2016 Annual Report

IOI CORPORATION BERHAD (9027-W)
Annual Report 2016

Strength in Fundamentals
Two IOI Square, IOI Resort City, 62502 Putrajaya, Malaysia
www.ioigroup.com
Annual Report 2016
STRENGTH IN FUNDAMENTALS
IOI Corporation Berhad remains focused towards being a fully integrated palm oil
producer by further strengthening its fundamentals in its plantation and resource-
based manufacturing sectors. By improving the quality of our products and
enhancing our operational efficiencies, we will continue to pursue profitability and
sustainability and deliver value to our shareholders.
OUR VISION
is to be a leading corporation in our core businesses by
providing products and services of superior values and by
sustaining consistent long-term growth in volume and
profitability.
We shall strive to achieve responsible commercial success by

satisfying our customers needs, giving superior performance
to our shareholders, providing rewarding careers to our
people, cultivating mutually beneficial relationship with our
business associates, caring for the society and the
environment in which we operate and contributing towards
the progress of our nation.
OUR CORE
VALUES
In our pursuit of Vision IOI, we expect our people to uphold,
at all times, the IOI Core Values which are expressed as follows:
INTEGRITY
which is essential and cannot
be compromised
1
COMMITMENT
as we do what we
say we will do
2
LOYALTY
is crucial because we are one
team sharing one vision
3
EXCELLENCE IN EXECUTION
as our commitments can only
be realised through actions and results
4
SPEED OR TIMELINESS
in response is important in our ever
changing business environment
5
INNOVATIVENESS
to provide us additional
competitive edge
6
COST EFFICIENCY
is crucial as we need to
remain competitive
7
DIVIDEND
PER SHARE
8.0 SEN
2015 9.0 SEN
PROFIT
BEFORE RM1.45 EARNINGS PER
SHARE (SEN)
INTEREST AND
TAXATION BILLION 9.99 SEN
2015 RM1.24 BILLION 2015 0.82 SEN
OUR RESULTS
MARKET CAPITALISATION
RM27.29 2015
RM25.66
BILLION BILLION
SHARE PRICE
RM4.34
2015 RM4.06
ANNUAL REPORT 2016
KEY INDICATORS
%
25
20
15
10
-5
-10
-15
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2015 2016
IOI CORPORATION BERHAD FTSE BURSA MALAYSIA KLCI BURSA MALAYSIA PLANTATION
2016 2015 2014 2013 2012

In RM million unless otherwise stated MFRS MFRS FRS FRS FRS
FINANCIAL
Profit before interest and taxation 1,449.6 1,240.4 1,927.4 1,622.6 2,821.3
Profit attributable to owners of the parent 629.7 51.9 3,373.0 1,973.7 1,797.4
Equity attributable to owners of the parent 7,138.1 7,069.0 6,036.8 13,650.5 12,607.0
Return on average shareholders equity (%) 8.86 0.68 34.27 15.03 14.62
Basic earnings per share (sen) 9.99 0.82 52.93 30.88 28.09
Gross dividend per share (%) 80.0 90.0 200.0 155.0 155.0
PLANTATION
FFB production (MT) 3,145,317 3,542,222 3,506,706 3,408,935 3,185,878
Total oil palm area (Ha) 179,271 178,768 174,061 160,626 157,752
MANUFACTURING
OLEOCHEMICALS
Plant utilisation (%) 82 85 84 80 77
Sales (MT) 595,820 586,076 583,555 561,001 624,542
REFINERY
Sales (MT) 2,427,326 2,591,197 2,706,786 3,052,027 2,919,543
SPECIALTY OILS AND FATS
Sales (MT) 782,972 773,767 735,099 734,691 665,785
Note: In conjunction with the adoption of Malaysian Financial Reporting Standards (MFRS) framework by the Group, the above information for
3
FY2015 and FY2016 have been prepared in accordance with MFRS, whereas information from FY2012 to FY2014 have been prepared in accordance
with Financial Reporting Standards (FRS).
CONTENTS
7 18 38
M ANAGE ME NT S S US T AI NAB I L I T Y
CH A IRMA N S
DISCUS S I O N AND AND C O R P O R AT E
S T A TEMENT
ANALYS I S R E S P O NS I B I L I T Y
Our Vision Managements Discussion and Analysis Sustainability and Corporate Responsibility 38
Our Core Values 1 Group Financial Review 18 Corporate Responsibility 54
Our Results 2 Group Business Review 22 Social Contributions
Key Indicators 3 Plantation Corporate Information 58

roup Business Review
G 30 Board of Directors 59
Resource-Based Manufacturing Profile of Directors 60
Chairmans Statement 7
Group Financial Overview 12 Senior Management Team 68
Group Performance Highlights 14 Profile of Senior Management Team 70
Group Quarterly Results 15 Group Business Activities 74
Financial Calendar 15 Global Presence 76
Five-Year Financial Highlights 16 Local Presence 78

Corporate Calendar 80
Audit and Risk Management
Committee Report 84
Statement on Corporate Governance 89
Statement on Risk Management and
Internal Control 109
Statement of Directors Interests 113
Other Information 114
117
FIN A N CIAL PROXY

REPO RTS FORM
Financial Reports 117 Group Properties 290

Notice of Annual General Meeting 296
Statement Accompanying Notice of
Annual General Meeting 301
Shareholders Information 302
Proxy Form
47 th ANNUAL GENERAL MEETING

IOI CORPORATION BERHAD
IOI Resort City, 62502 Sepang Utara, Malaysia

(9027-W)
VENUE : Putrajaya Ballroom I (Level 3), Putrajaya Marriott Hotel,
DATE : Friday, 28 October 2016
TIME : 10:00 am
TAN SRI DATO LEE SHIN CHENG
Executive Chairman
ANNUAL REPORT 2016
CHAIRMANS
STATEMENT
D E A R S H A R E H O L D E R S ,
On behalf of the Board of Directors of IOI Corporation

Berhad, it gives me great pleasure to present to you the
Annual Report of the Company and the Group for the
financial year ended 30 June 2016 (FY2016).
OPERATING ENVIRONMENT CONTRIBUTION TO SEGMENT RESULTS

The global economy was generally weak during the entire
FY2016. Emerging and developing economies were faced with PLANTATION
lacklustre trade flows and persistently low commodity prices, 58%
as well as a 12-year low of Brent crude oil prices of around RESOURCE-BASED
USD28/- per barrel. Growth for the China economy moderated MANUFACTURING
to 6.9% in 2015. In addition, the competitive devaluing of 42%
Chinas Renminbi heightened concerns over the health of the
2016
Chinese economy and the potential spillovers of its effects to
trading partners around the globe. The unexpected Brexit vote
in June 2016 has also sparked uncertainties in the financial
markets and there were concerns of contagion effects with
further European countries taking similar vote to leave the
European Union.
Meanwhile, the Malaysian economy expanded by 4.2% during

the first quarter of 2016, compared with 5.3% in the same PLANTATION
period last year, but the growth slowed to 4.0% during the 67%
second quarter of 2016. On the foreign currency exchange RESOURCE-BASED
(FX) front, the beginning of interest-rate normalisation regime MANUFACTURING
in the United States (US) and the adjustment of Chinas 33%
currency rate coupled with the slowdown of Chinas economy
contributed to high volatility in the FX and capital markets
during the financial year. The Dollar/Ringgit exchange market
started trading at 3.77 level at the beginning of our FY2016
2015
and trended upwards during the months of August and
September 2015 to as high as 4.45 level before settling down
to 4.01 level at the end of the FY2016.
7
CHAIRMANS STATEMENT (Contd)
On the operational front, FY2016 recorded the hottest periods

impacted by the strong El Nino weather phenomenon that
spawned droughts and weather-related calamities across the
South East Asia region. Crude palm oil (CPO) prices hovered
at a lacklustre level between RM2,100/MT and RM2,200/MT
during most of the first half of FY2016. However, prices
recovered subsequently and peaked at more than RM2,800/MT
in April 2016 after the reported fall in palm production caused
mainly by El Nino.
As for the palm oil downstream segment, the refining

sub-segment was again affected by negative refining and
fractionation margins mainly due to excess capacity in the
marketplace. Malaysian refiners also lost their competitiveness
due to duty advantage enjoyed by their Indonesian counterparts.
The oleochemical sub-segment continued to face challenges

following the graduation of Malaysia from the Generalised
System of Preferences (GSP) status in Europe in 2014 which
gave oleochemical players in Indonesia some tariff advantage With 90 estates in Malaysia and Indonesia totalling over 180,000 hectares of
when they sell fatty acids products into Europe. The build-up of planted area, IOI is confident of driving positive growth prospects and cultivating a
oleochemical capacities in Indonesia during the last two years satisfactory performance.
has caused intense competition while the surge in palm kernel

(PK) oil prices during the second half of FY2016 affected our
oleochemical sub-segments profitability for the financial year REVIEW OF RESULTS
under review. For FY2016, the Group reported a Profit Before Tax (PBT) of
RM965.8 million as compared to a PBT of RM316.4 million
As for our specialty oils and fats sub-segment, it experienced reported for FY2015. The higher PBT is due mainly to lower
the most difficult times since the acquisition of Loders Croklaan net foreign currency translation loss on foreign currency
group in 2002 from Unilever. This sub-segment was on a denominated borrowings and higher contribution from the
volume and profit growth path for some years especially in the resource-based manufacturing segment. Excluding the net
Americas and Asia regions before the suspension of Roundtable foreign currency translation loss of RM318.5 million (FY2015
on Sustainable Palm Oil (RSPO) certification on IOI Groups RM735.3 million) on foreign currency denominated borrowings,
businesses in April 2016. The suspension was subsequently lifted the underlying PBT of RM1,284.3 million for FY2016 is 22%
on 8 August 2016. higher than the underlying PBT of RM1,051.7 million for
FY2015.
The plantation segments profit of RM842.2 million for FY2016

is slightly lower than the profit of RM865.3 million reported for
FY2015. The lower profit reported is due mainly to lower fresh
fruit bunches (FFB) production which is mitigated by higher
CPO and PK prices realised. FFB production for FY2016 was
3,145,317 MT as compared to 3,542,222 MT for FY2015.
The resource-based manufacturing segments profit of

RM606.4 million for FY2016 is 44% higher than the profit of
RM420.4 million reported for FY2015 due mainly to fair value
gain on derivative financial instruments of RM120.9 million
(FY2015 loss of RM109.6 million). Excluding the fair value
gain/loss on derivative financial instruments, the underlying profit
IOI continues to leverage on its best agronomic practices and efficient plantation for the resource-based manufacturing segment for FY2016 is
management to create sustainable growth for the future.
8
ANNUAL REPORT 2016
strategic
executions
RM485.5 million which is 8% lower than the underlying profit
of RM530.0 million for FY2015. This is mainly due to lower
margin derived from the oleochemical sub-segment as a result
of high PK cost.
During the financial year under review, the Group has generated
a net cash inflow from operating activities of approximately
RM1.63 billion against RM1.45 billion generated during the last
financial year, representing an increase of approximately 12.4%
over the same period last year. The return on average capital
employed (excluding the net foreign exchange translation loss
on foreign currency denominated borrowings) for FY2016 is
approximately 7.2% compared to 6.1% for the corresponding
period last year. The return on shareholders equity (excluding
the net foreign exchange translation loss on foreign currency
The various prestigious awards received by IOI is a strong testament to its
denominated borrowings) has also improved to approximately excellent environmental management and executions.
13.4% for this financial year compared to 10.3% registered
in FY2015.
SUSTAINABILITY AND CORPORATE RESPONSIBILITY
A more detailed review of the Groups performance is covered
under the section on Managements Discussion and Analysis IOI has been embracing the values of sustainability and
in this Annual Report. corporate responsibility (CR) since the early days of its
plantation operations. These sustainability values are an integral
of our business and have been embedded in the Groups core
DIVIDENDS AND CAPITAL MANAGEMENT values, policy statements and work practices across its global
operations. For many years, the Group has been following a
During the year under review, two interim dividends totalling number of principles and criteria that were later codified by
8.0 sen per ordinary share amounting to a total payout of the RSPO diligently and consistently.
approximately RM503.5 million were declared. The dividends
were declared out of the total net cash of RM1,632.0 million However, during the year under review, certain gaps with RSPO
generated from operating activities for FY2016. The aforesaid standards were discovered at parts of our plantations in
total dividend payout represented approximately 31% of the Indonesia. This has led to the suspension of RSPO certification
Groups net cash flow generated from operating activities. on the entire Groups RSPO palm oil production and sales in
April 2016. Subsequent to the suspension, the Group has set up
The Company continues to manage its capital in a proactive a Sustainability Steering Committee headed by the Group Chief
manner to enhance returns to shareholders while optimising Executive Officer, assisted by the Group Head of Sustainability
gearing levels and providing for capital investment funding and committee members comprising various business divisional
requirements. heads, to oversee and manage sustainability developments of
the Group. This committee reports to the Board of Directors.
During the year, the Company bought back 35,676,300 ordinary The Group has also put in place sufficient resources including
shares of the Company from the open market at an average consultants and specialists in peat and High Carbon Stock
price of RM4.01 per share, representing 0.6% of the issued (HCS) areas to guide us on the required action plans to
and paid-up share capital of the Company. rectify the aforesaid gaps and advise on sustainability initiatives
going forward.
The Group also continues to maintain healthy cash and cash
equivalents, which as at 30 June 2016, stood at RM1.94 billion.
9
CHAIRMANS STATEMENT (Contd)
In addition, the Group has revised its Sustainable Palm Oil Policy Key highlights of the Groups sustainability measures and
(SPOP) and drawn up a Sustainability Implementation Plan CR initiatives are covered in the Sustainability and Corporate
(SIP). The revised policy introduces new commitments on Responsibility section.
peatland landscape management and protection, peatland
rehabilitation, enhanced fire prevention measures, and the
implementation of a more robust labour rights monitoring BUSINESS DEVELOPMENTS
system. As for the SIP, it sets out clearly the activities required
On the plantation front, our Indonesian subsidiary group,
to implement the sustainability policy commitments and contains
PT Sawit Nabati Agro (SNA Group), has to date planted
milestones and timelines for each activity. This SIP will be
approximately 21,000 hectares of oil palm trees, out of which
regularly updated over time to reflect stakeholder input and
9,000 hectares are already mature. SNA Group has targeted to
implementation progress on the ground.
plant another 3,000 hectares in the later part of the financial
year ended 30 June 2017 (FY2017). With more mature area
The combination of all the aforesaid measures and initiatives has
coming on stream, we expect SNA Group to start contributing
resulted in RSPO lifting the suspension of certification on the
positive cash flow to the Group during FY2017.
Group on 8 August 2016. Going forward, our sustainability
focus will be on the delivery of our policy commitments as well
On the specialty oils and fats sub-segment, as one of its main
as continued constructive engagement with our customers and
strategic initiatives to accelerate business and profit growth, the
other stakeholder groups.
business has restructured its operating model to provide a
stronger focus on three key global segments, namely
Besides driving sustainable profit growth and returns for the
confectionery, bakery and infant nutrition. This approach has
shareholders, the Group also undertakes many CR activities.
helped the Group to identify various opportunities for growth of
These CR activities are carried out mainly through Yayasan
its specialty oils and fats business. Plans are also in place to set
Tan Sri Lee Shin Cheng (Yayasan TSLSC), a charitable
up new sales offices in the Philippines and Mexico during
foundation funded by the Group. To date, Yayasan TSLSC has
FY2017 to support the Groups entry into new geographical
contributed over RM36 million to various schools, hospitals,
regions to serve our multinational and regional customers better.
welfare homes and charitable organisations, and has given
The Group will also be completing its 100,000 MT a year
scholarships and grants to hundreds of schools and students.
specialty oils and fats plant in Xiamen, the Peoples Republic of
China by this coming December. This new plant will cater for
the growing demand of semi and high-end specialty products
by the affluent customers in China and North East Asia.
CORPORATE DEVELOPMENT
During the financial year under review, the Group has
completed the purchase of Cremer Oleo GmbH & Co KGs
entire oleochemical manufacturing business in Germany for a
total purchase consideration of approximately 91.7 million
(equivalent to RM423.1 million).
This acquisition is an important step for the Group to move up

the value chain into a more specialised oleochemical business
which will enable the Group to expand into the higher margin
pharmaceutical, cosmetics, food and performance chemicals
markets worldwide. It will also enable the transfer of advanced
technical knowledge, application development and process
know-how back to our Malaysian oleochemical production sites.
In addition, it has created a number of collaborative
The latest acquisition of Cremer Oleos entire oleochemical manufacturing business opportunities between our oleochemical and our specialty oils
enables a strategic future to be forged while enhancing the value chain of the and fats businesses in the areas of strategic sourcing, processing
Group and expanding the product portfolio of the IOI Oleochemicals Group. technology and cross-marketing.
10
ANNUAL REPORT 2016
PROSPECTS
The global economic growth for 2016 is projected to remain
at 2.4% which is similar to last year. Growth in advanced
economies is estimated to increase to 1.7%. In Asia, India,
the largest palm oil importing country in the world, is expected
to expand its economy by 7.6% while Chinas growth is
expected to moderate to around 6.5% this year as compared to
6.9% last year. At the local front, the Malaysian economy is
expected to expand at approximately 4% in 2016 due mainly
to resilient domestic demand.
In the plantation segment, the Group expects positive growth

prospects from its plantation associate, Bumitama Agri Ltd, and
its subsidiary, SNA Group in Indonesia, as their young palm
trees are at the prime production age. With the recent CPO and
PK price rally due to low palm oil stocks and the expected IOI Loders Croklaan hosted various PHO removal courses to help food
increase in palm fruits production as the effect of the severe manufacturers and customers seamlessly eliminate PHO in product formulations
without sacrificing taste, quality, or texture.
drought in 2015 wears off, the plantation segment is expected
to perform satisfactorily.
ACKNOWLEDGEMENTS
In the resource-based manufacturing segment, given the
prevailing high PK prices, we expect the operating conditions for FY2016 has been a challenging year for IOI Group with the
our oleochemical sub-segment to remain challenging. However, sluggish global economy, volatile Ringgit exchange rates,
the Group will rely on its established global sales and extreme drought caused by El Nino and the RSPO certification
distribution networks, diverse product offerings and operational suspension. Despite these factors, the Group managed to record
efficiency to sustain its oleochemical sub-segments business an overall satisfactory performance. In this respect, I wish to
performance in FY2017. thank the management and all the employees for their
tremendous effort, perseverance and passion in contributing to
As for our specialty oils and fats sub-segment, the this years results. I would also like to take this opportunity to
commissioning of the new Xiamen plant in early 2017 will welcome our IOI Oleo GmbHs employees in Germany to the
enhance the competitiveness of the business in China and family of IOI Group.
North East Asia. In addition, the impending ban on partially
hydrogenated oils (PHOs) in US will help our operations in Finally, I wish to express my sincere thanks and appreciation
the Americas region increase the sales of palm-based alternatives. to all our customers, business partners, government authorities,
shareholders and fellow Board members for their confidence
The recent sustainability measures and initiatives introduced by and continued strong support to the Group.
the Group will give us a stronger platform to sustain and grow
our sustainability-based plantation and downstream Thank you,
manufacturing businesses.
The volatility of Dollar/Ringgit exchange rates will continue to

affect the non-cash flow foreign exchange translation gain/loss
arising from our US Dollar denominated borrowings although TAN SRI DATO LEE SHIN CHENG
we expect the effect to moderate from previous years due to Executive Chairman
the reduction of our foreign currency borrowings and the
relative stability of the crude oil price.
Overall, the Group expects its overall operating performance for

FY2017 to be satisfactory.
11
GROUP FINANCIAL OVERVIEW
CASH FLOW CASH AND CASH PROPERTY, PLANT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 EQUIVALENTS (A) AND EQUIPMENT
RM million 1,938.2 9,985.1
Net operating cash flow 1,632.0

Capital expenditure, net of disposal (475.7)
OTHER CURRENT
Free cash flow from operation 1,156.3 ASSETS CASH AND CASH PROPERTY, PLANT
Dividends received from investments 36.4
Proceeds from issuance of shares 7.0
3,927.6
EQUIVALENTS (A)
Assets
1,938.2 9,985.1
AND EQUIPMENT
Proceeds from disposal of investments, net of payment for OTHER LONG

other investments 40.4 TERM ASSETS
Share repurchase by the Company (143.2) 1,705.2
Finance costs paid (217.4) OTHER CURRENT
ASSETS
Acquisition of oleochemicals business, net of cash and
cash equivalents and borrowings (412.4) 3,927.6 Assets
Dividend payments
STATEMENT OF FINANCIAL
OTHER LONG
Shareholders of the Company (504.1)
Shareholders of subsidiaries (7.4)
TERM ASSETS
POSITION AS AT
1,705.2
30 JUNE
Cash outflow in net borrowings (44.4)
Transaction cost of borrowings (1.8)
Accretion of borrowings (2.0)
Net increase in net borrowings

Net borrowings as at 30 June 2015
Translation difference
(48.2)
(4,859.9)
(534.9)
2016 OTHER
LIABILITIES EQUITY
2,757.9 7,138.1
Net borrowings as at 30 June 2016 (5,443.0)
RM MILLION
NON-CONTROLLING
INTERESTS
278.9 Equity
OTHER
EQUITY
LIABILITIES
2,757.9
and
7,138.1
Liabilities
BORROWINGS (B)
NON-CONTROLLING
INTERESTS
7,381.2
278.9 Equity
and
Liabilities
BORROWINGS (B)
7,381.2
NET BORROWINGS = (B) (A) = RM5,443.0 MILLION

NET GEARING = 76%
12
ANNUAL REPORT 2016
CASH AND CASH PROPERTY, PLANT RETAINED EARNINGS

EQUIVALENTS (C) AND EQUIPMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016
1,788.5 9,765.5 RM million
Segment results 1,452.9

Unallocated corporate expenses (3.3)
OTHER CURRENT
ASSETS Profit before interest and taxation 1,449.6
CASH AND CASH PROPERTY, PLANT
Net foreign currency translation loss on foreign currency
3,382.8
EQUIVALENTS (C)
Assets
1,788.5
AND EQUIPMENT
9,765.5 denominated borrowings (318.5)
OTHER LONG
Net interest expenses (165.3)
TERM ASSETS
Profit before taxation 965.8
1,511.7 Taxation (319.5)
OTHER CURRENT
ASSETS
Profit for the financial year 646.3
3,382.8 Assets Other comprehensive loss (1.7)
STATEMENT
OTHER LONG OF FINANCIAL Total comprehensive income 644.6
TERM ASSETS
POSITION AS AT Less: Attributable to non-controlling interests (16.6)
1,511.7 Total comprehensive income attributable to owners
30 JUNE
of the parent 628.0
Dividends paid (504.1)
Expiration of share options 30.9
2015 OTHER
LIABILITIES EQUITY
Retained earnings for the financial year
Retained earnings as at 30 June 2015
Retained earnings as at 30 June 2016

154.8
7,040.1
7,194.9
2,457.0 7,069.0
RM MILLION
NON-CONTROLLING
INTERESTS
274.1
Equity
OTHER
2,457.0
and
EQUITY
LIABILITIES
7,069.0
Liabilities
NON-CONTROLLING
BORROWINGS (D)
INTERESTS
6,648.4
274.1
Equity
and
Liabilities
BORROWINGS (D)
6,648.4
NET BORROWINGS = (D) (C) = RM4,859.9 MILLION

NET GEARING = 69%
13
GROUP PERFORMANCE HIGHLIGHTS
In RM million unless otherwise stated 2016 2015 % +/(-)
FINANCIAL PERFORMANCE
Revenue 11,739.3 11,541.5 2
Profit before interest and taxation 1,449.6 1,240.4 17
Profit before taxation 965.8 316.4 205
Net operating profit after taxation (NOPAT) 812.4 266.0 205
Net profit attributable to owners of the parent 629.7 51.9 1,113
Average shareholders equity 7,103.6 7,628.3 (7)

Average capital employed 15,802.9 16,432.4 (4)
Operating margin (%) 11.54 9.89 17
Return on average shareholders equity (%) 8.86 0.68 1,203

Return on average capital employed (%) 5.14 1.62 217
Basic earnings per share (sen) 9.99 0.82 1,118

Dividend per share gross (sen) 8.0 9.0 (11)
Net assets per share (sen) 114 112 2
Dividend cover (number of times) 1.25 0.09 1,289

Interest cover (number of times) 5.42 2.12 155
PLANTATION PERFORMANCE
FFB production (MT) 3,145,317 3,542,222 (11)
Yield per mature hectare (MT) 21.41 23.99 (11)
Mill production (MT)
Crude palm oil 697,334 781,625 (11)
Palm kernel 163,520 187,718 (13)
Oil extraction rate (%)
Crude palm oil 21.55 21.49 0
Palm kernel 5.05 5.16 (2)
Average selling price (RM/MT)
Crude palm oil 2,249 2,221 1
Palm kernel 1,740 1,551 12
MANUFACTURING PERFORMANCE
OLEOCHEMICALS
Plant utilisation (%) 82 85 (4)
Sales (MT) 595,820 586,076 2
REFINERY
Sales (MT) 2,427,326 2,591,197 (6)

Sales (MT) 782,972 773,767 1
14
ANNUAL REPORT 2016
GROUP QUARTERLY RESULTS
1st 2nd 3rd 4th

In RM million unless otherwise stated Quarter % Quarter % Quarter % Quarter % 2016 %
Revenue 3,086.7 26 2,968.5 25 2,866.0 25 2,818.1 24 11,739.3 100
Operating profit 172.4 13 642.9 47 422.3 31 117.5 9 1,355.1 100

Share of results of associates 36.9 37 16.8 17 22.7 23 23.3 23 99.7 100
Share of results of joint ventures (1.2) 23 (1.3) 25 (1.1) 21 (1.6) 31 (5.2) 100
Profit before interest and taxation 208.1 14 658.4 45 443.9 31 139.2 10 1,449.6 100
Interest income 12.3 23 12.6 24 15.5 29 12.9 24 53.3 100
Finance costs (57.1) 26 (54.1) 25 (55.5) 25 (51.9) 24 (218.6) 100
Net foreign currency translation (loss)/gain
on foreign currency denominated
borrowings (853.9) 268 227.3 (71) 432.8 (136) (124.7) 39 (318.5) 100
(Loss)/profit before taxation (690.6) (71) 844.2 87 836.7 87 (24.5) (3) 965.8 100
Taxation (51.2) 16 (128.5) 40 (104.7) 33 (35.1) 11 (319.5) 100
(Loss)/profit after taxation (741.8) (115) 715.7 111 732.0 113 (59.6) (9) 646.3 100
Attributable to:
Owners of the parent (744.4) (118) 703.7 112 729.4 116 (59.0) (10) 629.7 100
Non-controlling interests 2.6 16 12.0 72 2.6 16 (0.6) (4) 16.6 100
(741.8) (115) 715.7 111 732.0 113 (59.6) (9) 646.3 100
(Loss)/earnings per share (sen)

Basic (11.78) 11.17 11.57 (0.94) 9.99
Diluted (11.78) 11.17 11.57 (0.94) 9.99
Profit before interest and taxation on
segmental basis
Plantation 221.4 26 292.1 35 133.6 16 195.1 23 842.2 100
Resource-based manufacturing (8.8) (1) 368.6 61 305.1 50 (58.5) (10) 606.4 100
Other operations (0.9) (21) 5.0 116 1.5 35 (1.3) (30) 4.3 100
211.7 15 665.7 46 440.2 30 135.3 9 1,452.9 100
Unallocated corporate (expenses)/income (3.6) 109 (7.3) 221 3.7 (112) 3.9 (118) (3.3) 100
Profit before interest and taxation 208.1 14 658.4 45 443.9 31 139.2 10 1,449.6 100
Note: The Group Quarterly Results are prepared in accordance with Malaysian Financial Reporting Standards.
FINANCIAL CALENDAR
FINANCIAL YEAR END 30 JUNE 2016
ANNOUNCEMENT OF RESULTS PAYMENT OF DIVIDENDS
1st Quarter 16 November 2015 1st Interim
Declaration 19 February 2016
2nd Quarter 19 February 2016
Entitlement 8 March 2016
3rd Quarter 18 May 2016 Payment 18 March 2016
4th Quarter 23 August 2016 2nd Interim
Declaration 23 August 2016
Notice of Annual General Meeting 29 September 2016 Entitlement 9 September 2016
Annual General Meeting 28 October 2016 Payment 23 September 2016
15
FIVE-YEAR FINANCIAL HIGHLIGHTS
2016 2015 2014 2013 2012

In RM million unless otherwise stated MFRS MFRS FRS FRS FRS
RESULTS
Revenue 11,739.3 11,541.5 11,910.6 12,198.5 15,640.3
Profit before interest and taxation 1,449.6 1,240.4 1,927.4 1,622.6 2,821.3
Net foreign currency translation (loss)/gain on
foreign currency denominated borrowings (318.5) (735.3) (22.0) 200.4 (290.4)
Net interest expenses (165.3) (188.7) (234.6) (219.5) (141.3)
Profit before taxation 965.8 316.4 1,670.8 1,603.5 2,389.6
Taxation (319.5) (261.6) (408.4) (320.2) (553.1)
Profit for the financial year from continuing operations 646.3 54.8 1,262.4 1,283.3 1,836.5
Profit for the financial year from discontinued operations 2,127.3 714.9
Profit for the financial year 646.3 54.8 3,389.7 1,998.2 1,836.5
Attributable to:
Owners of the parent 629.7 51.9 3,373.0 1,973.7 1,797.4
Non-controlling interests 16.6 2.9 16.7 24.5 39.1
ASSETS
Property, plant and equipment 9,999.3 9,765.5 6,410.0 5,928.6 5,713.7
Prepaid lease payments 21.1 6.7 30.1 129.2 29.6
Land held for property development 1,843.9 1,858.9
Investment properties 6.9 7.0 8.3 1,949.2 1,326.7
Associates 937.5 812.7 886.9 870.9 817.1
Joint ventures 31.7 35.2 33.0 3,686.1 3,483.1
Other assets 708.0 650.1 577.3 652.1 657.1
11,704.5 11,277.2 7,945.6 15,060.0 13,886.2
Current assets 5,851.6 5,171.3 7,386.0 8,846.7 9,185.6
17,556.1 16,448.5 15,331.6 23,906.7 23,071.8
EQUITY AND LIABILITIES

Share capital 646.2 645.9 645.0 643.4 642.7
Reserves 6,491.9 6,423.1 5,391.8 13,007.1 11,964.3
7,138.1 7,069.0 6,036.8 13,650.5 12,607.0
Non-controlling interests 278.9 274.1 196.3 280.0 288.0
Total equity 7,417.0 7,343.1 6,233.1 13,930.5 12,895.0
Non-current liabilities 6,314.7 7,240.1 5,601.7 8,307.4 7,974.3
Current liabilities 3,824.4 1,865.3 3,496.8 1,668.8 2,202.5
Total liabilities 10,139.1 9,105.4 9,098.5 9,976.2 10,176.8
17,556.1 16,448.5 15,331.6 23,906.7 23,071.8
Net operating profit after tax (NOPAT) 812.4 266.0 1,709.6 2,208.4 1,979.9
Average shareholders equity 7,103.6 7,628.3 9,843.7 13,128.8 12,295.3
Average capital employed 15,802.9 16,432.4 18,322.9 22,010.4 19,881.6
FINANCIAL STATISTICS
Basic earnings per share (sen) 9.99 0.82 52.93 30.88 28.09
Gross dividend per share (sen) 8.0 9.0 20.0 15.5 15.5
Net assets per share (sen) 114 112 95 214 197
Return on average shareholders equity (%) 8.86 0.68 34.27 15.03 14.62
Return on average capital employed (%) 5.14 1.62 9.33 10.03 9.96
Net debt/Equity (%) 76.25 68.75 58.57 32.35 29.83
Notes:
1 The Assets and Liabilities include Assets and Liabilities of disposal group held for sale.
2 Capital employed include shareholders equity, non-controlling interests, long term liabilities, short term borrowings and deferred taxation.
3 Net debt represents total bank borrowings less short term funds, deposits with financial institutions and cash and bank balances.
In conjunction with the adoption of Malaysian Financial Reporting Standards (MFRS) framework by the Group, the above information for
16
ANNUAL REPORT 2016
REVENUE
RM billion
20.00
15.64
15.00
12.20 11.91 11.74
11.54
10.00
5.00
0
2012 2013 2014 2015 2016
FRS FRS FRS MFRS MFRS
PROFIT BEFORE INTEREST AND TAXATION

RM billion
3.00 2.82
2.50
2.00 1.93
1.62
1.45
1.50
1.24
1.00
0.50
0
2012 2013 2014 2015 2016
SHAREHOLDERS EQUITY
RM billion
15.00
13.65
12.61
12.00
9.00
7.07 7.14
6.04
6.00
3.00
0
2012 2013 2014 2015 2016
17
MANAGEMENTS DISCUSSION AND ANALYSIS

Group Fi n an cia l Re v i e w
GROWING THROUGH THE CYCLE

RM/MT RM billion
4,000 3.5
3,500 3.0
3,000 2.5
2,500 2.0
2,000 1.5
1,500 1.0
1,000 0.5
500 0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
FRS MFRS
GROUP OPERATING PROFIT MONTHLY AVERAGE CPO PRICE

Note: In conjunction with the adoption of Malaysian Financial Reporting Standards (MFRS) framework by the Group, the above information for
INTRODUCTION
The purpose of this review is to highlight and provide brief insights on key financial and operating information at Group level.
A more detailed commentary on operating performance is covered under the respective business segment reports.
KEY FINANCIAL INDICATORS
2016 2015 Change %
Profit before interest and taxation (PBIT) RM million 1,449.6 1,240.4 17

Pre-tax earnings RM million 965.8 316.4 205
Net earnings RM million 629.7 51.9 1,113
Return on average shareholders equity (ROE) % 8.86 0.68 1,203
Return on average capital employed (ROCE) % 5.14 1.62 217
Net operating profit after taxation (NOPAT) RM million 812.4 266.0 205
Total returns to shareholders
Capital appreciation (per RM0.10 share) RM 0.28 (1.19) 124
Dividend (per RM0.10 share) sen 8.0 9.0 (11)
Net cash flow generated from operation RM million 1,632.0 1,447.0 13
Net gearing % 76.3 68.8 11
18
ANNUAL REPORT 2016
FINANCIAL HIGHLIGHTS AND INSIGHTS

At Group level, the results for FY2016 versus FY2015 are best compared and explained at three levels, mainly, PBIT, Pre-tax and
Net Earnings, as different factors affected the changes between the two fiscal years at the respective levels.
Looking at PBIT, contributions from the segments are as follows:
2016 Mix 2015 Mix Change

RM million % RM million % %
Plantation 842.2 58 865.3 70 (3)

Resource-based manufacturing 606.4 42 420.4 34 44
Palm oil Total 1,448.6 100 1,285.7 104 13

Others including unallocated corporate
income/(expenses) 1.0 (45.3) (4) 102
Groups PBIT 1,449.6 100 1,240.4 100 17
Plantation segments PBIT decreased by 3% to RM842.2 million, due mainly to lower FFB production which is mitigated by
higher CPO and PK prices realised.
The resource-based manufacturing segments PBIT increased by 44% to RM606.4 million. The increase in profit is due mainly to
fair value gain on derivative financial instruments of RM120.9 million (FY2015 loss of RM109.6 million) offset by lower margin
from the oleochemical sub-segment arising from high palm kernel raw material cost.
The improvement of results for other segment, including unallocated corporate income and expenses is mainly due to decrease in
corporate expenses.
Pre-tax Earnings increased by 205% over the last financial year. Apart from the increase in PBIT as explained in the foregoing
paragraphs, the increase is also due to lower net foreign currency translation loss on foreign currency denominated borrowings
amounted to RM318.5 million (FY2015 RM735.3 million).
At the Net Earnings level, profit attributable to owners of the parent increased to RM629.7 million.
With the increase of net earnings, the Group recorded a ROE of 8.86% for FY2016 based on an average shareholders equity
of RM7,103.6 million (FY2015 RM7,628.3 million), as compared to 0.68% recorded in the previous financial year.
The ROCE increased to 5.14% for FY2016, up from 1.62% for FY2015.
The Group strives to enhance ROE and ROCE by continuous improvement in operating performance and by active management
of its capital structure. Initiatives undertaken by the Group include maintaining dividend pay-outs, share buy-back
(and cancellation) programme and a continuous review and adjustment of the Groups debt gearing ratio having regard to
maintaining stable credit ratings.
19
MANAGEMENTS DISCUSSION AND ANALYSIS (Contd)

Group Fi n an cia l Re v i e w
FINANCIAL HIGHLIGHTS AND INSIGHTS (Continued)

The equity reduction for purpose of capital management includes the following:
2016 2015
RM million RM million
Cash dividend 503.5 569.9

Share buy-back 143.2 179.2
Total equity repayments 646.7 749.1
The Group generated an Operating Cash Flow of RM1,632.0 million for FY2016 against RM1,447.0 million for the previous
financial year. Similarly, Free Cash Flow increased from RM945.0 million to RM1,156.3 million due mainly to increase in
operating profit.
For FY2016, the Group spent a total of RM481.7 million (FY2015 RM551.2 million) for Capital Expenditure (Capex).
The Groups Shareholders Equity as at 30 June 2016 stood at RM7.1 billion, a marginal increase of RM0.1 billion or 1% over
the previous financial year. Net earnings of RM0.6 billion was offset by total dividend payment of RM0.5 billion during the
financial year.
The Groups Net Interest Cover was 5.4 times (FY2015 2.1 times).
RETURNS TO SHAREHOLDERS
Two interim cash dividends totaling 8.0 sen per ordinary share amounting to a total payout of RM503.5 million were declared for
FY2016.
If a shareholder had bought 1,000 ordinary shares in the Company (IOIC Shares) when it was listed in 1980 and assuming the
shareholder had subscribed/accepted for all rights issues and offer for sale to date and had not sold any of the shares, he would
have as at 30 June 2016, 76,000 IOIC Shares worth RM329,840 based on IOIC Share price of RM4.34 and 44,333 IOI Properties
Group Berhad Shares (IOIPG Shares) worth RM104,183 based on IOIPG Share price of RM2.35. The appreciation in value
together with the dividends and IOIPG Shares received less capital outlay translates to a remarkable compounded annual rate of
return of 19.0% for each of the 36 years since the Company was listed.
The Company continues to manage its capital in a proactive manner to provide value to shareholders, optimise gearing levels and
provide for funding requirements. The Group also continues to maintain a healthy cash and bank balance, which as at 30 June
2016 stood at RM1.94 billion, and a net gearing ratio of 76%.
20
ANNUAL REPORT 2016
PALM OIL BUSINESS STREAM

The Groups palm oil business comprises the plantation and downstream resource-based manufacturing segments. The vertical
integration of these two business segments has increased significantly over the last few years as the Group expanded and moved
more aggressively into downstream activities. Consequently, a substantial portion of the Groups plantation produce, i.e. crude
palm oil and palm kernel, is being utilised in our downstream manufacturing operations. For the financial year ended 30 June 2016,
approximately 91% (FY2015 91%) of our plantation revenue of RM1.9 billion comprises sales to our manufacturing segment.
To supplement downstream requirement, purchase of CPO and PKO are also made from pre-qualified suppliers. The integration of
the two business segments is best illustrated in the following diagrams:
EFB, FRONDS, TRUNKS
Oil Palm
Nursery Plantation
FFB
Plant Breeding
Bio-Mass Recycled
Tissue Culture
CPO Mills
PLANTATION
SEGMENT CPO PK
RESOURCE-BASED Other Oils

MANUFACTURING SEGMENT
Refinery/Kernel Crushing Palm Oil & PKO
Palm Oil & PKO
Specialty Oils & Fats
Oleochemicals
Fractions
Fatty Alcohol Fatty Acid & Glycerine
Stearates
Snack Ingredient
FFB Fresh Fruit Bunches
EFB Empty Fruit Bunches Soap Noodles & Esters
CPO Crude Palm Oil
PKO Palm Kernel Oil
PK Palm Kernel
Specialty Chemicals 21
PLANTATION
Banking on fundamentals for our
continued success
Our success in the plantation segment has been spearheaded by good
plantation management practices as well as advanced agronomic
practices. By leveraging on these competitive strengths to pursue cost
efficiency and higher productivity, our growth as a global leading player
in the oil palm industry is firmly on track.

Group B u si n ess Re v i e w P l a nta t io n
TOTAL PLANTED AREA*
180,322 Hectares
90 99%
TOTAL ESTATES
PLANTED WITH OIL PALM
15 Palm Oil Mills

ANNUAL MILLING CAPACITY OF
4.75 Million
TONNES OF FFB
* Excludes area owned by associate companies. Harvesting of FFB is done at an optimum time for good yields.
Plantation is the core business of the Group which contributes to more

than half of the Groups earnings. The Group is engaged in cultivation
of oil palm and processing of palm oil with operations in the full
spectrum of the palm oil value chain from the upstream activities of
seed breeding and planting to crop oil extraction to the downstream
resource-based manufacturing activities. With 90 estates in Malaysia and
Indonesia, IOI continues its growth by sustaining the efficiency and
productivity of its operations.
24
ANNUAL REPORT 2016
As at 30 June 2016, the Groups total planted area owned by

subsidiary and associate companies stood at 180,322 hectares
(FY2015 179,822 hectares) and 125,499 hectares (FY2015
114,198 hectares) respectively. Approximately 99% of the
planted area owned by subsidiary companies are planted with
oil palm.
The Group has 90 estates and the total oil palm planted area as
at the end of the financial year under review stood at 179,271
hectares. Approximately 64% of the Groups oil palm plantation
holdings are in East Malaysia, 24% in Peninsular Malaysia and
the remaining 12% in Indonesia. The Groups plantation
produce are principally processed by its 15 palm oil mills with
an annual milling capacity of approximately 4,750,000 tonnes of
fresh fruit bunches (FFB).
Oil palm fruits ripe for processing.
Over the years, the Group has been able to sustain as one of
the most cost efficient producers in the industry due to
managements emphasis on continuous improvement in
efficiency and productivity of its operations. Achievements in yield as well as quality of the palm oil produced. We have a
productivity are the result of years of concerted effort and dedicated research team focused on improving FFB yields and
commitment to good plantation management practices. oil extraction rates, and carrying out research involving tissue
culture to cultivate planting materials with superior traits.
Our commitment to quality in the plantation business begins
with the use of superior planting materials to ensure high oil Our Tissue Culture Laboratory, with BioNexus status, was
originally set up in the late 80s for research and development in
large scale tissue culture propagation of high-yielding oil palm
clones. The expertise and cutting-edge technology for the mass
propagation of high-yielding oil palm clones had been developed
through years of intensive and systematic research.
Over the years, millions of high-yielding clonal palms had been

produced and field planted in trials and commercial planting
areas. In addition to tissue culture propagation of high-yielding
clonal palms, IOI Palm Biotech Centre also carries out in-house
molecular research projects, and has been a partner of an
International Consortium involved in collaborative research on
Oil Palm Genome Projects. The objectives of these collaborative
researches are to maximise the exploitation and development of
genomic resources in oil palm, for the continuous improvement
in the yield and quality of palm oil, leading to long-term
profitability and optimum sustainability of our oil palm business.
The yields of oil palms also depend on other factors such as soil
and climatic conditions, the quality of plantation management,
and harvesting and processing of the FFB at the optimum time.
In this respect, hands-on management, proactive attitude and
attention to detail have contributed to higher productivity.
In addition, we also have a team of in-house agronomists to
conduct various analyses and studies with the objective of
ensuring quality palms and fruits, including studies on oil palm
nutrient status, palm appearance, ground conditions, pests and
diseases affecting palms and pruning methods to ensure that
best practices for sustainable agriculture are practised by
Molecular and genomic research for improving oil palm yield and productivity are the Group.
undertaken in the Molecular Research Laboratory of IOI Palm Biotech Centre.
25

Group B u si n ess Re v i e w P l a nta tio n
PLANTATION STATISTICS
Crop Statement
2016 2015 2014 2013 2012
OIL PALM
Average mature area harvested (hectare) 146,912 147,661 146,126 139,379 137,455
FFB production (tonne) 3,145,317 3,542,222 3,506,706 3,408,935 3,185,878
Yield per mature hectare (tonne) 21.41 23.99 24.00 24.46 23.18
Mill production (tonne)
Crude palm oil 697,334 781,625 751,536 708,028 668,177
Palm kernel 163,520 187,718 186,450 179,115 164,235
Oil extraction rate (%)
Crude palm oil 21.55 21.49 21.21 20.84 20.95
Palm kernel 5.05 5.16 5.26 5.27 5.15
Average selling price (RM/tonne)
Crude palm oil 2,249 2,221 2,509 2,433 3,135
Palm kernel 1,740 1,551 1,709 1,241 1,912
Area Statement
IN HECTARES 2016 2015 2014 2013 2012
OIL PALM
Mature 148,166 149,749 150,482 142,075 138,892
Immature 31,105 29,019 23,579 18,551 18,860
179,271 178,768 174,061 160,626 157,752

RUBBER
Mature 282
Immature 188 470 465 495 496
470 470 465 495 496

Others 581 584 605 633 633
Total planted area 180,322 179,822 175,131 161,754 158,881
Nursery 143 143 144 114 129

Estate under development 9,263 8,235 13,241 2,303 2,454
Housing projects 1,242 1,242
Labour lines, building sites and others 28,189 18,718 18,605 17,794 17,294
Total area 217,917 206,918 207,121 183,207 180,000
26
ANNUAL REPORT 2016
Crop Mix Oil Palm Hectarage by Age

RUBBER OTHERS IMMATURE DUE
0.3% 470 Ha 0.3% 581 Ha 17% 31,105 Ha 2% 3,504 Ha
PAST PRIME
23% 40,833 Ha
OIL PALM YOUNG
99.4% 179,271 Ha 10% 17,049 Ha
PRIME
48% 86,780 Ha
Total Planted Area 180,322 Ha Total Oil Palm Planted Area 179,271 Ha
Oil Palm Hectarage by Region

IMMATURE IMMATURE
13% 14,651 Ha 10% 4,419 Ha
MATURE MATURE
87% 100,026 Ha 90% 39,113 Ha
East Malaysia 64% Peninsular Malaysia 24%

Total Oil Palm Area 114,677 Ha Total Oil Palm Area 43,532 Ha
MATURE IMMATURE
43% 9,027 Ha 57% 12,035 Ha
Indonesia 12%
Total Oil Palm Area 21,062 Ha
27

Group B u si n ess Re v i e w P l a nta tio n
MATURE OIL PALM AREA/FFB PRODUCTION
ACTUAL PROJECTION
170 4,500
160
150 4,000
140
3,500
130
MT (000)
HA (000)
120
3,000
110
100
2,500
90
80 2,000
70
60 1,500
2012 2013 2014 2015 2016 2017 2018 2019
MATURE HA (000) FFB PRODUCTION MT (000)
OPERATIONS REVIEW
For FY2016, the Groups plantation segment reported a slightly
lower profit of RM842.2 million as compared to RM865.3
million for FY2015. The lower profit reported is due mainly to
lower FFB production which is mitigated by higher crude palm
oil (CPO) and palm kernel (PK) prices realised.
The Groups estates produced a total of 3.145 million MT of

FFB which is about 11% lower than the previous year mainly
due to lower yield.
The FFB yield dropped further to 21.41 MT as compared to

23.99 MT per mature hectare in the previous year. This drop in
FFB yield pushed down the oil yield to 4.81 MT per hectare.
OIL YIELD PER MATURE HECTARE
MT/HA
6.0
5.5
5.0
4.5
Estate worker making sure the nursery gets daily water needs. 4.0
2012 2013 2014 2015 2016
28
ANNUAL REPORT 2016
An overview showcasing nursery and mature oil palm trees at Pukin Estate, Pahang.
effective
practices
The Groups best performing estate was Meliau Estate in Sabah OUTLOOK AND PROSPECTS
which achieved a yield of 6.06 MT of CPO per hectare for
CPO prices continued to trade at above RM2,400/MT in August
FY2016.
2016. We foresee palm oil prices to pick up as demand is
holding well. Coupled with expected increase in palm production
The cess and tax incurred for the financial year are as follows:
over the next few months, the plantation segment is expected
2016 2015 to perform satisfactorily.
RM000 RM000
MPOB cess 8,872 10,067

Windfall profit levy 594
Sabah sales tax 79,936 89,822
89,402 99,889
For capital expenditure, the segment spent a total of RM237.3

million for FY2016 as compared to RM286.3 million for the
previous financial year. The capital expenditure was primarily
incurred on new and replanting of oil palm, construction of
staff quarters, acquisition of agricultural equipment and vehicles.
For FY2016, we have replanted 6,276 hectares of oil palm with

our own high-yielding materials which include clonal palms.
Going forward, we will replant 6,000 to 9,000 hectares per
year. As for new planting activities in Indonesia, we have
planted 21,062 hectares to date and we target to plant about
3,000 hectares per year in the next three years. Buffaloes are used to assist estate workers in collecting FFB.
29
RESOURCE-BASED
MANUFACTURING
Ensuring continued productivity with
cutting-edge capabilities
We are a global leader in specialty oils and fats as well as a leading
vegetable-based oleochemical producer. Our cutting-edge manufacturing
facilities as well as research and product application capabilities are a
testament of our continuing commitment to quality and innovation.
By leveraging on these strengths, we will keep driving productivity
and efficiency improvements to deliver added value to our
customers worldwide.

Group B u si n ess Re v i e w Re s ourc e - B a s e d M a n u f a c t u r in g
13 MANUFACTURING FACILITIES
COMBINED ANNUAL
REFINING CAPACITY OF
3.3 Million MT
85
EXPORT TO
COUNTRIES WORLDWIDE
The automated High Precision Analytical System in

IOI Oleochemicals manufacturing plant ensures superior
quality of products through precision testing.
The Groups global resource-based manufacturing business

fortifies its integrated palm value chain. It consists of
downstream activities such as refining of crude palm oil and
palm kernel oil, and the processing of refined palm oil and
palm kernel oil into oleochemical and specialty oils and fats
products. Its manufacturing facilities in Malaysia, the Netherlands,
Germany, USA and Canada are well-equipped to meet the needs
of its customers worldwide.
32
ANNUAL REPORT 2016
IOI Oleochemicals new plant in Wittenberge, Germany produced a sales IOI Oleochemicals warehouse facilities adhere to strict quality standards and
volume of 17,655 MT in 2015. international compliances.
REFINING OLEOCHEMICAL MANUFACTURING

The Group owns four palm oil refineries, three located in The principal activities of the oleochemical sub-segment are the
Malaysia and one in the Netherlands. They have a combined manufacturing and sales of fatty acids, glycerine, soap noodles
annual refining capacity of 3,300,000 MT. and fatty esters. These versatile products are used in a wide
variety of applications, including manufacturing of detergents,
In Malaysia, two of the refineries are situated in Pasir Gudang, surfactants, shampoos, soaps, cosmetics, pharmaceutical
Johor. They have a combined annual refining capacity of products, food additives and plastics.
1,100,000 MT. The third refinery in Malaysia is located in
Sandakan, Sabah with an annual refining capacity of The oleochemical products are exported to more than 60
1,000,000 MT. The fourth refinery which is located in countries worldwide mainly to Japan, China and Europe.
Rotterdam, the Netherlands has an annual refining capacity of Its customers include some of the worlds largest multinational
1,200,000 MT. Our refineries are strategically located close to corporations.
our plantations, mills, and along the major shipping routes with
direct port access. The oleochemical manufacturing activities are undertaken in
Penang and Johor by various wholly-owned subsidiaries of
These refineries produce palm and palm kernel oil fractions for IOI Oleochemical Industries Berhad. With a combined total
export as well as feedstock for the Groups downstream capacity of 740,000 MT, the oleochemical sub-segment is one of
activities. Our manufacturing premises are ISO 9001:2000 and the leading vegetable-based oleochemical producers in the world.
HACCP accredited. In addition, in line with the Groups
commitment to the Roundtable on Sustainable Palm Oil In our pursuit to move further up the value chain, we have
(RSPO), our refineries are all RSPO-certified to handle ventured into a more specialised downstream oleochemical
segregated RSPO oil on a large scale. In addition to our manufacturing business in Germany during the financial year.
Rotterdam refinery, our Sandakan refinery has also attained its This oleochemical specialty business has two production plants
International Sustainability and Carbon Certification (ISCC) in with a combined processing capacity of approximately
mid-2016. 39,200 MT per annum, and serves an established customer base
predominately in the pharmaceutical and cosmetic sectors.
With the Groups integrated business model, our refineries play
a pivotal role in the entire palm oil supply chain. We are also We intend to also transfer some of its advanced technical,
able to realise operational efficiencies and synergies. application development and process know-how back to
Malaysia to benefit the existing oleochemical production sites
within the IOI Oleochemicals Group, especially the new fatty
ester production of IOI Esterchem (M) Sdn Bhd.
33
enduring
Group B u si n ess Re v i e w Re s ource - B a s e d M a n u f a c t u r in g
Our manufacturing facilities are certified

and accredited by globally recognised
bodies in various areas of quality and
resilience
international standards compliance. In the
course of our persistent effort to achieve
excellence in quality, environmental
protection, and occupational health and
safety, we have won numerous prominent
awards as we consistently deliver quality
products and satisfy our customers
needs. The latest award won by
IOI Oleochemical is the very distinguished
Prime Ministers Hibiscus Award for SPECIALTY OILS AND FATS
Excellent Achievement in Environmental The specialty oils and fats manufacturing business of the Group
Performance. is carried out by IOI Loders Croklaan which is also a
downstream refining manufacturer. A global market leader,
it has manufacturing operations in the Netherlands, USA,
Malaysia and Canada, and sales to more than 85 countries
worldwide. It has one of the most developed specialty oils and
fats technology bases in the industry, with a history dating back
to 1890, when the Loder family started their business in
London.
The specialty oils and fats business of IOI Loders Croklaan

consists of supplying fractionated oils and blends, specifically
The Hibiscus Award Challenge Trophy (left) and formulated as ingredients required by the processed food
Penang State Award won at the environmental-
themed Prime Ministers Hibiscus Award (PMHA) industry, principally for applications in the bakery, confectionery,
2014/2015 demonstrate excellence in quality and frying, margarine and infant nutrition sectors. The products are
environmental performance.
Participating in international food

ingredients exhibitions and tradeshows
is a good platform to explore new
markets, deliver new ideas and satisfy
customers needs.
34
ANNUAL REPORT 2016
mainly coating fats (Coberine, Couva, CLSP), filling fats

(Creamelt, Biscuitine, Prestine, Freedom), shortenings
(SansTrans), hard stocks (Crokvitol), high stability oils (Durkex)
and human milk fat replacer (Betapol).
Since IOI acquired the business in end-2002, IOI Loders

Croklaans capabilities have been transformed with a series of
important strategic investments:
2004 Rotterdam Phase 1 bulk oil refinery
2005 Acquisition of Pasir Gudang facility to create
IOI Loders Croklaan Asia
2005 Conversion of Channahon plant to a palm oil
processing plant and the start of trans fat free solutions for
the US market
2008 Rotterdam Phase 2 enzymatic interesterification
facility for margarine and bakery applications
2010 IOI Lipid Enzymtec facility in Pasir Gudang providing
technologically advanced components for cocoa butter
equivalents (CBEs), Betapol and other applications
2011 Channahon expansion, doubling its capacity to meet Sample of refined shea product is kept cool in a jerry can by IOI Loders Croklaan
further growth in demand for trans fat free products in Europes lab specialist to maintain product quality for application testing.
North America
2012 Replacement of deodoriser at Wormerveer, expanding
its capacity and improving reliability These investments in process capabilities, combined with the
advantages of a vertically integrated palm oil supply chain, and
2013 Acquisition of (previously leased) land, buildings and
the technical know-how embedded in IOI Loders Croklaans
equipment at Rexdale, Canada; and investment in
culture provide us with competitive advantage. One which
replacement bleacher for additional reliability and capacity
allows us to serve over 500 customers worldwide with a diverse
2015 Construction commences on new plant in Xiamen, product portfolio, provided through an effective and efficient
the Peoples Republic of China supply chain.
2016 Acquisition of land in Tema, Ghana for the
construction of a solvent fractionation plant IOI Loders Croklaan has also developed the Creative Studio
concept over the last few years, opening branches in
Wormerveer, the Netherlands (2010), Pasir Gudang, Malaysia
(2011) and most recently in Channahon, USA (2013).
Through the Creative Studio concept, IOI Loders Croklaan

establishes new partnerships on product development where our
customers food technologists can work collaboratively with our
own lipid experts to create innovative solutions specifically for
application to their own products.
At Creative Studios, new partnerships on product development are forged to

develop innovative solutions.
35

Group B u si n ess Re v i e w Re s ource - B a s e d M a n u f a c t u r in g
following Indonesias introduction of new export levy in July

2015. The cooling down of the Chinese economy also affected
our exportable volumes. In addition, the El Nino phenomenon
further exacerbated the competitiveness of palm oil with record
oilseed crops manifesting in main growing and exporting
countries. However, our refineries continue to operate above the
industry utilisation rate in their respective regions. Over in the
Rotterdam refinery, despite a 5% decline in volume fully
attributable to the RSPO certification suspension, an improved
margin management (which has proven to be successful over
the past few years) was seen to work out positively again
for FY2016.
As for the oleochemical sub-segment, it started off the financial

year on a positive note, recording stable profit on the support
of low raw material prices despite the Indonesian export duty
structure on palm-related products which impacted pricing of
the final oleochemical products in most markets. On 1 January
2016, the significant rate hike on natural gas price undoubtedly
increased the overall operating costs. Nevertheless, the full
impact from the natural gas price hike was mitigated to some
extent by our timely execution of energy saving projects, notably
the co-generation of electricity and steam from natural gas
which was fully commissioned in October 2015.
In the third quarter of the financial year, the surge of palm

Thermal separation technique at IOI Loders Croklaan Asia is conducted in
kernel raw material prices began to take its toll on our margins.
meticulous care to separate oil into fractions and remove impurities based on Customers were buying mostly on spot basis in response to
specific temperature and vacuum. cautious spending and uncertainty in the major economies.
The graduation of Malaysia from the Generalised System of
Preferences (GSP) status in Europe since 1 January 2014
OPERATIONS REVIEW continues to create immense competition to our fatty acid sales
The resource-based manufacturing segment reported a profit of into the region. The generally bearish demand for glycerine and
RM606.4 million for FY2016 which is 44% higher than the the ample supply from the biodiesel industries in Indonesia
reported profit of RM420.4 million in FY2015. The higher profit and South America have also suppressed the overall
is due mainly to fair value gain on derivative financial oleochemical margin.
instruments of RM120.9 million (FY2015 loss of
RM109.6 million). Despite these challenges, the overall performance of the
oleochemical sub-segment was reasonably encouraging in
Excluding the fair value gain/loss on derivative financial FY2016. This was made possible by prompt response to
instruments, the underlying profit for the resource-based changing market conditions to ensure saleability of the products
manufacturing segment of RM485.5 million for FY2016 is 8% at a healthy margin on a full portfolio basis as we continue to
lower than the underlying profit of RM530.0 million for FY2015. expand our customer base, increase productivity and reduce
This is mainly due to lower margin derived from the costs through investment of capital expenditure in energy
oleochemical sub-segment. efficiency projects.
The details of the segmental contribution are as follows: In FY2016, the specialty oils and fats sub-segment reported
a higher profit as compared to FY2015 despite the RSPO
The primary refining sub-segments margins in Malaysia remained certification suspension. The strongest growth was visible in the
negative for most of the financial year. Exports of our Malaysian Americas region following the expansions in 2011 and 2012
palm oil products into major destinations were impacted which doubled capacity that was filled up by the teams success
36
ANNUAL REPORT 2016
patterns of our customers to buying more promptly, thus

creating challenges operationally. Besides that, the periodic
changes of the utility rates which have been on an uptrend are
expected to continue to increase our operating costs. Therefore,
we intend to continuously invest in capital expenditure to
improve efficiencies and cost savings. Overall, we believe that
our relentless effort to strive for operational excellence, cost
efficiency, enhanced productivity and growth of our oleochemical
specialty business will enable us to sustain our profitability.
As for the specialty oils and fats sub-segment, with the recent
lifting of suspension on our RSPO certification, the Groups
priority is to work towards regaining the business in Europe and
the United States that were lost during the suspension period.
We are confident that with our competitive advantage, we will

be able to restore IOI Loders Croklaans position in the market
IOI Loders Croklaans expertise in developing ingredients free of partially and continue further on our growth path as laid down in the
hydrogenated oils as well as trans-free solutions, contributes to its collaborative
Vision 2025 programme, which outlines our aspirations to
successes with manufacturers and customers.
double the business within 10 years. Vision 2025 anticipates a
number of strategic moves by margin optimisation initiatives
in embarking on the trans-fat free trend in the region. The through our Innovation and customer-centric approach, which
impending ban of partly hydrogenated products was also a are our recognised key strengths. This will be further developed
contributing factor. The Asia region showed a good increase of through our new global segment-based market approach.
volume including the successful Betapol product range for
infant nutrition. The Europe region was on track for the first Furthermore, our strategic moves include a global footprint
nine months, however an overall decline was seen as it was expansion, the first example of which is the construction of our
affected by the effects of the RSPO certification suspension in new plant in Xiamen, the Peoples Republic of China, which is
the last quarter of the financial year. expected to be completed by end of 2016.
The effective working capital management and the strong

operational performance resulted in an improved cash flow from
operating activities which is partially used to finance our future
business developments, for example in Canada.
OUTLOOK AND PROSPECTS

For the upcoming year, we expect a challenging external
environment on the palm oil markets. Biodiesel mandates,
import and export duty structures continue to affect demand
patterns in both origination and destination. Weather
uncertainties are also expected to weigh in on palm production
as well as in competing oilseeds crop. The refining sub-segment
in Malaysia should, however, see some respite from negative
margins with current export duty on crude palm oil.
As for the oleochemical sub-segment, we expect the operating

conditions to remain challenging due to the current high raw
Vitavance is a new range of dedicated products for animal nutrition that is
material prices notably palm kernel oil and the uncertain global
introduced by IOI Loders Croklaan to give assurance on the quality and origin of
economic condition. The latter outlook has altered the buying raw materials sourced.
37
SUSTAINABILITY
AND CORPORATE
RESPONSIBILITY
Buffaloes are used to transport FFB instead of machines in order to reduce greenhouse gas emissions.
IOI Group has embraced the values of sustainability and corporate

responsibility (CR) since the early days and embedded them in the Core
Values, policy statements and work practices across its global operations.
IOI Group commits to be a leading corporation in its core businesses,

and a leader in integrating the highest sustainability standards into its
business practices. Specifically, the Group is committed to the
sustainability management of its oil palm plantations and to the
implementation of responsible global palm oil supply chains.
38
ANNUAL REPORT 2016
SUSTAINABILITY GOVERNANCE
Sustainability is a fundamentally complex matter. There are no The Sustainability Steering Committee which is led by the Group
approaches that can be universally applied since corporations are Chief Executive Officer (CEO) comprises Heads of operating
faced with varied stakeholder demands, a continually changing divisions, Group Head of Sustainability and Senior Management
set of priorities, as well as a multitude of alternatives to meet from group support functions. To ensure that we are effective,
their sustainability challenges. accountability for our governance sits right at the top of our
firm, namely, the committee supports the Board in setting
Here, at IOI, we believe that our core values of INTEGRITY, high-level direction and focuses to ensure the Groups
COMMITMENT, SPEED IN RESPONSE, INNOVATIVESS and sustainability strategy and performance are on track.
EXCELLENCE IN EXECUTION reflect our seriousness in meeting
our stakeholders expectation towards the Principles of The Group has recently put in place a new Sustainability Team
Sustainability, which are, People, Planet and Profit. Structure and a Group Head of Sustainability appointed in
March 2016 to ensure effective execution of the Groups
So in line with this greater commitment towards sustainability, sustainability implementation and reporting. The Group Head of
IOI Group has set up a more formalised sustainability Sustainability who reports directly to the Group CEO has an
governance structure which comprises a Group Sustainability oversight on the Sustainability Leads from all operating divisions.
Steering Committee and a Group-led Sustainability Team. This ensures that operations personnel will strictly adhere to the
Groups sustainability policies, practices and commitments.
IOI Group Sustainability Team
IOI CORPORATION
GROUP CEO
IOI CORPORATION
GROUP HEAD OF SUSTAINABILITY
PLANTATION COMMODITIES SPECIALTY OLEOCHEMICAL

SUSTAINABILITY LEAD MARKETING OILS & FATS SUSTAINABILITY LEAD
SUSTAINABILITY LEAD SUSTAINABILITY LEAD
PLANTATION PLANTATION NORTH

(WEST MALAYSIA) (KALIMANTAN) ASIA
AMERICA
TEAM TEAM
PLANTATION
(EAST MALAYSIA) EUROPE ASIA EUROPE
TEAM
39
SUSTAINABILITY AND
CORPORATE RESPONSIBILITY (Contd)
REVISED GROUP SUSTAINABILITY PALM OIL POLICY

AND SUSTAINABILITY IMPLEMENTATION PLAN
IOI first launched its Group Sustainability Policy Statement in
2014. To further strengthen and consolidate its sustainability
commitments throughout the Group, IOI decided to revise its
Group Sustainability Palm Oil Policy (SPOP) which is aimed at
enhancing its sustainability commitments and applying a uniform
set of policies across all its operating units. The revised SPOP
has been published on 5 August 2016 together with a
Sustainability Implementation Plan (SIP) with clear deliverables
and timelines demonstrating the Groups commitment and
accountability towards driving change. Both SPOP and SIP were
crafted in close collaboration with customers and
non-governmental organisations (NGOs).
The key commitments in the SPOP are:
Reaffirm the existing commitments to no deforestation,

no planting on peat, zero burning on all new planting and
replanting as well as driving socio-economic advancement of
the communities.
Introduces new commitments on peat land landscape

Beneficial plants are part of IOIs integrated pest management to
management and protection, peat land rehabilitation, minimise use of pesticide.
enhanced fire prevention measures, and the implementation
of a more robust labour rights monitoring system.
3) We have undertaken High Carbon Stock (HCS)
Build traceable supply chains so that all suppliers are also in assessment, utilising the latest High Carbon Stock Approach
compliance with the commitments stated in the policy on (HCSA) converged methodology, by an approved HCSA
environmental management, human rights and workplace as practitioner which will contribute to the programme of field
well as community development and social impact. trials for HCSA.
To strive for the highest levels of transparency and 4) We have developed enhanced fire prevention and
stakeholder engagement. mitigation programmes within (including conservation areas)
and around our concession areas and signed a
While the revised Group SPOP is a reflection of our deeper Memorandum of Understanding with Balai Konservasi
commitment towards sustainability, the SIP serves as a practical Sumber Daya Alam as a partner to work on an action plan
working document that puts into practice the aspiration and on fire prevention.
commitments stated in our IOI Group SPOP.
5) As a means to resolve complaints and conflicts effectively
A number of areas where implementation is already underway: and responsibly through an open and transparent process
that is agreed upon by the affected stakeholders, we have
1) On the mapping of peat lands in our four palm oil commenced the development of a Grievance Mechanism
concessions in the Ketapang landscape, we have signed an which will acknowledge existing concerns and allegations
agreement for the commencement of LiDAR mapping of and outline clear actions and timelines to address past and
peat land areas within and around our Ketapang future grievances.
concession.
6) We have been taking active responsibility for the
2) We have finalised a peat land rehabilitation plan for areas sustainability of our third party suppliers since 2014,
of damaged peat land in our palm oil concession, PT BSS, through our three-step process that comprises traceability,
in Ketapang. This is the first step in a larger programme of risk assessment and mill-level verification. We are now
peat land rehabilitation being planned in other concessions. enhancing that programme with supplier workshops and
greater scrutiny of suppliers at Group level.
40
ANNUAL REPORT 2016
PLANTATION
SUSTAINABLE AGRICULTURAL PRACTICES
IOI believes that the sustainability of the Groups business is Over the years, millions of high yielding clonal ramets had been
interdependent with the sustainability aspects of the ecosystem produced by IOI Palm Biotech Centres Tissue Culture Laboratory
surrounding its operations. For years, the Group has been and field planted.
following a number of principles and criteria that were later
codified by the Roundtable on Sustainable Palm Oil (RSPO) Substantial areas of more than 20,000 hectares of the Groups
diligently and consistently. plantations planted with the high-yielding clonal palms have
shown great increase in oil extraction rates (OER) and
The key sustainability focus is to safeguard the environment by oil yields from the fresh fruit bunches (FFB) produced.
increasing production without increasing land footprint. IOI is Recent OER evaluation tests showed OER of more than 27%
still widely recognised for having among the highest yields of oil achieved in oil mill, with FFB crops harvested from pure stands
per hectare in the industry as a result of good plantation of clonal planting from commercial fields planted between 2004
management practices that include the development of and 2009. The production of superior clonal ramets will
high-yielding oil palm clones, precision agronomy and new continue, and more areas are expected to be replanted in the
planting practices. coming years with these high-yielding clonal palms to further
boost the productivity of the estates.
The Groups best performing estate achieved an oil yield of
6.06 MT per hectare this year. The Groups oil yield of 4.81 MT Precision technology tools such as GPS, GIS, Unmanned Aerial
per hectare is significantly higher than the industry average of Vehicle (UAV) and satellite imagery are becoming widely used
3.84 MT per hectare per year. To spur other estates into in IOI plantations to help design, map and manage estate fields
achieving high yields, the corporate target has been set at 6 MT as efficiently as possible.
per hectare per annum.
The efficient use of land through high productivity reduces
The high-yielding oil palm clones are developed through years of fertiliser and pesticide use, and improves energy efficiency that
intensive and systematic research by its research and results in lower greenhouse gas (GHG) emissions which in
development arm, IOI Palm Biotech Sdn Bhd, which is the turn reduces the impact of climate change and delivers
recipient of the Agriculture Biotech Excellence Award 2013. significant benefits to the environment.
Continuous research is conducted at the state-of-the-art Tissue Culture Laboratory for high-yielding clonal palms.
41
SUSTAINABILITY AND
Terracing and planting of legume cover crops are some of the soil conservation measures.
New Planting and Replanting Beneficial plants such as Cassia cobanensis and Euphorbia
heterophylla are planted to attract natural predators for the
When it comes to new planting and replanting, the Group
biological control of bagworms and other leaf-eating caterpillars
practises zero-burning technique in all its plantations where old
which are major insect pests in oil palm plantations. Barn owls
palm stands are felled, chipped and left to decompose at site.
have been proven effective in controlling rat population in our
This technique is designed to mitigate GHG emissions commonly
estates as the rodent population has been reduced by over 50%.
associated with land clearing and to return organic matter to
the soil.
Soil Conservation
Independent Social and Environmental Impact Assessment(s) The soil quality can be impacted by continual cultivation
(SEIA), calculation of GHG emissions from land use change activities. Erosion, compaction and surface run-off are main
due to new developments, peat mappings as well as HCS and factors affecting the soils water-holding capacity and soil
High Conservation Value (HCV) assessments are also carried fertility. To reduce the impact of possible soil degradation,
out ahead of any new plantings. terracing is carried out in undulating or hilly areas to conserve
soil, water and nutrients effectively.
Legume cover crops (LCC) are established in estates
immediately after planting to suppress the growth of noxious LCC which are planted immediately after planting also can
weeds that can affect crop yield. IOI has fully phased out the minimise soil erosion, conserve soil moisture and improve soil
use of paraquat by end of 2011 in an environmental and structure and soil fertility. In mature areas, fronds and empty
social move. fruit bunches (EFB) are placed in inter-rows to allow for the
slow release of organic nutrients through decomposition while
Integrated Pest Management conserving soil moisture, minimising soil erosion and
degradation, and improving soil structure.
IOI has been practising Integrated Pest Management (IPM) in
all its estates for over 10 years. IPM is an environmental-friendly
To further enhance its soil conservation measures, the Group
method to control pests, rodents and plant diseases without the
does not cultivate oil palms on fragile soils (peat), riverine
need for pesticides and other chemicals. This method is highly
riparian reserves, excessively steep hill slopes, and HCS or
beneficial to reduce GHG emissions and eliminate the release of
HCV areas.
pollutants into soil and waterways.
42
ANNUAL REPORT 2016
SUSTAINABLE PALM OIL MANIFESTO

As one of the signatories of the Sustainable Palm Oil Manifesto To safeguard this precious resource, IOI has enforced these
(SPOM), IOI recognises the importance in safeguarding our measures and practices:
environment; as such, we maintain no deforestation and the
Installing water-gate at strategic locations along main drains
protection of peat areas in new developments. Our funding of
and collection drains to keep the water level optimum.
the HCS Science Study towards improving the identification
methodology of these HCS clearly reflects our commitment. Maintaining optimum level of water to counter potential
shortfall in rain and risk of fire.
The HCS Study is now working towards a convergence with the
Maintaining riparian reserves to minimise soil run-off.
HCS Approach with the objective to provide the industry with
Riparian reserves also serve as a filtration system to preserve
uniform clear rules towards enhancing the production of
the quality of water entering the waterways.
Sustainable Palm Oil.
Planting LCC as a soil conservation measure to prevent
run-off into the waterways and avoid any planting on steep
WATER MANAGEMENT
terrain.
Water is the essence for life which covers over 70% of the
Monitoring and treating all palm oil mill effluent (POME)
earths surface. It is a key element in our entire palm oil supply
and wastewater before discharging into the natural
chain from oil palm plantation to resource-based manufacturing.
waterways. The treated POME will be used for land
Good quality water is vital for the health and wellbeing of our
application.
people and the local communities in which we operate. Hence,
it is our top priority to minimise the risk of water contamination
For the past three years, IOIs palm oil mills consume an
by our palm oil production to ensure a clean and healthy
average of 1.36 M3 water to process each MT of FFB. We are
environment for all.
targeting to reduce our water usage by 5% for the year 2016.
2.0
Use of good quality water in oil palm cultivation encourages 1.6
healthy growth of high-yielding palm trees. Efficient water 1.47
1.2 1.32
management ensures a steady supply of good water and helps 1.29
0.8
avoid aeration and moisture-stress to the palm trees during the
dry or rainy season. 0.4
0.0
2013 2014 2015
Water Consumption for the Processing of

FFB (M3 water/MT FFB)
IOI has proper water catchment system to ensure sustainable oil palm cultivation.
43
SUSTAINABILITY AND
palm oil. Best agronomic practices and efficient land utilisation

led to higher productivity, hence reducing usage of chemical
fertiliser and pesticide, and improving energy efficiency that
results in lower GHG emissions.
Green Energy and Waste Management
IOIs plantation operations produce a vast amount of biomass

by-products. Palm biomass such as pruned fronds, old palm
trunks and treated POME are recycled back to the soil as
natural fertilisers. Other forms of biomass such as shells and
EFB are used as renewable energy source to generate steam
and electricity for mill processing. This green energy is able to
sustain 98% of our mills energy needs.
Raw POME is highly acidic and has a high biological oxygen

demand (BOD) level, hence POME, which is a by-product of
our mill activities, is treated at the mills to bring its BOD level
within the permissible level for land application. The Group has
adopted the application of greentubes to remove solids in
POME, thus reducing its BOD level. The BOD level of our POME
is within the acceptable limit as required by the Department of
Environment. The lowest BOD level recorded is 23 PPM in 2015.
In addition, IOI has a 10 MW biomass co-generation power

plant at its refinery complex in Sandakan, Sabah that uses
kernel shells and EFB from its own mills to satisfy almost all the
steam and electricity requirements of the complex.
Methane Capture Facilities

Commission of the two biogas plants in Pukin Palm Oil Mill, Johor (top) and
Ladang Sabah Palm Oil Mill, Sandakan (bottom) to capture and mitigate In our effort to reduce climate changes, IOI has successfully
GHG emissions.
commissioned two biogas plants in Pukin Palm Oil Mill, Johor
and Ladang Sabah Palm Oil Mill, Sandakan to capture methane
gas and mitigate GHG emissions from POME. Methane emission
GREENHOUSE GAS REDUCTION from the treatment of POME is a large contributor to the
Groups total operational emissions. The two biogas plants are
Climate change is one of the biggest threats to the planet and expected to contribute an estimated GHG reduction of 120,000
IOI is committed to monitor and reduce the potential MT of CO2 per year. By 2018, we expect to commission two
contributions to the GHG emissions. more biogas plants in Syarimo Mill and Leepang Mill for a
further reduction of 140,000 MT of CO2 per year.
The Group has adopted both the International Sustainability and
Carbon Certification (ISCC) and RSPO PalmGHG methodologies Continuous Improvements
to proactively monitor our GHG emissions and take practical
steps to reduce GHG emissions in our palm oil production to IOIs operations and quality assurance teams are in constant
lessen the impact on climate change. collaboration with external researchers and consultants to
explore alternative and innovative means to reduce GHG
Sustainable Cultivation and Processing emissions. The Group has been using greentubes, which is a
form of geosynthetic fiber, to reduce the BOD content from
Our oil yield per hectare is approximately 50% higher than the POME. By end of 2016, IOI targets to complete a study to
nations average which has a positive impact towards mitigating demonstrate positive results of these greentubes in methane
climate change as less land is required in the production of avoidance.
44
ANNUAL REPORT 2016
HEALTH AND SAFETY

Employee welfare, especially the health and safety of our Ensure an average of five hours is allocated for each
employees, remains as IOIs top priority. The Group strives to employee (based on total number of hours worked) to
provide safe and healthy working conditions especially in undergo Occupational Safety and Health-related trainings
non-office-based environments such as field operations, in a year.
processing and manufacturing. IOI places substantial
Investigate and find causes of all accidents, near misses,
investments in occupational safety and health management
dangerous occurrences, occupational diseases and
systems that meet world-class accreditation levels such as
occupational poisoning, and take appropriate measures to
OHSAS 18001 standards.
prevent the recurrence of such incidents.
Continuous training and awareness programmes such as fire Ensure that every worker who is assigned to a new task or
training and hazard guidance are conducted for those dealing machine is provided with Safe Operating Procedures and
with potential hazards such as pesticides and machinery. on-the-job training before being allowed to commence work.
At the plantation operations, IOI also initiates free medical

treatment at clinics with X-ray and ambulance facilities for IOIs BIODIVERSITY CONSERVATION
estate workers and neighbouring communities.
IOI recognises the importance of biodiversity conservation and
strictly adheres to all relevant laws, RSPO and ISCC certification
To maintain cleanliness and hygiene, a Visiting Medical Officer
principles and criteria to protect, conserve and rehabilitate the
visits the labour quarters twice a month whilst frequent health
environment by adopting beneficial practices and incorporating
programmes and campaigns on pap smear, breast cancer and
the protection of HCV, HCS and peat areas in new developments.
other healthcare issues are organised for the workers and
local communities.
We are managing and monitoring a total of 1,128 hectares and
2,345 hectares of HCV areas within our concessions in Peninsula
To complement the Groups Occupational Safety and Health
Malaysia and Sabah respectively, which contributes towards
Policy and further enhance the level of safety and health at our
safeguarding and enhancing important biodiversity areas.
operating centres, the management and employees are
committed to work towards achieving the following activities:
We strive to conserve and rehabilitate biodiversity and ecology
Reduce accidents, occupational diseases and occupational within and in the vicinity of our estates with these following
poisonings by at least 10% as compared to previous year. practices:
Planting legume cover crops as a soil conservation measure

to prevent run-off into waterways and avoiding any planting
on steep terrains.
Conserving natural trees, flora and fauna species in buffer

zones and steep areas unsuitable for oil palm planting.
Conserving water channels, streams, ponds, and undisturbed

natural riparian reserve in tandem with the overall flood
mitigation plan.
Linking riparian and other reserve areas within the estates

and surrounding neighbourhoods to develop wildlife
corridors.
Preserving the existing natural landscape and its flora and

fauna surroundings while offering agro-tourism in some of
our finest estates.
Clinics and medical care facilities are set up in all estates to ensure welfare of
the workers and their family is taken care of.
45
SUSTAINABILITY AND
Becoming a strategic partner in Malua Wildlife Conservation

Initiative.
Contributing to the Orangutan Foundation Internationals

(OFI) Care Centre and Quarantine facility in
Pangkalan Bun, Kalimantan.
Contributing to the Malaysian Palm Oil Wildlife Conservation

Fund (MPOWCF). In May 2016, a historic engagement was
sealed between IOI Sandakan Region and Sabah Forestry
Department to enhance forest management and conservation
efforts. The collaboration paved the way for co-operative
efforts and assistance to be forged while talks on future ties
are underway.
CERTIFICATION IN SUSTAINABILITY
RSPO Certification
As a founding member of the RSPO, IOI has played an active

role in promoting sustainable practices since its inception in
2004. The Group has achieved full certification for its existing
plantations and mills in Peninsula Malaysia and Sabah since 2013.
Moving forward, the Group is committed on the following:

Maintaining riparian reserves within IOIs estates and the surrounding areas for
biodiversity and wildlife conservation. Implement RSPO Next in its Malaysian plantations,
commencing end of 2016.
Specific biodiversity and wildlife conservation initiatives Certify the newly acquired Unico-Desa Plantation Bhd
undertaken include: (Unico-Desa) in 2018.
Establishing a deer farm at Meliau Estate. Certify the outstanding management units, in Sarawak and
Indonesia, in accordance with the published time-bound plan.
Establishing a sanctuary for proboscis monkeys at
Bayok Estate. To ensure transparency and traceability of our supply chain,
Conducting biodiversity study of flora and fauna species in IOIs operating units and supply chain units in Malaysia and
our plantations (so far, 337 flora and 227 fauna endemic overseas have all successfully obtained the RSPO Supply Chain
species have been found). Certification.
integrity &
commitment
46
ANNUAL REPORT 2016
ISCC Certification On 30 May 2016, IOI has submitted to RSPO a progress report
containing the completed action plan together with the
In addition to the RSPO certification, the Group is also diligently
Statement on Group Sustainable Resource Allocations and
implementing the ISCC, which is the first international
Policy Initiatives which was endorsed by IOIs board of directors.
certification system that can be used to prove sustainability and
It has also completed and submitted the peer review assessment
GHG savings for biomass and bioenergy. It is recognised by the
of the three HCV reports on PT SKS, PT BNS and PT BSS.
European Commission for all member countries, specifically
Germany and the Netherlands.
Lifting of the Suspension
To date, 100% of the Groups plantations and mills in Peninsula On 5 August 2016, the RSPO has endorsed the recommendation
Malaysia and Sabah (except Unico-Desa) have been awarded the made by the Complaint Panel (CP) to lift the suspension of
ISCC certification. The achievement signifies that IOIs products the RSPO certification for the entire IOI Group as it has met all
comply with the strict sustainability criteria for the use of the conditions required by RSPO CP. The lifting of the suspension
biomass in renewable energy application set by the European was effective from 8 August 2016.
Commission. The Group targets to certify its two mills from
Unico-Desa by 2018. From 6 September to 11 September, RSPO is scheduled to
conduct an independent ground verification exercise by a team
of independent experts on the action plan that IOI had
CHALLENGES submitted to the RSPO.
On 4 April 2016, the RSPO certification on the entire IOI Group

In the meantime, IOI will continue to submit its quarterly
was suspended following a complaint lodged by NGO
progress report as mandated by the CP. At the end of a
Aidenvironment in April 2015 against IOIs subsidiary company
12-month period, the CP shall again commission independent
in Ketapang, Indonesia.
ground verification, following which a review of the complaint
will be undertaken by the CP.
The suspension has caused significant disruptions to IOIs
downstream operations as well as the food manufacturing sector
IOI Pelita and the Longhouse Communities of
in Europe and the United States. The suspension and ensuing
Long Teran Kanan in Sarawak
allegations by some other NGOs have led IOI to pursue
corrective actions to review and enhance its sustainability IOI Group is committed to an open and transparent approach
practices. The Group has also launched a stakeholder outreach to resolving outstanding grievances with the involvement of
programme to re-engage and re-build trust with RSPO, NGOs affected stakeholders, which includes the conduct of the
and key customers. As part of its stakeholder outreach mediation process with the affected longhouse communities
initiatives, IOI has initiated meetings with the NGOs which have (Long Teran Kanan) in Sarawak, to the satisfaction of all parties.
raised allegations against us and met with the sustainability This is despite the Malaysian Appeal Court ruling which held
personnel of multinational customers. that the Kayan and Kenyah communities had no native
customary rights (NCR) over two Provisional Leases issued to
The Group is also working with leading sustainability consultants IOI Pelita Plantation Sdn Bhd for the development of an
and specialists in peat and HCV to resolve the issues proactively. oil palm plantation.
IOI has engaged Global Environment Centre (GEC), a
specialist firm in peat, HCV and various conservation matters, on To this end, IOI have been conducting meetings regularly with
peat restoration and protection measures at the affected areas. the affected communities in the presence of the Residen of Miri
The Group has also appointed Proforest as an implementation as well as RSPO representative as observer, to discuss land/land
partner for its last new planting development in Kalimantan. use offers to settle this dispute. In the interests of greater
transparency, we will be providing progress updates on the
IOI has committed to voluntarily adopt the more stringent discussions regularly under our new Grievance Mechanism.
RSPO Next certification system starting from end of 2016.
RSPO Next certification includes additional criteria on no
deforestation, no planting on peat, reduction of greenhouse gas
and respect for human rights and transparency.
47
SUSTAINABILITY AND
RESOURCE-BASED MANUFACTURING
TRACEABILITY AND TRANSPARENT SUPPLY CHAIN
At IOI, we take responsibility in building a traceable, transparent The protocols linked to the 3-step-approach are currently part of
and sustainable palm oil supply chain. We contribute to the the IOI Group management procedures.
advancement of a sustainable palm oil industry as a whole
through our role in several industry networks and initiatives. Origin of the Oil
IOI Group started mapping its entire palm oil supply chain for
We realise that traceability does not equal sustainability, but
IOI Loders Croklaan Group and IOI Oleochemicals Group back
knowing the origin of the oil sourced allows us to monitor and
in 2012 and 2014 respectively. IOI will report the traceability
engage with our suppliers and transform our supply base into a
numbers for the following IOI refineries and terminals:
sustainable supply base that adheres to the same values as listed
in the IOI Group Sustainable Palm Oil Policy (SPOP). IOI Loders Croklaan Wormerveer refinery (The Netherlands)
IOI Loders Croklaan Rotterdam refinery (The Netherlands)
Traceability is step 1 in our 3-step approach towards a traceable, IOI Loders Croklaan Channahon refinery (USA)
transparent and sustainable palm and palm kernel supply chain.
IOI Loders Croklaan Rexdale refinery (Canada)
3-Step Approach: IOI Loders Croklaan Pasir Gudang refinery (Malaysia)
Step 1: Know the origin of the oil IOI Edible Oils Sandakan refinery (Malaysia)
Step 2: Prioritise the mills IOI FJB terminal Pasir Gudang (Malaysia)
Step 3: Execution of on-site verification programme IOI Oleochemicals Prai plant (Malaysia)
IOI Pan-Century Oleochemicals Pasir Gudang plant (Malaysia)
Traceability to mill for PO stream per IOI location FY15/16

100% 100%
100% 97%100% 98% 96% 98% 96%
99% 99% 99% 100% 100% 100% 98% 97% 99% 98%100%
93% 93% 93% 92%
78% 78% 81%
80%
60%
43%
40%
20%
0% 0%
0%
IOI Loders IOI Loders IOI Loders IOI Loders IOI Loders IOI Loders IOI Edible Oils IOI Oleo IOI PC Oleo FJB Terminal
Croklaan Croklaan Croklaan Croklaan Croklaan Croklaan Sandakan Prai Pasir Gudang
Group Wormerveer Rotterdam Channahon Rexdale Pasir Gudang
PO Total Traced PO Direct Traced PO Indirect Traced
Traceability to mill for PKO stream per IOI location FY15/16

99% 99% 99% 99% 100%100% 100% 100%100%
100%
87% 85% 85% 84%
80% 77% 74% 74% 79%
71%
64% 64%
59% 59%
60% 53%
40%
20% 16%
0% 0%
0%
IOI Loders IOI Loders Rotterdam IOI Loders IOI Loders IOI Loders IOI Edible Oils IOI Oleo IOI PC Oleo
Croklaan Croklaan Croklaan Croklaan Croklaan Sandakan Prai Pasir Gudang
Group Wormerveer Channahon Rexdale Pasir Gudang
PKO Total Traced PKO Direct Traced PKO Indirect Traced
48
ANNUAL REPORT 2016
IOI has made a distinction between direct sourced material and As for IOI Oleochemicals Group, IOI Oleochemicals (IOI Oleo)
indirect sourced material. co-operated with IOI Edible Oils to trace the source of oils
supplied to its two manufacturing sites in Prai and Johor.
Direct sourcing: The overall traceability to mills for the palm-based and palm
IOI mills and third party mills sourced via IOI Group kernel-based oils were good at typically above 90% and 85%
(directly sourced from CPO mill) respectively. The lower traceability for palm kernel-based oils is
expected due to the complexity of the supply chain in which
Indirect sourcing: many independent crushers accumulated palm kernel seeds from
various mills for processing. IOI is engaging and working with
Third party mills sourced via third party suppliers
its suppliers particularly palm kernel crushers to improve
(other shippers, processors/refiners & traders)
traceability scoring and is confident that this can be achieved in
the coming months.
Sourced volumes will qualify as traced volumes if following
information is available:
Traceability of source oils to plantation remains a challenge for
1. Mill name oleochemicals. This is because of the very low uptake of
2. GPS coordinates of the mill RSPO-Segregated (SG) products as compared to the other
3. Name parent company of the mill options namely the Mass Balance (MB) and Book and Claim
grades. The nature of fractions used in oleochemicals and
Risk Assessment complexity of downstream derivatives cause prohibitive costs and
low availability of SG raw materials and intermediates. IOI Oleo
Risk assessment of the IOI supply base is step 2 in our will work with IOI Group to conduct risk analysis supply base of
3-step-approach. In 2014, an external party completed a risk the supplying mills where high priority mills will be selected for
assessment on the IOI Loders Croklaan supplying mills. Spatial further assessment through audits.
parameters (legally protected areas key biodiversity areas, peat,
global forest change and forest loss: FORMA alerts) and non- The traceability targets set by IOI Group SPOP are available in
spatial parameters (Policy, RSPO certification, publically reported the Sustainable Implementation Plan:
information including social aspects) were reviewed resulting in
30 plus high priority mills. IOI will run a risk assessment every Palm Oil:
two years. Another risk assessment is scheduled to take place
100% to mill level by end 2016
second half 2016. On a weekly basis, an internal mill alerts
system monitors all supplying mills and its parents for 100% to plantation level by end 2020
potential issues.
Palm Kernel Oil:
Mill Verification and Monitoring 100% to crusher level by end 2016
On-site mill verification of high priority mills is step 3 of our 100% to mill level by end 2018
3-step-approach. Together with Proforest, we have developed a 100% to plantation level by end 2020
checklist for the on-site mill verification. IOI and Proforest have
completed verifications of 15 high priority mills from which we By working closely with its suppliers and key stakeholders to
directly source palm oil and palm kernel products. Once the mill enhance traceability awareness and comply with its SPOP,
verification is completed, the verification team will discuss the IOI is well-positioned to meet its sustainability goals and tap
results with the supplying mill. When the verification has into the growing market demand for CSPO.
identified gaps between the SPOP and the current practices at
level of the supplying mill, both parties agree on a time-bound-
action-plan. The mill verification team will monitor
implementation of the agreed actions.
49
SUSTAINABILITY AND
GREEN ENERGY AND ENERGY EFFICIENCY

Solar Power Generation The remarkable proven efficiency of this plant in the
Prai manufacturing site has spurred the management to consider
IOI Oleo fully subscribes to employment of green energy which
a similar co-generation plant to be built in its manufacturing
includes use of natural resources for sustainable energy for
site in Johor.
example through the installation of solar panels to harvest solar
energy. Since the commissioning of the project in 2013, it has
Vapour Absorption Chillers
been generating more than 750,000 KWh of electricity annually
that transpire to savings of 450 MT of CO2 or equivalent to The quest to improve efficiency across IOI Oleos manufacturing
planting 40,000 trees (or equivalent of 1.4 million square meters sites further led to the initiation of the Vapour Absorption
of forest) to absorb the amount of CO2 saved by the IOI Oleos Chiller (VAC) project in Prai. The use of VACs started in
solar panel system. The solar power generation project is part of IOI Oleos manufacturing site in Johor where old conventional
the national sustainable energy development effort and the chillers were replaced with newer low energy, high efficiency
electricity generated is fed into the national power grid. VACs which meant that a 120 KW unit can replace a 360 KW
conventional chiller. This technology is also eco-friendly in that it
Co-generation of Heat and Power Plant does not use Chloro-fluoro-carbon (CFC)-based refrigerant that
contributes to Volatile Organic Compound (VOC)-based air
The 6.5 MW co-generation plant located in Prai was successfully
pollutant, is powered by waste heat from refinery and reduces
commissioned in September 2015. The co-generation plant can
noise pollution drastically. CO2 emission reduction
generate electricity through its gas turbine system. In addition,
from using VAC instead of common chiller is estimated at
the waste heat in the flue gas from the turbine can be further
1.2 MT/annum.
used to generate medium pressure steam through a Heat
Recovery Steam Generator (HRGS). With that the total energy
In its manufacturing plant in Prai, waste heat generated from
efficiency can be boosted to above 90% as opposed to 39%
the flue gas of the thermal heaters is used to heat hot water
efficiency of conventional power supply systems. In addition,
which is then channelled to the VAC to generate chilled water.
this combined heat and power generation system significantly
The reduction in electricity usage compared to conventional
reduces GHG (NOx, SOx and CO2) emissions. The plant is
electric is estimated at 1,700,000 KWh per annum or almost
expected to generate 6.5 MW electricity per hour which
1,000 MT CO2 per annum.
translates to approximately 40,000 MT of CO2 savings.
CO2 (kg)/Throughput (MT) Water Consumption (MT)/Throughput (M3)
90 90 0.75 0.75
81 81
0.74 0.74
72 72
0.73 0.73
63 63
0.72 0.72
54 54
45 45 0.71 0.71
36 36
0.70 0.70
27 27
0.69 0.69
18 18
0.68 0.68
9 9
0 0 0.67 0.67
20142014 20152015 20162016 20142014 20152015 20162016
50
ANNUAL REPORT 2016
4R Refuse, Reduce, Reuse and Recycle The Steering Committee focuses on the review of the RSPO
rules for Physical Transition oleochemicals and derivatives namely
IOI Oleo launched a 4R (Refuse, Reduce, Reuse and Recycle)
the IP, SG and MB models and has presented the first draft
campaign at its manufacturing plants, to minimise environmental
review to RSPOs Trade and Traceability Standing Committee
footprint and improve its surroundings. The campaign covers
(T&T SC) for deliberation in the EU Roundtable (RT) in
industrial as well as day-to-day chores such as employment of
Milan June 2016. The review is in preparation for submission to
eco-friendly chemical-free manufacturing technologies as opposed
RSPOs Board of Governors for approval possibly in RSPO RT14
to employment of chemicals, reusing spent nickel catalyst,
in Bangkok in November 2016.
packaging materials and wastewater for non-critical cleaning
activities. IOI Oleo is also working with vendors to extend use
Our work through the Steering Committee extends further
of its waste material for example spent bleaching earth and
towards the education and clarification of RSPO rules as it
carbon for the cement industry, conversion of hardcopy
applies to oleochemicals and its derivatives. The committee has
document to softcopy archiving and general recycling of waste
in plan a list of FAQs to further guide users of the RSPO
paper, plastics, metals and e-waste.
oleochemical rules with examples and illustrations for easy
understanding. AOMG has also been asked to participate
Minimising Use of Resources
actively in planning for briefing and training sessions that may
The extraction and consumption of natural resources disrupts the be required with the revision of the new rules and FAQs.
environment and creates pollution. Reducing the use of natural
resources such as fossil fuels will protect human and The company continues to offer SG and MB-certified
environmental health. The various projects undertaken by oleochemicals and has seen almost a quadruple growth in
IOI Oleo throughout the years and its efforts to sustain and RSPO-certified product sales which is a result of persistent
continual improvement initiatives result in gradual improvements promotion and support for these sustainable products. The swift
leading to lower use of natural resources in our operation. obtainment of RSPO SCCS certification for our new ester
manufacturing site is testament of our support for sustainable
IOI Oleos various green projects such as the solar panel and products and our eagerness to make available these products to
co-generation plant has reduced the CO2 emission significantly our customers.
from 77.2 kg CO2/MT throughput to only 51.12 kg CO2/MT
throughput whereas its 4R campaign and prudent controls has Life Cycle Assessment
reduced its water consumption to 0.70 M3 water/MT throughput
IOI Oleo continues to work with the Malaysian Palm Oil Boards
from previously 0.74.
Advance Oloechemical Technical Division (AOTD) through the
Malaysian Oleochemical Manufacturers Group (MOMG) in
developing the first ever life cycle assessment on palm-based
MARKETPLACE
oleochemicals and its derivatives. Verification of data submitted
Supporting RSPO-certified Oleochemicals for basic oleochemicals is completed and AOTD will proceed
with processing the data to generate the Malaysian industrys
IOI Oleo continues to support the development of sustainable
average. In order to fulfil the requirements according to
products namely the RSPO-certified oleochemicals and derivatives.
ISO 14044 of comparative assertions disclosed to the public,
In 2016, IOI Oleo being the chairman of the ASEAN
a critical review of an independent external expert or expert
Oleochemical Manufacturers Groups (AOMG) RSPO Technical
panel is necessary if the study is intended to be published.
Working Group has been nominated as a Steering Committee
member of the RSPO Oleochemicals and Derivatives Subgroup.
excellence
in execution 51
SUSTAINABILITY AND
COMMUNITY
Human Capital Development financial assistance and school bags from Yayasan TSLSC
until he or she completes primary or secondary education.
IOI believes that education is an integral component in
Since its inception, the SAP has benefited more than 1000
empowering and enlightening the young to become leaders of
students from over 200 schools in Peninsula Malaysia and
tomorrow. The Groups community outreach programmes which
Sabah. To date, the total sponsorship amounts to more
centre on education, human capital development and corporate
than RM3 million.
philanthropic initiatives are mainly undertaken by its charity arm,
the Yayasan Tan Sri Lee Shin Cheng (Yayasan TSLSC).
c) School Adoption Programme
To date, Yayasan TSLSC has contributed over RM36 million to The School Adoption Programme was launched in 2007 to
various schools, hospitals, welfare homes and charitable bodies, create a conducive learning environment for students from
and has given scholarships and grants to hundreds of schools deprived schools in rural areas. Financial assistance is given
and students. to these adopted schools to upgrade their facilities such as
building new classrooms, new halls, libraries, perimeter
a) Scholarship Awards fences, IT and sports facilities in order to improve the
learning environment. To date, six primary and secondary
Scholarships and career opportunities are awarded to
schools in or near the Groups oil palm estates in Sabah
academically outstanding students pursuing full-time
have been adopted. From time to time, financial
undergraduate studies relating to the Groups business
assistance is also extended to improve and upgrade their
nature. Yayasan TSLSC deems it a great investment to
school buildings.
support qualified Malaysian youths and to help build the
nations human capital through the scholarships. To date,
d) Young Achievers Awards
Yayasan TSLSC has granted 247 students with more than
RM5.6 million worth of scholarships. The Young Achievers Awards (YAA) was introduced
by Yayasan TSLSC in 1999 to invigorate and motivate
b) Student Adoption Programme young students to strive for excellence in their studies.
Cash awards, plaques and certificates of achievement are
The Student Adoption Programme (SAP) was launched
given out annually to reward bright students from primary
in 2008 by the then Deputy Minister of Education
to upper secondary levels who excel academically, possess
YB Dr Wee Ka Siong to provide underprivileged children
high leadership qualities and are active in their
with equal access to a good basic education as a platform
for a brighter future. The adopted students will receive
Humana Learning Centres provide basic education and care for children of foreign workers who are unable to enrol into national schools.
52
ANNUAL REPORT 2016
collaboration, community engagement and youth upskilling

which contribute towards successful employment after school.
School retention and youth unemployment in Klang have been
identified as the two main focus areas of MCII. Two schools in
Klang SMK Pandamaran Jaya and SMK Tengku Idris Shah
have been identified as the pilot sites for the project.
IOI looks forward to playing a meaningful social transformative
role in MCII as it moves to make collective impact where it
matters.
Bargain Basement
Bargain Basement is another charity initiative by Yayasan TSLSC.
Armed with a Give to Inspire Others to Give motto,
the charitable store started its operation on 1 June 2016 with
an objective to encourage public to donate pre-loved or unused
Under SAP, visits are conducted to find out the need and progress items to help the community. The net proceeds from items sold
of the adopted students.
are channelled to different charities.
extra-curricular activities. More than RM535,000 worth of Community Outreach

cash prizes have been given to over 1,400 young achievers
Besides education and social investment programmes, the Group
since its inception.
also encourages and provides ample opportunities for employees
to volunteer their time and actively participate in various CR
e) Partnership with HUMANA
activities organised under Yayasan TSLSC. Some of the activities
IOI partners with the Borneo Child Aid Society, Sabah include bringing cheer to residents at old folks homes and
(HUMANA) to provide basic education and care for organising outdoor teambuilding sessions for children from
children of foreign plantation workers who are unable to orphanages. The Groups numerous CR efforts are highlighted in
enrol into national schools in Malaysia. the Corporate Responsibility section.
IOIs contribution has amounted to over RM1.5 million and

to date, IOI has built 22 HUMANA learning centres in CONCLUSION
Sabah that benefit about 2,200 children annually.
IOI integrates sustainability and social well-being into every
Besides bearing the operating cost of these centres and
aspect of its operations and work culture. The Groups
providing accommodation for the teachers, IOI also
sustainability and CR initiatives reflect its commitment to uphold
sponsors computers, projectors, sound system, school bags,
its Vision IOI and Core Values. As IOI expands its wings,
socks and stationery items to the learning centres and
the Group will continue to strive to broaden and deepen its
their students.
sustainability and CR efforts.
Malaysian Collective Impact Initiatives
In August 2015, IOI joined the Malaysian Collective Impact

Initiatives (MCII) along with several other private companies,
non-profit organisations and government agencies to collectively
drive positive change in the community at large. MCII was
established with the objective of improving education in Malaysia
in line with the objective of IOI, and encouraging cross-sector
53
CORPORATE RESPONSIBILITY
Soc ial C o n tr i b u ti ons
2015
IOI Oleo raised
RM3,000 in cash
and daily provisions
for Persatuan
Kebajikan Kanak-
Kanak Cacat Yee
1
AUG
Ran Jing Sheh.
5
AUG
IOI Oleochemical Industries Berhad (IOI Oleo)
organised a course on answering techniques for UPSR
for 50 students of Sekolah Tamil Prai. It also presented
bags and certificates to ex-students who excelled in
their UPSR, while the school received 100 books which
were donated by employees of IOI Oleo.
27
AUG
IOI Pan-Century Oleochemicals Sdn Bhd
(IOI Pan-Cen Oleo) collaborated with Pasir
Gudang Emergency Mutual Aid to organise a
Community Awareness & Emergency Response
20
Dialogue with neighbouring companies for mutual
safety and emergency aid.
AUG
IOI Corporation Berhad (IOIC) and IOI Properties
Group Berhad (IOIPG) participated in the Bursa Bull
Charge 2015 and contributed RM26,600 to support
Bursa Malaysias aim to foster a sustainable and
inclusive marketplace.
IOI Oleo sponsored 35 employees to join the annual

Penang Starwalk 2015.
13
SEP
54
ANNUAL REPORT 2016
16
SEP IOI Loders Croklaan Americas
(IOILC Americas) hosted an
Ice Cream Social and Dunk Tank
Fundraiser which raised US$515
for victims of a tornado in Coal
City, Illinois. It then matched the
raised amount for the Community
Foundation of Grundy County.
Yayasan Tan Sri Lee Shin Cheng

2
NOV
(Yayasan TSLSC) awarded
RM850,000 to 18 scholarship
recipients in recognition of their
excellent academic and IOILC Americas spearheaded Linus
extra-curricular achievements. Day to make 47 warm and cosy
31
OCT
fleece blankets for children and
families staying at The Ronald
McDonald House of Chicago.
8
NOV
Yayasan TSLSC
contributed
RM50,000 to the
building fund of
SJK (C) Pei Cheng
in Johor.
16
5
DEC
NOV
IOI Oleo organised a mud

ball-making event where 50 IOI Loders Croklaan (IOILC) initiated a
employees and their family Global Safety Summit Team comprising
members gathered to make safety and operational professionals from
2,000 mud balls to purify each IOILC region to conduct audits at its
the water system, improve plants in order to improve safety
water quality and manage performance and best practices.
pollution.
55

Soc ial C o n tr i b u ti ons
2016
To support social enterprises, Yayasan TSLSC pledged
RM80,000 to purchase tote bags and socks from Persatuan
16
FEB
Daybreak, a home cum social enterprise in Perak, where
the disabled are provided vocational skills training to make
handicrafts for sale.
Yayasan TSLSC awarded RM360,000 to 403 needy

students from 29 primary and secondary schools in
Peninsular Malaysia and Sabah under its Student
23
Adoption Programme 2016.
FEB
19
MAR
22
MAR
March was designated as
IOI Groups Earth Month whereby
green activities and awareness
campaigns were held throughout
the Group. On 19 March 2016, all
of IOIs business units and
premises commemorated Earth
Hour by switching off non-essential
lights from 8:30 pm to 9:30 pm. IOI Loders Croklaan Europe continued to support the
battle against multiple sclerosis and successfully raised
2844 for the Move for MS foundation.
IOIC and IOIPG participated in The Edge Kuala

Lumpur Rat Race 2016 and pledged RM32,000
29
MAR
in support of The Edge Education Foundation.
IOILC Americas participated in the clean-up of

Channahon Park Districts I&M (Illinois & Michigan)
Canal State Trail.
15
APR
56
ANNUAL REPORT 2016
18
MAY
IOI Pan-Century (IOI Pan-Cen) initiated a joint
emergency response with three neighbouring
companies and three government agencies to test the
effectiveness of corporate collaboration and response
capabilities to any oil or product spill.
Eighty-nine students received the Young Achievers Awards from

Yayasan TSLSC plus cash prizes, plaques and certificates worth
RM38,900 in recognition of their excellent results in public
20
MAY
examinations and active participation in extra-curricular activities.
1
JUN
26
MAY Yayasan TSLSC initiated Bargain Basement at
IOI City Mall to encourage the public to
donate pre-loved or unused items to help the
community. 100% of its net proceeds will be
IOILC Americas donated US$2,000 for
channelled to various charities.
Red Nose Day, a fundraiser organised to
raise funds to fight poverty in the United
States.
IOI Oleo held a third donation drive for Persatuan

Kebajikan Kanak-Kanak Cacat Yee Ran Jing Sheh and
10
contributed over 238 essential items.
JUN
57
CORPORATE
INFORMATION
BOARD OF DIRECTORS NOMINATING AND REGISTRAR
REMUNERATION COMMITTEE
TAN SRI DATO LEE SHIN CHENG Tricor Investor & Issuing House
PSM, DPMS, JP TAN SRI PETER CHIN FAH KUI* Services Sdn Bhd
Executive Chairman PSM, SSAP, PGBK, PBS, ABS Unit 32-01, Level 32, Tower A
Chairman Vertical Business Suite
DATO LEE YEOW CHOR Avenue 3, Bangsar South
DSAP DATUK KAROWNAKARAN @ No. 8, Jalan Kerinchi
Chief Executive Officer KARUNAKARAN A/L RAMASAMY* 59200 Kuala Lumpur
DSDK, DMSM, KMN, AMN Tel +60 3 2783 9299
LEE YEOW SENG Fax +60 3 2783 9222
Non-Independent Non-Executive Director CHEAH TEK KUANG*
JP THE ADMINISTRATION AND
LEE CHENG LEANG POLLING AGENT
Executive Director EXECUTIVE SHARE OPTION
Boardroom Corporate Services (KL)
SCHEME COMMITTEE
Sdn Bhd
TAN SRI PETER CHIN FAH KUI
TAN SRI DATO LEE SHIN CHENG Lot 6.05, Level 6, KPMG Tower
PSM, SSAP, PGBK, PBS, ABS
PSM, DPMS, JP 8 First Avenue, Bandar Utama
Senior Independent Non-Executive Director
Chairman 47800 Petaling Jaya
Selangor Darul Ehsan
DATUK KAROWNAKARAN @
DATO LEE YEOW CHOR Tel +60 3 7720 1188
KARUNAKARAN A/L RAMASAMY
DSAP Fax +60 3 7720 1111
DSDK, DMSM, KMN, AMN
Independent Non-Executive Director
LEE YEOW SENG LEGAL FORM AND DOMICILE
CHEAH TEK KUANG Public Limited Liability Company
CHARTERED SECRETARY
JP Incorporated and Domiciled in Malaysia
Independent Non-Executive Director VINCENT TAN CHOONG KHIANG
(MAICSA 7018448) STOCK EXCHANGE LISTING
LIM TUANG OOI
Main Market of Bursa Malaysia
AMN REGISTERED OFFICE AND
Securities Berhad
Non-Independent Non-Executive Director PRINCIPAL PLACE OF BUSINESS
Two IOI Square STOCK CODE
AUDIT AND RISK MANAGEMENT
IOI Resort City
COMMITTEE 1961
62502 Putrajaya
DATUK KAROWNAKARAN @ Tel +60 3 8947 8888
WEBSITES
KARUNAKARAN A/L RAMASAMY* Fax +60 3 8947 8909
DSDK, DMSM, KMN, AMN www.ioigroup.com
Chairman AUDITORS www.ioioleo.com
www.ioiloders.com
BDO
TAN SRI PETER CHIN FAH KUI*
Chartered Accountants
PSM, SSAP, PGBK, PBS, ABS EMAIL ADDRESS
Level 8
BDO @ Menara CenTARa corp@ioigroup.com
CHEAH TEK KUANG*
360 Jalan Tuanku Abdul Rahman
JP
50100 Kuala Lumpur
Tel +60 3 2616 2888
Fax +60 3 2616 2970
* Independent Non-Executive Directors
58
ANNUAL REPORT 2016
BOARD OF
DIRECTORS
1 2 3
4 1 TAN SRI DATO LEE SHIN CHENG

Executive Chairman
2 DATO LEE YEOW CHOR

Chief Executive Officer
3 LEE CHENG LEANG

Executive Director
4 LEE YEOW SENG

Non-Independent Non-Executive Director
5 6 7
5 TAN SRI PETER CHIN FAH KUI 8

Senior Independent Non-Executive Director
6 DATUK KAROWNAKARAN @
7 CHEAH TEK KUANG

8 LIM TUANG OOI

59
PROFILE OF DIRECTORS
01 TAN SRI DATO LEE SHIN CHENG

Executive Chairman 02 DATO LEE YEOW CHOR
Malaysian, Age 77, Male Malaysian, Age 50, Male
Tan Sri Dato Lee Shin Cheng was first appointed to the Board Dato Lee Yeow Chor was first appointed to the Board on
on 21 July 1981. 25 April 1996 and was appointed as Chief Executive Officer of
the Group on 8 January 2014. He is responsible for setting the
He is the founder of IOI Group which was listed on Bursa strategic directions and ensuring the optimal performance of the
Malaysia Securities Berhad on 28 July 1980. Tan Sri Lee is Groups core business segments.
pivotal to the operations of IOI Group, having founded the
plantation and property businesses more than twenty-five (25) Dato Lee is a barrister from Grays Inn, London and holds a
years ago. Through his entrepreneurial leadership and LLB (Honours) from Kings College London and a Postgraduate
stewardship, strategic vision, guidance, wisdom as well as his Diploma in Finance and Accounting from London School of
vast experience, IOI Group has grown in tandem to become Economics. Prior to joining IOI Group as a General Manager in
one of the leading plantation and property group in Malaysia.
1994, he served in the Malaysian Attorney Generals Chambers
As Executive Chairman, he oversees the day-to-day operations to
and the Malaysian Judiciary Service for about four (4) years. His
ensure the smooth and effective running of the Group.
last posting was as a Magistrate.
In recognition of Tan Sri Lees immense contributions to the
Dato Lee is presently a Non-Executive Director on the Boards of
evolving needs and aspirations of the property industry in
Malaysia, he was bestowed the singular honour of FIABCI IOI Properties Group Berhad and Bumitama Agri Ltd
Malaysia Property Man of the Year 2001 Award. In February respectively. He is also a Trustee of Yayasan Tan Sri Lee Shin
2002, Tan Sri Lee was conferred the Honorary Doctorate Degree Cheng, the charitable arm of the IOI Group.
in Agriculture by Universiti Putra Malaysia in recognition of his
contributions to the palm oil industry. In 2006, Tan Sri Lee was Dato Lee has been the Chairman of the Malaysian Palm Oil
conferred the Fellowship of the Incorporated Society of Planters Council (MPOC) since 2009 and also serves as a Council
(FISP) by Malaysias ISP. In October 2008, Tan Sri Lee was Member in the Malaysian Palm Oil Association (MPOA) since
conferred Honorary Fellowship of the Malaysian Oil Scientists 2002. In March 2015, Dato Lee was appointed as a Director on
and Technologists Association (MOSTA) for his outstanding the Board of Bank Negara, the Central Bank of Malaysia.
contributions to agriculture, in particular the oleochemical and
specialty oils and fats. Tan Sri Lee was also awarded the He was a Director of the Malaysian Green Technology
prestigious Malaysian Palm Oil Association (MPOA) Recognition Corporation from 2011 to 2013, and served on the National
Award 2011 for his outstanding contributions and leadership in Council of the Real Estate and Housing Developers Association
the plantation industry. In recognition of Tan Sri Lees leadership (REHDA) Malaysia as its Secretary General from 2002 to 2006.
efforts and qualities in Malaysian palm oil industry, he was
awarded the Palm Oil Industry Leadership Award in September Dato Lee is the eldest son of Tan Sri Dato Lee Shin Cheng and
2015 by Malaysian Palm Oil Council (MPOC). Tan Sri Lee was brother of Lee Yeow Seng.
a Council Member of the East Coast Economic Region
Development Council (ECERDC) for the Government from
He attended all the five (5) Board Meetings held during the
2008 to 2014.
financial year ended 30 June 2016.
Tan Sri Lee is also active in providing his advice and guidance to
a large number of industry groupings, associations and social
organisations. He serves as, among others, the Honorary
President of the Associated Chinese Chambers of Commerce
and Industry of Malaysia (ACCCIM).
Tan Sri Lee is also presently the Executive Chairman of

IOI Properties Group Berhad.
Tan Sri Lee is the father of Dato Lee Yeow Chor and Lee Yeow
Seng, and the brother of Lee Cheng Leang.
60
01
02
03
04
ANNUAL REPORT 2016
PROFILE OF DIRECTORS (Contd)
03 LEE CHENG LEANG

Executive Director 04 LEE YEOW SENG
Lee Cheng Leang was first appointed to the Board on 21 July Lee Yeow Seng was first appointed to the Board on 3 June
1981. He has considerable experience in the hardware, chemical 2008. Since joining the IOI Group, he has been actively involved
and industrial gas industry. Lee Cheng Leang continues to make in corporate affairs and general management within IOI Group.
a strong contribution to the Board.
Lee Yeow Seng is a barrister from the Bar of England & Wales
Lee Cheng Leang is the brother of Tan Sri Dato Lee Shin by Inner Temple and holds a LLB (Honours) from Kings College
Cheng. London. He has served at the London and Singapore offices of
a leading international financial services group for approximately
He attended all the five (5) Board Meetings held during the three (3) years.
He is also presently the Chief Executive Officer of IOI Properties
Group Berhad.
He is the youngest son of Tan Sri Dato Lee Shin Cheng and
the brother of Dato Lee Yeow Chor.
63
05 TAN SRI PETER CHIN FAH KUI

Senior Independent Non-Executive Director 06 DATUK KAROWNAKARAN @
Malaysian, Age 71, Male Independent Non-Executive Director
Malaysian, Age 66, Male
Tan Sri Peter Chin Fah Kui was first appointed to the Board on Datuk Karownakaran @ Karunakaran a/l Ramasamy was first
1 December 2014. He is a barrister from Grays Inn, London. appointed to the Board on 17 January 2011. Datuk R.
Karunakaran obtained a Bachelor of Economics (Accounting)
Tan Sri Peter Chin had held various senior appointments in the (Honours) degree from the University of Malaya in 1972. He
Malaysian Government Administration from 1986 until his joined the Malaysian Industrial Development Authority (MIDA)
retirement in May 2013 including the positions of Federal in August 1972 and served in various positions including Deputy
Minister, Federal Deputy Minister and Federal Parliament Director, Director, Deputy Director-General and Director-General.
Secretary for the Ministry of Energy, Green Technology and He also served as the Director of MIDA Singapore, Cologne
Water, Ministry of Plantation Industries and Commodities, (Germany) and London. Having served MIDA for about thirty-six
Ministry of Housing and Local Government, Ministry of Science, (36) years, Datuk R. Karunakaran retired as the Director-General
Technology and the Environment and Ministry of Welfare of MIDA in June 2008, a position he held for about four (4)
Services respectively. years. During his service with MIDA, he was responsible for the
promotion and coordination of the development of the
Tan Sri Peter Chin was the Chairman for Miri Municipal Council manufacturing and services sectors in Malaysia including
in 1984 and Member of Parliament for Lambir and Miri promoting domestic and foreign investment in Malaysia. He was
constituencies in Sarawak from 1986 to 2013. Tan Sri Peter also a member of the Cabinet Committee on Investment.
Chin has been the Special Advisor to Malaysia Green Technology
Corporation (MGTC) since November 2013 and was appointed Datuk R. Karunakaran is the Chairman of the Audit and Risk
as the Chairman of MGTC on 7 April 2015. Management Committee as well as member of the Nominating
and Remuneration Committee of the Company. He is the
Tan Sri Peter Chin is the Chairman of the Nominating and Chairman of Integrated Logistics Berhad, Etiqa Insurance Berhad
Remuneration Committee as well as member of the Audit and and Etiqa Takaful Berhad. He is also a Director of Malayan
Risk Management Committee of the Company. He is also a Banking Berhad, Maybank Ageas Holdings Berhad, Maybank
Trustee of Yayasan Tan Sri Lee Shin Cheng. Asset Management Group Berhad, Maybank (Cambodia) Plc, and
Bursa Malaysia Berhad. He is also a Director of several private
He attended four (4) out of the five (5) Board Meetings held limited companies.
during the financial year ended 30 June 2016.
64
05
06
07
08
ANNUAL REPORT 2016
07 CHEAH TEK KUANG

Independent Non-Executive Director 08 LIM TUANG OOI
Cheah Tek Kuang was first appointed to the Board on Lim Tuang Ooi was appointed to the Board on 17 January
22 August 2012. He graduated with a Bachelor of Economics 2011. He is the Senior General Manager of the Employees
degree from University of Malaya and is a Fellow of The Asian Provident Funds of Malaysia (EPF), which is the countrys
Institute of Chartered Bankers, formerly known as the Institute largest retirement fund with fund size of RM708 billion as of
of Bankers Malaysia. He first joined Amlnvestment Bank Berhad end July 2016. He has been with EPF for nine (9) years and he
in 1978 and was promoted to the position of Managing oversees the overall risk management function of the
Director in 1994. He then moved to head the AmBank Group organisation.
when he was appointed as Group Managing Director of AMMB
Holdings Berhad on 1 January 2005 till his retirement in April Lim Tuang Ooi is a professionally qualified Chartered and
2012. Prior to joining the AmBank Group, he was with the Certified Public Accountant and is a member of the Institute of
Malaysian Investment Development Authority. Chartered Accountants in England and Wales (ICAEW). He is
a member of the Malaysian Institute of Certified Public
Cheah Tek Kuang is also a member of the Audit and Risk Accountants (MICPA) and Malaysian Institute of Accountants
Management Committee as well as Nominating and (MIA). He is also granted professional membership to the
Remuneration Committee of the Company. He also sits on the Chartered Institute of Public Finance and Accountancy, United
Board of several public listed companies. He is the Independent Kingdom (CIPFA) as Chartered Public Finance Accountant
Non-Executive Chairman of Berjaya Sports Toto Berhad and (CPFA).
Independent Non-Executive Director of UMW Oil & Gas
Corporation Berhad, Eco World International Berhad and MOL Lim Tuang Ooi is a veteran with more than thirty-three (33)
Global, Inc. years of experience in the banking, risk management and
accounting industry. He joined EPF in November 2007 and prior
Presently he sits on the Board of several non-profit to that he was the Chief Financial Officer of Hong Leong Bank
organisations. He is a Governor of Yayasan Bursa Malaysia, Berhad where he oversaw the financial management, accounting
Board member of Malaysian Institute of Art and MIA Enterprise operations, tax management, strategic planning and risk
Sdn Bhd. management functions. He was with Citibank for more than
fifteen (15) years and held many roles covering business
He attended all the five (5) Board Meetings held during the banking, credit and market risk management, customer service,
financial year ended 30 June 2016. quality management, analytics, financial modelling and
operations. He spent seven (7) years with KPMG where he
qualified as a Chartered and Certified Public Accountant and
worked in the areas of audit and consultancy. He also sits on
the board of directorship of a major real estate and master
property development company.
Notes:
1. Save as disclosed above, none of the Directors have:
(a) any family relationship with any directors and/or major shareholders of the Company; and
(b) any conflict of interest with the Company.
2. None of the Directors have any conviction for offences (other than traffic offences) within the past
five (5) years.
3. None of the Directors have any public sanction or penalty imposed by the relevant regulatory bodies
during the financial year ended 30 June 2016.
67
SENIOR
MANAGEMENT
TEAM
Executive Chairman
Tan Sri Dato Lee Shin Cheng

Dato Lee Yeow Chor
Executive Director
Lee Cheng Leang
CORPORATE
Chief Financial Officer
Kevin Wong Tack Wee
Group Legal Counsel

Farah Suhanah Ahmad Sarji
Group Head of Sustainability

Dr Surina binti Ismail
Chartered Secretary
Vincent Tan Choong Khiang
PLANTATION
Senior General Manager
Sudhakaran a/l Nottath Bhaskaran
General Manager, Lahad Datu

Ragupathy a/l Selvaraj
General Manager, Indonesia

Goh Hock Sin
68
ANNUAL REPORT 2016
COMMODITIES MARKETING
General Manager, Commodities Marketing
Lim Jit Uei
REFINERY
General Manager
Shyam a/l M. K. Lakshmanan
OLEOCHEMICALS
Executive Director
Tan Kean Hua
Chief Operating Officer, Johor

Gurdev Singh a/l Darshan Singh
Chief Operating Officer, Penang

Lai Choon Wah
Chief Operating Officer, Germany

Thomas Kummer

Julian Veitch
Chief Operating Officer, Americas

William (Bill) Troy
Chief Operating Officer, Europe

Dr Loek Favre
Chief Operating Officer, Asia

Michael van Sallandt
69
PROFILE OF SENIOR MANAGEMENT TEAM
The management team is headed by the Group Executive Chairman, Tan Sri Dato Lee Shin Cheng
and the Group Chief Executive Officer, Dato Lee Yeow Chor. They are assisted by the Executive Director
and the following senior management team:
C O RP O RA T E
KEVIN WONG TACK WEE DR SURINA BINTI ISMAIL
Chief Financial Officer Group Head of Sustainability
Nationality : Malaysian Nationality : Malaysian
Age / Gender : 54 / Male Age / Gender : 56 / Female
Date of Appointment : 1 October 2012 Date of Appointment : 1 March 2016
Skills and Experience: Skills and Experience:

Mr Kevin Wong is a fellow member of the Chartered Institute Dr Surina binti Ismail obtained a Bachelor of Science (Honours)
of Management Accountants (FCMA), Chartered Global in Chemistry from Indiana University, MSc. in Polymer Organic
Management Accountant (CGMA) and a member of Chartered Chemistry from University of Massachusetts and a Ph.D. in
Accountant, Malaysia (CA, Malaysia). He has more than thirty Bioorganic Polymer from University of Akron, U.S.A. She has
(30) years of experience in financial management, group more than twenty (20) years of experience working in several
accounting, taxation, treasury management and auditing. He had multinational and large Malaysian corporations. She brings with
held various senior positions in multinational companies based in her, diverse experience in intellectual property management,
Malaysia and Hong Kong with regional responsibilities. Prior to research and development, corporate strategy & planning and
joining IOI Group, he was the regional Chief Financial Officer of sustainability. She has strong technical knowledge and
a multinational vegetable oil downstream manufacturing group. experience in oleochemicals, palm oil, rubber products,
UV coating and nanotechnology.
FARAH SUHANAH AHMAD SARJI

Group Legal Counsel VINCENT TAN CHOONG KHIANG
Nationality : Malaysian Chartered Secretary
Age / Gender : 51 / Female Nationality : Malaysian
Date of Appointment : 5 May 2015 Age / Gender : 46 / Male
Date of Appointment : 8 August 2011
Skills and Experience:
Ms Farah Suhanah obtained a Bachelor of Arts in Law (Honours) Skills and Experience:
from the University of Kent at Canterbury, is a Barrister-at-Law Mr Vincent Tan is a fellow member of the Malaysian Institute of
of the Middle Temple, UK, and has been called to the Malaysian Chartered Secretaries and Administrators (MAICSA). He was
Bar. Ms Farah Suhanah brings with her more than twenty-five elected to the MAICSA Council in June 2014 and is the
(25) years of experience in legal practice in the areas of Honorary Treasurer of MAICSA. He has twenty (20) years of
privatisation of infrastructure and services, conveyancing of working experience in secretarial practice. Mr Vincent Tan
property and real estate, joint venture transactions and started his career with PFA Corporate Services Sdn Bhd (PFA)
arrangements, corporate and commercial transactions, the in 1995 before joining Southern Steel Group. Subsequently he
satellite communications industry as well as regulatory joined a secretarial services provider firm in 1999 as Assistant
compliance. Prior to joining IOI Group, she was in private legal Manager and was last designated as the Senior Manager in year
practice and has also held various senior positions in public 2004 before returning to PFA. Prior to joining IOI Group, he
listed companies. was an Associate Director Corporate Services with Tricor
Services (Malaysia) Sdn Bhd (formerly PFA), a member of The
Bank of East Asia Group where he was responsible for
management and business development of their corporate
secretarial and accounting service divisions.
70
ANNUAL REPORT 2016
P L A N T A T I ON COMMODI TI ES MARKETI NG
SUDHAKARAN A/L NOTTATH BHASKARAN LIM JIT UEI
Senior General Manager General Manager
Nationality : Malaysian Nationality : Singaporean
Age / Gender : 57 / Male Age / Gender : 42 / Male
Date of Appointment : 16 March 2003 Date of Appointment : 3 August 2015

Mr Sudhakaran a/l Nottath Bhaskaran holds an Honours Degree Mr Lim Jit Uei obtained a Bachelor of Science in Real Estate
in Mechanical Engineering from University of Technology (Honours) from the National University of Singapore. He has
Malaysia and a Diploma in Palm Oil Mill Engineering from more than fifteen (15) years of experience in the trading of
MPOB. He joined IOI Group in 2003. He started his career in agricultural commodities with leading commodity companies.
Felda Mills Corporation as a Mill Engineer and later joined Prior to joining IOI Group, he was the Regional Procurement
Unilever Plantations where he held several positions as Mill Manager (Commodities) for a global food ingredients
Manager, Estate Manager and General Manager of Plantations. manufacturer. He also sits on the Management Board of the
Palm Oil Refiners Association of Malaysia (PORAM).
RAGUPATHY A/L SELVARAJ Mr Lim Jit Uei is the son-in-law of Tan Sri Dato Lee Shin
General Manager, Lahad Datu Cheng and the brother-in-law of both Dato Lee Yeow Chor
Nationality : Malaysian and Lee Yeow Seng.
Age / Gender : 58 / Male
Date of Appointment : 1 July 1989
Skills and Experience:

REFI NERY
Mr Ragupathy a/l Selvaraj holds a Bachelor of Science in
Agriculture from Andhra Pradesh Agriculture University, SHYAM A/L M. K. LAKSHMANAN
Hyderabad, Andra Pradesh, India. Prior to joining IOI Group as General Manager
an Assistant Manager in 1989, he was a Cadet Planter in Detas Nationality : Malaysian
Estate (1988) which was later acquired by IOI Group in 1989. Age / Gender : 53 / Male
Date of Appointment : 1 February 2013
GOH HOCK SIN Skills and Experience:

General Manager, Indonesia
Mr Shyam a/l M. K. Lakshmanan holds a Masters Degree in
Nationality : Malaysian Manufacturing Systems Engineering from the University of
Age / Gender : 56 / Male Warwick. He is a Chartered Chemical Engineer (U.K.) and a
Date of Appointment : 1 February 2008 Professional Engineer (Malaysia). Prior to joining IOI Group,
initially he worked as a Process Engineer in the edible oil
Skills and Experience: industry and then moved to the chemical industry. His
Mr Goh Hock Sin holds a diploma from the Association of international experiences include handling mineral processing
Incorporated Society of Planters. He was with a plantation group projects in China and Indonesia, and heading a mineral
in the Republic of Indonesia prior to joining IOI Group in 2008. processing plant in Western Australia.
71
PROFILE OF SENIOR MANAGEMENT TEAM (Contd)
O L E O CH E M I C A LS
TAN KEAN HUA LAI CHOON WAH
Executive Director Chief Operating Officer, Penang
Nationality : Malaysian Nationality : Malaysian
Date of Appointment : 1 April 2011 Date of Appointment : 1 October 2013

Mr Tan Kean Hua holds a First Class Honours Degree in Mr Lai Choon Wah holds a Degree in Chemical and Process
Chemical Engineering from University of Malaya and an Engineering from the National University of Malaysia and also a
Executive MBA Degree from the University of Bath-Malaysian Master degree in Business Administration from University Science
Institute of Management. Prior to joining IOI Group in 2004, Malaysia. He has extensive working experience in oleochemical
he held a senior marketing position in an oleochemicals industry and had been working with IOI Group since 1997.
multinational company. He has been appointed Chairman of Before his appointment as Chief Operating Officer in July 2016,
Malaysian Oleochemical Manufacturers Group (MOMG) since he was the Senior General Manager.
March 2010 and is also the current chair of the Asean
Oleochemical Manufacturers Group (AOMG). In May 2010,
he was appointed to the Board of Malaysia Palm Oil Board THOMAS KUMMER
(MPOB). Chief Operating Officer, Germany
Nationality : German
GURDEV SINGH A/L DARSHAN SINGH Date of Appointment : 16 February 2016
Chief Operating Officer, Johor
Nationality : Malaysian Skills and Experience:
Age / Gender : 58 / Male Mr Thomas Kummer holds a Bachelor of Chemical Production
Date of Appointment : 1 October 2013 and Management. Prior to IOI Group taken over the business
from the former owner in 2016, he held a senior operation
Skills and Experience: position in the former organisation and has more than
Mr Gurdev Singh holds a Upper Second-Class Honours Degree twenty (20) years of experience in the oleochemical business in
in Accountancy from University of London - Kings College different management positions.
London. Prior to joining IOI Group in 2007, he held a senior
manager position within the Pan Century division. Mr Gurdev
Singh is experienced in financial management, treasury
management, cost and budgetary accounting, auditing and
customised computerisation in Pan-Century Edible Oils and
marketing in oleochemicals fatty acids and soap noodles
since 1999.
72
ANNUAL REPORT 2016
S P E CI A L T Y O IL S A N D F AT S
JULIAN VEITCH DR LOEK FAVRE
Chief Executive Officer Chief Operating Officer, Europe
Nationality : British Nationality : Dutch
Date of Appointment : 1 April 2012 Date of Appointment : 1 September 2009

Mr Julian Veitch holds a Masters Degree in Engineering, Dr Loek Favre holds a Ph.D. in Chemistry from Leiden University.
Economics and Management from Oxford University. Prior to Prior to joining IOI Loders Croklaan in 1998, he worked for a
joining IOI Group in 2005, he worked for Cadbury Schweppes, number of different entities of Unilever in the fields of
Scott Paper Company, The Savola Company and Asia Food & detergents, cosmetic ingredients (oleochemicals) and clinical
Properties Ltd. He has extensive experience in marketing, merger products. He has extensive experience in research and
and acquisitions, and general management. Before his development, industrial marketing and sales and general
appointment as CEO, he was Chief Operating Officer for management. He has been appointed Chairman of Dutch MVO
IOI Loders Croklaan, North America. since January 2014, member of the Executive Board of FEDIOL
since June 2013, and member of the Steering Committee of the
European Palm Oil Alliance since January 2013.
WILLIAM (BILL) TROY
Chief Operating Officer, Americas
Nationality : American MICHAEL VAN SALLANDT
Age / Gender : 57 / Male Chief Operating Officer, Asia
Date of Appointment : 1 January 2013 Nationality : Dutch
Skills and Experience: Date of Appointment : 18 June 2012
Mr William (Bill) Troy holds a Bachelor of Science Degree in
Chemical Engineering from Lehigh University in Bethlehem, Skills and Experience:
Pennsylvania and a Masters of Business Administration from Mr Michael van Sallandt holds a Masters Degree in Food
Fairleigh Dickinson University in Madison, New Jersey. Before Science from Wageningen University. Prior to rejoining IOI
joining IOI Loders Croklaan in 2010, he held progressive Group in July 2012, he worked as an independent business
positions in engineering, research and technology, operations consultant. He has extensive experience in information
and general management in the chemical, food and biofuels technology, project management, supply chain, operations,
industries, with Diamond Shamrock, Occidental Chemical, business development and general management.
The Stepan Company, ConAgra Foods and GreenHunter Energy.
Prior to his present role, he was Vice President of Operations for
IOI Loders Croklaan, North America.
Notes:
Save as disclosed above, none of the above senior management team have:
(a) any directorship in public companies and listed issuers;
(b) any family relationship with any directors and/or major shareholders of the Company;
(c) any conflict of interest with the Company;
(d) any conviction for offences (other than traffic offences) within the past five (5) years; and
(e) any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
73
GROUP BUSINESS
ACTIVITIES
Plantation
IOI CORPORATION BERHAD*
PLANTATION SUBSIDIARIES
Oil Palm Plantations
Crude Palm Oil Mills
* Listed on the Main Market of

Bursa Malaysia Securities Berhad
74
ANNUAL REPORT 2016
Resource-Based
Manufacturing
IOI EDIBLE OILS GROUP
Palm Oil Refinery
Palm Kernel Crushing
IOI OLEOCHEMICAL INDUSTRIES

BERHAD GROUP
Oleochemicals
IOI LODERS CROKLAAN GROUP

Specialty Oils and Fats
Palm Oil Refinery and Fractionation
75
GLOBAL
PRESENCE
NORTH 1
AMERICA 3
2
Plantation & Mill

Resource-based Manufacturing
Sales/Procurement/Regional Office
4
SOUTH
AMERICA
NORTH AMERICA SOUTH AMERICA

1 Channahon, USA 4 Sao Paulo, BRAZIL
2 New Jersey, USA
3 Toronto, CANADA
76
ANNUAL REPORT 2016
14
8
13
12
9
15 11
10
EUROPE ASIA
18
5
19
16 20
7
6
17
AFRICA
AUSTRALIA
AFRICA EUROPE ASIA

5 Cairo, EGYPT 8 Rotterdam, THE NETHERLANDS 16 MALAYSIA
6 Tema, GHANA 9 Wormerveer, THE NETHERLANDS 17 Kalimantan, INDONESIA
7 Bobo Dioulasso, BURKINA FASO 10 Milan, ITALY 18 Shanghai,
THE PEOPLES REPUBLIC OF CHINA
11 Warsaw, POLAND
19 Xiamen,
12 Moscow, RUSSIA THE PEOPLES REPUBLIC OF CHINA
13 Hamburg, GERMANY 20 Manila, THE PHILIPPINES
14 Witten, GERMANY
15 Wittenberge, GERMANY
77
LOCAL
PRESENCE
Penang Port
34
PENANG
Penang
International
Airport
Sultan Azlan Shah

Airport
Kuantan Port
PAHANG Kuantan Airport
2
SELANGOR 3
1
Port Klang 4 5
West Port
NEGERI 8 7
KLIA SEMBILAN 10 6
9 12
11
MALACCA 13
Main Airport JOHOR
14
Palm Oil Mill
Main Port Senai
International
Airport
North-South Expressway
35 36 37
East Coast Expressway
Pasir Gudang
Tanjung Pelepas Port
Port
78
ANNUAL REPORT 2016
32
Kota Kinabalu Airport 31

Sandakan Airport
30 38
27 Sandakan Port
28
22
26 25 29 21
23 20
24 19
18 17
16
SABAH Lahad Datu Port
Lahad Datu Airport
15
Tawau Port Tawau Airport
33
SARAWAK
PLANTATION PLANTATION RESOURCE-BASED

(PENINSULAR) (EAST MALAYSIA) MANUFACTURING
1 Bukit Dinding Estate 15 Baturong Estate 34 IOI Oleochemical Operations
2 Detas Estate 16 Cantawan Estate 35 IOI Pan-Century Oleochemicals &
3 Bukit Leelau Estate 17 Unico 6 Estate Refinery Operations
4 Leepang A Estate & 18 Halusah Estate 36 IOI Lipid Enzymtec Plant

Laukin A Estate 19 Tas Estate 37 IOI Loders Croklaan Refinery/
5 Mekassar Estate & Specialty Fats Operations
20 Unico 1-5 Estates
Merchong Estate 38 IOI Palm Oil Refinery/
21 Morisem 1-5 Estates Kernel Crushing Plant
6 Pukin Estate
22 Leepang 1-5 Estates
7 Shahzan IOI 1 Estate &
Shahzan IOI 2 Estate 23 Permodalan Estate
8 Bahau Estate & 24 Syarimo 1-9 Estates
Kuala Jelei Estate 25 Bimbingan Estate
9 IOI Research Centre & 26 Mayvin Estate & Tangkulap Estate
Regent Estate
27 Laukin Estate
10 Gomali Estate, Paya Lang Estate
& Tambang Estate 28 Ladang Sabah Estates, IOI Lab &
Sandakan Regional Office
11 Bukit Serampang Estate &
Sagil Estate 29 Linbar Estates
12 Segamat Estate 30 Sakilan Estate
13 Kahang Estate 31 Pamol Sabah Estates
14 Pamol Barat Estate, 32 Sugut Estate
Pamol Timur Estate, 33 Sejap Estate & Tegai Estate
Mamor Estate & Unijaya Estate
79
CORPORATE CALENDAR
2015
1
AUG
IOI Group joined the Malaysian Collective Impact

Initiatives along with several other private
13
JUL
companies, non-profit organisations and
government agencies to collectively drive positive
change in the community at large.
IOI Acidchem Sdn Bhd (IOI Acidchem), a subsidiary

of IOI Oleochemical Industries Berhad (IOI Oleo)
recorded the start of multiple shipment parcels of
Roundtable on Sustainable Palm Oil (RSPO)
Segregated fatty acids to customers in Denmark.
7
SEP
18
IOI Group Executive Chairman Tan Sri Dato Lee
Shin Cheng was conferred the Palm Oil Industry
Leadership Award 2015 by Malaysian Palm Oil
AUG Council for his contribution to the development of
palm oil industry in the country.
IOI Loders Croklaan (IOILC) received the TreeHouse
Excellence Award for 2014/2015 and was named
Supplier of the Year by Bay Valley Foods for its
research and development expertise in todays
fast-paced environment as well as its dedication to
provide solutions and customer satisfaction.
IOILC obtained the International Sustainability & Carbon

Certification (ISCC) for its sustainable shea supply
chain. It is the first vegetable oils and fats company to
17
obtain this certification.
SEP
80
ANNUAL REPORT 2016
25
SEP
IOI Oleos efficient co-generation heat and power
plant was successfully commissioned and has boosted
total energy efficiency to above 90%. It is expected
to generate 6.5 MW electricity per hour and reduce
greenhouse gas emissions by saving 40,000 MT of
CO2 emission per year.
IOI Group appointed Tenaganita, a Malaysian

non-governmental organisation, to review the current
labour and working conditions in its plantations in
Malaysia. The move, to commence over nine months,
29
is in line with its Sustainability Policy Statement.
SEP
16
26
OCT
OCT
IOI Loders Croklaan Europe celebrated the 10th

IOI Corporation Berhad (IOIC) was
anniversary of the first delivery of oil from
recognised as the Most Profitable Company:
Rotterdam refinery in the Netherlands.
Highest Return on Equity Over Three Years in
the plantation sector at The Edge Billion Ringgit
Club Corporate Awards 2015.
IOILC is constructing a new US$65 million palm oil

speciality oils and fats factory on a 16-hectare plot in
Xiamen, the Peoples Republic of China to cater for its
existing and potential customers in the country. The
construction, which started in May 2015, is expected to
be completed by end of 2016.
1
NOV
81
CORPORATE CALENDAR (Contd)
11
NOV IOILC launched Vitavance, a new range of
Fat based ingredients dedicated products for animal nutrition which focuses
for animal nutrition on supporting animal health, growth and vitality.
IOI Loders Croklaan Americas achieved the single

largest savings in natural gas usage that saw over
US$80,000 savings in natural gas.
3
DEC
IOI Pan-Century Oleochemicals Sdn Bhd (IOI Pan-Cen Oleo)

won two Gold Awards (Employee Health & Safety Code; and
Community Awareness & Emergency Response Code) and two
Merit Awards (Process Safety Code; and Distribution Code) in the
12th Chemical Industries Council of Malaysia (CICM)
Responsible Care Awards 2014/2015.
Meanwhile, IOI Acidchem garnered a Gold Award (Pollution

Prevention Code), three Silver Awards (Employee Health & Safety
Code; Process Safety Code; and Distribution Code) and a Merit
Award (Community Awareness & Emergency Response).
8
DEC
IOI Acidchem received the highest accolade in

environmental management by winning the
Challenge Trophy in the biennial Prime Ministers
Hibiscus Award 2014/2015. It was also accorded
the Excellent Achievement in Environmental
Performance Award and retained the Penang State
Award that it won previously. 14
DEC
82
ANNUAL REPORT 2016
2016
15
FEB
IOI Oleo GmbH (formerly known
as Alstersee 217. V V GmbH
which is an indirect wholly-owned
subsidiary of IOI Corporation
Berhad) completed the acquisition
of Cremer Oleo GmbH & Co KGs
entire oleochemical manufacturing
business in Germany.
15
JAN
IOI Pan-Century (IOI Pan-Cen) became the
first refinery and oleochemical company in
Malaysia to be certified ISO 50001 by SIRIM
following its relentless green initiatives to
further reduce energy consumption and
implementation of the ISO 50001 Energy
Management System.
3
MAR
IOI Loders Croklaan Asia (IOILC Asia) unveiled its
newly-built ISO tank loading facility which enables it to
continue serving its clients and rapidly expanding
businesses. The new facility is dedicated to the
production of nutrition lipid Betapol.
5
JUN
IOILC Asia successfully installed six new
70 MT tanks, involving a RM2.7 million investment,
to cater for a number of new Low Trans and
No Trans specialty fats that will give an extra
12,000 TPA volume of specialty fats.
83

COMMITTEE REPORT
The Board of Directors of IOI Corporation Berhad is pleased to Overseeing the Groups system of disclosure controls
present the report on the Audit and Risk Management and system of internal controls that management and
Committee (the Committee) of the Board for the financial the Board have established
year ended 30 June 2016.
Assessing the Companys practices, processes and
effectiveness of risk management
The Audit Committee was established on 24 March 1994 in line
with the Main Market Listing Requirements (Listing Reviewing conflict of interest situations and related party
Requirements) of Bursa Malaysia Securities Berhad (Bursa transactions of the Group
Malaysia). Subsequently, on 6 September 2012, the Audit
Reviewing any significant matters highlighted including
Committee was renamed as the Audit and Risk Management
financial reporting issues, significant judgements made
Committee.
by management, significant and unusual events or
transactions, and how these matters are addressed
A MEMBERS
The Committee consists of three (3) following members, C SUMMARY OF WORK OF THE COMMITTEE
who each satisfy the independence requirements
The Committee report provides an overview of the work
contained in the Listing Requirements of Bursa Malaysia.
that the Committee carried out during the year, including
The biography of each member of the Committee is set
the significant issues considered in relation to the financial
out in the Profile of Directors section:-
statements and how the Committee assessed the
Datuk Karownakaran @ Karunakaran a/l Ramasamy effectiveness of the external auditors.
Chairman
Independent Non-Executive Director The Committee has a responsibility to oversee the Groups
internal control and risk management systems. The
Tan Sri Peter Chin Fah Kui Committee continues to monitor and review the
Member effectiveness of the Groups internal control and risk
Senior Independent Non-Executive Director management systems with the support of Group Internal
Audit and Risk Management function.
Cheah Tek Kuang
Member The Committee has an annual work plan, developed from
Independent Non-Executive Director its Terms of Reference, with standing items that the
Committee considers at each meeting, in addition to any
matters that arise during the year. The summary of work
B SUMMARY OF KEY SCOPE OF RESPONSIBILITIES and the main matters that the Committee considered
during the financial year ended 30 June 2016 (FYE 2016)
The Committee operates under a written Audit and Risk
are described below:-
Management Committees Terms of Reference containing
provisions that address requirements imposed by Bursa
1. Financial statements and reporting
Malaysia. That Terms of Reference is posted on the
Corporate Governance section of the Companys website at The Committee monitored the financial reporting
www.ioigroup.com. processes for the Group, which included reviewing
reports from, and discussing these with, management
The Terms of Reference prescribes the Committees and the external auditors, BDO. The Committee has
oversight of financial compliance matters in addition to a reviewed the unaudited quarterly financial results and
number of other responsibilities that the Committee audited financial statements of the Group before
performs. Those key responsibilities include, among others:- recommending them for Boards approval.
Overseeing the financial reporting process and integrity

During the fourth quarter of FYE 2016, the Committee
of the Groups financial statements
had considered and deliberated at length the reports
Evaluating the independence of external auditors from management and BDO on the Groups proposal
to apply an earlier transition to the Malaysian Financial
Evaluating the performance and process of the
Companys internal audit function and external auditors
84
ANNUAL REPORT 2016
Reporting Standards (MFRS) Framework, and the Internal Audit plan and budget for activities to be
early adoption of Amendments to MFRS 116 and undertaken during 2016/2017. The Committee also
MFRS 141 Agriculture: Bearer Plants which is effective reviewed the adequacy of the scope, functions,
for annual periods beginning on or after 1 January competency and resources of the internal audit
2016. function during the year.
As part of the year-end reporting process, the The Internal Audit Department performs routine audit
Committee noted the observations made by BDO with on and reviews all operating units within the Group,
regard to lack of systems integration at the estates, with emphasis on principal risk areas. Internal Audit
regional office and headquarter at which the adopts a risk-based approach towards planning and
Committee had advised management to further conduct of audits, which is partly guided by an
improve the system integration. The Committee had Enterprise Risk Management (ERM) framework.
also reviewed external auditors reports on other Impact on the Vision IOI is taken into consideration
internal controls, accounting and reporting matters and in determining the risk level as a holistic approach in
a management representation letter concerning contributing to the achievement of the Groups
accounting and reporting matters as well as objectives and in enhancing shareholders value.
recommendations in respect of control weaknesses
noted in the course of their audit. There were no 105 audit assignments (including 11 special audit
significant and unusual events or transactions assignments) were completed during the financial year
highlighted by the management as well as external on various operating units of the Group covering
auditors during the financial year. plantation, resource-based manufacturing and other
segments. Audit reports were issued to the Committee
2. Going concern assessment and Board quarterly incorporating findings,
recommendations to improve on the weaknesses noted
The Committee and the Board reviewed the going
in the course of the audits and managements
concern basis for preparing the Groups consolidated
comments on the findings. An established system has
financial statements, including the assumptions
been put in place to ensure that all remedial actions
underlying the going concern statement and the
have been taken on the agreed audit issues and
period of assessment. The Committees assessment was
recommendations highlighted in the audit reports.
based on presentation by management and took note
Certain significant issues and matters unsatisfactorily
of the principal risks and uncertainties, the existing
resolved had been highlighted to the Committee and
financial position, the Groups financial resources, and
it was also agreed on an increased focus on the speed
the expectations for future performance and capital
of their resolution.
expenditure.
The Committee reviewed the audit reports presented
3. Internal audit
by Internal Audit Department on findings and
The Internal Audit provides independent and objective recommendations and managements responses thereto
assurance and advisory services designed to add value and ensure that material findings are adequately
and improve the operations of the Group. Its scope addressed by management.
encompasses, but is not limited to, the examination
and evaluation of the adequacy and effectiveness of The tasks, responsibilities, and goals of the Committee
the Groups governance, risk management and internal and internal auditing are closely intertwined in many
control processes in relation to the Groups defined ways. Certainly, as the magnitude of the corporate
goals and objectives. The Committee approved the accountability issue increases, so does the significance
internal audit functions charter, which sets out its role, of the internal auditing and audit committee
scope, accountability and authority. relationship. The Committee had met one (1) time
privately (without management presence) with the
The Head of Group Internal Audit, who is an Head of Group Internal Audit during the FYE 2016 in
Associate Member of The Institute of Internal Auditors assuring that the mechanisms for corporate
Malaysia, reports functionally to the Committee, and accountability are in place and functioning.
the Committee reviewed and approved the annual
85

COMMITTEE REPORT (Contd)
The total costs incurred for the internal audit function The Committee discussed with management how they
of the Group for the FYE 2016 was RM3,547,640 would continue to deliver high-quality oversight and
(2015: RM3,173,589). The increase in the internal risk evaluation against sustainability matters including
audit cost was mainly attributed to the newly set up but not limited to Roundtable on Sustainable Palm Oil
of Sandakan region internal audit office in addition to (RSPO) action plans arising from the RSPO
Lahad Datu internal audit team during the FYE 2016. certification suspension, which was lifted on 8 August
2016. Where areas for improvement have been
4. Risk review identified and the necessary actions in respect of the
relevant control procedures have been or are being
The Board and management drive a proactive risk
taken.
management culture and ensure that the Groups
employees have a good understanding and application
The details relating to risk management is reported
of risk management principles towards cultivating a
separately under Statement on Risk Management and
sustainable risk management culture through
Internal Control on pages 109 to 112.
education. Regular risk awareness sessions are
conducted at the operational level to promote the
5. Assessing the effectiveness of external audit
understanding of risk management principles and
process
practices across different functions within the Group.
In addition, a risk-based approach is embedded into The Committee places great importance on ensuring
existing key processes as well as new key projects, and that there are high standards of quality and
is compatible with the Groups internal control systems. effectiveness in the external audit carried out by BDO.
Audit quality is reviewed by the Committee throughout
The Board conducts periodic reviews on the adequacy the year and includes reviewing and approving the
and integrity of the Groups ERM framework and annual audit plan to ensure that it is consistent with
policies, particularly in relation to the mechanisms for the scope of the audit engagement. In reviewing the
principal risk identification, assessment, response and audit plan, the Committee discussed the significant
control, communication and monitoring. and elevated risk areas identified by BDO most likely
to give rise to a material financial reporting error or
Bi-annual review of the effectiveness of risk those that are perceived to be of higher risk and
management and internal control processes was requiring additional audit emphasis. The Committee
carried out by the Committee. The Committee focused also considered the audit scope and materiality
its review on the Companys risk mitigation and threshold.
controls and the strategic and organisation-wide risks
facing the Group. Risk management activities take The Committee met with BDO at various stages during
place throughout the organisation to support the the audit process, including without management
Committee in its corporate governance responsibilities, present, to discuss their remit and any issues arising
working with the business to proactively and effectively from the audit. During the FYE 2016, the Committee
manage risk. This, together with the related control met privately four (4) times with BDO without
and the following assurance processes, is designed to management present.
identify, evaluate and manage risk and to ensure that
the resultant residual risks meet the risk appetite of The Committee concluded that the effectiveness of the
the Board:- external audit process remains strong.
Bi-annual risk review reports compiled by the

respective operating units Risk Management
Committees, and annual presentation to and
discussion with the Committee.
Operating units CEO/CFOs Internal Control

Certification and Assessment Disclosure.
Operating units response to the Questionnaire on

Control and Regulations.
86
ANNUAL REPORT 2016
6. Auditors re-appointment review (iii) Non-audit work carried out by the external
auditors
The Committee considered the re-appointment of BDO.
This review took into account the following factors:- To help protect auditor objectivity and
independence, the provision of any non-audit
(i) Auditors effectiveness
services provided by the external auditors requires
The Committee met with management, including prior approval, as set out in the table below:-
without the auditors present, to hear their views
on the effectiveness of the external auditors. The Approval thresholds for
criteria for assessing the effectiveness of the audit non-audit work Approver
included the robustness of the audit, the quality
Below RM200,000 per engagement CFO
of the audit delivery and the quality of the
people and service. The Committee concluded Above RM200,000 and up to
that the performance of BDO remained effective. RM500,000 per engagement CEO
Greater than RM500,000 per

(ii) Independence and objectivity
engagement, or if the value of
The Committee reviews the work undertaken by non-audit fees to audit fees reaches
the external auditor and each year assesses its a ratio of 1:2 as a result of a new
independence, objectivity and performance. In engagement, regardless of value Committee
doing so, it takes into account relevant
professional and regulatory requirements and the Certain types of non-audit service are of
relationship with the auditor as a whole, including sufficiently low risk as not to require the prior
the provision of any non-audit services. The approval of the Committee, such as "audit-related
Committee monitors the auditors compliance with services" including the review of interim financial
relevant regulatory, ethical and professional information. The prohibited services are those that
guidance on the rotation of partners, as well as have the potential to conflict directly with the
assessing annually its qualifications, expertise, auditors' role, such as the preparation of the
resources and the effectiveness of the audit Company's financial statements.
process, including presentation from the external
auditor on its own internal quality procedures. Non-audit work undertaken during the period
The total of non-audit fees and audit fees paid to
The audit engagement partner is required to BDO during the FYE 2016 is set out in Note 11
rotate every five (5) years as per BDO firm policy, of the audited financial statements.
which is in accordance with the by By-Laws (on
professional ethics, conduct and practice) of the BDO also provided in its engagement letter on the
Malaysian Institute of Accountants (MIA). The specific safeguards put in place for each piece of
current audit engagement partner has held the non-audit work confirming that it was satisfied
position for four (4) years and the last rotation of that neither the extent of the non-audit services
previous audit engagement partner was in 2013. provided nor the size of the fees charged had any
BDO reported to the Committee that it had impact on its independence as statutory auditors.
considered its independence in relation to the The Committee is satisfied that the quantum of
audit and confirmed to the Committee that it the non-audit fees relative to the audit fees (being
complies with professional requirements and that 34.6% of the total audit fees on a group basis
its objectivity is not compromised. payable to BOD and affiliates) and the Committee
concluded that the auditors' independence from
The Committee concluded that it continues to be the Group was not compromised.
satisfied with the performance of BDO and that
BDO continues to be objective and independent in
relation to the audit. Hence, the Committee and
the Board have recommended their re-appointment.
87

COMMITTEE REPORT (Contd)
(iv) Audit fees D ATTENDANCE
The Committee was satisfied that the level of Number of Meetings and Details of Attendance
audit fees payable in respect of the audit services
Seven (7) meetings were held during the FYE 2016. The
provided (being RM2,163,000 for 2016) [2015:
attendance record of each member was as follows:-
RM2,297,000] was appropriate and that an
effective audit could be conducted for such a fee.
Total Number of
The existing authority for the Directors (including Number of Meetings
the Committee) to determine the current Members Meetings Attended
remuneration of the external auditors is derived
from the shareholders approval granted at the Datuk Karownakaran @
Companys Annual General Meeting (AGM) in Karunakaran a/l Ramasamy 7 7
2015. Tan Sri Peter Chin Fah Kui 7 6
Recommendation to re-appointment Cheah Tek Kuang 7 6
Following its consideration, the Committee recommended

Three (3) meetings were held subsequent to the financial
to the Board the re-appointment of BDO as external
year end to the date of Directors Report and were
auditors. The Board has accepted this recommendation
attended by the following members:-
and a resolution for its re-appointment for a further year
will be put to the shareholders at the AGM. Total Number of
Number of Meetings
7. Other matters considered by the Committee Members Meetings Attended
The Committee also:- Datuk Karownakaran @
Karunakaran a/l Ramasamy 3 2
(i) Reviewed whistleblowing activities to monitor the
actions taken by the Group in respect of Tan Sri Peter Chin Fah Kui 3 2
whistleblowing reports received.
Cheah Tek Kuang 3 3
(ii) Reviewed the Groups compliance with the
relevant provisions set out under the Malaysian
Code on Corporate Governance 2012 for the E ANNUAL REVIEW AND PERFORMANCE EVALUATION
purpose of preparing the Statement on Corporate
Governance and Statement on Risk Management The Committee reviewed and amended its Terms of
and Internal Control pursuant to the Listing Reference during the FYE 2016 due to the changes in the
Requirements of Bursa Malaysia. Listing Requirements of Bursa Malaysia. Also, as required by
its Terms of Reference, the Committee conducted an annual
(iii) Reviewed the Circular to Shareholders on the performance evaluation in an effort to continuously improve
proposed renewal of shareholders mandate and its processes.
proposed new shareholders mandate for recurrent
related party transactions of a revenue or trading The Committees responsibility is to monitor and review the
nature. processes performed by management and external auditors.
(iv) Reviewed the internal audit report relating to It is not the Committees duty or responsibility to conduct
existing related party transactions annually. auditing or accounting reviews or procedures. The
Committee members are not employees of the Company.
Therefore, the Committee has relied, without Independent
verification, on managements representation that the
financial statements have been prepared with integrity and
objectivity and in conformity with approved accounting
principles generally accepted in Malaysia and on the
representations of external auditors included in its reports
on the Companys financial statements and internal control
over financial reporting.
88
ANNUAL REPORT 2016
STATEMENT ON
CORPORATE GOVERNANCE
INTRODUCTION governance results in quantifiable and sustainable long term
success and value for shareholders as well as all other
This statement sets out the principles features of IOI Groups
stakeholders, as reflected by our performance and track record
corporate governance framework and main governance practices.
over the years. During the financial year, IOI Group has received
At IOI Group, we continue to practice a governance framework
numerous accolades and awards in recognition of its efforts.
that goes beyond an interest in governance for its own sake or
the need to simply comply with regulatory requirements. In the
IOI Group will continue its efforts in evaluating its governance
same of spirit, we do not see governance is just a matter for
practices in response to evolving best practices and the changing
the Board of Directors (the Board). Good governance is also
needs of IOI Group. The Board is pleased to present this
the responsibility of senior management.
Statement and explain how IOI Group has applied the principles
and recommendations set out in the Malaysian Code on
The Board recognises the paramount importance of good
Corporate Governance 2012 (the CG Code). The diagram
corporate governance to the success of IOI Group. It strives to
below describes the governance framework at IOI Group.
ensure that a high standard of corporate governance is being
It shows interaction between the stakeholders and the Board,
practised throughout IOI Group in ensuring continuous and
demonstrates how the Board Committee structure facilitates the
sustainable growth for the interests of all its stakeholders.
interaction between the Board and the Chief Executive Officer
(CEO) and illustrates the flow of delegation from stakeholders.
IOI Groups corporate governance practices are guided by its
We have process in place to ensure the delegation flows
Vision IOI whereby responsible and balanced commercial
through the Board and its committees to the CEO and
success is to be achieved by addressing the interests of all
management committees and into the organisation. At the same
stakeholders. A set of core values guides our employees at all
time, accountability flows back upwards from the Company to
levels in the conduct and management of the business and
stakeholders.
affairs of IOI Group. We believe that good corporate
GOVERNANCE FRAMEWORK
STAKEHOLDERS
Engagement
BOARD OF
DIRECTORS
Board Oversight,
Engagement,
Delegated
Authority
Audit and Risk Nominating and Executive Share
Remuneration Options Scheme (ESOS) and Accountability
Management
Committee (ARMC) Committee (NRC) Committee
Engagement
CEO
Engagement,
Resource-Based
Risk Management Plantation Segment Reporting and
Group Sustainability Manufacturing Segment
Committees of All Management
Steering Committee Management Accountability
Business Operating Units Committee
Committee
89
STATEMENT ON
CORPORATE GOVERNANCE (Contd)
IOI Group has complied with the principles and recommendations of the CG Code save for the following recommendations and will
further review its corporate governance practices to bring the same in line with the recommendations under the CG Code:-
The CG Code
Recommendations Compliance Explanation
Recommendation 3.4
The positions of Chairman and The departure from the The Executive Chairman is Tan Sri Dato Lee Shin Cheng and
CEO should be held by Recommendation 3.4 is only the role of CEO is fulfilled by Dato Lee Yeow Chor. Their
different individuals, and the limited to non-executive roles are separate and there is a clear division of
Chairman must be a non- chairman and the reasons for responsibilities to distinguish between the provision of
executive independent member such departure is listed. leadership to the Board and the executive responsibility for
of the Board running IOI Groups business.
Despite our Chairman is an executive member of the Board,

the Board has the majority presence of Non-Executive
Directors, of whom three (3) are Independent Non-Executive
Directors with distinguished records and credentials to ensure
that there is independence of judgement and balance of
power and authority on the Board.
The Executive Chairman encourages free expression of opinions

and healthy debates by all Directors, allowing sufficient time
for discussion of issues and ensuring that all Directors are able
to fully and actively contribute to the deliberations and the
Boards decisions fairly reflect Board consensus.
The NRC was satisfied that notwithstanding Tan Sri Lees

executive chairmanship, he has continued to discharge his
duties effectively and has shown tremendous commitment and
had played an integral role in the stewardship of IOI Group.
Recommendation 3.5
The Board must comprise a The departure from the The Board comprises eight (8) members, of whom three (3)
majority of independent Recommendation 3.5 and the are Executive Directors, three (3) are Independent
directors where the Chairman reasons for such departure is Non-Executive Directors and two (2) are Non-Independent
of the Board is not an listed. Non-Executive Directors.
independent director
Our Non-Independent Non-Executive Directors are Mr Lee
Yeow Seng and Mr Lim Tuang Ooi.
Mr Lim Tuang Ooi is a representative of Employees Provident

Fund Board (EPF) may nevertheless be considered as an
Independent Director wherein EPF is not a promoter of the
Company and the aggregate equity shareholding in the
Company is 6.19% as at 30 August 2016, pursuant to
Paragraph 3.2, Practice Note 13 of Main Market Listing
Requirements of Bursa Malaysia Securities Berhad (Bursa
Securities).
90
ANNUAL REPORT 2016
PRINCIPLE 1: ESTABLISH CLEAR ROLES AND their responsibilities to the shareholders and stakeholders for the
RESPONSIBILITIES manner in which the affairs of the Company are managed. The
Board sets IOI Groups values and standards and ensures that its
The responsibilities of the Board, which should be set out in a
obligations to its stakeholders are understood and met.
Board Charter, include management oversight, setting strategic
direction premised on sustainability and promoting ethical
All matters not specifically reserved to the Board and necessary
conduct in business dealings.
for the day-to-day operations of IOI Group are delegated to
management. Specifically, the responsibilities of management are,
Recommendation 1.1
among others:
The Board should establish clear functions reserved for the
Formulating, recommending and implementing the strategic
Board and those delegated to management
objectives of the Company;
The Board takes full responsibility for the oversight and overall Translation of the approved strategic plan into annual
performance of the Company and of IOI Group. In discharging operating and financial plans of the business;
its functions and responsibilities, the Board is guided by the
Manage the Companys human, physical and financial
Board Charter and Capital Expenditure Policy which outline the
resources to achieve the Companys objectives;
duties and responsibilities of the Board, matters reserved for the
Board as well as those which the Board may delegate to the Operate within the delegated authority limits set by the
Board Committees, CEO and management. The Board has a Board;
well-defined framework on the various categories of matters
Assumption of the day-to-day responsibility for the
that require the Boards approval, endorsement or notations,
Companys conformance with relevant laws and regulations,
as the case may be.
its compliance framework and all other aspects of the
day-to-day running of the company;
The Board reserves full decision-making powers, amongst others,
on the following matters (save to the extent that the Board Develop, implement and manage the Companys risk
resolves that determination and/or approval of any such matter management and internal compliance and control systems
shall be delegated to the Committees of the Board or and operate within the risk appetite set by the Board;
management):-
Develop, implement and update policies and procedures;
a) Conflict of interest issues relating to a substantial
Keep pace with industry and economic trends in the
shareholder or a Director;
Companys operating environment; and
b) Material acquisitions and disposals of undertakings and
Provide the Board with accurate, timely and clear information
properties not in the ordinary course of business;
to enable the Board to perform its responsibilities.
c) Material investments in capital projects;
Executive Directors are involved throughout the investment
d) Annual budgets (including major capital commitments);
process and alignment with the Boards strategy is considered
e) Material corporate or financial exercise/restructuring; from the initial discussion of a transaction, right through to final
approval.
f) Declaration of dividend and Directors fees; and
g) Annual and interim results. The Executive Chairman leads the Board and is responsible for
the effective performance of the Board. As Executive Chairman,
The Board is free to alter the matters reserved for its decision, he also oversees the day-to-day operations to ensure the smooth
subject to the limitations imposed by the Articles of Association and effective running of IOI Group.
and the law.
The CEO implements the policies, strategies and decisions
The Board plays a critical role in setting the appropriate tone at adopted by the Board. All Board authorities conferred on the
the top and is charged with leading and managing IOI Group management is delegated through the CEO and this will be
in an effective, good governance and ethical manner. Each considered as the CEOs authority and accountability as far as
Director has a legal duty to act in the best interest of IOI the Board is concerned.
Group. The Directors are, collectively and individually, aware of
91
STATEMENT ON
The Executive Directors take on primary responsibility to The Board assumes, amongst others, the following significant
spearhead and manage the overall business activities of the responsibilities:-
various business divisions of IOI Group to ensure optimum
a) Reviewing and adopting strategic plans for IOI Group
utilisation of corporate resources and expertise by all the
which include strategies on environmental, social and
business divisions and at the same time achieves IOI Groups
governance (ESG) underpinning sustainability;
long-term objectives. The Executive Directors are assisted by the
head of each division in implementing and running IOI Groups b) Providing entrepreneurial leadership to management that
day-to-day business. Their intimate knowledge of the business promotes innovation and long term value creation;
and hands-on management practices enabled IOI Group to
c) Overseeing the conduct of IOI Groups businesses and the
have leadership positions in its chosen industries.
performance of managements implementation of IOI
Groups strategic and objectives and its performance;
The Independent Non-Executive Directors are actively involved in
various Board committees and contribute significantly to areas d) Ensuring that the Company has in place an appropriate risk
such as performance monitoring and enhancement of corporate management framework and setting the risk appetite within
governance and controls. They provide a broader view, which the Board expects management to operate;
independent assessment and opinions on management proposals
e) Planning for the succession of Board and key senior
sponsored by the Executive Directors.
management and having in place a process to provide for
the diversity (including gender diversity);
Recommendation 1.2
f) Overseeing the development and implementation of an
The Board should establish clear roles and responsibilities in
investor relations programme and shareholder
discharging its fiduciary and leadership functions
communications policy; and
The duties and responsibilities of the Board of Directors are g) Reviewing the adequacy and integrity of IOI Groups
clearly spelt out in the Board Charter. To facilitate the discharge accounting and corporate reporting systems as well as
of this responsibility and oversight role, the Board is assisted by internal control and management information systems.
a number of Board Committees to which the Board has
delegated certain key matters. When running Board meetings the Chairman maintains a
collaborative atmosphere and ensures that all Directors contribute
The Board Committees namely, the ARMC, the NRC and the to debates. The Chairman or CEO arranges informal meetings
ESOS Committee, all collectively referred to as the Committees and events from time to time to help build constructive
are entrusted with specific responsibilities to oversee IOI Groups relationships between the Board members.
affairs, in accordance with their respective clear written terms of
reference. All terms of reference of the Committees are Recommendation 1.3
approved by the Board and reviewed periodically to ensure their
The Board should formalise ethical standards through a code of
continued relevance. At each Board meeting, the Chairmen of
conduct and ensure its compliance
the Committees report to the Board on the key issues
deliberated and outcome of the Committees meetings.
All Directors and employees are expected to safeguard the
Minutes of the Committees meetings will also presented to
integrity and protect the reputation and performance of IOI
the Board for notation and endorsement.
Group by behaving ethically and professionally at all times.
The Board establishes the vision and strategic objectives of the

The Companys Code of Business Conduct and Ethics (the
Group, directing policies, strategic action plans and stewardship
Code) sets forth the standard of conduct and culture required
of the Groups resources towards realising Vision IOI.
for all officers, managers and employees of IOI Group.
Adherence to the Code and to our other official policies are
essential to maintaining and furthering our reputation for fair
and ethical practices among our customers, shareholders,
employees, communities and other stakeholders. Working with a
strong sense of integrity is critical to maintaining trust and
92
ANNUAL REPORT 2016
credibility. The Code covers all aspect of IOI Groups business The Whistleblowing Policy is to provide an avenue for all
operations, such as fairness, work environment and employment, employees of IOI Group and all agents, vendors, contractors,
environment, safety, health and security, company assets and suppliers, consultants and customers of IOI Group and members
information, dealing with conflict of interest (including no bribes of public to raise concerns about any improper conduct within
or kickbacks), communicating with the public, financial IOI Group without fear of retaliation and to offer protection for
accounting and reporting accuracy and etc. such persons (including the employees of IOI Group) who report
such allegations.
In discharging its responsibilities, the Board is also guided by
Code of Ethics for Directors issued by the Companies Any employee or member of the public who has knowledge or
Commission of Malaysia. Directors are expected to conduct is aware that any improper conduct has been, is being, or is
themselves with the highest ethical standards and corporate likely to be committed within IOI Group is encouraged to make
governance. The Directors are required to notify the Company of disclosure by filling a prescribed Whistleblower Report Form and
any potential conflicts of interest that may affect them in their submit it through any of the following reporting channels:-
roles as Directors of IOI under the Code. All potential conflicts
a) E-mail to whistleblowing@ioigroup.com or complete an
of interest are recorded and reviewed by the ARMC and full
online whistleblowing form on the IOI Group website,
Board.
http://whistleblowing.ioigroup.com/
IOI Group communicates the Code of Ethics for Directors and b) Fax to +(603) 8948 8233. Whistleblowing Secretariat
the Code to all Directors and employees upon their Group Internal Audit, Tel: +(603) 8947 8888
appointment/employment. (General line)
c) In person to the respective Head of Business/Operating

In addition, IOI Group encourages its employees to raise
Unit, or its Head of Human Resource
genuine concerns about possible improprieties in matters of
financial reporting, compliance, suspected violations of the Code d) In writing to one or more of the following persons as
and to disclose any improper conduct or other malpractices appropriate at: IOI Group, Level 10, Two IOI Square,
within IOI Group (i.e. whistleblowing) in an appropriate way. IOI Resort City, 62502 Putrajaya, Malaysia
Position Name Email Address
Chairman of ARMC Datuk Karownakaran @ Karunakaran a/l Ramasamy karownakaran@ioigroup.com
Head of Group Internal Audit Ling Kea Ang ling.kea.ang@ioigroup.com
Executive Chairman Tan Sri Dato Lee Shin Cheng whistleblowing@ioigroup.com
CEO Dato Lee Yeow Chor whistleblowing@ioigroup.com
Senior General Manager, Plantation Sudhakaran a/l Nottath Bhaskaran nbsudha@ioigroup.com
Executive Director, Oleochemicals Tan Kean Hua tankeanhua@ioioleo.com
The Code of Ethics for Directors, the Code and Whistleblowing Policy can be viewed on our website.
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Recommendation 1.4 Recommendation 1.5
The Board should ensure that the Companys strategies promote The Board should have procedures to allow its members access
sustainability to information and advice
The Board is cognisant of the importance of business All Board members are supplied with information in a timely
sustainability and, in conducting IOI Groups business, the manner. Board reports are circulated prior to the Board meetings
impact on the ESG is taken into consideration. IOI Group to enable the Directors to obtain further information and
embraces the values of sustainability and corporate responsibility explanation, where necessary, before the meetings.
since the early days and embedded them into the core values,
policy statements and work practices across its global operations. The Board reports include, amongst others, periodical financial
and corporate information, significant operational, financial and
The suspension by the Roundtable on Sustainable Palm Oil corporate issues, performance of the various business units and
(RSPO) of IOI Groups certification, for non-compliance of management proposals that require Boards approval.
certain RSPO Principles and Criteria had been lifted on 8 August
2016, was a serious matter and had given rise to new Detailed periodic briefings on industry outlook, company
challenges for IOI Group. IOI Group has taken corrective performance and forward previews (forecasts) are also conducted
actions to review and enhance its sustainability practices. In for the Directors to ensure that the Board is well informed of
March 2016, IOI Group has further put in place a new the latest market and industry trends and developments.
sustainability team structure where the Sustainability Heads at all
operating divisions have a reporting line to IOI Groups Head of From time to time and where necessary, the Directors, whether
Sustainability, who reports directly to IOI Groups CEO. This will as a group or individually, with the consent of the Chairman,
ensure that the operations personnel strictly adhere to all are entitled to take independent professional advice at the
sustainability policies, practices and commitments of IOI Group. expense of the Company, in furtherance of their duties and in
the event that circumstances warrant the same.
IOI Group takes its commitment to sustainable palm oil industry
practices seriously. The Company is a founding member of the Recommendation 1.6
RSPO which functions as a standards-setter for the global
The Board should ensure it is supported by a suitably qualified
industry. We aim to meet the objective for all IOI estates and
and competent Company Secretary
palm oil mills in Malaysia to be certified by RSPO and
International Sustainability & Carbon Certification (ISCC).
The Company Secretary, Vincent Tan Choong Khiang, having
twenty (20) years experience in corporate secretarial practice. He
IOI Group has recently launched its revised Sustainable Palm Oil
is a council member cum Honorary Treasurer of the Malaysian
Policy (SPOP) and its Sustainability Implementation Plan (SIP)
Institute of Chartered Secretaries and Administrators (MAICSA).
which reaffirms our commitments to no-deforestation,
no planting on peat, zero-burning on all new planting and
The Company Secretary whose appointment and removal is
re-planting as well as driving socio-economic advancement of
subject to Boards approval, attend all Board and Board
the communities. It also introduces new commitments on peat
Committee meetings. The Board has direct access to the advice
land landscape management and protection, peat land
and services of a Company Secretary who is responsible to the
rehabilitation, enhanced fire prevention measures, and the
Board for ensuring that all governance matters and Board
implementation of a more robust labor rights monitoring system.
procedures are followed and that applicable laws and regulations
Sustainability strategies are also encapsulated in IOIs Vision
are complied with. These include obligations on Directors
and Mission and forms part of Sustainability and
relating to disclosure of interests and disclosure of any conflicts
Corporate Responsibility Statement which can be found
of interest in transactions with IOI Group. The Company
in this Annual Report.
Secretary is also charge with highlighting all compliance and
governance issues which they feel ought to be brought to the
Boards attention. During the year, the Company Secretary had
tabled the summary on the amendments to the Main Market
Listing Requirements of Bursa Securities and analysis of corporate
governance disclosure in annual report at the Board meeting for
their notation.
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ANNUAL REPORT 2016
The Company Secretary also facilitates the communication of key PRINCIPLE 2: STRENGTHEN COMPOSITION
decisions and policies between the Board, Board Committees
The Board should have transparent policies and procedures that
and senior management. In ensuring the uniformity of Board
will assist in the selection of Board members. The Board should
conduct and effective boardroom practices throughout
comprise members who bring value to Board deliberations.
IOI Group, the Company Secretary has oversight on overall
corporate secretarial functions of IOI Group, both in Malaysia
Recommendation 2.1
and the region where IOI Group operates.
The Board should establish a Nominating Committee which
Recommendation 1.7 should comprise exclusively of Non-Executive Directors, a majority
of whom must be independent
The Board should formalise, periodically review and make public
its Board Charter
The NRC of the Board comprises exclusively three (3)
Independent Non-Executive Directors as follows:-
The Board adopts the Boards Charter to outline the manner in
which its constitutional powers and responsibilities of the Board
NRC Members Designation
will be exercised and discharged, having regard to principles of
good corporate governance, international best practice and Tan Sri Peter Chin Fah Kui Chairman, Senior Independent
applicable laws. Non-Executive Director
The Board Charter is established to provide guidance and clarity Datuk Karownakaran @ Member, Independent
for the Boards roles and responsibilities as well as the powers Karunakaran a/l Ramasamy Non-Executive Director
between the Board and the management, the different Cheah Tek Kuang Member, Independent
committees established by the Board, between the Executive Non-Executive Director
Chairman, CEO, Executive Directors and Independent
Non-Executive Directors.
The NRC is responsible to review and recommend the
appropriate remuneration policies applicable to Directors and
The Board Charter can be viewed on our website. The Board
CEO, the appointment and evaluation of the performance of the
Charter comprises, among others, the following areas:-
Directors and Board Committees. The full term of reference of
Roles of the Board and Board Committees NRC is available on our website.
Role of Individual Directors
Role of Senior Independent Non-Executive Director The main activities of the NRC were as follows:-
Role of Chairman and CEO
Board Composition and Balance 1. Reviewed the Executive Directors remunerations and
Board Evaluation Directors Fees;
Meetings 2. Performance evaluation of the Board, various Board
Remuneration Policies Committees and key officer(s) of the Company;
Access to Information and Independent Advice
3. Evaluation of Directors seeking re-election and
Financial Reporting
re-appointment at the forthcoming Annual General Meeting
Stakeholders Communication
(AGM) prior to their endorsement by the Board;
Company Secretary
Conflict of Interest 4. Reviewed the independence of the Boards Independent
Code of Business Conduct and Ethics Director;
5. Reviewed the terms of office and performance of the
The Board will review the Board Charter every two (2) years
ARMC and its members to determine whether the ARMC
and make any necessary amendments to ensure they remain
and its members have carried out their duties in accordance
consistent with the Boards objectives, current law and practices.
with their terms of reference;
In light of impending launching of the revised CG Code 2016,
the Board has agreed to undertake a meaningful review once 6. Deliberated on the gender diversity of boardroom prior to
the revised CG Code has been launched by the Securities the new appointment of Director; and
Commission. Any updates to the principles and practices set out 7. Deliberated the revised CG Code 2016 and Directors
in this Charter will be made available on the Companys remuneration benchmarking based on top 10 market
website. capitsalisation companies on Bursa Malaysia as well as peers
comparison.
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STATEMENT ON
Recommendation 2.2 evaluation of the Directors are also used by the NRC, in its
consultation with the Chairman of the Board, to review,
The Nominating Committee should develop, maintain and review
where appropriate, the composition of the Board and
the criteria to be used in the recruitment process and annual
Committees, and to support its proposals, if any, for
assessment of Directors
appointment of new members and its recommendations for the
re-appointment and re-election of retiring Directors. Comments
The procedure for the appointment of new Directors is rigorous
from the Directors, if any, concerning the Board as a whole and
and transparent. There are no changes to the composition of
the general performance of the Directors, are also presented to
the Board occurred during the year.
the Board.
Selection of candidates to be considered for appointment as

The performance of Chief Financial Officer and other key
Directors is facilitated through recommendations from the
executives is reviewed yearly by the CEO.
Directors, management or external parties including the
Companys contacts in related industries, and finance, legal and
The terms and conditions of appointment of Non-Executive
accounting professions. The NRC meets with the shortlisted
Directors are available for inspection at the Companys registered
candidates to assess their suitability before formally considering
office and at the AGM.
and recommending them for appointment to the Board and
where applicable, to the Committees.
Board Evaluation Criteria
In reviewing and recommending to the Board any new Director The Board evaluation comprises Performance Evaluation of the
appointments, the NRC considers: (a) the candidates Board and various Board Committees, Directors Peer Evaluation
independence, in the case of the appointment of an and assessment of the independence of the Independent
Independent Non-Executive Director; (b) the composition Directors.
requirements for the Board and Committees (if the candidate
is proposed to be appointed to any of the Committees); The assessment of the Board is based on four (4) main areas
(c) the candidates age, track record, skills, knowledge, expertise, relating to board structure, board operations, board and
experience, professionalism, integrity, capabilities and such other Chairmans roles and responsibilities and board committees role
relevant factors as may be determined by the NRC which would and responsibilities.
contribute to the Boards collective skills; and (d) any competing
time commitments if the candidate has multiple board For Directors Peer Evaluation, the assessment criteria include
representations. abilities and competencies, calibre and personality, technical
knowledge, objectivity and the level of participation at Board
The Board through the NRC also annually reviews its required and Committee meetings including his contribution to Board
mix of skills and experience and other qualities, including core processes and the business strategies and performance of
competencies which the Directors should bring to the Board. IOI Group.
The Board has also implemented a process to be carried out by
the NRC annually for continuous assessment and feedback to The criteria for assessing the independence of an Independent
the Board on the effectiveness of the Board as a whole, the Director include the relationship between the Independent
Board committees and the contribution of each individual Director and IOI Group and his involvement in any significant
Director. transaction with IOI Group.
When deliberating on the performance of a particular Director During the year under review, the Board conducted an internally
who is also a member of the NRC, that member abstains from facilitated Board assessment. Directors provide anonymous
the discussions in order to avoid any conflict of interests. The feedback on their peers performance and individual performance
NRC will reassess the qualifications of a Director, including the contributions to the Board. Each Director was provided feedback
Directors past contributions to the Board and the Directors on their contribution to the Board and its Committees. The
attendance and contributions at Board and Committee meetings, review supported the Boards decision to endorse all retiring
prior to recommending a Director for re-election or Directors standing for re-election.
re-appointment to another term. The results of the individual
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ANNUAL REPORT 2016
Re-election and Re-appointment of Directors The Board recognises the challenges in achieving the right
balance of diversity on the Board. This will be done over time,
In accordance with the Companys Articles of Association
taking into account the present size of the Board, the valuable
(Articles), all Directors who are appointed by the Board are
knowledge and experience of the present Board members and
subject to re-election by shareholders at the first opportunity
the evolving challenges to the Company over time. The Board
after their appointment. The Articles also provide that at least
through its NRC has sought the women candidates and
one-third (1/3) of the remaining Directors be subject to
considered in its recruitment exercise recently. The Board believes
re-election by rotation at each AGM provided always that all
that while it is important to promote gender diversity, it decided
Directors shall retire from office at least once every three (3)
not to set specific targets just to fill the quota for gender
years but shall be eligible for re-election.
diversity as the selection criteria of a Director will be based on
an effective blend of competencies, skills, extensive experience
Pursuant to Section 129 of the Companies Act, 1965, Directors
and knowledge in areas identified by the Board. Nevertheless,
who are over the age of seventy (70) years shall retire at every
the NRC and Board are endeavouring to finalise a woman board
AGM and may offer themselves for re-appointment to hold
member to be appointed in the financial year ending 30 June
office until the next AGM.
2017.
The Directors retire by rotation due for re-election pursuant to

Directors core areas of expertise
Article 101 of the Articles at the forthcoming Forty-Seventh
AGM are Datuk Karownakaran @ Karunakaran a/l Ramasamy The table below summarises the key skills and experiences of
and Mr Lim Tuang Ooi. The profiles of the Directors who are the Directors:-
due for re-election are set out on pages 64 and 67.
Leadership and strategic management
Business acumen
The Directors who are due for retirement and re-appointment in
Legal
accordance to Section 129 of the Companies Act, 1965 at the
Finance and banking
forthcoming Forty-Seventh AGM are Tan Sri Dato Lee Shin
Accounting and financial management
Cheng and Tan Sri Peter Chin Fah Kui. Their profiles are set out
Risk management and internal control
on pages 60 and 64.
Plantation and agronomy
Government/Public sector regulatory
Diversity
The Board recognises the value of appointing individual Directors Some Directors are represented in more than one (1) category.
who bring a variety of diverse opinions, perspectives, skills,
experiences, backgrounds and orientations to its discussions and We are committed to diversity and have had an equal
its decision-making processes. All appointments to the Board will employment opportunity policy that goes beyond gender in
be made on merit while taking into account suitability for the terms of promoting diversity in our business, in place for some
role, board balance and composition, the required mix of skills, time. For various reasons set out in the corporate governance
background and experience (including consideration of diversity). section of this Annual Report, the Board has not set specific
Other relevant matters will also be taken into account, such as gender diversity targets at this time. We have a relatively even
independence and the ability to fulfil required time commitments spread of employees across all age brackets which is reflective
in the case of Non-Executive Directors. of our culture of teamwork and respect. Below is a summary of
the gender mix of our team (excluding foreign workers):-
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STATEMENT ON
Employees gender diversity disclosure
Headcount Headcount Headcount

of All % of All of Male % of Male of Female % of Female
Age Bracket Employees Employees Employees Employees Employees Employees
20-29 1,980 29.93 1,363 69.00 617 31.00
30-39 1,768 26.73 1,222 69.00 546 31.00
40-49 1,559 23.57 950 61.00 609 39.00
50-59 1,127 17.04 859 76.00 268 24.00
60-69 174 2.63 142 82.00 32 18.00
70 & above 7 0.10 7 100.00
Grand Total 6,615 100.00 4,543 2,072
69% 31%
Management position and Directors on the Board of IOI
Headcount Headcount
Total of Male % of Male of Female % of Female
Category Headcount Employees Employees Employees Employees
In management position (Manager & above) 337 270 80.00 67 20.00
Directors on the Board of the Company 8 8 100.00
In management position
80% 20%
Ethnicity
OTHERS BUMIPUTERA INDIAN CHINESE OTHERS BUMIPUTERA
41% 11% 12% 88% 18% 60%
In For all
management Directors
INDIAN
employees
16% (except those in
position on the Board Management position
and Directors
(Manager & above)
CHINESE on the Board)
INDIAN CHINESE 6%
11% 37%
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ANNUAL REPORT 2016
Recommendation 2.3 When reviewing the structure and level of Directors fees, which
comprises base Directors fee and additional fees for service
The Board should establish formal and transparent remuneration
rendered on Board Committee, the NRC takes into the
policies and procedures to attract and retain Directors
consideration of Directors respective roles and responsibilities in
the Board and Committees and the NRC also compared against
Based on the remuneration framework, the remuneration
to the peers practices.
packages for the Executive Directors comprise a fixed component
in the form of a base salary and, where applicable, meeting
Each of the Directors receives a base fixed Directors fee and
allowance together with other benefits-in-kind and variable
meeting allowance for each Board and general meetings that
components (which includes year-end bonus) which is
they attend. The level of remuneration of Non-Executive
determined by IOI Groups overall financial performance in each
Directors reflects their experience and level of responsibility
financial year are designed to reward performance that supports
undertaken by them. Non-Executive Directors will receive a fixed
our strategy and creates sustainable long term value for
fee, with additional fees if they are members of Board
shareholders.
Committees, with the Chairman of the ARMC or NRC receiving
a higher fee in respect of his service as chairman of the
Executive Directors are eligible to participate in the Companys
respective Committees. The fees for Directors are determined by
ESOS and on the same basis as other eligible employees. The
the full Board with the approval from shareholders at the AGM.
Company provides Directors and Officers Liability Insurance and
No Director is involved in deciding his own remuneration.
may provide an indemnity to the fullest extent permitted by the
Companies Act, 1965 (the Act).
The details of the remuneration of Directors of the Company
comprising remuneration received/receivable from the Company
and subsidiary companies during the financial year ended
30 June 2016 (FYE 2016) are as follows:
1. Aggregate remuneration of Directors categorised into appropriate components:-
Company Subsidiaries
Salaries Benefits- Company Salaries Group
Fees & Bonus+ in-kind Others^ Total & Bonus+ Others^ Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Executive Directors
Tan Sri Dato Lee Shin Cheng 105 19,917 35 110 20,167 20,167
Dato Lee Yeow Chor 105 9,920 27 163 10,215 10,215
Lee Cheng Leang 105 8 113 370 10 493
Total 315 29,837 62 281 30,495 370 10 30,875
Non-Executive Directors
Tan Sri Peter Chin Fah Kui 135 8 143 143
Datuk Karownakaran @
Karunakaran a/l Ramasamy 140 9 149 149
Lee Yeow Seng 105 6 111 111
Cheah Tek Kuang 135 8 143 143
Lim Tuang Ooi 105* 8 113 113
Total 620 39 659 659
Notes:
+ The salary and variable bonus are inclusive of employers provident fund and social security welfare contributions.
^ Comprises meeting allowances and leave passages, where relevant.
* 50% of the Directors fee for nominee of EPF on the Board of the Company is paid directly to EPF.
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STATEMENT ON
2. Number of Directors whose remuneration falls into the Although a relatively mid-sized Board, it provides an effective
following bands:- blend of entrepreneurship, business and professional expertise in
business and risk management, financial (including audit, tax
Number of Directors and accounting), legal and technical areas of the industries
IOI Group is involved in. The members of the Board with their
Range of Remuneration Executive Non-Executive
combined business, management and professional experience,
RM1 to RM50,000 knowledge and expertise, provide the core competencies to
allow for diverse and objective perspectives on IOI Groups
RM50,001 to RM100,000
business and direction. Taking into account the scope and nature
RM100,001 to RM150,000 5 of the operations of IOI Group, the Board is satisfied that the
current composition and size of the Board provide for sufficient
RM150,001 to RM450,000 diversity and yet allow for effective decision making.
RM450,001 to RM500,000 1
A brief profile of each Director is presented on pages 60 to 67
RM500,001 to RM10,200,000 of the Annual Report, and the Notice of AGM for Directors
proposed for re-election and re-appointment at the 2016 AGM.
RM10,200,001 to RM10,250,000 1
Currently, no alternate Directors have been appointed in respect
RM10,250,001 to RM20,150,000 of any of the Directors.
RM20,150,001 to RM20,200,000 1
The Board and NRC review the independence of Directors
annually according to the criteria on independence set out in
the below Main Market Listing Requirements and Practice Notes
For FYE 2016, none of the Directors were offered share options of Bursa Securities on independence. In addition to the annual
under the Companys ESOS. review by the NRC and the Board of the Directors
independence, each Independent Non-Executive Director also
submits an annual declaration.
PRINCIPLE 3: REINFORCE INDEPENDENCE
The Board should have policies and procedures to ensure A Director may be considered independent in character and
effectiveness of Independent Directors. judgement if he is independent of management and free from
any business or other relationship which could interfere with the
Recommendation 3.1 exercise of independent judgement or the ability to act in the
best interests of the Company. Without limiting the generality of
The Board should undertake an assessment of its Independent the foregoing, an Independent Director is one who:-
Directors annually
(a) is not an Executive Director of the Company or any related
Presently, the Board comprises eight (8) members, of whom corporation of the Company;
three (3) are Executive Directors, three (3) are Independent (b) has not been within the last two (2) years and is not an
Non-Executive Directors and two (2) are Non-Independent officer (except as a Non-Executive Director) of the
Non-Executive Directors. The Board composition complies with Company. For this purpose, officer has the meaning
the Main Market Listing Requirements of Bursa Securities that given in Section 4 of the Act;
requires a minimum of two (2) Directors or one-third (1/3) of
the Board, whichever is the higher, to be Independent Directors. (c) is not a major shareholder the Company;
(d) is not a family member of any Executive Director, officer or

Other than the three (3) Independent Non-Executive Directors, major shareholder of the Company;
Mr Lim Tuang Ooi, a representative from the EPF which is a
substantial shareholder of the Company was appointed as (e) is not acting as a nominee or representative of any
Non-Independent Non-Executive Director. Executive Director or major shareholder of the Company;
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ANNUAL REPORT 2016
(f) has not been engaged as an adviser by the Company The Board has adopted a letter of appointment that contains
under such circumstances as prescribed by Bursa Securities the terms on which Non-Executive Directors will be appointed.
or is not presently a partner, Director (except as an The letter of appointment clearly defines role of Directors,
Independent Director) or major shareholder, as the case including among others, the expectations in terms of
may be, of a firm or corporation which provides independence participation, time commitment and continuous
professional advisory services to the Company under such improvement.
circumstances as prescribed by Bursa Securities; or
The tenure of new Senior Independent Non-Executive Director
(g) has not engaged in any transaction with the Company
(namely, Tan Sri Peter Chin Fah Kui) of the Company has been
under such circumstances as prescribed by Bursa Securities
set for five (5) years. Currently, the office tenure of other
or is not presently a partner, director or major shareholder,
existing Independent Non-Executive Directors is still less than
as the case may be, of a firm or corporation (other than
six (6) years. The Board is mindful of the compliance of the
subsidiaries of the Company) which has engaged in any
Recommendations 3.2 and 3.3 of the CG Code. The Board also
transaction with the Company under such circumstances as
believes that each of them has retained independence of
prescribed by Bursa Securities.
character and judgement and has not formed associations with
management that might compromise their ability to exercise
Tan Sri Peter Chin Fah Kui, Datuk Karownakaran @ Karunakaran
independent judgement or act in the best interests of
a/l Ramasamy and Mr Cheah Tek Kuang are considered to be
IOI Group.
Independent Directors and the Company satisfies the
requirement under Recommendation 3.5 of the CG Code.
PRINCIPLE 4: FOSTER COMMITMENT

In accordance with the best practices in corporate governance,
Tan Sri Peter Chin Fah Kui continues to play his role as the Directors should devote sufficient time to carry out their
Senior Independent Non-Executive Director of the Board to responsibilities, regularly update their knowledge and enhance
whom concerns of shareholders and stakeholders may be their skills.
conveyed. The Senior Independent Non-Executive Director
may be contacted at Tel: +(603) 8947 8900 and email: Recommendation 4.1
peter.chin@ioigroup.com
The Board should set out expectations on time commitment for
its members and protocols for accepting new directorships
Recommendation 3.2
The tenure of an Independent Director should not exceed a Regular Board and Committee meetings are scheduled
cumulative term of nine (9) years. Upon completion of the throughout the year and the Directors ensure that they allocate
nine (9) years, an Independent Director may continue to serve sufficient time to discharge their duties effectively. Occasionally,
on the Board subject to the Directors re-designation as a Board meetings may be held at short notice, when Board-level
Non-Independent Director decisions of a time-critical nature need to be made. The
Chairman considers that all the Directors continue to devote
Recommendation 3.3 sufficient time in discharging their duties.
The Board must justify and seek shareholders approval in the

When considering the re-nomination of Directors for re-election
event it retains as an Independent Director, a person who has
or appointment, the NRC also takes into account the competing
served in that capacity for more than nine (9) years
time commitments faced by Directors with multiple board
representations. In addition to current review procedures of the
Length of Independent Directors Tenures (in year 2016)
attendance records, the appointment letter has put in place for
Directors to consult the Chairman of the Board with regard to
0 3 Years 33% accepting any new appointments as Directors on listed
companies and notifying the Board on any changes in their
external appointments. This would allow the Director to review
3 6 Years 67% his time commitments with the proposed new appointments.
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The Board has at least five (5) regularly scheduled meetings The Directors are required to disclose and update their
annually, with additional meetings for particular matters directorships and shareholdings in other companies as and when
convened as and when necessary. Board meetings bring an necessary. The Directors are also expected to comply with
independent judgement to bear on issues of strategies, risks, Paragraph 15.06 of the Main Market Listing Requirements of
performance, resources and standards of conduct. Bursa Securities on the maximum number of five (5)
directorships they can hold in public listed companies to ensure
Five (5) Board meetings were held during the FYE 2016. The that all Directors are able to commit sufficient time for the
attendance record of each Director since the last financial year Company.
was as follows:-
To facilitate the Directors time planning, an annual meeting
Total Number of calendar is prepared and circulated to them before the
Number of Meetings beginning of every financial year. It provides the schedules
Meetings Attended dates for meetings of the Board and Board Committees as
well as the AGM.
Executive Directors
Tan Sri Dato Lee Shin Cheng 5 5
Recommendation 4.2
Dato Lee Yeow Chor 5 5
The Board should ensure its members have access to appropriate
Lee Cheng Leang 5 5 continuing education programmes
Non-Executive Directors Training needs as deemed appropriate by individual Board

Tan Sri Peter Chin Fah Kui 5 4 members are provided. Board members keep abreast with
general economic, industry and technical developments by their
Datuk Karownakaran @ 5 5 attendances at appropriate conferences, seminars and briefings.
Karunakaran a/l Ramasamy Further training is available for Directors, including presentations
Lee Yeow Seng 5 5 by the executive team on particular aspects of the business.
Cheah Tek Kuang 5 5 All the Directors had completed the Mandatory Accreditation
Programme (MAP) as specified by Bursa Securities.
Lim Tuang Ooi 5 5
During the financial year, members of the Board who have

attended various training programmes, forums, conferences and
seminars are as follows:-
Tan Sri Dato Lee Shin Cheng First World Conference of Overseas Chinese Business 6 July 2015 to
7 July 2015
The Fifth Kubuqi International Desert Forum 2015 28 July 2015 to

29 July 2015
HSBC Forum: RMB and Chinas Global Future 17 August 2015
Malaysias Economic Update 2015 21 September 2015
The Maritime Silk Road China-Malaysia Forum 28 September 2015
Malaysia China High Level Economic Forum 23 November 2015
Global Outstanding Chinese Forum 2016 30 April 2016
The Eighth Conference for Friendship of Overseas Chinese Association 1 June 2016 to
7 June 2016
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ANNUAL REPORT 2016
Dato Lee Yeow Chor Palm International Nutra Cosmeceutical Conference 3 August 2015
Palm Oil Industry Leadership Forum (PILF) 2015 7 September 2015
Global Oils and Fats Forum, USA 14 October 2015 to

15 October 2015
Global Transformation Forum 21 October 2015
Palm Oil Economic Review and Outlook Seminar 2016 19 January 2016
IOI In-House Senior Management Training Programme 6 April 2016 to

7 April 2016
Invest Malaysia 2016 by Bursa Malaysia Berhad 12 April 2016
Indonesia Malaysia Investment Forum 29 April 2016
Palm Oil Trade Seminar, Turkey 16 May 2016 to

17 May 2016
Sustainability Engagement Series for Directors/Chief Executive Officers 1 June 2016
Young Presidents Organisation (YPO) Forum 16 June 2016 to

18 June 2016
Lee Yeow Seng The Fifth Kubuqi International Desert Forum 2015 28 July 2015 to
29 July 2015
Sustainability Engagement Series for Directors/Chief Executive Officers 31 March 2016
Lee Cheng Leang Corporate Governance Breakfast Series with Directors: The Boards 4 August 2015
Response in Light of Rising Shareholders Engagements
The New Auditors Report - Sharing the UK Experience by Audit 13 January 2016
Oversight Board (AOB), Securities Commission Malaysia
Directors Duties, Business Ethics & Governance Seminar 2016 28 April 2016
Tan Sri Peter Chin Fah Kui Corporate Governance Workshop: The Interplay between Corporate 19 August 2015
Governance, Non-Financial Information and Investment Decision
What Boards of listed companies need to know
Federation of Public Listed Companies Bhds National Seminar on 1 December 2015

TPPA 2015
Ring the Bell for Gender Equality by Bursa Malaysia 11 March 2016
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STATEMENT ON
Datuk Karownakaran @ The Global Sustainability and Impact Investing Forum 23 July 2015
Karunakaran a/l Ramasamy Swap Futures Presentation by CME 31 July 2015
Maybank Group Annual Risk Workshop 11 August 2015
Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of 1 September 2015
Unlawful Activities Act 2001: The Law & Compliance
World Capital Markets Symposium 2015 Markets and Technology: 3 September 2015
Driving Future Growth Through Innovation
Sustainability Symposium: Responsible Business, Responsible Investing 8 October 2015
Presentation by Ministry of International Trade and Industry (MITI) 9 November 2015
on TPPA
Sime Darby Workshop on Risk Management 14 January 2016
Invest Malaysia 2016 By Bursa Malaysia Berhad 12 April 2016
International Emergency Management Organisation Conference by Bursa 18 April 2016
Malaysia Berhad and World Federation of Exchanges
Avoiding Financial Myopia by Financial Institutions Directors Education 19 April 2016
(FIDE) Forum
Cheah Tek Kuang Corporate Governance Breakfast Series with Directors: The Boards 4 August 2015
Response in Light of Rising Shareholders Engagements
World Nuclear Association (WNA) Symposium 2015, London 8 September 2015 to
9 September 2015
Corporate Governance Breakfast Series: Future of Auditor Reporting 21 September 2015
The Game Changer for Boardroom
Capital Market Directors Programme (CMDP) Module 1: Directors as 5 October 2015
Gatekeepers of Market Participants and Module 4: Current and
Emerging Regulatory Issues in the Capital Market
CMDP Module 2A: Business Challenges and Regulatory Expectations 6 October 2015
What Directors need to know (Equities & Futures Broking)
Khazanah Nasional Berhad Megatrends Forum 2015 6 October 2015
Bursa Malaysia Customised Advocacy Session for UMW Holdings Berhad 20 October 2015
Group
UMW Oil & Gas Board of Directors Training 26 October 2015
Danajamin Nasional Berhads Anti-Money Laundering (AML) Training 28 October 2015
for Directors
ICLIF Leadership Energy Summit Asia 2015 1 December 2015 to
2 December 2015
Federation of Public Listed Companies Bhds National Seminar on 1 December 2015
TPPA 2015
CMDP Module 2B: Business Challenges and Regulatory Expectations 2 December 2015
What Directors need to know (Fund Management)
CMDP Module 3: Risk Oversight and Compliance Action plan for 3 December 2015
Board of Directors
FIDE Forum Directors Remuneration Report 2015 25 February 2016
Corporate Governance Breakfast Series with Directors: Improving Board 26 February 2016
Risk Oversight Effectiveness
FIDE Forum Dialogue on Directors and Officers Liability Insurance 5 April 2016
Invest Malaysia 2016 by Bursa Malaysia Berhad 12 April 2016
FIDE Forum Second Distinguished Board Leadership Series: Avoiding 19 April 2016
Financial Myopia
104
ANNUAL REPORT 2016
Lim Tuang Ooi Course on Talent Acceleration for Sustainable Growth 3 August 2015 to
4 August 2015
HSBC Forum: RMB and Chinas Global Future 17 August 2015
Unscheduled Crisis Simulation at EPF Melaka 11 September 2015
Unscheduled Crisis Simulation at EPF Ipoh 2 October 2015
EPF Risk Management Seminar 8 October 2015
EPF Investment Seminar 17 October 2015
Course on Leadership Coaching 2 November 2015 to

3 November 2015
Course on Strategic Leadership Alignment 17 January 2016 to

19 January 2016
EPF Islamik Trek Pelaburan 2 February 2016
EPF Thought Leadership Session 6 April 2016
EPF Management Conference 2016 13 April 2016 to

16 April 2016
PRINCIPLES 5: UPHOLD INTEGRITY IN FINANCIAL In addition to the Chairmans Statement, the Annual Report of
REPORTING the Company contains the following additional non-mandatory
information to enhance shareholders understanding of the
The Board should ensure financial statements are a reliable
business operations of IOI Group:-
source of information.
Managements discussion and analysis; and
Recommendation 5.1 Financial trends and highlights, key performance indicators
and other background industry notes deemed necessary.
The Audit Committee should ensure financial statements comply
with applicable financial reporting standards
Directors Responsibility for Preparing the Annual Audited
Financial Statements
In presenting the annual financial statements and quarterly
financial results announcements to shareholders, the Board aims The Directors are required by the Act to prepare financial
to present a balanced and comprehensible assessment of statements for each financial year which give a true and fair
IOI Groups financial position and prospects and ensures that view of IOI Group and of the Companys state of affairs, results
the financial results are released to Bursa Securities within the and cash flows. The Directors are of the opinion that IOI Group
stipulated time frame and that the financial statements comply uses appropriate accounting policies that are consistently applied
with regulatory reporting requirements. In this regard, the Board and supported by reasonable as well as prudent judgements and
is assisted by the ARMC in overseeing and governing estimates, and that the financial statements have been prepared
IOI Groups financial reporting processes and the quality of its in accordance with Malaysian Financial Reporting Standards and
financial reporting. the provisions of the Act and the Main Market Listing
Requirements of Bursa Securities.
The financial statements are prepared on a going concern basis
and give a true and fair view of the financial position of
IOI Group as at 30 June 2016.
105
STATEMENT ON
The Directors are satisfied that IOI Group and the Company keep Additional disclosures on non-statutory audit fees and the
accounting records which disclose with reasonable accuracy the detailed work carried out by the ARMC for the financial year
financial position of IOI Group and of the Company and which are set out separately in ARMC Report. The Company requires
enable proper financial statements to be prepared. They have also that the engagement partner involved in the external audit
taken the necessary steps to ensure that appropriate systems are should not remain in a key audit role beyond five (5) years and
in place to safeguard the assets of IOI Group, and to detect and cannot be re-engaged to play a significant role in the audit of
prevent fraud as well as other irregularities. The systems, by their the Company for at least another two (2) successive years. This
nature can only provide reasonable and not absolute assurance is consistent with current By-Laws (on Professional Ethics,
against material misstatements, loss and fraud. Conduct and Practice) of the Malaysian Institute of Accountants.
Recommendation 5.2
PRINCIPLE 6: RECOGNISE AND MANAGE RISKS
The Audit Committee should have policies and procedures to
assess the suitability and independence of external auditors The Board should establish a sound risk management framework
and internal controls system.
The Board maintains a transparent and professional relationship
with IOI Groups external auditors. During the year, the ARMC Recommendation 6.1
considered the independence and objectivity of BDO based on the
The Board should establish a sound framework to manage risks
criteria quality of services, sufficiency of resources, communication
and interaction, audit planning, independence, objectivity and
The Board has established a framework to formulate and review
professional scepticism. In determining the independence of BDO,
risk management policies and risk strategies. Further information
the ARMC reviewed all aspects of their relationships with them
on IOI Groups internal control is presented in the Statement on
including the processes, policies and safeguards adopted by IOI
Risk Management and Internal Control.
Group and BDO relating to audit independence, and agreed the
audit strategy and the audit fee. A copy of the Policies and
Recommendation 6.2
Procedures to assess the Suitability and Independence of External
Auditors can be found in our website. The Board should establish an internal audit function which
reports directly to the Audit Committee
The ARMC meets periodically to carry out its functions and
duties pursuant to its terms of reference. Other Board members The Groups internal audit function is carried out by the Internal
also attend meetings upon the invitation of the ARMC. During Audit (IA) Department, which reports directly to the ARMC on
the FYE 2016, the ARMC met privately four (4) times with the its activities based on the approved annual Internal Audit Plan.
external auditors (i.e. BDO) without the presence of the The function comprises a dedicated in-house team of qualified
executive Board members and management. In addition, the professionals based in Putrajaya, Sabah and Penang. The internal
external auditors are invited to attend the Companys AGM. audit function is independent of management and has full
access of all IOI Groups entities, records and personnel.
The non-statutory audit fees incurred for services rendered to
IOI Group by BDO Malaysia and its affiliates for the FYE 2016 The appointment, resignation and dismissal of the Head of IA is
was RM332,000 (2015: RM304,000). reviewed and approved by the ARMC. The ARMC also provides
input on the annual performance appraisal of the Head of IA.
The Board has carefully considered the non-audit fees provided The Head of IA has unfettered access to the ARMC, the Board
during the year by BDO and is satisfied that the provision of and management. The Head of IA and a number of internal
those non-audit services during the year by BDO does not auditors of the IA Department are members of The Institute of
compromise the auditors independence. Internal Auditors Malaysia.
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ANNUAL REPORT 2016
PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY There is also a section focusing on corporate governance and
DISCLOSURE outlined in that section are the Companys Board Charter, Code
of Ethics for Directors, Code of Business Conduct and Ethics,
Companies should establish corporate disclosure policies and
Statement on Corporate Governance, Statement on Risk
procedures to ensure comprehensive, accurate and timely
Management and Internal Control, Whistleblowing Policy and
disclosure.
various corporate governance initiative.
Recommendation 7.1
The Board should ensure the Company has appropriate PRINCIPLE 8: STRENGTHEN RELATIONSHIP BETWEEN
corporate disclosure policies and procedures COMPANY AND SHAREHOLDERS
The Board should facilitate the exercise of ownership rights by
The Board reviews and approves all quarterly and other
shareholders.
important announcements. The Company announces its quarterly
and full-year results within the mandatory period. The financial
Recommendation 8.1
statements and, where necessary, other presentation materials
presented at the Companys general meetings, including material The Board should take reasonable steps to encourage
and price-sensitive information, are disseminated and publicly shareholder participation at general meetings
released via BURSA LINK on a timely basis to ensure effective
dissemination of information relating to IOI Group. All shareholders of the Company receive the annual report of
the Company and the notice of AGM, which is also advertised
To ensure that communications to the public regarding in the press and released via BURSA LINK. The chairmen of the
IOI Group are timely, factual, accurate, and complete, we have ARMC, NRC and the external auditors were present at the last
put in place a Media Disclosure Policy which outlines the central AGM, and the full Board plans to attend the 2016 AGM, which
principles and practices in communicating with the media. provides an opportunity for all shareholders to question the
Directors in person. Historically, the Companys AGMs have been
This Media Disclosure Policy is applicable to all Directors, those well attended. It has always been the practice for the Chairman
authorised to speak on IOI Groups behalf as well as all the to provide ample time for the Q&A sessions in the AGMs and
employees of IOI. It covers Media Guidelines comprising media for suggestions and comments by shareholders to be noted by
protocols to engage with the media in a responsible, productive, management for consideration.
and positive manner whilst keeping the integrity of IOI Group
in mind. Recommendation 8.2
The Board should encourage poll voting

Recommendation 7.2
The Board should encourage the Company to leverage on In line with the recent amendments to the Main Market Listing
information technology for effective dissemination of information Requirements of Bursa Securities, the Company will implement
poll voting for all the resolutions set out in the Notice of AGM
The Companys website is the key communication channel for via electronic means at the AGM to expedite verification and
the Company to reach its shareholders and general public. The counting of votes. In addition, the Company will appoint one (1)
Investor Relations section enhances the investor relations function scrutineer to validate the votes cast at the AGM.
by including all announcements made by the Company, financial
results, annual reports, corporate presentation, financial calendar
as well as enquiries. The shareholders and general public may
direct their enquiries on the Company via Enquiries and the
Companys Investor Relations team will endeavour to reply to
these queries in the shortest possible time.
107
STATEMENT ON
Recommendation 8.3 IOI Group has also established several websites with the main
one being www.ioigroup.com for shareholders and the public to
The Board should promote effective communication and
access corporate information, financial statements, news and
proactive engagements with shareholders
events related to IOI Group on a timely basis. Material facts
and presentation materials given out at above functions are
The Company strives to maintain an open and transparent
made available on IOI Groups website to provide equal
channel of communication with its stakeholders, institutional
opportunity of access for other shareholders and the investing
investors and the investing public at large with the objective of
public and to allow them to write in to IOI Group if they have
providing as clear and complete picture of IOI Groups
questions.
performance and financial position as possible. The Company
believes that a constructive and effective investor relationship is
During the financial year, IOI Group had approximately thirty-six
an essential factor in enhancing value for its shareholders.
(36) meetings with analysts and investors. IOI Group enjoys a
However, whilst the Company endeavours to provide as much
relatively high level of coverage and exposure to the investment
information as possible to its shareholders and stakeholders, it is
community.
mindful of the legal and regulatory framework governing the
release of material and price-sensitive information.
Besides the above, management believes that the Companys
Annual Report is a vital and convenient source of essential
The AGM is the principal forum for dialogue with shareholders,
information for existing and potential investors and other
who are given the opportunity to enquire and seek clarification
stakeholders. Accordingly, the Company strives to provide a high
on the operations and financial performance of IOI Group. In
level of reporting and transparency that goes beyond mandatory
addition, the Company uses the following key investor relation
requirements in order to provide value for stakeholders.
activities in its interaction with investors:
Meeting with analysts and institutional fund managers;
Participating in roadshows and investors conferences, both
domestically and internationally; and
Participating in teleconferences with investors and analysts.
108
ANNUAL REPORT 2016
STATEMENT ON RISK MANAGEMENT AND

INTERNAL CONTROL
INTRODUCTION Group Internal Audit Department
This statement is in line with the Main Market Listing The Group Internal Audit Department (GIAD) reports directly
Requirements of Bursa Malaysia Securities Berhad on the Groups to the ARMC. The activities of the GIAD are guided by Internal
compliance with the Principles and Best Practices relating to Audit Charter and Annual Audit Plan that are approved by the
internal control as stipulated in the Malaysian Code on ARMC. The GIAD monitors compliance with the Groups policies
Corporate Governance 2012. and procedures and applicable laws and regulations, and
provides independent and objective assurance on the adequacy
and effectiveness of risk management and internal control
ROLES AND RESPONSIBILITIES system by conducting regular audits and continuous assessment.
Significant audit findings and recommendations for improvement
Board of Directors
are tabled quarterly to top management and the ARMC, with
The Board of Directors (the Board) affirms its overall periodic follow-up reviews of the implementation of corrective
responsibility for the Groups system of internal control, including action plans.
the assurance of its adequacy and integrity, and its alignment
with business objectives. However, it should be noted that control
systems are designed to manage rather than to totally eliminate RISK MANAGEMENT FRAMEWORK
associated risks; and as such, can only provide reasonable but not
The Group adopts an Enterprise Risk Management (ERM)
absolute assurance against material loss or failure.
framework which was formalised in 2002 and is consistent with
the Committee of Sponsoring Organisations of the Treadway
The Board has established a process for identifying, evaluating,
Commissions (COSO) ERM framework, the Statement on Risk
monitoring and managing the significant risks faced by the
Management and Internal Control Guidelines for Directors of
Group in its achievement of objectives and strategies. This
Listed Issuers, and Bursa Malaysias Corporate Governance Guide
process has been in place for the year under review and up to
and also in line with ISO 31000, Risk Management Principles
the date of approval of this statement.
and Guidelines (which is a standard relating to risk management
codified by the International Organisation for Standardisation.
Audit and Risk Management Committee
ISO 31000 provides a standard on the implementation of risk
Board committees such as the Audit and Risk Management management).
Committee and Nominating and Remuneration Committee are
established by the Board, and they are governed by clearly The Groups ERM framework essentially links the Groups
defined terms of reference and authority for areas within their objectives and goals (that are aligned to its Vision) to principal
scope. The Audit and Risk Management Committee (ARMC) risks; and the principal risks to controls and opportunities that
maintains risk and audit oversight within the Group. are translated to actions and programmes. The framework also
outlines the Groups approach to its risk management policies:
Corporate Risk Management Department
i) Embrace risks that offer opportunities for superior
The Group has established the Corporate Risk Management
returns
(CRM) Department to assist the Board and ARMC in
discharging their risk management responsibilities. Amongst By linking risks to capital, the Group establishes risk-
others the CRM is responsible for assisting in development of adjusted-return thresholds and targets that commensurate
risk management framework, policies, processes and procedures; with varying risk levels assumed by its businesses. Superior
maintaining the risk register for the Group; monitoring operating risk management and other corporate governance practices
units compliance with the Groups policies and procedures; are also promoted as contributing factors to lowering
monitoring and reporting of the key risks as identified by the long-term cost of funds and boosting economic returns
Management and facilitate the bi-annual risk review. through an optimal balance between control costs and
benefits.
109

INTERNAL CONTROL (Contd)
ii) Risk Management as a collective responsibility The Board conducts periodic reviews on the adequacy and
integrity of the Groups ERM framework and policies, particularly
By engaging every level of the organisation as risk owners
in relation to the mechanisms for principal risks identification,
of their immediate sphere of risks (as shown in the
assessment, response and control, communication and
illustration), the Group aims to approach risk management
monitoring.
holistically.
The Groups activities are exposed to a variety of risks, including

This is managed through an oversight structure involving
operating, financial and compliance risks. The Groups overall risk
the Board, ARMC, Internal Audit, Executive Management
management objective is to ensure that the Group creates value
and business units Risk Management Committees.
for its shareholders whilst minimising potential adverse effects on
its performance and positions. The Group operates within an
iii) Risk forbearance shall not exceed capabilities and
established risk management framework and clearly defined
capacity to manage
policies and guidelines that are approved by the Board.
Any business risk to be assumed shall be within the
Groups core competencies to manage. Hence, the Under the Groups ERM framework, the Group has relevant
continuous effort in building risk management capabilities policies and guidelines on risk reporting and disclosure which
and capacity are key components of the Groups ERM cover the following principal risks:
effort. The Groups overall risk appetite is based on
assessments of the Groups risk management capabilities i) Operating Risk
and capacity.
The Groups policy is to assume operating risks that are
within its core businesses and competencies to manage.
iv) To apply as both a control and strategic tool
Operating risk management ranges from managing
As a control tool, the Group ensures that the intensity and strategic operating risks to managing diverse day-to-day
types of controls commensurate with assessed risk rankings. operational risks.
The Group also applies risk management as a strategic tool
in scoping opportunities, investment and resource allocation,
strategy formulation and performance measurement.
ORGANISATION BUSINESS FRAME OF

HIERARCHY OBJECTIVES REFERENCE
HIERARCHY
EXTERNAL
RISKS
BOARD
VISION
(Executive
Management)
AL
IG
Divisions & SBU Strategic

NE
(Senior Management Objectives & Goals

D
& Mid-Management)
Operation/Functions Operational INTERNAL

(Executives & Staff) Goals & Targets RISKS
110
ANNUAL REPORT 2016
The management of the Groups day-to-day operational Whistleblowing Policy

risks includes those relating to health and safety, quality,
A whistleblowing policy is established to provide appropriate
production, marketing and distribution, supply chain,
communication and feedback channels which facilitate
sustainability and compliance with laws and regulations
whistleblowing in a transparent and confidential manner to
and various certifications is mainly decentralised at the
enable employees and stakeholders to raise genuine concerns
business unit level and guided by approved standard
about possible improprieties, improper conduct or other
operating procedures. Operational risks that cut across
malpractices within the Group in an appropriate way.
the organisation includes those relating to integrated
systems, transfer pricing, group sustainability and
Internal Control Systems
reputation are coordinated centrally.
The Group manages its risks by implementing various internal
ii) Financial Risk control mechanisms. The key elements of the internal control
systems are as follows:
The Group is exposed to various financial risks relating
to credit, liquidity, interest rates, foreign currency The Group has an organisational structure that is aligned
exchange rates, and commodity prices. The Groups risk with its business and operational requirements, with clearly
management objectives and policies coupled with the defined lines of responsibility and authority levels. Authority
required quantitative and qualitative disclosures relating limits for acquisition and disposal of assets, awarding of
to its financial risks are set out in Note 41 to the contracts and approving operating expenditures are
financial statements on pages 215 to 247. established.
The Group has in place a well-established and documented

iii) Compliance Risk
business processes which are aligned with the strategic
The Group operates in diverse geographical locations business objectives and goals. Policies and procedures and
and as such is exposed to compliance risks of the laws also rules relating to the delegation and segregation of
and regulations in the various countries the Group duties have been established for key business processes. The
operates, and compliance with the various certifications Groups policies and procedures are reviewed and revised
including Roundtable on Sustainable Palm Oil (RSPO) periodically to meet changing business and operational needs
and International Sustainability and Carbon Certification and regulatory requirements.
(ISCC) certifications.
The Group has in place a Management Information System
that captures, compiles, analyses and reports relevant data,
which enables management to make business decisions in an
RISK MANAGEMENT AND INTERNAL CONTROL
accurate and timely manner. Management and financial
SYSTEMS
reports are generated regularly to facilitate the Board and
The Groups Core Values the Groups Management in performing financial and
operating reviews of the various operating units.
The Groups corporate culture is embedded in its core values of
integrity, commitment, loyalty, excellence in execution, speed or Annual business plans and operating budgets are prepared
timeliness, innovativeness and cost efficiency to achieve the by business and operating units, and are approved by the
Groups vision and support the business objectives and goals. Board. Actual performance and significant variances against
budget are monitored on an ongoing basis.
Code of Business Conduct and Ethics
Key result areas and key performance indicators are
The Group communicates the Code of Business Conduct and established and aligned with the strategic business objectives
Ethics to its employees upon their employment. The Code of and goals and are monitored on an ongoing basis.
Business Conduct and Ethics reinforces the Groups core value
Regular management and operation meetings are conducted
on integrity by providing guidance on moral and ethical
by senior management which comprises the Chief Executive
behaviour that is expected from all employees in following the
Officer (CEO) and divisional heads.
laws, policies, standards and procedures.
Board meetings are held at least once in a quarter with a
formal agenda on matters for discussion. The Board is kept
updated on the Groups activities and operations on a timely
and regular basis.
111

INTERNAL CONTROL (Contd)
RISK REVIEW FOR THE FINANCIAL YEAR REVIEW OF THIS STATEMENT BY EXTERNAL AUDITORS
A half-yearly review on the adequacy and effectiveness of the The external auditors i.e. BDO have reviewed this Statement on
risk management and internal control system has been Risk Management and Internal Control for inclusion in the
undertaken for the financial year under review. Each business Annual Report of the Group for the financial year ended
unit, cutting across all geographic areas, via its respective Risk 30 June 2016. Their review was conducted in accordance with
Management Committees and workgroups comprising personnel Recommended Practice Guide 5 (Revised) [RPG 5 (Revised)],
at all levels carried out the following areas of work: Guidance for Auditors on Engagements to Report on the
Statement on Risk Management and Internal Control, issued by
Conducted reviews and updates of risk profiles of principal
the Malaysian Institute of Accountants (MIA). RPG 5 (Revised)
risks and emerging risks which will potentially derail the
does not require the external auditors to, and they did not,
achievement of the business objectives and goals.
consider whether this Statement covers all risks and controls,
Evaluated the adequacy of key processes, systems, and or to form an opinion on the adequacy and effectiveness of
internal controls in relation to the rated principal risks, and the Groups risk and control procedures. RPG 5 (Revised) also
established strategic responses, actionable programmes and does not require the external auditors to consider whether the
tasks to manage the aforementioned and/or eliminate processes described to deal with material internal control aspects
performance gaps. of any significant problems disclosed in the annual report will,
in fact, remedy the problems.
Ensured internal audit programmes covered identified
principal risks. Audit findings throughout the financial period
Based on their review, the external auditors have reported to
served as key feedback to validate effectiveness of risk
the Board that nothing has come to their attention that causes
management activities and embedded internal controls.
them to believe that the Statement on Risk Management and
Reviewed implementation progress of actionable programmes, Internal Control is inconsistent with their understanding of the
and evaluated post-implementation effectiveness. process the Board has adopted in the review of the adequacy
and effectiveness of the Groups risk management and internal
Reviewed the adequacy of all business resumption and
control system.
contingency plans, and their readiness for rapid deployment.
The review includes the following:

CONCLUSION
Regular internal audit reports which are tabled quarterly to
The Board is satisfied with the adequacy and effectiveness of
top management and the ARMC.
the Groups risk management and internal control system. The
Bi-annual risk reviews compiled by the respective units Board has received assurance from the CEO and CFO that the
Risk Management Committees, and annual presentation to Groups risk management and internal control system, in all
and discussion with the ARMC, the Board, internal auditors, material aspects, is operating adequately and effectively. For the
and external auditors. financial year under review, there were no material control
failures or adverse compliance events that have directly resulted
Operating units CEO/Chief Financial Officers (CFO) Internal
in any material loss to the Group.
Control Certification and Assessment Disclosure.
Operating units response to the Questionnaire on Control This Statement on Risk Management and Internal Control is
and Regulations. made in accordance with the minutes of the Board of Directors
meeting held on 13 September 2016.
112
ANNUAL REPORT 2016
STATEMENT OF DIRECTORS INTERESTS

In th e C o m pa ny a nd i ts Re l at e d C o r p o r a t io n s a s a t 3 0 A u g u s t 2 0 1 6
( B ased o n the Re gi s te r of D i r e c t o r s S h a r e h o ld in g s )
Name of Directors Direct % Indirect %
The Company
No. of ordinary shares of RM0.10 each
Tan Sri Dato Lee Shin Cheng 67,086,100 1.07 2,976,856,8801 47.34
Dato Lee Yeow Chor 9,000,400 0.14 2,959,773,3802 47.07
Lee Yeow Seng 4,180,400 0.07 2,959,678,3803 47.07
Lee Cheng Leang 400,000 0.01
Tan Sri Peter Chin Fah Kui 20,0004 *
Datuk Karownakaran @ Karunakaran a/l Ramasamy
Cheah Tek Kuang 12,0005 *
Lim Tuang Ooi
By virtue of Tan Sri Dato Lee Shin Cheng, Dato Lee Yeow Chor and Lee Yeow Sengs interests in the ordinary shares of the
Company, they are also deemed to be interested in the ordinary shares of all the subsidiaries of the Company to the extent that the
Company has an interest.
Notes:
1 Deemed interested by virtue of his interest in Progressive Holdings Sdn Bhd (PH), which in turn holds 100% equity interest in Vertical Capacity Sdn Bhd (VC) and
shares held by his children, Dato Lee Yeow Chor, Lee Yeow Seng, Lee Yoke Ling, Lee Yoke Har, Lee Yoke Hean and Lee Yoke Hui
2 Deemed interested by virtue of his interest in PH, which in turn holds 100% equity interest in VC and also interest in the Company held by his spouse, Datin Joanne
Wong Su-Ching under Section 134(12) of the Companies Act, 1965
3 Deemed interested by virtue of his interest in PH, which in turn holds 100% equity interest in VC
4 Deemed interested by virtue of the interest in shares of his spouse, Puan Sri Ruby Wee Hui Kiang pursuant to Section 134(12)(c) of the Companies Act, 1965
5 Deemed interested by virtue of the interest in shares of his spouse, Ooi Siew Cheng pursuant to Section 134(12)(c) of the Companies Act, 1965
* Negligible
113
OTHER INFORMATION
COMPOSITION OF SHAREHOLDERS
as at 30 August 2016
FOREIGNERS
15.12%
GOVERNMENT AND MALAYSIAN
OTHER GOVERNMENT SUBSTANTIAL
RELATED AGENCIES SHAREHOLDERS
0.01% 54.53%
MALAYSIAN BODIES
CORPORATE AND
INDIVIDUALS
30.34%
MATERIAL CONTRACTS
There were no material contracts entered into by the Company and its subsidiaries which involved Directors and major shareholders
interests either still subsisting at the end of the financial year ended 30 June 2016 or entered into since the end of the previous
financial year.
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE NATURE

Recurrent related party transactions of a revenue nature of IOI Corporation Berhad (IOIC) Group conducted pursuant to
shareholders mandate for the financial year ended 30 June 2016 are as follows:
Type of Recurrent Value of

Related Party Interested Directors/Major Shareholders and Transactions
Transacting Parties Transactions Persons Connected RM million
Nice Frontier Sdn Bhd Purchase of fresh fruit Vertical Capacity Sdn Bhd (VCSB) (2) 12.0
(NFSB) (1) bunches (FFB) by Progressive Holdings Sdn Bhd (PHSB) (3)
Pamol Plantations Tan Sri Dato Lee Shin Cheng (Tan Sri Lee) (4)
Sdn Bhd (PPSB) (1) Puan Sri Datin Hoong May Kuan (Puan Sri Lee) (5)
Dato Lee Yeow Chor (Dato Lee) (6)

Lee Yeow Seng (LYS) (7)
Lee Cheng Leang (LCL) (8)
Lee Yoke Ling (LY Ling) (9)
Lee Yoke Har (LY Har) (9)
Lee Yoke Hean (LY Hean) (9)
Lee Yoke Hui (LY Hui) (9)
114
ANNUAL REPORT 2016
Type of Recurrent Value of

Related Party Interested Directors/Major Shareholders and Transactions
Transacting Parties Transactions Persons Connected RM million
Continental Estates Sdn Bhd Purchase of FFB by VCSB (10) 15.4

(CESB) (1) Dynamic Plantations PHSB (11)
Berhad (DPB) (1) Tan Sri Lee (12)
Puan Sri Lee (5)
Dato Lee (13)
LYS (14)
LCL (8)
LY Ling (9)
LY Har (9)
LY Hean (9)
LY Hui (9)
1. Dynamic Management Provision of management VCSB (15) 4.2

Sdn Bhd (DMSB) services by IOI Global PHSB (16)
2. IOI Corporation Services Sdn Bhd Tan Sri Lee (17) 3.8
Berhad (IOIC) (formerly known as Puan Sri Lee (5)
3. IOI Plantation Services IOI Corporate Services Dato Lee (18) 2.9
Sdn Bhd (IPSSB) Sdn Bhd) (IGS) (1) LYS (19)
4. Loders Croklaan B.V. LCL (20) 0.6
(LCBV) LY Ling (9)
5. IOI Loders Croklaan LY Har (9) 0.3
Oils Sdn Bhd (ILCO) LY Hean (9)
6. IOI Oleochemical LY Hui (9) 0.2
Industries Berhad
(IOIB) and its
certain subsidiaries
Notes:
1 Details of the transacting parties
Effective Equity
Name of Company (%) Principal Activities
NFSB, a subsidiary of IOI Properties Group Berhad Not applicable Property development, cultivation of plantation produce and property investment
(IOIPG)
PPSB, a subsidiary of IOIC 100.00 Cultivation of oil palm, processing of palm oil and investment holding
CESB, an associate company of IOIPG Not applicable Property development and operation of oil palm estate
DPB, a subsidiary of IOIC 100.00 Cultivation of oil palm and processing of palm oil
@ IGS, a subsidiary of IOIC and associate of IOIPG 65% Sharing common corporate function required by shareholders
(35% equity interest)
DMSB, a subsidiary of IOIPG Not applicable Property development, provision of management services and investment holding
IPSSB, a subsidiary of IOIC 100.00 Provision of management services to its related companies
LCBV, a subsidiary of IOIC 100.00 Manufacturing of specialty oils and fats
ILCO, a subsidiary of IOIC 100.00 Refining and sale of palm oil and related products
IOIB, a subsidiary of IOIC 100.00 Investment holding
115
OTHER INFORMATION (Contd)
2 VCSB, a wholly-owned subsidiary of PHSB, is a Major Shareholder of IOIC and IOIPG and a deemed Major Shareholder of NFSB and PPSB
3 PHSB, the holding company of VCSB, is a deemed Major Shareholder of IOIC, IOIPG, NFSB and PPSB
4 Tan Sri Lee is the Executive Chairman and a deemed Major Shareholder of both IOIC and IOIPG. Tan Sri Lee is also a Director of PPSB
5 Puan Sri Lee is a deemed Major Shareholder of IOIC and IOIPG and person connected to Tan Sri Lee, Dato Lee and LYS
6 Dato Lee is the Chief Executive Officer of IOIC and a Director of IOIPG and a deemed Major Shareholder of both IOIC and IOIPG. He is a person connected to
Tan Sri Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of LYS. Dato Lee is also a Director of PPSB
7 LYS is a Director of IOIC and the Chief Executive Officer of IOIPG and a deemed Major Shareholder of both IOIC and IOIPG. He is a person connected to Tan Sri
Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of Dato Lee. LYS is also a Director of NFSB
8 LCL is a Director of IOIC and a person connected to Tan Sri Lee as he is the brother of Tan Sri Lee
9 LY Ling, LY Har, LY Hean and LY Hui are persons connected to Tan Sri Lee as they are the daughters of both Tan Sri Lee and Puan Sri Lee and the sisters of
Dato Lee and LYS
10 VCSB, a wholly-owned subsidiary of PHSB, is a Major Shareholder of IOIC and IOIPG and a deemed Major Shareholder of DPB
11 PHSB, the holding company of VCSB, is a deemed Major Shareholder of IOIC, IOIPG and DPB
12 Tan Sri Lee is the Executive Chairman and a deemed Major Shareholder of both IOIC and IOIPG
Tan Sri Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of LYS. Dato Lee is also a Director of both CESB and DPB
Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of Dato Lee
15 VCSB, a wholly-owned subsidiary of PHSB, is a Major Shareholder of IOIC and IOIPG and a deemed Major shareholder of IGS, DMSB, IPSSB, LCBV, ILCO and IOIB
16 PHSB, the holding company of VCSB, is a deemed Major Shareholder of IOIC, IOIPG, IGS, DMSB, IPSSB, LCBV, ILCO and IOIB
17 Tan Sri Lee is the Executive Chairman and a deemed Major Shareholder of both IOIC and IOIPG. Tan Sri Lee is also a Director of DMSB
Tan Sri Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of LYS. Dato Lee is also a Director of IGS, DMSB, IPSSB, LCBV, ILCO and IOIB
Lee as he is the son of both Tan Sri Lee and Puan Sri Lee and the brother of Dato Lee. LYS is also a Director of IGS and DMSB
20 LCL is a Director of IOIC and a person connected to Tan Sri Lee as he is the brother of Tan Sri Lee. LCL is also a Director of DMSB
@ Following the disposal of 35% equity interest in IGS by IOIPG on 15 June 2016, IGS is now a wholly-owned subsidiary of IOIC
116
118 Directors Report
FINANCIAL STATEMENTS
127 Statements of Profit or Loss
128 Statements of Comprehensive Income
129 Statements of Financial Position
133 Statements of Changes in Equity
136 Statements of Cash Flows
139 Notes to the Financial Statements
287 Statement by Directors
287 Statutory Declaration
288 Independent Auditors Report
FINANCIAL
REPORTS
DIRECTORS REPORT
The Directors of IOI Corporation Berhad have pleasure in submitting their report and the audited financial statements of the Group
and of the Company for the financial year ended 30 June 2016.
PRINCIPAL ACTIVITIES
The principal activity of the Company is that of an investment holding company.
The principal activities of the subsidiaries, associates and joint ventures are set out in Note 45 to the financial statements.
There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.
FINANCIAL RESULTS
The audited financial results of the Group and of the Company for the financial year are as follows:
In RM million Group Company
Profit before taxation 965.8 625.2

Taxation (319.5) (3.0)
Profit for the financial year 646.3 622.2
Attributable to:
Owners of the parent 629.7 622.2
Non-controlling interests 16.6
646.3 622.2
DIVIDENDS
Dividends declared and paid since the end of the previous financial year were as follows:
In RM million Company
In respect of the financial year ended 30 June 2015

Second interim single tier dividend of 4.5 sen per ordinary share, paid on 18 September 2015 283.6
In respect of the financial year ended 30 June 2016

First interim single tier dividend of 3.5 sen per ordinary share, paid on 18 March 2016 220.5
504.1
The Directors declared a second interim single tier dividend of 45% or 4.5 sen per ordinary share, amounting to RM283.0 million in
respect of the financial year ended 30 June 2016. The dividend is payable on 23 September 2016 to shareholders whose names appear
in the Record of Depositors and Register of Members of the Company at the close of business on 9 September 2016.
No final dividend has been recommended by the Directors for the financial year ended 30 June 2016.
118
ANNUAL REPORT 2016
ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company issued the following new ordinary shares of RM0.10 each for cash, arising from the exercise
of options granted under the Companys Executive Share Option Scheme:
Issue price No. of shares

RM
2.03 1,260,800
3.49 1,260,000
The newly issued ordinary shares rank pari passu in all respects with the existing issued ordinary shares of the Company.
There was no issue of debentures by the Company during the financial year.
TREASURY SHARES
The shareholders of the Company, by an ordinary resolution passed at an extraordinary general meeting held on 18 November 1999,
approved the Companys plan to repurchase up to 10% of the issued and paid-up share capital of the Company (Share Buy Back).
The authority granted by the shareholders was subsequently renewed during subsequent Annual General Meetings of the Company,
including the last meeting held on 27 October 2015.
The Directors of the Company are committed to enhance the value of the Company to its shareholders and believe that the Share Buy
Back can be applied in the best interests of the Company and its shareholders.
During the financial year, the Company repurchased 35,676,300 ordinary shares of RM0.10 each of its issued shares from the open
market. The average price paid for the ordinary shares repurchased was RM4.01 per ordinary share. The repurchase transactions were
financed by internally generated funds. The ordinary shares repurchased are held as treasury shares and treated in accordance with the
requirement of Section 67A of the Companies Act, 1965.
The Company has the right to cancel, resell and/or distribute these shares as dividends at a later date. As treasury shares, the rights
attached to voting, dividends and participation in other distribution is suspended. None of the treasury shares repurchased had been
sold as at 30 June 2016.
At the end of the financial year, the number of ordinary shares in issue after deducting treasury shares is 6,288,206,995 ordinary shares
of RM0.10 each.
119
DIRECTORS REPORT (Contd)
EXECUTIVE SHARE OPTION SCHEME

The Executive Share Option Scheme (ESOS) which was established on 23 November 2005 for the benefit of the executives and full
time Executive Directors of the Group expired on 23 November 2015.
The movements of the options over the unissued ordinary shares of RM0.10 each in the Company granted under the ESOS during the
financial year prior to expiry were as follows:
No. of options over ordinary shares
Option price As at As at
RM Date of offer 1 July 2015 Exercised Lapsed* 30 June 2016
2.03 12 January 2006 6,276,500 (1,260,800) (5,015,700)

3.49 2 April 2007 8,598,600 (1,260,000) (7,338,600)
4.17 6 July 2010 1,418,000 (1,418,000)
Total 16,293,100 (2,520,800) (13,772,300)
* Due to resignation/retirement of employees and expiry of ESOS on 23 November 2015.
In view of the expiry of the ESOS, the Companys shareholders approved the establishment of a new executive share option scheme
(New ESOS) of up to ten percent (10%) of the issued and paid-up share capital of the Company (excluding treasury shares) at an
extraordinary general meeting held on 27 October 2015. Following that, the New ESOS was established on 28 January 2016.
The salient features of the New ESOS are as follows:
a) Maximum number of shares available under the New ESOS
The maximum number of new ordinary shares in the Company (IOI Shares) which may be granted under the New ESOS shall
not in aggregate exceed ten percent (10%) of the issued and paid-up ordinary share capital (excluding treasury shares) of the
Company at any point of time throughout the duration of the New ESOS.
b) Eligibility
Employee of the Group
Subject to the discretion of the committee appointed by the Board to administer the New ESOS (ESOS Committee), any
employee of the Group shall be eligible to participate in the New ESOS if, as at the date of the Offer (Offer Date), the
employee:
i. has attained at least eighteen (18) years of age;
ii. falls under the grade of M1 and above;
iii. is confirmed in writing as a full time employee and/or has been in employment of the Group (excluding subsidiaries which
are dormant and/or incorporated outside Malaysia) for a period of at least three (3) years of continuous service prior to and
up to the Offer Date; and
iv. fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee from time to time.
120
ANNUAL REPORT 2016
EXECUTIVE SHARE OPTION SCHEME (Continued)

b) Eligibility (Continued)
Director of the Group
Subject to the discretion of ESOS Committee, any Director of the Group shall be eligible to participate in the New ESOS if, as at
Offer Date, the Director:
ii. is an Executive Director who has been involved in the management of the Group (excluding subsidiaries which are dormant
and/or incorporated outside Malaysia) for a period of at least three (3) years of continuous service prior to and up to the
Offer Date;
iii. the specific allocation of the new IOI Share to such Executive Director under the New ESOS must have been approved by
the Shareholders at a general meeting and he/she is not prohibited or disallowed by the relevant authorities or laws from
participating in the New ESOS; and
iv. fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee from time to time.
(The eligible employees (including Executive Director) above are hereinafter referred to as Eligible Person(s))
c) Maximum allowable allotment and basis of allocation
Subject to any adjustment which may be made under the By-Laws, the maximum number of new IOI Shares that may be offered
under the New ESOS shall be at the sole and absolute discretion of the ESOS Committee after taking into consideration, amongst
others, the Eligible Persons position, performance, length of service and seniority in the Group respectively, or such other matters
which the ESOS Committee may in its discretion deem fit subject to the following:
i. the Eligible Person does not participate in the deliberation or discussion in respect of their own allocation; and
ii. the number of new IOI Shares allotted to any Eligible Person, who either singularly or collectively through person connected
with him/her (as defined under the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities)), holds
twenty percent (20%) or more of the issued and paid-up capital of the Company, shall not exceed ten percent (10%) of the
total number of new IOI Shares to be issued under the New ESOS, provided always that it is in accordance with any
prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other requirements of the relevant authorities
and as amended from time to time.
d) Exercise price
The exercise price shall be based on the higher of the following:
i. the five (5)-day volume weighted average market price of IOI Shares, as quoted on Bursa Securities, immediately preceding
the Offer Date, with a discount of not more than ten percent (10%) or such other percentage of discount as may be
permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the New ESOS; or
ii. the par value of the IOI Shares of RM0.10 each;
and subject to any adjustments stipulated in the By-Laws, where applicable.
121
EXECUTIVE SHARE OPTION SCHEME (Continued)

e) Duration and termination of the New ESOS
i. The New ESOS came into force on 28 January 2016 (Effective Date) and shall be for a duration of five (5) years.
ii. The New ESOS may be terminated by the ESOS Committee at any time before the expiry of its duration provided that the
Company makes an announcement immediately to Bursa Securities. The announcement shall include:
the effective date of termination;
the number of options exercised or shares vested, if applicable; and
the reasons and justification for termination.
iii. Approval or consent of the shareholders of the Company by way of a resolution in a general meeting and written consent
of grantees who have yet to exercise their options and/or vest the unvested shares (if applicable) are not required to effect
a termination of the New ESOS.
f) Exercise of option
Options are exercisable commencing from the Offer Date and expiring at the end of five (5) years from the Effective Date or in
the event of a termination of the New ESOS, the date of termination of the New ESOS.
g) Ranking of the new IOI Shares
The new IOI Shares to be allotted and issued upon any exercise of the option shall, upon allotment and issuance, rank pari passu
in all respects with the existing issued and paid-up IOI Shares, save and except that the holders of the new IOI Shares shall not
be entitled to any dividends, rights, allotments and/or any other distributions that may be declared, made or paid to the
shareholders of the Company, where the record date precedes the date of allotment of the said shares. The option shall not carry
any right to vote at a general meeting of the Company.
RESERVES AND PROVISIONS

There were no material transfers to and from reserves or provisions during the financial year.
122
ANNUAL REPORT 2016
DIRECTORS
The Directors who have held office since the date of the last report are as follows:

Dato Lee Yeow Chor
Lee Cheng Leang
Lee Yeow Seng
Tan Sri Peter Chin Fah Kui
Cheah Tek Kuang
Lim Tuang Ooi
In accordance with Article 101 of the Companys Articles of Association, Datuk Karownakaran @ Karunakaran a/l Ramasamy and
Lim Tuang Ooi retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-election.
Tan Sri Dato Lee Shin Cheng and Tan Sri Peter Chin Fah Kui who are over the age of seventy (70), retire in accordance with Section
129(2) of the Companies Act, 1965 in Malaysia at the forthcoming Annual General Meeting. The Directors recommend that they shall
be re-appointed in accordance with Section 129(6) of the said Act and to hold office until the conclusion of the next Annual General
Meeting of the Company.
DIRECTORS INTERESTS
The Directors holding office at the end of the financial year and their beneficial interests in the shares and options over ordinary shares
of the Company and of its related corporations during the financial year as recorded in the Register of Directors Shareholdings kept
by the Company under Section 134 of the Companies Act, 1965 in Malaysia are as follows:
As at As at
1 July 2015 Acquired Disposed 30 June 2016
Direct Interests
The Company
Tan Sri Dato Lee Shin Cheng 66,986,300 99,8001 67,086,100
Dato Lee Yeow Chor 9,000,400 9,000,400
Lee Yeow Seng 4,180,400 4,180,400
Lee Cheng Leang 400,000 400,000
Indirect Interests
The Company
Tan Sri Dato Lee Shin Cheng 2,954,367,480 22,639,200 (149,800)2 2,976,856,880
Dato Lee Yeow Chor 2,937,625,180 22,148,200 2,959,773,380
Lee Yeow Seng 2,937,530,180 22,148,200 2,959,678,380
Tan Sri Peter Chin Fah Kui 20,000 20,000
Cheah Tek Kuang 12,000 12,000
Notes:
1 Transfer of 99,800 shares from his daughter.
2 Includes the transfer of 99,800 shares and disposal of 50,000 shares by his daughter.
3 Includes the exercise of 491,000 share options under ESOS by his daughter.
123
DIRECTORS INTERESTS (Continued)

The movements of the options over the unissued ordinary shares of RM0.10 each in the Company granted under the ESOS to the
Directors in office at the end of the financial year are as follows:
Option price As at As at
RM 1 July 2015 Exercised 30 June 2016
Indirect Interests
Tan Sri Dato Lee Shin Cheng 2.03 375,800 (375,800)
Tan Sri Dato Lee Shin Cheng 3.49 115,200 (115,200)
By virtue of Tan Sri Dato Lee Shin Cheng, Dato Lee Yeow Chor and Lee Yeow Sengs interests in the ordinary shares of the Company,
they are also deemed to be interested in the shares of all the subsidiaries of the Company to the extent that the Company has an
interest.
The other Directors holding office at the end of the financial year namely, Datuk Karownakaran @ Karunakaran a/l Ramasamy and
Lim Tuang Ooi did not have any interest in shares and options over ordinary shares in the Company and its related corporations during
the financial year.
DIRECTORS BENEFITS
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive any
benefit by reason of a contract made by the Company or a related corporation with the Director, or with a firm of which the Director
is a member, or with a company in which the Director has a substantial financial interest except for any benefits which may be deemed
to have arisen by virtue of the significant related party transactions as disclosed in Note 39 to the financial statements.
During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects
of enabling the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company
or any other body corporate, except for the share options granted to the Directors of the Company pursuant to the Companys ESOS.
124
ANNUAL REPORT 2016
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS OF THE GROUP AND OF THE COMPANY
Before the statements of profit or loss, statements of comprehensive income and statements of financial position of the Group and of
the Company were made out, the Directors took reasonable steps:
i. to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful
debts, and had satisfied themselves that no known bad debts need to be written off and that adequate provision had been made
for doubtful debts; and
ii. to ensure that any current assets, other than debts, which were unlikely to realise their book values in the ordinary course of
business of the Group and of the Company have been written down to an amount which they might be expected so to realise.
As at the date of this report, the Directors are not aware of any circumstances:
i. which would necessitate the writing off of bad debts or render the amount of provision for doubtful debts in the financial
statements of the Group and of the Company inadequate to any substantial extent; or
ii. which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
iii. which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of
the Company misleading or inappropriate.
As at the date of this report, there does not exist:
i. any charge on the assets of the Group or of the Company that has arisen since the end of the financial year which secures the
liabilities of any other person; 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 or other liability has become enforceable, or is likely to become enforceable within the period of twelve (12) months
after the end of the financial year, which in the opinion of the Directors, will or may substantially affect the ability of the Group or
of the Company to meet their obligations as and when they fall due.
OTHER STATUTORY INFORMATION

As at the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Company that would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
i. the results of operations of the Group and of the Company for the financial year were not substantially affected by any item,
transaction or event of a material and unusual nature; and
ii. no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year
and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for
the financial year in which this report is made.
125
DIFFERENT FINANCIAL YEAR END OF SUBSIDIARIES

Due to local requirements, five (5) indirect subsidiaries of the Company, IOI (Xiamen) Edible Oils Co., Ltd, Loders Croklaan (Shanghai)
Trading Co. Ltd, Tianjin Palmco Oil And Fats Co. Ltd, Loders Croklaan Latin America Comercio De Gorduras e Oleos Vegetais Ltda and
Loders Croklaan Burkina Faso S.A.R.L. adopt a 31 December financial year end, which does not coincide with that of the Company.
The Directors of the Company have been granted approvals under Section 168(3) of the Companies Act, 1965 in Malaysia by the
Companies Commission of Malaysia for the aforementioned subsidiaries to have different financial year end from that of the Company
for the financial year ended 30 June 2016.
AUDIT AND RISK MANAGEMENT COMMITTEE

The Directors who serve as members of the Audit and Risk Management Committee as at the date of this report are as follows:
Datuk Karownakaran @ Karunakaran a/l Ramasamy (Chairman)

Cheah Tek Kuang
NOMINATING AND REMUNERATION COMMITTEE

The Directors who serve as members of the Nominating and Remuneration Committee as at the date of this report are as follows:
Tan Sri Peter Chin Fah Kui (Chairman)

Cheah Tek Kuang
ESOS COMMITTEE
The Directors who serve as members of the ESOS Committee as at the date of this report are as follows:
Tan Sri Dato Lee Shin Cheng (Chairman)

Dato Lee Yeow Chor
Lee Yeow Seng
AUDITORS
The auditors, BDO, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 13 September 2016:

Executive Chairman
Dato Lee Yeow Chor

126
ANNUAL REPORT 2016
STATEMENTS OF PROFIT OR LOSS

F o r Th e Fi na nc i a l Ye a r E nde d 3 0 J u n e 2 0 1 6
Group Company
In RM million Note 2016 2015 2016 2015
Revenue 6 11,739.3 11,541.5 862.9 866.7

Cost of sales (9,346.9) (9,430.9) (3.4) (3.4)
Gross profit 2,392.4 2,110.6 859.5 863.3

Other operating income 7 512.5 632.1 82.4 144.6
Marketing and selling expenses (287.1) (249.5)
Administration expenses (449.5) (449.4) (33.8) (17.4)
Other operating expenses 8 (813.2) (902.2) (78.4) (395.7)
Operating profit 1,355.1 1,141.6 829.7 594.8

Share of results of associates 99.7 104.6
Share of results of joint ventures (5.2) (5.8)
Profit before interest and taxation 1,449.6 1,240.4 829.7 594.8

Interest income 9 53.3 92.9 48.1 66.2
Finance costs 10 (218.6) (281.6) (139.9) (176.8)
Net foreign currency translation loss on foreign
currency denominated borrowings (318.5) (735.3) (112.7) (87.5)
Profit before taxation 11 965.8 316.4 625.2 396.7

Taxation 12 (319.5) (261.6) (3.0) 10.5
Profit for the financial year 646.3 54.8 622.2 407.2
Attributable to:
Owners of the parent 629.7 51.9 622.2 407.2
Non-controlling interests 16.6 2.9
646.3 54.8 622.2 407.2
Earnings per ordinary share attributable to

owners of the parent (sen) 13
Basic 9.99 0.82
Diluted 9.99 0.82
Gross dividend per ordinary share of

RM0.10 each (sen) 14
First interim single tier dividend 3.5 4.5 3.5 4.5
Second interim single tier dividend 4.5 4.5 4.5 4.5
Total 8.0 9.0 8.0 9.0
The notes on pages 139 to 286 form an integral part of the financial statements.
127
STATEMENTS OF COMPREHENSIVE INCOME

F or Th e Fi n an ci a l Ye a r E nde d 30 J u n e 2 0 1 6
Group Company
In RM million 2016 2015 2016 2015
Other comprehensive loss that will not be

reclassified subsequently to profit or loss
Share of other comprehensive loss of associates (0.3)

Actuarial loss on defined benefit obligation (1.4) (15.2)
(1.7) (15.2)
Other comprehensive income/(loss) that will be

reclassified subsequently to profit or loss when
specific conditions are met
Exchange differences on translation of foreign operations 60.5 63.6

Share of other comprehensive income/(loss) of associates 18.4 (20.9)
Hedge of net investments in foreign operations (0.7)
78.2 42.7
Other comprehensive income for the financial year,

net of tax 76.5 27.5
Total comprehensive income for the financial year 722.8 82.3 622.2 407.2
Total comprehensive income attributable to:

Owners of the parent 709.4 80.9 622.2 407.2
Non-controlling interests 13.4 1.4
722.8 82.3 622.2 407.2
128
ANNUAL REPORT 2016
STATEMENTS OF FINANCIAL POSITION

A s A t 3 0 June 2016
Group
30 June 30 June 1 July

In RM million Note 2016 2015 2014
ASSETS
Non-current assets
Property, plant and equipment 15 9,985.1 9,765.5 9,645.7
Prepaid lease payments 16 21.1 6.7 4.0
Investment properties 17 6.9 7.0 8.3
Intangible assets 18 521.7 458.4 458.4
Investments in associates 20 937.5 812.7 799.4
Interests in joint ventures 21 31.7 35.2 33.0
Derivative assets 22 148.3 138.7 75.1
Deferred tax assets 23 38.0 53.0 50.4
11,690.3 11,277.2 11,074.3
Current assets
Inventories 24 2,284.4 2,083.1 2,154.6
Biological assets 25 40.8 45.2 51.2
Trade and other receivables 26 1,191.2 1,062.4 1,062.7
Amounts due from associates 20 6.4 0.5 0.4
Derivative assets 22 232.9 41.1 61.4
Current tax assets 53.5 43.3 38.5
Other investments 27 104.2 107.2 80.7
Short term funds 28 1,120.1 1,088.9 3,450.0
Deposits with financial institutions 29 248.7 221.4 186.8
Cash and bank balances 569.4 478.2 350.9
5,851.6 5,171.3 7,437.2

Assets of disposal group held for sale 30 14.2
TOTAL ASSETS 17,556.1 16,448.5 18,511.5
129
STATEMENTS OF FINANCIAL POSITION (Contd)

As At 3 0 Ju n e 2016
Group


Equity attributable to owners of the parent
Share capital 31 646.2 645.9 645.0
Reserves 32 (703.0) (617.0) (510.2)
Retained earnings 7,194.9 7,040.1 8,052.7
7,138.1 7,069.0 8,187.5

Non-controlling interests 278.9 274.1 282.5
Total equity 7,417.0 7,343.1 8,470.0
Liabilities
Non-current liabilities
Borrowings 33 4,902.9 5,835.9 5,069.2
Derivative liabilities 22 13.3 29.9 44.8
Other long term liabilities 34 64.3 29.4 36.3
Deferred tax liabilities 23 1,334.2 1,344.9 1,394.4
6,314.7 7,240.1 6,544.7
Current liabilities
Trade and other payables 35 1,129.5 833.4 866.7
Borrowings 33 2,478.3 812.5 2,454.3
Amounts due to associates 20 96.7 91.1 73.8
Current tax liabilities 25.4 4.5 43.9
3,824.4 1,865.3 3,496.8
Total liabilities 10,139.1 9,105.4 10,041.5
TOTAL EQUITY AND LIABILITIES 17,556.1 16,448.5 18,511.5
130
ANNUAL REPORT 2016
Company

ASSETS
Non-current assets
Property, plant and equipment 15 89.8 89.4 89.2
Investments in subsidiaries 19 7,763.8 7,685.7 7,557.4
Investments in associates 20 20.4 20.4 20.4
Interests in joint ventures 21 43.7 42.0 34.0
Derivative assets 22 2.2
7,919.9 7,837.5 7,701.0
Current assets
Biological assets 25 0.2 0.2 0.2
Trade and other receivables 26 20.3 15.4 15.5
Amounts due from subsidiaries 19 845.7 933.2 2,980.8
Current tax assets 40.1 43.0 33.7
Other investments 27 4.1 4.2 4.5
Deposits with financial institutions 29 128.6 17.0
1,154.2 1,125.9 3,074.5
TOTAL ASSETS 9,074.1 8,963.4 10,775.5
131
STATEMENTS OF FINANCIAL POSITION (Contd)

As At 3 0 Ju n e 2016
Company


Share capital 31 646.2 645.9 645.0
Reserves 32 (625.8) (458.4) (307.5)
Total equity 4,956.1 4,974.2 5,766.3
Liabilities
Borrowings 33 1,364.7 1,696.1 1,439.0
Amounts due to subsidiaries 19 601.1 1,146.0 1,019.6
Deferred tax liabilities 23 3.9 3.7 3.8
1,983.0 2,872.6 2,502.8
Current liabilities
Trade and other payables 35 32.9 25.5 133.0
Borrowings 33 799.2 264.2 479.7
Amounts due to subsidiaries 19 1,302.9 826.9 1,856.2
Derivative liabilities 22 22.1
Current tax liabilities 15.4
2,135.0 1,116.6 2,506.4
Total liabilities 4,118.0 3,989.2 5,009.2
132
ANNUAL REPORT 2016
STATEMENTS OF CHANGES IN EQUITY

F o r Th e Fi na nc i a l Ye a r E nde d 3 0 J u n e 2 0 1 6
Non-distributable Distributable
Total
Foreign attributable
currency to owners Non-
Share Share Capital Other translation Treasury Retained of the controlling Total
In RM million capital premium reserves reserve reserve shares earnings parent interests equity
Group
As at 1 July 2014
As previously reported 645.0 27.6 113.7 (215.1) (441.0) 5,906.6 6,036.8 196.3 6,233.1
Effect of adoption of
MFRSs and Amendment
to MFRSs (Note 44) 4.6 2,146.1 2,150.7 86.2 2,236.9
As restated 645.0 27.6 113.7 (210.5) (441.0) 8,052.7 8,187.5 282.5 8,470.0

Actuarial loss on defined
benefit obligation (15.2) (15.2) (15.2)
Exchange differences on
translation of foreign
operations 65.1 65.1 (1.5) 63.6
Share of other
comprehensive loss of
associates (3.8) (17.1) (20.9) (20.9)
Total comprehensive
(loss)/income (3.8) 48.0 36.7 80.9 1.4 82.3
Transactions with
owners
Exercise of share options 0.9 36.8 (8.5) 29.2 29.2
Repurchase of shares
(Note 32.2) (179.2) (179.2) (179.2)
Liquidation of a subsidiary
(Note 37) (0.1) (0.1) (0.1)
Dividends paid in respect
of current financial year
(Note 14) (286.3) (286.3) (286.3)
Dividends paid in respect
of previous financial year
(Note 14) (763.0) (763.0) (763.0)
Dividends paid to
non-controlling interests (9.8) (9.8)
As at 30 June 2015 645.9 64.4 105.1 (3.8) (162.5) (620.2) 7,040.1 7,069.0 274.1 7,343.1
133
STATEMENTS OF CHANGES IN EQUITY (Contd)

Total
Foreign attributable
currency to owners Non-
Share Share Capital Other Hedging translation Treasury Retained of the controlling Total
In RM million capital premium reserves reserve reserve reserve shares earnings parent interests equity
Group
As at 1 July 2015 645.9 64.4 105.1 (3.8) (162.5) (620.2) 7,040.1 7,069.0 274.1 7,343.1
Profit for the financial
year 629.7 629.7 16.6 646.3
Actuarial loss on
defined benefit
obligation (1.4) (1.4) (1.4)
Exchange differences
on translation of
foreign operations 63.7 63.7 (3.2) 60.5
Share of other
comprehensive gain/
(loss) of associates 2.1 16.3 (0.3) 18.1 18.1
Hedge of net
investments in
foreign operations (0.7) (0.7) (0.7)
Total comprehensive
income/(loss) 2.1 (0.7) 80.0 628.0 709.4 13.4 722.8
Transactions with
owners
Exercise of share
options 0.3 8.9 (2.2) 7.0 7.0
Repurchase of shares
(Note 32.2) (143.2) (143.2) (143.2)
Expiration of share
options (30.9) 30.9
Dividends paid in
respect of current
financial year
(Note 14) (220.5) (220.5) (220.5)
Dividends paid in
respect of previous
financial year
(Note 14) (283.6) (283.6) (283.6)
Changes in equity
interest in
subsidiaries (1.2) (1.2)
Dividends paid to
non-controlling
interests (7.4) (7.4)
As at 30 June 2016 646.2 73.3 72.0 (1.7) (0.7) (82.5) (763.4) 7,194.9 7,138.1 278.9 7,417.0
134
ANNUAL REPORT 2016
Share Share Capital Treasury Retained Total

In RM million capital premium reserves shares earnings equity
Company
As at 1 July 2014
As previously reported 645.0 27.6 105.9 (441.0) 5,404.9 5,742.4
Effect of adoption of MFRSs and
Amendment to MFRSs (Note 44) 23.9 23.9
As restated 645.0 27.6 105.9 (441.0) 5,428.8 5,766.3
Total comprehensive income 407.2 407.2

Transactions with owners
Exercise of share options 0.9 36.8 (8.5) 29.2
Repurchase of shares (Note 32.2) (179.2) (179.2)
Dividends paid in respect of current
financial year (Note 14) (286.3) (286.3)
Dividends paid in respect of previous
As at 30 June 2015 645.9 64.4 97.4 (620.2) 4,786.7 4,974.2
As at 1 July 2015 645.9 64.4 97.4 (620.2) 4,786.7 4,974.2

Transactions with owners
Expiration of share options (30.9) 30.9
Exercise of share options 0.3 8.9 (2.2) 7.0
Repurchase of shares (Note 32.2) (143.2) (143.2)
Dividends paid in respect of current
Dividends paid in respect of previous
As at 30 June 2016 646.2 73.3 64.3 (763.4) 4,935.7 4,956.1
135
STATEMENTS OF CASH FLOWS

Group Company
Cash Flows From Operating Activities

Profit before taxation 965.8 316.4 625.2 396.7
Adjustments for:
Depreciation of property, plant and equipment 15 457.8 439.7 1.4 1.2
denominated borrowings 318.5 735.3 112.7 87.5
Finance costs 218.6 281.6 139.9 176.8
Net unrealised foreign currency translation loss 61.3 26.5 20.6 71.4
Retirement benefits expenses 34.1 32.1 13.8
Property, plant and equipment written off 15 24.5 3.3
Net inventories written down to net realisable values 11.9 6.4
Loss arising from acquisition of interest in an associate 5.3 1.8
Share of results of joint ventures 5.2 5.8
Net loss arising from changes in fair value of biological assets 4.4 6.0
Impairment losses on receivables 2.9 0.6
Net fair value loss/(gain) on other investments 2.8 11.8 (0.3) 0.3
Amortisation of intangible assets 18.2 1.6
Amortisation of prepaid lease payments 16 0.2
Depreciation of investment properties 17 0.1
Net (gain)/loss on disposal of property, plant and equipment (0.2) (0.5) 0.2 (0.1)
Impairment losses on receivables written back (0.3) (1.2)
Dividend income from other investments (3.0) (2.5) (0.1) (0.1)
Interest income (53.3) (92.9) (48.1) (66.2)
Share of results of associates (99.7) (104.6)
Net fair value (gain)/loss on derivative financial instruments (120.6) 110.8
Loss on repayment of term loan 8.1 6.0
Gain on liquidation of a subsidiary 37 (0.1)
Gain on disposal of investment properties (0.3)
Gain on disposal of land from compulsory acquisition (39.0) (1.6)
Dividend income from subsidiaries (804.7) (857.9)
Dividend income from associates (3.0)
Waiver of debt by a subsidiary (76.2)
Operating profit/(loss) before working capital changes 1,835.9 1,726.8 46.8 (265.2)
136
ANNUAL REPORT 2016
Group Company
Cash Flows From Operating Activities (Continued)

Operating profit/(loss) before working capital changes 1,835.9 1,726.8 46.8 (265.2)
Increase in trade payables 270.8 7.5
(Increase)/decrease in inventories (8.7) 20.9
(Increase)/decrease in trade receivables (19.4) 142.9
(Decrease)/increase in other payables and accruals (46.6) 46.9 7.4 (107.5)
(Increase)/decrease in other receivables, deposits and
prepayments (67.2) (75.0) (4.9) 1.4
Cash generated from/(used in) operations 1,964.8 1,870.0 49.3 (371.3)

Tax refunded 11.5 1.9 3.1
Retirement benefits paid 34.1 (0.8) (2.1)
Retirement benefits contributed 34.1 (26.7) (36.4)
Tax paid (316.8) (386.4) (3.0) (14.3)
Net cash from/(used in) operating activities 1,632.0 1,447.0 49.4 (385.6)
Cash Flows From Investing Activities

Interest received 52.0 93.1 2.6 1.3
Dividends received from associates 33.4 52.8 3.0
Proceeds from disposal of property, plant and equipment 5.8 2.2 0.5 0.1
Dividends received from other investments 3.0 2.5 0.1 0.1
Proceeds from disposal of other investments 0.3 0.4
Acquisitions of additional interest in subsidiary (1.2) (1.2)
Addition to associates (10.7) (8.6)
Additions to prepaid lease payments (14.8) (2.5)
Acquisition of oleochemicals business, net of cash and cash
equivalents acquired 36 (412.4)
Additions to property, plant and equipment 15 (458.6) (548.5) (2.5) (1.9)
Proceeds from disposal of land from compulsory acquisition 46.8 2.1
Advances from associates 14.0
Proceeds from disposal of investment properties 1.6
Advances to joint ventures (8.0) (8.0)
Additions to other investments (38.0)
Dividends received from subsidiaries 804.7 857.9
Redemption of preference shares 0.6
Payment (to)/advances from subsidiaries (54.5) 1,242.9
Investment in subsidiaries (77.5) (128.3)
Net cash (used in)/from investing activities (803.2) (392.6) 673.2 1,969.2
137
STATEMENTS OF CASH FLOWS (Contd)

Group Company
Cash Flows From Financing Activities

Drawdown of term loans 327.7 2,229.9 1,618.7
Net drawdown of short term borrowings 53.4 373.3 74.4 258.7
Proceeds from issuance of shares 7.0 29.2 7.0 29.2
Dividends paid to non-controlling interests (7.4) (9.8)
Repurchase of shares 32.2 (143.2) (179.2) (143.2) (179.2)
Repayments of term loans (194.8) (2,729.0) (2,117.8)
Finance costs paid (217.4) (314.1) (42.8) (53.8)
Dividends paid 14 (504.1) (1,049.3) (504.1) (1,049.3)
Redemption of Guaranteed Notes (1,607.1)
Net cash used in financing activities (678.8) (3,256.1) (608.7) (1,493.5)
Net increase/(decrease) in cash and cash equivalents 150.0 (2,201.7) 113.9 90.1
Cash and cash equivalents at beginning of financial year 1,788.5 3,987.7 129.9 39.8
Effect of exchange rate changes (0.3) 2.5
Cash and cash equivalents at end of financial year 38 1,938.2 1,788.5 243.8 129.9
138
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACTIVITIES
The principal activity of the Company is that of an investment holding company.
The principal activities of the subsidiaries, associates and joint ventures are set out in Note 45 to the financial statements.
There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (MFRSs), International Financial Reporting Standards (IFRSs) and the provisions of the Companies
Act, 1965 in Malaysia.
These are the Group and the Companys first financial statements prepared in accordance with MFRSs and IFRSs. In addition
to that, the Group and Company has also early adopted the Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer
Plants which is effective for annual periods beginning on or after 1 January 2016.
In the previous financial years, the financial statements of the Group and of the Company were prepared in accordance with
Financial Reporting Standards (FRSs) in Malaysia. As required by MFRS 1 First-time Adoption of Malaysian Financial
Reporting Standards, the Group and the Company have consistently applied the same accounting policies in its opening
MFRS statement of financial position at 1 July 2014 and throughout all financial years presented, as if these policies had
always been in effect. Comparative information for the financial year ended 30 June 2015 in these financial statements have
been restated to give effect to these changes and the financial impact on transition from FRSs in Malaysia to MFRSs are
disclosed in Note 44 to the financial statements.
Notwithstanding the above, Note 47 to the financial statements has been prepared in accordance with Guidance on Special
Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of
Bursa Malaysia Securities Berhad.
2.2 Basis of accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention except
as otherwise stated in the financial statements.
The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition,
the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas
involving such judgements, estimates and assumptions are disclosed in Note 4 to the financial statements. Although these
estimates and assumptions are based on the Directors best knowledge of events and actions, actual results could differ from
those estimates.
2.3 Presentation currency
The financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency and all
financial information presented in RM are rounded to the nearest million, except where otherwise stated.
139
NOTES TO THE FINANCIAL STATEMENTS (Contd)
3. ADOPTION OF NEW MFRSs AND AMENDMENT TO MFRSs

3.1 New MFRSs adopted during the current financial year
Title
MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards

MFRS 2 Share-based Payment
MFRS 3 Business Combinations
MFRS 4 Insurance Contracts
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations
MFRS 6 Exploration for and Evaluation of Mineral Resources
MFRS 7 Financial Instruments: Disclosures
MFRS 8 Operating Segments
MFRS 10 Consolidated Financial Statements
MFRS 11 Joint Arrangements
MFRS 12 Disclosure of Interests in Other Entities
MFRS 13 Fair Value Measurement
MFRS 14 Regulatory Deferral Accounts
MFRS 101 Presentation of Financial Statements
MFRS 102 Inventories
MFRS 107 Statement of Cash Flows
MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors
MFRS 110 Events After the Reporting Period
MFRS 112 Income Taxes
MFRS 116 Property, Plant and Equipment
MFRS 117 Leases
MFRS 118 Revenue
MFRS 119 Employee Benefits
MFRS 120 Accounting for Government Grants and Disclosure of Government Assistance
MFRS 121 The Effects of Changes in Foreign Exchange Rates
MFRS 123 Borrowing Costs
MFRS 124 Related Party Disclosures
MFRS 126 Accounting and Reporting by Retirement Benefit Plans
MFRS 128 Investments in Associates and Joint Ventures
MFRS 129 Financial Reporting in Hyperinflationary Economies
MFRS 132 Financial Instruments: Presentation
MFRS 133 Earnings Per Share
MFRS 134 Interim Financial Reporting
MFRS 136 Impairment of Assets
140
ANNUAL REPORT 2016
3. ADOPTION OF NEW MFRSs AND AMENDMENT TO MFRSs (Continued)

3.1 New MFRSs adopted during the current financial year (Continued)
Title
MFRS 137 Provisions, Contingent Liabilities and Contingent Assets

MFRS 138 Intangible Assets
MFRS 139 Financial Instruments: Recognition and Measurement
MFRS 140 Investment Property
MFRS 141 Agriculture
Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants
IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities
IC Interpretation 2 Members Shares in Co-operative Entities and Similar Instruments
IC Interpretation 4 Determining whether an Arrangement Contains a Lease
IC Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IC Interpretation 6 Liabilities Arising from Participating in a Specific Market Waste Electrical and Electronic Equipment
IC Interpretation 7 Applying the Restatement Approach under MFRS 129 Financial Reporting in Hyperinflationary Economies
IC Interpretation 9 Reassessment of Embedded Derivatives
IC Interpretation 10 Interim Financial Reporting and Impairment
IC Interpretation 12 Service Concession Arrangements
IC Interpretation 13 Customer Loyalty Programmes
IC Interpretation 14 MFRS 119 Employee Benefits The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction
IC Interpretation 15 Agreements for the Construction of Real Estate
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17 Distributions of Non-cash Assets to Owners
IC Interpretation 18 Transfers of Assets from Customers
IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments
IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
IC Interpretation 21 Levies
IC Interpretation 107 Introduction of the Euro
IC Interpretation 110 Government Assistance No Specific Relation to Operating Activities
IC Interpretation 115 Operating Leases Incentives
IC Interpretation 125 Income Taxes Changes in the Tax Status of an Entity or its Shareholders
IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
IC Interpretation 129 Service Concession Arrangements: Disclosures
IC Interpretation 132 Intangible Assets Web Site Costs
141
3. ADOPTION OF NEW MFRSs AND AMENDMENT TO MFRSs (Continued)

3.2 New MFRSs that have been issued, but not yet effective and not yet adopted
Title Effective Date
Annual Improvements to MFRSs 2012 2014 Cycle 1 January 2016

Amendments to MFRS 10, MFRS 12 and MFRS 128 Investment Entities: Applying the 1 January 2016
Consolidation Exception
Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations 1 January 2016
MFRS 14 Regulatory Deferral Accounts 1 January 2016
Amendments to MFRS 101 Disclosure Initiative 1 January 2016
Amendments to MFRS 116 Property, plant and equipment: Clarification of 1 January 2016
Acceptable Methods of Depreciation and Amortisation
Amendments to MFRS 127 Equity method in Separate Financial Statements 1 January 2016
Amendments to MFRS 138 Intangible Assets: Clarification of Acceptable Methods of 1 January 2016
Depreciation and Amortisation
Amendments to MFRS 107 Disclosure Initiative 1 January 2017
Amendments to MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017
Amendments to MFRS 2 Classification and Measurement of Share-based Payment Transactions 1 January 2018
MFRS 9 Financial Instruments (IFRS 9 as issued by IASB in July 2014) 1 January 2018
MFRS 15 Revenue from Contracts with Customers 1 January 2018
Clarifications to MFRS 15 1 January 2018
MFRS 16 Leases 1 January 2019
Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor Deferred
and its Associates or Joint Ventures
The Group is in the process of assessing the impact of the adoption of these MFRSs and Amendments to MFRSs since the
effects would only be observable in future financial years.
142
ANNUAL REPORT 2016
4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

4.1 Changes in estimates
Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The Directors are of the opinion that there are no
material changes in estimates during the financial year, which would have a significant financial impact on the financial
statements.
4.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial year
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below:
4.2.1 Impairment of goodwill on consolidation
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the
value-in-use of the Cash-generating Units (CGU) to which goodwill is allocated. Estimating a value-in-use amount
requires management to make an estimate of the expected future cash flows from the CGU and also to choose a
suitable discount rate in order to calculate the present value of those cash flows. Further details are disclosed in Note
18.1 to the financial statements.
4.2.2 Deferred tax assets
Deferred tax assets are recognised for all deductible temporary differences, unutilised tax losses and unabsorbed
capital allowances to the extent that it is probable that taxable profit will be available against which the unutilised
tax losses and unabsorbed capital allowances can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
5. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and
have been applied consistently by Group entities, unless otherwise stated.
5.1 Basis of Consolidation
5.1.1 Business Combinations
Business combinations are accounted for by applying the acquisition method of accounting.
Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at
their fair value at the acquisition date, except that:
i. deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised
and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively;
ii. liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement
by the Group of an acquirees share-based payment transactions are measured in accordance with MFRS 2 Share-
based Payment at the acquisition date; and
iii. assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held
for Sale and Discontinued Operations are measured in accordance with that Standard.
143
5. SIGNIFICANT ACCOUNTING POLICIES (Continued)

5.1 Basis of Consolidation (Continued)
5.1.1 Business Combinations (Continued)
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services
are received.
Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement period
adjustments to contingent consideration are dealt with as follows:
i. if the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within
equity; and
ii. subsequent changes to contingent consideration classified as an asset or liability that is a financial instrument
within the scope of MFRS 139 are recognised either in profit or loss or in other comprehensive income in
accordance with MFRS 139. All other subsequent changes are recognised in profit or loss.
In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair
value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any)
is recognised at fair value, or at the non-controlling interests proportionate share of the acquiree net identifiable
assets on the acquisition date.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Groups previously held equity interest in
the acquiree (if any), over the net fair value of the acquirees identifiable assets and liabilities is recorded as goodwill
in the statement of financial position. The accounting policy for goodwill is set out in Note 5.10.1 to the financial
statements. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain
purchase in profit or loss on the acquisition date.
As part of its transition to MFRSs, the Group elected not to restate those business combinations that occurred before
the date of transition to MFRSs, i.e. 1 July 2014. Goodwill represents the amount recognised under the previous FRS
Framework in respect of acquisitions prior to 1 July 2014.
5.1.2 Subsidiaries
A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from
its involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control stated above. Subsidiaries are consolidated from the date on which
control is transferred to the Group up to the effective date on which control ceases, as appropriate. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed off during the financial year are included in the statement
of profit or loss and other comprehensive income from the date the Group gains control until the date the Group
ceases to control the subsidiary.
If the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including rights arising from contractual
arrangement and potential voting rights.
144
ANNUAL REPORT 2016

5.1.2 Subsidiaries (Continued)
In the Companys separate financial statements, investments in subsidiaries are stated at cost less impairment losses,
if any. Investments accounted for at cost shall be accounted for in accordance with MFRS 5 Non-current Assets Held
for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal group that
is classified as held for sale) in accordance with MFRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would
derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value
of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date
control is lost. The resulting difference is recognised as a gain or loss in profit or loss.
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries
made up to the end of the reporting period, using consistent accounting policies.
If a subsidiary uses accounting policies other than those adopted in the consolidated financial statements for like
transactions and events in similar circumstance, appropriate adjustments are made to its financial statements in
preparing the consolidated financial statements.
Non-controlling interests represent the equity in subsidiaries that are not attributable, directly or indirectly, to owners
of the Company, and is presented separately in the consolidated statement of profit or loss and other comprehensive
income and within equity in the consolidated statement of financial position, separately from equity attributable to
owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the
owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
Components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders
to a proportionate share of the entitys net assets in the event of liquidation are initially measured at either fair value
or at the present ownership instruments proportionate share in the recognised amounts of the acquirees identifiable
net assets. All other components of non-controlling interests shall be measured at their acquisition date fair values,
unless another measurement basis is required by MFRSs. The choice of measurement basis is made on a combination-
by-combination basis. Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount
of those interests at initial recognition plus the non-controlling interests share of subsequent changes in equity.
Changes in the Company owners ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-
controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the amount by which the non-controlling interests is adjusted and the fair value of consideration paid or
received is recognised directly in equity and attributed to owners of the parent.
If the Group loses control of a subsidiary as a result of a transaction, event or other circumstance, profit or loss on
disposal is calculated as the difference between:
i. the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
ii. the previous carrying amounts of the assets (including goodwill), and liabilities of the subsidiary and any non-
controlling interests.
145

5.1.2 Subsidiaries (Continued)
Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e.
reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if
the relevant assets or liabilities were disposed off. The fair value of any investments retained in the former subsidiary
at the date when control is lost, is regarded as the fair value on initial recognition for subsequent accounting under
MFRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on initial recognition
of an investment in an associate or a joint venture.
5.1.3 Associates
Associates are entities in which the Group and the Company have significant influence and that are neither
subsidiaries nor interest in joint ventures. Significant influence is the power to participate in the financial and
operating policy decisions of the investees but is not control or jointly control over those policies.
In the Companys separate financial statements, investments in associates are stated at cost less impairment losses, if
any. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
included in profit or loss.
Investments in associates are accounted for in the consolidated financial statements using the equity method of
accounting based on the latest financial statements of the associates concerned, from the date significant influence
commences until the date the Group ceases to have significant influence over the associates. The investments in
associates in the consolidated statement of financial position are initially recognised at cost and adjusted thereafter
for the post acquisition changes in the Groups share of net assets of the investments.
The interest in associates is the carrying amount of the investments in associates under the equity method together
with any long-term interest that, in substance, form part of the Groups net interest in the associates.
The excess of the cost of investment over the Groups share of the fair value of the associates identifiable assets,
liabilities and contingent liabilities at the date of acquisition represents goodwill. Goodwill relating to the associate is
included in the carrying amount of the investment and is not amortised. The excess of the Groups share of the fair
values of the associates identifiable assets, liabilities and contingent liabilities over the cost of investment at the date
of acquisition is recognised in consolidated profit or loss.
The Groups share of results of the associates during the financial year is recognised in consolidated profit or loss,
after adjustments to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases. Distributions received from the associates would reduce
the carrying amount of the investments. Adjustments to the carrying amount may also be necessary for changes in
the Groups proportionate interest in the associate arising from changes in the associates equity that have not been
recognised in the associates profit or loss. Such changes include those arising from the revaluation of property, plant
and equipment and from foreign currency translation differences. The Groups share of those changes is recognised
directly in equity of the Group.
When the Groups share of losses exceeds its interest in the associate, the carrying amount of that interest is reduced
to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made
payments on its behalf.
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5.1.3 Associates (Continued)
The most recent available financial statements of the associates are used by the Group in applying the equity method.
Where the reporting period of the financial statements are not coterminous, the share of results is arrived at using
the latest financial statements for which the difference in reporting period is no more than three (3) months.
Adjustments are made for the effects of any significant transactions or events that occur between the intervening
periods.
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 off and the carrying amount of the investment at the date when the equity method is
discontinued is recognised in profit or loss.
When the interest of the Group 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
the 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.
5.1.4 Joint arrangements
A joint arrangement is an arrangement of which two or more parties have joint control. The parties are bound by a
contractual arrangement which gives two or more parties joint control of the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
A joint arrangement is either a joint operation or a joint venture.
A joint arrangement classified as joint operations when the Group and the Company have rights to the assets, and
obligations for the liabilities, relating to the arrangement. The Group and the Company recognise its share of assets,
liabilities, revenue and expenses of the joint arrangement in relation to its interest in a joint operation.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint operation that
is attributable to the other parties. The Group does not recognise its share of profits or losses from the joint operation
that result from the purchase of assets by the Group from the joint operation until it resells the assets to an
independent party.
A joint arrangement classified as joint venture when the Group and the Company have rights to the net assets of
the arrangement. In the Companys separate financial statements, an investment in a joint venture is stated at cost
less impairment losses, if any.
Any premium paid for an investment in a joint venture above the fair value of the share of the identifiable assets,
liabilities and contingent liabilities acquired of the Group is capitalised and included in the carrying amount of the
investment in joint venture. Where there is an objective evidence that the investment in a joint venture has been
impaired, the carrying amount of the investment is tested for impairment in accordance with MFRS 136 Impairment
of Assets as a single asset, by comparing its recoverable amount with its carrying amount.
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5.1.4 Joint arrangements (Continued)
Joint arrangements are accounted for in the consolidated financial statements using the equity method in accordance
with MFRS 128 Investment in Associates and Joint Ventures. The consolidated financial statements include the Groups
share of the income and expenses of the equity accounted joint arrangements, after adjustments to align the
accounting policies with those of the Group, from the date that joint control commences until the date that joint
control ceases.
5.1.5 Transactions eliminated on consolidation
Intragroup transactions and balances and the resulting unrealised gains are eliminated on consolidation. Unrealised
losses resulting from intragroup transactions are also eliminated unless cost cannot be recovered.
Unrealised profits arising on transactions between the Group and its associates and joint ventures, which are included
in the carrying amount of the related assets and liabilities are eliminated partially to the extent of the Groups
interests in the associates and joint ventures. Unrealised losses on such transactions are also eliminated partially unless
cost cannot be recovered.
5.2 Foreign Currency
5.2.1 Functional and presentation currency
The separate financial statements of each entity of the Group are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements
are presented in Ringgit Malaysia (RM), which is also the Companys functional currency.
5.2.2 Foreign currency translation and balances
Transactions in foreign currencies are converted into the relevant functional currency at rates of exchange ruling at
the transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting period are
translated into the relevant functional currency at rates of exchange ruling at that date. All exchange differences
arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary
assets and liabilities are included in profit or loss in the period in which they arise except for financial liability
designated as a hedge of the net investments in foreign operations to the extent that the hedge is effective. Non-
monetary items initially denominated in foreign currencies, which are carried at historical cost, are translated using
the historical rate as at the date of acquisition, and non-monetary items which are carried at fair value are translated
using the exchange rate that existed when the values were determined for presentation currency purposes.
5.2.3 Foreign operations
Financial statements of foreign operations are translated at the end of the reporting period exchange rates with
respect to their assets and liabilities, and at exchange rates at the dates of the transactions with respect to the
statement of profit or loss and other comprehensive income. All resulting translation differences are recognised as a
separate component of equity.
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5.2 Foreign Currency (Continued)
5.2.3 Foreign operations (Continued)
Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign
operation shall be recognised in profit or loss in the separate financial statements of the Company or the foreign
operation, as appropriate. In the consolidated financial statements, such exchange differences shall be recognised
initially as a separate component of equity and recognised in profit or loss upon disposal of the net investment. When
a foreign operation is partially disposed off or sold, exchange differences that were recorded in equity are recognised
in profit or loss as part of the gain or loss on disposal.
Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation
are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the end of
the reporting period.
5.3 Property, Plant and Equipment and Depreciation
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable
to the acquisition of the items. The cost of self-constructed assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the assets 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.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when
the cost is incurred and it is probable that future economic benefits associated with the cost will flow to the Group and
the cost of the item can be measured reliably. The carrying amount of parts that are replaced is derecognised. The cost of
the day-to-day servicing of property, plant and equipment are charged to profit or loss during the financial year in which
they are incurred.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the
item and which have different useful lives, is depreciated separately.
After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated
impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated.
Construction in progress is not depreciated until such time when the asset is available for use.
Bearer plants are living plant that are used in the production or supply of agriculture produce for more than one period and
have remote likelihood of being sold as agriculture produce, except for incidental scrap sales. The bearer plants that are
available for use are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes
plantation expenditure, which represents the total cost incurred from land clearing to the point of harvesting. Bearer plants
have an average life cycle of twenty-five (25) years with the first three (3) years as immature bearer plants and the remaining
years as mature bearer plants. The mature bearer plants are depreciated over its remaining useful lives of twenty-two (22)
years on a straight-line basis. The immature bearer plants are not depreciated until such time when it is available for use.
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5.3 Property, Plant and Equipment and Depreciation (Continued)
Other property, plant and equipment are depreciated on a straight-line basis so as to write off the cost of the assets over
their estimated useful lives. The principal depreciation periods and annual rates are as follows:
Long term leasehold land over the lease period of up to 99 years

Plantation infrastructures over the period of 25 years
Buildings and improvements 2% 10%
Plant and machinery 4% 20%
Motor vehicles 10% 20%
Furniture, fittings and equipment 5% 33%
At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for
impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write-down
is made if the carrying amount exceeds the recoverable amount.
The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that
the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the items of property, plant and equipment. The estimates of the
residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial
and production factors. The Group anticipates that the residual values of its property, plant and equipment will be
insignificant.
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying
amount is recognised in profit or loss.
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value
and reclassified as investment property. Any gain arising on remeasurement is recognised directly in equity. Any loss is
recognised immediately in profit or loss.
5.4 Biological Assets
Produce growing on bearer plants
Produce growing on bearer plants are measured at fair value less costs to sell. Any gains or losses arising from changes in
the fair value less costs to sell of produce growing on bearer plants are recognised in profit or loss. Fair value is determined
based on the present value of expected net cash flows from the produce growing on bearer plants. The expected net cash
flows are estimated using expected output method and the estimated market price of the produce growing on bearer plants.
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5.5 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalised
as part of the cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use
or sale are complete, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing cost is suspended
during extended periods in which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the
period less any investment income on the temporary investment of the borrowing.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
5.6 Leases
5.6.1 Finance leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental
to ownership. Assets acquired under finance leases are recognised initially at amounts equal to the fair value of the
leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of
the lease. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets
are capitalised as property, plant and equipment and the corresponding obligations, net of finance charges, are
included in borrowings. The property, plant and equipment capitalised are depreciated on the same basis as owned
assets as disclosed in Note 5.3 to the financial statements.
The minimum lease payments are allocated between finance charges and the reduction of the outstanding liability.
The finance charges are recognised in profit or loss over the period of the lease term so as to produce a constant
periodic rate of interest on the remaining finance lease obligations.
Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets.
The land and buildings elements of a lease are considered separately for the purpose of lease classification. All leases
that do not transfer substantially all the risks and the rewards are classified as operating leases other than the
following:
property held under operating leases that would otherwise meet the definition of an investment property is
classified as an investment property on a property-by-property basis and, if classified as investment property, is
accounted for as if held under a finance lease; and
land held for own use under an operating lease, the fair value of which cannot be measured separately from the
fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a
finance lease, unless the building is also clearly held under an operating lease.
5.6.2 Operating lease the Group as lessee
Leases of assets under which all the risks and rewards incidental to ownership are retained by the lessor are classified
as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over
the period of the lease.
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5.6 Leases (Continued)
5.6.3 Lease of land and building
The minimum lease payments including lump-sum upfront payments made to acquire the interest in the land and
building are allocated between the land and building elements in proportion to the relative fair values of the leasehold
interests in the land element and the buildings element at the inception of the lease.
The lump-sum upfront lease payments made represent prepaid lease payments and are amortised over the lease term
on a straight-line basis.
For leases of land and buildings in which the amount that would initially be recognised for the land element is
immaterial, the land and buildings are treated as a single unit for the purpose of lease classification and is accordingly
classified as a finance or operating lease. In such a case, the economic life of the building is regarded as the economic
life of the entire leased asset.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment.
5.7 Investment Properties
Investment properties are properties, which are held either to earn rental yields or for capital appreciation or for both and
are not occupied by the Group. Investment properties also include properties that are being constructed or developed for
future use as investment properties.
Investment properties are initially measure at cost, including transaction costs. Subsequent costs are included in the carrying
amount of the investment properties or recognised as a separate asset, as appropriate, only when the cost is incurred and
it is probable that the future economic benefits associated with the asset would flow to the Group and the cost of the
asset could be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-
day maintenance of investment properties are recognised in profit or loss as incurred.
After initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated
impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated.
Depreciation is calculated to write off the cost of the investment properties to their residual values on a straight-line basis
over their estimated useful lives. The principal depreciation periods for the investment properties is as follows:
Buildings 50 years
At the end of each reporting period, the carrying amount of an item of the investment properties are assessed for
impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down
is made if the carrying amount exceeds the recoverable amount.
Properties that are occupied by companies in the Group are accounted for as owner-occupied rather than as investment
properties in the consolidated financial statements.
Investment properties are derecognised when either they have been disposed off or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. The gain or loss arising from
the retirement or disposal of investment property is determined as the difference between the net disposal proceeds, if any,
and the carrying amount of the asset and is recognised in profit or loss in the period of the retirement or disposal.
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5.8 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined on a weighted average basis. Cost comprises the original cost of purchase plus the cost of bringing the
inventories to their intended location and condition. The cost of produce and finished goods includes the cost of raw
materials, direct labour and a proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
5.9 Cash and Cash Equivalents
Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid
investments and short term funds with original maturities of three (3) months or less, which are readily convertible to cash
and are subject to insignificant risk of changes in value.
5.10 Intangible Assets
5.10.1 Goodwill
Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost,
being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirers previously held equity interest (if any) in the entity over net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the
Groups interest in the fair value of the acquirees identifiable net assets exceeds the sum of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirers previously
held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not
amortised but instead tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying amount may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill arising on acquisition of an associate is the excess of cost of investment over the Groups share of the net
fair value of net assets of the associates identifiable assets and liabilities at the date of acquisition.
Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. The
excess of the Groups share of the net fair value of the associates identifiable assets and liabilities over the cost of
investment is included as income in the determination of the Groups share of the associates profit or loss in the
period in which the investment is acquired.
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5.10 Intangible Assets (Continued)
5.10.2 Other intangible assets
Other intangible assets are recognised only when the identifiability, control and future economic benefit probability
criteria are met.
Other intangible assets are initially measured at cost. The cost of intangible assets recognised in a business
combination is their fair values as at the date of acquisition.
After initial recognition, other intangible assets are carried at cost less accumulated amortisation and any accumulated
impairment losses.
The useful lives of other intangible assets are assessed to be either finite or indefinite.
Other intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful
lives. The estimated useful lives are as follows:
Brand names 12 years
Other intangible assets are assessed for any indication that the asset could be impaired. If any such indication exists,
the entity shall estimate the recoverable amount of the asset. The amortisation period and the amortisation method
for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. The
amortisation expense on intangible assets with finite lives is recognised in profit or loss.
The carrying amount of an item of intangible assets are derecognised on disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the
carrying amount is recognised in profit or loss.
5.11 Impairment of non-financial assets
The carrying amounts of assets, other than inventories, deferred tax assets, assets arising from employee benefits, investment
properties, non-current assets (or disposal groups) held for sale and financial assets (other than investments in subsidiaries,
associates and joint ventures) are reviewed at the end of each reporting period to determine whether there is any indication
of impairment. If such indication exists, impairment is measured by comparing the carrying value of the assets with their
recoverable amounts.
For goodwill, the recoverable amount is estimated at the end of each reporting period or more frequently when indicators
of impairment are identified.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless
the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable
amount is determined for the Cash-generating Unit (CGU) to which the asset belongs. Goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Groups CGUs, or groups of CGUs, that are expected to
benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned
to those units or groups of units.
Goodwill acquired in a business combination shall be tested for impairment as part of the impairment testing of the CGU
to which it relates. The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the
goodwill is monitored for internal management purposes and not larger than an operating segment determined in accordance
with MFRS 8 Operating Segments.
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5.11 Impairment of non-financial assets (Continued)
Recoverable amount is the higher of net selling price and value-in-use, which is measured by reference to discounted future
cash flows. In estimating value-in-use, the estimated future cash inflows and outflows to be derived from continuing use of
the asset and from its ultimate disposal 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 for which the future cash flow
estimates have not been adjusted.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The impairment
loss is charged to profit or loss unless it reverses a previous revaluation in which case it will be charged to equity.
Impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for an asset other than goodwill is
reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since
the last impairment loss was recognised.
The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this
amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had
no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than
goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated
as a revaluation increase.
5.12 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity
instrument of another enterprise.
A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or
another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with
another enterprise under conditions that are potentially favourable to the Group.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another
enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under
conditions that are potentially unfavourable to the Group.
Financial instruments are classified as assets, liabilities or equity in accordance with the substance of the contractual
arrangement. At initial recognition, a financial instrument is recognised at 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 issuance of the
financial instrument. Interest, dividends and losses and gains relating to a financial instrument or a component that is a
financial liability shall be recognised as income or expense in profit or loss. Distributions to holders of an equity instrument
are debited directly to equity, net of any related tax effect. Financial instruments are offset when the Group has a legally
enforceable right to offset and intends to settle on a net basis or to realise the asset and settle the liability simultaneously.
An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic
characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the
host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative,
and the hybrid instrument is not measured at fair value through profit or loss.
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5.12 Financial Instruments (Continued)
5.12.1 Financial assets
A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent
measurement:
i. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e.
financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding
and embedded) and financial assets that were specifically designated into this classification upon initial
recognition.
Subsequent to initial recognition, financial assets classified as fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in the fair value of financial assets classified as fair value
through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as fair
value through profit or loss exclude interest and dividend income. Such income is recognised separately in profit
or loss as components of other income or other operating losses.
However, derivatives that are linked to and must be settled by delivery of unquoted equity instruments that do
not have a quoted market price in an active market are recognised at cost.
Financial assets classified as financial assets at fair value through profit or loss include short term investment
and short term funds.
ii. Held-to-maturity investments
Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable
payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.
Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost
using the effective interest method. Gains or losses on financial assets classified as held-to-maturity are
recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation
process.
iii. Loans and receivables
Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised
cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables
are recognised in profit or loss when the financial assets are derecognised or impaired, and through the
amortisation process.
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5.12.1 Financial assets (Continued)
iv. Available-for-sale financial assets
Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as
available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets
at fair value through profit or loss.
Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any
gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are
recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains
and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously
recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using
the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity
instruments are recognised in profit or loss when the Groups right to receive payment is established.
A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of
consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or
loss that had been recognised directly in other comprehensive income shall be recognised in profit or loss.
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 marketplace convention. A regular
way purchase or sale of financial assets shall be recognised and derecognised, as applicable, using trade date
accounting.
5.12.2 Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. A financial liability is classified into the following two categories after initial recognition for the purpose
of subsequent measurement:
i. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading,
derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this
classification upon initial recognition.
Subsequent to initial recognition, financial liabilities classified as fair value through profit or loss are measured
at fair value. Any gains or losses arising from changes in the fair value of financial liabilities classified as fair
value through profit or loss are recognised in profit or loss.
ii. Other financial liabilities
Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither
held for trading nor initially designated as fair value through profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective
interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial
liabilities are derecognised and through the amortisation process.
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5.12.2 Financial liabilities (Continued)
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the
contract is discharged or is cancelled or expires. An exchange between an existing borrower and lender of debt
instruments with substantially different terms are accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing
financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability.
Any difference between the carrying amount of a financial liability extinguished or transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
All financial liabilities of the Group are measured at amortised cost except for financial liabilities at fair value through
profit or loss, which are held for trading (including derivatives) or designated at fair value through profit or loss upon
initial recognition.
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.
The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance
contracts as defined in MFRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised
insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
At the end of every reporting period, the Group shall assess whether its recognised insurance liabilities are adequate,
using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying
amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss.
Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it
is extinguished via a discharge, cancellation or expiration.
5.12.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company
after deducting all of its liabilities. Ordinary shares are classified as equity instruments.
Ordinary shares are classified as equity and are recorded at the their nominal value and proceeds in excess of the
nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium
are classified as equity. Interim dividends to shareholders are recognised in equity in the period in which they are
declared. Final dividends are recognised upon approval by shareholders in a general meeting.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity
transaction costs comprise only those incremental external costs directly attributable to the equity transaction, which
would otherwise have been avoided.
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5.12.3 Equity instruments (Continued)
The Group measures a liability to distribute non-cash 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 the end of 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.
When issued shares of the Company are repurchased, the consideration paid, including any attributable transaction
costs, is presented as a change in equity. Repurchased shares that have not been cancelled are classified as treasury
shares and presented as a deduction from equity. No gain or loss is recognised in profit or loss on the sale, re-
issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the
sales consideration and the carrying amount of the treasury shares is shown as a movement in equity.
5.12.4 Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into
and subsequently remeasured at their fair value. Any gains or losses arising from changes in the fair value of these
contracts except for derivative designated as a hedging instrument are recognised in profit or loss.
The Group designates certain derivatives as hedging instruments to hedge its net investment in foreign operations.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments that do not have a
quoted market price in an active market are recognised at cost.
5.12.5 Hedge of net investment in foreign operation
Hedge of net investment in foreign operation are hedges against the exposure to exchange rate fluctuations on the
net asset of the Groups foreign operations. Any gain or loss on the hedging instrument relating to the effective
portion of the hedge is recognised directly in the hedging reserve in equity via other comprehensive income while
any gain or loss relating to the ineffective portion is recognised directly in profit or loss. On disposal of the foreign
operation, the cumulative value of any such gains or losses recognised in other comprehensive income is reclassified
to profit or loss.
5.13 Impairment of Financial Assets
The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting
period.
i. Held-to-maturity investments and loans and receivables
The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the
receivable, and default or significant delay in payments to determine whether there is objective evidence that an
impairment loss on held-to-maturity investments and loans and receivables has occurred. Other objective evidence of
impairment include historical collection rates determined on an individual basis and observable changes in national or
local economic conditions that are directly correlated with the historical default rates of receivables.
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5.13 Impairment of Financial Assets (Continued)
i. Held-to-maturity investments and loans and receivables (Continued)
If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial
assets carrying amount and the present value of estimated future cash flows discounted at the financial assets original
effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of held-to-maturity investments is directly reduced by the impairment loss whilst the carrying
amount of loans and receivables are reduced through the use of an allowance account.
If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring
after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the
carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of impairment
reversed is recognised in profit or loss.
ii. Available-for-sale financial assets
The Group collectively considers factors such as significant or prolonged decline in fair value below cost, significant
financial difficulties of the issuer or obligor, and the disappearance of an active trading market as objective evidence
that available-for-sale financial assets are impaired.
If any such objective evidence exists, an amount comprising the difference between the financial assets cost (net of
any principal payment and amortisation) and current fair value, less any impairment loss previously recognised in profit
or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in subsequent periods.
Instead, any increase in fair value subsequent to the impairment loss is recognised in other comprehensive income.
Impairment losses on available-for-sale debt investments are subsequently reversed in profit or loss if the increase in the
fair value of the investment can be objectively related to an event occurring after the recognition of the impairment
loss in profit or loss.
5.14 Provisions
Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is
probable that an outflow of resources embodying economic benefits would be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Provisions are reviewed at the end of each reporting period and adjusted to reflect current best estimates. If it is no longer
probable that an outflow of resources embodying economic benefits would be required to settle the obligation, the provision
would be reversed.
Provisions for restructuring are recognised when the Group has approved a detailed formal restructuring plan, and the
restructuring either has commenced or has been announced publicly.
Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation
under the contract shall be recognised and measured as a provision.
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5.15 Contingent Liabilities and Contingent Assets
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is
not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured
reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise
contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured
initially at their fair values at the acquisition dates.
5.16 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and is recognised when it is probable that
the economic benefits associated with the transaction will flow to the entities and the amount of the revenue can be
measured reliably.
5.16.1 Commodities, other products and services
Revenue is recognised upon delivery of products and customer acceptance, if any, or performance of services, net
of discounts.
5.16.2 Dividend income
Dividend income is recognised when shareholders right to receive payment is established.
5.16.3 Rental income
Rental income from investment properties is recognised based on the accruals basis.
5.16.4 Interest income
Interest income is recognised in profit or loss as it accrues.
5.16.5 Management fees
Management fees are recognised when services are rendered.
161

5.17 Employee Benefits
5.17.1 Short term employee benefits
Wages, salaries, other monetary and non-monetary benefits are accrued in the period in which the associated services
are rendered by employees of the Group.
Short term accumulating compensated absences such as paid annual leave are recognised as an expense when
employees render services that increase their entitlement to future compensated absences. Short term non-
accumulating compensated absences such as sick leave are recognised when absences occur and they lapse if the
current periods entitlement is not used in full and do not entitle employees to a cash payment for unused
entitlement on leaving the Group.
Bonuses are recognised as an expense when there is a present, legal or constructive, obligation to make such
payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.
5.17.2 Retirement benefits
The Group has various retirement benefit plans in accordance with local conditions and practices in the countries in
which it operates. These benefit plans are either defined contribution or defined benefit plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity
(a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. A defined
benefit plan is a pension plan that defines the amount of pension benefit to be provided, usually as a function of
one or more factors such as age and years of service.
5.17.2.1 Defined contribution plans
The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident
fund. Contributions to defined contribution plans are recognised as an expense in the period in which the
employees render their services. Once the contributions have been paid, the Group has no further payment
obligations.
5.17.2.2 Defined benefit plans
The Group operates various defined benefit plans for eligible employees of the Group. The amount
recognised as a liability in respect of the defined benefit plan is the present value of the defined benefit
obligations at the end of the reporting period less the fair value of plan assets.
The Group determines the present value of the defined benefit obligations and the fair value of the plan
assets with sufficient regularity such that the amounts recognised in the financial statements do not differ
materially from the amounts that would be determined at the end of the reporting period.
The present value of the defined benefit obligations and the related current service cost and past service
cost are determined using the projected unit credit method by an actuary. The rate used to discount the
obligations is based on market yields at the end of the reporting period for high quality corporate bonds
or government bonds.
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5.17 Employee Benefits (Continued)
5.17.2 Retirement benefits (Continued)
5.17.2.2 Defined benefit plans (Continued)
Remeasurement of the net defined obligation which comprise actuarial gains and losses, the effect of the
asset ceiling, and the return on plan assets are recognised directly within equity in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
In measuring its defined benefit liability, the Group recognises past service cost as an expense on a straight-
line basis over the average period until the benefits become vested. To the extent that the benefits are
already vested immediately following the introduction of, or changes to, the defined benefit plan, the
Group recognises past service cost immediately in profit or loss.
Net interest is recognised in profit or loss, and is calculated by applying the discount rate used to measure
the defined benefit obligation at the beginning of the annual period to the balance of the net defined
benefit obligation, considering the effects of contributions and benefit payment during the reporting
period. Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised
immediately in profit or loss.
If the Group has an unconditional right to a refund during the life of the plan, it would recognise an asset
measured as the amount of the surplus at the reporting date that it has a right to receive a refund which
would be the fair value of the plan assets less the present value of the defined benefits obligation, less
any associated costs, such as taxes. If the amount of a refund is determined as the full amount or a
proportion of the surplus, rather than a fixed amount, the Group would make no adjustment for the time
value of money, even if the refund is realisable only at a future date.
If there is no minimum funding requirement for contributions relating to future service, the economic
benefit available as a reduction in future contributions is the present value of future service cost to the
entity for each period over the shorter of the expected life of the plan and the expected life of the entity.
The Group would assume that there would be no change to the benefits provided by a plan in the future
until the plan is amended and a stable workforce unless it is demonstrably committed at the reporting
dates to make a reduction in the number of employees covered by the plan.
5.17.3 Equity compensation benefits
The Group operates equity-settled share-based compensation plans, allowing certain employees of the Group to
acquire ordinary share of the Company at pre-determined prices. The compensation expense relating to share options
is now recognised within staff costs in profit or loss over the vesting periods of the grants with a corresponding
increase in equity.
The total amount to be recognised as compensation expense is determined by reference to the fair value of the
share options at the date of the grant and the number of share options to be vested by the vesting date. The fair
value of the share options is computed using a binomial options pricing model performed by an actuary.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to
become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in profit or
loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised
in capital reserve until the option is exercised, upon which it will be transferred to share premium, or until the option
expires, upon which it will be transferred directly to retained earnings.
163

5.17 Employee Benefits (Continued)
5.17.3 Equity compensation benefits (Continued)
The proceeds received net of any directly attributable transaction costs are credited to equity when the options are
exercised.
In the event that modification increases the fair value of the equity instruments granted, measured immediately
before and after the modification, the Group includes the incremental fair value granted in the measurement of the
amount recognised for services received as consideration for the equity instruments granted. The incremental fair
value granted is the difference between the fair value of the modified equity instrument and that of the original
equity instrument, both estimated as at the date of the modification.
If the modification occurs during the vesting period, the incremental fair value granted is included in the measurement
of the amount recognised for services received over the period from the modification date until the date when the
modified equity instruments vest, in addition to the amount based on the grant date fair value of the original equity
instruments, which is recognised over the remainder of the original vesting period. If the modification occurs after
vesting date, the incremental fair value granted is recognised immediately.
If the Group modifies the terms and conditions of the equity instruments granted in a manner that reduces the total
fair value of the share-based payment arrangement, or is not otherwise beneficial to the employees, the Group
continues to account for the revised services received as consideration for the equity instruments granted as if that
modification had not occurred, other than a cancellation of some or all of the equity instruments granted.
5.18 Income Taxes
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes, such as
withholding taxes, which are payable by foreign subsidiaries, associates or joint ventures on distributions to the Group and
Company, and real property gains taxes, if any.
Taxation in profit or loss comprises current and deferred tax.
5.18.1 Current tax
Current tax expenses are determined according to the tax laws of each jurisdiction in which the Group operates and
include all taxes based upon the taxable profits (including withholding taxes payable by foreign subsidiaries on
distribution of retained earnings to companies in the Group), and real property gains taxes payable on disposal of
properties.
5.18.2 Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying
amount of an asset or liability in the statement of financial position and its tax base.
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial
recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction, affects neither accounting profit nor taxable profit.
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5.18 Income Taxes (Continued)
5.18.2 Deferred tax (Continued)
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying
amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that
sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised,
the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient
taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.
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 income taxes relate to the same taxation authority on either:
i. the same taxable entity; or
ii. different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred
tax liabilities or assets are expected to be settled or recovered.
Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax
relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the
deferred tax will be charged or credited directly to equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on the announcement of tax rates and tax laws by the Government
which have the substantive effect of actual enactment by the end of the reporting period.
5.19 Non-current Assets (or Disposal Groups) Held For Sale
5.19.1 Non-current Assets (or Disposal Groups) Held For Sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset is available for immediate sale in its present condition subject only
to terms that are usual and customary. Management must be committed to a plan to sell the assets which are
expected to qualify for recognition as a completed sale within one year from the date of classification. However, an
extension of the period required to complete the sale does not preclude the assets (or disposal groups) from being
classified as held for sale if the delay is caused by events or circumstances beyond the control of the Group and
there is sufficient evidence that the Group remains committed to its plan to sell the assets (or disposal groups).
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities
of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the
Group retains a non-controlling interest in its former subsidiary after the sale or otherwise.
Immediately before classification as held for sale, the measurement of the non-current assets (or all the assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable MFRSs. Then, on initial classification
as held for sale, non-current assets or disposal groups (other than investment properties, deferred tax assets,
employee benefits assets, financial assets and inventories) are measured in accordance with MFRS 5 that is at the
lower of carrying amount and fair value less costs to sell. Any differences are included in profit or loss as an
impairment loss.
165

5.19 Non-current Assets (or Disposal Groups) Held For Sale (Continued)
5.19.1 Non-current Assets (or Disposal Groups) Held For Sale (Continued)
The Group measures a non-current asset (or disposal group) classified as held for distribution to owners at the lower
of its carrying amount and fair value less costs to distribute.
Non-current assets (or disposal groups) held for sale are classified as current assets (and current liabilities, in the case
of non-current liabilities included within disposal groups) on the face of the statement of financial position and are
stated at the lower of carrying amount immediately before initial classification and fair value less costs to sell and
are not depreciated. Any cumulative income or expense recognised directly in equity relating to the non-current asset
(or disposal group) classified as held for sale is presented separately.
If the Group has classified an asset (or disposal group) as held for sale but subsequently the criteria for classification
is no longer met, the entity shall cease to classify the asset (or disposal group) as held for sale. The Group shall
measure a non-current asset that ceases to be classified as held for sale (or ceases to be included in a disposal group
classified as held for sale) at the lower of:
i. its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any
depreciation, amortisation or revaluations that would have been recognised had the asset (or disposal group)
not been classified as held for sale; and
ii. its recoverable amount at the date of the subsequent decision not to sell.
5.19.2 Discontinued operations
A component of the Group is classified as a discontinued operation when the criteria to be classified as held for
sale have been met or it has been disposed of and such a component represents a separate major line of business
or geographical area of operations, is part of a single co-ordinated plan to dispose of a separate major line of
business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. When an
operation is classified as discontinued operation, the comparative statement of comprehensive income is re-presented
as if the operation had been discontinued from the beginning of the comparative period.
5.20 Earnings Per Share
The Group presents basic and diluted earnings per shares (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing profit or loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting profit and loss attributable to owners of the parent and weighted
average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares.
5.21 Operating Segments
Operating segments are defined as components of the Group that:
i. engage in business activities from which they may earn revenues and incur expenses (including revenues and expenses
relating to transactions with other components of the Group);
ii. whose operating results are regularly reviewed by the Groups chief operating decision maker (i.e. the Groups Chief
Executive Officer) in making decisions about resources to be allocated to the segment and assessing its performance;
and
iii. for which discrete financial information is available.
An operating segment may engage in business activities for which it has yet to earn revenues.
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5.21 Operating Segments (Continued)
The Group reports separately information about each operating segment that meets any of the following quantitative
thresholds:
i. The reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per
cent or more of the combined revenue, internal and external, of all operating segments.
ii. The absolute amount of reported profit or loss is ten (10) per cent or more, in absolute terms of the greater of:
the combined reported profit of all operating segments that did not report a loss; and
the combined reported loss of all operating segments that reported a loss.
iii. The assets are ten (10) per cent or more of the combined assets of all operating segments.
Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately
disclosed, if the management believes that information about the segment would be useful to users of the financial
statements.
Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Groups
revenue. Operating segments identified as reportable segments in the current financial year in accordance with the
quantitative thresholds would result in a restatement of prior years segment data for comparative purposes.
5.22 Fair value measurements
The 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 fair value measurement assumes that the transaction to sell the asset or transfer the liability
takes place either in the principal market or in the absence of a principal market, in the most advantageous market.
The Group measures the fair value of an asset or a liability by taking into account the characteristics of the asset or liability
if market participants would take these characteristics into account when pricing the asset or liability. The Group considers
the following characteristics when determining fair value:
i. the condition and location of the asset; and
ii. restrictions, if any, on the sale or use of the asset.
The fair value measurement for a non-financial asset takes into account the ability of the market participant to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The fair value of a financial or non-financial liability or an entitys own equity instrument assumes that:
i. a liability would remain outstanding and the market participant transferee would be required to fulfil the obligation.
The liability would not be settled with the counterparty or otherwise extinguished on the measurement date; and
ii. an entitys own equity instrument would remain outstanding and the market participant transferee would take on the
rights and responsibilities associated with the instrument. The instrument would not be cancelled or otherwise
extinguished on the measurement date.
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5.22 Fair value measurements (Continued)
The financial and non-financial assets and liabilities that are measured subsequent to initial recognition at fair value are
grouped into Level 1 to Level 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The classification of an item into the above levels is based on the lowest level of the inputs used in the fair value
measurement of the item. Transfers of items between levels are recognised in the period they occur.
6. REVENUE
Group Company
In RM million 2016 2015 2016 2015
Sales of plantation produce and related products 167.1 185.8 6.1 5.7
Resource-based manufacturing 11,551.3 11,337.8
Dividend income 3.0 2.5 804.8 861.0
Others 17.9 15.4 52.0
11,739.3 11,541.5 862.9 866.7
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ANNUAL REPORT 2016
7. OTHER OPERATING INCOME
Group Company
In RM million 2016 2015 2016 2015
Fair value gain on derivative financial instruments 200.2 31.8

Fair value gain on other investments 4.1 0.2 0.3
Fair value gain on short term funds 2.0 6.8
Foreign currency translation gain
Realised 37.2 122.5 32.5
Unrealised 26.0 198.4 42.1 61.3
Gain on disposal of investment properties 0.3
Gain on disposal of land from compulsory acquisition 39.0 1.6
Gain on disposal of property, plant and equipment 0.7 0.8 0.1
Gain on liquidation of a subsidiary 0.1
Realised fair value gain on derivative financial instruments 186.8 189.8
Waiver of debt by a subsidiary 76.2
Others 55.5 42.4 7.5 5.4
512.5 632.1 82.4 144.6
8. OTHER OPERATING EXPENSES
Group Company
In RM million 2016 2015 2016 2015
Depreciation of investment properties 0.1

Depreciation of property, plant and equipment 136.3 105.8 0.7 0.5
Fair value loss on derivative financial instruments 79.6 142.6
Fair value loss on other investments 6.9 12.0 0.3
Fair value loss on short term funds 0.1 3.1
Foreign currency translation loss
Realised 167.8 78.8 8.1 249.5
Unrealised 87.3 224.9 62.7 132.7
Loss on disposal of property, plant and equipment 0.5 0.3 0.2
Loss on repayment on term loan 8.1 6.0
Property, plant and equipment written off 18.3 3.1
Realised fair value loss on derivative financial instruments 263.0 279.9
Rental expenses 10.0 13.9
Research and development expenses 6.4 4.9
Others 24.3 16.4 6.7 6.7
813.2 902.2 78.4 395.7
169
9. INTEREST INCOME
Group Company
In RM million 2016 2015 2016 2015
Short term funds 36.7 79.5

Short term deposits 13.9 13.4 1.1 0.9
Subsidiaries 44.3 65.3
Others 2.7 2.7
53.3 92.9 48.1 66.2
10. FINANCE COSTS
Group Company
In RM million 2016 2015 2016 2015
Interest expenses
Term loans 44.8 96.4 46.4
Guaranteed Notes 62.4
Notes 99.5 93.3
Short term loans 5.8 6.3
Subsidiaries 93.0 121.1
Associates 4.3 5.7
Others 3.1 6.4 0.8 1.9
157.5 270.5 93.8 169.4

Profit payment on Islamic financing 61.3 11.3 46.1 7.4
Total finance costs 218.8 281.8 139.9 176.8

Less: Interest capitalised (Note 15) (0.2) (0.2)
Net finance costs 218.6 281.6 139.9 176.8
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ANNUAL REPORT 2016
11. PROFIT BEFORE TAXATION
Group Company
In RM million 2016 2015 2016 2015
a) Other than those disclosed in Note 7 and Note 8, profit

before taxation has been arrived at after charging:
Amortisation of prepaid lease payments (Note 16) 0.2
Amortisation of intangible assets (Note 18.2) 1.6
Auditors remuneration
BDO and affiliates
Statutory audit 1.0 1.1 0.1 0.1
Non-statutory audit
tax compliance and advisory services 0.3 0.3
Member firms of BDO International
Statutory audit 1.2 1.2
Other auditors
Statutory audit 0.8 0.5
Depreciation of property, plant and equipment (Note 15) 457.8 439.7 1.4 1.2
denominated borrowings 318.5 735.3 112.7 87.5
Hire of plant and machinery 8.9 9.5
Inventories written down to net realisable values 18.6 10.7
Property, plant and equipment written off 24.5 3.3
Lease of land 2.2 1.6
Rental of premises 5.0 2.9
Research and development expenses 18.2 13.6
and crediting:
Reversal of inventories written down to net realisable values 6.7 4.3
Gross dividends received from:
other quoted investments in Malaysia 2.6 1.7 0.1 0.1
other unquoted investments in Malaysia 0.4 0.8
unquoted subsidiaries 804.7 857.9
unquoted associates 3.0
Impairment losses on receivables written back 0.3 1.2
Rental income from:
investment properties 0.4 0.4
plant and machinery 0.1
storage tank 7.4 7.2
others 1.5 1.6
Cost of inventories of the Group recognised as an expense during the financial year amounted to RM4,451.8 million
(2015 RM4,548.4 million).
171
11. PROFIT BEFORE TAXATION (Continued)

b) Employee information
The employee benefits costs are as follows:
Group Company
In RM million 2016 2015 2016 2015
Wages, salaries and others 837.2 809.8 27.9 12.5

Post employment benefits 28.1 25.9 3.2 1.5
Retirement benefits expenses (Note 34.1) 32.1 13.8
897.4 849.5 31.1 14.0
12. TAXATION
Group Company
In RM million 2016 2015 2016 2015
Current year
Malaysian income taxation 268.0 307.5 2.8 7.2
Foreign taxation 51.6 27.1
Deferred taxation (Note 23) 7.2 (38.8) 0.2 (0.1)
326.8 295.8 3.0 7.1

Prior years
Malaysian income taxation (3.5) (19.8) (17.6)
Foreign taxation (0.3)
Deferred taxation (Note 23) (3.8) (14.1)
(7.3) (34.2) (17.6)
319.5 261.6 3.0 (10.5)
172
ANNUAL REPORT 2016
12. TAXATION (Continued)

A numerical reconciliation between average effective tax rate and applicable tax rate of the Group and of the Company is as
follows:
Group Company
% 2016 2015 2016 2015
Applicable tax rate 24.00 25.00 24.00 25.00
Tax effects in respect of:

Non allowable expenses 13.85 130.17 12.56 37.83
Non-taxable income (0.82) (47.24) (5.53) (7.16)
Revenue expenses capitalised (0.06)
Tax exempt income (1.08) (3.99) (30.89) (54.23)
Tax incentives and allowances (0.55) (1.78)
Utilisation of previously unrecognised tax losses and capital
allowances (0.01) (3.44)
Deferred tax assets not recognised 1.04 4.22
Different tax rates in foreign jurisdiction 0.01 1.55
Share of post-tax results of associates (2.48) (8.27)
Share of post-tax results of joint ventures 0.13 0.46
Effect of changes in tax rates on deferred tax (1.47)
Other items (0.25) (1.66) 0.34 0.35
33.84 93.49 0.48 1.79

Over provision in prior years (0.76) (10.81) (4.44)
33.08 82.68 0.48 (2.65)
The amount of tax savings arising from the utilisation of brought forward unutilised tax losses of the Group amounted to
approximately RM0.1 million (2015 RM10.9 million).
Subject to agreement with the tax authorities, certain subsidiaries of the Group have unutilised tax losses of approximately
RM106.9 million (2015 RM63.0 million), for which the related tax effects have not been recognised in the financial statements.
These losses are available to be carried forward for set off against future chargeable income when these subsidiaries derive future
assessable income of a nature and amount sufficient for the tax losses to be utilised.
Malaysian income tax is calculated at the statutory rate of 24% (2015 25%) of the estimated assessable income for the year.
Deferred tax is calculated on temporary differences between the tax base of assets and liabilities and their carrying amounts in
the financial statements.
173
13. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share
The basic earnings per ordinary share of the Group is calculated based on the profit for the financial year attributable to owners
of the parent divided by the weighted average number of ordinary shares in issue during the financial year, after taking into
consideration of treasury shares held by the Company.
Group
2016 2015
In RM million
Profit for the financial year attributable to owners of the parent 629.7 51.9
In million
Weighted average number of ordinary shares of RM0.10 each in issue after deducting the
treasury shares 6,303.5 6,357.7
In sen
Basic earnings per ordinary share 9.99 0.82
Diluted earnings per ordinary share
The diluted earnings per ordinary share of the Group is calculated based on the profit for the financial year attributable to owners
of the parent divided by the adjusted weighted average number of ordinary shares after taking into consideration all potential
dilutive ordinary shares.
Group
2016 2015
In RM million
Profit for the financial year attributable to owners of the parent 629.7 51.9
The adjusted weighted average number of ordinary shares for the computation of diluted
earnings per ordinary share is arrived at as follows:
In million
Weighted average number of ordinary shares in issue after deducting the treasury shares 6,303.5 6,357.7
Adjustments for share option granted to executives of the Group 2.9 6.1
Adjusted weighted average number of ordinary shares for diluted earnings per ordinary share 6,306.4 6,363.8
In sen
Diluted earnings per ordinary share 9.99 0.82
174
ANNUAL REPORT 2016
14. DIVIDENDS
Group and Company
In RM million 2016 2015
Second interim single tier dividend in respect of financial year ended 30 June 2015 declared
and paid of 4.5 sen per ordinary share 283.6
First interim single tier dividend in respect of financial year ended 30 June 2016 declared and
paid of 3.5 sen per ordinary share 220.5
Second interim single tier dividend in respect of financial year ended 30 June 2014 declared
and paid of 12.0 sen per ordinary share 763.0
First interim single tier dividend in respect of financial year ended 30 June 2015 declared and
paid of 4.5 sen per ordinary share 286.3
504.1 1,049.3
15. PROPERTY, PLANT AND EQUIPMENT

Group
2016
At beginning Acquisition of Foreign currency Asset of At end of
of financial oleochemicals translation disposal group financial
In RM million year Additions business Disposals differences Write-offs Reclassifications held for sale year
At cost
Freehold land 1,923.3 4.0 12.4 4.0 1,943.7
Leasehold land 3,868.2 14.0 (0.3) (5.0) 3,876.9
Bearer plants 2,574.2 109.5 16.5 (78.8) 2,621.4
Plantation infrastructures 160.9 28.1 0.3 189.3
Buildings and improvements 1,546.1 29.9 30.6 (2.5) 28.8 (2.7) 80.2 (12.0) 1,698.4
Plant and machinery 3,325.4 134.5 145.1 (5.2) 59.0 (11.9) 126.6 (0.8) 3,772.7
Motor vehicles 69.5 9.9 (6.1) 0.1 (1.4) 0.5 72.5
Furniture, fittings and equipment 191.4 18.3 3.0 (3.8) 3.1 (3.2) 2.0 210.8
Construction in progress 255.4 118.7 3.6 (4.5) 7.9 (209.3) 171.8
13,914.4 466.9 194.7 (22.1) 119.4 (98.0) (17.8) 14,557.5
175
15. PROPERTY, PLANT AND EQUIPMENT (Continued)

Group
2016
At beginning Current year Foreign currency Asset of
of financial depreciation translation disposal group At end of
In RM million year charge Disposals differences Write-offs held for sale financial year
Accumulated depreciation
Leasehold land 94.8 53.7 0.3 (0.6) 148.2
Bearer plants 1,006.6 145.2 0.5 (59.0) 1,093.3
Plantation infrastructures 38.7 9.5 48.2
Buildings and improvements 632.9 55.7 (2.5) 12.1 (1.8) (2.9) 693.5
Plant and machinery 2,178.8 175.6 (4.9) 43.1 (9.3) (0.1) 2,383.2
Motor vehicles 49.5 6.8 (5.4) 0.2 (1.4) 49.7
Furniture, fittings and equipment 147.6 11.3 (3.7) 3.1 (2.0) 156.3
4,148.9 457.8 (16.5) 59.3 (73.5) (3.6) 4,572.4
2015
At beginning Foreign currency
of financial translation At end of
In RM million year Additions Disposals differences Write-offs Reclassifications financial year
At cost
Freehold land 1,925.7 3.2 (4.4) (1.2) 1,923.3
Leasehold land 3,801.7 67.6 (1.2) 0.1 3,868.2
Bearer plants 2,479.8 133.6 (2.2) 8.3 (45.3) 2,574.2
Buildings and improvements 1,506.2 30.6 (0.2) 0.4 (2.5) 11.6 1,546.1
Plant and machinery 3,154.6 107.3 (10.1) 30.8 (9.4) 52.2 3,325.4
Motor vehicles 65.4 7.9 (2.0) 0.1 (2.4) 0.5 69.5
Furniture, fittings and equipment 181.3 11.9 (1.1) (2.6) 1.9 191.4
Construction in progress 148.0 174.0 0.7 (1.1) (66.2) 255.4
13,411.0 548.7 (20.1) 38.1 (63.3) 13,914.4
176
ANNUAL REPORT 2016

Group
2015
At beginning Current year Foreign currency
of financial depreciation translation At end of
In RM million year charge Disposals differences Write-offs financial year
Leasehold land 30.5 65.0 (0.7) 94.8
Bearer plants 903.4 149.3 (1.0) (45.1) 1,006.6
Buildings and improvements 582.9 50.7 (0.1) 0.9 (1.5) 632.9
Plant and machinery 2,029.9 149.7 (8.8) 16.6 (8.6) 2,178.8
Motor vehicles 47.8 5.6 (1.7) (2.2) 49.5
Furniture, fittings and equipment 140.3 11.2 (1.3) (2.6) 147.6
3,765.3 439.7 (10.6) 14.5 (60.0) 4,148.9
Company
2016
At beginning
of financial At end of
In RM million year Additions Disposals financial year
At cost
Freehold land 71.9 71.9
Bearer plants 20.0 0.7 20.7
Motor vehicles 3.0 1.3 (1.7) 2.6
Furniture, fittings and equipment 1.2 0.5 1.7
96.1 2.5 (1.7) 96.9
At beginning Current year

of financial depreciation At end of
In RM million year charge Disposals financial year
6.7 1.4 (1.0) 7.1
177

Company
2015
At beginning
of financial At end of
In RM million year Additions Disposals financial year
At cost
Freehold land 72.3 (0.4) 71.9
Bearer plants 19.0 1.1 (0.1) 20.0
Furniture, fittings and equipment 1.2 1.2
95.1 1.9 (0.9) 96.1
At beginning Current year

of financial depreciation At end of
In RM million year charge Disposals financial year
Furniture, fittings and equipment 1.2 1.2
5.9 1.2 (0.4) 6.7
Group Company
In RM million 2016 2015 2016 2015
Carrying amount
Freehold land 1,943.7 1,923.3 71.9 71.9
Leasehold land 3,728.7 3,773.4
Bearer plants 1,528.1 1,567.6 15.7 15.8
Plantation infrastructures 141.1 122.2
Buildings and improvements 1,004.9 913.2
Plant and machinery 1,389.5 1,146.6
Motor vehicles 22.8 20.0 1.8 1.7
Construction in progress 171.8 255.4
9,985.1 9,765.5 89.8 89.4
178
ANNUAL REPORT 2016

Included in the Groups bearer plants is an amount of interest expense capitalised during the financial year amounting to RM0.2
million (2015 RM0.2 million).
Interest is capitalised at 4.70% (2015 4.50%) per annum.
During the financial year, the Group and the Company made the following cash payments to purchase property, plant and
equipment:
Group Company
In RM million 2016 2015 2016 2015
Additions to property, plant and equipment 466.9 548.7 2.5 1.9

Interest capitalised (0.2) (0.2)
Financed by finance lease arrangement (8.1)
Cash payments on purchase of property, plant and equipment 458.6 548.5 2.5 1.9
16. PREPAID LEASE PAYMENTS
Long term Short term

leasehold leasehold
In RM million land land Total
Group
2016
At cost
At beginning of financial year 3.8 6.3 10.1
Additions 13.8 1.0 14.8
Exchange differences (0.7) 0.5 (0.2)
At end of financial year 16.9 7.8 24.7
Accumulated amortisation
At beginning of financial year (3.0) (0.4) (3.4)
Current year amortisation (0.2) (0.2)
At end of financial year (3.2) (0.4) (3.6)
Carrying amount
179
16. PREPAID LEASE PAYMENTS (Continued)
Long term Short term

leasehold leasehold
In RM million land land Total
Group
2015
At cost
At beginning of financial year 2.9 4.5 7.4
Additions 0.9 1.6 2.5
Exchange differences 0.2 0.2
At beginning/at end of financial year (3.0) (0.4) (3.4)
Carrying amount
17. INVESTMENT PROPERTIES
Group
Freehold land and buildings

At cost
At beginning of financial year 7.0 8.3
Disposal (1.3)
At end of financial year 7.0 7.0
Current year depreciation charge (0.1)
At end of financial year (0.1)
Carrying amount
180
ANNUAL REPORT 2016
18. INTANGIBLE ASSETS
Group
Goodwill (Note 18.1) 462.7 458.4

Other intangible assets (Note 18.2) 59.0
521.7 458.4
18.1 Goodwill
Group

Acquisition of oleochemicals business (Note 36) 4.5
Exchange differences (0.2)
The goodwill recognised on the acquisitions was attributable mainly to the skills and technical talents of the acquired
businesss work force and the synergies expected to be achieved from integrating the company into the Groups existing
business.
For the purpose of impairment testing, goodwill is allocated to the Groups Cash-generating Units (CGUs) identified
according to the operating segments as follows:
Group
Plantation 128.5 128.5

Resource-based manufacturing 334.2 329.9
462.7 458.4
181
18. INTANGIBLE ASSETS (Continued)

18.1 Goodwill (Continued)
Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount of
the CGUs based on value-in-use. Value-in-use is determined by discounting the future cash flows to be generated from the
continuing use of the CGUs based on the following assumptions:
i. Cash flows are projected based on the managements most recent three-year business plan and extrapolated to a period
of ten (10) years (the average economic useful lives of the assets) for all companies with the exception of plantation
companies. For plantation companies, cash flows are projected for a period of twenty-five (25) years (the average life
cycle of oil palm trees).
ii. Discount rates used for cash flows discounting purpose is the Groups weighted average cost of capital. The average
discount rate applied for cash flow projections is 7.06% (2015 7.52%).
iii. Growth rate for the plantation segment are determined based on the managements estimate of commodity prices,
palm yields, oil extraction rates and also cost of productions whilst growth rates of other segments are determined
based on the industry trends and past performances of the segments.
iv. Profit margins are projected based on the industry trends and historical profit margin achieved.
The management is not aware of any reasonably possible change in the above key assumptions that would cause the
carrying amounts of the CGUs to materially exceed their recoverable amounts.
18.2 Other intangible assets
Group
In RM million 2016
Brand names
At cost
At end of financial year 60.7
Current year amortisation (1.6)
At end of financial year (1.7)
Carrying amount
At end of financial year 59.0
Other intangible assets of the Group comprise of brand names relate to WITEPSOL, MIGLYOL and SOFTISAN which stand
for proven quality and unique performance over decades.
182
ANNUAL REPORT 2016
19. SUBSIDIARIES
19.1 Investments in subsidiaries
Company
At cost
Unquoted shares in Malaysia 6,690.9 6,690.3
Unquoted shares outside Malaysia 1,077.2 999.7
7,768.1 7,690.0
Less: Accumulated impairment losses (4.3) (4.3)
7,763.8 7,685.7
Details of the subsidiaries are set out in Note 45 to the financial statements.
2016
During the financial year, the Company:
i. subscribed for an additional 143,507,003 redeemable preference shares of HK$1.00 each in IOI Edible Oils (HK) Limited
at par value with cash payments of HKD143.5 million (equivalent to RM77.5 million).
ii. acquired 1,050,000 ordinary shares of RM1.00 each in IOI Global Services Sdn Bhd (formerly known as IOI Corporate
Services Sdn Bhd) with cash payments of RM1.2 million. The acquisition has no material impact on the Groups financial
statements.
iii. redeemed 550,000 redeemable preference shares of RM0.10 each plus a premium of RM0.90 each in Morisem
Consolidated Sdn Bhd with total redemption amount of RM0.6 million.
2015
During the previous financial year, the Company subscribed for shares in the following subsidiaries:
Company Type of shares No. of shares Amount

RM million
IOI Bio-Energy Sdn Bhd Ordinary share of RM1.00 each at par value 2,342,000 2.3
Redeemable non-cumulative preference shares of

RM0.10 each at a premium of RM0.90 per share 22,500,000 22.5
Morisem Consolidated Sdn Bhd Ordinary share of RM1.00 each at par value 3,500,000 3.5
Redeemable non-cumulative preference shares of

IOI Lipid Enzymtec Sdn Bhd Redeemable non-cumulative preference shares of

IOI Edible Oils (HK) Limited Redeemable preference shares of HK$1.00 each at
par value 90,713,870 41.5
The above subscriptions were settled by cash and had no material impact on the Groups financial statements.
183
19. SUBSIDIARIES (Continued)

19.2 Amounts due from and to subsidiaries
The amounts due from and to subsidiaries represent outstanding amounts arising from inter-company sales and purchases,
advances and payments made on behalf of or by subsidiaries. These amounts are unsecured and bear interest at rates
ranging from 0% to 5.50% (2015 0% to 5.25%) per annum.
The non-current amounts due to subsidiaries are payable on a back-to-back basis with the corresponding borrowings of the
Group. The current amounts due from and to subsidiaries are payable upon demand in cash and cash equivalents.
19.3 Different financial year end of subsidiaries
Due to local requirements, five (5) indirect subsidiaries of the Company, IOI (Xiamen) Edible Oils Co., Ltd, Loders Croklaan
(Shanghai) Trading Co. Ltd, Tianjin Palmco Oil And Fats Co. Ltd, Loders Croklaan Latin America Comercio De Gorduras e
Oleos Vegetais Ltda and Loders Croklaan Burkina Faso S.A.R.L. adopt a 31 December financial year end, which does not
coincide with that of the Company.
19.4 Material non-controlling interests
The Group does not have any subsidiary that has non-controlling interests which is individually material to the Group as at
30 June 2016.
20. ASSOCIATES
20.1 Investments in associates
Group Company
In RM million 2016 2015 2016 2015
At cost
Shares quoted outside Malaysia 434.0 423.3
Unquoted shares in Malaysia 82.4 82.4 20.4 20.4
516.4 505.7 20.4 20.4

Share of post acquisition results and reserves 421.1 307.0
937.5 812.7 20.4 20.4
At Market Value
Shares quoted outside Malaysia 1,269.6 1,531.3
Details of the associates are set out in Note 45 to the financial statements.
184
ANNUAL REPORT 2016
20. ASSOCIATES (Continued)

20.2 Material associates and summary of financial information
The Group regards Bumitama Agri Ltd (Bumitama) as a material associate. The summary of financial information of
Bumitama for the year ended 31 March 2016 is summarised as follows.
Bumitama
Assets and liabilities

Current assets 745.0 902.6
Non-current assets 3,682.1 3,087.0
Total assets 4,427.1 3,989.6
Current liabilities 716.9 1,055.7

Non-current liabilities 1,796.0 1,421.4
Total liabilities (2,512.9) (2,477.1)
Net assets 1,914.2 1,512.5

Non-controlling interests (170.0) (137.2)
Net assets attributable to shareholders of Bumitama 1,744.2 1,375.3
Results
Revenue 1,666.5 1,623.3

Other comprehensive income/(loss) 36.6 (66.7)
The information above represents the amounts in the financial statements of Bumitama and do not reflect the Groups
proportionate share in those amounts.
The reconciliation of the above summarised financial information to the carrying amount of the Groups interest in Bumitama
is as follows:
Net assets attributable to shareholders of Bumitama 1,744.2 1,375.3
Proportion of ownership interest held by the Group 31.71% 31.41%

Groups share of net assets 553.1 431.9
Goodwill 168.7 168.7
Carrying value of Groups interest in Bumitama 721.8 600.6
Dividends received from Bumitama during the financial year amounted to RM8.0 million (2015 RM22.2 million).
185
20. ASSOCIATES (Continued)

20.2 Material associates and summary of financial information (Continued)
The summarised financial information based on the Groups interest in the individually immaterial associates in aggregate is
as follows:
Group

Other comprehensive income 7.5
Carrying amount 215.7 212.1
20.3 Amounts due from and to associates
Amounts due from and to associates represent outstanding amounts arising from agency income, purchases, advances and
payments made on behalf of or by associates, which are unsecured, bear interest at rates ranging from 0% to 5.50%
(2015 0% to 5.25%) per annum and payable upon demand in cash and cash equivalents.
21. JOINT VENTURES

21.1 Interests in joint ventures
Group Company
In RM million 2016 2015 2016 2015
Unquoted shares, at cost 18.0 18.0 18.0 18.0

Share of post acquisition results and reserves (12.0) (6.8)
6.0 11.2 18.0 18.0

Amounts due from joint ventures 25.7 24.0 25.7 24.0
31.7 35.2 43.7 42.0
Details of the joint ventures are set out in Note 45 to the financial statements.
Amounts due from joint ventures represent outstanding amounts arising from advances and payments made on behalf of
joint ventures, which are unsecured, bear interest at 3.50% (2015 3.50%) per annum and are not repayable within the
next twelve (12) months.
186
ANNUAL REPORT 2016
21. JOINT VENTURES (Continued)

21.1 Interests in joint ventures (Continued)
The summarised financial information based on the Groups interest in the individually immaterial joint ventures in aggregate
is as follows:
Group
Loss for the financial year (5.2) (5.8)
Total comprehensive loss (5.2) (5.8)
Carrying amount 31.7 35.2
21.2 Capital commitment of joint ventures
Group
Authorised capital expenditure of joint ventures

Property, plant and equipment
Non contracted 0.2
22. DERIVATIVE FINANCIAL INSTRUMENTS
Fair value
Contract/
Notional amount Financial Financial
In RM million Net (short)/long Assets Liabilities
Group
2016
Forward foreign exchange contracts (1,047.3) 56.7 16.6
Commodity forward contracts 284.7 65.5 67.7
Commodity futures 52.2 8.5 9.2
Cross currency swap contracts 1,624.6 250.5
Interest rate swap contracts 1,502.7 14.3
Total derivative financial instruments 2,416.9 381.2 107.8
Less: Current portion (232.9) (94.5)
Non-current portion 148.3 13.3
187
22. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
Fair value
Contract/
In RM million Net (short)/long Assets Liabilities
Group
2015
Forward foreign exchange contracts (1,651.8) 14.1 105.2
Commodity forward contracts (34.1) 25.5 11.2
Commodity futures 52.1 1.5 7.8
Cross currency swap contracts 1,024.4 138.7
Less: Current portion (41.1) (123.8)
Fair value
Contract/
In RM million Net long Assets Liabilities
Company
2016
Cross currency swap contracts 401.8 2.2
Less: Current portion
2015
Total derivative financial instruments 1,698.5 26.8
Less: Current portion
Non-current portion 26.8
188
ANNUAL REPORT 2016
22. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

i. Forward foreign exchange contracts
Forward foreign exchange contracts were entered into as hedges for sales and purchases denominated in foreign currencies
and to limit the exposure to potential changes in foreign exchange rates with respect to the Groups foreign currencies
denominated financial assets and financial liabilities.
ii. Commodity forward contracts, swap contracts and futures
The commodities forward contracts, swap contracts and futures were entered into with the objective of managing and
hedging the respective exposure of the Groups plantation segment and resource-based manufacturing segment to adverse
price movements in vegetable oil commodities. The fair values of these components have been determined based on
published market prices or quoted prices from reputable financial institutions.
iii. Cross currency swap contracts
The cross currency swap contracts of the Group are mainly used to hedge against its exposures of borrowings, except for a
cross currency swap contract which swapped a fixed rate of USD100.0 million liability to a fixed rate of EUR90.9 million
liability (USDEUR CCS) to serve as a net investment hedge against the Groups Euro denominated assets. The fair value of
the USDEUR CCS as at end of the financial year is RM2.2 million.
iv. Interest rate swap contracts
Interest rate swap contracts are used to hedge the Groups exposures to movements in interest rates.
All the above derivatives were initially recognised at fair value on the date the derivative contracts were entered into. The
derivatives except for the USDEUR CCS were subsequently remeasured at fair value through profit or loss, where the resulting
gains or losses from the remeasurement were recognised in the profit or loss. The changes in fair value of the USDEUR CCS were
recognised in the other comprehensive income pursuant to hedge accounting.
During the financial year, the Group and the Company recognised total fair value gain of RM45.9 million (2015 loss of RM50.8
million) and fair value gain of RM13.5 million (2015 gain of RM35.7 million) respectively arising from fair value changes of
derivative liabilities. The methods and assumptions applied in determining the fair values of derivatives are disclosed in Note 41.6
to the financial statements.
189
23. DEFERRED TAXATION
Group Company
In RM million 2016 2015 2016 2015
At beginning of financial year 1,291.9 1,344.0 3.7 3.8

Recognised in profit or loss (Note 12)
Current year 7.2 (38.8) 0.2 (0.1)
Prior years (3.8) (14.1)
3.4 (52.9) 0.2 (0.1)

Recognised in other comprehensive income (1.3) (1.7)
Acquisition of oleochemicals business (Note 36) (6.5)
Foreign currency translation differences 8.7 2.5
At end of financial year 1,296.2 1,291.9 3.9 3.7
Presented after appropriate offsetting as follows:
Group Company
In RM million 2016 2015 2016 2015
Deferred tax liabilities 1,334.2 1,344.9 3.9 3.7

Deferred tax assets (38.0) (53.0)
1,296.2 1,291.9 3.9 3.7
The movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:
Deferred tax liabilities
Group Company
In RM million 2016 2015 2016 2015
At beginning of financial year 1,344.9 1,394.4 3.7 3.8

Recognised in profit or loss
Temporary differences on property, plant and equipment (23.3) (44.3) 0.1 (0.1)
Temporary differences on fair valuation of biological assets (1.1) (2.3) 0.1
Temporary differences on prepaid lease rental 0.1 (0.3)
Other temporary differences 5.8 (3.8)
(18.5) (53.3) 0.2 (0.1)

At end of financial year 1,334.2 1,344.9 3.9 3.7
190
ANNUAL REPORT 2016
23. DEFERRED TAXATION (Continued)

Deferred tax assets
Group

Recognised in profit or loss
Temporary differences on unutilised tax losses (16.4) (8.2)
Temporary differences on unabsorbed capital allowances 1.2 (2.7)
Retirement benefit obligation 0.2
Unrealised profits on inventories (6.9) 2.6
Other deductible temporary differences 8.4
(21.9) (0.4)
Recognised in other comprehensive income 1.3 1.7
Foreign currency translation differences (0.9) 1.3
The components of deferred tax liabilities and assets at the end of the financial year comprise the tax effects of:
Deferred tax liabilities
Group Company
In RM million 2016 2015 2016 2015
Temporary differences on property, plant and equipment 1,314.9 1,327.1 3.8 3.7
Temporary differences on prepaid lease rental 5.3 4.9
Temporary differences on fair valuation of biological assets 9.7 10.8 0.1
Other taxable temporary differences 4.3 2.1
1,334.2 1,344.9 3.9 3.7
191
23. DEFERRED TAXATION (Continued)

Deferred tax assets
Group
Unutilised tax losses 16.4 28.3

Unabsorbed capital allowances 6.8 9.8
Retirement benefit obligation 9.2 2.4
Unrealised profits on inventories 5.6 12.5
38.0 53.0
The amount of temporary differences for which no deferred tax asset has been recognised in the statement of financial position
is as follow:
Group
Unutilised tax losses 106.9 63.0
Deferred tax asset of certain subsidiaries has not been recognised in respect of this item as it is not probable that taxable income
of the subsidiaries will be available against which the deductible temporary differences can be utilised.
24. INVENTORIES
Group
At cost
Plantation produce 26.9 51.9
Raw materials and consumables 1,205.8 1,046.2
Nursery inventories 23.0 26.6
Finished goods 415.4 510.1
Semi-finished goods 304.5 253.3
Others 2.3 3.3
1,977.9 1,891.4
At net realisable value
Raw materials and consumables 7.0 0.7
Semi-finished goods 30.4
Finished goods 299.5 160.6
306.5 191.7
2,284.4 2,083.1
192
ANNUAL REPORT 2016
25. BIOLOGICAL ASSETS
Group Company
In RM million 2016 2015 2016 2015
At fair value
Fresh fruit bunches
At beginning of financial year 45.2 51.2 0.2 0.2
Changes in fair value less costs to sell (4.4) (6.0)
At end of financial year 40.8 45.2 0.2 0.2
The biological assets of the Group comprise of fresh fruit bunches (FFB) prior to harvest. The valuation model adopted by the
Group considers the present value of the net cash flows expected to be generated from the sale of FFB. To arrive at the fair
value, the management has considered the oil content of the unripe FFB and derived the assumption that the net cash flows to
be generated from FFB prior to more than 15 days to harvest is negligible, therefore quantity of unripe FFB on bearer plant of
up to 15 days prior to harvest was used for valuation purpose. The value of the unripe FFB was estimated to be approximately
80% of the ripe FFB, based on actual oil extraction rate and kernel extraction rate of the unripe FFB from the laboratory tests.
Costs to sell include harvesting cost, transport and windfall profit levy.
During the financial year, the Group and the Company harvested approximately 3,145,317 tonnes (2015 3,542,222 tonnes) and
12,473 tonnes (2015 12,057 tonnes) of FFB respectively.
As at 30 June 2016, none of the biological assets are pledged as securities for liabilities.
The fair value measurement of the Groups biological assets are categorised within Level 3 of the fair value hierarchy. If the FFB
selling price changes by 10%, profit or loss for the Group and the Company would have equally increased or decreased by
approximately RM4.8 million (2015 RM5.5 million) and RM0.1 million (2015 RM0.1 million) respectively.
There were no transfers between all three (3) levels of the fair value hierarchy during the financial year.
26. TRADE AND OTHER RECEIVABLES
Group Company
In RM million 2016 2015 2016 2015
Trade receivables (Note 26.1) 926.7 865.0

Other receivables, deposits and prepayments (Note 26.2) 264.5 197.4 20.3 15.4
1,191.2 1,062.4 20.3 15.4
193
26. TRADE AND OTHER RECEIVABLES (Continued)

26.1 Trade receivables
Group
Trade receivables 940.3 875.9

Less: Impairment losses (13.6) (10.9)
926.7 865.0
i. The normal trade credit terms granted by the Group range from 7 to 120 days. They are recognised at their original
invoiced amounts, which represent their fair values on initial recognition.
ii. The reconciliation of movements in the impairment losses of trade receivables is as follows:
Group

Charge for the financial year 2.9 0.6
Written back (0.3) (1.2)
26.2 Other receivables, deposits and prepayments
Group Company
In RM million 2016 2015 2016 2015
Other receivables 205.6 129.9 0.3

Less: Impairment losses (0.4) (0.4)
205.2 129.5 0.3

Deposits 29.8 21.5 20.2 15.0
Prepayments 29.5 46.4 0.1 0.1
264.5 197.4 20.3 15.4
194
ANNUAL REPORT 2016
27. OTHER INVESTMENTS
Group Company
In RM million 2016 2015 2016 2015
At fair value through profit or loss

In Malaysia
Quoted shares 95.1 98.1 4.1 4.2
Unquoted shares 7.4 6.7
Outside Malaysia
Quoted shares 1.7 2.4
104.2 107.2 4.1 4.2
28. SHORT TERM FUNDS
Group
At fair value through profit or loss

Investments in fixed income trust funds in Malaysia 1,120.1 1,088.9
Investments in fixed income trust funds in Malaysia represent investments in highly liquid money market instruments, which are
readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.
29. DEPOSITS WITH FINANCIAL INSTITUTIONS
Group Company
In RM million 2016 2015 2016 2015
Deposits with licensed banks 248.7 221.4 128.6 17.0
195
30. ASSETS OF DISPOSAL GROUP HELD FOR SALE

On 7 March 2016, IOI Pan-Century Edible Oils Sdn Bhd, an indirect wholly owned subsidiary of the Company has entered into
an agreement to dispose off a parcel of leasehold land, buildings and improvements, and plant and machinery. These disposal are
expected to be completed by October 2016.
As at 30 June 2016, the assets of disposal group held for sale are as follows:
Group
2016
Accumulated Carrying
In RM million Cost depreciation amount
Property, plant and equipment

Leasehold land 5.0 (0.6) 4.4
Buildings and improvements 12.0 (2.9) 9.1
Plant and machinery 0.8 (0.1) 0.7
17.8 (3.6) 14.2
31. SHARE CAPITAL
2016 2015
No. of shares Amount No. of shares Amount

RM million RM million
Group and Company

Authorised
Ordinary shares of RM0.10 each 7,500,000,000 750.0 7,500,000,000 750.0
Issued and fully paid-up

Ordinary shares of RM0.10 each
At beginning of financial year 6,459,295,395 645.9 6,450,377,395 645.0
Issue of shares arising from the exercise of ESOS
At RM2.03 per ordinary share 1,260,800 0.2 2,612,100 0.3
At RM3.49 per ordinary share 1,260,000 0.1 3,553,400 0.3
At RM4.17 per ordinary share 2,752,500 0.3
At end of financial year 6,461,816,195 646.2 6,459,295,395 645.9
i. The owners of the parent are entitled to receive dividends as declared from time to time and are entitled to one (1) vote
per ordinary share at meetings of the Company. All ordinary shares rank equally with regard to the Companys residual assets.
ii. Of the total 6,461,816,195 (2015 6,459,295,395) issued and fully paid-up ordinary shares of RM0.10 each, 173,609,200
shares (2015 137,932,900) are held as treasury shares as disclosed in Note 32.2 to the financial statements. Accordingly,
the number of ordinary shares in issue and fully paid-up after deducting treasury shares as at end of the financial year is
6,288,206,995 (2015 6,321,362,495) ordinary shares of RM0.10 each.
196
ANNUAL REPORT 2016
31. SHARE CAPITAL (Continued)

31.1 Executive Share Option Scheme
The Executive Share Option Scheme (ESOS) which was established on 23 November 2005 for the benefit of the executives
and full time Executive Directors of the Group expired on 23 November 2015.
The movements of the options over the unissued ordinary shares of RM0.10 each in the Company granted under the ESOS
during the financial year prior to expiry were as follows:
Outstanding
as at Outstanding Exercisable
beginning as at as at
Option price of the end of the end of the
RM Date of offer financial year Exercised Lapsed* financial year financial year
2016
2.03 12 January 2006 6,276,500 (1,260,800) (5,015,700)
3.49 2 April 2007 8,598,600 (1,260,000) (7,338,600)
4.17 6 July 2010 1,418,000 (1,418,000)
16,293,100 (2,520,800) (13,772,300)
Weighted average exercise price (RM) 2.99 2.76 3.03
2015
2.03 12 January 2006 12,643,000 (2,612,100) (3,754,400) 6,276,500 6,276,500
3.49 2 April 2007 13,092,800 (3,553,400) (940,800) 8,598,600 8,598,600
4.17 6 July 2010 6,906,400 (2,752,500) (2,735,900) 1,418,000 1,418,000
32,642,200 (8,918,000) (7,431,100) 16,293,100 16,293,100
Weighted average exercise price (RM) 3.07 3.27 3.00 2.99 2.99
* Due to resignation/retirement of employees and expiry of ESOS on 23 November 2015.
31.1.1 Share options outstanding as at end of the previous financial year
No. of Weighted average

Option price share options exercise price
RM RM Exercisable period
2015
2.03 6,276,500 2.03 12 January 2007 23 November 2015
3.49 8,598,600 3.49 2 April 2008 23 November 2015
4.17 1,418,000 4.17 6 July 2011 23 November 2015
16,293,100 2.99
197

31.1 Executive Share Option Scheme (Continued)
31.1.2 Share options exercised during the financial year
No. of share options exercised Weighted average

Option price share price
RM 2.03 3.49 RM
2016
August 2015 284,600 341,400 3.99
November 2015 264,900 308,600 4.31
December 2015 711,300 610,000 4.44
1,260,800 1,260,000 4.34
No. of share options exercised Weighted average

Option price share price
RM 2.03 3.49 4.17 RM
2015
July 2014 1,039,500 1,855,500 2,222,000 5.00
September 2014 653,300 346,800 258,000 4.81
October 2014 154,300 226,000 9,000 4.88
January 2015 236,100 384,200 137,000 4.74
February 2015 38,200 122,000 35,000 4.72
May 2015 325,200 389,000 91,500 3.99
June 2015 165,500 229,900 4.04
2,612,100 3,553,400 2,752,500 4.44
In view of the expiry of the ESOS, the Companys shareholders approved the establishment of a new executive share option
scheme (New ESOS) of up to ten percent (10%) of the issued and paid-up share capital of the Company (excluding
treasury shares) at an extraordinary general meeting held on 27 October 2015. Following that, the New ESOS was established
on 28 January 2016.
The salient features of the New ESOS are as follows:
a) Maximum number of shares available under the New ESOS
The maximum number of new ordinary shares in the Company (IOI Shares) which may be granted under the New
ESOS shall not in aggregate exceed ten percent (10%) of the issued and paid-up ordinary share capital (excluding
treasury shares) of the Company at any point of time throughout the duration of the New ESOS.
198
ANNUAL REPORT 2016

b) Eligibility
Employee of the Group
Subject to the discretion of the committee appointed by the Board to administer the New ESOS (ESOS Committee),
any employee of the Group shall be eligible to participate in the New ESOS if, as at the date of the Offer (Offer
Date), the employee:
ii. falls under the grade of M1 and above;
iii. is confirmed in writing as a full time employee and/or has been in employment of the Group (excluding subsidiaries
which are dormant and/or incorporated outside Malaysia) for a period of at least three (3) years of continuous
service prior to and up to the Offer Date; and
iv. fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee from time
to time.
Director of the Group
Subject to the discretion of ESOS Committee, any Director of the Group shall be eligible to participate in the New ESOS
if, as at Offer Date, the Director:
ii. is an Executive Director who has been involved in the management of the Group (excluding subsidiaries which are
dormant and/or incorporated outside Malaysia) for a period of at least three (3) years of continuous service prior
to and up to the Offer Date;
iii. the specific allocation of the new IOI Share to such Executive Director under the New ESOS must have been
approved by the Shareholders at a general meeting and he/she is not prohibited or disallowed by the relevant
authorities or laws from participating in the New ESOS; and
iv. fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee from time
to time.
(The eligible employees (including Executive Director) above are hereinafter referred to as Eligible Person(s))
c) Maximum allowable allotment and basis of allocation
Subject to any adjustment which may be made under the By-Laws, the maximum number of new IOI Shares that may
be offered under the New ESOS shall be at the sole and absolute discretion of the ESOS Committee after taking into
consideration, amongst others, the Eligible Persons position, performance, length of service and seniority in the Group
respectively, or such other matters which the ESOS Committee may in its discretion deem fit subject to the following:
i. the Eligible Person does not participate in the deliberation or discussion in respect of their own allocation; and
ii. the number of new IOI Shares allotted to any Eligible Person, who either singularly or collectively through person
connected with him/her (as defined under the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa
Securities)), holds twenty percent (20%) or more of the issued and paid-up capital of the Company, shall not
exceed ten percent (10%) of the total number of new IOI Shares to be issued under the New ESOS, provided
always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements
or any other requirements of the relevant authorities and as amended from time to time.
199

d) Exercise price
The exercise price shall be based on the higher of the following:
i. the five (5)-day volume weighted average market price of IOI Shares, as quoted on Bursa Securities, immediately
preceding the Offer Date, with a discount of not more than ten percent (10%) or such other percentage of
discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the
duration of the New ESOS; or
ii. the par value of the IOI Shares of RM0.10 each;
and subject to any adjustments stipulated in the By-Laws, where applicable.
e) Duration and termination of the New ESOS
i. The New ESOS came into force on 28 January 2016 (Effective Date) and shall be for a duration of five (5) years.
ii. The New ESOS may be terminated by the ESOS Committee at any time before the expiry of its duration provided
that the Company makes an announcement immediately to Bursa Securities. The announcement shall include:
the effective date of termination;
the number of options exercised or shares vested, if applicable; and
the reasons and justification for termination.
iii. Approval or consent of the shareholders of the Company by way of a resolution in a general meeting and written
consent of grantees who have yet to exercise their options and/or vest the unvested shares (if applicable) are not
required to effect a termination of the New ESOS.
f) Exercise of option
Options are exercisable commencing from the Offer Date and expiring at the end of five (5) years from the Effective
Date or in the event of a termination of the New ESOS, the date of termination of the New ESOS.
g) Ranking of the new IOI Shares
The new IOI Shares to be allotted and issued upon any exercise of the option shall, upon allotment and issuance, rank
pari passu in all respects with the existing issued and paid-up IOI Shares, save and except that the holders of the new
IOI Shares shall not be entitled to any dividends, rights, allotments and/or any other distributions that may be declared,
made or paid to the shareholders of the Company, where the record date precedes the date of allotment of the said
shares. The option shall not carry any right to vote at a general meeting of the Company.
200
ANNUAL REPORT 2016
32. RESERVES
Group Company
In RM million 2016 2015 2016 2015
Share premium 73.3 64.4 73.3 64.4

Capital reserves (Note 32.1) 72.0 105.1 64.3 97.4
Treasury shares, at cost (Note 32.2) (763.4) (620.2) (763.4) (620.2)
Foreign currency translation reserve (Note 32.3) (82.5) (162.5)
Other reserves (Note 32.4) (1.7) (3.8)
Hedging reserve (Note 32.5) (0.7)
(703.0) (617.0) (625.8) (458.4)
The movements in reserves are shown in the statements of changes in equity.
32.1 Capital reserves
Group Company
In RM million 2016 2015 2016 2015
Net accretion in Groups share of net assets arising from

shares issued by certain subsidiaries to non-controlling
shareholders 7.7 7.7
Capital redemption reserves arising from the cancellation
of treasury shares 64.3 64.3 64.3 64.3
Share option reserves 33.1 33.1
72.0 105.1 64.3 97.4
32.2 Treasury shares
The shareholders of the Company, by an ordinary resolution passed at an extraordinary general meeting held on 18November
1999, approved the Companys plan to repurchase up to 10% of the issued and paid-up share capital of the Company
(Share Buy Back). The authority granted by the shareholders was subsequently renewed during subsequent Annual General
Meetings of the Company, including the last meeting held on 27 October 2015.
The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that
the Share Buy Back can be applied in the best interests of the Company and its shareholders. The Company has the right
to cancel, resell these shares and/or distribute these shares as dividends at a later date. As treasury shares, the rights attached
to voting, dividends and participation in other distribution is suspended.
201
32. RESERVES (Continued)

32.2 Treasury shares (Continued)
During the financial year, the Company repurchased its issued ordinary shares of RM0.10 each from the open market as
follows:
Purchase Price*
No. of Shares Cost Highest Lowest Average

RM million RM RM RM
2016
At beginning of financial year 137,932,900 620.2 5.69 3.98 4.50
Purchased during the financial year
July 2015 700,000 2.9 4.15 4.15 4.15
August 2015 13,180,100 52.1 4.04 3.89 3.96
September 2015 8,985,900 35.2 4.07 3.84 3.92
November 2015 50,000 0.2 4.18 4.18 4.18
May 2016 11,473,100 47.4 4.21 4.10 4.13
June 2016 1,287,200 5.4 4.15 4.15 4.15
35,676,300 143.2 4.21 3.84 4.01
At end of financial year 173,609,200 763.4 5.69 3.84 4.40
2015
At beginning of financial year 94,954,700 441.0 5.69 4.14 4.64
Purchased during the financial year
November 2014 1,130,000 5.1 4.62 4.54 4.56
April 2015 12,158,300 53.5 4.41 4.37 4.40
May 2015 15,525,400 63.8 4.30 3.99 4.11
June 2015 14,164,500 56.8 4.10 3.98 4.01
42,978,200 179.2 4.62 3.98 4.17
At end of financial year 137,932,900 620.2 5.69 3.98 4.50
* Purchase price includes stamp duty, brokerage and clearing fees.
The transactions under Share Buy Back were financed by internally generated funds. The repurchased ordinary shares of the
Company were held as treasury shares in accordance with the provision of Section 67A of the Companies Act, 1965 in
Malaysia.
32.3 Foreign currency translation reserve
The foreign currency translation reserve is used to record foreign currency exchange differences arising from the translation
of the financial statements of foreign operations whose functional currencies are different from that of the Groups
presentation currency. It is also used to record the exchange differences arising from monetary items, which form part of
the Groups net investment in foreign operations, where the monetary item is denominated in either the functional currency
of the reporting entity or the foreign operation.
202
ANNUAL REPORT 2016
32. RESERVES (Continued)

32.4 Other reserves
The other reserves arising from the Groups share of associates fair value reserve.
32.5 Hedging reserve
The hedging reserve arising from changes in the fair value relating to the effective portion on the hedge of net investments
in foreign operations.
33. BORROWINGS
Group Company
In RM million 2016 2015 2016 2015
Unsecured
Term loans (Note 33.1) 1,282.3 1,267.7
Less: Portion due within 12 months included under
short term borrowings (461.3)
821.0 1,267.7
Islamic financing facilities (Note 33.2) 2,781.7 2,318.9 1,806.3 1,696.1

short term borrowings (1,104.2) (441.6)
1,677.5 2,318.9 1,364.7 1,696.1

Notes (Note 33.5) 2,396.5 2,249.3
Finance lease obligation (Note 33.8) 8.1

short term borrowings (0.2)
7.9
4,902.9 5,835.9 1,364.7 1,696.1
Current liabilities
Unsecured
Term loans portion due within 12 months (Note 33.1) 461.3
Islamic financing facilities portion due within 12
months (Note 33.2) 1,104.2 441.6
Trade financing (Note 33.6) 555.0 548.3
Islamic revolving credit financing facilities (Note 33.7) 357.6 264.2 357.6 264.2
Finance lease obligation portion due within 12
months (Note 33.8) 0.2
2,478.3 812.5 799.2 264.2
Total borrowings 7,381.2 6,648.4 2,163.9 1,960.3
203
33. BORROWINGS (Continued)

33.1 Term loans
The term loans of the Group include:
Unsecured
i. 30-year JPY15.0 billion fixed-rate loan due 2037 that was drawn down on 22 January 2007 by a wholly-owned
subsidiary incorporated in Labuan. The outstanding amount as at the end of the financial year is JPY15.0 billion (2015
JPY15.0 billion). This fixed-rate loan bears interest at 4.325% per annum and is repayable in full on 22 January 2037.
ii. 30-year JPY6.0 billion fixed-rate loan due 2038 that was drawn down on 5 February 2008 by a wholly-owned subsidiary
incorporated in Labuan. The outstanding amount as at end of the financial year is JPY6.0 billion (2015 JPY6.0 billion).
This fixed-rate loan bears interest at 4.50% per annum and is repayable in full on 5 February 2038.
iii. USD330.0 million term loan that was drawn down by a wholly-owned subsidiary. This floating-rate term loan bears
interest at 0.82% plus London Interbank Offered Rate (LIBOR) per annum and is repayable in five (5) years from the
first drawn down date in December 2011. Part of the term loan amounted to USD165.0 million was refinanced by
entering into Islamic financing facility of USD165.0 million during the previous financial year and USD50.0 million of
the term loan was repaid during the financial year. The outstanding amount as at end of the financial year is USD115.0
million (2015 USD165.0 million).
33.2 Islamic financing facilities
The Islamic financing facilities of the Group include:
Unsecured
i. Commodity Murabahah Financing Facility of USD165.0 million that was drawn down on 16 March 2015 by a wholly-
owned subsidiary. The outstanding amount as at end of the financial year is USD165.0 million (2015 USD165.0
million). The profit rate of this Islamic financing facility is 0.70% plus LIBOR and is repayable in full on 13 December
2016.
ii. Commodity Murabahah Financing Facility of USD120.0 million that was drawn down on 5 May 2015 by the Company.
The outstanding amount as at end of the financial year is USD120.0 million (2015 USD120.0 million). The profit rate
of this Islamic financing facility is 0.75% plus LIBOR and is repayable in full on 12 January 2018.
iii. Commodity Murabahah Financing Facility of USD330.0 million that was drawn down on 5 May 2015 by the Company.
The outstanding amount as at end of the financial year is USD330.0 million (2015 USD330.0 million). The profit rate
of this Islamic financing facility is 0.88% plus LIBOR and is repayable in three (3) annual instalment of USD110.0 million
each commencing 24 months from the first drawn date.
iv. Commodity Murabahah Financing Facility of EUR70.0 million that was drawn down on 21 January 2016 by a wholly-
owned subsidiary. The outstanding amount as at end of the financial year is EUR70.0 million. The profit rate of this
Islamic financing facility is 1.20% plus Euro Interbank Offered Rate and is repayable in two (2) annual instalment of
EUR35.0 million each commencing 48 months from the first drawn date.
204
ANNUAL REPORT 2016

33.3 Repayment schedule
The term loans and the Islamic financing facilities are repayable by instalments of varying amounts or upon maturity over
the following periods:
Group Company
In RM million 2016 2015 2016 2015
Less than 1 year 1,565.5 441.6

1 2 years 923.0 1,658.4 923.0 414.8
2 3 years 441.7 866.5 441.7 866.5
3 4 years 156.4 414.8 414.8
4 5 years 156.4
More than 5 years 821.0 646.9
4,064.0 3,586.6 1,806.3 1,696.1
33.4 USD500 Million 5.25% Guaranteed Notes due 2015 (Guaranteed Notes)
On 16 March 2005, the Companys wholly-owned subsidiary, IOI Ventures (L) Berhad, a company incorporated in the Federal
Territory of Labuan under the Labuan Companies Act, 1990, issued a 10-year USD500 million Guaranteed Notes at an issue
price of 99.294% (the Guaranteed Notes). The Guaranteed Notes were listed on the Singapore Exchange Securities Trading
Limited and the Labuan International Financial Exchange. The Guaranteed Notes carried an interest rate of 5.25% per annum
payable semi-annually in arrears on 16 March and 16 September commencing 16 March 2005 and has matured on 16 March
2015. The Guaranteed Notes were unconditionally and irrevocably guaranteed by the Company.
At initial recognition, the Guaranteed Notes were recognised in the Groups statement of financial position as follows:
In RM million Group
Principal amount 1,900.0

Discount on issue price (13.4)
Net proceeds received 1,886.6
On 16 March 2015, the Group redeemed and settled in full the outstanding Guaranteed Notes of USD488.9 million (being
principal of USD476.4 million and interest of USD12.5 million). Following from the redemption, the Guaranteed Notes ceased
to be quoted on the Singapore Exchange Securities Trading Limited and the Labuan International Financial Exchange Inc.
205

33.4 USD500 Million 5.25% Guaranteed Notes due 2015 (Guaranteed Notes) (Continued)
The movements of the Guaranteed Notes during the previous financial year were as follows:
Group
In RM million 2015
At beginning of financial year 1,528.2

Redemption (1,756.4)
Foreign currency translation differences 227.2
Interest expense 1.0
At end of financial year
33.5 USD600 Million 4.375% Guaranteed Notes due 2022 (Notes)
On 15 May 2012, the Companys wholly-owned subsidiary, IOI Investment (L) Berhad (IOI Investment), a company
incorporated in the Federal Territory of Labuan under the Labuan Companies Act, 1990, established a Euro Medium Term
Note Programme, with an initial programme size of USD1.5 billion (EMTN Programme).
Subsequently, on 27 June 2012, IOI Investment issued USD600 million 4.375% Notes due 2022 at an issue price of
99.288% (Notes) under the EMTN Programme. The Notes are listed on the Singapore Exchange Securities Trading Limited.
The Notes carry an interest rate of 4.375% per annum payable semi-annually in arrears on 27 June and 27 December
commencing 27December 2012 and will mature on 27 June 2022. The Notes are unconditionally and irrevocably guaranteed
by the Company.
At initial recognition, the Notes were recognised in the Groups statement of financial position as follows:
In RM million Group
Principal amount 1,912.2

Discount on issue price (13.7)
Net proceeds received 1,898.5

Transaction cost (3.8)
1,894.7
206
ANNUAL REPORT 2016

33.5 USD600 Million 4.375% Guaranteed Notes due 2022 (Notes) (Continued)
The movements of the Notes during the financial year are as follows:
Group
At beginning of financial year 2,249.3 1,911.1

Interest expense 2.0 1.7
At end of financial year 2,396.5 2,249.3
33.6 Trade financing
Unsecured
Trade financing utilised during the financial year is subject to interest rates ranging from 0.155% to 4.190% (2015
0.500% to 4.260%) per annum.
33.7 Islamic revolving credit financing facilities
Unsecured
The Islamic revolving credit financing facilities (Commodity Murabahah Revolving Credit) is subject to profit rate ranging from
0.780% to 1.220% (2015 0.775% to 0.780%) per annum.
33.8 Finance lease obligation
The minimum lease payments under the finance lease obligation as at the end of the financial year are as follows:
Group
In RM million 2016
Future minimum lease payments

not later than 1 year 0.2
later than 1 year but not later than 5 years 0.6
later than 5 years 11.4
12.2
Less: Unexpired finance charges (4.1)
Present value of minimum lease payments 8.1
207

33.8 Finance lease obligation (Continued)
The present value of minimum lease payments as at the end of the financial year is recognised as follows:
Group
In RM million 2016
Current liabilities
not later than 1 year 0.2
later than 1 year and not later than 5 years 0.6
later than 5 years 7.3
7.9
8.1
Included in the Groups finance lease obligation is a leased land which covers a net area of 23,767 square meters used for
production purposes with unlimited lease term. The lease arrangement does not impose any restrictions concerning dividends
or additional debt.
The finance lease obligation is subject to fixed interest rate of 2.00% per annum.
34. OTHER LONG TERM LIABILITIES
Group
Retirement benefits (Note 34.1) 64.3 29.4
34.1 Retirement benefits
Group
Present value of funded obligations 659.8 516.8

Fair value of plan assets (606.9) (509.5)
52.9 7.3
Present value of unfunded obligations 11.4 22.1
Recognised liability for defined benefit obligations 64.3 29.4
208
ANNUAL REPORT 2016
34. OTHER LONG TERM LIABILITIES (Continued)

34.1 Retirement benefits (Continued)
Certain subsidiaries of the Company operate various defined benefit plans. The plans of the Malaysian subsidiaries are
operated on an unfunded basis whilst certain foreign subsidiaries are operating on funded defined benefit plans. The benefits
payable on retirement are generally based on the length of service and average salary of the eligible employees.
The last actuarial valuations for the unfunded and funded plans were carried out on 30 June 2015 and 30 June 2016
respectively.
Movements in the net liability recognised in the statements of financial position:
Group
2016
Present value Present value

of funded of unfunded Fair value of
In RM million obligations obligations plan assets Total
At beginning of financial year 516.8 22.1 (509.5) 29.4

Acquisition of oleochemicals business (Note 36) 28.0 28.0
Contributions to funded plans (26.7) (26.7)
Benefits paid (4.2) (1.6) 5.0 (0.8)
Expense recognised in profit or loss (Note 11(b)) 44.2 2.8 (14.9) 32.1
Actuarial loss/(gain) recognised in other
comprehensive income 73.0 (39.3) (31.0) 2.7
Foreign currency translation differences 30.0 (0.6) (29.8) (0.4)
At end of financial year 659.8 11.4 (606.9) 64.3
Group
2015
Present value Present value

of funded of unfunded Fair value of
In RM million obligations obligations plan assets Total
At beginning of financial year 516.8 21.7 (502.2) 36.3

Contributions to funded plans (36.4) (36.4)
Benefits paid (12.3) (1.7) 11.9 (2.1)
Expense recognised in profit or loss (Note 11(b)) (43.1) 2.1 54.8 13.8
Actuarial loss/(gain) recognised in other
comprehensive income 58.5 (41.6) 16.9
Foreign currency translation differences (3.1) 4.0 0.9
At end of financial year 516.8 22.1 (509.5) 29.4
209
34. OTHER LONG TERM LIABILITIES (Continued)

34.1 Retirement benefits (Continued)
Expense recognised in profit or loss:
Group
Current service cost 31.4 25.2

Interest cost 1.0 2.0
Expected return on plan assets 3.0
Past service cost (0.3) (19.9)
Other costs 3.5
32.1 13.8
A summary of the combined allocation of the plan assets by major asset classes is shown below:
Group
% 2016 2015
Equity instruments 44.1 38.2

Debt instruments 55.9 57.1
Other 4.7
100.0 100.0
Liability for defined benefit obligations

Principal actuarial assumptions used at the reporting period (expressed as weighted averages):
Group
% 2016 2015
Discount rate 1.6 2.9
Sensitivity analysis
The impact on changes of each significant actuarial assumption as at the end of the reporting period is as follows:
Group
Discount rate increase by 0.1% (16.7) (12.3)

Discount rate decrease by 0.1% 18.4 13.3
210
ANNUAL REPORT 2016
35. TRADE AND OTHER PAYABLES
Group Company
In RM million 2016 2015 2016 2015
Trade payables (Note 35.1) 621.7 311.8

Other payables and accruals (Note 35.2) 507.8 521.6 32.9 25.5
1,129.5 833.4 32.9 25.5
35.1 Trade payables
Credit terms of trade payables vary from 14 to 60 days from date of invoice.
35.2 Other payables and accruals
Group Company
In RM million 2016 2015 2016 2015
Other payables 254.4 293.3 0.7 1.1

Customer deposits and other deposits 3.6 6.5
Accruals 249.8 221.8 32.2 24.4
507.8 521.6 32.9 25.5
36. ACQUISITION OF OLEOCHEMICALS BUSINESS

IOI Oleo GmbH
On 15 February 2016 (date of acquisition), IOI Oleo GmbH (formerly known as Alstersee 217. V V GmbH)(IOI Oleo), an
indirect wholly owned subsidiary of the Company acquired the entire oleochemicals business of Cremer Oleo GmbH & Co KG
(Cremer Oleo) in Germany. The total consideration transferred at the date of acquisition amounted to EUR91.7 million
(equivalent to RM423.1 million).
The analysis of the above acquisition is summarised as follow:
Fair value of the identifiable assets acquired and liabilities assumed at the date of acquisition
In RM million Group
Property, plant and equipment 194.7

Intangible assets 62.7
Deferred tax assets 6.5
Inventories 137.1
Trade and other receivables 56.3
Trade and other payables (10.7)
Retirement benefits (28.0)
Total identifiable net assets 418.6
211
36. ACQUISITION OF OLEOCHEMICALS BUSINESS (Continued)

IOI Oleo GmbH (Continued)
Net cash outflow arising from the acquisition
In RM million Group
Total identifiable net assets 418.6

Goodwill arising from acquisition (Note 18.1) 4.5
423.1
Less: Amount due to Cremer Oleo (10.7)
Net cash outflow on acquisition, net of cash and cash equivalents acquired 412.4
The above acquisition has no material effect on the financial results of the Group for the current financial year as IOI Oleos
contribution to the Groups revenue and Groups profit since acquisition date is not significant.
37. LIQUIDATION OF SUBSIDIARY

Jasasinar Multimedia Sdn Bhd
A subsidiary of the Company, Jasasinar Multimedia Sdn Bhd was liquidated during the previous financial year and the analysis of
the liquidation was summarised as follows:
In RM million Group
Group share of net liabilities

Capital reserve arose from bonus issue in prior years 0.1
Net proceeds from liquidation
Gain on liquidation of a subsidiary 0.1
38. CASH AND CASH EQUIVALENTS

Cash and cash equivalents at the end of the financial year comprise:
Group Company
In RM million 2016 2015 2016 2015
Short term funds (Note 28) 1,120.1 1,088.9

Deposits with financial institutions (Note 29) 248.7 221.4 128.6 17.0
Cash and bank balances 569.4 478.2 115.2 112.9
1,938.2 1,788.5 243.8 129.9
The Group has undrawn borrowing facilities of RM5,438.3 million (2015 RM4,641.1 million) at the end of the financial year.
212
ANNUAL REPORT 2016
39. SIGNIFICANT RELATED PARTY DISCLOSURES

39.1 Identity of related parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operation decisions, or vice versa, or where the Group
and the party are subject to common control or common significant influence. Related parties may be individuals or other
entities.
Related parties of the Group include:
i. Direct and indirect subsidiaries as disclosed in Note 45 to the financial statements;
ii. Vertical Capacity Sdn Bhd and its holding company, Progressive Holdings Sdn Bhd, the major corporate shareholders of
the Company;
iii. Associates and joint ventures as disclosed in Note 45 to the financial statements;
iv. Key management personnel, which comprises persons (including the Directors of the Company) having authority and
responsibility for planning, directing and controlling the activities of the Group directly or indirectly; and
v. Affiliates, companies in which the Directors who are also the substantial shareholders of the Company have substantial
shareholdings interest.
39.2 Significant related party transactions
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following
transactions with related parties during the financial year:
Group
Associates
Sales of oleochemical products and palm kernel oil 534.5 524.4
Purchases of oleochemical products 14.6 16.5
Rental income on storage tank 7.4 7.2
Affiliates
Management fees income 6.4 1.3
Agency fees income 1.2 1.4
Purchases of palm products 19.1 29.7
Rental expenses 2.5 3.9
Company
Subsidiaries
Sales of palm products 6.1 5.7
Purchases of palm products 2.7 2.7
Advisory fees income 52.0
Management fees income 1.1
Management fees expenses 5.8 1.2
Interest income 44.3 65.3
Interest expense 93.0 121.1
213
39. SIGNIFICANT RELATED PARTY DISCLOSURES (Continued)

39.2 Significant related party transactions (Continued)
The related party transactions described above were carried out on terms and conditions not materially different from those
obtainable in transactions with unrelated parties.
Information regarding outstanding balances arising from related party transactions as at 30 June 2016 are disclosed in Note
19.2, Note 20.3 and Note 21.1 to the financial statements.
39.3 Key management personnel compensation
The remuneration of key management personnel during the financial year is as follows:
Group Company
In RM million 2016 2015 2016 2015
Directors
Fees 0.9 0.9 0.9 0.9
Remuneration 27.3 12.8 27.0 12.4
Estimated monetary value of benefits-in-kind 0.1 0.1 0.1 0.1
Total short term employee benefits 28.3 13.8 28.0 13.4

Post employment benefits 3.2 1.5 3.2 1.5
31.5 15.3 31.2 14.9
Other key management personnel

Short term employee benefits 3.8 3.4
Post employment benefits 0.3 0.3
4.1 3.7
40. CAPITAL MANAGEMENT

The primary objective of the Groups capital management is to ensure that entities of the Group are able to continue as going
concerns while maximising the return to shareholders through the optimisation of the debt and equity mix. The overall strategy
of the Group remains unchanged from that in financial year ended 30 June 2015.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. Capital of the
Group comprises equity, borrowings and other long term liabilities. To maintain or adjust the capital structure, the Group may
adjust the dividend payment to shareholders, return capital to shareholders, buy back shares or issue new shares. No changes
were made in the objectives, policies or processes during the financial years ended 30 June 2016 and 30 June 2015.
The Group monitors capital using a gearing ratio, which is net debt divided by equity attributable to owners of the parent. The
Groups net debt includes borrowings less cash and cash equivalents. The Group has an appropriate target gearing ratio, which
is monitored by the Group on an ongoing basis.
214
ANNUAL REPORT 2016
40. CAPITAL MANAGEMENT (Continued)
Group Company
In RM million 2016 2015 2016 2015
Borrowings 7,381.2 6,648.4 2,163.9 1,960.3

Less: Cash and cash equivalents (1,938.2) (1,788.5) (243.8) (129.9)
Net debt 5,443.0 4,859.9 1,920.1 1,830.4
Equity 7,138.1 7,069.0 4,956.1 4,974.2
Gearing ratio (%) 76.25 68.75 38.74 36.80
41. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies
The Groups activities expose it to a variety of financial risks, including foreign currency risk, interest rate risk, price fluctuation
risk, credit risk, liquidity and cash flow risk. The Groups overall financial risk management objective is to ensure that the Group
creates value for its shareholders whilst minimising potential adverse effects on its financial performance and positions. The Group
operates within an established risk management framework and clearly defined guidelines that are approved by the Board of
Directors.
The Group operates within an established Enterprise Risk Management framework with clearly defined policies and guidelines,
which are administered via divisional Risk Management Committees. Divisional Risk Management Committees report regularly to
the Audit and Risk Management Committee which oversees the management of risk in the Group on behalf of the Board of
Directors.
41.1 Foreign currency risk

The Group operates internationally and is exposed to various currencies, mainly US Dollar (USD), Euro (EUR), and
Japanese Yen (JPY). Foreign currency denominated assets and liabilities together with expected cash flows from committed
purchases and sales give rise to foreign currency exposures.
The Groups foreign currency risk management objective is to minimise foreign currency exposure that gives rise to economic
impact, both at transaction and reporting period translation levels.
41.1.1 Risk management approach
The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country, in which the
property or investment is located or by borrowing in currencies that match the future revenue stream to be
generated from its investments.
Foreign currency exposures in transactional currencies other than the functional currencies of the operating entities
are kept to an acceptable level. Material foreign currency transaction exposures are hedged with derivative financial
instruments such as forward foreign exchange contracts and options on a back-to-back basis.
215
41. FINANCIAL INSTRUMENTS (Continued)

41.1 Foreign currency risk (Continued)
41.1.1 Risk management approach (Continued)
The downstream segments forward contractual commitments intended to be physically settled are fully hedged with
respect to its currency risk on a back-to-back basis with currency forward contracts. Where the netting of forward
sales against forward purchases with matching currency risk characteristics is possible, these would first be netted
before hedging the net currency exposure with forward contracts. Currency risk on forward contractual commitments
with clear intention for net-cash settlement (i.e. paper trading) are not considered for hedging until the exercising
of the net settlement.
The hedging methods that the Group adopts in managing its currency risk depend on the principal forms of foreign
currency exposure, as discussed below:
i. Structural foreign currency exposure from its net investment in foreign operations (subsidiaries,
associates, and joint ventures)
Background
The Groups foreign operations of various functional currencies when translated into its parents reporting
currency based on closing rates (for assets and liabilities) and average transaction rates (for income and
expenses) at consolidation, gives rise to foreign currency translation gain or loss that will be recognised in other
comprehensive income. Intragroup transactions with foreign operations involving monetary financial instruments
will also result in foreign currency translation gain or loss that cannot be eliminated on consolidation, but has
to be recognised either in profit or loss or in other comprehensive income. However, non-monetary financial
items translated at historical exchange rates will not give rise to foreign currency risk. Resulting from its net
investment in foreign operations, the Groups current and future profit stream in various foreign currencies will
also be exposed to foreign currency risk.
Hedging method
Where feasible the Group would match its foreign currency borrowing with the functional currency of its foreign
operations. Nevertheless, the Group considers such foreign currencies overall fiscal position and borrowing costs
before deciding on the major currency to be carried as debt in its book. In this regard, the Group has major
foreign currency borrowings denominated in USD, EUR and JPY, which do not necessarily match all the
functional currencies of its foreign operations. Where appropriate, exposures from mismatch in foreign currency
borrowings are hedged with Cross Currency Swap.
ii. Transactional obligations or rights denominated in foreign currency
Background
The majority of the Groups transactional currency risk arises from its foreign currency based forward sales and
purchases of commodity items, contracted by its subsidiaries along the palm value chain. These forward
commodity contracts for own use purposes are non-financial instruments and are generally not recognised in
the statements of financial position. However, these non-financial forward contracts denominated in foreign
currency are exposed to economic risk due to currency fluctuations. Certain product-streams underlying the
forward contracts are net-cash settled or have contract provisions for net-cash settlement, and these are
accounted by the Group as financial instruments with fair valuation impact to its financial statements. Regardless
of own use or fair value through profit or loss, these forward contracts on fulfilment at maturity will result
in book receivables or payables in foreign currency.
216
ANNUAL REPORT 2016

ii. Transactional obligations or rights denominated in foreign currency (Continued)
Hedging method
Intra-day transactions or forward contracts in foreign currencies are first netted based on matching characteristics.
The net exposure is then hedged off with vanilla foreign exchange forwards.
In general, currency exposure from foreign investments and borrowings is managed centrally at the Group HQ level,
whilst currency exposure arising from transactions or contractual obligations is managed at the respective entity or
business units level. The Group adopts an uniform Foreign Currency Risk Management Policy and Guide, which sets
out the authority and limits for inception of foreign currency derivatives; types of approved foreign currency
derivatives; acceptable hedging practices and methods; and over-sight structure and controls. Below are extracts of
key policies:
a) Speculative positioning on foreign currency is prohibited;
b) Net currency exposure on trade transactions and forward contracts are to be hedged in full on back-to-back
basis. Hedging on portfolio basis (or macro-hedging) comprising unmatched mixed maturity and amount is
disallowed;
c) Inception of foreign currency derivatives as hedging instrument against forecast trade transactions in foreign
currency is disallowed;
d) Hedging with foreign currency futures on traded exchanges is generally disallowed;
e) Inception of over-the-counter structured derivatives for hedging purposes are confined to HQ and each contract
is subject to executive managements approval; and
f) Subsidiaries inception of foreign currency derivative for hedging purposes are confined to vanilla foreign currency
forwards and plain European style foreign currency options.
The Groups entire currency exposure (as hedge items) and corresponding foreign currency derivative hedging
instruments are marked-to-market and fair valued once a month primarily for operational hedge effectiveness testing
and for executive management reporting and oversight. Weekly long-short positions on foreign currencies and foreign
currency derivatives are also produced for timely control and intervention.
217

41.1.2 Foreign currency risk exposure
The analysis of the Groups foreign currencies long/(short) positions for each class of financial instruments with
separate lines on currency derivative is as follows:
In RM million
Contract based currency USD EUR JPY Others
Maturity <1 year >1 year <1 year >1 year <1 year >1 year <1 year >1 year
Group
2016
Financial assets in foreign
currencies
Cash and bank balances 187.4 60.9 1.1 70.8
Deposits with financial
institutions 137.4
Trade and other receivables 470.3 259.5 11.0 98.3
Amounts due from associates 6.3
Derivative assets 529.2
Financial liabilities in foreign

currencies
Trade and other payables (273.8) (103.0) (27.3)
Amounts due to associates (96.7)
Borrowings (2,098.3) (3,776.9) (352.7) (312.9) (821.0)
Derivative liabilities (776.5) (0.1)
Currency derivatives
Foreign currency forwards (835.8) (4.7) (79.1) (21.9) (97.0)
Structured and hybrids 401.8 (332.6) (405.8) 821.0
Net exposure (2,355.0) (4,114.2) (214.4) (718.7) (9.8) 51.0
218
ANNUAL REPORT 2016

41.1.2 Foreign currency risk exposure (Continued)
In RM million
Contract based currency USD EUR JPY Others
Maturity <1 year >1 year <1 year >1 year <1 year >1 year <1 year >1 year
Group
2015
currencies
institutions 2.7
Trade and other receivables 483.0 274.4 10.1 40.4
Amounts due from associates 0.4
Derivative assets 461.9
Financial liabilities in foreign

currencies
Trade and other payables (185.9) (76.3) (0.1) (15.0)
Amounts due to associates (89.9) (1.2)
Borrowings (408.6) (5,208.8) (338.0) (646.9)
Derivative liabilities (317.0)
Foreign currency forwards (1,413.6) (2.6) (90.2) (20.1) (107.4)
Structured and hybrids (312.5) 646.9
Net exposure (1,217.8) (5,523.9) (223.6) (10.1) (27.5)
219

In RM million
Contract based currency USD EUR Others
Maturity <1 year >1 year <1 year >1 year <1 year >1 year
Company
2016
currencies
institutions 128.6
Amounts due from subsidiaries 5.7 365.9 10.4
Financial liabilities in
foreign currencies
Borrowings (799.6) (1,366.1)
Amounts due to subsidiaries (330.3) (601.1)
Structured and hybrids 401.8 (405.8)
Net exposure (940.8) (1,565.4) 414.1 (405.8) 18.6
In RM million
Contract based currency USD EUR Others
Maturity <1 year >1 year <1 year >1 year <1 year >1 year
Company
2015
currencies
Cash and bank balances 104.8 2.3
Amounts due from subsidiaries 49.7 490.6
Financial liabilities in
foreign currencies
Borrowings (264.2) (1,698.5)
Amounts due to subsidiaries (27.7) (844.0)
Net exposure (137.4) (2,542.5) 492.9
220
ANNUAL REPORT 2016

i. The Group is net short in USD by USD1.6 billion (equivalent to RM6.5 billion) (2015 USD1.8 billion (equivalent
to RM6.7 billion)) where USD1.0 billion (equivalent to RM4.1 billion) (2015 USD1.5 billion (equivalent to
RM5.5 billion)) is due beyond 12 months. This short position is expected to be met from its future revenue
stream mainly denominated in USD;
ii. The foreign currency long-short mismatch between forward commodity contracts (as hedge items) and foreign
currency forward derivative (as hedging instruments) is attributed to intragroup forward commodity sales and
purchases that give rise to net currency exposure at the entity level. Foreign currency long-short position from
forward commodity contracts of both related entities are eliminated on consolidation (but not necessarily its fair
value gain or loss arising from foreign currency) i.e. leaving behind the currency long short on foreign currency
forward derivative.
The currency swap contracts of the Group and the Company are as follows:
Group
2016
i. Cross currency swaps to swap JPY liability of JPY21.0 billion to USD liability of USD182.7 million. These were
entered into as a cashflow hedge for the Groups principal repayment for the loan obtained. The effective
period for these cross currency swaps is from January 2007 to February 2038.
ii. Cross currency swaps to swap floating rate USD liability of USD100.0 million to fixed rate RM liability of
RM302.0 million. These were entered into as a cashflow hedge for the Groups principal repayment for the loan
obtained. The effective period for these cross currency swaps is from March 2012 to December 2016.
iii. Cross currency swaps to swap USD liability of USD100.0 million to fixed rate EUR liability of EUR90.9 million.
These were entered into as a net investments hedge against the Groups Euro denominated assets. The effective
period for these cross currency swaps is from August 2015 to June 2022.
2015
i. Cross currency swaps to swap JPY liability of JPY21.0 billion to USD liability of USD182.7 million. These were
entered into as a cashflow hedge for the Groups principal repayment for the loan obtained. The effective
period for these cross currency swaps is from January 2007 to February 2038.
ii. Cross currency swaps to swap floating rate USD liability of USD100.0 million to fixed rate RM liability of
RM302.0 million. These were entered into as a cashflow hedge for the Groups principal repayment for the loan
obtained. The effective period for these cross currency swaps is from March 2012 to December 2016.
Company
2016
i. Cross currency swaps to swap USD liability of USD100.0 million to fixed rate EUR liability of EUR90.9 million.
These were entered into as a net investments hedge against the Groups Euro denominated assets. The effective
period for these cross currency swaps is from August 2015 to June 2022.
221

41.1.3 Sensitivity analysis
The Groups exposure to foreign currency risk primarily from foreign currency denominated borrowings. A 1,000 pips
increase or decrease in foreign currency rate of foreign currency denominated borrowings would have equally
decreased or increased the profit for the Group and the Company by approximately RM125.1 million (2015
RM152.8 million) and RM53.9 million (2015 RM51.9 million) respectively.
41.2 Interest rate risk

The Groups interest rate risk arises from its interest bearing financial instruments that could impact fair value and future
cash flows due to fluctuation in market interest rates.
The Groups objective on interest rate risk management is to achieve a balance in repricing risks and the optimisation of its
cost of funds whilst ensuring sufficient liquidity to meet funding needs.

The Group actively reviews its debt portfolio, taking into account the nature and requirements of its businesses as
well as the current business and economic environment. This strategy allows it to achieve an optimum cost of capital
whilst locking in long term funding rates for long term investments.
Funds held for liquidity purposes and temporary surpluses are placed in short term interest bearing financial
instruments. Changes in market interest rates will be re-priced immediately into these floating interest bearing
financial instruments.
41.2.2 Interest rate risk exposure

The following tables set-out the carrying amounts, the weighted average effective interest rates as at the end of the
financial year and the remaining repricing brackets of the Groups and Companys financial instruments that are
exposed to interest rate risk:
Repricing Brackets Total
Weighted
average
effective
Less than 12 23 3 4 More than interest rate
In RM million Note 1 year years years years 4 years Amount %
Group
2016
Interest bearing financial assets
Fixed rate instruments
Short term funds 28 1,120.1 1,120.1 3.60
1,368.8 25.7 1,394.5

Floating rate instruments
569.4 569.4
Total assets repricing 1,938.2 25.7 1,963.9
222
ANNUAL REPORT 2016

41.2 Interest rate risk (Continued)
41.2.2 Interest rate risk exposure (Continued)
Weighted
average
effective
Group
2016
Interest bearing financial liabilities
Term loans 33.1 821.0 821.0 5.15
Notes 33.5 2,396.5 2,396.5 4.49
Trade financing 33.6 555.0 555.0 0.27
Finance lease obligation 33.8 0.2 0.2 0.1 0.1 7.5 8.1 2.00
Islamic revolving credit financing
facilities 33.7 357.6 357.6 1.00
912.8 0.2 0.1 0.1 3,225.0 4,138.2

Amount due to associates 20.3 96.7 96.7 5.50
Islamic financing facilities 33.2 2,781.7 2,781.7 2.10
Term loans 33.1 461.3 461.3 1.31
3,339.7 3,339.7
Total liabilities repricing 4,252.5 0.2 0.1 0.1 3,225.0 7,477.9
Net repricing gap (2,314.3) 25.5 (0.1) (0.1) (3,225.0) (5,514.0)
223

Weighted
average
effective
Group
2015
Short term funds 28 1,088.9 1,088.9 3.59
1,310.3 24.0 1,334.3

478.2 478.2

Term loans 33.1 646.9 646.9 5.36
Notes 33.5 2,249.3 2,249.3 4.49
Trade financing 33.6 548.3 548.3 0.71
facilities 33.7 264.2 264.2 0.74
812.5 2,896.2 3,708.7

Amount due to associates 20.3 91.1 91.1 5.25
Term loans 33.1 620.8 620.8 1.69
3,030.8 3,030.8
Total liabilities repricing 3,843.3 2,896.2 6,739.5
Net repricing gap (2,054.8) 24.0 (2,896.2) (4,927.0)
224
ANNUAL REPORT 2016

Weighted
average
effective
Company
2016
Amounts due from subsidiaries 19.2 845.7 845.7 4.71
974.3 25.7 1,000.0

115.2 115.2

Amounts due to subsidiaries 19.2 1,302.9 601.1 1,904.0 3.98
facilities 33.7 357.6 357.6 1.00
1,660.5 601.1 2,261.6

1,806.3 1,806.3
Total liabilities repricing 3,466.8 601.1 4,067.9
Net repricing gap (2,377.3) 25.7 (601.1) (2,952.7)
225

Weighted
average
effective
Company
2015
Amounts due from subsidiaries 19.2 933.2 933.2 6.31
950.2 24.0 974.2

112.9 112.9

Amounts due to subsidiaries 19.2 826.9 581.3 564.7 1,972.9 5.13
facilities 33.7 264.2 264.2 0.74
1,091.1 581.3 564.7 2,237.1

1,696.1 1,696.1
Total liabilities repricing 2,787.2 581.3 564.7 3,933.2
Net repricing gap (1,724.1) (581.3) 24.0 (564.7) (2,846.1)
226
ANNUAL REPORT 2016

The interest rate swap contracts of the Group and the Company are as follows:
Group
2016
i. Interest rate swaps to swap notional principal amount of USD300.0 million from floating interest rate to fixed
interest rate to hedge against interest rate fluctuations. The effective period for these interest rate swaps is from
October 2010 to October 2017.
ii. Interest rate swap to swap notional principal amount of USD74.0 million from floating interest rate to fixed
interest rate to hedge against interest rate fluctuations. The effective period for this interest rate swap is from
December 2011 to December 2016.
2015
ii. Interest rate swap to swap notional principal amount of USD74.0 million from floating interest rate to fixed
interest rate to hedge against interest rate fluctuations. The effective period for this interest rate swap is from
December 2011 to December 2016.
Company
2016
2015
Sensitivity analysis on interest rate is applied on floating rate financial instruments only, as the carrying amount of
fixed rate financial instruments are measured at amortised cost.
A 50 basis points increase or decrease in interest rates would have equally decreased or increased the profits for the
Group and the Company by approximately RM0.2 million (2015 RM0.6 million) and RM0.6 million (2015 RM0.6
million) respectively.
227

41.3 Price fluctuation risk
The Groups plantation and resource-based manufacturing segments are inversely exposed to price fluctuation risk on sales
and purchases of vegetable oil commodities. These two (2) operating segments enter into commodity future contracts with
the objective of managing and hedging their respective exposures to price volatility in the commodity markets.
The Groups objective on price risk management is to limit the Groups exposure to fluctuations in market prices and to
achieve expected margins on revenue.
The Group manages its price fluctuation risk by having strict policies and procedures governing forward and futures
positions with dynamic limits on volume and tenure, mark-to-market losses, and on approvals. The Groups marketing
and trading operations are centralised, and the long-short and mark-to-market positions are monitored daily and
reported to Senior Management weekly.
The Groups commodity price risk management activities are integrated with its commodity sales and marketing
activities, which is centralised at the corporate level. The operation is governed by formalised policies and procedures
of which an outline is extracted below:
i. Forward sales commitment is limited to certain forward periods (generally two (2) five (5) months, depending
on product type);
ii. Volume that can be committed to forward sales is limited to a certain percentage of forecast production
(generally not exceeding 70% of monthly production, depending on product type);
iii. Forward contracts can only be incepted with pre-approved counter-parties. (Limits on volume and forward
period are further established for each counter-party);
iv. Commodity futures can only be traded by authorised officers with established volume limits; and
v. Each portfolio (by product category and legal entity) is subject to further limits on net volume exposure,
payment exposure and net mark-to-market fair value (MTM FV) loss limit (that serves as trigger for
intervention).
Trade positions are compiled daily, and mark-to-market fair value is reviewed weekly. An exposure report on the
Groups total long-short position (of all physical contracts, futures contracts and uncommitted inventory) with mark-
to-market fair value is produced monthly for executive oversight.
228
ANNUAL REPORT 2016

41.3 Price fluctuation risk (Continued)
41.3.2 Price risk exposure
Detailed in the table below is a summary of the Groups financial instruments subject to price risk along with their
contract values and mark-to-market fair value on closing, plus fair value recognised over the financial year.
Fair value attributed to price changes

Contract and Notional value at period closing
In RM million <1 year >1 year Total <1 year >1 year Total
Group
2016
Commodity based
Forward sales contracts (858.5) (858.5) 39.6 39.6
Forward purchase contracts 1,143.2 1,143.2 (41.8) (41.8)
Commodity derivatives 52.2 52.2 (0.7) (0.7)
Equity based
Other investments 81.2 81.2 104.2 104.2
101.3 101.3
2015
Commodity based
Forward sales contracts (844.9) (844.9) 17.5 17.5
Forward purchase contracts 810.8 810.8 (3.2) (3.2)
Commodity derivatives 52.1 52.1 (6.3) (6.3)
Equity based
115.2 115.2
Company
2016
Equity based
4.1 4.1
2015
Equity based
4.2 4.2
229

41.3 Price fluctuation risk (Continued)
The Groups exposure to price volatility was derived from palm products and other investment. If the price changes
by 7.5%, profit or loss for the Group and the Company would have equally increased or decreased by approximately
RM33.1 million (2015 RM9.4 million) and RM0.3 million (2015 RM0.3 million) respectively.
41.4 Credit risk
The Groups credit risk exposure is mainly related to external counter-party credit risk on monetary financial assets and trade
credits. Credit risk is managed at the business unit level, but macro Group-wide policies on the granting of credit and credit
control are issued and monitored centrally, such as those relating to credit risk concentration, adequacy of formal credit
rating and evaluation of counter parties, credit impairment and unit level credit control performance.
Credit risk from monetary financial assets is generally low as the counter-parties involved are strongly rated financial
institutions or authorised exchanges. The Group does not extend any loans or financial guarantees to third parties except
for its own subsidiaries and joint ventures.
The Groups objective on credit risk management is to avoid significant exposure to any individual customer or counter party
and to minimise concentration of credit risk.
Credit risk or financial loss from the failure of customers or counter parties to discharge their financial and contractual
obligations from trade credits is managed through the application of credit approvals, credit limits, insurance
programmes and monitoring procedures on an on-going basis. If necessary, the Group may obtain collateral from
counter parties as a means of mitigating losses in the event of default.
The Groups credit risk varies with the different classes of counter-parties as outlined below:
i. Plantation and resource-based manufacturing
Most of the upstream sales are intragroup to downstream resource-based manufacturing. Upstream sales to
external parties are mainly payment on delivery and/or secured with trade-financing documentation. Resource-
based manufacturing sales are mostly to external parties with credit terms ranging from 30 to 90 days and
across global markets of varying sovereign risk. The Group also engages in forwards sales (and forward
procurement of feedstock). Such forward contracts may have positive fair valuation giving rise to counter-party
default risk.
Policies and procedures
a) Customers are assessed for credit and sovereign nation risks (where applicable) on both quantitative and
qualitative elements prior to the approval of credit exposure and limits. In this regard, external credit rating
services such as Standard & Poors or Dun & Bradstreet are used. Where customers are approved for
forward physical contracts, limits on contractual forward periods and value are established. Regular reviews
are made;
b) Credit risk authority is decentralised to the respective entities credit committee but supervised centrally
at the corporate level; and
c) Credit exposure is monitored on limits and ageing, managed and reviewed periodically. Customers with
emerging credit problems are identified early and remedial actions are taken promptly to minimise further
exposure and to restore past due status.
230
ANNUAL REPORT 2016

41.4 Credit risk (Continued)
i. Plantation and resource-based manufacturing (Continued)
Collateral and credit enhancement
In general, a combination of:
a) Corporate guarantee may be required for globe-wide credit facilities for multinational corporations;
b) Cash deposits/advance may be required for certain customers or orders;
c) Transactional documentation (i.e. Letter of Credit or Cash against Document) for export sales; and
d) Credit insurance coverage (up to certain established limits) for downstream Oleochemicals and Specialty
Fats credit sales leaving some credit exposure on declined coverage and those beyond approved limits.
ii. Financial institutions and Exchanges
The Group places its working capital and surplus funds in current account, money market, and time-deposits
with banks; and in security papers and investment trusts managed by licensed institutions. The Group also enters
into financial derivative contracts with licensed financial institutions, and in commodity futures contracts with
licensed Exchanges for hedging purposes. Beyond the minimal deposit guarantee offered by certain sovereign
nations deposit insurance schemes, the Group is exposed to a degree of counter-parties credit risk in times of
severe economic or financial crisis.
Policies and procedures
a) Funds are placed only with licensed financial institutions with credit rating of A- and above. Similar
requirement is enforced on counter-parties for financial derivatives in addition to the mandatory International
Swaps and Derivatives Association master agreements;
b) Funds placements are centrally monitored, and where applicable are spread out based on location needs;
and
c) Commodity futures are incepted only with main licensed Exchanges.
Collateral and credit enhancement
In general, a combination of:
a) National deposit insurance; and
b) Fidelity guarantee
In general, all business units in the Group have a comprehensive policy that governs the need for formal credit rating
system and evaluation on counter parties prior to any contractual arrangement that would result in credit risk
exposure. Besides exposure amount, credit risk is also measured and monitored by way of credit quality segregation,
past due ageing analysis, and limits breach alerts. Reviews on credit impairment needs are made quarterly based on
objective evidence of loss events.
231

41.4.2 Credit risk exposures and concentration
The Groups credit risks are mainly on financial assets relating to trade receivables, cash deposits, and securities
placement and investments as summarised in the table below for both the Group and Company level.
Collateral and
Maximum enhancement Net exposure Collateral or credit
In RM million Note exposure obtained to credit risk enhancement obtained
Group
2016
Financial assets
Cash and bank balances 569.4 569.4 (i) Fidelity guarantee and
cash-in-transit
insurance cover; and
(ii) Banks limited
guarantee of deposits
Trade and other receivables,
excluded deposits and Letter of credit and credit
prepayments 1,045.7 469.6 576.1 insurance
Other investments 27 104.2 104.2
Short term funds 28 1,120.1 1,120.1
Amounts due from associates 20.3 6.4 6.4
Amount due from joint ventures 21.1 25.7 25.7
Derivative assets 22 381.2 381.2
3,501.4 469.6 3,031.8
2015
Financial assets
Cash and bank balances 478.2 478.2 (i) Fidelity guarantee and
cash-in-transit
insurance cover; and
(ii) Banks limited
guarantee of deposits
excluded deposits and Letter of credit and credit
prepayments 937.3 387.1 550.2 insurance
Short term funds 28 1,088.9 1,088.9
Amounts due from associates 20.3 0.5 0.5
3,037.3 387.1 2,650.2
232
ANNUAL REPORT 2016

41.4.2 Credit risk exposures and concentration (Continued)
Collateral and
Maximum enhancement Net exposure Collateral or credit
In RM million Note exposure obtained to credit risk enhancement obtained
Company
2016
Financial assets
1,121.5 1,121.5
2015
Financial assets
Other receivables, excluded
deposits and prepayment 0.2 0.2
1,091.5 1,091.5
233

The table below outlines the credit quality analysis of the Groups and the Companys financial assets together with
the impairment charge for the year.
Impairment Impairment
Neither past due nor impaired charged in at end of
Past due but reporting reporting
In RM million Strong Medium Weak Renegotiated not impaired Total period period
Group
2016
institutions 248.7 248.7
excluded deposits and
prepayments 740.6 190.4 18.2 96.5 1,045.7 2.9 14.0
Other investments 104.2 104.2
Short term funds 1,120.1 1,120.1
Amounts due from associates 6.4 6.4
Amount due from joint
ventures 25.7 25.7
Derivative assets 381.2 381.2
3,196.3 190.4 18.2 96.5 3,501.4 2.9 14.0
2015
excluded deposits and
prepayments 598.6 225.4 7.5 105.8 937.3 0.6 11.3
ventures 24.0 24.0
2,698.6 225.4 7.5 105.8 3,037.3 0.6 11.3
234
ANNUAL REPORT 2016

Impairment Impairment
Neither past due nor impaired charged in at end of
Past due but reporting reporting
In RM million Strong Medium Weak Renegotiated not impaired Total period period
Company
2016
ventures 25.7 25.7
1,121.5 1,121.5 1.5
2015
Other receivables, excluded
deposits and prepayments 0.2 0.2
ventures 24.0 24.0
1,091.5 1,091.5 1.5
Credit quality is analysed into the categories of Strong, Medium and Weak, whereby:
Strong = Strong financial standing, low probability of default
Medium = Low to moderate risk of default
Weak = Weak financial standing, history of past due
From the above table, more than 85% in value of the Groups financial assets are of strong credit quality, with
only the receivables class having past due and impairment. Besides the objective evidence of loss events, it is also
the Groups policy to provide impairment for any amount past due in ageing brackets above 120 days unless
supported by valid reasons. The following table provides an ageing analysis of past due but not impaired alongside
with the rationale for deferment of impairment on those past due above 120 days.
235

Estimated fair
Past due but not impaired values of
collateral
and credit
1 30 31 60 61 90 91 120 enhancement
In RM million days days days days >120 days Total held
Group
2016
Trade receivables 75.3 12.5 0.9 0.7 4.0 93.4 34.5
Other receivables 0.4 0.7 0.2 0.8 1.0 3.1
75.7 13.2 1.1 1.5 5.0 96.5 34.5
2015
Trade receivables 102.5 2.6 0.4 0.1 105.6 43.9
Other receivables 0.2 0.2
102.5 2.8 0.4 0.1 105.8 43.9
Receivables of the Group that are past due but not impaired are merely represented by reputable organisations.
The amount past due with ageing brackets above 120 days are from active corporate clients with healthy business
relationship for whom there are no recent histories of default and there are no concerns on the credit worthiness
of the counter parties and the recoverability of these debts.
It is the Groups policy to monitor the financial standing of these receivables on an ongoing basis to ensure that the
Group is exposed to minimal credit risk.
236
ANNUAL REPORT 2016

The credit risk concentration of the Group is mainly in the receivables class, except for deposits and prepayments,
and this is further analysed below to reveal the credit risk concentration by geographic location and business
segment.
Resource-based
Plantation manufacturing Others Total
In RM million Amount % Amount % Amount % Amount %
Group
2016
Malaysia 22.4 31 131.8 14 2.7 100 156.9 15
Europe 403.7 42 403.7 39
Asia (excluding Malaysia) 49.7 69 141.3 15 191.0 18
Others 294.1 29 294.1 28
72.1 100 970.9 100 2.7 100 1,045.7 100
2015
Malaysia 34.3 70 117.1 13 5.8 100 157.2 17
Europe 7.7 16 345.2 39 352.9 38
Asia (excluding Malaysia) 6.7 14 153.5 18 160.2 17
Others 267.0 30 267.0 28
48.7 100 882.8 100 5.8 100 937.3 100
Company
2016 2015
In RM million Amount % Amount %
Malaysia 18.1 2 41.8 5

Asia (excluding Malaysia) 461.7 55 355.7 38
Central and Eastern Europe 365.9 43 535.9 57
845.7 100 933.4 100
237

41.5 Liquidity and cash flow risk
Liquidity or cash flow risk arises when financial resources are insufficient to meet financial obligations as and when they fall
due, or have to be met at excessive cost. The Groups liquidity risk includes non-financial instruments and forward contract
obligations.
The Groups liquidity risk management objective is to ensure that all foreseeable funding commitments can be met as and
when due and in a cost-effective manner.
The Group leverages on IOI Corporation Berhad as the public listed parent company whereby treasury related
activities are centralised and where the optimal weighted-average-costs-of funds is managed. The parent company
plays a central liquidity management role where the Groups longer term funding requirements are managed based
on business and liquidity needs, whilst the day-to-day operational liquidity needs are decentralised at the business
unit level. The Group practises an arms-length market based policy with regard to funding costs and encourages its
business units to seek localised trade financing facilities where appropriate.
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to
ensure all operating, investing and financing needs are met. To mitigate liquidity risk, management measures and
forecasts its cash commitments, monitors and maintains a level of cash and cash equivalents deemed adequate to
finance the Groups operations and investment activities. In addition, the Group strives to maintain available banking
facilities at a reasonable level against its overall debt position.
The Group manages its liquidity risk with a combination of the following methods:
i. Maintain a balanced contractual maturity profile of financial assets to meet financial liabilities (particularly on
near and immediate term maturity);
ii. Maintain a diversified range of funding sources with adequate back-up facilities;
iii. Maintain debt financing and servicing plan; and
iv. Maintain medium to long term cash flow planning incorporating funding positions and requirements of all its
subsidiaries.
As the Groups policy, all business units conform to the following processes in ensuring its liquidity profiles are
balanced and that all its obligations can be met when due:
i. Perform annual cash flow budgeting and medium term cash flow planning, in which the timing of operational
cash flows and its resulting surplus or deficit is reasonably determined. (Such aggregation allows for an overview
of the Groups forecasted cash flow and liquidity position, which in-turn facilitates further consolidated cash
flow planning);
ii. Manage contingent liquidity commitment and exposures;
iii. Monitor liquidity ratios against internal thresholds;
iv. Manage working capital for efficient use of tied-in funds and optimise cash conversion cycle; and
v. Manage concentration and maturity profile of both financial and non-financial liabilities.
238
ANNUAL REPORT 2016

41.5 Liquidity and cash flow risk (Continued)
41.5.2 Liquidity risk exposure
The following table details the maturity profile of the Groups and the Companys financial liabilities at the end of
the financial year based on contractual undiscounted repayment obligations.
Less than 1 2 2 3 3 4 More than

In RM million 1 year years years years 4 years Total
Group
2016
Financial liabilities
Trade and other payables 885.4 885.4
Borrowings 2,479.8 924.3 442.1 156.6 3,395.7 7,398.5
Amounts due to associates 96.7 96.7
Derivative liabilities net
settlement 94.5 13.3 107.8
3,556.4 937.6 442.1 156.6 3,395.7 8,488.4
2015
Borrowings 812.5 1,660.8 868.1 415.2 2,911.6 6,668.2
settlement 123.8 3.1 26.8 153.7
1,725.0 1,663.9 894.9 415.2 2,911.6 7,610.6
Company
2016
Borrowings 799.6 924.1 442.0 2,165.7
Amounts due to subsidiaries 1,302.9 601.1 1,904.0
settlement 13.3 13.3
2,113.4 937.4 442.0 601.1 4,093.9
2015
Borrowings 264.2 415.2 868.1 415.2 1,962.7
Amounts due to subsidiaries 826.9 581.3 564.7 1,972.9
settlement 26.8 26.8
1,115.9 996.5 894.9 415.2 564.7 3,987.2
239

41.5 Liquidity and cash flow risk (Continued)
41.5.2 Liquidity risk exposure (Continued)
i. The Group and the Company maintain a level of cash and cash equivalents and banking facilities that is
adequate to meet its financial liabilities and obligations maturing in the next 12 months; and
ii. Financial liabilities contractual maturity periods exceeding 12 months are within comfortable levels, and should
be well covered by its annual free cash flow to be generated from its operations.
41.6 Fair values
Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Level 1 to 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
Fair value of financial instruments carried at fair value
Hierarchy of the underlying variable

input used in measuring fair valuation
In RM million Level 1 Level 2 Level 3 Total
Group
2016
Derivatives
Forward foreign exchange contracts 40.1 40.1
Commodity forward contracts (2.2) (2.2)
Commodity futures (0.7) (0.7)
Cross currency swap contract 250.5 250.5
Interest rate swap contracts (14.3) (14.3)
Equity based
Other investments 96.8 7.4 104.2
1,216.2 274.1 7.4 1,497.7
240
ANNUAL REPORT 2016

41.6 Fair values (Continued)
Fair value hierarchy (Continued)

Group
2015
Derivatives
Forward foreign exchange contracts (91.1) (91.1)
Commodity forward contracts 14.3 14.3
Commodity futures (6.3) (6.3)
Equity based
Other investments 100.5 6.7 107.2
1,183.1 32.4 6.7 1,222.2
There were no transfers between all 3 levels of the fair value hierarchy during the financial year.

Company
2016
Derivatives
Equity based
4.1 (11.1) (7.0)
241


Company
2015
Derivatives
Equity based
4.2 (26.8) (22.6)
There were no transfers between all 3 levels of the fair value hierarchy during the financial year.
The fair value measurement in Level 3 is based on the Groups share of net assets of the investees. There are no alternative
assumptions that would result in changes in the amount determined and the management believes that its estimates of fair
value are appropriate.
Reconciliation of fair value measurements of Level 3 financial instruments
The Group carries unquoted equity shares as financial assets at fair value through profit or loss classified in Level 3 within
the fair value hierarchy.
Group
Financial assets designated at fair value through profit or loss

Total gain recognised in profit or loss 0.7 0.2
242
ANNUAL REPORT 2016

The carrying amounts of financial assets and financial liabilities, which are not carried at fair values, would approximate their
fair values as at the end of the financial year. This is due to the relatively short term nature of the financial instruments or
there is no significant difference between the historical interest rate at the point when liabilities were undertaken and the
current prevailing market interest rate.
The following methods and assumptions were used to estimate the fair values of financial instruments:
i. The carrying amounts of financial assets and liabilities maturing within twelve (12) months approximate fair values due
to the relatively short term maturity of these financial instruments.
ii. The fair values of quoted investments are their quoted market prices at the end of the financial year. The fair values
of unquoted investments are estimated based on a valuation approach by reference to the Groups share of net assets
of the investees based on the latest available financial statements of the investees.
iii. The fair value of the Groups borrowings are estimated using discounted cash flow analysis, based on current
incremental lending rates for similar types of lending and borrowing arrangements and of the same remaining
maturities.
iv. The fair values of derivative financial instruments are the estimated amounts that the Group would expect to pay or
receive on the termination of the outstanding positions as at the end of the financial year arising from such contracts.
They are determined by reference to the difference between the contracted rate and the forward rate as at the end
of the financial year applied to a contract of similar amount and maturity profile.
243

41.7 Classification of financial instruments
The financial assets and liabilities are classified into the following categories after initial recognition for the purpose of
subsequent measurement:
Fair value
Loan and through Available Held to
In RM million receivables profit or loss for sale maturity Total
Group
Financial assets
2016
Trade and other receivables, net of deposits
and prepayments 1,045.7 1,045.7
Amount due from joint ventures 25.7 25.7
Deposits with financial institutions 248.7 248.7
1,895.9 1,605.5 3,501.4
2015
Trade and other receivables, net of deposits
and prepayments 937.3 937.3
1,661.4 1,375.9 3,037.3
244
ANNUAL REPORT 2016

41.7 Classification of financial instruments (Continued)
subsequent measurement (Continued):
Other Fair value

financial through
In RM million liabilities profit or loss Total
Group
2016
Borrowings 7,381.2 7,381.2
Derivative liabilities 107.8 107.8
8,363.3 107.8 8,471.1
2015
Borrowings 6,648.4 6,648.4
7,437.1 153.7 7,590.8
245

Fair value
Loan and through Available Held to
In RM million receivables profit or loss for sale maturity Total
Company
Financial assets
2016
1,115.2 6.3 1,121.5
2015
Other receivables, net of deposits and
prepayments 0.2 0.2
1,087.3 4.2 1,091.5
246
ANNUAL REPORT 2016

Other Fair value

financial through
In RM million liabilities profit or loss Total
Company
2016
Borrowings 2,163.9 2,163.9
Amounts due to subsidiaries 1,904.0 1,904.0
4,078.8 13.3 4,092.1
2015
Borrowings 1,960.3 1,960.3
3,958.0 26.8 3,984.8
42. COMMITMENTS
42.1 Capital Commitments
Group Company
In RM million 2016 2015 2016 2015
Authorised capital expenditure not provided for in the

financial statements
Contracted
Additions of property, plant and equipment 57.8 69.0
Not contracted
Additions of property, plant and equipment 249.2 150.4 0.2
247
42. COMMITMENTS (Continued)

42.2 Operating Lease Commitments
42.2.1 The Group as lessee
The significant non-cancellable operating lease agreements entered by the Group are as follows:
i. lease of storage tank for a lease period of 1 year with a renewal term of 1 year;
ii. lease of a piece of land for a lease period of 22 years which cover a net area of 5,663 square meters for
bulking installation; and
iii. lease of a piece of land for a lease period of 22 years which cover a net area of 13,400 square meters for
bulk cargo terminal.
The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at end of
the financial year but not recognised as liabilities are as follows:
Group
Not later than 1 year 32.2 19.5

Later than 1 year and not later than 5 years 72.8 39.0
Later than 5 years 3.0 2.1
108.0 60.6
42.2.2 The Group as lessor
The minimum lease payments receivable under non-cancellable operating leases contracted for as at end of the
financial year but not recognised as receivables are as follows:
Group
Not later than 1 year 0.4 0.2

Later than 1 year and not later than 5 years 0.6
1.0 0.2
248
ANNUAL REPORT 2016
43. SEGMENTAL INFORMATION

The Group has two (2) reportable operating segments that are organised and managed separately according to the nature of
products and services, specific expertise and technologies requirements, which requires different business and marketing strategies.
The reportable segments are summarised as follows:
Plantation Cultivation of oil palm and rubber and processing of palm oil
Resource-based Manufacturing of oleochemicals, specialty oils and fats, palm oil refinery and palm kernel crushing
manufacturing
Other operations Other operations which are not sizable to be reported separately
The Groups chief operating decision maker monitors the operating results of its business units separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating
profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in
the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis
and are not allocated to operating segments.
Transfer prices between operating segments are on an arms length basis in a manner similar to transactions with third parties.
Segment assets exclude tax assets and assets used primarily for corporate purposes.
Segment liabilities exclude tax liabilities, loans and borrowings that are managed under centralised treasury function.
Details are provided in the reconciliations from segment assets and liabilities to the Group position.
249
43. SEGMENTAL INFORMATION (Continued)
Resource-
based Other
In RM million Plantation manufacturing operations Total
2016
Revenue
Segment revenue 1,946.9 11,551.3 20.9 13,519.1
Result
Operating profit 763.9 590.2 4.3 1,358.4
Share of results of associates 78.3 21.4 99.7
Segment results 842.2 606.4 4.3 1,452.9
Assets
Operating assets 7,979.9 6,611.9 141.6 14,733.4
Interest in associates 744.6 192.9 937.5
Interest in joint ventures 31.7 31.7
Segment assets 8,724.5 6,836.5 141.6 15,702.6
Liabilities
Segment liabilities 337.5 1,039.4 21.4 1,398.3
Other Information
Capital expenditure 217.0 264.2 0.5 481.7
Depreciation and amortisation 272.0 187.4 0.3 459.7
Non-cash items other than depreciation and amortisation 12.0 159.6 37.8 209.4
250
ANNUAL REPORT 2016
Resource-
based Other
In RM million Plantation manufacturing operations Total
2015
Revenue
Segment revenue 2,020.3 11,337.8 17.9 13,376.0
Result
Operating profit 788.8 398.1 (2.8) 1,184.1
Share of results of associates 76.5 28.1 104.6
Segment results 865.3 420.4 (2.8) 1,282.9
Assets
Operating assets 8,166.3 5,826.5 82.8 14,075.6
Interest in associates 623.9 188.8 812.7
Interest in joint ventures 35.2 35.2
Segment assets 8,790.2 6,050.5 82.8 14,923.5
Liabilities
Segment liabilities 321.6 748.9 37.1 1,107.6
Other Information
Capital expenditure 316.5 233.2 1.5 551.2
Depreciation and amortisation 273.0 165.7 1.0 439.7
Non-cash items other than depreciation and amortisation 20.8 210.5 2.6 233.9
251

Reconciliation of reportable segment revenue, profit or loss, assets and liabilities to the Groups corresponding amounts are as
follows:
Group
Revenue
Segment revenue 13,519.1 13,376.0
Inter-segment sales (1,779.8) (1,834.5)
Total revenue 11,739.3 11,541.5
Profit or loss
Segment results 1,452.9 1,282.9
Unallocated corporate expenses (3.3) (42.5)
Profit before interest and taxation 1,449.6 1,240.4

Finance costs (218.6) (281.6)
Net foreign currency translation loss on foreign currency denominated borrowings (318.5) (735.3)
Profit before taxation 965.8 316.4

Taxation (319.5) (261.6)
Assets
Segment assets 15,702.6 14,923.5
Unallocated corporate assets 1,853.5 1,525.0
Total assets 17,556.1 16,448.5
Liabilities
Segment liabilities 1,398.3 1,107.6
Unallocated corporate liabilities 8,740.8 7,997.8
Total liabilities 10,139.1 9,105.4
252
ANNUAL REPORT 2016

Geographical Segments
North
In RM million Malaysia Europe America Asia Others Consolidated
Group
2016
Revenue from external customers
by location of customers 2,404.0 4,162.5 1,986.2 2,819.1 367.5 11,739.3
Segment assets by location of
assets 11,393.7 2,472.9 936.4 899.3 0.3 15,702.6
Capital expenditure by location of
assets 294.8 40.2 53.8 92.9 481.7
2015
Revenue from external customers
by location of customers 1,609.7 4,225.2 1,756.3 3,261.7 688.6 11,541.5
Segment assets by location of
assets 11,391.0 1,726.2 882.3 815.0 109.0 14,923.5
Capital expenditure by location of
assets 328.5 15.3 37.5 169.5 0.4 551.2
There is no single external customer that the revenue generated from exceeded 10% of the Groups revenue.
44. EXPLANATION OF TRANSITION TO MFRSs

As disclosed in Note 2.1, these are the first financial statements of the Group and of the Company prepared in accordance with
MFRSs.
The Group is a transitioning entity as defined by the Malaysian Accounting Standards Board and its financial statements were
prepared in accordance with FRS framework during the previous financial years. For the financial year ended 30 June 2016, the
Group and the Company have applied an earlier transition to the MFRS Framework. The date of transition to the MFRS Framework
is on 1 July 2014.
The accounting policies set out in Note 5 to the financial statements have been applied in preparing the financial statements of
the Group and of the Company for the financial year ended 30 June 2016, as well as comparative information presented in these
financial statements for the financial year ended 30 June 2015 and in the preparation of the opening MFRS statements of financial
position at 1 July 2014 in accordance with MFRS 1.
In preparing the opening statements of financial position at 1 July 2014, the Group and the Company adjusted amounts reported
previously in the financial statements prepared in accordance with FRSs. An explanation on the impact arising from the transition
from FRSs to MFRSs and early adoption of the Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants on the Group
and the Companys financial position, financial performance and cash flows is set out as follows:
253
44. EXPLANATION OF TRANSITION TO MFRSs (Continued)

44.1 Reconciliation of statements of financial position at 1 July 2014
Group
Previously Effect on Restated

reported adoption under
In RM million under FRSs of MFRSs MFRSs
ASSETS
Non-current assets
Property, plant and equipment 6,410.0 3,235.7 9,645.7
Prepaid lease payments 30.1 (26.1) 4.0
Investment properties 8.3 8.3
Intangible assets 458.4 458.4
Investments in associates 886.9 (87.5) 799.4
Interests in joint ventures 33.0 33.0
Deferred tax assets 43.8 6.6 50.4
7,945.6 3,128.7 11,074.3
Current assets
Inventories 2,154.6 2,154.6
Biological assets 51.2 51.2
Trade and other receivables 1,062.7 1,062.7
Current tax assets 38.5 38.5
7,386.0 51.2 7,437.2
TOTAL ASSETS 15,331.6 3,179.9 18,511.5
254
ANNUAL REPORT 2016

44.1 Reconciliation of statements of financial position at 1 July 2014 (Continued)
Group


Share capital 645.0 645.0
Reserves (514.8) 4.6 (510.2)
6,036.8 2,150.7 8,187.5

Total equity 6,233.1 2,236.9 8,470.0
Liabilities
Borrowings 5,069.2 5,069.2
Other long term liabilities 36.3 36.3
Deferred tax liabilities 451.4 943.0 1,394.4
5,601.7 943.0 6,544.7
Current liabilities
Borrowings 2,454.3 2,454.3
Current tax liabilities 43.9 43.9
3,496.8 3,496.8
Total liabilities 9,098.5 943.0 10,041.5
255

Company

ASSETS
Non-current assets
Property, plant and equipment 61.7 27.5 89.2
Investments in subsidiaries 7,557.4 7,557.4
Investments in associates 20.4 20.4
7,673.5 27.5 7,701.0
Current assets
Trade and other receivables 15.5 15.5
Amounts due from subsidiaries 2,980.8 2,980.8
3,074.3 0.2 3,074.5
TOTAL ASSETS 10,747.8 27.7 10,775.5
256
ANNUAL REPORT 2016

Company


Reserves (307.5) (307.5)
Retained earnings 5,404.9 23.9 5,428.8
Total equity 5,742.4 23.9 5,766.3
Liabilities
Borrowings 1,439.0 1,439.0
Deferred tax liabilities 3.8 3.8
2,499.0 3.8 2,502.8
Current liabilities
Borrowings 479.7 479.7
2,506.4 2,506.4
TOTAL EQUITY AND LIABILITIES 10,747.8 27.7 10,775.5
257

44.2 Reconciliation of statements of financial position at 30 June 2015
Group

ASSETS
Non-current assets
Property, plant and equipment 6,649.8 3,115.7 9,765.5
Prepaid lease payments 32.5 (25.8) 6.7
Investment properties 7.7 (0.7) 7.0
Intangible assets 458.4 458.4
Investments in associates 939.1 (126.4) 812.7
Deferred tax assets 46.4 6.6 53.0
8,307.8 2,969.4 11,277.2
Current assets
Inventories 2,083.1 2,083.1
Trade and other receivables 1,062.4 1,062.4
5,126.1 45.2 5,171.3
TOTAL ASSETS 13,433.9 3,014.6 16,448.5
258
ANNUAL REPORT 2016

44.2 Reconciliation of statements of financial position at 30 June 2015 (Continued)
Group


Reserves (597.0) (20.0) (617.0)
5,059.1 2,009.9 7,069.0

Total equity 5,248.4 2,094.7 7,343.1
Liabilities
Borrowings 5,835.9 5,835.9
Other long term liabilities 29.4 29.4
Deferred tax liabilities 425.0 919.9 1,344.9
6,320.2 919.9 7,240.1
Current liabilities
1,865.3 1,865.3
259

Company

ASSETS
Non-current assets
Property, plant and equipment 62.2 27.2 89.4
Investments in subsidiaries 7,685.7 7,685.7
Investments in associates 20.4 20.4
7,810.3 27.2 7,837.5
Current assets
Trade and other receivables 15.4 15.4
1,125.7 0.2 1,125.9
TOTAL ASSETS 8,936.0 27.4 8,963.4
260
ANNUAL REPORT 2016

Company


Reserves (458.4) (458.4)
Retained earnings 4,763.0 23.7 4,786.7
Total equity 4,950.5 23.7 4,974.2
Liabilities
Borrowings 1,696.1 1,696.1
Deferred tax liabilities 3.7 3.7
2,868.9 3.7 2,872.6
Current liabilities
Amounts due to subsidiaries 826.9 826.9
1,116.6 1,116.6
TOTAL EQUITY AND LIABILITIES 8,936.0 27.4 8,963.4
261

44.3 Reconciliation of statements of profit or loss and statements of other comprehensive income for the financial
year ended 30 June 2015
Group

Revenue 11,621.0 (79.5) 11,541.5

Cost of sales (9,261.9) (169.0) (9,430.9)
Gross profit 2,359.1 (248.5) 2,110.6

Other operating income 637.0 (4.9) 632.1
Marketing and selling expenses (249.5) (249.5)
Administration expenses (449.5) 0.1 (449.4)
Other operating expenses (949.9) 47.7 (902.2)
Operating profit 1,347.2 (205.6) 1,141.6

Share of results of associates 119.1 (14.5) 104.6
Profit before interest and taxation 1,460.5 (220.1) 1,240.4

Interest income 13.4 79.5 92.9
denominated borrowings (735.3) (735.3)
Profit before taxation 457.0 (140.6) 316.4

Taxation (284.6) 23.0 (261.6)
Profit for the financial year 172.4 (117.6) 54.8
Attributable to:
Owners 168.1 (116.2) 51.9
Non-controlling interests 4.3 (1.4) 2.9
172.4 (117.6) 54.8
262
ANNUAL REPORT 2016

year ended 30 June 2015 (Continued)
Group

Profit for the financial year 172.4 (117.6) 54.8
Other comprehensive loss that will not be reclassified subsequently

to profit or loss
Actuarial loss on defined benefit obligation (15.2) (15.2)
(15.2) (15.2)
Other comprehensive income/(loss) that will be reclassified

subsequently to profit or loss when specific conditions are met
Exchange differences on translation of foreign operations 88.2 (24.6) 63.6
Share of other comprehensive loss of associates (20.9) (20.9)
67.3 (24.6) 42.7
Other comprehensive income for the financial year, net of tax 52.1 (24.6) 27.5
Total comprehensive income for the financial year 224.5 (142.2) 82.3
Total comprehensive income attributable to:

Owners of the parent 221.7 (140.8) 80.9
Non-controlling interests 2.8 (1.4) 1.4
224.5 (142.2) 82.3
263

year ended 30 June 2015 (Continued)
Company

Revenue 866.7 866.7

Cost of sales (2.7) (0.7) (3.4)
Gross profit 864.0 (0.7) 863.3

Other operating income 144.8 (0.2) 144.6
Administration expenses (17.4) (17.4)
Other operating expenses (396.3) 0.6 (395.7)
Profit before interest and taxation 595.1 (0.3) 594.8

denominated borrowings (87.5) (87.5)

Taxation 10.4 0.1 10.5
Profit and total comprehensive income for the financial year 407.4 (0.2) 407.2
264
ANNUAL REPORT 2016

44.4 Reconciliation of statements of cash flows for the financial year ended 30 June 2015
Group

Adjustments for:
denominated borrowings 735.3 735.3
Finance costs 281.6 281.6
Depreciation of property, plant and equipment 232.3 207.4 439.7
Net fair value loss on derivative financial instruments 110.8 110.8
Net unrealised foreign currency translation loss 26.5 26.5
Retirement benefits expenses 13.8 13.8
Net fair value loss on other investments 11.8 11.8
Net inventories written down to net realisable values 6.4 6.4
Share of results of joint ventures 5.8 5.8
Property, plant and equipment written off 3.1 0.2 3.3
Amortisation of prepaid lease payments 2.9 (2.9)
Gain on liquidation of a subsidiary (0.1) (0.1)
Gain on disposal of investment properties (0.3) (0.3)
Net gain on disposal of property, plant and equipment (0.5) (0.5)
Net fair value gain on investment properties (0.7) 0.7
Impairment losses on receivables written back (1.2) (1.2)
Dividend income from other investments (2.5) (2.5)
Interest income (13.4) (79.5) (92.9)
Gain on disposal of land from compulsory acquisition (43.2) 4.2 (39.0)
Dividend income from short term funds (79.5) 79.5
Share of results of associates (119.1) 14.5 (104.6)
Operating profit before working capital changes 1,637.3 89.5 1,726.8
Decrease in trade receivables 142.9 142.9
Increase in other payables and accruals 46.9 46.9
Decrease in inventories 20.9 20.9
Increase in trade payables 7.5 7.5
Increase in other receivables, deposits and prepayments (75.0) (75.0)
Cash generated from operations 1,780.5 89.5 1,870.0
Tax refunded 1.9 1.9
Retirement benefits paid (2.1) (2.1)
Retirement benefits contributed (36.4) (36.4)
Tax paid (386.4) (386.4)
Net cash from operating activities 1,357.5 89.5 1,447.0
265

44.4 Reconciliation of statements of cash flows for the financial year ended 30 June 2015 (Continued)
Group


Dividends received from short term funds 79.5 (79.5)
Dividends received from associates 52.8 52.8
Advances from associates 14.0 14.0
Interest received 13.6 79.5 93.1
Dividends received from other investments 2.5 2.5
Proceeds from disposal of property, plant and equipment 2.2 2.2
Proceeds from disposal of investment properties 1.6 1.6
Additions to prepaid lease payments (5.0) 2.5 (2.5)
Addition to associates (8.6) (8.6)
Additions to other investments (38.0) (38.0)
Additions to property, plant and equipment (456.5) (92.0) (548.5)
Net cash used in investing activities (303.1) (89.5) (392.6)

Drawdown of term loans 2,229.9 2,229.9
Proceeds from short term borrowings 373.3 373.3
Proceeds from issuance of shares 29.2 29.2
Dividends paid to non-controlling interests (9.8) (9.8)
Repurchase of shares (179.2) (179.2)
Finance costs paid (314.1) (314.1)
Dividends paid (1,049.3) (1,049.3)
Redemption of Guaranteed Notes (1,607.1) (1,607.1)
Repayments of term loans (2,729.0) (2,729.0)
Net cash used in financing activities (3,256.1) (3,256.1)
Net decrease in cash and cash equivalents (2,201.7) (2,201.7)

Cash and cash equivalents at beginning of financial year 3,987.7 3,987.7
Effect of exchange rate changes 2.5 2.5
Cash and cash equivalents at end of financial year 1,788.5 1,788.5
266
ANNUAL REPORT 2016

Company


Adjustments for:
denominated borrowings 87.5 87.5
Finance costs 176.8 176.8
Depreciation of property, plant and equipment 0.5 0.7 1.2
Net unrealised foreign currency translation loss 71.4 71.4
Net fair value loss on other investments 0.3 0.3
Net gain on disposal of property, plant and equipment (0.1) (0.1)
Dividend income from other investments (0.1) (0.1)
Interest income (66.2) (66.2)
Gain on disposal of land from compulsory acquisition (1.8) 0.2 (1.6)
Dividend income from associates (3.0) (3.0)
Waiver of debt by a subsidiary (76.2) (76.2)
Dividend income from subsidiaries (857.9) (857.9)
Operating loss before working capital changes (265.8) 0.6 (265.2)

Decrease in other payables and accruals (107.5) (107.5)
Decrease in other receivables, deposits and prepayments 1.4 1.4
Cash used in operations (371.9) 0.6 (371.3)

Tax paid (14.3) (14.3)
Net cash used in operating activities (386.2) 0.6 (385.6)
267

Company


Dividends received from associates 3.0 3.0
Interest received 1.3 1.3
Dividends received from other investments 0.1 0.1
Proceeds from disposal of property, plant and equipment 0.1 0.1
Additions to property, plant and equipment (1.3) (0.6) (1.9)
Advances from subsidiaries 1,242.9 1,242.9
Dividends received from subsidiaries 857.9 857.9
Investment in subsidiaries (128.3) (128.3)
Net cash from investing activities 1,969.8 (0.6) 1,969.2

Drawdown of term loans 1,618.7 1,618.7
Proceeds from short term borrowings 258.7 258.7
Proceeds from issuance of shares 29.2 29.2
Repurchase of shares (179.2) (179.2)
Finance costs paid (53.8) (53.8)
Dividends paid (1,049.3) (1,049.3)
Repayments of term loans (2,117.8) (2,117.8)
Net cash used in financing activities (1,493.5) (1,493.5)
Net increase in cash and cash equivalents 90.1 90.1

Cash and cash equivalents at beginning of financial year 39.8 39.8
Cash and cash equivalents at end of financial year 129.9 129.9
268
ANNUAL REPORT 2016

44.5 Notes to reconciliation
(i) Property, plant and equipment
Freehold land and leasehold land
The Group elected to apply the optional exemption to measure certain freehold land and leasehold land at fair value
at the date of transition to MFRSs and use that fair value as deemed cost. The surplus net of deferred tax arising from
the fair valuation and non-controlling interest was recognised in retained earnings as at 1 July 2014.
The aggregate fair values and adjustment to the carrying amounts of freehold land and leasehold land as at 1 July
2014 are as follows:
In RM million Group Company
Aggregate fair value 5,458.3 70.1

Aggregate adjustment to the carrying amounts previously reported under FRSs 4,150.0 30.9
The impact on the fair valuation of the property, plant and equipment as deemed cost on 1 July 2014 has resulted in
additional depreciation on property, plant and equipment.
The impact arising from the change is summarised as follows:
Group Company
In RM million 30 June 2015 1 July 2014 30 June 2015 1 July 2014
Statements of financial position

Increase in property, plant and equipment 4,106.8 4,150.0 30.7 30.9
Statements of profit or loss

Increase in other operating expenses (38.5)
Decrease in other operating income (4.2) (0.2)
The fair value measurements of the Groups and the Companys property, plant and equipment at the date of transition
to MFRSs are categorised within Level 2 of the fair value hierarchy.
269

44.5 Notes to reconciliation (Continued)
(i) Property, plant and equipment (Continued)
Bearer plants
Prior to the adoption of the Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants, all the new planting
expenditure incurred from land clearing to the point of harvesting was capitalised under plantation development
expenditure and was not amortised. Replanting expenditure, which represents cost incurred in replanting old planted
areas, was charged to profit or loss. With the adoption of the Amendments to MFRS 116 and MFRS 141, the new
planting expenditure and replanting expenditure are measured at cost less accumulated depreciation and accumulated
impairment losses, if any.
The early adoption of the Amendments to MFRS 116 and MFRS 141 have resulted in additional depreciation on
property, plant and equipment. The replanting expenditure that are charged to profit or loss during the previous
financial year are reversed and capitalised under property, plant and equipment.
Group Company

Decrease in property, plant and equipment (991.1) (914.3) (3.5) (3.4)

Increase in cost of sales (169.0) (0.7)
Decrease in other operating expenses 92.2 0.6
(ii) Biological assets

Prior to the adoption of the Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants, biological assets which
form part of the bearer plants and were not recognised separately. With the adoption of the Amendments to MFRS
116 and MFRS 141, the biological assets within the scope of MFRS 141 are measured at fair value less costs to sell.
The changes in fair value less costs to sell of the biological assets were recognised in profit or loss during the financial
year.
Group Company

Increase in biological assets 45.2 51.2 0.2 0.2

Increase in other operating expenses (6.0)
270
ANNUAL REPORT 2016

(iii) Investment properties
Prior to transition to MFRSs, the Group measured its investment properties at fair value. Upon transition to MFRSs, the
Group has elected to apply the optional exemption to use the fair value at the date of transition as deemed cost of
investment properties under MFRSs. This has resulted a reversal of fair value gain on investment properties in financial
year 2015. The impact of adopting the cost model has resulted in additional depreciation charge on the investment
properties.
The aggregate fair values and adjustment to the carrying amounts as at 1 July 2014 are as follows:
In RM million Group
Aggregate fair value 8.3

Aggregate adjustment to the carrying amounts previously reported under FRSs
Group
In RM million 30 June 2015 1 July 2014

Decrease in investment properties (0.7)

Decrease in other operating income (0.7)
(iv) Prepaid lease payments
Prior to transition to MFRSs, certain leasehold lands were classified as operating leases. Upon transition to MFRSs, the
Group has reassessed and determined that the leasehold land amounted to RM26.1 million of the Group are in
substance finance leases and has reclassified the said amount to property, plant and equipment. The reclassification has
no effect to the retained earnings as at 1 July 2014.
(v) Associates
With the early adoption of the Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants, the new planting
expenditure and replanting expenditure of the associates are measured at cost less accumulated depreciation and
accumulated impairment losses, if any, to align with the accounting policy of the Group.
271

(vi) Others
The impact arising from all of the changes described earlier to the other assets, liabilities, equity and profit or loss is
summarised as follows:
Group Company

Assets
Increase in deferred tax assets 6.6 6.6
Liabilities
Increase in deferred tax liabilities 919.9 943.0 3.7 3.8
Equity
(Decrease)/increase in reserves (20.0) 4.6
Increase in retained earnings 2,029.9 2,146.1 23.7 23.9
Increase in non-controlling interests 84.8 86.2
Statements of profit and loss

Decrease in taxation 23.0 0.1
Decrease in non-controlling interests (1.4)
272
ANNUAL REPORT 2016
45. LIST OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The subsidiaries, associates and joint ventures, incorporated in Malaysia except otherwise stated, are as follows:
Effective Group Interest
Name of Company 2016 2015 Principal Activities
Direct Subsidiaries
Plantation
B. A. Plantations Sdn Bhd 100.0% 100.0% Cultivation of oil palm and investment holding
IOI Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm and investment holding
Pine Capital Sdn Bhd 100.0% 100.0% Cultivation of oil palm and investment holding
Mayvin Incorporated Sdn Bhd 100.0% 100.0% Processing of palm oil and investment holding
Dynamic Plantations Berhad 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Halusah Ladang Sdn Bhd 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Ladang Sabah Sdn Bhd 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Morisem Palm Oil Mill Sdn Bhd 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Perusahaan Mekassar (M) Sdn Bhd 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Syarikat Pukin Ladang Kelapa Sawit Sdn Berhad 100.0% 100.0% Cultivation of oil palm and processing of palm oil
Pamol Plantations Sdn Bhd 100.0% 100.0% Cultivation of oil palm, processing of palm oil and
investment holding
Syarimo Sdn Bhd 100.0% 100.0% Cultivation of oil palm, processing of palm oil and
investment holding
Right Purpose Sdn Bhd 100.0% 100.0% Cultivation of oil palm and soft wood timber
Ladang Asas Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Ladang Cantawan (Sabah) Sdn Berhad 100.0% 100.0% Cultivation of oil palm
Laksana Kemas Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Meriteam Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Morisem Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Morisem (Sabah) Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Palmco Plantations (Sabah) Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Palmco Properties Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Permodalan Plantations Sdn Bhd 70.0% 70.0% Cultivation of oil palm
PR Enterprise Sdn Bhd 100.0% 100.0% Cultivation of oil palm
273
45. LIST OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES (Continued)
Direct Subsidiaries (Continued)
Plantation (Continued)
Priceland Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Safima Plantations Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Sakilan Desa Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Terusan Baru Sdn Bhd 100.0% 100.0% Cultivation of oil palm
IOI Commodity Trading Sdn Bhd 100.0% 100.0% Trading of palm oil commodities
IOI Palm Biotech Sdn Bhd 100.0% 100.0% Commercialisation of high quality clonal ramets
through tissue culturing process and its
biotechnology related research and development
activities
IOI Plantation Services Sdn Bhd 100.0% 100.0% Provision of management services
Mayvin (Sabah) Sdn Bhd 100.0% 100.0% Investment holding
Lynwood Capital Resources Pte Ltd * 100.0% 100.0% Investment holding

(Incorporated in Singapore)
Oakridge Investments Pte Ltd * 100.0% 100.0% Investment holding

Oleander Capital Resources Pte Ltd * 100.0% 100.0% Investment holding

Cantawan Oil Palms Sdn Bhd 100.0% 100.0% Dormant
Fruitful Plantations Sdn Bhd 100.0% 100.0% Dormant
Future Growth Sdn Bhd 100.0% 100.0% Dormant
Hill Land Sdn Bhd 100.0% 100.0% Dormant
Morisem Sdn Bhd 100.0% 100.0% Dormant
Sri Cantawan Sdn Bhd 100.0% 100.0% Dormant
Unipamol Malaysia Sdn Bhd 100.0% 100.0% Dormant
Zonec Plus Sdn Bhd 100.0% 100.0% Dormant
274
ANNUAL REPORT 2016
IOI Bio-Energy Sdn Bhd 100.0% 100.0% Producing and supplying palm-based renewable
energy
IOI Edible Oils Sdn Bhd 100.0% 100.0% Investment holding and palm oil trading and
refinery
IOI Lipid Enzymtec Sdn Bhd 100.0% 100.0% Manufacturing of specialty fats by applying enzyme
technology
IOI Loders Croklaan Procurement Company 100.0% 100.0% Commodities trading and international procurement
Sdn Bhd of palm oil
IOI Oleochemical Industries Berhad * 100.0% 100.0% Investment holding
IOI Speciality Fats Sdn Bhd 100.0% 100.0% Investment holding
Loders Croklaan Group B. V. # 100.0% 100.0% Investment holding

(Incorporated in The Netherlands)
IOI Edible Oils (HK) Limited # 100.0% 100.0% Investment holding

(Incorporated in Hong Kong)
Non-Segment
IOI Biofuel Sdn Bhd 100.0% 100.0% Embark in renewable energy project
IOI Management Sdn Bhd 100.0% 100.0% Provision of treasury management services to its
related companies
IOI Global Services Sdn Bhd 100.0% 65.0% Provision of management services
(Formerly known as IOI Corporate Services
Sdn Bhd)
Kayangan Heights Sdn Bhd 60.0% 60.0% Property development
Rapat Jaya Sendirian Berhad 100.0% 100.0% Property development, property investment and
cultivation of plantation produce
IOI Corporation N. V. * 100.0% 100.0% Investment holding

(Incorporated in The Netherlands Antilles)
(In members voluntary winding-up)
Morisem Consolidated Sdn Bhd 100.0% 100.0% Investment holding
275
Non-Segment (Continued)
IOI Investment (L) Berhad 100.0% 100.0% Issuance of Exchangeable Bonds

(Incorporated in the Federal Territory of
Labuan)
IOI Ventures (L) Berhad 100.0% 100.0% Issuance of Guaranteed Notes

(Incorporated in the Federal Territory of Labuan)
IOI Capital (L) Berhad 100.0% 100.0% Dormant

(In the process of striking-off under Section
151 of the Labuan Companies Act, 1990)
IOI Resources (L) Berhad 100.0% 100.0% Dormant

151 of the Labuan Companies Act, 1990)
IOI Palm Products Sdn Bhd 100.0% 100.0% Dormant
IOI Pulp & Paper Sdn Bhd 100.0% 100.0% Dormant
Kean Ko Sdn Berhad 100.0% 100.0% Dormant
Palmco Plantations Sendirian Berhad 100.0% 100.0% Dormant
Indirect Subsidiaries
Plantation
Subsidiary of B. A. Plantations Sdn Bhd
Kesan Jadi Sdn Bhd 100.0% 100.0% Dormant
Subsidiaries of Mayvin (Sabah) Sdn Bhd
Sri Mayvin Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Deramakot Plantations Sdn Bhd 100.0% 100.0% Dormant
Ladang Mayvin Sdn Bhd 100.0% 100.0% Dormant
Mowtas Plantations Sdn Bhd 100.0% 100.0% Dormant
276
ANNUAL REPORT 2016
Indirect Subsidiaries (Continued)
Subsidiaries of Pine Capital Sdn Bhd
Ladang Tebu Batu Putih Sdn Bhd 100.0% 100.0% Dormant
Luminous Aspect Sdn Bhd 100.0% 100.0% Dormant
Priceland Plantation Sdn Bhd 100.0% 100.0% Dormant
Sayang Segama Sdn Bhd 100.0% 100.0% Dormant
Sri Vagas Sdn Bhd 100.0% 100.0% Dormant
Sri Yongdankong Sdn Bhd 100.0% 100.0% Dormant
Subsidiaries of Mayvin Incorporated Sdn Bhd
Gamore Corporation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Vantage Wealth Sdn Bhd 100.0% 100.0% Dormant
Subsidiaries of Syarimo Sdn Bhd
Agroplex (Sabah) Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Maxgrand Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Mewahandal Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Syarikat Best Cocoa Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Very Good Estate Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Fastscope Development Sdn Bhd 100.0% 100.0% Cultivation of soft wood timber
Bilprice Development Sdn Bhd 100.0% 100.0% Dormant

308 of the Companies Act, 1965)
Erat Manis Sdn Bhd 100.0% 100.0% Dormant

Hidayat Rakyat Sdn Bhd 100.0% 100.0% Dormant

277
Subsidiaries of Syarimo Sdn Bhd

(Continued)
Hidayat Ria Sdn Bhd 100.0% 100.0% Dormant

Kunimas Sdn Bhd 100.0% 100.0% Dormant

Lokoh Sdn Bhd 100.0% 100.0% Dormant

Muara Julang Sdn Bhd 100.0% 100.0% Dormant

Pricescore Enterprise Sdn Bhd 100.0% 100.0% Dormant

Pujian Harum Sdn Bhd 100.0% 100.0% Dormant

Unikhas Corporation Sdn Bhd 100.0% 100.0% Dormant

Subsidiary of Pamol Plantations Sdn Bhd
Pamol Estates (Sabah) Sdn Bhd 70.0% 70.0% Cultivation of oil palm, processing of palm oil and
investment holding
Subsidiary of Pamol Estates (Sabah) Sdn Bhd
Milik Berganda Sdn Bhd 70.0% 70.0% Cultivation of oil palm
278
ANNUAL REPORT 2016
Subsidiaries of Oleander Capital Resources

Pte Ltd
PT Berkat Agro Sawitindo * 67.0% 67.0% Investment holding

(Incorporated in Republic of Indonesia)
PT Sawit Nabati Agro * 67.0% 67.0% Investment holding

Subsidiaries of PT Sawit Nabati Agro
PT Bumi Sawit Sejahtera * 67.0% 67.0% Cultivation of oil palm

PT Berkat Nabati Sejahtera * 67.0% 67.0% Cultivation of oil palm

PT Sukses Karya Sawit * 67.0% 67.0% Cultivation of oil palm

PT Ketapang Sawit Lestari * 67.0% 67.0% Pre-operating

Subsidiaries of IOI Plantation Sdn Bhd
Unico-Desa Plantations Berhad 100.0% 100.0% Cultivation of oil palm, processing of palm oil and
investment holding
IOI Pelita Plantation Sdn Bhd 70.0% 70.0% Cultivation of oil palm
Subsidiaries of Unico-Desa Plantations

Berhad
Unico Plantations Sdn Bhd 100.0% 100.0% Cultivation of oil palm and investment holding
Basic Plantation (S) Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Builtec Agricultural & Development Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Gelodar Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Golden Focus Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Korop Holdings Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Zutaland Development Sdn Bhd 100.0% 100.0% Cultivation of oil palm
279
Subsidiaries of Unico Plantations Sdn Bhd
Fasgro Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Segaco Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Supercrop Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Syarikat Zuba Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Topcrop Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Tutico Plantation Sdn Bhd 100.0% 100.0% Cultivation of oil palm
Unico Oil Mill Sdn Bhd 100.0% 100.0% Processing of palm oil
Subsidiary of IOI Edible Oils Sdn Bhd
IOI Jeti Sdn Bhd 100.0% 100.0% Dormant
Subsidiaries of IOI Oleochemical Industries

Berhad
IOI Acidchem Sdn Bhd * 100.0% 100.0% Manufacture and sale of fatty acids and glycerine
(Formerly known as Acidchem International and other related products
Sdn Bhd)
IOI Derichem Sdn Bhd * 100.0% 100.0% Manufacture and sale of soap noodles
(Formerly known as Derichem (M) Sdn Bhd)
IOI Esterchem (M) Sdn Bhd 100.0% 100.0% Manufacture and trading of fatty ester
IOI Pan-Century Edible Oils Sdn Bhd 100.0% 100.0% Refining and processing of crude palm oil and
glycerine products
IOI Pan-Century Oleochemicals Sdn Bhd 100.0% 100.0% Manufacturing of oleochemical products and soap
noodle
Palmco Oil Mill Sendirian Berhad * 100.0% 100.0% Trading in commodities and renting of storage
tanks
Stabilchem (M) Sdn Bhd * 100.0% 100.0% Dormant
280
ANNUAL REPORT 2016
Resource-based Manufacturing (Continued)
Subsidiaries of IOI Acidchem Sdn Bhd
IOI Oleo GmbH * 100.0% Manufacture and sale of oleochemical specialty

(Incorporated in Germany) products
Acidchem (USA) Inc * 100.0% 100.0% Trading in fatty acids and glycerine
(Incorporated in United States of America)
IOI Oleo (Europe) ApS * 100.0% 100.0% Carrying out registration of oleochemical products
(Incorporated in Denmark) of European Union registration, trading and
distribution of oleochemical products
Subsidiary of IOI Edible Oils (HK) Limited
IOI (Xiamen) Edible Oils Co., Ltd * 100.0% 100.0% Pre-operating

(Incorporated in the Peoples Republic of
China)
Subsidiaries of Loders Croklaan Group B. V.
IOI-Loders Croklaan Oils B.V. # 100.0% 100.0% Palm oil refinery

IOI Loders Croklaan Oils Sdn Bhd 100.0% 100.0% Refining and sale of palm oil and related products
Loders Croklaan B. V. # 100.0% 100.0% Manufacturing of specialty oils and fats

Loders Croklaan Burkina Faso S.A.R.L. * 100.0% 100.0% Wholesale procurement and trading of agricultural
(Incorporated in the West Africa) products particularly shea nuts and shea butter
Loders Croklaan Canada Inc. #

100.0% 100.0% Manufacturing of specialty oils and fats
(Incorporated in Canada)
Loders Croklaan For Oils S.A.E. #

100.0% 100.0% Production of emulsified raw materials and semi
(Incorporated in Egypt) finished goods on oils and fats
Loders Croklaan Ghana Limited * 100.0% 100.0% Procurement and development of raw material for
(Incorporated in Ghana) specialty fats application
Loders Croklaan Latin America Comercio De 100.0% 100.0% Commission-based agent for the import of
Gorduras e Oleos Vegetais Ltda * specialty fats for the food industry
(Incorporated in Brazil)
281
Resource-based Manufacturing (Continued)
Subsidiaries of Loders Croklaan Group B. V.

(Continued)
Loders Croklaan (Shanghai) Trading Co. Ltd #

100.0% 100.0% Trading of specialty oils and fats products
China)
LCK Nutrition Limited # 100.0% 100.0% Sales, marketing, development and distribution of
(Incorporated in the Republic of Ireland) nutrition lipid betapol business
Loders Croklaan Malaysia Sdn Bhd 100.0% 100.0% Investment holding
Loders Croklaan USA B. V. # 100.0% 100.0% Investment holding

Loders Croklaan Nutrition B.V. # 100.0% 100.0% To be sales, marketing, development and
(Incorporated in The Netherlands) distribution of nutrition lipid Betapol business
IOI Loders Croklaan Industries Limited * 100.0% Procurement and development of raw material for
(Incorporated in Ghana) specialty fats application (Shea)
Subsidiary of Loders Croklaan USA B. V.
Loders Croklaan USA LLC # 100.0% 100.0% Manufacturing of specialty oils and fats
(Incorporated in United States of America)
Subsidiaries of Loders Croklaan For

Oils S. A. E.
IOI Specialty Fats For Trade Limited Liability 99.0% 99.0% Trading of specialty fats
Company #
(Incorporated in Egypt)
Loders Croklaan for Trading & Distribution LLC #

100.0% 100.0% Dormant
(Incorporated in Egypt)
(In liquidation)
Subsidiary of IOI Loders Croklaan Oils

Sdn Bhd
Loders Croklaan (Asia) Sdn Bhd 100.0% 100.0% Dormant
282
ANNUAL REPORT 2016
Non-Segment
Subsidiaries of IOI Oleochemical Industries

Berhad
Care Security Services Sdn Bhd * 100.0% 100.0% Dormant
Palmco Jaya Sendirian Berhad * 100.0% 100.0% Bulk cargo warehousing
Palmco International (HK) Limited * 100.0% 100.0% Investment holding

Acidchem (Sabah) Sdn Bhd * 100.0% Dormant

(Struck-off under Section 308 of the
Companies Act, 1965)
Direct Consolidated Sdn Bhd * 100.0% Dormant

(Struck-off under Section 308 of the
Companies Act, 1965)
Palmco Management Services Sdn Bhd * 100.0% 100.0% Dormant
Palmina Sendirian Berhad * 100.0% 100.0% Dormant
Pamol Bintang Sdn Bhd * 100.0% 100.0% Dormant
Performance Chemicals (M) Sdn Bhd * 100.0% 100.0% Dormant
Quantum Green Sdn Bhd * 100.0% 100.0% Dormant
Subsidiaries of Palmco International (HK)

Limited
Palmco Engineering Limited * 100.0% 100.0% Investment holding

Acidchem (Singapore) Pte Ltd * 100.0% 100.0% Dormant

283
Non-Segment (Continued)
Subsidiary of Palmco Engineering Limited
Tianjin Palmco Oil And Fats Co. Ltd * 100.0% 100.0% Dormant
China)
Subsidiary of Kayangan Heights Sdn Bhd
Common Portfolio Sdn Bhd 60.0% 60.0% Dormant
Notes:
* Subsidiaries not audited by BDO.
# Subsidiaries audited by member firms of BDO International.
284
ANNUAL REPORT 2016
Associates
Plantation
Reka Halus Sdn Bhd 30.0% 30.0% Cultivation of oil palm and processing of palm oil
Asssociate of Lynwood Capital Resources

Pte Ltd and Oakridge Investments Pte Ltd
Bumitama Agri Ltd 31.7% 31.4% Investment holding

Associates of IOI Oleochemical Industries

Berhad
Fatty Chemical (Malaysia) Sdn Bhd 30.0% 30.0% Manufacturing and sale of fatty alcohol and
refined glycerine
Kao Plasticizer (Malaysia) Sdn Bhd 30.0% 30.0% Manufacturing and sale of plasticizer products
Peter Greven Asia Sdn Bhd 40.0% 40.0% Production, marketing and distribution of metallic
stearates
Malaysia Pakistan Venture Sdn Bhd 25.0% 25.0% Investment holding
Joint Ventures
Adeka Foods (Asia) Sdn Bhd 40.0% 40.0% Manufacturing of margarine, shortening and fat
spreads
IOI Loders Croklaan SC B.V. 50.0% Dormant

46. AUTHORISATION FOR ISSUE

The financial statements of the Group and of the Company for the financial year ended 30 June 2016 were authorised for issue
by the Board of Directors on 13 September 2016.
285
47. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES

The retained earnings as at the end of the financial year are analysed as follows:
Group Company
In RM million 2016 2015 2016 2015
Total retained profits of the Company and its subsidiaries

Realised 11,451.7 11,483.2 5,128.2 4,808.0
Unrealised (537.1) (286.3) (192.5) (21.3)
10,914.6 11,196.9 4,935.7 4,786.7

Total share of retained profits from associates
Realised 285.1 226.8
Unrealised 117.8 104.8
Total share of accumulated losses from joint ventures

Realised (12.0) (6.8)
Unrealised
11,305.5 11,521.7 4,935.7 4,786.7

Less: Consolidation adjustments (4,110.6) (4,481.6)
7,194.9 7,040.1 4,935.7 4,786.7
286
ANNUAL REPORT 2016
STATEMENT BY DIRECTORS
In the opinion of the Directors, the financial statements set out on pages 127 to 285 have been drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the provisions 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 at 30 June 2016 and of their financial
performance and cash flows of the Group and of the Company for the financial year then ended.
In the opinion of the Directors, the information set out in Note 47 to the financial statements on page 286 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 in accordance with a resolution of the Directors dated 13 September 2016:

Executive Chairman
Dato Lee Yeow Chor

STATUTORY DECLARATION
I, Wong Tack Wee, being the officer primarily responsible for the financial management of IOI Corporation Berhad, do solemnly and
sincerely declare that the financial statements set out on pages 127 to 286 are, to the best of my knowledge and belief, correct and
I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations
Act, 1960.
Subscribed and solemnly declared )

by the abovenamed ) Wong Tack Wee
at Puchong, Selangor Darul Ehsan )
this 13 September 2016 )
Before me
Ng Say Jin
Commissioner for Oaths
No. B195
287
INDEPENDENT AUDITORS REPORT

To The Mem b e rs O f IOI C orpora t io n B e r h a d
REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of IOI Corporation Berhad, which comprise the statements of financial position as at 30 June
2016 of the Group and of the Company, and the statements of profit or loss, statements of comprehensive income, statements of
changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary
of significant accounting policies and other explanatory information, as set out on pages 127 to 285.
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 Malaysian 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 misstatements, whether due to fraud or errors.
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 misstatements.
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 entitys 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 the entitys 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 at
30 June 2016 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian
Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
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 financial statements and the auditors reports of all the subsidiaries of which we have not acted as
auditors, which are indicated in Note 45 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys 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 financial statements of the subsidiaries did not contain any qualification or any adverse comment made
under Section 174(3) of the Act.
288
ANNUAL REPORT 2016
OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 47 to the financial statements is disclosed to meet the requirements of Bursa Malaysia
Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary
information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of
Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is
prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
OTHER MATTERS
As stated in Note 2.1 to the financial statements, IOI Corporation Berhad adopted Malaysian Financial Reporting Standards on 1 July
2015 with a transition date of 1 July 2014. These Standards were applied retrospectively by the Directors to the comparative information
in these financial statements, including the statements of financial position as at 30 June 2015 and 1 July 2014 and the statements
of profit or loss, the statements of comprehensive income, statements of changes in equity and statements of cash flows for the
financial year ended 30 June 2015 and related disclosures. We were not engaged to report on the restated comparative information,
and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the
financial year ended 30 June 2016 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the
opening balances as at 1 July 2015 do not contain misstatements that materially affect the financial position as of 30 June 2016 and
financial performance and cash flows for the year then ended.
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.
BDO Ooi Thiam Poh

AF: 0206 2495/01/18 (J)
Chartered Accountants Chartered Accountant
Kuala Lumpur
13 September 2016
289
GROUP PROPERTIES
A. PLANTATION ESTATES
Net Carrying
Amount as at
Area Crop Factory/ Year of 30 June 2016
Location Tenure (Hectare) Planted Mill Acquisition RM million
Pahang Darul Makmur

Bukit Dinding Estate, Bentong Freehold 1,660 OP 1983 116.6
Pukin Estate, Pekan Rompin Leasehold expiring 2071, 2,428 OP 1 1985 134.5
2074, 2077
Mekassar Estate, Pekan Rompin Leasehold expiring 2075 1,209 OP 1985 66.4
Detas Estate, Pekan Leasehold expiring 2081 2,226 OP 1989 131.0
Bukit Leelau Estate, Pekan Leasehold expiring 2088 2,088 OP 1 1989 112.7
Merchong Estate, Pekan Leasehold expiring 2075 1,934 OP 1990 105.7
Leepang A Estate, Rompin Leasehold expiring 2067 2,322 OP 2000 118.5
Laukin A Estate, Rompin Leasehold expiring 2067 1,565 OP 2000 79.3
Shahzan IOI Estate 1, Rompin Leasehold expiring 2062 1,562 OP 2002 71.1
Shahzan IOI Estate 2, Rompin Leasehold expiring 2062 1,640 OP 2002 57.4
Negeri Sembilan Darul Khusus

Regent Estate, Tampin Freehold 2,300 OP 1990 156.0
Bahau Estate, Kuala Pilah Freehold 2,553 OP 1990 171.3
Kuala Jelei Estate, Kuala Pilah Freehold 679 OP 1990 46.1
Johor Darul Takzim

Gomali Estate, Segamat Freehold 2,562 OP R 1 1990 190.6
Paya Lang Estate, Segamat Freehold 2,446 OP R 1990 171.0
Tambang Estate, Segamat Freehold 2,011 OP 1990 138.6
Bukit Serampang Estate, Tangkak Freehold 2,564 OP 1990 173.8
Kahang Estate, Kluang Leasehold expiring 2082 2,420 OP 1990 119.6
Sagil Estate, Tangkak Freehold 2,547 OP 1990 178.3
Segamat Estate, Segamat Freehold 1,340 OP 1990 89.8
Pamol Plantations Estate, Kluang Freehold 8,109 OP 1 2003 585.1
Sabah
Morisem 1 Estate, Kinabatangan Leasehold expiring 2080 2,032 OP 1993 52.6
Morisem 2 Estate, Kinabatangan Leasehold expiring 2038, 2,042 OP 1993-2009 61.5
2087, 2090
Morisem 3 Estate, Kinabatangan Leasehold expiring 2087, 2,014 OP 1993 43.2
2088
Baturong 1-3 Estates, Kunak Leasehold expiring 2081 7,485 OP 1 1991 238.0
Halusah Estate, Lahad Datu Leasehold expiring 2076, 813 OP 1991 15.1
2078
290
ANNUAL REPORT 2016
A. PLANTATION ESTATES (Continued)
Net Carrying
Amount as at
Area Crop Factory/ Year of 30 June 2016
Location Tenure (Hectare) Planted Mill Acquisition RM million
Sabah (Continued)
Syarimo 1-9 Estates, Kinabatangan Leasehold expiring 2035, 18,417 OP 1 1985-2000 539.0
2077-2097, 2963-2990
Permodalan Estate, Kinabatangan Leasehold expiring 2078 8,094 OP 1995 144.1
Laukin Estate, Sugut Leasehold expiring 2077 2,128 OP 1996 58.8
Sakilan Estate, Sandakan Leasehold expiring 2887 2,296 OP 1 1996 98.4
Ladang Sabah Estates, Labuk-Sugut Leasehold expiring 2077, 12,228 OP 1 1998-2003 373.1
2082, 2087, 2089
Cantawan Estate, Lahad Datu Leasehold expiring 2061, 1,452 OP 1998 34.5
2066, 2078-2080
Tas Estate, Kinabatangan Leasehold expiring 2077 1,209 OP 1998 24.6
Tangkulap Estate, Labuk-Sugut Leasehold expiring 2,277 OP 2001 124.0
2080-2086
Bimbingan Estate, Labuk-Sugut Leasehold expiring 2083 3,893 OP 2001 151.8
Pamol Plantations, Labuk-Sugut Leasehold expiring 2037, 1,792 OP 2003-2007 52.7
2081, 2097
Pamol Estates, Labuk-Sugut Leasehold expiring 2888 8,186 OP 1 2003 385.0
Milik Berganda Estate, Labuk-Sugut Leasehold expiring 2090 5,269 OP 2003 146.8
Linbar 1-2 Estates, Kinabatangan Leasehold expiring 2081 4,840 OP 2003 156.4
Mayvin 1-2 Estates, Labuk-Sugut Leasehold expiring 3,423 OP 1 2003 113.4
2079-2081, 2090, 2092
Mayvin 5-6 Estates, Kinabatangan Leasehold expiring 2082 3,602 OP 2003 117.8
Leepang 1-5 Estates, Kinabatangan Leasehold expiring 10,031 OP 2 2003-2009 248.5
2030-2039, 2078-2102
Unico 1-5 Estates, Kinabatangan Leasehold expiring 11,396 OP 1 2013 673.1
2081-2101
Unico 6 Estate, Lahad Datu Leasehold expiring 2074, 2,264 OP 1 2013 180.6
2077-2079
Sarawak
Sejap Estate, Baram Leasehold expiring 2058 4,960 OP 2002 27.6
Tegai Estate, Baram Leasehold expiring 2067, 4,038 OP 2002 23.9
2095
OP Oil palm
R Rubber
291
GROUP PROPERTIES (Contd)
B. INVESTMENT PROPERTY
Net Carrying
Net Age of Amount as at
Lettable Building 30 June 2016
Location Tenure Land Area Area Usage (Year) RM million
No. 7 Jalan Kenari 5 Freehold 465 sq m 1,650 sq m 1 unit 21 6.9

Bandar Puchong Jaya 3 storey
47100 Puchong shop office
C. INDUSTRIAL PROPERTIES
Net Carrying
Age of Amount as at
Building Year of 30 June 2016
Location Tenure Land Area Usage (Year) Acquisition RM million
Country lease Leasehold expiring 22 hectares Palm oil refinery 19 1995 94.3
075365632, 075376279 2039, 2042, 2044 and palm based
075376260 & 075469340 renewable energy
Sg Mowtas and Batu Sapi
Sandakan
Sabah
Lorong Perusahaan Satu Leasehold expiring 180,263 sq m Offices and 37 2001 66.6
Prai Industrial Complex between factory sites
13600 Prai 2035-2071 Factory site 1-15 34.5
Penang
Palmco Jaya Warehouse Leasehold expiring 13,400 sq m Bulk cargo 42 2001 0.2
Bulk Cargo Terminal 2025 terminal
13600 Prai
Penang
Deep Water Wharves Leasehold expiring 5,663 sq m Bulking 42 2001

12100 Butterworth 2030 installation
Penang
PT 110296 & 216213 Leasehold expiring 14.4 hectares Factory complex 26-35 2005 140.1
Jalan Pekeliling 2037, 2041, 2052 and vacant
HS(D) 160988 PTD 89217 industrial land
Mukim Plentong
Pasir Gudang
Johor Bahru
Johor Darul Takzim
292
ANNUAL REPORT 2016
C. INDUSTRIAL PROPERTIES (Continued)
Net Carrying
Age of Amount as at
PT 17368, Jalan Pekeliling Leasehold expiring 11.6 hectares Factory complex 29 2007 33.1
PT 101373 & 2038, 2047, 2051
PT 80565, Jalan Timah
PT 101367, Jalan Tembaga
Pasir Gudang, Johor Bahru
Johor Darul Takzim
Plot 1-2-4, A7-6 TEDA Leasehold expiring 34,375 sq m Offices and 27 2001
300457 Tianjin 2024 factory sites
The Peoples Republic of China
Durkee Road Freehold 36 hectares Specialty oils 14-46 2002 81.3

24708 W Channahon and fats
Illinois manufacturing
United States facilities
Loders Croklaan Freehold 6 hectares Specialty oils 25-46 2002 111.2

Hogeweg 1, 1520 Wormerveer and fats
The Netherlands manufacturing
facilities
Antarcticaweg 191 Leasehold expiring 15 hectares Palm oil refinery 11-15 2004 238.3
Harbour 8228 2029 and specialty oils
3199 KA Maasvlakte and fats
Rotterdam manufacturing
The Netherlands facilities
195 Belfield Rd. Freehold 9,308 sq m Specialty oils 40 2002 9.9

Rexdale, Ontario M9W-1G8 and fats
Canada manufacturing
facilities
Industrial Park III Freehold 12,031 sq m Vacant land 2010 4.3

Lots 15 & 16
Jundiai
Brazil
Dusun Arang-Arang * 122,444 sq m Palm oil mill 2 ^ 32.9

Air Hitam Hulu
Kecamatan Kendawangan
Kabupaten Ketapang
Kalimantan Barat, Indonesia
No 101 Leasehold expiring 160,004 sq m Specialty oils # 2015 32.2

Cangjiang Road 2064 and fats
Haicang District, Xiamen manufacturing
Fujian Province facilities
The Peoples Republic of China
293
GROUP PROPERTIES (Contd)
C. INDUSTRIAL PROPERTIES (Continued)
Net Carrying
Age of Amount as at
Zur Hafenspitze 15 Freehold 60,000 sq m Factory complex 15 2016 10.9

19322 Wittenberge
Germany
Arthur-Imhausen-Strasse 92 Perpetual lease 24,000 sq m Factory complex 25 2016 38.9

D-58453 Witten
Germany
Notes:
* Yet to be determined.
^ Self constructed and completed in year 2015.
# Under construction.
D. OTHER PROPERTIES
Net Carrying
Age of Amount as at
Land/Built Building Year of 30 June 2016
Location Tenure Up Area Usage (Year) Acquisition RM million
HS(D) 45890 PT 9427 Freehold 1,803 sq m Petrol station 1992

Mukim Petaling land
Lot 40476 & 40480 Freehold 3,018 sq m Bungalow plots 1992 2.0
Daerah Wilayah Persekutuan
Kuala Lumpur
Lot 200-203 Leasehold expiring 1,807 sq m 4 units 36 2005 0.2

Taman Air Biru 2070 double storey
Mukim Plentong semi-detached
Pasir Gudang, Johor Bahru house
Johor Darul Takzim
Geran 1341, Lot 12040 Freehold 2 hectares Vacant land 1998 0.1
Mukim of Tangkak
Johor Darul Takzim
Lot 51665 Leasehold expiring 2,968 sq m Vacant land 2009 0.4

Mukim Plentong 2043
Pasir Gudang, Johor Bahru
Johor Darul Takzim
294
ANNUAL REPORT 2016
D. OTHER PROPERTIES (Continued)
Net Carrying
Age of Amount as at
Land/Built Building Year of 30 June 2016
Location Tenure Up Area Usage (Year) Acquisition RM million
Country lease 115325534 Leasehold expiring 2 hectares Vacant land 1993 0.1
New Wharf Road 2914
Lahad Datu
Sabah
Country lease 115325543, Leasehold expiring 5 hectares Vacant land 1993 0.1
116179269 2058, 2914
New Wharf Road
Lahad Datu
Sabah
Country lease 115310926 Leasehold expiring 1 hectare Regional office 15 1993

Jalan Segama 2932
Lahad Datu
Sabah
Country lease 075349343, Leasehold expiring 417 sq m 3 storey 2 2015 1.3

075349352 2882 shop/office
Lot 34, Phase 7A
Northern Ring Road
Sandakan
Sabah
302-H, Jalan Relau Freehold 167 sq m Shoplot 21 2001 0.2

Desaria, 11900 Sg Ara
Penang
Lot 8165, Mukim 12 Freehold 1,799 sq m Future 2001 0.2

Sg Ara Estate development land
Penang
Lots 429, 432 & 434 Freehold 19 hectares Future 1990 1.2
Bukit Sebukor development land
Bukit Baru, Melaka Tengah
Melaka
295
NOTICE OF
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Forty-Seventh Annual General Meeting (AGM) of the
Company will be held at Putrajaya Ballroom I (Level 3), Putrajaya Marriott Hotel, IOI Resort City,
62502 Sepang Utara, Malaysia on Friday, 28 October 2016 at 10:00 am for the following purposes:
AGENDA
1 To receive the Audited Financial Statements for the financial year ended 30 June 2016 and the Reports Please refer to
of the Directors and Auditors thereon. Note A
2 To re-elect the following Directors retiring by rotation pursuant to Article 101 of the Companys Articles
of Association:
(i) Datuk Karownakaran @ Karunakaran a/l Ramasamy Resolution 1
(ii) Mr Lim Tuang Ooi Resolution 2
(Please refer to Note B)
3 To consider and if thought fit, to pass the following as Ordinary Resolutions in accordance with Section
129 of the Companies Act, 1965:
(i) THAT Tan Sri Dato Lee Shin Cheng, a Director retiring pursuant to Section 129(2) of the Companies
Act, 1965 be and is hereby re-appointed a Director of the Company to hold office until the next
Annual General Meeting. Resolution 3
(ii) THAT Tan Sri Peter Chin Fah Kui, a Director retiring pursuant to Section 129(2) of the Companies
Act, 1965 be and is hereby re-appointed a Director of the Company to hold office until the next
Annual General Meeting. Resolution 4
(Please refer to Note B)
4 To consider and if thought fit, to pass the following as an Ordinary Resolution:
THAT the payment of Directors fees of RM1,195,000 for the financial year ending 30 June 2017
payable quarterly in arrears after each month of completed service of the Directors during the financial
year, be and is hereby approved. Resolution 5
(Please refer to Note C)
5 To re-appoint Messrs BDO, the retiring auditors for the financial year ending 30 June 2017 and to
authorise the Audit and Risk Management Committee to fix their remuneration. Resolution 6
(Please refer to Note D)
296
ANNUAL REPORT 2016
6 As special business, to consider and if thought fit, to pass the following Ordinary Resolutions:
6.1 Authority to Directors to allot and issue shares pursuant to Section 132D of the Companies
Act, 1965
THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby
authorised with full powers to allot and issue shares in the Company from time to time and upon
such terms and conditions and for such purposes as they may deem fit subject always to the
approval of the relevant authorities being obtained for such issue and provided that the aggregate
number of shares to be issued pursuant to this resolution does not exceed ten percent (10%) of
the issued share capital for the time being of the Company and that such authority shall continue
in force until the conclusion of the next Annual General Meeting of the Company 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. Resolution 7
6.2 Proposed Renewal of Existing Share Buy-Back Authority

THAT subject to compliance with applicable laws, regulations and the approval of all relevant
authorities, approval be and is hereby given to the Company to utilise up to the aggregate of the
Companys latest audited retained earnings and share premium account, to purchase, from time to
time during the validity of the approval and authority under this resolution, such number of ordinary
shares of nominal value RM0.10 each in the Company as may be determined by the Directors of
the Company from time to time through Bursa Malaysia Securities Berhad (Bursa Securities) upon
such terms and conditions as the Directors may deem fit and expedient in the interest of the
Company provided that the aggregate number of shares to be purchased and/or held by the
Company pursuant to this resolution does not exceed ten percent (10%) of the issued and paid-up
ordinary share capital of the Company at the time of purchase (Proposed Purchase);
THAT at the discretion of the Directors of the Company, the shares of the Company to be purchased
are to be cancelled and/or retained as treasury shares and distributed as dividends or resold on Bursa
Securities;
THAT the Directors of the Company be and are hereby empowered generally to do all acts and
things to give effect to the Proposed Purchase with full powers to assent to any condition,
modification, revaluation, variation and/or amendment (if any) as may be imposed by the relevant
authorities and/or do all such acts and things as the Directors may deem fit and expedient in the
best interest of the Company;
AND THAT such authority shall commence immediately upon passing of this resolution until:
(i) the conclusion of the next Annual General Meeting of the Company at which time the
authority shall lapse unless by ordinary resolution passed at a general meeting, the authority is
renewed either unconditionally or subject to conditions;
(ii) the expiration of the period within which the next Annual General Meeting after that date is
required by law to be held; or
(iii) revoked or varied by ordinary resolution of the shareholders of the Company in a general
meeting,
whichever is the earlier but not so as to prejudice the completion of purchase(s) by the Company
before the aforesaid expiry date and, in any event, in accordance with the provisions of the Main
Market Listing Requirements of Bursa Securities or any other relevant authorities. Resolution 8
297
NOTICE OF
ANNUAL GENERAL MEETING (Contd)
6.3 Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a
Revenue or Trading Nature
THAT subject always to the provisions of the Companies Act, 1965 (the Act), the Memorandum
and Articles of Association of the Company, Main Market Listing Requirements of Bursa Malaysia
Securities Berhad or other regulatory authorities, approval be and is hereby given to the Company
and/or its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature
which are necessary for day-to-day operations involving the interests of Directors, Major Shareholders
or persons connected to the Directors and/or Major Shareholders of the Company and its subsidiaries
(Related Parties), as detailed in Part B, Section 4 of the Circular to Shareholders of the Company
dated 29 September 2016 (Shareholders Mandate) subject to the following:
(i) the transactions are carried out in the ordinary course of business on normal commercial terms
which are not more favourable to the Related Parties than those generally available to the
public and are not to the detriment of the minority shareholders of the Company; and
(ii) disclosure is made in the annual report of the aggregate value of transactions conducted
pursuant to the Shareholders Mandate during the financial year.
THAT authority conferred by this resolution will commence immediately upon the passing of this
resolution and shall continue to be in force until:
(i) the conclusion of the next Annual General Meeting of the Company, at which time it will lapse,
unless renewed by a resolution passed by the shareholders of the Company in a general
meeting;
(ii) the expiration of the period within which the next Annual General Meeting of the Company after
that date it is required to be held pursuant to Section 143(1) of the Act (but shall not extend to
such extension as may be allowed pursuant to Section 143(2) of the Act); or
(iii) revoked or varied by resolution passed by the shareholders of the Company in a general
meeting,
whichever is the earlier,
AND THAT the Directors of the Company be and are hereby authorised to complete and do all such
acts and things as they may consider expedient or necessary to give effect to the Shareholders
Mandate. Resolution 9
7 To transact any other business of which due notice shall have been given in accordance with the
Companies Act, 1965 and the Companys Articles of Association.
By Order of the Board,
Vincent Tan Choong Khiang

Secretary (MAICSA 7018448)
Putrajaya
29 September 2016
298
ANNUAL REPORT 2016
Notes
1 A member may appoint any person to be his proxy and there shall be no restriction as to the qualification of the proxy. The provision of Section 149(1)(b) of the
Companies Act, 1965 shall not apply to the Company.
2 An instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation,
either under seal or under the hand of an officer or attorney duly authorised.
3 Subject to Note 4 below, a member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. If a member appoints two (2)
proxies to attend at the same meeting, the instrument of proxy must specify the proportion of his shareholdings to be represented by each proxy and only one (1) of
those proxies is entitled to vote on show of hands.
4 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, there is 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 Securities Industry (Central Depositories) Act 1991 (SICDA) which is exempted from compliance with the
provisions of 25A(1) of the SICDA.
5 An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so
provides, the proxy is not entitled to vote on the resolution except as specified in the instrument.
6 An instrument appointing a proxy must be deposited at Boardroom Corporate Services (KL) Sdn Bhd, Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama,
47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time for holding the meeting or any adjournment thereof.
7 Only members whose names appear in the Record of Depositors as at 21 October 2016 shall be eligible to attend the AGM or appoint proxy to attend and vote on
his behalf.
8 Note A To receive Audited Financial Statements for the financial year ended 30 June 2016
This Agenda item is meant for discussion only as under the provision of Section 169(1) of the Companies Act, 1965, the audited financial statements do not require a
formal approval of the shareholders. Hence, this resolution will not put forward for voting.
The 2016 Annual Report (which includes the Financial Report, the Directors Report and the Independent Auditors Report) will be presented to the meeting. Shareholders
can access a copy of the 2016 Annual Report at IOI Corporation Berhad (IOI Corp)s website, www.ioigroup.com.
The Chairman will give shareholders an opportunity to ask questions about, and make comments on, the financial statements and reports and IOI Corps performance.
Shareholders will also be given an opportunity to ask the representative(s) of IOI Corps auditors, Messrs BDO, questions relevant to audit matters, including the Auditors
Report.
9 Note B To re-elect Directors/To re-appoint Directors
Datuk Karownakaran @ Karunakaran a/l Ramasamy and Mr Lim Tuang Ooi are standing for re-election as Directors of the Company and being eligible, have offered
themselves for re-election at this AGM.
The Companys Articles of Association states that at each AGM of the Company, one-third (1/3) of the Directors or if their number is not three (3) or a multiple of
three (3), then the number nearest one-third (1/3) must retire from office, provided always that all Directors shall retire from office once at least in each three (3) years,
but shall eligible for re-election.
The re-appointment of Tan Sri Dato Lee Shin Cheng and Tan Sri Peter Chin Fah Kui who have attained the age of 70 years, as Directors of the Company to hold office
until the conclusion of the next AGM, shall take effect if the Ordinary Resolutions 3 and 4 are passed by a majority of not less than three-fourths (3/4) of such members
as being entitled to vote in person or by proxy at this AGM of which not less than 21 days notice has been given.
Each of the Directors standing for re-election/re-appointment has undergone a performance evaluation and has demonstrated that he remains committed to the role and
continues to be an effective and valuable member of the Board. The Board has also conducted assessment on the independence of the Independent Directors who are
seeking for re-election/re-appointment and is satisfied that the Independent Directors have complied with the independence criteria applied by the Company and continue
to bring independent and objective judgement to the Board deliberation.
The Board comprises eight (8) Directors, consisting of an Executive Chairman, two (2) Executive Directors and five (5) Non-Executive Directors, whose experience and
expertise are derived from a range of industries and sectors providing an invaluable perspective on the Groups business. Biographical details for each Director, including
their career history, skills, competencies and experience can be found from pages 60 to 67 of the 2016 Annual Report.
299
NOTICE OF
ANNUAL GENERAL MEETING (Contd)
10 Note C To approve Directors Fees
The Board has reviewed the Directors fees after taking into account fee levels and trends for similar positions in the market and time commitment required from the
Directors. The payment of Directors fees for the financial year ending 30 June 2017 shall payable quarterly in arrears after each month of completed service of the
Directors during the financial year.
11 Note D To re-appoint auditors
The Companys Auditors must offer themeselves for re-appointment at each AGM at which Audited Financial Statements are presented. The performance and
effectiveness of the Auditors has been evaluated by the Audit and Risk Management Committee, which included an assessment of the Auditors independence and
objectivity, which has recommended to the Board that Messrs BDO be re-appointed and its remuneration be determined by the Audit and Risk Management Committee.
12 Explanatory Notes on Special Businesses
i Authority to Directors to allot and issue shares pursuant to Section 132D of the Companies Act, 1965
Ordinary Resolution 7 is to seek a renewal of the general mandate which was approved at the 46th AGM of the Company held on 27 October 2015 and which
will lapse at the conclusion of the forthcoming AGM to be held on 28 October 2016.
The general mandate, if approved, will provide flexibility to the Company for any possible fund raising activities, including but not limited to placing of shares for
the purpose of funding future investment project(s) and acquisition(s) and for strategic reasons. In order to eliminate any delay and costs in convening a general
meeting to specifically approve such issuance of shares, it is considered appropriate that the Directors be empowered, as proposed under Ordinary Resolution 7, to
allot and issue shares in the Company up to an amount not exceeding in total ten percent (10%) of the issued share capital of the Company for the time being.
This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.
The Company did not issue any new shares pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the 46th
AGM of the Company.
The Directors currently have no intention of issuing new shares, or of granting rights to subscribe for or to convert any security into shares, except in connection
with the Companys executive share option scheme.
ii Proposed Renewal of Existing Share Buy-Back Authority
Ordinary Resolution 8 is to seek a renewal of the authority granted at the 46th AGM of the Company held on 27 October 2015 and which will lapse at the
conclusion of the forthcoming AGM to be held on 28 October 2016. The resolution authorises the Company to make market purchases of its own ordinary shares
as permitted by the Companies Act 1965.
The Board seeks authority to purchase up to 10% of the Companys issued ordinary shares (excluding any treasury shares), should market conditions and price justify
such action.
The Directors only intend to use this authority to make such purchases if to do so could be expected to lead to an increase in net assets value per share for the
remaining shareholders and would be in the best interests of shareholders generally, having due regard to appropriate gearing levels, alternative investment
opportunities and the overall financial position of the Company. The Company bought back 35,676,300 ordinary shares of RM0.10 each during the financial year
ended 30 June 2016.
Any purchases of ordinary shares would be by means of market purchases through the Bursa Malaysia Securities Berhad. Any shares purchased under this authority
may either be cancelled or held as treasury shares by the Company. Treasury shares may subsequently be cancelled or sold for cash.
Please refer to explanatory information in the Circular to Shareholders dated 29 September 2016.
iii Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (Proposed Shareholders
Mandate)
Ordinary Resolution 9 is to seek approval from the shareholders for renewal of the shareholders mandate granted by the shareholders of the Company at the 46th
AGM held on 27 October 2015. The Proposed Shareholders Mandate will enable the Company and its subsidiaries to enter into any of the recurrent related party
transactions of a revenue or trading nature which are necessary for the day-to-day operations involving the interest of Directors, Major Shareholders or persons
connected to the Directors and/or Major Shareholders of the Company and its subsidiaries (Related Parties), subject to the transactions being in the ordinary
course of business on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public and are not to
the detriment of the minority shareholders of the Company. This authority unless revoked or varied at a general meeting, will expire at the conclusion of the next
AGM of the Company.
The details of the proposal are set out in the Circular to Shareholders dated 29 September 2016.
300
ANNUAL REPORT 2016
STATEMENT ACCOMPANYING
NOTICE OF ANNUAL GENERAL MEETING
Pu rsu an t to P a ra gra ph 8.27(2 ) o f t h e Ma in M a r k e t L is t in g R e q u ir em en t s o f
B u rsa Mala y s i a S e c uri ti e s Be r h a d
(i) Details of individuals who are standing for election as Directors (excluding Directors standing for a re-election)
No individual is seeking election as a Director at the forthcoming Forty-Seventh Annual General Meeting of the Company.
(ii) Directors standing for re-election/re-appointment
(a) The Directors retiring by rotation and standing for re-election pursuant to Article 101 of the Articles of Association of the
Company are as follows:
Mr Lim Tuang Ooi
(b) The Directors seeking for re-appointment under Section 129 of the Companies Act, 1965 are as follows:
The profiles of the above-named Directors are set out in the section entitled Profile of Directors on pages 60 to 67 of the Annual
Report.
Their shareholdings in the Company and its related corporations are set out in the section entitled Statement of Directors Interests
on page 113 of the Annual Report.
301
SHAREHOLDERS INFORMATION
as at 3 0 A u g us t 2016
Type of shares : Ordinary shares of RM0.10 each
Voting rights : One vote per shareholder on a show of hands

One vote per ordinary share on a poll
Number of shareholders : 24,830
ANALYSIS OF SHAREHOLDINGS
(Adjusted capital after netting treasury shares)
Size of holdings No. of holders Total holdings %
1 99 3,143 29,253 0.00

100 1,000 4,735 3,644,708 0.06
1,001 10,000 12,320 47,995,217 0.76
10,001 100,000 3,753 100,973,615 1.61
100,001 314,410,348 872 2,712,570,149 43.14
314,410,349 and above 7 3,422,994,053 54.43
Total 24,830 6,288,206,995 100.00
LIST OF TOP 30 SHAREHOLDERS

(without aggregating securities from different securities accounts belonging to the same person)
Name No. of shares held %
1. Vertical Capacity Sdn Bhd 801,300,000 12.74
4. CIMB Group Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Vertical Capacity Sdn Bhd 405,000,000 6.44
5. Citigroup Nominees (Tempatan) Sdn Bhd

Employees Provident Fund Board 363,275,873 5.78
7. AmanahRaya Trustees Berhad

Amanah Saham Bumiputera 321,039,800 5.10
8. Kumpulan Wang Persaraan (Diperbadankan) 225,685,100 3.59
9. Cartaban Nominees (Asing) Sdn Bhd

Exempt Authorised Nominee for Bank J. Safra Sarasin Ltd, Singapore Branch (BSCSG) 218,189,200 3.47
10. Annhow Holdings Sdn Bhd 123,372,300 1.96

Amanah Saham Wawasan 2020 90,189,367 1.43
12. AMSEC Nominees (Tempatan) Sdn Bhd

Pledged Securities Account AmIslamic Bank Berhad for Vertical Capacity Sdn Bhd 89,000,000 1.41
302
ANNUAL REPORT 2016
LIST OF TOP 30 SHAREHOLDERS (Continued)

(without aggregating securities from different securities accounts belonging to the same person)
Name No. of shares held %

Amanah Saham Malaysia 86,237,000 1.37
14. HLB Nominees (Tempatan) Sdn Bhd

15. Cartaban Nominees (Asing) Sdn Bhd

Exempt Authorised Nominee for State Street Bank & Trust Company 62,727,180 1.00
16. HSBC Nominees (Tempatan) Sdn Bhd
17. Cartaban Nominees (Tempatan) Sdn Bhd

Exempt Authorised Nominee for Eastspring Investments Berhad 60,731,501 0.97
18. HSBC Nominees (Asing) Sdn Bhd

BBH and Co Boston for Vanguard Emerging Markets Stock Index Fund 55,829,578 0.89
19. Cartaban Nominees (Tempatan) Sdn Bhd

Exempt Authorised Nominee for Bank J. Safra Sarasin Ltd, Singapore Branch (BSCSG) 54,000,000 0.86
20. HSBC Nominees (Asing) Sdn Bhd

Exempt Authorised Nominee for JPMorgan Chase Bank, National Association (U.S.A.) 50,290,806 0.80
21. Maybank Nominees (Tempatan) Sdn Bhd

Maybank Trustees Berhad for Public Ittikal Fund 45,000,000 0.72
22. Citigroup Nominees (Asing) Sdn Bhd

Exempt Authorised Nominee for UBS AG Singapore (Foreign) 37,270,100 0.59
23. RHB Capital Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Rickoh Holdings Sdn Bhd 32,500,000 0.52
24. Malaysia Nominees (Tempatan) Sendirian Berhad

Great Eastern Life Assurance (Malaysia) Berhad 30,842,513 0.49
25. Permodalan Nasional Berhad 30,733,900 0.49
26. AMSEC Nominees (Tempatan) Sdn Bhd

MTrustee Berhad for CIMB Islamic Dali Equity Growth Fund 30,380,217 0.48

AS 1Malaysia 29,362,300 0.47
28. Citigroup Nominees (Tempatan) Sdn Bhd

Exempt Authorised Nominee for AIA Berhad 27,052,081 0.43

Amanah Saham Didik 24,782,600 0.39

Public Islamic Dividend Fund 24,295,733 0.39
Total 4,983,465,529 79.25
303
SHAREHOLDERS INFORMATION (Contd)

as at 3 0 A u g us t 2016
SUBSTANTIAL SHAREHOLDERS
(Based on the Register of Substantial Shareholders)
No. of ordinary shares held

Name of substantial shareholders Direct % Indirect %
Tan Sri Dato Lee Shin Cheng 67,086,100 1.07 *2,972,859,180 47.28
Puan Sri Datin Hoong May Kuan **3,039,945,280 48.34
Dato Lee Yeow Chor 9,000,400 0.14 ***2,959,678,380 47.07
Lee Yeow Seng 4,180,400 0.07 ***2,959,678,380 47.07
Vertical Capacity Sdn Bhd 2,959,678,380 47.07
Progressive Holdings Sdn Bhd #

2,959,678,380 47.07
Employees Provident Fund Board 389,282,373 6.19
Amanahraya Trustees Berhad 321,039,800 5.11

Amanah Saham Bumiputera
Notes:
* Deemed interested by virtue of his interest in Progressive Holdings Sdn Bhd (PH), which in turn holds 100% equity interest in Vertical Capacity Sdn Bhd (VC) and
shares held by his sons, Dato Lee Yeow Chor and Lee Yeow Seng.
** Deemed interested by virtue of her interest and the interests of her spouse, Tan Sri Dato Lee Shin Cheng and her sons, Dato Lee Yeow Chor and Lee Yeow Seng in
PH, which in turn holds 100% equity interest in VC and shares held by Tan Sri Dato Lee Shin Cheng, Dato Lee Yeow Chor and Lee Yeow Seng.
*** Deemed interested by virtue of his interest in PH, which in turn holds 100% equity interest in VC.
# Deemed interested by virtue of its interest in VC, the wholly-owned subsidiary.
304
IOI CORPORATION BERHAD (Company No. 9027-W)
(Incorporated in Malaysia)
PROXY FORM
I/We
(Please use block letters)
NRIC/Co. No. Mobile Phone No.

of
being a member(s) of IOI Corporation Berhad, hereby appoint
NRIC/Co. No.
of
and/or failing him, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Forty-Seventh Annual
General Meeting (AGM) of the Company to be held at Putrajaya Ballroom I (Level 3), Putrajaya Marriott Hotel, IOI Resort
City, 62502 Sepang Utara, Malaysia on Friday, 28 October 2016 at 10:00 am or any adjournment thereof.
The proportion of my/our holding to be represented by my/our proxy/proxies are as follows:
First proxy A : % No. of Shares Held :
Second proxy B : %
100% CDS A/C No. :
My/our proxy/proxies shall vote as follows:

(Please indicate with an or in the space provided as to how you wish your votes to be cast. If you do not do so, the proxy/proxies will vote, or abstain from
voting on the resolutions as he/they may think fit)
First Proxy A Second Proxy B

No. Ordinary Resolutions For Against For Against
1. To re-elect Datuk Karownakaran @ Karunakaran a/l Ramasamy as a Director
2. To re-elect Mr Lim Tuang Ooi as a Director
3. To re-appoint Tan Sri Dato Lee Shin Cheng pursuant to Section 129 of the
Companies Act, 1965
4. To re-appoint Tan Sri Peter Chin Fah Kui pursuant to Section 129 of the
Companies Act, 1965
5. To approve Directors Fees for the financial year ending 30 June 2017 payable
quarterly in arrears
6. To re-appoint Messrs BDO as Auditors and to authorise the Audit and Risk
Management Committee to fix their remuneration
7. To authorise the Directors to allot and issue shares pursuant to Section 132D
of the Companies Act, 1965
8. To approve the proposed renewal of existing share buy-back authority
9. To approve the proposed renewal of shareholders mandate for recurrent
related party transactions
Dated this day of 2016

* Delete if inapplicable. Signature of Shareholder/Common Seal
Notes:
1 A member may appoint any person to be his proxy and there shall be no exempt authorised nominee may appoint in respect of each omnibus account
restriction as to the qualification of the proxy. The provision of Section 149(1) it holds. An exempt authorised nominee refers to an authorised nominee
(b) of the Companies Act, 1965 shall not apply to the Company. defined under the Securities Industry (Central Depositories) Act 1991 (SICDA)
2 An instrument appointing a proxy must be in writing under the hand of the which is exempted from compliance with the provisions of 25A(1) of the
appointor or of his attorney duly authorised in writing or, if the appointor is SICDA.
a corporation, either under seal or under the hand of an officer or attorney 5 An instrument appointing a proxy may specify the manner in which the proxy
duly authorised. is to vote in respect of a particular resolution and, where an instrument of
3 Subject to Note 4 below, a member shall not be entitled to appoint more proxy so provides, the proxy is not entitled to vote on the resolution except
than two (2) proxies to attend and vote at the same meeting. If a member as specified in the instrument.
appoints two (2) proxies to attend at the same meeting, the instrument of 6 An instrument appointing a proxy must be deposited at Boardroom Corporate
proxy must specify the proportion of his shareholdings to be represented Services (KL) Sdn Bhd, Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar
by each proxy and only one (1) of those proxies is entitled to vote on show Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48
of hands. hours before the time for holding the meeting or any adjournment thereof.
4 Where a member of the company is an exempt authorised nominee which 7 Only members whose names appear in the Record of Depositors as at
holds ordinary shares in the Company for multiple beneficial owners in one 21 October 2016 shall be eligible to attend the AGM or appoint proxy to
(1) securities account, there is no limit to the number of proxies which the attend and vote on his behalf.
Personal Data Privacy

By submitting the proxy form, the shareholder or proxy accepts and agrees to the collection, use and disclosure of their personal data by the Company (or its agents
or service providers) for the purpose of preparation and compilation of documents relating to the AGM (including any adjournment thereof).
1st fold here
STAMP
The Administration and Polling Agent

Boardroom Corporate Services (KL) Sdn Bhd
Lot 6.05, Level 6, KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
2nd fold here

Annual Report 2016
Strength in Fundamentals
Two IOI Square, IOI Resort City, 62502 Putrajaya, Malaysia
www.ioigroup.com
Annual Report 2016

2016 Annual Report

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2016 Annual Report

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IOI CORPORATION BERHAD (9027-W)

Annual Report 2016

We shall strive to achieve responsible commercial success by

2016 2015 2014 2013 2012

Key Indicators 3 Plantation Corporate Information 58

Group Performance Highlights 14 Profile of Senior Management Team 70

Group Quarterly Results 15 Group Business Activities 74

Financial Calendar 15 Global Presence 76

Five-Year Financial Highlights 16 Local Presence 78

FIN A N CIAL PROXY

Financial Reports 117 Group Properties 290

47 th ANNUAL GENERAL MEETING

VENUE : Putrajaya Ballroom I (Level 3), Putrajaya Marriott Hotel,

DATE : Friday, 28 October 2016

On behalf of the Board of Directors of IOI Corporation

OPERATING ENVIRONMENT CONTRIBUTION TO SEGMENT RESULTS

Meanwhile, the Malaysian economy expanded by 4.2% during

CHAIRMANS STATEMENT (Contd)

On the operational front, FY2016 recorded the hottest periods

As for the palm oil downstream segment, the refining

The oleochemical sub-segment continued to face challenges

has caused intense competition while the surge in palm kernel

The plantation segments profit of RM842.2 million for FY2016

The resource-based manufacturing segments profit of

CHAIRMANS STATEMENT (Contd)

This acquisition is an important step for the Group to move up

In the plantation segment, the Group expects positive growth

The volatility of Dollar/Ringgit exchange rates will continue to

Overall, the Group expects its overall operating performance for

GROUP FINANCIAL OVERVIEW

CASH FLOW CASH AND CASH PROPERTY, PLANT

Net operating cash flow 1,632.0

Proceeds from disposal of investments, net of payment for OTHER LONG

Net increase in net borrowings

NET BORROWINGS = (B) (A) = RM5,443.0 MILLION

CASH AND CASH PROPERTY, PLANT RETAINED EARNINGS

Segment results 1,452.9

Retained earnings as at 30 June 2016

NET BORROWINGS = (D) (C) = RM4,859.9 MILLION

GROUP PERFORMANCE HIGHLIGHTS

In RM million unless otherwise stated 2016 2015 % +/(-)

Average shareholders equity 7,103.6 7,628.3 (7)

Operating margin (%) 11.54 9.89 17

Return on average shareholders equity (%) 8.86 0.68 1,203

Basic earnings per share (sen) 9.99 0.82 1,118

Dividend cover (number of times) 1.25 0.09 1,289

SPECIALTY OILS AND FATS

GROUP QUARTERLY RESULTS

1st 2nd 3rd 4th

Operating profit 172.4 13 642.9 47 422.3 31 117.5 9 1,355.1 100

(Loss)/earnings per share (sen)

FIVE-YEAR FINANCIAL HIGHLIGHTS

2016 2015 2014 2013 2012

EQUITY AND LIABILITIES

PROFIT BEFORE INTEREST AND TAXATION

MANAGEMENTS DISCUSSION AND ANALYSIS

GROWING THROUGH THE CYCLE

GROUP OPERATING PROFIT MONTHLY AVERAGE CPO PRICE

KEY FINANCIAL INDICATORS

2016 2015 Change %