Sdn. Bhd. Procure to Pay June 2015 March 2015 31 March 2015 (The Latitude) 2nd Visit in 1 December 2014 – Ivory Properties Group Human Resource September 2015 June 2015 30 April 2015 Berhad Management 3rd Visit in 1 April 2015 – Ivory Associates Sdn. Bhd. Sales to Receipt December 2015 September 2015 30 September 2015 4th Visit in 1 July 2015 – Ivory Villas Sdn. Bhd. Project March 2016 December 2015 31 December 2015 (The Latitude) Development Management
The audit focuses on high risk area to ensure that an adequate action plan has been in place to improve the internal controls. The audit ascertains that the risks are effectively mitigated by the controls. The highlighted areas will be followed up closely to determine the extent of their recommendations that have been implemented by the management. annual report 2016 59
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTERNAL CONTROL
Apart from risk management and internal audit, the Group has put in place the following key elements of internal control:
• An organisation structure with well-defined scopes of responsibility, clear lines of accountability, and appropriate levels of delegated authority; • A process of hierarchical reporting which provides a documented and auditable trail of accountability; • A set of documented internal policies and procedures which is subject to regular review and improvement; • Regular and comprehensive information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making; • Monitoring of results against project budget, with major variances being followed up and management action taken, where necessary; and • Regular visits to operating units by members of the Board and senior management.
The Group’s system of internal control does not extend to associate companies and its joint venture as the Group does not have full management control over them. However, the Group’s interest is represented through the Board of these associate companies and the joint venture.
REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 (Revised 2015), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the Annual Report of the Group for the year ended 31 March 2016, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the Annual Report of the Group, in all material respects:
(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or
(b) is factually inaccurate.
RPG 5 (Revised 2015) does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The external auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the Annual Report will, in fact, remedy the problems.
CONCLUSION
The Board has received assurance from the Group Chief Executive Officer and Chief Financial Officer that the Group’s risk management and internal control systems have been operating adequately and effectively, in all material aspects, during the financial year under review and up to the date of this statement. Taking this assurance into consideration, the Board is of the view that there were no significant weaknesses in the current system of internal control of the Group that may have material impact on the operations of the Group for the financial year ended 31 March 2016. The Board and the management will continue to take necessary measures and ongoing commitment to strengthen and improve its internal control environment and risk management.
This statement is issued in accordance with a resolution of the Directors dated 30 May 2016. 60 IVORY PROPERTIES GROUP BERHAD (673211-M)
ADDITIONAL COMPLIANCE INFORMATION
Audit Fees and Non-Audit Fees
The amount of audit fees and non-audit fees paid to the external auditors of the Group, or a firm or corporation affiliated to the external auditors of the Group, for the financial year ended 31 March 2016 are as follows:-
Paid By Audit Fees (RM) Non-Audit Fees (RM)
(i) Company 35,000 12,000
(ii) Group 139,000 38,800
Material Contracts
Other than those disclosed in Note 31 to the Financial Statements in this Annual Report, there were no material contract (not being contracts entered into in the ordinary course of business) entered into by the Company and its subsidiaries involving the interest of the Company’s Directors and/or its major shareholders either still subsisting as at 31 March 2016 or since the end of the previous financial period ended 31 March 2015.
Recurrent Related Party Transactions of a Revenue or Trading Nature
At the Extraordinary General Meeting held on 17 September 2015, the Company obtained shareholders’ mandate to allow the Directors and/or major shareholders of the Company and its subsidiary companies to enter into recurrent related party transactions of a revenue or trading nature. There were no recurrent related party transactions conducted during the financial year ended 31 March 2016 pursuant to the shareholders’ mandate. FINANCIAL STATEMENTS
62 71 144 Directors’ Consolidated Statement Report Statement of by Directors Changes in Equity 67 145 Consolidated 72 Statutory Statements Declaration of Financial Statement of Position Changes in Equity 146 69 Independent 73 Auditors’ Report Statement of Financial Statements of Position Cash Flows
70 76 Statements Notes to the of Profit or Financial Loss and Other Statements Comprehensive Income 62 IVORY PROPERTIES GROUP BERHAD (673211-M)
DIRECTORS' REPORT For The Year Ended 31 March 2016
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2016.
Principal activities
The Company is principally engaged in investment holding and provision of management and marketing services, whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.
Results
Group Company RM’000 RM’000
Profit for the year attributable to :
Owners of the Company 10,543 19,449 Non-controlling interests (149) -
10,394 19,449
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review.
Dividend
No dividend was paid since the end of the previous financial period and the Directors do not recommend any dividend to be paid for the financial year under review.
Directors of the Company
Directors who served since the date of the last report are :
Dr. Asairinachan @ Aravinachan A/L Kunjamboo Dato’ Low Eng Hock Dato’ Ooi Chin Loo Loh Chye Teik Ooi Choi Kiat Lim Hock Siu annual report 2016 63
DIRECTORS' REPORT For The Year Ended 31 March 2016
Directors’ interests in shares
The interests and deemed interests in the ordinary shares and warrants of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.50 each At At 1 April 2015 Bought Sold 31 March 2016
Interests in the Company : Dr. Asairinachan @ Aravinachan A/L Kunjamboo - own 45,000 - - 45,000
Dato’ Low Eng Hock - own 224,503,750 - (6,600,000) 217,903,750 - others * 23,430,000 6,600,000 - 30,030,000
Dato’ Ooi Chin Loo - own 10,000 - - 10,000
Loh Chye Teik - own 45,000 250,000 - 295,000
Ooi Choi Kiat - own 27,920,997 - - 27,920,997 - others * 2,137,500 - - 2,137,500
Lim Hock Siu - own 165,750 30,000 - 195,750
Number of warrants over ordinary shares of RM0.50 each At At 1 April 2015 Granted Exercised 31 March 2016
Interests in the Company : Dr. Asairinachan @ Aravinachan A/L Kunjamboo - own 20,000 - - 20,000
Dato’ Low Eng Hock - own 94,180,766 - - 94,180,766 - others * 4,000,000 - - 4,000,000
Loh Chye Teik - own 20,000 - - 20,000
Ooi Choi Kiat - own 8,699,232 - - 8,699,232 - others * 696,000 - - 696,000
Lim Hock Siu - own 46,600 - - 46,600
* These are shares and warrants held in the name of spouse and/or children and are treated as interest of the Directors in accordance with Section 134(12)(c) of the Companies Act, 1965. 64 IVORY PROPERTIES GROUP BERHAD (673211-M)
DIRECTORS' REPORT For The Year Ended 31 March 2016
Directors’ interests in shares (cont'd)
By virtue of his interest in the shares of the Company, Dato’ Low Eng Hock is also deemed interested in the shares of the subsidiaries during the financial year to the extent that Ivory Properties Group Berhad has an interest.
None of the other Directors holding office at 31 March 2016 had any interest in the warrants over ordinary shares of the Company and of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial period, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than as disclosed in Note 31 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than the warrants of the Company as disclosed in Note 16 to the financial statements.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company and no debentures were in issue by the Company during the financial year.
Warrants
As at the end of the financial year, the Company has the following outstanding warrants :
Exercise price Expiry Number of warrants outstanding Warrants per ordinary share date as at 31 March 2016
Warrants 2012/2017 RM0.75 26 April 2017 186,000,000
Each warrant entitles its registered holder to subscribe one (1) new ordinary share in the Company at an exercise price of RM0.75 per share, subject to adjustments in accordance with the provisions of the deed poll, at any time within 5 years from the date of issue of the warrant. The last date to exercise the warrant rights is 26 April 2017.
There were no new ordinary shares issued by virtue of the exercise of warrants during the financial year. As at the end of the financial year, 186,000,000 warrants remained unexercised.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year.
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise. annual report 2016 65
DIRECTORS' REPORT For The Year Ended 31 March 2016
Other statutory information (cont’d)
At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 March 2016 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.
Significant events
The details of such events are disclosed in Note 32 to the financial statements.
Subsequent events
The details of such events are disclosed in Note 33 to the financial statements. 66 IVORY PROPERTIES GROUP BERHAD (673211-M)
DIRECTORS' REPORT For The Year Ended 31 March 2016
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
Dato’ Low Eng Hock
Dato’ Ooi Chin Loo
Penang
Date : 28 July 2016 annual report 2016 67
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As At 31 March 2016
Note 31.3.2016 31.3.2015 1.1.2014 RM’000 RM’000 RM’000 (Restated) (Restated)
Assets
Property, plant and equipment 3 46,654 55,544 57,041 Investment properties 4 58,209 60,393 95,006 Intangible assets 5 5 13 550 Investments in associates 7 3,011 4,985 5,150 Investments in joint ventures 8 128,503 79,640 42,765 Deferred tax assets 9 4,928 6,161 2,500
Total non-current assets 241,310 206,736 203,012
Property development costs 10 171,241 279,880 322,184 Inventories 11 169,943 174,631 158,555 Trade and other receivables 12 254,008 217,282 214,295 Current tax assets 3,080 2,588 4 Short term investments 13 26,945 4,917 8,391 Cash and cash equivalents 14 52,776 27,290 25,634
Total current assets 677,993 706,588 729,063
Total assets 919,303 913,324 932,075
Equity
Share capital 15 204,164 204,164 204,164 Reserves 16 209,178 198,635 175,122
Equity attributable to owners of the Company 413,342 402,799 379,286
Non-controlling interests (248) (1,605) (267)
Total equity 413,094 401,194 379,019 68 IVORY PROPERTIES GROUP BERHAD (673211-M)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As At 31 March 2016
Note 31.3.2016 31.3.2015 1.1.2014 RM’000 RM’000 RM’000 (Restated) (Restated)
Liabilities
Loans and borrowings 17 205,724 251,098 273,770 Deferred tax liabilities 9 6,323 9,711 18,275
Total non-current liabilities 212,047 260,809 292,045
Loans and borrowings 17 46,358 48,247 46,009 Trade and other payables 18 241,467 191,687 197,637 Current tax payables 6,337 11,387 17,365
Total current liabilities 294,162 251,321 261,011
Total liabilities 506,209 512,130 553,056
Total equity and liabilities 919,303 913,324 932,075
The notes on pages 76 to 143 are an integral part of these financial statements. annual report 2016 69
STATEMENT OF FINANCIAL POSITION As At 31 March 2016
Note 31.3.2016 31.3.2015 RM’000 RM’000
Assets
Property, plant and equipment 3 24,276 24,580 Investment properties 4 13,242 13,522 Investments in subsidiaries 6 304,021 120,021 Investments in associates 7 404 404
Total non-current assets 341,943 158,527
Trade and other receivables 12 81,184 307,498 Short term investments 13 10,229 - Cash and cash equivalents 14 3,523 1,834
Total current assets 94,936 309,332
Total assets 436,879 467,859
Equity
Share capital 15 204,164 204,164 Reserves 16 92,612 73,163
Equity attributable to owners of the Company 296,776 277,327
Liabilities
Loans and borrowings 17 21,002 22,181
Total non-current liabilities 21,002 22,181
Loans and borrowings 17 1,565 1,597 Trade and other payables 18 114,243 165,952 Current tax payables 3,293 802
Total current liabilities 119,101 168,351
Total liabilities 140,103 190,532
Total equity and liabilities 436,879 467,859
The notes on pages 76 to 143 are an integral part of these financial statements. 70 IVORY PROPERTIES GROUP BERHAD (673211-M)
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For The Year Ended 31 March 2016
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to Note 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Continuing operations
Revenue 19 423,007 270,185 35,771 15,475 Cost of sales 20 (354,932) (212,029) (758) (793)
Gross profit 68,075 58,156 35,013 14,682
Other income 13,608 48,813 2,673 37,466 Selling and marketing expenses (8,426) (3,229) - - Administrative expenses (55,604) (75,061) (14,486) (14,213) Other expenses (12) (2,247) (4) (15)
Results from operating activities 17,641 26,432 23,196 37,920
Finance income 1,432 1,486 701 - Finance costs 21 (10,269) (13,332) (1,166) (1,463)
Net finance costs (8,837) (11,846) (465) (1,463)
Share of (loss)/profit of equity-accounted investees, net of tax - associates (1,895) (143) - - - joint venture 10,841 8,951 - -
8,946 8,808 - -
Profit before tax 22 17,750 23,394 22,731 36,457
Tax expense 24 (7,356) (1,219) (3,282) (462)
Profit for the year/period representing total comprehensive income for the year/period 10,394 22,175 19,449 35,995
Profit for the year/period representing total comprehensive income for the year/period attributable to :
Owners of the Company 10,543 23,513 19,449 35,995 Non-controlling interests (149) (1,338) - -
Total comprehensive income for the year/period 10,394 22,175 19,449 35,995
Basic and diluted earnings per ordinary share (sen) 25 2.37 5.28
The notes on pages 76 to 143 are an integral part of these financial statements. annual report 2016 71
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For The Year Ended 31 March 2016 Total equity (267) 379,019 (149) 10,394 (248) 413,094 Non- interests controlling - 1,506 1,506 Total - earnings Retained - 23,513 23,513 (1,338) 22,175 -- 10,543 10,543 Note 16 reserve Warrant Warrant - - - Attributable to owners of the Company Share capital Non-distributable Distributable Note 15 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 204,164 27,900 147,222 379,286 204,164 27,900 170,735 402,799 (1,605) 401,194 204,164 27,900 181,278 413,342 32 Note comprehensive income for the period comprehensive income for the year Group At 1 January 2014 Profit for the period representing total At 31 March 2015/1 April 2015 The notes on pages 76 to 143 are an integral part of these financial statements. At 31 March 2016 Profit for the year representing total Disposal of a subsidiary 72 IVORY PROPERTIES GROUP BERHAD (673211-M)
STATEMENT OF CHANGES IN EQUITY For The Year Ended 31 March 2016
Attributable to owners of the Company Non-distributable Distributable Share Warrant Retained Total capital reserve earnings equity RM’000 RM’000 RM’000 RM’000
Company
At 1 January 2014 204,164 27,900 9,268 241,332
Profit for the period representing total comprehensive income for the period - - 35,995 35,995
At 31 March 2015/1 April 2015 204,164 27,900 45,263 277,327
Profit for the year representing total comprehensive income for the year - - 19,449 19,449
At 31 March 2016 204,164 27,900 64,712 296,776 Note 15 Note 16
The notes on pages 76 to 143 are an integral part of these financial statements. annual report 2016 73
STATEMENTS OF CASH FLOWS For The Year Ended 31 March 2016
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 (Restated)
Cash flows from operating activities
Profit before tax from continuing operations 17,750 23,394 22,731 36,457
Adjustments for: Amortisation of intangible assets 5 8 10 - - Bad debts recovered 22 (276) - - - Depreciation of : - property, plant and equipment 3 6,605 8,409 925 877 - investment properties 4 2,184 2,841 280 350 Finance income 22 (1,432) (1,486) (701) - Finance costs 21 10,269 13,332 1,166 1,463 (Gain)/Loss on disposal of : - property, plant and equipment 22 (36) (434) 1 15 - investment properties 22 - (5,179) - - - investment in joint venture 22 - (34,242) - (34,157) - investment in a subsidiary 22 (6,021) - - - Write off of : - property, plant and equipment 22 14 126 3 - - bad debts 22 149 201 149 20 - investment properties 22 - 286 - -
Impairment loss on : - trade receivables 22 373 1,656 - - - other receivables 22 2,213 361 - - - property, plant and equipment 3 - 3,646 - - - intangible assets 5 - 527 - - Write down of inventories 22 - 664 - - Share of loss in associates, net of tax 1,895 143 - - Share of profit in joint ventures, net of tax (10,841) (8,951) - - Unrealised gain from downstream sale to associates 79 22 - - Unrealised gain from downstream sales to joint venture companies 4,720 1,061 - -
Operating profit before changes in working capital 27,653 6,387 24,554 5,025 74 IVORY PROPERTIES GROUP BERHAD (673211-M)
STATEMENTS OF CASH FLOWS For The Year Ended 31 March 2016
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 (Restated)
Change in property development costs 108,639 42,304 - - Change in inventories 4,592 (16,740) - - Change in trade and other receivables (39,555) 11,150 42,165 (155,580) Change in trade and other payables 62,635 (5,950) (51,713) 136,206
Cash generated from /(used in) operations 163,964 37,151 15,006 (14,349)
Tax paid (15,053) (22,006) (791) (1,334)
Net cash from/ (used in) operating activities 148,911 15,145 14,215 (15,683)
Cash flows from investing activities
Acquisition of investment properties 4 - (335) - - Acquisition of property, plant and equipment B (1,449) (3,021) (191) (1,199) Interest received 1,432 1,486 701 - Increase in investments in joint ventures (42,742) (48,598) - (19,698) (Withdrawal)/Placement of fixed deposits 2,116 (992) - - Proceeds from disposal of : - investment properties - 37,000 - - - property, plant and equipment 70 531 - 5 - investment in joint venture - 37,500 - 37,500 Cash outflow from disposal of subsidiary 32 (354) - - - (Placement)/withdrawal of short term investment, net (22,028) - (10,229) -
Net cash (used in)/from investing activities (62,955) 23,571 (9,719) 16,608 annual report 2016 75
STATEMENTS OF CASH FLOWS For The Year Ended 31 March 2016
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 (Restated) Cash flows from financing activities
Interest paid (10,269) (13,332) (1,166) (1,463) Repayment of finance lease liabilities (3,529) (2,886) (382) (296) Repayment of term loans (92,986) (127,844) (1,259) (808) Drawdown of term loans 48,625 102,718 - -
Net cash used in financing activities (58,159) (41,344) (2,807) (2,567)
Net increase/(decrease) in cash and cash equivalents 27,797 (2,628) 1,689 (1,642)
Cash and cash equivalents at beginning of year/period 23,006 25,634 1,834 3,476
Cash and cash equivalents at end of year/period A 50,803 23,006 3,523 1,834
NOTES :
A. Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:
Group Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000 (Restated) Cash and bank balances 14 52,131 24,529 3,523 1,834 Bank overdrafts 17 (1,328) (1,523) - -
50,803 23,006 3,523 1,834
B. Acquisition of property, plant and equipment
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Total acquisitions during the year/period (Note 3) 2,271 10,781 621 1,579 Less : Acquisition by means of finance leases (822) (7,760) (430) (380)
Total cash acquisitions 1,449 3,021 191 1,199
The notes on pages 76 to 143 are an integral part of these financial statements. 76 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
Ivory Properties Group Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows:
Principal place of business
Ivory Tower @ Penang Times Square 81-11-1 Jalan Dato’ Keramat 10150 Georgetown Penang
Registered office
Suite 16-1 (Penthouse Upper) Menara Penang Garden 42A Jalan Sultan Ahmad Shah 10050 Penang
The consolidated financial statements of the Company as at and for the financial year ended 31 March 2016 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interests in associates and joint ventures.
The Company is principally engaged in investment holding and provision of management and marketing services whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 28 July 2016.
1. Basis of preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards (“FRS”) and the requirements of the Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and the Company :
FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 • FRS 14, Regulatory Deferral Accounts • Amendments to FRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements 2012-2014 Cycle) • Amendments to FRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle) • Amendments to FRS 10, Consolidated Financial Statements, FRS 12, Disclosure of Interests in Other Entities and FRS 128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception • Amendments to FRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations • Amendments to FRS 101, Presentation of Financial Statements – Disclosure Initiative • Amendments to FRS 116, Property, Plant and Equipment and FRS 138, Intangible Assets – Clarification of Acceptable Methods of Depreciation and Amortisation • Amendments to FRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle) • Amendments to FRS 127, Separate Financial Statements – Equity Method in Separate Financial Statements • Amendments to FRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle) annual report 2016 77
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation (cont'd)
(a) Statement of compliance (cont'd)
FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 • Amendments to FRS 107, Statement of Cash Flows – Disclosure Initiative • Amendments to FRS 112, Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses
FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 • FRS 9, Financial Instruments (2014)
FRSs, Interpretations and amendments effective for a date yet to be confirmed • Amendments to FRS 10, Consolidated Financial Statements and FRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations in the respective financial years when the above mentioned standards, amendments or interpretations become effective.
The Group and the Company’s financial statements for annual period beginning on 1 April 2018 will be prepared in accordance with the Malaysian Financial Reporting Standards (MFRSs) issued by the MASB and International Financial Reporting Standards (IFRSs).
The Group is currently assessing the financial impact that may arise from the adoption of the above accounting standards, amendments and interpretations.
The Group and the Company fall within the scope of IC Interpretation 15, Agreements for the Construction of Real Estate. Therefore, the Group and the Company are currently exempted from adopting the Malaysian Financial Reporting Standards (“MFRS”) and is referred to as a “Transitioning Entity”.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis, other than as disclosed in Note 2 to the financial statements.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 78 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation (cont'd)
(d) Use of estimates and judgements (cont'd)
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than the following:
(i) Property development and construction
The Group recognises property development and construction contract revenue and expenses in profit or loss using the stage of completion method. The stage of completion is measured by reference to either the costs incurred to date to the estimated total costs or the completion of a physical proportion of work-to-date.
Significant judgement is required in determining the stage of completion, the extent of the costs incurred, the estimated total property development and construction revenue and costs, as well as the recoverability of the development and construction projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.
(ii) Inventories
The Directors are of the opinion that no further write down is required for the unsold units of the Group’s completed development properties as they are confident of realising those units at a price which is higher than the carrying amount.
(iii) Recognition and measurement of the low medium cost housing (“LMC”) quota recognised as disclosed in Note 11 to the financial statements.
(iv) Valuation of investment properties as disclosed in Note 4 to the financial statements.
(v) Deferred tax assets as disclosed in Note 9 to the financial statements.
2. Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs. annual report 2016 79
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(a) Basis of consolidation (cont'd)
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as: • the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interests in the acquiree; plus • if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less • the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
(iii) Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.
(iv) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level or influence retained.
(v) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. 80 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(a) Basis of consolidation (cont'd)
(v) Associates (cont'd)
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs.
(vi) Joint arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
• A joint arrangement is classified as “joint operation” when the Group or the Company has rights to the assets and obligations for the liabilities relating to an arrangement. The Group account for each of its share of the assets, liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation to the joint operation.
• A joint arrangement is classified as “joint venture” when the Group has rights only to the net assets of the arrangements. The Group accounts for its interest in the joint venture using the equity method. Investment in joint venture is measured in the Group’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs.
(vii) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company. annual report 2016 81
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(a) Basis of consolidation (cont'd)
(vii) Non-controlling interests (cont'd)
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non- controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
(viii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract), contingent consideration in a business combination or financial assets that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. 82 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(b) Financial instruments (cont'd)
(ii) Financial instrument categories and subsequent measurement (cont'd)
Financial assets (cont'd)
(b) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.
(c) Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(k)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract), contingent consideration in a business combination or financial liabilities that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. annual report 2016 83
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(b) Financial instruments (cont'd)
(iii) Financial guarantee contracts (cont'd)
Fair value arising from financial guarantee contracts are classified as deferred income and is amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.
(iv) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.
(v) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or control of the asset is not retained or substantially all of the risk and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged, cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
(c) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. 84 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(c) Property, plant and equipment (cont'd)
(i) Recognition and measurement (cont'd)
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between knowledgeable willing parties in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items when available and replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income” and “other expenses” respectively in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Capital work-in-progress are not depreciated until the assets are ready for their intended use.
The depreciation rate for the current and comparative periods based on their estimated useful lives are as follows :
% Buildings 2 Office equipment, furniture and fittings 10 - 20 Site equipment and machinery 10 - 20 Motor vehicles 20 Renovation 10
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and adjusted as appropriate. annual report 2016 85
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(d) Leased assets
(i) Finance leases
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as investment property if held to earn rental income or for capital appreciation or for both.
(ii) Operating leases
Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and the leased assets are not recognised on the statement of financial position.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.
Leasehold land which in substance is an operating lease is classified as prepaid lease payments.
(e) Intangible assets
(i) Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of equity-accounted associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted associates and joint ventures.
(ii) Other intangible assets
Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. 86 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(e) Intangible assets (cont'd)
(iv) Amortisation
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and whenever there is an indication that they may be impaired.
Other intangible assets are amortised from the date that they are available for use. Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets.
The estimated useful lives for the current and comparative periods for franchise fees range between 3 to 8 years.
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if appropriate.
(f) Investment property
(i) Investment property carried at cost
Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Investment properties are stated at cost less any accumulated depreciation and any accumulated impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy Note 2(c).
Cost includes expenditure that is attributable to the acquisition of the investment property. The cost of self-constructed investment property includes of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of 50 years.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.
(ii) Reclassification to/from investment property
Transfers between investment properties, property, plant and equipment and inventories do not change the carrying amount and cost of the property transferred.
(iii) Determination of fair value
The Directors estimate the fair values of the Group’s investment property by taking into account of some of the valuations done by external, independent property valuers.
The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. annual report 2016 87
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(g) Inventories
Inventories are measured at the lower of cost and net realisable value. Cost is determined on the specific identification basis and includes costs of land, direct building costs and other related development cost.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
LMC quota represents the remaining tradable quota available to the Group arising from their completed low medium cost project and is measured initially at fair value which represents the cost of the LMC quota inventory. The fair value used to determine the LMC quota is based on Directors’ estimation using the latest available market information and recent experience and knowledge of the LMC quota market.
(h) Property development costs
Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities, including interest expense incurred during the period of active development.
Property development costs not recognised as an expense is recognised as an asset and is stated at the lower of cost and net realisable value.
The excess of revenue recognised in profit or loss over billings to purchasers is shown as accrued billings under receivables and the excess of billings to purchasers over revenue recognised in profit or loss is shown as progress billings under payables.
(i) Construction work-in-progress
Construction work-in-progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity.
Construction work-in-progress is presented as part of trade and other receivables as amount due from contract customers in the statement of financial position for all contracts in which costs incurred plus recognised profits exceed progress billings. If progress billings exceed costs incurred plus recognised profits, then the difference is presented as amount due to contract customers which is part of the deferred income in the statement of financial position.
(j) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks including the amount maintained pursuant to the Housing Developers (Housing Development Account) (Amendment) Regulations 2002, and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits. 88 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(k) Impairment
(i) Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investments in subsidiaries and investments in associates and joint ventures) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the impairment loss of the financial asset is estimated.
An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available for sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
(ii) Other assets
The carrying amounts of other assets (except for inventories, amount due from contract customers and deferred tax asset) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating unit or a group of cash-generating units that are expected to benefit from the synergies of the combination. annual report 2016 89
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(k) Impairment (cont'd)
(ii) Other assets (cont'd)
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash- generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash- generating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.
(l) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i) Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
(iii) Distribution of assets to owners of the Company
The Group measures a liability to distribute assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss. 90 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(m) Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
(ii) State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
(n) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
(o) Contingencies
(i) Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
(ii) Contingent assets
When an inflow of economic benefit of an asset is probable where it arises from past events and where existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, the asset is not recognised in the statements of financial position but is being disclosed as a contingent asset. When the inflow of economic benefit is virtually certain, then the related asset is recognised.
(p) Revenue and other income
(i) Property development
Revenue from property development activities is recognised based on the stage of completion measured by reference to the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.
Where the financial outcome of a property development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on the development units sold are recognised as an expense in the year in which they are incurred. annual report 2016 91
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(p) Revenue and other income (cont'd)
(i) Property development (cont'd)
Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised immediately in profit or loss.
(ii) Construction contracts
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are recognised in profit or loss in proportion to the stage of completion of the contract. Contract expenses are recognised as incurred unless they create an asset related to future contract activity.
The stage of completion is assessed by reference to the proportion that contract costs incurred for work performed to-date bear to the estimated total contract costs.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
(iii) Completed development properties
Revenue relating to sale of completed development properties is recognised net of discounts when transfer of risks and rewards has been completed.
(iv) Services
Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the end of the reporting period. The stage of completion is assessed by reference to surveys of work performed.
Revenue from the sale of food and beverages are recognised when the services are rendered.
(v) Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.
(vi) Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
(vii) Management fees
Revenue arising from the provision of services is recognised on the dates the services are rendered and completed. 92 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(p) Revenue and other income (cont'd)
(viii) Project management
Project management includes commission income. When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission made by the Group.
(ix) Rental income
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental income from sub-leased property is recognised as other income.
(x) LMC quota
Revenue from sales of LMC quota in the course of ordinary activities is measured at fair value of the consideration received or receivable. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sale agreement that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated cost can be estimated reliably, the Group has fulfilled its obligation in the sale agreement, and the amount of revenue can be measured reliably.
(q) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(r) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years. annual report 2016 93
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(r) Income tax (cont'd)
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, and the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(s) Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares, which comprise warrants issued by the Company.
(t) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segment’s results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
(u) Warrant reserve
Fair values from the issuance of warrants are credited to warrant reserve which is non-distributable. When the warrants are exercised or expired, the warrant reserve will be transferred to another reserve account within equity.
(v) Fair value measurement
Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market. 94 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies (cont'd)
(v) Fair value measurement (cont'd)
For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers. annual report 2016 95
NOTES TO THE FINANCIAL STATEMENTS
3. Property, plant and equipment
Office Site equipment, equipment furniture and Motor Buildings and fittings machinery vehicles Renovation Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Cost
At 1 January 2014 23,033 10,257 33,299 4,328 10,635 81,552
Additions 596 734 8,554 778 119 10,781 Disposals - (61) (713) (600) (33) (1,407) Write-off - (81) (50) - (72) (203)
At 31 March 2015/ 1 April 2015 23,629 10,849 41,090 4,506 10,649 90,723
Additions - 498 652 551 570 2,271 Disposals - (78) - - - (78) Write-off - (39) (10) - - (49) Disposal of a subsidiary - - (8,568) - (856) (9,424)
At 31 March 2016 23,629 11,230 33,164 5,057 10,363 83,443
Depreciation and impairment loss
At 1 January 2014
Accumulated depreciation 19 4,661 14,103 2,990 2,738 24,511
Depreciation for the period 588 1,185 4,472 819 1,345 8,409 Disposals - (25) (680) (600) (5) (1,310) Write-off - (39) (17) - (21) (77) Impairment loss - - 2,044 - 1,602 3,646
At 31 March 2015/ 1 April 2015
Accumulated depreciation 607 5,782 17,878 3,209 4,057 31,533 Accumulated impairment loss - - 2,044 - 1,602 3,646
607 5,782 19,922 3,209 5,659 35,179 96 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
3. Property, plant and equipment (cont'd)
Office Site equipment, equipment furniture and Motor Buildings and fittings machinery vehicles Renovation Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Depreciation and impairment loss
Depreciation for the year 472 906 3,910 512 805 6,605 Disposals - (44) - - - (44) Write-off - (30) (5) - - (35) Disposal of a subsidiary- depreciation - - (2,424) - (242) (2,666) Disposal of a subsidiary- impairment loss - - (2,044) - (206) (2,250)
At 31 March 2016
Accumulated depreciation 1,079 6,614 19,359 3,721 4,620 35,393 Accumulated impairment loss - - - - 1,396 1,396
1,079 6,614 19,359 3,721 6,016 36,789 Carrying amounts
At 1 January 2014 23,014 5,596 19,196 1,338 7,897 57,041
At 31 March 2015/ 1 April 2015 23,022 5,067 21,168 1,297 4,990 55,544
At 31 March 2016 22,550 4,616 13,805 1,336 4,347 46,654 annual report 2016 97
NOTES TO THE FINANCIAL STATEMENTS
3. Property, plant and equipment (cont'd)
Office Motor Buildings equipment vehicles Renovation Total RM’000 RM’000 RM’000 RM’000 RM’000
Company
Cost
At 1 January 2014 22,715 197 768 50 23,730
Additions 596 521 439 23 1,579 Disposal - (25) - - (25) Transfer from a subsidiary - 4 339 - 343
At 31 March 2015/1 April 2015 23,311 697 1,546 73 25,627
Additions - 122 499 - 621 Disposal - (2) - - (2) Write-off - (5) - - (5) Transfer from a subsidiary - 9 - - 9
At 31 March 2016 23,311 821 2,045 73 26,250
Depreciation
At 1 January 2014 - 17 101 3 121
Depreciation for the period 580 48 240 9 877 Disposal - (5) - - (5) Transfer from a subsidiary - 1 53 - 54
At 31 March 2015/1 April 2015 580 61 394 12 1,047
Depreciation for the year 466 81 370 8 925 Disposal - (1) - - (1) Write-off - (2) - - (2) Transfer from a subsidiary - 5 - - 5
At 31 March 2016 1,046 144 764 20 1,974
Carrying amounts
At 1 January 2014 22,715 180 667 47 23,609
At 31 March 2015/1 April 2015 22,731 636 1,152 61 24,580
At 31 March 2016 22,265 677 1,281 53 24,276 98 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
3. Property, plant and equipment (cont'd)
3.1 Leased equipment and motor vehicles
At 31 March 2016, the net carrying amounts of leased equipment and motor vehicles of the Group and of the Company were RM9,351,669 (2015: RM11,100,604) and RM1,260,658 (2015 : RM1,151,618) respectively.
3.2 Security
Property, plant and equipment of the Group and the Company amounting to RM22,265,285 (2015 : RM22,731,512) and RM22,265,285 (2015 : RM22,731,512) respectively have been pledged to licensed banks as security for banking facilities granted to the Group.
3.3 Motor vehicles held in trust
Included in property, plant and equipment of the Group are motor vehicles held in trust by certain Directors of the Company amounting to RM Nil (2015 : RM95,958).
4. Investment properties
Freehold Freehold Freehold residential commercial Freehold buildings lots retail lots land Total RM’000 RM’000 RM’000 RM’000 RM’000
Group
Cost
At 1 January 2014 12,069 396 60,656 29,405 102,526
Additions - - 330 5 335 Disposals - (266) (2,636) (29,410) (32,312) Write-off - - (569) - (569)
At 31 March 2015/ 1 April 2015/ 31 March 2016 12,069 130 57,781 - 69,980
Depreciation
At 1 January 2014 113 79 7,328 - 7,520
Depreciation for the period 341 10 2,490 - 2,841 Disposals - (58) (433) - (491) Write-off - - (283) - (283)
At 31 March 2015/ 1 April 2015 454 31 9,102 - 9,587
Depreciation for the year 273 3 1,908 - 2,184
At 31 March 2016 727 34 11,010 - 11,771 annual report 2016 99
NOTES TO THE FINANCIAL STATEMENTS
4. Investment properties (cont'd)
Freehold Freehold Freehold residential commercial Freehold buildings lots retail lots land Total RM’000 RM’000 RM’000 RM’000 RM’000
Group
Carrying amounts
At 1 January 2014 11,956 317 53,328 29,405 95,006
At 31 March 2015/ 1 April 2015 11,615 99 48,679 - 60,393
At 31 March 2016 11,342 96 46,771 - 58,209
Freehold buildings RM’000
Company
Cost
At 1 January 2014/31 March 2015/1 April 2015/31 March 2016 14,000
Depreciation
At 1 January 2014 128
Depreciation for the period 350
At 31 March 2015/1 April 2015 478
Depreciation for the year 280
At 31 March 2016 758
Carrying amounts
At 1 January 2014 13,872
At 31 March 2015/1 April 2015 13,522
At 31 March 2016 13,242
Investment properties comprise a number of commercial properties that are leased to third parties. No contingent rents are charged.
Certain properties of the Group and the Company amounting to RM57,080,305 (2015 : RM59,119,727) and RM13,241,667 (2015 : RM13,521,667) respectively were charged as securities for borrowings granted to certain subsidiaries (see Note 17). 100 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
4. Investment properties (cont'd)
The following are recognised in profit or loss in respect of investment properties :
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Rental income 2,426 2,123 480 512 Direct operating expenses: - income generating investment properties 5,351 6,447 829 974 - non-income generating investment properties 401 364 - -
Fair value information
The fair value of the investment properties of the Group and the Company as at 31 March 2016 is classified as Level 3 of fair value hierarchy and is estimated at approximately RM98,243,000 (2015 : RM97,125,000) and RM14,000,000 (2015 : RM14,000,000) respectively.
The following table shows the valuation techniques used in the determination of fair value within Level 3, as well as the significant unobservable inputs used in the valuation models.
Inter-relationship between significant Description of valuation Significant unobservable inputs and technique and inputs used unobservable inputs fair value measurement
Discounted cash flows: The valuation Void periods (average 1 The estimated fair value method considers the present value of month after the end of would increase (decrease) net cash flows to be generated from the each lease). if : expected void periods property, taking into account expected Rent-free periods (1 month were shorter (longer); rental growth rate, void periods, occupancy period on new leases). rent-free periods were rate, lease incentive costs such as rent-free Risk-adjusted discount rates shorter (longer); or risk- periods and other costs not paid by tenants. (3.5% - 5%, weighted adjusted discount rates The expected net cash flows are discounted average 4.25%). were higher (lower). using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs. secondary), tenant credit quality and lease terms.
Sales comparison approach: Sales price of Price per square foot The estimated fair value comparable properties in close proximity (RM700 - RM1,500) would increase (decrease) are adjusted for differences in key attributes if the price per square foot such as property size. The most significant is higher (lower). input into this valuation approach is price per square foot.
Valuation processes applied by the Group for Level 3 fair value
The fair value of investment properties is based on the estimates of market value by Directors, taking into account some of the valuation in 2015 and 2016 by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property. Investment properties of the Group for a carrying amount of RM14,567,000 (2015: RM15,452,000) and with the fair value of RM19,248,000 (2015: RM18,315,000) are determined solely based on Directors’ estimates using either discounted cash flows or recent transaction prices around the vicinity. annual report 2016 101
NOTES TO THE FINANCIAL STATEMENTS
4. Investment properties (cont'd)
Valuation processes applied by the Group for Level 3 fair value (cont'd)
Highest and best use
Investment properties comprise a number of commercial properties. The Directors had determined the current use of these investment properties as their highest and best use.
5. Intangible assets - Group
Goodwill on Franchise consolidation fees Total RM’000 RM’000 RM’000 Cost
At 1 January 2014/ 31 March 2015/1 April 2015/ 31 March 2016 527 43 570
Amortisation and impairment loss
At 1 January 2014 - 20 20
Amortisation for the period (Note 22) - 10 10 Impairment loss (Note 22) 527 - 527
At 31 March 2015/1 April 2015 527 30 557
Amortisation for the year (Note 22) - 8 8
At 31 March 2016 527 38 565
Carrying amounts
At 1 January 2014 527 23 550
At 31 March 2015/1 April 2015 - 13 13
At 31 March 2016 - 5 5
5.1 Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill was allocated to the Group’s Cash-Generating Units (“CGUs”) identified.
Goodwill was tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount of the CGUs based on the value-in-use.
Value-in-use was determined by discounting the future cash flows generated from the continuing use of the unit and is based on the recent financial projections approved by the Management.
The gross margin used in the projections was based on past experience. 102 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
6. Investments in subsidiaries
Company 2016 2015 RM’000 RM’000
Unquoted shares, at cost 304,021 120,021
Details of the subsidiaries are as follows :
Effective Country of ownership interest Name of entity incorporation Principal activities and voting interest 2016 2015 %%
Ivory Associates Sdn Bhd (“IASB”) Malaysia Property development and 100 100 construction activities
Ivory Gleneary Sdn Bhd (“IGSB”) Malaysia Property development 100 100
Ivory Square Sdn Bhd (“ISSB”)* Malaysia Property development and 100 100 construction activities
Ivory Meadows Sdn Bhd (“IM”)* Malaysia Property development 100 100
Ivory Property Management Malaysia Property management services 100 100 Services Sdn Bhd (“IPMS”)*
G & A Consultancy Sdn Malaysia Engineering and architectural 100 100 Bhd (“G&A”)* consultancy services
Ivory Indah Sdn Bhd (“IISB”)* Malaysia Property development 100 100
Ivory Furniture & Interior Sdn Bhd Malaysia Interior designer and contractor 100 100 (“IFSB”)* in interior decoration and furnishing
Ivory Times Square Sdn Malaysia Tenancy management services, 100 100 Bhd (“ITS”)* sub-letting of properties and providing utilities services
Ivory Utilities Sdn Bhd (“IUSB”) Malaysia Investment holding 100 100
Sunlink Properties Sdn Malaysia Operations of entertainment, 100 100 Bhd (“Sunlink”)* food and beverage outlets
Ivory Media Sdn Bhd (“IMD”)* Malaysia Advertising services and 100 100 sub-letting of properties
Ivory Residence Sdn Bhd Malaysia Dormant 100 100 (“IRSB”)*
Ivory View Sdn Bhd (“IWSB”) Malaysia Property development and 100 100 construction activities
Ivory Villas Sdn Bhd (“IVSB”) Malaysia Property development 100 100
TTG Holdings Sdn Bhd (“TTGH”)* Malaysia Investment holding 100 100 annual report 2016 103
NOTES TO THE FINANCIAL STATEMENTS
6. Investments in subsidiaries (cont'd)
Effective Country of ownership interest Name of entity incorporation Principal activities and voting interest 2016 2015 %%
Ivory Place Sdn Bhd (“IPSB”) Malaysia Dormant 70 70
G Ivory Sdn Bhd (“G Ivory”) * Malaysia Dormant 100 -
Ivory World City Sdn Bhd (“IWC”) * Malaysia Dormant 100 -
Soju Entertainment Sdn Bhd Malaysia Operations of entertainment, - 80 (“Soju”)* food and beverage outlets
Subsidiary of IASB Tanjong Tokong Garden Malaysia Property development 100 100 Development Sendirian Berhad (“TTGD”)*
* Not audited by KPMG
Non-controlling interests in subsidiaries
The Group’s subsidiaries that have non-controlling interests (“NCI”) are as follows :
2016 Soju** IPSB Total RM’000 RM’000 RM’000
NCI percentage of ownership interest and voting interest - 30%
Carrying amount of NCI - (248) (248)
Loss allocated to NCI (185) 36 (149)
** Summarised financial information for Soju is not presented as the Group had disposed of its entire 80% equity interest during the financial year.
2016 IPSB RM’000
Summarised financial information before intra-group elimination
As at 31 March
Non-current assets 5 Current assets 1 Non-current liabilities (131) Current liabilities (703)
Net liabilities (828) 104 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
6. Investments in subsidiaries (cont'd)
2016 IPSB RM’000
Summarised financial information before intra-group elimination (cont'd)
Year ended 31 March
Revenue - Loss for the year representing total comprehensive expense for the year (7)
Cash flows from operating activities 53 Cash flows from financing activities (54)
Net decrease in cash and cash equivalents (1)
2015 Soju IPSB Total RM’000 RM’000 RM’000
NCI percentage of ownership interest and voting interest 20% 30%
Carrying amount of NCI (1,321) (284) (1,605) Loss allocated to NCI (1,073) (265) (1,338)
2015 Soju IPSB RM’000 RM’000
Summarised financial information before intra-group elimination
As at 31 March
Non-current assets 4,499 5 Current assets 714 3 Non-current liabilities - (188) Current liabilities (11,817) (641)
Net liabilities (6,604) (821)
Period ended 31 March
Revenue 5,247 - Loss for the period representing total comprehensive expense for the period (5,363) (765)
Cash flows from operating activities (1,379) 118 Cash flows from investing activities (164) (57) Cash flows from financing activities 1,664 (59)
Net increase in cash and cash equivalents 121 2 annual report 2016 105
NOTES TO THE FINANCIAL STATEMENTS
7. Investments in associates
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 414 414 404 404 Share of post-acquisition reserves 2,597 4,571 - - 3,011 4,985 404 404
Details of the associates are as follows :
Effective Country of ownership interest Name of entity incorporation Principal activities and voting interest 2016 2015 %%
Ivory Continental Sdn Bhd (“ICSB”) Malaysia Property development 49 49
Park Vue Realty Sdn Bhd Malaysia Investment holding 45 45
Associate of IGSB George Town Bids Sdn Bhd Malaysia Provision of management 20 20 and regeneration activities for George Town business improvement district
The following table summarises the information of the Group’s associate, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the associates.
2016 Other Ivory individually Continental immaterial Sdn Bhd associates Total RM’000 RM’000 RM’000
Group
Summarised financial information
As at 31 March
Non-current assets 6,431 - 6,431 Current assets 14,976 431 15,407 Current liabilities (12,851) (16) (12,867)
Net assets 8,556 415 8,971 106 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
7. Investments in associates (cont'd)
2016 Other Ivory individually Continental immaterial Sdn Bhd associates Total RM’000 RM’000 RM’000
Group
Summarised financial information (cont'd)
Year ended 31 March
Loss from continuing operations representing total comprehensive expense (3,864) (4) (3,868)
Included in the total comprehensive expense is:
Revenue - - -
Reconciliation of net assets/(liabilities) to carrying amount as at 31 March
Group’s share of net assets/(liabilities) 4,192 (1,102) 3,090 Elimination of unrealised gain (79) - (79)
Carrying amount in the statement of financial position 4,113 (1,102) 3,011
Group’s share of results for the year ended 31 March
Group’s share of loss from continuing operations representing Group’s share of total comprehensive expense (1,893) (2) (1,895)
2015 Other Ivory individually Continental immaterial Sdn Bhd associates Total RM’000 RM’000 RM’000
Group
Summarised financial information
As at 31 March
Non-current assets 8,382 - 8,382 Current assets 17,428 444 17,872 Current liabilities (13,390) (14) (13,404)
Net assets 12,420 430 12,850 annual report 2016 107
NOTES TO THE FINANCIAL STATEMENTS
7. Investments in associates (cont'd)
2015 Other Ivory individually Continental immaterial Sdn Bhd associates Total RM’000 RM’000 RM’000
Group
Summarised financial information (cont'd)
Period ended 31 March
Loss from continuing operations representing total comprehensive expense (281) (32) (313)
Included in the total comprehensive expense is:
Revenue 38 15 53
Reconciliation of net assets/(liabilities) to carrying amount as at 31 March
Group’s share of net assets/(liabilities) 6,085 (1,078) 5,007 Elimination of unrealised gain (22) - (22)
Carrying amount in the statement of financial position 6,063 (1,078) 4,985
Group’s share of results for the period ended 31 March
Group’s share of loss from continuing operations representing Group’s share of total comprehensive expense (138) (5) (143)
8. Investment in joint venture
Group 2016 2015 RM’000 RM’000
Unquoted shares, at cost 119,317 76,573 Share of post-acquisition reserves 9,186 3,067
128,503 79,640
Tropicana Ivory Sdn Bhd (“TISB”), the only joint arrangement in which the Group participates, is principally engaged in property development.
TISB is structured as separate vehicles and provide the Group rights to the net assets of the entity. Accordingly, the Group has classified the investment in TISB as joint venture. 108 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
8. Investment in joint venture (cont'd)
The following tables summarise the financial information of TISB. The table also reconciles the summarised financial information to the carrying amount of the Group’s interest in TISB, which is accounted for using the equity method.
Group 2016 2015 RM’000 RM’000
Percentage of ownership interest 45% 45%
The Group treated TISB as a joint venture as the shareholder agreements require unaminous consent over decisions.
Summarised financial information
As at 31 March
Non-current assets 6,737 8,015 Current assets 805,343 545,622 Non-current liabilities (443,102) (315,160) Current liabilities (70,549) (59,126)
Net assets 298,429 179,351
Year/Period ended 31 March
Profit from continuing operations representing total comprehensive income 24,090 20,074
Included in the total comprehensive income is:
Revenue 211,656 179,415
Reconciliation of net assets to carrying amount as at 31 March
Group’s share of net assets 134,293 80,701 Elimination of unrealised gain (5,790) (1,061)
Carrying amount in the statement of financial position 128,503 79,640
Group’s share of results for the year/period ended 31 March
Group’s share of profit from continuing operations representing Group’s share of total comprehensive income 10,841 8,951
Contingent liabilities
Share of joint ventures’ contingent liabilities incurred jointly with other investors: - Guaranteed bank facilities 277,200 157,500 annual report 2016 109
NOTES TO THE FINANCIAL STATEMENTS
9. Deferred tax assets/(liabilities) - Group
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following :
Assets Liabilities Net 2016 2015 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and equipment (251) (160) (6,323) (9,711) (6,574) (9,871) Tax loss carry- forwards 5,179 6,321 - - 5,179 6,321
Net tax assets/(liabilities) 4,928 6,161 (6,323) (9,711) (1,395) (3,550)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the Group can utilise the benefits therefrom.
Movement in temporary differences during the financial year/period
Recognised At Recognised At in profit 31 March in profit At 1 January or loss 2015/1 April or loss 31 March 2014 (Note 24) 2015 (Note 24) 2016 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and equipment (18,275) 8,404 (9,871) 3,297 (6,574) Tax loss carry- forwards 2,500 3,821 6,321 (1,142) 5,179
(15,775) 12,225 (3,550) 2,155 (1,395)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items (stated at gross):
2016 2015 RM’000 RM’000
Tax loss carry-forwards 19,220 12,525 Capital allowances carry-forwards 5,647 3,596
24,867 16,121
The comparative figures have been restated to reflect the revised tax loss carry-forwards and capital allowances carry-forwards available to the Group.
The tax loss carry-forwards and capital allowances carry-forwards do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group can utilise the benefits therefrom. 110 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
10. Property development costs - Group
2016 2015 RM’000 RM’000
At beginning of year/period
Freehold land 159,508 169,633 Development costs 288,713 278,535 Accumulated costs charged to profit or loss (168,341) (125,984)
279,880 322,184
Add : Development costs incurred during the year/period 102,877 112,017 Less : Cost charged to profit or loss (Note 20) (194,309) (150,225) Less : Transfer to inventories (17,207) (4,096)
At end of year/period 171,241 279,880
This represents :
Freehold land 135,685 159,508 Development costs 294,072 288,713 Accumulated costs charged to profit or loss (258,516) (168,341)
171,241 279,880
(i) Included in property development costs incurred during the year/period of the Group are the following :
1.4.2015 1.1.2014 to to 31.3.2016 31.3.2015 RM’000 RM’000
Staff costs 1,505 1,970 Interest expense (Note 21) 10,797 13,625
(ii) Property development costs amounting to RM175,717,477 (2015 : RM234,089,119) have been charged to a licensed bank as securities for banking facilities granted to the Group.
11. Inventories - Group
Note 2016 2015 RM’000 RM’000
Completed development properties 169,868 152,989 Quota on low medium cost housing (“LMC quota”) 11.1 - 21,490 Others 75 152
169,943 174,631 annual report 2016 111
NOTES TO THE FINANCIAL STATEMENTS
11. Inventories - Group (cont'd)
11.1 Low medium cost housing quota (“LMC quota”)
The LMC quota represents the remaining tradable quota available to the Group granted by the local council arising from the Group’s development of low and medium cost housing project. The LMC quota was initially measured at fair value. The fair value used to determine the LMC quota was based on Directors’ estimation using the latest available market information and recent experience and knowledge of the LMC quota market. The fair value of LMC quota as at 31 March 2015 was classified as Level 3 of fair value hierarchy.
11.2 Security
Certain completed development properties of the Group amounting to RM119,849,045 (2015 : RM124,458,778) are charged to licensed banks as securities for banking facilities (see Note 17).
12. Trade and other receivables
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Trade
Amount due from subsidiaries 12.1 - - 2,673 6,706 Amount due from an associate 12.1 6,416 8,165 - - Amount due from a joint venture 12.1 70,454 17,358 - - Trade receivables 12.2 57,466 36,182 18,078 192 Amount due from contract customers 12.3 2 8,953 - - Accrued billings 72,150 79,551 - -
206,488 150,209 20,751 6,898
Non-trade
Amount due from subsidiaries 12.1 - - 36,063 264,352 Amount due from an associate 12.1 1,793 - 1,793 - Amount due from a joint venture 12.1 2 - - - Other receivables 12.4 14,840 25,232 105 17,122 Deposits and prepayments 12.5 30,885 25,842 22,472 19,126 Share application money 12.6 - 15,999 - -
47,520 67,073 60,433 300,600
254,008 217,282 81,184 307,498 112 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
12. Trade and other receivables (cont'd)
12.1 Amounts due from subsidiaries, an associate and a joint venture
The trade amounts due from subsidiaries, associate and joint venture are subject to normal trade terms.
The non-trade amounts due from subsidiaries, associate and joint venture are unsecured, interest free and repayable on demand.
Included in amount due from a joint venture is a retention sum of RM17,814,000 (2015 : RM2,481,000) relating to construction work-in-progress. Retention sum is unsecured and interest-free.
12.2 Trade receivables
Included in trade receivables is an amount of RM118,200 (2015: RM14,200) due from a Company in which a Director of the Group has substantial financial interest.
12.3 Construction work-in-progress
Group Note 2016 2015 RM’000 RM’000
Aggregate costs incurred to date 12.3.1 441,715 197,690 Add: Attributable profits 26,331 8,004
468,046 205,694
Less : Progress billings (468,044) (196,741)
Amount due from contract customers 2 8,953
12.3.1 Included in construction costs incurred during the year of the Group are the following :
1.4.2015 1.1.2014 to to 31.3.2016 31.3.2015 RM’000 RM’000
Staff costs 7,171 7,828 Hire of machinery, tools and equipment 2,293 2,099 Interest expense 435 -
12.4 Other receivables
(i) Included in other receivables of the Group and the Company was an amount of RM16,806,000 and RM16,806,000 respectively as at 31 March 2015 in respect of remaining balance receivable for the divestment of 49% stake in a joint venture, Aspen Vision Land Sdn. Bhd.
(ii) Included in other receivables of the Group is an amount of RM361,000 (2015: RM75,600) due from a Company in which a Director of the Group has substantial financial interest. annual report 2016 113
NOTES TO THE FINANCIAL STATEMENTS
12. Trade and other receivables (cont'd)
12.5 Deposits and prepayments
(i) Included in deposits and prepayments of the Group and the Company is an amount of RM11,930,000 (2015: RM17,600,000) and RM11,930,000 (2015: RM17,600,000) respectively being payment made for the purchase of LMC quota.
(ii) Included in deposits and prepayments of the Group and the Company is an amount of RM8,566,000 (2015: RMNil) and RM8,566,000 (2015: RMNil) being refundable deposits to secure the marketing right for a proposed commercial development.
(iii) Included in deposits and prepayments of the Group is an amount of RM500,000 (2015 : RM500,000) being deposit paid to land owners for development of a joint venture project.
12.6 Share application money
Share application money represents the amount paid for the proposed subscription of shares in a joint venture. In the event that the application for allotment of shares is not accepted, the share application money will be refunded to the Group.
13. Short term investments
31.3.2016 31.3.2015 1.1.2014 RM’000 RM’000 RM’000 (Restated) (Restated)
Group
Fixed deposits with licensed banks 8,677 4,917 8,391 Unit trust money market funds 18,268 - -
26,945 4,917 8,391
31.3.2016 31.3.2015 RM’000 RM’000
Company
Unit trust money market funds 10,229 -
13.1 Fixed deposits with licensed banks
Included in fixed deposits with licensed banks are as follows :
(i) an amount of RM8,676,969 (2015: RM4,916,638; 2014: RM2,932,945) pledged for bank facilities granted to the subsidiaries (see Note 17).
(ii) an amount of RM100,783 (2015: RM100,783) held in trust by a Director of the Company. 114 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
14. Cash and cash equivalents
31.3.2016 31.3.2015 1.1.2014 RM’000 RM’000 RM’000 (Restated) (Restated)
Group
Fixed deposits with licensed banks 645 2,761 - Cash and bank balances 52,131 24,529 25,634
52,776 27,290 25,634
31.3.2016 31.3.2015 RM’000 RM’000
Company
Cash and bank balances 3,523 1,834
Included in cash and bank balances of the Group is an amount of RM3,253,589 (2015 : RM4,016,171) held under Housing Development Account as required under the Housing Developers (Housing Development Account) (Amendment) Regulations 2002.
15. Share capital
Number of Number of shares Amount shares Amount 2016 2016 2015 2015 ’000 RM’000 ’000 RM’000
Group and Company
Authorised:
Ordinary shares of RM0.50 each 1,000,000 500,000 1,000,000 500,000
Issued and fully paid:
Ordinary shares of RM0.50 each 445,527 222,764 445,527 222,764 Less: Allocation of proceeds to warrant reserve (Note 16.1) - (18,600) - (18,600)
445,527 204,164 445,527 204,164
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company. annual report 2016 115
NOTES TO THE FINANCIAL STATEMENTS
16. Reserves
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Distributable
Retained earnings 181,278 170,735 64,712 45,263
Non-distributable
Warrant reserve 16.1 27,900 27,900 27,900 27,900
209,178 198,635 92,612 73,163
16.1 Warrant Reserve
Group and Company 2016 2015 RM’000 RM’000
Allocation of proceeds from Rights Issue (Note15) 18,600 18,600 Transferred from share premium 9,300 9,300
27,900 27,900
During the financial year 2012, the Company issued 186,000,000 new detachable warrants (“Warrant(s)”) on the basis of one (1) share to be issued to the Rights Issue and one (1) warrant for every one (1) existing ordinary share of RM0.50 each held in the Company. The theoretical fair value of the warrants was computed using the Black-Scholes Option Pricing Model at approximately RM0.2777 per warrant.
Each warrant entitles its registered holder to subscribe for one (1) new ordinary share in the Company at an exercise price of RM0.75 per share subject to adjustments in accordance with the provisions of the deed poll, at any time within 5 years from the date of issue of the warrant. The last date to exercise the warrant rights is 26 April 2017.
As at 31 March 2016, 186,000,000 warrants remained unexercised.
17. Loans and borrowings
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Non-current
Secured : Term loans 201,670 245,037 20,609 21,932 Finance lease liabilities 4,054 6,061 393 249
205,724 251,098 21,002 22,181 116 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
17. Loans and borrowings (cont'd)
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Current
Secured : Term loans 21,748 27,901 1,324 1,260 Finance lease liabilities 2,623 3,323 241 337 Bank overdrafts 1,328 1,523 - - Revolving credit 10,659 5,500 - -
Unsecured : Revolving credit 10,000 10,000 - -
46,358 48,247 1,565 1,597
17.1 Securities
Term loans and bank overdrafts
The Group’s and the Company’s borrowings are secured by way of :
(i) first party legal charge or assignment over the Group’s and the Company’s certain freehold land, freehold building, development land, investment properties and inventories (see Notes 3, 4, 10 and 11);
(ii) a debenture incorporating fixed and floating charge over certain subsidiaries’ present and future assets;
(iii) fixed deposits of certain subsidiaries (see Note 13 and 14);
(iv) corporate guarantees by the Company and its subsidiaries;
(v) joint and several guarantees by certain Directors of the Company;
(vi) third party legal charge over development land and inventories of certain subsidiaries; and
(vii) housing development account, sinking fund account and project account of certain subsidiaries.
Revolving credit
The Group’s revolving credit facilities are secured by way of :
(i) third party first legal charge;
(ii) assignment of all sales/rental proceeds;
(iii) assignment of contract proceeds;
(iv) fixed deposit;
(v) memorandum of charge over the Joint Account;
(vi) corporate guarantee by the company; and
(vii) irrevocable & unconditional Standby Letter of Credit from Bank of East Asia. annual report 2016 117
NOTES TO THE FINANCIAL STATEMENTS
17. Loans and borrowings (cont'd)
17.2 Finance lease liabilities
Finance lease liabilities are payable as follows :
Present Present Future value of Future value of minimum minimum minimum minimum lease lease lease lease payments Interest payments payments Interest payments 2016 2016 2016 2015 2015 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Less than one year 2,950 (327) 2,623 3,791 (468) 3,323 Between one and five years 4,311 (257) 4,054 6,594 (533) 6,061
7,261 (584) 6,677 10,385 (1,001) 9,384
Company
Less than one year 265 (24) 241 357 (20) 337 Between one and five years 419 (26) 393 259 (10) 249
684 (50) 634 616 (30) 586
18. Trade and other payables
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Trade
Amount due to a joint venture 18.1 28 - 28 - Trade payables 101,123 76,248 136 365 Progress billings 213 10,986 - - Advance payment from contract customer 33,978 53,271 - -
135,342 140,505 164 365 118 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
18. Trade and other payables (cont'd)
Group Company Note 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Non-trade
Amount due to subsidiaries 18.1 - - 91,851 160,713 Amount due to an associate 18.1 221 221 - 221 Amount due to a joint venture 18.1 27 - - - Amount due to Directors 18.1 19,734 2,743 19,734 2,285 Other payables 18.2 17,189 23,954 1,423 948 Refundable advances from customers 18.3 59,152 - - - Accruals 9,802 24,264 1,071 1,420
106,125 51,182 114,079 165,587
241,467 191,687 114,243 165,952
18.1 Amounts due to subsidiaries, an associate, a joint venture and Directors
The trade amount due to a joint venture is subject to normal trade terms.
The non-trade amounts due to subsidiaries, associate, joint venture and Directors are unsecured, interest-free and payable on demand.
18.2 Other payables
Included in other payables of the Group is an amount of RM7,500,000 (2015 : RM7,500,000) being the first deposit received for the disposal of the freehold land.
18.3 Refundable advances from customers
Refundable advances from customers are money paid by a facilitator for securing the rights to market and sell the properties of the Group. These advances will be refunded to the facilitator once the properties are successfully sold and money received by the Group.
19. Revenue
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Property development 231,106 198,096 - - Project management 32,800 7,319 19,426 2,813 Completed development properties 6,061 9,656 - - Construction contracts 122,388 43,599 - - Management fee - - 5,818 11,160 Dividend income - - 9,624 - LMC quota 27,437 - - - Others 3,215 11,515 903 1,502
423,007 270,185 35,771 15,475 annual report 2016 119
NOTES TO THE FINANCIAL STATEMENTS
20. Cost of sales
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Property development (Note 10) 194,309 150,225 - - Project management 9,270 4,776 758 793 Completed development properties 3,061 5,966 - - Construction contracts 119,688 42,573 - - Post-completion project costs 5,095 (81) - - LMC quota 21,490 - - - Others 2,019 8,570 - -
354,932 212,029 758 793
21. Finance costs
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Interest expense of financial liabilities that are not at fair value through profit or loss : - finance leases 491 420 32 27 - loans 19,673 24,875 1,121 1,436 - overdrafts 374 562 - - - other borrowings 528 1,100 13 -
21,066 26,957 1,166 1,463
Recognised in profit or loss 10,269 13,332 1,166 1,463
Capitalised under property development cost (Note 10) 10,797 13,625 - -
21,066 26,957 1,166 1,463 120 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
22. Profit before tax
Group Company Note 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000 Profit before tax is arrived at after charging :
Auditors’ remuneration: - Statutory audit - current year - KPMG 139 132 35 33 - Other auditors 41 52 - - - prior year - Other auditors 3 - - - - Other services - current year - KPMG 10 14 6 6 - Affiliate of KPMG 29 60 6 10 - Other auditors 64 20 39 - - prior year - Affiliate of KPMG - 2 - - - Other auditors 7 2 - - Amortisation of intangible assets 5 8 10 - - Depreciation on : - property, plant and equipment 3 6,605 8,409 925 877 - investment properties 4 2,184 2,841 280 350 Impairment loss on : - trade receivables 373 1,656 - - - other receivables 2,213 361 - - - property, plant and equipment 3 - 3,646 - - - intangible assets 5 - 527 - - Write down of inventories - 664 - - Write-off of : - property, plant and equipment 14 126 3 - - investment properties - 286 - - - bad debts 149 201 149 20 Personnel expenses (including key management personnel): - Wages, salaries and others 22,061 29,235 6,731 6,810 - Contributions to Employees Provident Fund 2,137 3,149 696 776 Rental of premises 2,966 3,645 76 100 Rental of equipment 153 208 62 22 Loss on disposal of property, plant and equipment - - 1 15 annual report 2016 121
NOTES TO THE FINANCIAL STATEMENTS
22. Profit before tax (cont'd)
Group Company Note 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000 and after crediting :
Gain on disposal of : - property, plant and equipment 36 434 - - - investment properties - 5,179 - - - investment in joint venture - 34,242 - 34,157 Rental income from property 5,329 4,695 1,851 2,837 Bad debts recovered 276 - - - Interest income 1,432 1,486 701 - Gain on disposal of a subsidiary 32 6,021 - - -
23. Key management personnel compensation - Group
The key management personnel compensations are as follows:
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000 Directors of the Company : - Fees 195 175 175 155 - Remuneration 2,865 3,299 2,865 3,299
Other Directors : - Fees 5 5 - - - Remuneration 440 480 - -
3,505 3,959 3,040 3,454
Other key management personnel : - Salaries and others 2,975 3,386 2,470 2,762 - Short-term employee benefits 357 406 296 331
3,332 3,792 2,766 3,093
6,837 7,751 5,806 6,547
Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility for planning, directing and controlling the activities of the Group entities either directly or indirectly.
The estimated monetary value of Directors’ benefit-in-kind of the Group and of the Company otherwise than in cash are RM24,041 (2015: RM30,870). 122 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
24. Tax expense
Recognised in profit or loss
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Income tax expense on continuing operations 7,356 1,219 3,282 462 Share of tax of equity-accounted associates and joint ventures 4,854 3,583 - -
Total income tax expense 12,210 4,802 3,282 462
Major components of income tax expense include :
Group Company Note 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Current tax expense
Malaysian - Current year 8,047 13,615 2,971 734 - Under/(Over) provision in prior years 1,463 (171) 311 (272)
Total current tax recognised in profit or loss 9,510 13,444 3,282 462
Deferred tax expense
Reversal of temporary differences (1,792) (11,136) - - Over provision in prior years (363) (1,089) - -
Total deferred tax recognised in profit or loss 9 (2,155) (12,225) - -
Share of tax of equity- accounted associates and joint ventures
- Current year 4,701 3,575 - - - Prior years 154 8 - -
4,855 3,583 - -
Total income tax expense 12,210 4,802 3,282 462 annual report 2016 123
NOTES TO THE FINANCIAL STATEMENTS
24. Tax expense (cont'd)
Reconciliation of tax expense
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Profit for the year 10,394 22,175 19,449 35,995 Total income tax expense 12,210 4,802 3,282 462
Profit excluding tax 22,604 26,977 22,731 36,457
Income tax calculated using Malaysian tax rate of 24% (2015 : 25%) 5,425 6,744 5,455 9,114 Non-deductible expenses 4,940 6,206 793 533 Non-taxable income (1,323) (8,653) (2,310) (8,826) Deferred tax assets not recognised 2,099 1,863 - - Effect of changes in tax rate - (14) - (5) Utilisation of group relief - - (801) - Others (185) (92) (166) (82) Under/(Over) provision in prior years 1,254 (1,252) 311 (272)
12,210 4,802 3,282 462
The Malaysian Budget 2014 announced the reduction of corporate tax to 24% with effect from year of assessment 2016. Consequently, the tax laibilities are measured using the tax rate of 24%.
25. Earnings per ordinary share - Group
Basic earnings per ordinary share
The basic earnings per ordinary share has been calculated based on the profit attributable to ordinary shareholders of RM10,543,000 (2015 : RM23,513,000) and a weighted average number of ordinary shares of 445,527,000 (2015 : 445,527,000) ordinary shares in issue during the year.
Diluted earnings per ordinary share
The diluted earnings per ordinary share for the financial year as at 31 March 2016 and 31 March 2015 is the same as the basic earnings per ordinary share for the financial year as the effects of dilutive potential ordinary shares are ignored since the exercise price of the warrants is higher than the market price of the Company’s ordinary shares.
26. Operating segments - Group
The Group has four reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different marketing strategies. For each of the strategic business units, the Chief Operating Decision Maker (“CODM”) (i.e. the Group’s Chief Executive Officer) reviews internal management reports at least on a quarterly basis. 124 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
26. Operating segments - Group (cont'd)
The following summary describes the operations in each of the Group’s reportable segments:
• Segment 1 : Includes property development activities, developed properties, property management and tenancy management services. • Segment 2 : Includes building and construction activities. • Segment 3 : Includes operations of entertainment, food and beverage outlets. • Segment 4 : Includes investment holding and others.
Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the CODM. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
Segment assets
The total of segment asset is measured based on all assets (including goodwill) of a segment, as included in the internal management reports that are reviewed by the CODM. Segment total asset is used to measure the return of assets of each segment.
Segment liabilities
Segment liabilities information is neither included in the internal management reports nor provided regularly to the CODM. Hence, no disclosure is made on segment liabilities.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment, investment properties and intangible assets other than goodwill. annual report 2016 125
NOTES TO THE FINANCIAL STATEMENTS
26. Operating segments - Group (cont'd)
Property development Investment and Construction Food and holding and management contracts beverage others Total RM’000 RM’000 RM’000 RM’000 RM’000
1.4.2015 to 31.3.2016
Segment profit/(loss) 13,090 5,130 (1,698) 1,228 17,750
Included in the measure of segment profit/(loss) are: Revenue from external customers 297,404 122,388 1,605 1,610 423,007 Inter-segment revenue 17,070 173,206 - 15,218 205,494 Share of loss/(profit) of equity-accounted investees, net of tax - associates (1,895) - - - (1,895) - joint ventures 10,841 - - - 10,841
Segment assets 653,997 167,520 3,696 94,090 919,303
Included in the measure of segment assets are: Additions to non-current assets other than financial instruments 488 543 616 624 2,271
1.1.2014 to 31.3.2015
Segment profit/(loss) 13,853 (10,686) (4,895) 25,122 23,394
Included in the measure of segment profit/(loss) are: Revenue from external customers 215,071 43,599 6,639 4,876 270,185 Inter-segment revenue 17,586 127,581 - 11,160 156,327 Share of loss/(profit) of equity-accounted investees, net of tax - associates (143) - - - (143) - joint ventures 8,951 - - - 8,951
Segment assets 589,846 147,904 8,644 166,930 913,324
Included in the measure of segment assets are: Additions to non-current assets other than financial instruments 603 8,365 210 1,938 11,116 126 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
26. Operating segments - Group (cont'd)
Geographical segments
The business of the Group only operates in Malaysia. As such, information on geographical segment is not presented.
Major customers
The following are major customers with revenue equal or more than 10% of the Group’s total revenue :
Revenue Segment 2016 2015 RM’000 RM’000
Customer A 104,669 34,147 Construction contracts Customer B 61,860 - Property development
27. Financial instruments
27.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (“L&R”); and (b) Financial liabilities measured at amortised cost (“FL”).
Carrying amount L&R RM’000 RM’000
2016
Financial assets
Group
Trade and other receivables (excluding non-refundable deposits and prepayment) 251,138 251,138 Short term investments 26,945 26,945 Cash and cash equivalents 52,776 52,776
330,859 330,859 Company
Trade and other receivables (excluding non-refundable deposits and prepayment) 80,957 80,957 Short term investments 10,229 10,229 Cash and cash equivalents 3,523 3,523
94,709 94,709 annual report 2016 127
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.1 Categories of financial instruments (cont'd)
Carrying amount L&R RM’000 RM’000 (Restated) (Restated)
2015
Financial assets
Group
Trade and other receivables (excluding non-refundable deposits and prepayment) 192,782 192,782 Short term investments 4,917 4,917 Cash and cash equivalents 27,290 27,290
224,989 224,989
Company
Trade and other receivables (excluding non-refundable deposits and prepayment) 306,217 306,217 Cash and cash equivalents 1,834 1,834
308,051 308,051
Carrying amount FL RM’000 RM’000
2016
Financial liabilities
Group
Loans and borrowings 252,082 252,082 Trade and other payables 240,897 240,897
492,979 492,979
Company
Loans and borrowings 22,567 22,567 Trade and other payables 114,243 114,243
136,810 136,810 128 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.1 Categories of financial instruments (cont'd)
Carrying amount FL RM’000 RM’000
2015
Financial liabilities
Group
Loans and borrowings 299,345 299,345 Trade and other payables 191,687 191,687
491,032 491,032
Company
Loans and borrowings 23,778 23,778 Trade and other payables 165,952 165,952
189,730 189,730
27.2 Net gain and losses arising from financial instruments
Group Company 1.4.2015 1.1.2014 1.4.2015 1.1.2014 to to to to 31.3.2016 31.3.2015 31.3.2016 31.3.2015 RM’000 RM’000 RM’000 RM’000
Net losses/(gains) on:
Loan and receivables 1,027 732 (552) 20 Financial liabilities measured at amortised cost 21,066 26,957 1,166 1,463
22,093 27,689 614 1,483
27.3 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
• Credit risk • Liquidity risk • Market risk annual report 2016 129
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.4 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk arises principally from advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Normally, credit evaluations are performed on cash purchases.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitored individually.
The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables (excluding amount due from contract customers and accrued billings). The ageing of trade receivables as at the end of the reporting period was :
Individual Gross impairment Net RM’000 RM’000 RM’000
Group
2016
Not past due 123,032 - 123,032 Past due 1 - 30 days 1,580 - 1,580 Past due 31 - 60 days 164 - 164 Past due 61 - 90 days 272 - 272 Past due 91 - 120 days 4,048 - 4,048 Past due more than 120 days 7,269 (2,029) 5,240
136,365 (2,029) 134,336 130 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.4 Credit risk (cont'd)
Receivables (cont'd)
Exposure to credit risk, credit quality and collateral (cont'd)
Individual Gross impairment Net RM’000 RM’000 RM’000
Group
2015
Not past due 51,244 - 51,244 Past due 1 - 30 days 671 - 671 Past due 31 - 60 days - - - Past due 61 - 90 days 259 - 259 Past due 91 - 120 days 224 - 224 Past due more than 120 days 10,963 (1,656) 9,307
63,361 (1,656) 61,705 Company
2016
Not past due 20,751 - 20,751
2015
Not past due 6,898 - 6,898
The movements in the allowance for impairment losses of trade receivables during the financial year/ period were :
Group 2016 2015 RM’000 RM’000
At beginning of year/period 1,656 -
Impairment loss recognised 373 1,656
At end of year/period 2,029 1,656
The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.
Investments and other financial assets
Risk management objectives, policies and processes for managing the risk
Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group. annual report 2016 131
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.4 Credit risk (cont'd)
Investments and other financial assets (cont'd)
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the Group has only invested in domestic equity interests. The maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position.
Investments and other financial assets are unsecured.
Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries and joint venture. The Company monitors on an ongoing basis the results of the subsidiaries and joint venture and repayments made by the subsidiaries and joint venture.
Exposure to credit risk, credit quality and collateral
The maximum exposure to credit risk amounts to RM435,119,000 (2015 : RM426,558,000) representing the outstanding banking facilities of the subsidiaries and joint venture as at end of the reporting period.
As at end of the reporting period, there was no indication that any subsidiary and joint venture would default on repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not material.
Inter-company balances
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured advances to subsidiaries and an associate. The Company monitors the results of the subsidiaries and associate regularly.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.
Advances are provided to wholly-owned subsidiaries and an associate by the Company.
Impairment losses
As at the end of the reporting period, there was no indication that the advances to the subsidiaries and associate are not recoverable. The Company does not specifically monitor the ageing of the advances to the subsidiaries and associate.
27.5 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significant different amounts. 132 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS ------5 years More than ------2 - 5 years - - - - - 1 - 2 years Under 1 year 684 265 419 548,211 299,788 84,355 75,729 88,339 579,397 552,007 2,799 7,139 17,452 cash flow Contractual - 241,467 241,467 - 114,243 114,243 - 435,119 435,119 % RM’000 RM’000 RM’000 RM’000 RM’000 4.95 29,351 2,380 2,380 7,139 17,452 Contractual interest rate interest - 634 - 2.98 2.38 1,328 - 8.60 8.35 1,328 1,328 6,677 - 3.50 2.38 7,261 2,950 2,636 1,675 20,659 - 7.85 4.33 20,659 20,659 21,933 RM’000 amount 223,418 - 8.35 4.95 277,496 33,384 81,719 74,054 88,339 241,467 493,549 114,243 136,810 Carrying table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period of the end the financial liabilities as at Company’s Group’s and the profile of the maturity the below summarises table instruments (cont'd) Secured term loans Revolving credit Bank overdrafts Finance lease liabilities Trade and other payables Trade Secured term loans Trade and other payables Trade Finance lease liabilities Financial guarantees 2016 Group Non-derivative financial liabilities Liquidity risk (cont'd) Maturity analysis The based on undiscounted contractual payments: Company Non-derivative financial liabilities
Financial 27.5
27. annual report 2016 133
NOTES TO THE FINANCIAL STATEMENTS ------5 years More than - - - - - 90 2 - 5 years - - - - - 1 - 2 years Under 1 year 616 358 168 554,266 248,688 25,933 53,252 226,393 624,855 595,248 2,548 7,229 19,830 cash flow Contractual - 191,687 191,687 - 165,952 165,952 - 426,558 426,558 % RM’000 RM’000 RM’000 RM’000 RM’000 4.95 31,729 2,380 2,380 7,139 19,830 Contractual interest rate interest - 586 - 2.98 2.38 1,523 - 8.60 8.35 1,523 1,523 9,384 - 3.50 2.38 10,385 3,791 2,654 3,940 15,500 - 4.60 3.81 15,500 15,500 23,192 RM’000 amount 272,938 - 7.60 4.92 335,171 36,187 23,279 49,312 226,393 191,687 491,032 165,952 189,730 Carrying instruments (cont'd) Secured term loans Revolving credit Bank overdrafts Finance lease liabilities Trade and other payables Trade Secured term loans Trade and other payables Trade Finance lease liabilities Financial guarantees 2015 Group Non-derivative financial liabilities Liquidity risk (cont'd) Maturity analysis (cont'd) Company Non-derivative financial liabilities
Financial 27.5
27. 134 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.6 Market risk
Market risk is the risk that changes in market prices, such as interest rates and other prices that will affect the Group’s financial position or cash flows.
27.6.1 Interest rate risk
The Group’s investment in fixed rate financial instruments are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables and payables are not significantly exposed to interest rate risk.
Risk management objectives, policies and processes for managing the risk
The Group adopts a policy of ensuring that exposure to loans and borrowings are kept at a minimum.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was:
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Fixed rate instruments
Financial assets 9,322 7,678 - - Financial liabilities (6,677) (9,384) (634) (586)
2,645 (1,706) (634) (586)
Floating rate instruments
Financial assets 18,268 - 10,229 - Financial liabilities (245,405) (289,961) (21,933) (23,192)
(227,137) (289,961) (11,704) (23,192)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points (“bp”) in interest rates at the end of the reporting period would have increased/(decreased) equity and post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. annual report 2016 135
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.6 Market risk (cont'd)
27.6.1 Interest rate risk (cont'd)
(b) Cash flow sensitivity analysis for variable rate instruments (cont'd)
Profit or loss 50 bp 50 bp increase decrease Group RM’000 RM’000
2016
Floating rate instruments 863 (863)
2015
Floating rate instruments 1,087 (1,087)
Company
2016
Floating rate instruments 44 (44)
2015
Floating rate instruments 87 (87)
27.7 Fair value information
The carrying amounts of cash and cash equivalents, short term investment, short term receivables and payables and short term borrowings reasonably approximate their fair values due to the relatively short term nature of these financial instruments.
The carrying amount of floating rate borrowings approximate their fair value as their effective interest rate changes accordingly to movements in the market interest rates. 136 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS amount Carrying Total fair value carried at fair value Fair value of financial instruments not Fair carried at fair value ------(223,418) (223,418) (223,418) (223,418) ------(6,832) (6,832) (6,832) (6,677) ------(230,250) (230,250) (230,250) (230,095) ------(21,933) (21,933) (21,933) (21,933) ------(638) (638) (638) (634) ------(22,571) (22,571) (22,571) (22,567) Fair value of financial instruments Fair Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 instruments (cont'd) air value information (cont'd) F carried at fair value for which is disclosed, together not carried at fair value and those table below analyses financial instruments The with their fair values and carrying amounts shown in the statement of financial position. 2016 Group Financial liabilities Secured term loans Finance lease liabilities Company Financial liabilities Secured term loans Finance lease liabilities
Financial 27.7
27. annual report 2016 137
NOTES TO THE FINANCIAL STATEMENTS amount Carrying Total fair value carried at fair value Fair value of financial instruments not Fair carried at fair value ------(272,938) (272,938) (272,938) (272,938) ------(8,724) (8,724) (8,724) (9,384) ------(281,662) (281,662) (281,662) (282,322) ------(23,192) (23,192) (23,192) (23,192) ------(564) (564) (564) (586) ------(23,756) (23,756) (23,756) (23,778) Fair value of financial instruments Fair Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 instruments (cont'd) air value information (cont'd) F 2015 Group Financial liabilities Secured term loans Finance lease liabilities Company Financial liabilities Secured term loans Finance lease liabilities
Financial 27.7
27. 138 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
27. Financial instruments (cont'd)
27.7 Fair value information (cont'd)
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. For borrowings, the market rate of interest is determined by reference to similar borrowing arrangements.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values during the financial year (2015 : no transfer in either directions).
Level 3 fair values
Level 3 fair is estimated using unobservable inputs for the financial assets and liabilities.
The fair value of finance lease liabilities are calculated using discounted cash flows.
28. Capital management - Group
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
There were no changes in the Group’s approach to capital management during the financial year.
29. Capital and other commitments - Group
29.1 Other commitment
2016 2015 RM’000 RM’000
Purchase of LMC quota - 2,200 Investment in a joint venture - 16,000
30. Contingencies
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
30.1 Corporate guarantees to certain subsidiaries and joint ventures
2016 2015 RM’000 RM’000
Corporate guarantees relating to credit facilities of subsidiaries and joint ventures : - granted 747,516 795,531 - utilised 435,119 426,558 annual report 2016 139
NOTES TO THE FINANCIAL STATEMENTS
30. Contingencies (cont'd)
30.2 Continuing financial support
The Company has undertaken to provide continuing financial support to certain subsidiaries to enable them to meet their financial obligations as and when they fall due.
31. Related parties
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly and entity that provides key management personnel services to the Group. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group.
The Group has related party relationship with its subsidiaries, associates, joint venture, Directors and key management personnel.
Significant related parties transactions
Related party transactions have been entered into in the normal course of business under normal trade terms. The significant related party transactions of the Group and the Company are shown below. The balances related to the below transactions are shown in Notes 12 and 18.
1.4.2015 1.1.2014 to to 31.3.2016 31.3.2015 RM’000 RM’000 Group
A. Associates
- Progress billings charged 6,416 - - Cleaning charges 3 -
B. Joint venture
- Progress billings charged 131,017 49,519 - Commission income 1,347 2,813 - Cleaning charges 74 167 - Sales of LMC quota 29,988 - 140 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
31. Related parties (cont'd)
Significant related parties transactions (cont'd)
Company
A. Subsidiaries
- Management fees charged 5,818 11,160 - Rental changed 1,234 2,325 - Purchase of property, plant and equipment 5 288 - Administrative fee 48 74 - Security service 632 - - Cleaning charges 72 91 - Rental 27 33 - Utilities charges 197 321
The following transactions with Directors and key management personnel were carried out under terms not more favorable than those generally available to the public or employee of the holding company and its subsidiaries, or under negotiated terms which the Board of Directors, after deliberation, has believed to be in the best interests of the Group.
1.4.2015 1.1.2014 to to 31.3.2016 31.3.2015 RM’000 RM’000 Group
Progress billings charged to :
- Directors and key management personnel of the Group and of the Company 255 1,094 - Close family members of Directors of the Company 961 2,909
Administrative fee charged to a director of the Company 6 -
Consultancy fee paid to a Director of a subsidiary 95 78
Consultancy fee paid to a company in which certain Directors of a subsidiary of the Company have interest - 308
Performance fee paid to a company in which certain Directors of the Company have interest - 1,778
Rental charged to a company in which certain Directors of the Company have interest 213 254
Cleaning fee charged to a company in which certain Directors of the Company have interest 57 72
Electricity charged to a company in which certain Directors of the Company have interest 21 -
Administrative fee paid to a company in which certain directors of the Company have interest 29 -
There were no other transactions with key management personnel and Directors of the Group other than the remuneration package paid to them as disclosed in Note 23 to the financial statements. annual report 2016 141
NOTES TO THE FINANCIAL STATEMENTS
32. Significant events
Significant events during the year are as follows :
(a) The Company had on 22 May 2015, entered into a Shares Sale and Purchase Agreement with Worldwide Platinum Holdings Sdn Bhd for the disposal of the entire 80% equity interest in Soju Entertainment Sdn Bhd representing 8 ordinary shares of RM1.00 each for cash consideration of RM8 only.
The disposal had the following effect on the Group’s assets and liabilities :
2016 RM’000 Property, plant and equipment 4,508 Inventories 96 Trade and other receivables 370 Cash and cash equivalents 354 Trade and other payables (12,855)
Net identifiable liabilities (7,527)
Gain on disposal 6,021 Non controlling interest 1,506
Consideration received satisfied in cash -*
Less : Cash and cash equivalents disposed (354)
Net cash outflow on disposal (354)
* cash consideration of RM8
(b) On 1 August 2015, the Company capitalised part of the net debts owing by its wholly owned subsidiary, Ivory View Sdn Bhd (“IWSB”) by applying for and effecting the same as full consideration for the subscription of 1,840,000 non-cumulative non-convertible redeemable preference shares (“RPS”) of RM1 each in IWSB at a premium of RM99 per RPS, for a total consideration of RM184,000,000.
(c) On 26 October 2015, the Company acquired the entire issued and paid up share capital of Ivory World City Sdn Bhd (“IWC”) and G Ivory Sdn Bhd (“G Ivory”) for a total cash consideration of RM2.00 each. Upon completion of the acquisition, IWC and G Ivory became the wholly-owned subsidiaries of the Company.
33. Subsequent Events
(a) On 25 May 2016, the Company entered into a Shares Sale and Purchase Agreement (“SSP”) with Alshem Venture Sdn Bhd for the acquisition of the entire 100% issued and paid up shares in Alshem Development Sdn Bhd, comprising 250,000 fully-paid ordinary shares of RM1.00 each for cash consideration of RM17,760,000. The completion of the SSP is subject to fulfillment of conditions precedent in the SSP.
(b) On 9 June 2016, the Company proposed a private placement of up to ten percent (10%) of the issued and paid-up share capital of the Company. Subsequently, on 22 July 2016, the Company announced that the 44,552,702 placement shares which representing ten percent (10%) of the issued and paid-up share capital were issued pursuant to the private placement and were listed and quoted on the Main Market of Bursa Securities, marking the completion of the private placement.
(c) On 17 June 2016, the Company announced that its wholly owned subsidiary, Ivory Times Square Sdn Bhd has entered into a Joint Venture Agreement (“JVA”) with LLK Properties Sdn Bhd (formerly known as Dsenergy Development Sdn Bhd) for the proposed development of all the 29 pieces of leasehold land measuring approximately 3,351 square meter located at Mukim Petaling, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan. The completion of the JVA is still subject to fulfillment of conditions precedent in the JVA. 142 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTES TO THE FINANCIAL STATEMENTS
34. Material Litigations
(a) Diamex Sdn. Bhd. – Civil Suit No. 21NCVC-54-09/2015 filed at the Kuala Lumpur High Court
On 17 September 2015, the Company's wholly-owned subsidiary, Ivory Indah Sdn. Bhd. (“IISB”) was served with a Civil Suit No: 21NCVC-54-09/2015 filed at the Kuala Lumpur High Court on 3 September 2015 (“Civil Suit”) from Diamex Sdn. Bhd. (“the Plaintiff) against IISB as the 1st Defendant and 4 other Defendants claiming for several declarations and orders in connection with the sale of a parcel of freehold land held under Geran No. 1272, Lot No. 2838, Mukim 18, Daerah Timor Laut, Negeri Pulau Pinang owned by IISB.
The High Court has on 14 June 2016 allowed IISB’s application to strike out the plaintiff’s claim and dismissed the Plaintiff’s application for injunction.
The Plaintiff has filed a Notice of Appeal dated 23 June 2016 against the High Court’s decision. It is now pending for the Court of Appeal to assign the date for the appeal.
(b) Krishna Kumar a/l T.N. Sharma – Civil Suit No. 22NCVC-102-06/2015 at Penang High Court
On 5 March 2015, Krishna Kumar a/l T.N. Sharma (“the Plaintiff”) had filed a Writ of Summons & Statement of Claim (“Writ & Claim”) against Ivory Indah Sdn Bhd (“IISB”) in the High Court of Malaya at Kuala Lumpur which was subsequently transferred to High Court of Malaya at Penang under Civil Suit No. 22NCVC-102-06/2015.
The Writ & Claim is in relation to the sales of property by the Plaintiff to IISB in Year 2007 & 2008, with claims that IISB has abrogated the sales agreement and orders to restrain IISB from disposing and dealing with the property until the final disposal of this case.
The matter was struck off by the Court on 8 September 2015. The Plaintiff’s application for reinstatement was allowed by the High Court on 25 March 2016. The High Court has subsequently dismissed IISB’s appeal against the reinstatement with cost.
IISB has filed two applications, one to strike out the Plaintiff’s claim and the other for Security for Cost from the Plaintiff. The High Court has fixed the Decision for the said two applications on 12 August 2016.
35. Comparative figures
(a) In previous financial years, all investments in fixed deposits were classified as cash and cash equivalents.
On 1 April 2015, the Group changed its accounting policy with respect to classification of cash and cash equivalents. Short term investment held for investment purpose or with a maturity period of more than 3 months are classified as short term investments.
This change in accounting policy was applied retrospectively. The following table summarised the restatements made :
31.03.2015 01.01.2014 As As previously As previously As stated restated stated restated RM’000 RM’000 RM’000 RM’000 Group
Cash and cash equivalents 32,207 27,290 34,025 25,634 Short term investment - 4,917 - 8,391
(b) The Company changed its financial year end from 31 December to 31 March since previous financial period. Accordingly, the Company has prepared its financial statements for a financial period of 12 months ended 31 March 2016, as compared to the comparative financial statements, which covered a period of 15 months for the financial period ended 31 March 2015. annual report 2016 143
NOTES TO THE FINANCIAL STATEMENTS
36. Supplementary information on the breakdown of realised and unrealised profits or losses
The breakdown of the retained earnings of the Group and of the Company as at year/period end, into realised and unrealised profits, pursuant to the Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows :
Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000
Total retained earnings of the Company and its subsidiaries:
- Realised gain 295,983 280,542 64,712 45,263 - Unrealised loss (1,396) (3,550) - -
294,587 276,992 64,712 45,263
Total share of retained earnings of associates
- Realised gain 1,720 3,691 - - - Unrealised gain 880 880 - -
Total share of retained earnings of joint ventures
- Realised gain 9,174 3,052 - - - Unrealised gain 12 16 - -
306,373 284,631 64,712 45,263
Less : Consolidation adjustments (125,095) (113,896) - -
Total retained earnings 181,278 170,735 64,712 45,263
The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010. 144 IVORY PROPERTIES GROUP BERHAD (673211-M)
STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965
In the opinion of the Directors, the financial statements set out on pages 67 to 142 are drawn up in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2016 and of their financial performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out in Note 36 on page143 to the financial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Dato’ Low Eng Hock
Dato’ Ooi Chin Loo
Penang
Date : 28 July 2016 annual report 2016 145
STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
I, Dato’ Low Eng Hock, the Director primarily responsible for the financial management of Ivory Properties Group Berhad, do solemnly and sincerely declare that the financial statements set out on pages 67 to 143 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named at Georgetown in the State of Penang on 28 July 2016.
…………………..………………….. Dato’ Low Eng Hock
Before me :
GOH SUAN BEE (No. P125) Pesuruhjaya Sumpah (Commissioner of Oaths) Penang 146 IVORY PROPERTIES GROUP BERHAD (673211-M)
INDEPENDENT AUDITORS’ REPORT To The Members Of Ivory Properties Group Berhad
Report on the Financial Statements
We have audited the financial statements of Ivory Properties Group Berhad, which comprise the statements of financial position as at 31 March 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 67 to 142.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2016 and of their financial performance and cash flows for the year then ended in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. annual report 2016 147
INDEPENDENT AUDITORS’ REPORT To The Members Of Ivory Properties Group Berhad
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. b) We have considered the accounts and the auditors’ report of the subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements. c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 36 on page 143 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Financial Reporting Standards in Malaysia. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KPMG Ooi Kok Seng AF0758 2432/05/17 (J) Chartered Accountants Chartered Accountant
Date : 28 July 2016
Penang 148 IVORY PROPERTIES GROUP BERHAD (673211-M)
GROUP PROPERTIES as at 31 March 2016
Carrying Amount Approximate as at 31 Age of Build-up Approximate March Building Description/ Area Land Area 2016 Year of Location (years) Existing Use (sq. ft.) (sq. ft.) Tenure (RM'000) Acquisition
Phase 3, 4 and 5 N/A Currently N/A 229,725 Freehold 46,561 2005 of Penang Times Square under Partial of No. Hakmilik 153461, development Lot 10000, Seksyen 10, - Residential Bandar George Town, and Daerah Timor Laut, Commercial Pulau Pinang.
No. Hakmilik 29375, 29376 2008 and 29377, Lot 954, 955 and 956, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang.
No. H.S.(D) 16611, 2009 PT 26, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang.
No. Hakmilik 6991, 2011 Lot 100, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang.
Ivory Tower 2 Office for 48,766 N/A Freehold 22,271 2013 Partial of No. Hakmilik 153461, own use Lot 10000, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang.
Birch House 7 Commercial 18,710 18,140 Freehold 11,341 2008 Partial of No. Hakmilik 153461, Lot 10000, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang.
Plaza Birch 7 Residential 1,130 N/A Freehold 279 2010 Partial of No. Hakmilik 153461, Lot 10000, Seksyen 10, Bandar George Town, Daerah Timor Laut, Pulau Pinang. annual report 2016 149
GROUP PROPERTIES as at 31 March 2016
Carrying Amount Approximate as at 31 Age of Build-up Approximate March Building Description/ Area Land Area 2016 Year of Location (years) Existing Use (sq. ft.) (sq. ft.) Tenure (RM'000) Acquisition
Phase 1 & 2 4-7 Commercial 149,061 N/A Freehold 44,515 2008, of Penang Times Square with Car 2010 Partial of No. Hakmilik 153461, Parking -2013 Lot 10000, Seksyen 10, Bays Bandar George Town, Daerah Timor Laut, Pulau Pinang.
Seri Taman Tanjung 12 Residential 34,789 N/A Freehold 775 2004 & No. Geran 70643, and 2005 Lot 1598, Seksyen 2, Commercial Bandar Tanjong Tokong, with Car Daerah Timor Laut, Parking Bays Pulau Pinang.
Plaza Ivory 11 Commercial 32,615 N/A Freehold 1,578 2006 No. Geran 2608, with Car Lot 10320, Mukim 13, Parking Bays Daerah Timor Laut, Pulau Pinang.
No. H.S.(D) 18980, N/A Currently N/A 102,731 Freehold 60,692 2008 & PT 7, Seksyen 2, under 2011 Bandar Tanjong Tokong, development Daerah Timor Laut, - Residential Pulau Pinang. and Commercial
No. Hakmilik 163292, N/A Currently N/A 2,702 Freehold 1,968 2006 Lot 10106, Seksyen 4, under Bandar Bukit Mertajam, development Seberang Perai Tengah, - Commercial Pulau Pinang.
No. Hakmilik 1272, N/A Development N/A 2,344,088 Freehold 68,465 2013 Lot 2838, Mukim 18 Land* Daerah Timor Laut, Pulau Pinang.
* Ivory Indah Sdn Bhd, a wholly-owned subsidiary of the Company has entered into a Sale and Purchase Agreement to dispose of the land in last financial period. The sale transaction is currently in progess pending fulfilment of the conditions precedent stated under the agreement. 150 IVORY PROPERTIES GROUP BERHAD (673211-M)
ANALYSIS OF SHAREHOLDINGS as at 27 June 2016
Authorised Share Capital : RM500,000,000.00 Issued and Paid-up Share Capital : RM222,763,513.50 Class of Shares : Ordinary shares of RM0.50 each Voting Right : One vote per share
1. ANALYSIS BY SIZE OF SHAREHOLDINGS
No. of % of total No. of % of total Size of shareholdings shareholders shareholders shares issued capital
Less than 100 159 3.26 7,043 0 100 to 1,000 330 6.76 170,137 0.04 1,001 to 10,000 2,047 41.91 13,656,158 3.07 10,001 to 100,000 2,059 42.16 67,121,551 15.07 100,001 to less than 5% of issued shares 284 5.81 185,567,683 41.65 5% and above of issued shares 5 0.10 179,004,455 40.18
TOTAL 4,884 100.00 445,527,027 100.00
2. THIRTY LARGEST SECURITIES ACCOUNT HOLDERS
No. of % of total Name Shares issued capital
1 RHB Nominees (Tempatan) Sdn Bhd 67,000,000 15.04 Pledged Securities Account for Low Eng Hock
2 MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd 35,165,455 7.89 Pledged Securities Account for Low Eng Hock (MGN-LEH0004M)
3 Maybank Nominees (Tempatan) Sdn Bhd 28,510,000 6.40 Pledged Securities Account for Low Eng Hock
4 Kenanga Nominees (Tempatan) Sdn Bhd 24,230,000 5.44 Pledged Securities Account for Khoo Siew Siew
5 Kenanga Nominees (Tempatan) Sdn Bhd 24,099,000 5.41 Pledged Securities Account for Low Eng Hock (027)
6 AMSEC Nominees (Tempatan) Sdn Bhd 18,230,766 4.09 Pledged Securities Account for Low Eng Hock
7 RHB Nominees (Tempatan) Sdn Bhd 16,760,000 3.76 Bank of China (Malaysia) Berhad Pledged Securities Account for Low Eng Hock
8 Ooi Choi Kiat 15,370,997 3.45
9 M & A Nominee (Tempatan) Sdn Bhd 9,000,000 2.02 Pledged Securities Account for Low Eng Hock (PNG)
10 RHB Capital Nominees (Tempatan) Sdn Bhd 8,550,000 1.92 Pledged Securities Account for Low Eng Hock annual report 2016 151
ANALYSIS OF SHAREHOLDINGS as at 27 June 2016
2. THIRTY LARGEST SECURITIES ACCOUNT HOLDERS (cont'd)
No. of % of total Name Shares issued capital
11 HLB Nominees (Tempatan) Sdn Bhd 6,750,000 1.52 Pledged Securities Account for Ooi Choi Kiat
12 JF Apex Nominees (Tempatan) Sdn Bhd 6,420,800 1.44 Pledged Securities Account for Teow Wooi Huat (STA 2)
13 Low Eng Hock 6,388,529 1.43
14 AMSEC Nominees (Tempatan) Sdn Bhd 4,000,000 0.90 Pledged Securities Account for Ooi Choi Kiat (MX3499)
15 Alliancegroup Nominees (Tempatan) Sdn Bhd 3,200,000 0.72 Pledged Securities Account for Low Eng Hock (8120716)
16 EB Nominees (Tempatan) Sendirian Berhad 3,000,000 0.67 Pledged Securities Account for M & A Securities Sdn Bhd (IPO)
17 M & A Nominee (Tempatan) Sdn Bhd 2,800,000 0.63 Pledged Securities Account for Khoo Siew Siew (PNG)
18 Tan Kim Hee 2,436,300 0.55
19 Cartaban Nominees (Asing) Sdn Bhd 2,237,375 0.50 Exempt An for Credit Industriel ET Commercial (AC Client)
20 Maybank Nominees (Tempatan) Sdn Bhd 2,137,500 0.48 Pledged Securities Account for Low Hooi Bee
21 Public Nominees (Tempatan) Sdn Bhd 1,800,000 0.40 Pledged Securities Account for Ooi Choi Kiat (E-SLY)
22 Maybank Nominees (Tempatan) Sdn Bhd 1,420,250 0.32 Chang Tan Sen
23 TA Nominees (Tempatan) Sdn Bhd 1,350,800 0.30 Pledged Securities Account for Tan Sin Lam
24 Boey Chee Kun 1,335,000 0.30
25 Maybank Securities Nominees (Tempatan) Sdn Bhd 1,200,500 0.27 Pledged Securities Account for Chia Tue Hua (REM 166)
26 Choong Mei Ling 1,063,000 0.24
27 Khoo Siew Siew 1,000,000 0.22
28 Affin Hwang Nominees (Tempatan) Sdn Bhd 900,000 0.20 Pledged Securities Account for Chai Chau @ Peh Chai Chau (M09)
29 Tan Bee Choon 900,000 0.20
30 Chong Siew Kim 840,000 0.19 152 IVORY PROPERTIES GROUP BERHAD (673211-M)
ANALYSIS OF SHAREHOLDINGS as at 27 June 2016
3. SUBSTANTIAL SHAREHOLDERS
Direct Interest Indirect Interest No. of % of No. of % of shares issued shares issued Name held capital held capital
1 Dato’ Low Eng Hock 216,903,750 48.68 31,030,000^ 6.96 2 Ooi Choi Kiat 27,920,997 6.27 2,137,500^ 0.48
4. DIRECTORS’ SHAREHOLDINGS
Direct Interest Indirect Interest No. of % of No. of % of shares issued shares issued Name held capital held capital
1 Dr Asairinachan @ Aravinachan A/L Kunjamboo 45,000 0.01 - - 2 Dato’ Low Eng Hock 216,903,750 48.68 31,030,000^ 6.96 3 Dato’ Ooi Chin Loo 10,000 - - - 4 Ooi Choi Kiat 27,920,997 6.27 2,137,500^ 0.48 5 Loh Chye Teik 295,000 0.07 - - 6 Lim Hock Siu 195,750 0.04 - -
^ Held in the name of spouse and is treated as interest of the Director in accordance with Section 134(12)(c) of the Companies Act, 1965.
Note: By virtue of his interest of more than 15% in the shares of the Company, Dato’ Low Eng Hock is deemed to have interest in the shares of all the subsidiaries to the extent that the Company has an interest. annual report 2016 153
ANALYSIS OF WARRANTHOLDINGS as at 27 June 2016
No of Warrants 2012/2017 Issued : 186,000,000 Exercise/Conversion Price : RM0.75 Exercise/Conversion Ratio : One warrant for one ordinary share of RM0.50 each Exercise/Conversion Period : 5 years Maturity Date : 26 April 2017
1. ANALYSIS BY SIZE OF WARRANTHOLDINGS
% of total No. of % of total No. of outstanding Size of warrantholdings warrantholders warrantholders warrants warrants
Less than 100 3 0.20 190 0 100 to 1,000 129 8.44 93,547 0.05 1,001 to 10,000 613 40.12 3,824,900 2.06 10,001 to 100,000 644 42.15 25,690,065 13.81 100,001 to less than 5% of issued warrants 138 9.03 62,210,532 33.45 5% and above of issued warrants 1 0.07 94,180,766 50.63
TOTAL 1,528 100.00 186,000,000 100.00
2. THIRTY LARGEST WARRANTHOLDERS
No. of % of Name warrants warrants
1 Low Eng Hock 94,180,766 50.63
2 Ooi Choi Kiat 5,609,332 3.02
3 Ting Ata @ Ting Teong Cheow 5,200,000 2.80
4 Lam Yee Foon 5,187,000 2.79
5 M & A Nominee (Tempatan) Sdn Bhd 4,000,000 2.15 Pledged Securities Account for Khoo Siew Siew (PNG)
6 HLB Nominees (Tempatan) Sdn Bhd 2,289,900 1.23 Pledged Securites Account for Ooi Choi Kiat
7 Kuek Yek Hing 1,350,000 0.73
8 Wan Cheng Hoe 1,150,000 0.62
9 Soo Lai Ping 1,070,000 0.58
10 Phnuah Farn Farn 949,000 0.51 154 IVORY PROPERTIES GROUP BERHAD (673211-M)
ANALYSIS OF WARRANTHOLDINGS as at 27 June 2016
2. THIRTY LARGEST WARRANTHOLDERS (cont'd)
No. of % of Name warrants warrants
11 Sonny Yap Choon Kar 900,000 0.48
12 Tam Shyh Yeau 900,000 0.48
13 Lee Ann Nee 850,000 0.46
14 Chew Shung Hyang 830,000 0.45
15 Maybank Nominees (Tempatan) Sdn Bhd 820,000 0.44 Malazura binti Mat Desa
16 Public Nominees (Tempatan) Sdn Bhd 800,000 0.43 Pledged Securities Account for Ooi Choi Kiat (E-SLY)
17 Goee Miow Kheng 787,200 0.42
18 Kong Khop Song 750,000 0.40
19 Maybank Nominees (Tempatan) Sdn Bhd 696,000 0.37 Pledged Securities Account for Low Hooi Bee
20 RHB Nominees (Tempatan) Sdn Bhd 656,900 0.35 Pledged Securities Account for Tan Wee Hwang
21 Quah Ai Luan 600,000 0.32
22 JF Apex Nominees (Tempatan) Sdn Bhd 540,500 0.29 Pledged Securities Account for Teow Chee Chow (STA 2)
23 Kong Khop Song 516,600 0.28
24 CIMSEC Nominees (Tempatan) Sdn Bhd 512,500 0.28 CIMB Bank for Yap Yee Huat (MY 1163)
25 Ayub bin Abd Aziz 500,000 0.27
26 Lee Choon Lim 500,000 0.27
27 Tan Geng Sing 500,000 0.27
28 Hasmah binti Adenan 470,000 0.25
29 Maybank Securities Nominees (Tempatan) Sdn Bhd 427,900 0.23 Pledged Securities Account for Chia Tue Hua (REM 166)
30 Kong Kou Choi 400,000 0.22 annual report 2016 155
ANALYSIS OF WARRANTHOLDINGS as at 27 June 2016
3. SUBSTANTIAL WARRANTHOLDERS
Direct Interest Indirect Interest No. of % of total No. of % of total warrants outstanding warrants outstanding Name held warrants held warrants
1 Dato’ Low Eng Hock 94,180,766 50.63 4,000,000^ 2.15 2 Ooi Choi Kiat 8,699,232 4.68 696,000^ 0.37
4. DIRECTORS’ WARRANTHOLDINGS
Direct Interest Indirect Interest No. of % of total No. of % of total warrants outstanding warrants outstanding Name held warrants held warrants
1 Dr Asairinachan @ Aravinachan A/L Kunjamboo 20,000 0.01 - - 2 Dato’ Low Eng Hock 94,180,766 50.63 4,000,000^ 2.15 3 Dato’ Ooi Chin Loo - - - - 4 Ooi Choi Kiat 8,699,232 4.68 696,000^ 0.37 5 Loh Chye Teik 20,000 0.01 - - 6 Lim Hock Siu 46,600 0.03 - -
^ Held in the name of spouse and is treated as interest of the Director in accordance with Section 134(12)(c) of the Companies Act, 1965. 156 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Eleventh Annual General Meeting of Ivory Properties Group Berhad will be held at Auditorium, Ivory Tower @ Penang Times Square, 81-11-1, Jalan Dato’ Keramat, 10150 George Town, Penang, Malaysia on Friday, 26 August 2016 at 10.30 a.m. for the following purposes:-
AS ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 March 2016 together with the Reports of the Directors and Auditors thereon.
2. To approve the payment of Directors’ fees of RM175,000 for the financial year ended Ordinary Resolution 1 31 March 2016.
3. To re-elect the following Directors who retire in accordance with Article 128 of the Company’s Articles of Association and being eligible, offer themselves for re-election:-
(a) Dato’ Ooi Chin Loo Ordinary Resolution 2 (b) Mr Lim Hock Siu Ordinary Resolution 3
4. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the Ordinary Resolution 4 Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions with or without modifications:-
5. Ordinary Resolution
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 Ordinary Resolution 5 “THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant Governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time upon such terms and conditions and for such purposes and to such person or persons as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is required by law to be held or revoked/varied by resolution passed by the shareholders in general meeting whichever is the earlier.”
6. Ordinary Resolution
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Ordinary Resolution 6 Transactions of Revenue or Trading Nature “THAT subject always to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and its subsidiaries (“Ivory Group”) to enter into and give effect to specified recurrent related parties transactions of a revenue or trading nature of the Ivory Group with specified classes of Related Parties (as specified in Section 2.3 of the Circular to Shareholders dated 29 July 2016) which are necessary for the day-to-day operations, in the ordinary course of business and are carried out at arm’s length basis on normal commercial terms of Ivory Group which are not more favourable to the Related Parties than those generally available to the public and are not detrimental to minority shareholders of the Company and such approval shall continue to be in full force until: annual report 2016 157
NOTICE OF ANNUAL GENERAL MEETING
(a) the conclusion of the next Annual General Meeting (“AGM”) following this AGM; (b) the expiration of the period within which the next AGM after the date it is required by law to be held; or (c) revoked or varied by resolution passed by shareholders in a general meeting.
whichever is earlier.
THAT authority be and is hereby given to the Directors of the Company to complete and do all such acts and things as they may consider necessary or expedient in the best interest of the Company (including executing all such documents as may be required) to give full effect to the transactions contemplated and or authorised by this Ordinary Resolution.”
7. To consider any other business for which due notice shall have been given in accordance with the Companies Act, 1965.
By Order of the Board
Tai Yit Chan (MAICSA 7009143) Ong Tze-En (MAICSA 7026537) Joint Company Secretaries
Penang, 29 July 2016
Notes:
1. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. Where a member appoints two (2) or more proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) Securities Account (“Omnibus Account”), there shall be no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. An Exempt Authorised Nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of the SICDA.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.
5. For the proxy to be valid, the proxy form duly completed must be deposited at the Company’s Registered Office at Suite 16-1 (Penthouse Upper), Menara Penang Garden, 42-A Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia, not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
6. In respect of deposited securities, only a Depositor whose name appears on the Record of Depositors on 18 August 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy to attend and/or vote on his/her behalf. 158 IVORY PROPERTIES GROUP BERHAD (673211-M)
NOTICE OF ANNUAL GENERAL MEETING
Explanatory Notes on Special Business
Ordinary Resolution 5
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 The Ordinary Resolution 5 is a renewal of the general mandate given to the Directors of the Company to allot and issue shares pursuant to Section 132D of the Companies Act, 1965 as approved by the Shareholders at the Tenth Annual General Meeting (“AGM”) held on 17 September 2015.
The Ordinary Resolution 5, if passed, will empower the Directors of the Company to issue and allot shares in the Company from time to time and for such purposes as the Directors consider would be in the interest of the Company up to an amount not exceeding 10% of the Company’s issued capital for the time being. This authority will, unless revoked or varied by the Company in general meeting, expire at the next AGM of the Company or the period within which the next AGM of the Company is required by law to be held, whichever is the earlier.
The general mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment projects, working capital and/or acquisitions as well as to avoid any delay and cost in convening general meetings to specifically approve such an issuance of shares.
As at the date of the Notice, a total of 44,552,702 new ordinary shares of RM0.50 each in the Company were issued pursuant to the mandate granted to the Directors at the last AGM which will lapse at the conclusion of the forthcoming AGM to be held on 26 August 2016.
Ordinary Resolution 6
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of Revenue or Trading Nature The Ordinary Resolution 6, if passed, will allow Ivory Group to enter into recurrent related party transactions in the ordinary course of business with specified classes of related parties and avoid the necessity to convene separate general meetings from time to time to seek shareholders’ approval when such recurrent related party transactions occur. This would reduce substantial administrative time, inconveniences and expenses associated with the convening of such meetings. The shareholders’ mandate is subject to renewal on an annual basis.
Further information on the proposed Ordinary Resolution 6 is set out in the Circular to Shareholders dated 29 July 2016.
Statement Accompanying Notice of Annual General Meeting Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
Details of individuals who are standing for election as Directors
No individual is standing for election as a Director at the forthcoming AGM of the Company. IVORY PROPERTIES GROUP BERHAD (673211-M) annual report 2016
PROXY FORM For the 11th Annual General Meeting
CDS Account No. No. of Shares Held
I/We ______(Full Name in Block Letters) of ______(Address) being a member/members of the above Company appoint ______(Full Name in Block Letters) of______(Address) or failing him, ______(Full Name in Block Letters) of ______(Address) as my/our Proxy to vote in my/our name(s) on my/our behalf at the Eleventh Annual General Meeting of the Company to be held on Friday, 26 August 2016 at 10.30 a.m. and at any adjournment thereof in the manner indicated below:-
Ordinary Resolutions For Against
1. To approve the payment of Directors’ fees of RM175,000 for the financial year ended 31 March 2016.
2. To re-elect Dato’ Ooi Chin Loo as a Director of the Company.
3. To re-elect Mr Lim Hock Siu as a Director of the Company.
4. To re-appoint Messrs KPMG as Auditors of the Company.
5. To empower the Directors to issue and allot shares up to 10% of the issued share capital of the Company.
6. To renew Shareholders’ Mandate for recurrent related party transactions of revenue or trading nature.
(Please indicate with an "X" in the appropriate box against each Resolution how you wish your proxy to vote. If no instruction is given, this form will be taken to authorise the proxy to vote at his/her discretion.)
Dated this ______day of ______2016.
Signature of Shareholder Common Seal to be affixed here if Shareholder is a Corporation
Notes: 1. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. Where a member appoints two (2) or more proxies, he shall specify the proportion of his shareholdings to be represented by each proxy. 2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) Securities Account (“Omnibus Account”), there shall be no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. An Exempt Authorised Nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of the SICDA. 4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney. 5. For the proxy to be valid, the proxy form duly completed must be deposited at the Company’s Registered Office at Suite 16-1 (Penthouse Upper), Menara Penang Garden, 42-A Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia, not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof. 6. In respect of deposited securities, only a Depositor whose name appears on the Record of Depositors on 18 August 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy to attend and/or vote on his/her behalf.
Personal Data Privacy By submitting the duly executed proxy form, the member and his/her proxy consent to the Company and/or its agents/service providers to collect, use and disclose the personal data therein in accordance with the Personal Data Protection Act 2010, for the purpose of the Annual General Meeting of the Company and any adjournment thereof. Please fold here
Affix Stamp
Joint Company Secretaries Ivory Properties Group Berhad (673211-M) Suite 16-1 (Penthouse Upper) Menara Penang Garden 42-A Jalan Sultan Ahmad Shah 10050 Penang Malaysia
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ANNUAL REPORT 2016
IVORY PROPERTIES GROUP BERHAD (673211-M) Ivory Tower @ Penang Times Square 81-11-1, Jalan Dato’ Keramat 10150 George Town, Penang, Malaysia Tel : (604) 2108000 Fax : (604) 2270000 www.ivory.com.my