ANNUAL REPORT 2017 GROUP HIGHLIGHTS 2017 1. SALES 4. SHAREHOLDERS FUND 7. PROFIT ATTRIBUTABLE TO 10. ON-GOING PROJECTS RM4.92 billion RM11.94 BILLION OWNERS OF THE COMPANY 44 projects RM933 million TOTAL SALES 2. REVENUE 5. EARNINGS PER SHARE 8. ENLARGED LAND BANKS 11. UNBILLED SALES ACHIEVED RM4.52 billion 26.77 Sen 9,606 acres RM7.72 billion FOR FY2017 IS 3. PROFIT BEFORE TAX 6. DIVIDEND PER SHARE 9. STRONG GDV IN THE PIPELINE 12. TOTAL STRONG DYNAMIC & RM1.27 billion 15.5 sen RM128.37 billion DIVERSIFIED EMPLOYEES RM4.92 BILLION 2,300 people COVER RATIONALE VISION VALUES At S P Setia, the sky is not the limit. In fact, we believe that the future is limitless. TO BE THE BEST • I build life-long relationships with my customers • I am responsive to the expressed and unexpressed needs of Opened to the possibilities of tomorrow, we embarked on a journey of strengthening growth, anchored IN ALL WE DO my customers by the dynamic and highly-talented Team Setia and our wide range of products. • I create magical moments at every opportunity Guided by our ethos, we worked together, embraced change and demonstrated • I embrace integrity and protect the privacy of my customers our resilience in the face of challenges while at the same time, boosting our capabilities today to fortify and the company’s confidential information tomorrow’s opportunities. MISSION • I understand my role and responsibility in achieving SETIA’s We will continue to reinforce our strong foundations, define our path forward to build a meaningful, success sustainable future, for us and for our stakeholders. • To provide superior customer service and satisfy • I have the opportunity to learn and grow customer needs through a culture of excellence • I perform my work professionally and with continuous • To enhance shareholder’s value improvement • I am responsible for ensuring a safe and clean environment • To be a caring and responsible employer • I support and respect my fellow team members CONTENT • To be mindful of our social responsibilities • We are TEAM SETIA OUR BUSINESS OUR LEADERSHIP AND PEOPLE OUR GOVERNANCE OUR FINANCIAL STATEMENTS Vision, Mission & Values 3 Board of Directors 36 Corporate Governance Overview Statement 89 Notes to the Financial Statements 147 Corporate Profile 4 Directors’ Profiles 38 Additional Compliance Information 110 Statement by Directors 267 Global Presence 6 Senior Management Team Profiles 48 Statement on Risk Management and Internal Controls 115 Statutory Declaration 267 Corporate Structure 8 Independent Auditors’ Report 268 Corporate Information 11 OUR ACHIEVEMENTS AND ACCOLADES OUR FINANCIAL STATEMENTS Achievements 54 Corporate Information 126 OTHER INFORMATION OUR PERFORMANCE REVIEW Accolades 60 Directors’ Report 127 Analysis of Shareholdings 273 Chairman’s Message 12 Statements of Financial Position 135 List of Material Properties held by the Group 280 Management Discussion and Analysis 16 OUR SUSTAINABILITY STATEMENT Statements of Comprehensive Income 138 Notice of Annual General Meeting 281 Group Financial Summary 34 Introduction 62 Consolidated Statement of Changes in Equity 140 Group Directory 286 Economic 66 Statement of Changes in Equity 142 Environment 68 Statements of Cash Flows 143 Form of Proxy Social 74 CORPORATE CORPORATE PROFILE PROFILE as well as in Kota Kinabalu, Sabah. The Group has also gained In 2017, S P Setia was ranked No. 1 in The Edge Malaysia’s Top Property Ranked No. S P Setia Berhad is the No. 1 1 a bigger market share in terms of land banks with its recent Developers Awards for a record-breaking ten times, the only developer to in The Edge Malaysia’s acquisitions. In terms of international projects, we have built a have achieved this feat. In recognition of our efforts in delivering innovation pure-play property developer strong presence in the United Kingdom, Australia, Singapore, and quality in property development, we were recognised by the International Top Property Developers China and Vietnam where the Group has successfully Real Estate Federation (“FIABCI”) seven times, including being awarded Best in Malaysia. developed high quality residential, commercial spaces and Master Plan Development and Best Affordable Housing at the FIABCI Malaysia Awards 10 times. integrated developments. Property Awards 2017. S P Setia was also recognised for its efforts in building a strong team as it won the 8th Aon Best Employers in Malaysia Award. Recognised as one of Malaysia’s leading listed real estate Team Setia is our point of difference. With a workforce of more players with a portfolio that encompasses townships, eco- than 2,300 Team Setia members from diverse backgrounds, sanctuaries, luxury enclaves, high-rise residences, commercial we focused on strengthening growth. We believe it is important and retail as well as integrated mixed developments, S P Setia to keep our team highly-motivated and dedicated to our core has today emerged as a strong and diversified award-winning value of pursuing continuous excellence. Placing customer multi-disciplinary property developer in Malaysia. satisfaction at the forefront of the development value chain, these talented individuals make the experience of purchasing The Group is at the forefront of branding in the property and owning a Setia property, uniquely Setia. industry, holding steadfast to its development philosophy. Our ability to connect communities, S P Setia takes its sustainability commitments seriously. As create ecological features and sustainable living environments a responsible corporate citizen, we believe that we have a that enrich the lives of our residents has made the Setia brand role to play in conserving the environment, empowering our synonymous with strength, reliability and the value creation communities and generally, being a positive agent of change that we bring to all our developments. in the areas where we operate. The S P Setia Foundation, helmed by our Group Chairman, implements our corporate S P Setia has an extensive presence in the three key economic responsibility initiatives with impactful results for the regions of Malaysia, namely Klang Valley, Johor and Penang, betterment of the society. 4 OUR BUSINESS S P Setia Berhad Group Annual Report 2017 S P Setia Berhad Group Annual Report 2017 OUR BUSINESS 5 GLOBAL GLOBAL PRESENCE PRESENCE MALAYSIA UNITED KINGDOM Central Region • Battersea Power Station • Setia Alam • Setia City • Setia EcoHill • Setia EcoHill 2 • Setia Eco Park • Setia Eco Glades • Setia Eco Templer • KL Eco City • Setia Sky Seputeh Battersea Power Station, London • TRIO by Setia • Setia Seraya Residences CHINA • Bandar Kinrara • Qinzhou Industrial Park • TemasyaGlenmarie • Alam Impian VIETNAM • Bandar Baru Seri Petaling • EcoLakes, My Phuoc • Setia AlamSari • EcoXuan, Lai Thieu • Kota Bayuemas • Seri Beringin EcoLakes, Vietnam • Alam Damai • Alam Sutera Setia EcoHill, Semenyih Southern Region • Setia Eco Cascadia • Setia Tropika AUSTRALIA • Setia Indah • MAISON, Carnegie • Setia Eco Gardens • Sapphire By The Gardens, Melbourne • Bukit Indah Johor • Setia Business Park I & II Sapphire By The Gardens, Melbourne Northern Region • Setia Sky 88 • Setia Pearl Island • Taman Perling • Setia Greens • Taman Rinting • Setia Sky Vista • Taman Pelangi • Setia Sky Ville • Taman Pelangi Indah Eastern Region SINGAPORE • Setia SPICE • Taman Industri Jaya • Aeropod, Kota Kinabalu • Eco Sanctuary Setia SPICE, Penang Setia Sky 88, Johor Aeropod, Kota Kinabalu Eco Sanctuary, Singapore 6 OUR BUSINESS S P Setia Berhad Group Annual Report 2017 S P Setia Berhad Group Annual Report 2017 OUR BUSINESS 7 CORPORATE CORPORATE STRUCTURE STRUCTURE PROPERTY DEVELOPMENT CONSTRUCTION 100% Bandar Setia Alam Sdn Bhd 50% Greenhill Resources Sdn Bhd 100% Setia Readymix Sdn Bhd 100% Setia Precast Sdn Bhd 100% Setia Duta One Sdn Bhd# 100% Setia Alam Recreation Sdn Bhd 100% Setia Prefab Sdn Bhd Manih System 100% 60% Suharta Sdn Bhd* 51% Suharta Development Sdn Bhd* 50% Bandar Eco-Setia Sdn Bhd 100% Setia Eco Park Recreation Sdn Bhd Construction Sdn Bhd# 60% Yunikhas Sdn Bhd * 100% Bukit Indah (Johor) Sdn Bhd 8% investment in Yunikhas Sdn Bhd is held by S P Setia Berhad 100% Setia Indah Sdn Bhd 10% investment in Yunikhas Sdn 100% Shabra Development Sdn Bhd Bhd is held by Manih System Construction Sdn Bhd 100% Syarikat Kemajuan Jerai Sdn Bhd# 100% Lagavest Sdn Bhd# 100% Ambleside Sdn Bhd# 100% Aneka Baru (M) Sdn Bhd# 100% Bukit Indah (Perak) Sdn Bhd 100% Setia Promenade Sdn Bhd Bukit Indah Property Management 70% Sdn Bhd MANUFACTURING/INVESTMENT & PROPERTY HOLDING/PROPERTY MANAGEMENT/OTHERS 50% Golden Klang Valley Sdn Bhd# 100% Setia-Wood Industries Sdn Bhd 100% S P Setia Marketing Sdn Bhd 100% Sendiman Sdn Bhd 100% S P Setia Management Services Sdn Bhd 100% Exceljade Sdn Bhd 60% S P Setia Estate Management Sdn Bhd* 100% Aeropod Sdn Bhd 100% S P Setia PMC Sdn Bhd 70% Setia Eco Glades Sdn Bhd 100% S P Setia Technology Sdn Bhd 70% Kemboja Mahir Sdn Bhd 100% Ganda Anggun Sdn Bhd 100% Futurecrest (M) Sdn Bhd 70% Kesas Kenangan Sdn Bhd 100% Kewira Jaya Sdn Bhd 100% Kay Pride Sdn Bhd 100% S P Setia (Indonesia) Sdn Bhd 60% Setia Putrajaya Sdn Bhd 100% Setia Putrajaya Construction Sdn Bhd# 100% Setiahomes (MM2H) Sdn Bhd 100% KL Eco City Sdn Bhd 100% Setia Putrajaya Development Sdn Bhd 99.9% Kenari Kayangan Sdn Bhd# 49% PTB Property Developer Sdn Bhd 100% Setia International Limited 100% Setia MyPhuoc Limited 55% SetiaBecamex Joint Stock Company 100% Tenaga Raya Sdn Bhd 100% KL East Sdn Bhd 100% Setia Land (China) Limited 100% Setia Eco Green Sdn Bhd Setia