Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ Our Achievements and Accolades Our Sustainability Statement A Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Group Highlights 2016 PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY RM808 MILLION (RM‘ million) 918 808 577 427 388 1. REVENUE RM4.96 BILLION 12 months (RM710 million) 12 months 2. PROFIT BEFORE TAX RM1.18 BILLION 3. SHAREHOLDERS FUND RM9.20 BILLION 2015 2013 2012 2014 2016 4. EARNINGS PER SHARE (14 months) (14 29.8 SEN “ PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY RM808 MILLION IS THE HIGHEST RECORDED OVER A 12-MONTH PERIOD. ” 5. DIVIDEND PER SHARE 9. BACK AS MALAYSIA’S NO. 1 20.0 SEN TOP PROPERTY DEVELOPER 6. TOTAL SALES EXCEEDED SALES TARGET OF 10. TOTAL STRONG DYNAMIC & DIVERSIFIED RM3.50 BILLION EMPLOYEES RM3.82 BILLION 1,824 PEOPLE 7. TOTAL PROPERTIES COMPLETED IN 2016 11. UNBILLED SALES 6,056 UNITS RM8.25 BILLION 8. NEW LAND BANK ACQUIRED 12. STRONG LAND BANK OF 5,218 ACRES WITH GDV OF 1,676 ACRES RM76.48 BILLION CONTENTS Setia Sky Ville, Penang OUR BUSINESS 3 Vision, Mission & Values 4 Corporate Profile 6 Global Presence 8 Corporate Structure 10 Corporate Information OUR PERFORMANCE REVIEW 11 Chairman’s Message 12 Management Discussion and Analysis 28 Group Financial Summary OUR LEADERSHIP AND PEOPLE 30 Board of Directors 32 Directors’ Profiles 42 Senior Management Team Profiles OUR ACHIEVEMENTS AND ACCOLADES 46 Achievements 50 Accolades OUR SUSTAINABILITY STATEMENT 53 Introduction Setia Sky Seputeh, Kuala Lumpur 55 Economic 56 Environment 59 Social OUR GOVERNANCE 68 Corporate Governance Statement 82 Additional Compliance 85 Statement of Risk Management and Internal Controls 90 Audit Committee Report OUR FINANCIAL STATEMENTS 94 Corporate Information 95 Directors’ Report 100 Statements of Financial Position 102 Statements of Comprehensive Income 103 Consolidated Statement of Changes in Equity 105 Statement of Changes in Equity ViiA Residences 106 Statements of Cash Flows @ KL Eco City, 110 Notes to the Financial Statements Kuala Lumpur 201 Statement by Directors 201 Statutory Declaration 202 Independent Auditors’ Report OTHER INFORMATION 207 Analysis of Shareholdings 211 List of Material Properties held by the Group 212 Notice of Annual General Meeting TRIO by Setia, 216 Group Directory Bandar Bukit Tinggi, Klang Form of Proxy Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ Our Achievements and Accolades Our Sustainability Statement 3 Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Vision, Mission & Values VISION SETIA VALUES TO BE THE BEST • I build life-long relationships with my customers • I am responsive to the expressed and unexpressed IN ALL WE DO needs of my customers • I create magical moments at every opportunity • I embrace integrity and protect the privacy of my customers and the Company’s confidential information MISSION • I understand my role and responsibility in achieving SETIA’s success • I have the opportunity to learn and grow • To provide superior customer service and satisfy customer needs through a culture of excellence • I perform my work professionally and with continuous improvement • To enhance shareholder’s value • 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 • To be mindful of our social responsibilities • We are TEAM SETIA Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ 4 Our Achievements and Accolades Our Sustainability Statement Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Corporate Profile S P SETIA BERHAD IS AN AWARD-WINNING MULTI-DISCIPLINARY PROPERTY DEVELOPER. With more than four decades of experience, S P Setia has established itself as an award-winning developer with projects in six different countries, namely in Malaysia, Vietnam, Singapore, Australia, China and the United Kingdom (“UK”). Passionate employees of Setia fondly known as TEAM SETIA S P Setia was incorporated as a construction company in 1974, and was subsequently listed on the Kuala Lumpur Stock Exchange (now Bursa Malaysia) in 1993. In 1996, we refocused our core business to property development, supported by construction, infrastructure and wood- based manufacturing activities. S P Setia is recognised as one of Malaysia’s leading listed real estate players with a portfolio that encompasses townships, eco-sanctuaries, luxury enclaves, high-rise residences, commercial and retail as well as integrated mixed developments. Our corporate culture is one that is focused on the principle of continuous excellence, which exemplifies our vision to be the best in all we do. An aerial view of Setia Alam Northern Precinct 11 Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ Our Achievements and Accolades Our Sustainability Statement 5 Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Corporate Profile Our workforce of more than 1,800 Team Setia members are from diverse backgrounds and are highly motivated and dedicated to our core value of pursuing excellence and becoming “The Best in All We Do”. Trailblazing Branding in the Property Industry Striving to be the best and Grateful for the Recognition In an industry that revolves around bricks and mortar, S P Setia We have received numerous awards in recognition of our efforts is more than just a builder as it is at the forefront of branding in in innovation in property development and in the quality of our the property industry, being the pioneer in coining the concept of properties. We have been recognised by the International Real as its development philosophy. Wherever Estate Federation (“FIABCI”) seven times. Our other plaudits include we set our footprint, we strive to connect with our communities, receiving the Best Master Plan Development (2013, 2009, 2007), creating ecological features and sustainable living environments Best Retail Development (2014) and Best Residential (Low-Rise) that enrich their lives. The Setia brand today is synonymous with Development (2011). In addition, S P Setia is the only developer strength, reliability and the value creation that we bring to all our in Malaysia that has been ranked No. 1 in The Edge Malaysia’s developments. Top Property Developers Awards nine times. Recognising the importance of placing our employees at the forefront, we have also We have an extensive presence in the three key economic regions been honoured with the 7th Aon Hewitt’s Best Employers Award and of Malaysia, namely Klang Valley, Johor and Penang, and also in a Commitment to Employee Engagement Award. Kota Kinabalu, Sabah. Our projects outside Malaysia are currently focused in Australia and the UK where we develop both residential, commercial spaces and integrated development. Our workforce of more than 1,800 Team Setia members are from diverse backgrounds and are highly motivated and dedicated to Ranked our core value of pursuing excellence and becoming “The Best in All We Do”. They place customer satisfaction at the forefront of No. 1 the development value chain - from the design, location and build in The Edge of the property to the quality of service. Team Setia makes a point of difference for our product offerings, making the experience of Malaysia’s purchasing and owning a Setia property uniquely Setia. Top Property In addition to building quality homes, S P Setia also takes its sustainability commitments seriously. As a responsible Developers corporate citizen, we believe that we have a role to play in conserving the environment, empowering our communities and Awards generally, being a positive agent of change in the areas where we operate. To achieve these ends, we are careful to include 9 times conservation efforts in our operations and have established the S P Setia Foundation to implement our corporate responsibility (“CR”) initiatives. Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ 6 Our Achievements and Accolades Our Sustainability Statement Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Global Presence List includes ongoing projects, projects handed over in FY2016 and upcoming projects. UNITED KINGDOM CHINA SINGAPORE AUSTRALIA • Battersea Power Station • Qinzhou Industrial Park • Eco Sanctuary • MAISON, Carnegie • Parque, Melbourne Our Business Our Performance Review Our Leadership and People S P Setia Berhad Group ｜ ｜ Our Achievements and Accolades Our Sustainability Statement 7 Annual Report 2016 ｜ ｜ Our Governance Our Financial Statements Other Information ｜ ｜ ｜ Global Presence VIETNAM • EcoLakes, My Phuoc • EcoXuan, Lai Thieu MALAYSIA KL Eco City, Kuala Lumpur Battersea Power Station, London Central Region • Setia Alam • Setia City • Setia EcoHill • Setia EcoHill 2 • Setia Eco Park • Setia Eco Glades • Setia Eco Templer • KL Eco City • Setia Sky Seputeh • Dwiputra Residences Parque, Melbourne Setia Sky Ville, Penang • Setia Sky Residences • Trio by Setia • Setia Federal Hill Northern Region • Setia Pearl Island • Setia Greens • Setia Sky Vista • Setia V Residences • Setia Sky Ville • Setia SPICE Setia Eco Glades, Cyberjaya Setia Eco Cascadia, Johor Bahru Southern Region • Setia Eco Cascadia • Setia Tropika • Setia Indah • Setia Eco Gardens • Bukit Indah Johor • Setia Business Park I & II • Setia