Eng - IOI Group

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Management’s Discussion and Analysis cont’dGROUP FINANCIAL REVIEWFIVE-YEAR ECONOMIC PROFIT TREND cont’dCOE, ROCE, WACC and Economic Profit%16141210864202003 2004 2005 2006 2007Cost of EquityReturn on CapitalEmployed (“ROCE”)Weighted AverageCost of Capital(“WACC”)EconomicProfit SpreadThe above computations were arrived at based on the following parameters:%7.0Beta1.206.56.05.55.01.000.800.604.54.03.532003 2004 2005 2006 20070.400.200Risk-Free Rate (Rf)Market risk PremiumBeta co-efficient23ANNUAL REPORT 2007IOI Corporation Berhad
Management’s Discussion and Analysis cont’dGROUP FINANCIAL REVIEWRISK MANAGEMENTThe Group has in place a formal risk management framework. Overall through strategic measures, consistent risk management andcontinuous refinement, we are able to recognise and exclude fundamental dangers for IOI in the ordinary course of business.Operating Risk Management• Our participation in our core businesses, namely palm oil and properties, entails risks that arise in the ordinary course ofbusiness. Palm oil prices in particular, can be very volatile and can result in wide fluctuation in revenue and cash flow. Other risksinclude oleochemical and specialty fats products margin risk, changes in the property market and other operational risks. Ourrisk management philosophy is to exploit as fully as possible the many opportunities available in the markets we operate in, whiletaking on only those risks that are necessarily associated with creating added economic value and ensuring always a worthwhilerisk-reward ratio. Risks that could not otherwise be managed to a satisfactory level on a proactive basis are strategicallymitigated.• In the case of palm oil, for instance, normal price fluctuations are manageable risks whilst unduly sharp fluctuations and cyclicaltrends are strategically mitigated by the Group’s positioning in different segments of the palm oil value chain, namely plantation,refinery, oleochemicals and specialty oils and fats. The Group’s exposure to different segments of the palm oil chain also providesbetter visibility and enables better risk management execution that enhances value beyond mere balancing out the effects of pricefluctuation.• For the property segment the judicious selection of locations when acquiring land bank and the choice of product mix whenmaking property sales launches during different phases of the property market cycles are the most crucial factors in managingmarket and operation risks.• Control risks and other day-to-day operational risks are covered by the Group’s Enterprise Risk Management System. Risks of notmeeting strategic objectives or performance targets are identified, evaluated and remedial action taken. The Risk ManagementCommittee of the respective business units formally reviews, update status and reports to the Audit Committee on a quarterlybasis.IOI Corporation BerhadANNUAL REPORT 2007 24
Page 3 and 4: Our Vision... is to be a leading co
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Page 20 and 21: Efficiency“The future belongs to
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Page 30 and 31: PALM OIL BUSINESS STREAMManagement
Page 40 and 41: CORPORATE SOCIAL RESPONSIBILITY (CS
Page 58 and 59: KepongKLCCKL SentralPetaling JayaKu
Page 61 and 62: Corporate InformationBOARD OF DIREC
Page 63 and 64: Profile of Directors cont’dDATO
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Page 68 and 69: Excellence in ExecutionOur commitme
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Page 74 and 75: Corporate GovernanceINTRODUCTIONThe
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Corporate Governance cont’dTHE BO
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Corporate Governance cont’dTHE BO
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Corporate Governance cont’dSHAREH
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Statement on Internal ControlINTROD
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Statement on Internal Control cont
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Other InformationCOMPOSITION OF SHA
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RECURRENT RELATED PARTY TRANSACTION
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Other Information cont’dPENALTIES
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Senior Management TeamGroup Chief E
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Global PresenceNORTH AMERICA• USA
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Location of Operations in MalaysiaP
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Corporate CalendarNov 2006• IOI P
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Corporate Calendar cont’dMarch200
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Social ContributionSep 2006• Yaya
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Social Contributions cont’dMay 20
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Directors’ ReportThe Directors of
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Directors’ Report cont’dUSD310
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Directors’ Report cont’dExecuti
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Directors’ Report cont’dReserve
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Directors’ Report cont’dDirecto
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Directors’ Report cont’dStatuto
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Directors’ Report cont’dSignifi
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Directors’ Report cont’dSignifi
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Income Statementsfor the financial
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Balance Sheets cont’das at 30 Jun
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Statements Of Changes In Equity con
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Statements Of Changes In Equity con
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Cash Flow Statements cont’dfor th
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Cash Flow Statements cont’dfor th
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Notes To The Financial Statements c
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Statement By DirectorsIn the opinio
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Group PropertiesA. PLANTATION ESTAT
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Group Properties cont’dA. PLANTAT
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Group Properties cont’dB. DEVELOP
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Group Properties cont’dC. INVESTM
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Group Properties cont’dD. INDUSTR
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Group Properties cont’dE. OTHER P
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Notice of Annual General MeetingNOT
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Notice of Annual General Meeting co
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Statement Accompanying Noticeof Ann
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Shareholders Information cont’das
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fold herestampThe Company Secretary
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Eng - IOI Group

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