A N N U A L R E P O R T 2 0 0 1 - IGB Corporation Berhad

(5745-A)ANNUAL REPORT 2001FIABCI Awardof Distinction 2001Best Retail DevelopmentMalaysian TourismAward 2000Best Shopping Complex

CONTENTSNotice of Annual General Meeting 4-6Statement Accompanying Notice OfAnnual General Meeting 7-8Corporate Information 9-10Profile of the Board of Directors 11-17Statement on Corporate Governance 19-29Audit Committee Report 31-38Chairman’s Statement 39-42Review of Operations 43-52Analysis of Shareholdings 53-56Analysis of Warrantholdings 57-58Group Finance Highlights 59-60Report and Financial Statements for theyear ended 31 Dec 2001 61-104List of Properties Held 105-106Form of Proxy 107-108(5745-A)

Leisure & Entertaiment at Mid Valley MegamallCORPORATE INFORMATION

NOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Thirty-Eighth Annual General Meeting of IGBCorporation Berhad will be held at Bintang Ballroom, Level 5, Cititel Mid Valley,Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, on Wednesday, 29May 2002 at 12.00 p.m. for the transaction of the following businesses:1. To receive the Audited Financial Statements for the year ended 31 December2001 and the Reports of the Directors and Auditors thereon.2. To declare a final gross dividend of 2% for the year ended 31 December 2001.Resolution 1Resolution 23. To re-elect the following Directors retiring pursuant to Article 85 of the Company’sArticles of Association :(a)(b)(ci)Robert Tan Chung MengTan Boon SengTan Boon GarkResolution 3Resolution 4Resolution 54. To re-appoint PricewaterhouseCoopers as Auditors of the Company and toauthorise the Directors to fix their remuneration.Resolution 604IGB Annual Report 2001

NOTICE OF ANNUAL GENERAL MEETING5. As SPECIAL BUSINESS, to consider and if thought fit,to pass the following resolution:Ordinary ResolutionAuthority to issue shares pursuant to Section 132D ofthe Companies Act, 1965‘THAT, subject to the Companies Act, 1965, the Articles of Association of theCompany and approvals of the relevant governmental/regulatory authorities, theDirectors be and are hereby empowered, pursuant to Section 132D of theCompanies Act, 1965, to issue shares in the Company from time to time and uponsuch terms and conditions and for such purposes as the Directors may deem fitprovided that the aggregate number of shares to be issued pursuant to thisresolution does not exceed 10% of the issued share capital for the time being ofthe Company, and that the Directors be and are also empowered to obtain theapproval from the Kuala Lumpur Stock Exchange for the listing and quotation forthe additional shares so issued and that such authority shall continue in force untilthe conclusion of the next Annual General Meeting of the Company.’Resolution 76. To transact any other business of which due notice shall have been given.By Order of the BoardTina Chan Lai YinMary WongCompany SecretariesKuala Lumpur30 April 2002IGB Annual Report 200105

NOTICE OF ANNUAL GENERAL MEETINGNotes:1. Appointment of ProxyA member entitled to attend and vote at the meeting isentitled to appoint a proxy to attend and vote instead ofhim. A proxy may but need not be a member of theCompany. In the case of a corporate member, theinstrument appointing a proxy must be either under itscommon seal or under the hand of a duly authorized officeror attorney. The instrument appointing a proxy must bedeposited at the Registered Office of the Company at Penthouse, Menara IGB,No. 1, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpurnot less than forty-eight (48) hours before the time appointed for holding themeeting or at any adjournment thereof.2. Closure of RegisterThe Register of Transfer will be closed on 1 July 2002 for purpose of preparingwarrants for the final dividend which, if approved, will be paid on 18 July 2002to every member who is entitled to receive the dividend as at 5.00 p.m.on 28 June 2002.3. Re-election of DirectorsThe details of Directors who are standing for re-election are set out on pages13 and 14 of this Annual Report.4. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965The Resolution 7, if approved, will renew the authorization obtained at the lastAnnual General Meeting, pursuant to Section 132D of the Companies Act, 1965,for issuance of up to 10% of the issued share capital of the Company,subject to compliance with the regulatory requirements. The approval is sought toavoid any delay and cost in convening a general meeting for such issuance ofshares. The authorization, unless in pursuance of offers, agreements or optionsgranted by the Directors while the approval is in force, will expire at the nextAnnual General Meeting.06IGB Annual Report 2001

STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.28(2) of the Kuala Lumpur Stock Exchange Listing Requirements)1. Details of the Board meetings held during the financial year ended 31 December 2001:-There were five (5) Board meetings held during the financial year ended 31 December 2001.All Board meetings were held at the Boardroom, Penthouse, Menara IGB, No. 1, The Boulevard,Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. The date and time of the Board meetingsare as follows:Date of meetingsTime27 February 2001 11.30 a.m.28 March 2001 11.00 a.m.30 May 2001 3.00 p.m.30 August 2001 12.00 p.m.29 November 2001 11.00 a.m.2. Details of attendance of Directors at Board meetings:-The attendance record of Directors at Board meetings held during the financial year ended31 December 2001 are as follows:Name of DirectorAttendanceTan Sri Abu Talib bin Othman 5/5Robert Tan Chung Meng 5/5Tan Boon Seng 4/5Tan Boon Gark 5/5Lai Meng 5/5Abdul Samad bin Haji Alias 3/5Dato’ Seri Khalid Ahmad bin Sulaiman 5/5Osman bin Haji Ismail 4/5Jeffrey Heng Wah Yong (appointed on 17 September 2001) 1/5Chua Seng Yong (alternate to Robert Tan Chung Meng) 5/5Dato’ Tan Chin Nam (resigned on 30 May 2001) 2/5Mihir Kumar Sen (resigned on 28 March 2001) 2/5Chong Kim Weng (resigned on 30 May 2001) 1/5IGB Annual Report 200107

STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.28(2) of the Kuala Lumpur Stock Exchange Listing Requirements)3. Details of Directors who are standing for re-electionThe Directors who are offering themselves for re-election at the Annual General Meeting of theCompany are as follows:Shareholdings in the Company as at 31.12.2001Name of Directors Direct IndirectRobert Tan Chung Meng 186,000 203,946,771Tan Boon Seng 9,375 -Tan Boon Gark 221,000 -Details of the above Directors are set out in the Profile of the Board of Directors on pages 13 and 14of this Annual Report.08IGB Annual Report 2001

Gegenbesuch ecuadorianischer Sonderpädagoginnen in der BRDFriedrich AlbrechtVom 8.Mai bis 8.Juni waren neun WissenschaftlerInnen, LehrerInnen und andere PädagogInnenaus Ecuador, die im sonderpädagogischen Bereich tätig sind, auf die Einladung des Institutesfür Sonder- und Heilpädagogik zu Gast in der BRD.Dieser Besuch war eingebettet in die Aktivitäten des Arbeitskreises „Sonderpädagogik undDritte Welt“ am o.g. Institut, der einen kontinuierlich interkulturellen Austausch zwischenWissenschaftlerInnen und StudentInnen aus der Bundesrepublik und einem Land der DrittenWelt verfolgt.Das Einladungsprogramm stellte die ergänzende Fortsetzung einer im Sommer 1988 durchgeführtenStudienreise von den Angehörigen dieses Arbeitskreises nach Ecuador dar. Die damalsbegonnenen Kontakte wurden nun unter umgekehrten Vorzeichen fortgesetzt. DieBesucherInnen aus Quito und Guayaquil lernten zahlreiche sonderpädagogische Einrichtungenin der Bundesrepublik und in Berlin kennen, darüber hinaus fanden am Institutviele Veranstaltungen zu verschiedensten Themen aus dem Bereich der Sonderpädagogikstatt.„Die Sonderpädagogik (Edcacion Especial)in unserem Land befindet sich momentan in einerPhase der Evaluation und Reorganisation. Die Konzepte innerhalb der Behindertenarbeit unterliegenimmer mehr einem Wandel von caritativen zu pädagogischen Sichtweisen.Bis in die achtziger Jahre hinein war von unseren zuständigen staatlichen Stellen so gut wienichts für den sonderpädagogischen Sektor zu erwarten. Das überließ man den wenigen privatenund kirchlichen Trägern. Diese Einstellung hat sich aber geändert. Im Erziehungsministeriumbesteht ein Interesse an qualitativen sonderpädagogischen Konzepten.Von daher ist der Besuch in der Bundesrepublik gerade zum jetzigen Zeitpunkt sehr wichtigfür uns. Mit den hier gewonnenen Eindrücken, Erfahrungen und den Diskussionsergebnissenhaben wir jetzt eine Verhandlungs- und Argumentationsbasis gegenüber dem Erziehungsministerium: Für den Ausbau integrativer Klassen mit Stützlehrern, für eine Lehrerbildung, diestärker an pädagogischen und didaktischen Inhalten orientiert ist und für eine bessere Zusammenarbeitzwischen privaten und öffentlichen Trägern.“So faßte Conception de Villao, die zuständigen Supervisora für die 60 Förderklassen in derProvinz Guayas, bei einem Vortrag im Turm einen wichtigen Aspekt des Besuchsprogrammszusammen.Eindrücke und Erfahrungen sammelten die ecuadorianischen BesucherInnen zur Genüge. Dievier Wochen waren gefüllt mit Besuchen in den verschiedensten sonderpädagogischen Einrichtungen.Geplant war, ein möglichst breites Spektrum von dem vorzustellen, was Sonderpädagogikin der BRD beinhaltet. Es umfaßte dabei die klassischen Sonderschultypen wie dieLernbehindertenschule, die Schule für praktisch Bildbare, die Hörbehindertenschule, dieSprachbehindertenschule, die Körperbehindertenschule und die Schule für Blinde und Sehbehinderte.Darüberhinaus gab es Besuche in Einrichtungen der vorschulischen sowie der nachschulischenBetreuung Behinderter, der bruflichen Qualifizierung und von integrativen Projektenund Schulversuchen. An dieser Stelle sei einmal auf die hervorragende Unterstützunghingewiesen, die das Austauschprojekt von Seiten der einzelnen Einrichtungen, LehrerInnen,PädagogInnen und anderen Beteiligten erhielt. Sehr viele bekundeten eine spontane Bereit-10

CORPORATE INFORMATIONBOARD OF DIRECTORSChairmanTan Sri Abu Talib bin OthmanIndependent Non Executive ChairmanDirectorsRobert Tan Chung MengManaging DirectorTan Boon SengExecutive DirectorTan Boon GarkExecutive DirectorLai MengExecutive DirectorDato’ Seri Khalid Ahmad bin SulaimanSenior Independent Non-Executive DirectorAbdul Samad bin Haji AliasIndependent Non-Executive DirectorOsman bin Haji IsmailNon-Independent Non-Executive DirectorJeffrey Heng Wah YongIndependent Non-Executive DIrectorChua Seng YongAlternate to Robert Tan Chung MengCOMPANY SECRETARIESTina Chan Lai YinMary WongSTOCK EXCHANGE LISTINGKuala Lumpur Stock Exchange, Main BoardAUDIT COMMITTEEChairmanDato’ Seri Khalid Ahmad bin SulaimanMembersAbdul Samad bin Haji AliasJeffrey Heng Wah YongLai MengNOMINATION COMMITTEEChairmanTan Sri Abu Talib bin OthmanMembersAbdul Samad bin Haji AliasDato’ Seri Khalid Ahmad bin SulaimanOsman bin Haji IsmailREMUNERATION COMMITTEEChairmanTan Sri Abu Talib bin OthmanMembersAbdul Samad bin Haji AliasOsman bin Haji IsmailRobert Tan Chung MengEXECUTIVE COMMITTEEChairmanTan Boon SengMembersRobert Tan Chung MengTan Boon GarkLai MengOsman bin Haji IsmailSHARE & ESOS COMMITTEEMembersTan Boon SengTan Boon GarkLai MengAbdul Samad bin Haji AliasTina Chan Lai YinREGISTERED OFFICEPenthouse, Menara IGB,No. 1, The Boulevard, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala LumpurTelephone : 03-22898989 Facsimile : 03-22898802REGISTRARIGB Corporation Berhad[Share Registration Department]23rd Floor, Menara IGB,No. 1, The Boulevard, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala LumpurTelephone : 03-22898989 Facsimile : 03-22898983AUDITORSPricewaterhouseCoopers11th Floor, Wisma Sime Darby,Jalan Raja Laut, 50350 Kuala LumpurPRINCIPAL BANKERSHSBC Bank Malaysia BerhadCitibank BerhadMalayan Banking BerhadRHB Sakura Merchant Bankers BerhadAffin Bank Berhad10IGB Annual Report 2001

Mid Valley Mulia CondominiumPROFILE OF THE BOARD OF DIRECTORS

PROFILE OF THE BOARD OF DIRECTORSThe Board of Directors of IGB Corporation Berhad (‘IGB’) comprises ofan Independent Non-Executive Chairman, a Managing Director, three(3) Executive Directors and four (4) Non-Executive Directors, three (3)of whom are independent.The Board meets quarterly and additional Board Meetings are held asand when required. The Board met five (5) times during the year ended 31 December 2001.Particulars of the Directors are as follows:Y. Bhg. Tan Sri Abu Talib Bin OthmanIndependent Non-Executive ChairmanMalaysian, aged 64, joined the Board of IGB on 18 July 1995. He was appointed Chairman on 30 May 2001. He isalso the Chairman of the Nomination and Remuneration Committees of IGB.He is a Barrister-at-law and has served in various capacities in the judicial and legal service of the Government ofMalaysia. He was the Attorney General of Malaysia from 1980 until his retirement in October 1993.Other directorships in public companies include British American Tobacco (Malaysia) Berhad, Sime Darby Berhad,Sapura Telecommunications Berhad, Alliance Merchant Bank Berhad, Alliance Bank Malaysia Berhad, AllianceUnit Trust Management Berhad, MUI Continental Insurance Berhad and Gold IS Berhad.He does not have any interest in the securities of IGB and its subsidiaries. He has no family relationship with anydirector and/or major shareholder of IGB. He has not entered into any transaction, whether directly or indirectly,which has a conflict of interest with IGB. He has no conviction for any offence within the past 10 years.12IGB Annual Report 2001

PROFILE OF THE BOARD OF DIRECTORSRobert Tan Chung MengManaging DirectorMalaysian, aged 50, was appointed Joint Managing Director of IGB on 18 December 1995 and subsequentlyre-designated as Managing Director on 30 May 2001. He is also a member of the Executive and RemunerationCommittees of IGB.He has vast experience in the property and hotel industry. After studying Business Administration in the UnitedKingdom, he was attached to a Chartered Surveyor’s firm for one year. He has also developed a housing projectin Central London before returning to Malaysia. He has been involved in various development projects carriedout by IGB, in particular the Mid Valley Project, Tan & Tan Developments Berhad (‘Tan & Tan’) and Wah SeongGroup of Companies which has interest in the industrial sectors including oil and gas, infrastructure relatedproducts, industrial engineering, construction material and property.He has a direct shareholding of 186,000 ordinary shares in IGB and 750,000 options pursuant to the ESOS of IGB.He is a major shareholder of IGB by virtue of his substantial shareholdings in Tan & Tan, Tan Kim Yeow Sdn. Bhd. andWah Seong (Malaya) Trading Co. Sdn. Bhd., all of whom are major shareholders of IGB. He is the brother ofPauline Tan Suat Ming and Tony Tan Choon Keat and nephew to Dato’ Tan Chin Nam, who are also majorshareholders of IGB. Save as disclosed, he has no family relationship with any other director and/or majorshareholder of IGB. He has not entered into any transaction, whether directly or indirectly, which has aconflict of interest with IGB, other than those disclosed in Note 32 to the Financial Statements. He has noconviction for any offence within the past 10 years.Tan Boon SengExecutive DirectorMalaysian, aged 46, joined IGB in 1980 as General Manager. He was appointed to the Board of IGB on 20December 1990, Managing Director in 1991, re-designated as Joint Managing Director in 1995, and subsequentlyre-designated as Executive Director on 30 May 2001. He is the Chairman of the Executive Committee, and also amember of the Share and ESOS Committee of IGB.He holds a Master of Arts from Cambridge University. He is also the Chairman and Managing Director of Lee HingDevelopment Ltd, and a Director of South China Holdings Limited, South China Brokerage Co. Ltd, South ChinaIndustries Ltd., Wo Kee Hong (Holdings) Limited and Star Cruise Limited, all listed on The Stock Exchange of HongKong Limited.He is the son of Dato’ Tan Chin Nam and cousin to Robert Tan Chung Meng, Tan Boon Gark, Pauline Tan SuatMing and Tony Tan Choon Keat, who are major shareholders and/or directors of IGB. Save as disclosed, he hasno family relationship with any other director and/or major shareholder of IGB. He has not entered into anytransaction, whether directly or indirectly, which has a conflict of interest with IGB. He has no conviction for anyoffence within the past 10 years.IGB Annual Report 2001 13

PROFILE OF THE BOARD OF DIRECTORSTan Boon GarkExecutive DirectorMalaysian, aged 52, joined IGB in 1980 as Project Manager. Since then, he has held the position of AreaManager for Kuala Lumpur Office, Director-Properties and Executive Director of IGB before he was appointed asits Deputy Managing Director on 9 January 1995. On 30 May 2001, he was re-designated as ExecutiveDirector. He also serves as a member of the Executive and Share and ESOS Committees of IGB.He also sits on the Board of Negara Properties (M) Berhad.He has a direct shareholding of 221,000 ordinary shares in IGB. He is the cousin to Robert Tan Chung Meng, TanBoon Seng, Pauline Tan Suat Ming and Tony Tan Choon Keat, who are major shareholder and/or directors of IGB.Save as disclosed, he has no family relationship with any other director and/or major shareholder of IGB otherthan those disclosed in Note 32 to the Financial Statements. He has not entered into any transaction, whetherdirectly or indirectly, which has a conflict of interest with IGB. He has no conviction for any offence within the past10 years.Lai MengExecutive DirectorMalaysian, aged 46, joined IGB in 1992 as Director-Corporate Affairs. He was appointed to the Board on9 January 1995. He is also a member of the Audit, Executive and Share and ESOS Committees of IGB. He hadserved as General Manager (Finance and Administration) with Tan & Tan, Corporate Planner with Kinta KellasInvestments Plc., Corporate Planner with Hong Kong Tin Corporation (Malaysia) Berhad (now known as YTLCorporation Berhad) and Senior Administration Officer in Bank Negara Malaysia. He holds a Bachelor ofEconomics and Statistics (1st Class Honours) from University of Malaya.Current directorships in public companies include IJM Corporation Berhad and Ipmuda Berhad.He has 105,000 options pursuant to the ESOS of IGB. He has no family relationship with any director and/or majorshareholder of IGB. He has not entered into any transaction, whether directly or indirectly, which has a conflict ofinterest with IGB. He has no conviction for any offence within the past 10 years.14IGB Annual Report 2001

PROFILE OF THE BOARD OF DIRECTORSAbdul Samad bin Haji AliasIndependent Non-Executive DirectorMalaysian, aged 59, was appointed as a Director of IGB on 12 April 1983 and also served as the Chairman ofthe Audit Committee until his resignation on 30 May 2001. However, he remains as a member of the AuditCommittee, and also serves as a member of the Nomination, Remuneration and Share and ESOS Committees ofIGB. He graduated from the University of Western Australia with a Bachelor of Commerce degree. He is amember of the Malaysian Association of Certified Public Accountants and the Malaysian Institute ofAccountants. He is also a member of the Financial Reporting Foundation, a Fellow of the Institute of CharteredAccountants in Australia and an Associate Member of the Chartered Institute of Bankers, United Kingdom. Heis currently an advisor to Arthur Andersen & Co., Malaysia.Other directorships in public companies include Malaysia Mining Corporation Berhad and MMC EngineeringGroup Berhad.He does not have any interest in the securities of IGB and its subsidiaries. He has no family relationship with anydirector and/or major shareholder of IGB. He has not entered into any transaction, whether directly or indirectly,which has a conflict of interest with IGB. He has no conviction for any offence within the past 10 years.Y.Bhg. Dato’ Seri Khalid Ahmad bin SulaimanSenior Independent Non-Executive DirectorMalaysian, aged 66, was appointed as a Director of IGB on 18 June 1982. He is the Chairman of the AuditCommittee, and also a member of the Nomination Committee of IGB. He graduated from the Universityof Leicester, England and was called to the Bar at Middle Temple in 1964. He worked as Legal Advisor to thestatutory body (MARA) for three (3) years before setting up his own legal practice in Penang in 1969. He was alsothe Penang State Executive Councilor from 1974 to 1982.He also sits on the Board of Hong Leong Credit Berhad.He has an indirect shareholding of 125,250 ordinary shares in IGB. He does not hold any shares in the subsidiarycompanies of IGB. He has no family relationship with any director and/or major shareholder of IGB. He has notentered into any transaction, whether directly or indirectly, which has a conflict of interest with IGB. He has noconviction for any offence within the past 10 years.IGB Annual Report 200115

PROFILE OF THE BOARD OF DIRECTORSOsman bin Haji IsmailNon-Independent Non-Executive DirectorMalaysian, aged 44, was appointed as a Director of IGB on 4 January 2001, and is a representative of PermodalanNasional Berhad (‘PNB’), a major shareholder of IGB. He is also a member of the Executive, Nomination andRemuneration Committees of IGB.He is an Assistant General Manager, Financial and Management Audit Department, of PNB Group of Companiesand has been with PNB Group since 1985. He is also a member of the Institute of Internal Auditor Malaysia.He obtained his Diploma in Accountancy from Mara Institute of Technology in 1980, an AdvanceDiploma in Accountancy from Luton University, England in 1983 and a Certificate in Internal Quality Auditor(Neville Clark) in 1996.Other directorships in public companies include IJM Corporation Berhad, Gold IS Berhad and HeiTech PaduBerhad.He does not have any interest in the securities of IGB and its subsidiaries. He has no family relationship with anydirector and/or major shareholder of IGB. He has not entered into any transaction, whether directly or indirectly,which has a conflict of interest with IGB. He has no conviction for any offence within the past 10 years.Jeffrey Heng Wah YongIndependent Non-Executive DirectorSingaporean, aged 57, was appointed as an Independent Non-Executive Director on 17 September 2001. Healso serves as a member of the Audit Committee of IGB. He holds a B.A. Hons. Class II Upper (Singapore), DiplomaTown Planning (Manchester) and was a member of Royal Town Planning Institute. Trained as a town planner, heserved in the Planning Service, Singapore, and for 14 years was involved in the various aspects of statutory anddevelopment planning, until he left in 1981 to join Parkway Holdings Limited (‘Parkway’), a company listed onThe Stock Exchange of Singapore. As Director, Property, he was a key member of the management team thatsuccessfully implemented major residential condominiums and the highly successful shopping mall, ParkwayParade and the redevelopment of the Gleneagles Hospital and Medical Centre. He left Parkway in mid-1996 tobe Chief Executive Officer of Centrepoint Properties, another listed property company in Singapore withdominant interests in retail, and subsequently also a major developer of upgraders’ homes. He opted forearly retirement in 2001.He does not have any interest in the securities of IGB and its subsidiaries. He has no family relationship with anydirector/major shareholder of IGB. He has not entered into any transaction, whether directly or indirectly, whichhas a conflict of interest with IGB. He has no conviction for any offence within the past 10 years.16IGB Annual Report 2001

PROFILE OF THE BOARD OF DIRECTORSChua Seng YongAlternate Director to Robert Tan Chung MengMalaysian, aged 40, is the Special Assistant to the Managing Director of IGB. He joined IGB as Financial Controllerin 1994 and has more than 16 years experience in property and hotel industry. He was appointed to the Board ofIGB on 30 November 1999 as an alternate to Robert Tan Chung Meng. He graduated with an Economics degreefrom Monash University, Australia in 1984. He is also an associate member of the Australia Society ofAccountants. He attained his Masters in Business Administration from Cranfield School of Management,United Kingdom in 1992.He has 127,500 options pursuant to the ESOS of IGB. He does not hold any shares in the subsidiary companiesof IGB. He has no family relationship with any director/major shareholder of IGB. He has not entered into anytransaction, whether directly or indirectly, which has a conflict of interest with IGB. He has no conviction for anyoffence within the past 10 years.IGB Annual Report 2001 17

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Cititel Mid ValleySTATEMENT ON CORPORATE GOVERNANCE

STATEMENT ON CORPORATE GOVERNANCEThe Board of Directors of the Company is committed to the principles of corporate governance as embodied inthe Malaysian Code of Corporate Governance (‘the Code’). Towards this end, the Board takes every step toensure that the principles of corporate governance and best practices are observed and practised throughoutthe Group.Set out below is a statement of how the Group has applied the principles of the Code and compliance with thebest practices provisions:1. THE BOARD(a) Composition of the BoardThe Board, led by an independent non-executive Chairman, has nine (9) members, comprising five (5)non-executive Directors and four (4) executive Directors, with four (4) of the five (5) non-executiveDirectors being independent Directors. The Board comprises of an appropriate balance of nonexecutiveand executive Directors with diverse experience and expertise required for the effectivestewardship of the Group and independence in decision making at Board level. A brief profile of eachDirector is presented on pages 12 to 17 of this Annual Report.The roles of the Chairman of the Board and the Managing Director are distinct and separated withresponsibilities clearly defined to ensure a balance of power and authority. Generally, the Chairman ofthe Board is responsible for ensuring Board effectiveness and conduct, whilst the Managing Directorhas primary responsibilities for the day-to-day management of the Group and together with theexecutive Directors ensure that strategies, policies and matters approved by the Board and/or theExecutive Committee are effectively implemented.The presence of four (4) independent non-executive Directors fulfil a pivotal role in corporateaccountability. Essentially, independent non-executive Directors provide unbiased and independentviews, advice and judgement in the decision making process. As and when a potential conflictof interest arises, the Director concerned would declare his interest and abstain from thedecision-making process.On 14 March 2002, the Board has appointed Dato’ Seri Khalid Ahmad bin Sulaiman as the seniorindependent non-executive Director and he is available for communication of any concern, includingwith the shareholders and general public.All Directors attended the Mandatory Accreditation Programme (‘MAP’) prescribed by Kuala LumpurStock Exchange (‘KLSE’) during the financial year under review. The Directors will continue to undergoother relevant training programmes to further enhance their skills and knowledge where relevant.20IGB Annual Report 2001

STATEMENT ON CORPORATE GOVERNANCE(b) Re-election of DirectorsIn accordance with the Company’s Articles of Association, one-third (1/3) of the Directors, including theManaging Director, shall retire from office, at least once in three (3) years. Retiring directors can offerthemselves for re-election. Directors who are appointed by the Board during the financial year aresubject to re-election by the shareholders at the next Annual General Meeting held following theirappointments. Directors over seventy (70) years of age are required to submit themselves forre-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.For the forthcoming Annual General Meeting, Mr Robert Tan Chung Meng, Mr Tan Boon Seng andMr Tan Boon Gark will retire by rotation, and being eligible, offer themselves for re-election.Mr Jeffrey Heng Wah Yong will not be offering himself for re-appointment.(c) Board MeetingsThe Board meets every quarter with additional meetings convened as and when necessary. The Boardmet for a total of five (5) times for the financial year ended 31 December 2001 and all the presentDirectors have attended more than 50% of the Board meetings. Details of Board members attendanceat Board meetings are outlined in page 7 of this Annual Report.Scheduled Board meetings are structured with a pre-set agenda. Board reports providing updates onoperational, financial and corporate issues as well as minutes of meetings of the Board Committees arecirculated prior to the meetings to enable Directors to obtain further explanations/clarifications, wherenecessary, in order to be properly briefed before the meeting.In addition to the quarterly Board reports, the Board is also notified of any corporate announcementsreleased to the KLSE and the impending restriction in dealing with the securities of the Company at leastone month prior to release of the quarterly financial results announcement. The Board is also keptinformed of the various requirements and updates issued by the various regulatory authorities.The Board has unrestricted access to senior management and the advice and services of the CompanySecretaries. Directors may also seek independent professional advice, where necessary, in thefurtherance of their duties at the Group’s expense.(d) Directors’ RemunerationRemuneration of the executive Directors is reviewed periodically having regard to the Group andindividual performance as well as overall market conditions. Remuneration of non-executive Directors islinked to their experience and level of responsibilities undertaken. Directors’ fees are paid only tonon-executive Directors. Increases in Directors’ fees are determined by the Board with the approval fromshareholders at the Annual General Meeting.IGB Annual Report 2001 21

STATEMENT ON CORPORATE GOVERNANCEThe aggregate remuneration of Directors for the financial year ended 31 December 2001 are as follows:Salaries & other Emoluments Fees TotalRM’000 RM’000 RM’000Executive Directors 1,239.1 - 1,239.1Non-Executive Directors 49.0 61.5 110.5The number of Directors whose total remuneration falls within the respective band are as follows:Range of Remuneration Executive Non-ExecutiveBelow RM50,000 - 6RM50,001 to RM100,000 - 1RM100,001 to RM150,000 1RM250,001 to RM300,000 4 -Note:1. For purpose of the above, remuneration paid to an alternate Director who is a full time employee of the Group has beenplaced according to the classification of the principal Director.2. The aggregate fees and meeting allowances of the non-executive Directors also include those who had resigned duringthe financial period under review.2. THE BOARD COMMITTEESThe Group has within it a structured framework of policies and procedures and internal guidelines.The efficacy of the governance structure and mechanism is monitored through the Board, the AuditCommittee, the Share and Employees Share Option Scheme (‘ESOS’) Committee, the NominationCommittee, the Remuneration Committee and the Executive Committee. The Board Committees operateunder clearly defined terms of reference regarding its objectives, duties and responsibilities, authority,meeting and membership, the details of which are set out below:(a) Audit CommitteeThe terms of reference of the Audit Committee, composition of its membership and other pertinentinformation about the Audit Committee and its activities are highlighted in the Audit Committee Report.22IGB Annual Report 2001

STATEMENT ON CORPORATE GOVERNANCE(b) Share and ESOS CommitteeThe Share and ESOS Committee is responsible for regulating and approving securities transactionsand registrations, and for implementing and administering the ESOS of the Company.(c) Nomination CommitteeThe Nomination Committee is responsible for:• reviewing, recommending and considering candidates to the Board of the Company,subsidiaries and associates of the Group, including committees of the Board;• reviewing succession planning and senior management development including nominations tothe Board of Directors of the Company; and• assessing the effectiveness of the Board as a whole, the committees of the Board and thecontribution of each individual Director on an annual basis.The Committee has met twice since its inception.(d) Remuneration CommitteeThe Remuneration Committee is responsible for:• establishing and reviewing from time to time the scheme and conditions of service of staff inthe Group;• establishing and reviewing the terms and conditions of employment and remuneration ofexecutive Directors and senior executives of the Group;• reviewing and approving annual salary increments and bonuses of executive Directors andsenior executives of the Group;• approving the terms of service or re-employment of retiring senior executives; and• formulating overall personnel and remuneration policies for the Group together with otherfunctions as may be agreed to by the Remuneration Committee and the Board of Directors.The Committee met once since its inception. The meeting was attended by all the members ofthe Committee.IGB Annual Report 2001 23

STATEMENT ON CORPORATE GOVERNANCETo assist in the execution of its responsibilities, in addition to the above mentioned Committees, the Boardhas also established an Executive Committee. The Committee is delegated with certain authority by theBoard to oversee the conduct of the Group’s core business or existing investments and to review and/orimplement strategic plan for the Group with restricted authority given by way of limits determined by theBoard, and to undertake such function and all matters as may be approved or delegated by the Boardfrom time to time.3. ACCOUNTABILITY AND AUDIT(a) Financial reportingIn presenting the annual financial statements and quarterly announcement of results to shareholders,the Directors take responsibility to present a balanced and understandable assessment of the Group’sposition and prospects. The Audit Committee of the Board assists by scrutinizing the information to bedisclosed, to ensure accuracy and adequacy.(b) Responsibility Statement by the Board of DirectorsIn the course of preparing the annual financial statements for the Group and the Company, theDirectors are collectively responsible for ensuring that these financial statements are drawn up inaccordance with the requirements of the applicable Approved Accounting Standards in Malaysia, theprovisions of the Companies Act, 1965 and the Listing Requirements of the Kuala Lumpur Stock Exchange.It is the responsibility of the Directors to ensure that financial statements for each financial year present atrue and fair view of the state of affairs of the Group and the Company at the end of the financial yearand of the results and cash flows of the Group and the Company for the financial year.In preparing the financial statements for the year ended 31 December 2001, the Directors have appliedappropriate and relevant accounting policies consistently and in accordance with applicableaccounting standards and made judgments and estimates that are reasonable and fair.The financial statements are prepared on a going concern basis and the Directors have ensured thatproper accounting records are kept which enable the preparation of the financial statements withreasonable accuracy.The Directors have also taken the necessary steps, as are reasonably open to them, to ensure thatappropriate systems are in place for the assets of the Group and the Company to be adequatelysafeguarded through the prevention and detection of fraud and other irregularities and materialmisstatements. Such systems, by their nature, can only provide reasonable and not absolute assuranceagainst material misstatement, loss and fraud.(c) State of internal controlsThe Board acknowledges its responsibility of maintaining a good system of internal controls, covering notonly financial controls but also operational and compliance controls as well as risk assessments.The internal control system is designed to meet the Group’s particular needs and to manage the risks towhich it is exposed. This system is designed to manage rather than eliminate the risk of failure to achievebusiness objectives and can only provide reasonable, and not absolute, assurance against materialmisstatement, fraud or loss. Ongoing reviews are continuously carried out to ensure the effectiveness,24IGB Annual Report 2001

STATEMENT ON CORPORATE GOVERNANCEadequacy and integrity of the system of internal controls in safeguarding the Group’s assets andtherefore shareholders’ investment in the Group.An independent internal audit department has been established. The internal audit department reportsto the Audit Committee of the Company. The internal audit team performed its duties in accordancewith its annual audit plan covering management, operational and system audit of the Group. Theinternal audit team had already conducted various audit assignments, and effected several systems ofinternal control covering financial controls, operational and compliance controls and risk management.Management information system has also been established for the Group so that both financial andnon-financial information on a monthly basis are submitted to the Executive Committee for betterdecision-making and control of the Group’s activities.The system of internal controls will continue to be reviewed, added on or updated in line with the changesin the operating environment. The Board seeks regular assurance on the continuity and effectiveness ofthe internal control system through independent appraisals by the internal and external auditors.The Board is of the view that the current system of internal control in place throughout the Group issufficient to safeguard the Group’s interest.The Board and Management are currently formulating a formal approach towards risk managementand working towards complying with the guidance issued by the relevant authorities.(d) Relationship with external auditorsThe role of the Audit Committee in relation to the external auditors is described in the AuditCommittee Report.4. INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATIONThe Board acknowledges the need for shareholders and investors to be well informed of the Group’sperformance and major developments. Announcements and release of financial results on a quarterly basisprovide the shareholders and the investing public with an overview of the Group’s performance andoperations. The Annual Report also contains a full business review, including a financial and operationalreview, and a description of the Group’s products.The Annual General Meeting of the Company represents the principal forum for dialogue and interactionwith all shareholders, and the Board encourages shareholders to participate in the question and answersession. Directors and the external auditors are available to provide explanations to all shareholders’ queriesduring the meeting. Where appropriate, the Chairman will undertake to provide a written answer to anysignificant question that cannot be readily answered on the spot. After the conclusion of each AnnualGeneral Meeting, executive Directors and senior management had all the while voluntarily conduct aquestion-and-answer session with the press, in addition to the constant dialogues with financial analysts andfund managers, to provide constructive communications on any matters concerning the Group such as itspast performance, its results and its intended future performance and other relevant concerns. However,any information that may be regarded as undisclosed material information about the Group will not begiven to any party, and such information would only be released after the Company has duly complied withthe Listing Requirements.Signed by the Board of Directors in accordance with their resolution dated 16 April 2002.IGB Annual Report 2001 25

Additional Compliance InformationIn conformance with the Kuala Lumpur Stock Exchange Listing Requirements, the following informationis provided:1. Material contractsThe material contracts entered into by the Company and/or its subsidiaries which involve Directors’ andmajor shareholders’ interests either still subsisting at the end of the financial year ended 31 December 2001or entered into since the end of the previous financial year comprise the following:(a) On 15 May 2000, Commerce International Merchant Bankers Berhad (‘CIMB’) had announced on behalfof IGB that the Company had entered into a Memorandum of Understanding with Tan & TanDevelopments Berhad (‘Tan & Tan’), a major shareholder of the Company, to explore the feasibility ofmerging their property related businesses with the Company. Subsequently, on 25 July 2000, theCompany, Tan & Tan and Gold IS Berhad (‘Gold IS’), entered into an agreement to merge the propertyrelated businesses of the Company and Tan & Tan (‘Merger Agreement’) which includes, among others,the following:(i)acquisition of the equity interest in Tan & Tan by the Company from Gold IS for a purchaseconsideration of approximately RM644.82 million to be satisfied by RM50.0 million in cash, theissuance of 166,548,514 new ordinary shares of RM0.50 each in IGB (‘IGB Shares’) at an issue price ofRM2.50 per share and 178,444,836 1% irredeemable convertible preference shares of RM1.00 eachin IGB (‘ICPS 2002/2007’) at par (‘Acquisition’);(ii)bonus issue of new IGB Shares to be credited as fully paid-up on the basis of one (1) new IGB Sharefor every two (2) IGB Shares held after the Acquisition;(iii)waiver for Gold IS and persons acting in concert with Gold IS from undertaking a mandatorytake-over offer to acquire all the remaining IGB Shares not already owned by them pursuant to theAcquisition (‘Waiver’);(iv) increase in the authorized share capital of the Company from RM1,000,000,000 comprising2,000,000,000 IGB Shares to RM1,200,000,000 comprising 2,000,000,000 IGB Shares and 200,000,000ICPS 2002/2007;(v)amendments to the Memorandum and Articles of Association of the Company; and(vi) amendments to the Bye-Laws of IGB’s Employees Share Option Scheme.[hereinafter collectively referred to as ‘Proposal’]26IGB Annual Report 2001

Additional Compliance InformationOn 15 October 2001, the Securities Commission in its letter dated 10 October 2001, has approved theMerger. The Securities Commission has also approved in its letter dated 30 January 2002, the Waiver. TheForeign Investment Committee in its letters dated 21 March 2001, 12 September 2001 and 19 September2001 has also approved the Merger.By virtue of their common directorship and/or substantial shareholding in both IGB and Tan & Tan, theDirectors of the Company namely, Tan Sri Abu Talib bin Othman, Osman bin Haji Ismail, RobertTan Chung Meng and Tan Boon Seng are deemed interested in the Proposal.The Proposal was duly approved by the shareholders of the Company at the Extraordinary GeneralMeeting held on 13 December 2001.On 28 January 2002, the Kuala Lumpur Stock Exchange has approved, amongst others the listingof and quotation for the 178,444,836 ICPS 2002/2007 and up to 607,932,133 new IGB Shares to be issuedpursuant to the Acquisition on the Main Board of the KLSE, the IGB Bonus Issue and such number of newIGB Shares to be issued upon conversion of the ICPS 2002/2007, up to additional 59,279,107 new Warrants1999/2004 to be issued pursuant to the adjustment to the outstanding Warrants 1999/2004, and upto 59,279,107 new IGB Shares to be issued pursuant to the exercise of the additional new Warrants1999/2004.The Court Order which had been obtained on 29 January 2002 from the High Court of Malaya,sanctioning the scheme of arrangement under Section 176 of the Companies Act, 1965 for theimplementation of the Merger, has been duly filed with the Registrar of Companies on 31 January 2002.(b) A conditional take-over offer (‘Offer’) by Reco Bay Pte. Ltd. (‘Reco Bay’) to acquire IGB’s entireshareholding of 33,740,679 ordinary shares of A$1.00 each in Ipoh Limited for a consideration of A$1.65per share was accepted by the Company on 8 November 2001 for a total cash consideration ofA$55,672,210 upon the terms and subject to the conditions of the Offer as contained in the Bidder’sStatement by Reco Bay dated 21 September 2001 (‘the Disposal’). With the Disposal, IGB ceased tobe a substantial shareholder of Ipoh Limited.Dato’ Tan Chin Nam was a Director of IGB within the preceding twelve (12) months prior to the dateof the Main Circular and was a non-executive Director and substantial shareholder (ceased on13 November 2001) of Ipoh Limited during the period commencing on the date of the Offer until heresigned on 15 November 2001. Dato’ Tan Chin Nam is also a major shareholder of IGB. Robert TanChung Meng and Tan Boon Seng (‘Interested Directors’) are both Directors of IGB and personsconnected with Dato’ Tan Chin Nam. Dato’ Tan Chin Nam and the Interested Directors are deemedinterested in the Disposal, and they had accordingly abstained from voting in relation to their directand indirect interests in the Extraordinary General Meeting held on 5 November 2001; andIGB Annual Report 2001 27

Additional Compliance Information(c) On 13 November 2001, the Company and its wholly-owned subsidiary, Intercontinental AviationServices Sdn. Bhd. (‘IAS’), disposed of their entire shareholding of 24,028,000 Tan & Tan Shares for atotal consideration of approximately RM23.55 million via open market transactions (‘the Disposal’).With the Disposal, the Company and IAS ceased to be major shareholders of Tan & Tan.Robert Tan Chung Meng is a Director of IGB whilst Dato’ Tan Chin Nam was a Director of IGB withinthe preceding twelve (12) months prior to the Disposal. Robert Tan Chung Meng was a Director ofTan & Tan within the preceding twelve (12) months prior to the Disposal. Both Dato’ Tan Chin Namand Robert Tan Chung Meng are common major shareholders of both IGB and Tan & Tan. RobertTan Chung Meng had abstained from all deliberations and voting on the resolution pertaining to theDisposal at the Board meetings of IGB.2. DisclosuresThe Group also took all the necessary steps to ensure transactions which were deemed to be ‘related partytransactions’ were appropriately disclosed in accordance with the Listing Requirements, and conveninggeneral meetings to obtain shareholders’ approval. Additionally, notification or announcements whereappropriate and required were also made. Significant related party transactions are disclosed inNote 32 to the Financial Statements.3. Options, warrants or convertible securitiesNo options, warrants or convertible securities were issued by the Company during the financial year exceptthat during the year 36,439 Transferable Subscription Rights were converted to 36,439 new ordinary shares ofRM0.50 each.4. Imposition of sanctions/penaltiesThere were no material sanctions and/or penalties imposed on the Company and its subsidiary companies,Directors or management by the relevant regulatory bodies during the financial year.5. WaiverAn Application under Section 169(A)(1) of the Companies Act, 1965, in respect of the Employees ShareOption Scheme was approved by the Registrar of Companies on 21 February 2002.6. Non-audit feesThe amount of non-audit fees paid and payable to the external auditors by the Company and its subsidiariesfor the financial year ended 31 December 2001 are as follows:RMPWC Taxation Services Sdn. Bhd. 422,262.00PricewaterhouseCoopers 333,806.00756,068.0028IGB Annual Report 2001

Additional Compliance Information7. Profit guaranteesDuring the financial year, there were no profit guarantees given by the Company.8. Revaluation of landed propertiesSave and except for hotel properties which were appraised once in every five (5) years, the Group does nothave a revaluation policy.9. American Depository Receipt (‘ADR’) orGlobal Depository Receipt (‘GDR’) ProgrammeDuring the financial year, the Company did not sponsor any ADR or GDR programme.IGB Annual Report 2001 29

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The Boulevard, Mid Valley MegamallAUDIT COMMITTEE REPORT

AUDIT COMMITTEE REPORTThe Board of Directors of IGB CorporationBerhad (‘IGB’) is pleased to present thereport of the Audit Committee of the Boardfor the year ended 31 December 2001.Members and meetingsThe composition of the Audit Committee is as listed below. The Audit Committee convened four (4) meetingsduring the year, on 26 February 2001, 29 May 2001, 30 August 2001 and 27 November 2001.Name Status of directorship Attendance of meetingsDato’ Seri Khalid Ahmad bin Sulaiman Chairman, Senior Independent Non-Executive Director 2/4[appointed: member, 30 May 2001; chairman, 28 February 2002]Abdul Samad bin Haji Alias Independent Non-Executive Director 2/4Lai Meng Executive Director 4/4Jeffrey Heng Wah Yong Independent Non-Executive Director -(appointed : 28 February 2002)Tan Sri Abu Talib bin Othman Independent Non-Executive Chairman 2/4[appointed: chairman, 30 May 2001; resigned : 28 February 2002]Chong Kim Weng Non-Independent Non-Executive Director 2/4(resigned : 30 May 2001)Tan Boon Gark Executive Director 2/4(resigned : 30 May 2001)32IGB Annual Report 2001

AUDIT COMMITTEE REPORTTerms of referenceThe Audit Committee was established in 1993 to act as a Committee of the Board of Directors, with the terms ofreference as set out on pages 35 to 38.During the year, the terms of reference of the Audit Committee has been revised to conform to the ListingRequirements of the KLSE.Summary of activities during the financial yearIn line with the terms of reference of the Audit Committee, the following activities were carried out by the AuditCommittee during the year ended 31 December 2001 in the discharge of its functions and duties:(a)Reviewed the external auditors’ scope of work and audit plans for the year. Prior to the audit,representatives from the external auditors, presented their audit strategy and plan.(b)Reviewed with the external auditors the results of the audit, the audit report and the management letter,including management’s response.(c)Consideration and recommendation to the Board for approval of the audit fees payable to theexternal auditors;(d)Reviewed the quarterly unaudited financial results announcements before recommending them forthe Board’s approval.(e)Reviewed the internal audit department’s resources requirements, programmes and plan for the financialyear under review.(f)Reviewed the internal audit reports, which highlighted the audit issues, recommendations andmanagement’s response.(g)Reviewed the audited Financial Statements of the Group and the Company prior to submission to theBoard for their consideration and approval. The review was to ensure that the audited FinancialStatements were drawn up in accordance with the provisions of the Companies Act 1965 and the applicableapproved accounting standards approved by the Malaysian Accounting Standard Board (‘MASB’).IGB Annual Report 2001 33

AUDIT COMMITTEE REPORT(h)Reviewed the Company’s compliance in particular the quarterly and year end financial statements withthe Listing Requirements of the KLSE, MASB and other relevant legal and regulatory requirements.(i)Reviewed the related party transactions entered into by the Group.(j)Reviewed the extent of the Group’s compliance with the provisions set out under the Malaysian Code onCorporate Governance for the purpose of preparing the Corporate Governance Statement pursuant tothe KLSE Listing Requirements.(k)Reviewed the profit estimate, forecast and projections of the Group for the financial periods 31 December2000 to 31 December 2004 for the purpose of submission to the Securities Commission in connection withthe proposed merger of the property related businesses of IGB and Tan & Tan.Internal Audit FunctionsThe Group has an Internal Audit department whose principal responsibility is to undertake regular and systematicreviews of the systems of financial and operational controls so as to provide reasonable assurance that suchsystems continue to operate satisfactorily and effectively. The attainment of such objectives involves thefollowing activities being carried out by the department:(a)reviewing and appraising the soundness, adequacy and application of accounting, financial and othercontrols promoting effective control in the Company and the Group at reasonable cost;(b)ascertaining the extent of compliance with established policies, procedures and statutory requirements;(c)ascertaining the extent to which the Company and the Group’s assets are accounted for and safeguarded;(d)appraising the reliability of information developed within the Company and the Group for management;(e)recommending improvements to the existing system of controls;(f)reviewing the effectiveness and efficiency of operations; and(g)carrying out investigations and special reviews requested by management and/or Audit Committee.34IGB Annual Report 2001

Terms of reference of the Audit CommitteeObjectivesThe primary objectives of the Audit Committee are:• ensure transparency, integrity and accountability in the Group’s activities so as to safeguard the rights andinterests of the shareholders.• provide assistance to the Board in discharging its responsibilities relating to the Group’s management ofprincipal risks, internal controls, financial reporting and compliance of statutory and legal requirements.• maintain through regularly scheduled meetings, a direct line of communication between the Board,senior management, internal auditors and external auditors.Membership• The members of the Audit Committee shall be appointed by the Board of Directors upon therecommendations of the Nomination Committee and shall consist of not less than three (3) members,a majority of whom shall be independent Directors. If membership for any reason falls below three (3)members, the Board of Directors shall, within three (3) months of that event, appoint such number of newmembers as may be required to fulfil the minimum requirement.• The members of the Audit Committee shall elect a chairman from among their number who shall be anindependent Director.• No alternate Director shall be appointed as a member of the Audit Committee.• At least one member of the Audit Committee must be a member of the Malaysian Institute of Accountants(‘MIA’) or if he is not a member of the MIA, he must have at least three (3) years of working experience and(a) he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act1967; or (b) he must be a member of one of the associations of accountants specified in Part II of the1st Schedule of the Accountants Act 1967.• The Board shall review the terms of office of each of the Audit Committee at least once in three (3) years.IGB Annual Report 2001 35

Terms of reference of the Audit CommitteeProceedings of the Audit Committee• Meetings shall be held not less than four (4) times a year, and shall normally be attended by the Head ofFinance and Head of Internal Audit. The presence of external auditors may be requested, if required.Other members of the Board may attend meetings upon the invitation of the Audit Committee. At leastonce a year, the Audit Committee shall meet with the external auditors without any executive Boardmembers present.• Unless otherwise determined by the Audit Committee members, three (3) days’ notice specifying the place,date and hour of the Audit Committee Meeting and the matters to be discussed thereat shall be given toall the Audit Committee members. The external auditors and the internal auditors may request a meetingby notifying the Company Secretary if they consider it necessary.• The quorum for each meeting shall be at least two (2) members present in person, of whom at least two (2)must be independent Directors. In the absence of the Chairman, the members present shall elect aChairman for the meeting from amongst the members present.• The Audit Committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall bedetermined by a majority of votes of the members present, and in the case of an equality of votes,the Chairman shall have a second or casting vote.• The Company Secretary shall be appointed Secretary of the Audit Committee.• The Audit Committee shall cause minutes to be made of all proceedings at all meetings of the AuditCommittee. The minutes of any meeting of the Audit Committee, if purporting to be signed by theChairman of such meeting, or by the Chairman of the next succeeding meeting, shall be receivable asprima facie evidence of the matters stated in such minutes. Minutes of each meeting shall be distributedto members of the Board. The Chairman of the Audit Committee shall report on each meeting tothe Board.36IGB Annual Report 2001

Terms of reference of the Audit CommitteeAuthorityThe Audit Committee have the following authority as empowered by the Board:(a)(b)(c)(d)(e)to investigate any matter within its terms of reference;have the resources which are required to perform its duties;have full and unrestricted access to any information and personnel pertaining to the Group;have direct communication channels with the external and internal auditors; andto obtain independent professional advice as necessary.Responsibilities and dutiesIn fulfilling its primary objectives, the Audit Committee shall undertake the following responsibilities and duties:• Review and discuss with the external auditors of the following:(a)(b)(c)(d)(e)the audit plan (including the nature and scope of audit and to ensure co-ordination of audit wheremore than one audit firm is involved), prior to the commencement of audit;their audit report;their evaluation of the system of internal controls;problems and reservations arising from the interim and final external audits, and any matters theexternal auditors may wish to discuss (in the absence of management, where necessary); andtheir management letter and management’s response• Review the quarterly results and year end financial statements, prior to submission to the Board forapproval, focusing particularly on:(a)(b)(c)(d)going concern assumptions;changes in or implementation of major accounting policy changes;major judgemental areas, significant and unusual events; andcompliance with accounting standards, regulatory and other legal requirements.IGB Annual Report 2001 37

Terms of reference of the Audit Committee• Review any related party transaction and conflict of interest situation that may arise within the Companyor the Group, including any transaction, procedure or course of conduct that raises questions ofmanagement integrity, and to ensure that the Directors report such transactions annually to theshareholders vide the annual report.• Review the following in respect of internal auditors:(a)(b)(c)(d)(e)(f)(g)adequacy of the scope and plan, functions and resources of the internal audit function and that ithas the necessary authority to carry out its work;internal audit programme, processes and results of the internal audit programme, processes orinvestigation, and ensure that appropriate actions are taken on the recommendations of theinternal audit function;effectiveness of the system of internal controls;major findings of internal audit investigations and management’s response;review any appraisal or assessment of the performance of the staff of the internal audit function;approve any appointment or termination of senior staff member of the internal audit function; andnote resignations of internal audit staff members and provide the resigning staff member anopportunity to submit his/her reason for resignation.• Consider and recommend the nomination and appointment of external auditors, the audit fee and anyquestions of resignation, dismissal or re-appointment.• Report promptly to the KLSE on any matter reported by it to the Board of Directors which has not beensatisfactorily resolved resulting in the breach of the KLSE Listing Requirements.• Review all prospective financial information provided to the regulators and/or the public.• Prepare reports, if the circumstances arise or at least once a year, to the Board summarising the workperformed in fulfilling the Audit Committee’s primary responsibilities.• Any other activities, as authorized by the Board.Signed by the Board of Directors in accordance with their resolutions dated 7 March 2002 and 16 April 2002.38IGB Annual Report 2001

DESA DAMANSARA 2CHAIRMAN’S STATEMENT

CHAIRMAN’S STATEMENTThe year 2001 was not only a challenging year butalso another milestone in the history of the IGB Group.It is most heartening to note that the proposedmerger of the property related businesses of IGB andTan & Tan has been successfully completed. Therationalization exercise of placing Tan & Tan underthe umbrella of IGB not only has expanded theGroup’s portfolio of investment properties whichcomprise substantially of upmarket residentialproperties, commercial entities and hotels, but alsoenabled the Group to be well placed to exploitopportunities from its prime land assets fordevelopment activities and to realize theappreciation in the value of the land banks.The merger henceforth added considerablecreditability to the new direction of the Group toimprove both its prospects and performance as wellas working towards its vision to deliver growth andincrease shareholders value as it moves forward.Starting out on this positive note, it is both mypleasure and privilege to now present, on behalf ofthe Board, the Annual Report and Audited FinancialStatements of IGB Corporation Berhad Group for thefinancial year ended 31 December 2001.FINANCIAL RESULTSIn 2001, the Group performed reasonably welldespite the lingering uncertainties of the globaleconomic downturn. The Group revenue wasRM199.9 million compared with RM312.5 million lastyear. The lower revenue was mainly due to absenceof launches and minimal progress billing. The Grouppretax profit was however higher at RM61.9 million,compared with RM46.0 million in the preceding year.The improved results were mainly due to exceptionalgains derived from the disposal of the Group’s stakein Ipoh Limited and the share of profit on thedisposal of quoted investment by the Group’sassociate company, IJM Corporation Berhad (‘IJM’),coupled with the better performance from theGroup’s construction and hotel divisions. In tandemwith the improved earnings, the Group’s earningsper share rose to 8.50 sen while the Group’s nettangible assets backing per share improved toRM2.15. The Shareholders’ funds increased fromRM1,235.0 million to RM1,276.0 million for the yearunder review.With the exception of the investment holdingdivision, all operating divisions in the Group reportedpositive earnings for the year. The property divisionmaintained its positive contribution to the Group withcommendable rental returns from the Mid ValleyMegamall and the sales revenue of properties soldin the previous year. The construction divisioncontinued its upwards growth trend and registeredcredible profits. The hotel division also showed asignificant improvement in profitability, benefitingfrom both improved average room rates andincreased occupancies.As shareholders are aware, the financial year endedalso saw the completion of the disposal by theCompany of its 21.44% equity interest in Ipoh Limitedfollowing a conditional general offer. The disposalhas resulted in a gain of RM41.0 million. As mentionedearlier, the gain was taken up as an exceptional item,which contributed substantially to the pretax profitfor the year under review. The proceeds would beused to pare down the Group’s borrowings and forworking capital. Following the disposal, Ipoh Limitedhas effectively ceased to be an associate companyof the Group.40IGB Annual Report 2001

CHAIRMAN’S STATEMENTSHARE CAPITALThe total issued and paid up share capital ofthe Company increased from RM296,976,536to RM296,994,755-50 during the year as a result ofconversion of Transferable Subscription Rights 1993/1998, and the latter was removed from the OfficialList of the Exchange on 12 December 2001.As at 31 December 2001, the number of Warrants1999/2004 outstanding remains at 118,558,214 whilst3,671,000 share options remain unissued under theEmployees Share Option Scheme.DIVIDENDOn 7 January 2002, an interim dividend of 3% lessincome tax was paid. The Board is recommendinga final dividend of 2% less income tax, giving atotal dividend of 5% for the financial year ended31 December 2001, the same as in the previous year.GROUP PROSPECTS FOR 2002The forecast growth in the Gross Domestic Productof 3.5% for 2002 compared to 0.5% achieved in 2001(Source: Bank Negara Report 2001) bears ampletestimony to the pervading optimism with regard tothe turnaround in the country’s economic health.Although still clouded by global economicuncertainties, with the Government’s relentlessefforts in implementing various policies topump-primed the economy and other measures toprotect the economy from the adverse effects of theglobal slowdown, the country’s economy isexpected to continue on its recovery path.With that in mind, the outlook for the Group’sdiversified portfolio of business activities is expectedto improve in line with the anticipated sustainabilityof the overall business environment in the country.The Group will focus its efforts to build on its corebusinesses, while at the same time exploiting newbusiness ventures and opportunities thathave synergistic benefits and could contributeto its bottom line apart from enhancingshareholders’ value.Going forward, with a bigger asset base enlargedby the recently completed merger with Tan & Tan,the revenue and profit generation capacity ofthe Group is obviously higher. However, in orderto stimulate long term profitability, competitivenessand growth, the Group will focus even more ondeveloping long range business policies which willmaintain a steady source of income and earningsover time. Hence, the Group is now looking into theexpansion of the Mid Valley City project, which willact as the primary stimulus to provide a strong andsteady recurring revenue to fuel futuredevelopment activities and for investmentopportunities. Concurrently, the Group is alsoscouting for budget hotels in the region to expandits home grown Cititel chain as well as to beef upsome of the Group’s development projects tocapitalize on the upturn in the economy.Having taken the first step, the Group is now poisedto move forward, armed to face the challenges thatIGB Annual Report 2001 41

CHAIRMAN’S STATEMENTthe future holds. Even though there may still be somebumps along the way, the Board is confident thatwith the overall optimism, commitment andperseverance to strengthen the Group financiallyand strategically, and in the absence of any surprisefactors that could interfere with the further recoveryof the Malaysian economy, 2002 will see thecontinued growth of the Group.BOARD ROOMFirst and foremost, I would like to thank and expressmy heartfelt appreciation to the previous Chairmanof the Board, Dato’ Tan Chin Nam, who retired on 30May 2001, after serving and steering the growthof the Group for the past 32 years. The Board,management and staff of IGB shall endeavor toshow our appreciation in the best way possible bycontinuing to give him the pleasure and pride ofseeing the IGB Group continue to grow from strengthto strength.There have been some changes to the Boardstructure since the previous Annual GeneralMeeting. Mr Robert Tan Chung Meng, the JointManaging Director since 1995, was re-designatedas the Managing Director of the Company witheffect from 30 May 2001. Concurrently, Mr Tan BoonSeng has been re-designated as an ExecutiveDirector and was also appointed Chairman of theExecutive Committee, while Mr Tan Boon Gark, hasalso been re-designated as an Executive Director.ACKNOWLEDGEMENT AND APPRECIATIONOn behalf of the Board, I wish to express ourappreciation to the management and staff for theirdedication and commitment in the performanceof their duties during the year and to our businessassociates, customers, tenants, financiers andshareholders for their strong and continued support.I also wish to record my thanks to my fellowDirectors for their advice and support.I would also like to extend my appreciation to formerDirectors, namely Mr Mihir Kumar Sen and Mr ChongKim Weng, who resigned from the Board on28 March 2001 and 30 May 2001, respectively. Weare grateful for their contribution to the Company.TAN SRI ABU TALIB BIN OTHMANChairman16 April 200242IGB Annual Report 2001

Sri Bukit PersekutuanREVIEW OF OPERATIONS

REVIEW OF OPERATIONSDear Shareholders,The year under review saw the active pursuit of theGroup’s rationalization exercise with Tan & Tan.In this regard, I am pleased to report that the mergerof the property development and investmentbusiness and subsidiaries of IGB and Tan & Tan hasbeen successfully concluded. With this, may I assureshareholders that we will relentlessly continue to steerthe Group firmly towards a steady and well chartedgrowth with the single minded objective of creatingand enhancing shareholders wealth.The year presented many challenges to the Group’sbusinesses in the light of highly competitive local andregional markets and the continued effects of theeconomic downturn together with difficultoperating conditions. Despite the challengingeconomic circumstances, the Group managed torecord another commendable performance. Thepretax profit rose 35% to RM61.9 million from RM46.0million previously, albeit revenue was 36% lower atRM199.9 million from RM312.5 million previously.All the core business divisions within the Groupshowed increased contribution. For the propertydivision, the Group’s prime asset, the Mid ValleyMegamall (‘Megamall’) was again the maincontributor with gross rental income amounting toapproximately RM88.0 million. The Megamallmaintained its position as the most popular megaentertainment and shopping centre as amplydemonstrated by its steady and sustained growth inrevenue and profits, brought about by theselection of tenants, cultural and other exhibits,features, facilities and services that all combine tocreate a unique retail mix and theme attractive toconsumers. As at the end of the financial year, 99%of the Megamall’s lettable space had been leased.The Megamall recorded in excess of 18 millionvisitations in 2001 providing the basis for excellenttrading conditions for retailers within the Megamall.It is indeed heartening to note that besidesattracting the continued presence of shoppers andvisitors, the Megamall has been the proud recipientof various awards during the year. The Megamallwas bestowed with the 2001 FIABCI Awards ofDistinction for Best Retail Development. This is a highlycommendable achievement and reflects thesuccess of our Megamall. The Megamall was alsothe recipient of the award for the ‘Best ShoppingComplex for Year 2000’ organized by the MalaysianTourism Promotion Board. Apart from bothprestigious awards, the Megamall was named theKuala Lumpur City Hall’s Best and CleanestShopping Centre Award 2001. I must say that the44IGB Annual Report 2001

REVIEW OF OPERATIONSoutstanding result speaks well for the experiencedmanagement team of the Megamall which hassuccessively demonstrated the effectiveness ofapplying sound marketing strategies and leasinginitiatives to ensure the continued prosperity of theMegamall.The earnings of the property division were alsoderived from the progressive billings of the DesaDamansara Phase 2 and sale of completedSignature Offices. Menara IGB also achieved arespectable occupancy rate which commensuratewith prevailing market levels.On the hotel front, competition remains intensefor the Group’s local and overseas hotelswhich are experiencing fall-outs following theaftermath of the September 11 terrorist attacks.However, Renaissance Hotel Kuala Lumpur and PanPacific Resort Pangkor continued to report healthygrowth in both occupancies and room rates. The646-rooms Cititel Mid Valley Hotel is proving to be avaluable additional revenue earner, enjoying 70%occupancy for its first operating year. Apart from thethree local hotels, the Group also has interests inhotels in the United Kingdom, Myanmar and Vietnam.Despite the unforeseen operational encumbrancesand the saturation of hotel rooms in their respectivelocations, the performance of the Group’s hotelproperties has overall improved for the yearunder review.The Group continued to benefit from theperformance of its associate company, IJMwhich continued to register credible improvementin performance. Construction division was theleading contributor to IJM’s earnings. With its strongorder book and the expectation of favourable crudepalm oil price, IJM is expected to record anothercommendable results for the current financial year.As shareholders are aware, the Company haddisposed of its 21.44% equity interest in Ipoh Limitedfollowing a conditional general offer. Following thedisposal, the profit contributions through equityaccounting of investments in Ipoh Limited haseffectively ceased.A summary of the various core divisions performedduring the year under review is as follows:PROPERTY DEVELOPMENTMid Valley CitySited on more than 50 acres of prime property, MidValley City is one of the largest urban developmentprojects in the world. Phase 1 of the Mid Valley City,covering a gross floor area of 4.5 million sq. ft. iscompleted. Phase 1 comprises Mid Valley Megamall,Cititel Mid Valley Hotel, 30 Signature Offices and theMenara IGB office tower. These properties are nowfully operational. The Signature Offices which hadbeen fully sold have been handed over to therespective purchasers and many of whom havealready moved in, or are in the process offitting out. The units are expected to be progressivelyoccupied by mid 2002.IGB Annual Report 2001 45

REVIEW OF OPERATIONSMindful of the importance of accessibility andconvenience to our customers, plans are in place tofurther improve the surrounding infrastructure, roadstructure and upgrading works to the developmentsunder Phase 1. The increase of car parking, publictransport and other transportation modes are aimedat alleviating the traffic congestions and reducingingress and egress times to the Mid Valley City.At present, the Group is evaluating the remainder ofthe Mid Valley City site. Phase 2 of the developmentwill see the balance of another 2.5 million nett sq. ft.of mixed development, and it is anticipated tocome on stream before the close of this decade.Notwithstanding any unexpected or unforeseensetbacks to the economy, the Mid Valley Citydevelopment will continue to contribute significantlyto the Group’s long term growth.Mid Valley CondominiumThe Group has also commenced construction of 450apartments (Parcel 4 of the development) on thesite adjoining the northern end of the Megamall. Saleof apartments is expected to commence in the firsthalf of 2002. Due to the location and excellentaccessibility of the Mid Valley City, the launch of theseunits is expected to be well received.Desa Damansara Phase 2 CondominiumDesa Damansara Phase 2, an upmarket resort-stylecondominium with a clearly defined nichemarket, was officially launched in May 2000. Thedevelopment, consisting of 132 units of 3 and 4-bedroom units housed in two tower blocks, is locatedat the prime residential area of Damansara Heights.The units of apartments are spacious in built up areawith superior quality finishes and are enclaved in asecuritized surrounding with natural landscapedgarden and full recreational facilities. To-date about70% of the units have been sold with constructionworks moving according to schedule. The project isexpected to be completed in May 2003. By virtueof its prestigious locality, sales opportunities areenvisaged to pick up as the economy gathersfurther momentum.Kundang JayaThe development of the 996 acres of land in Rawangby our 50% owned associate company, KundangProperties Sdn Bhd continued to make furtherprogress. 260 acres earmarked for industrialdevelopment had been completed and theindustrial lots had been handed over to purchasers.Another 190 acres which has been converted fromindustrial development into affordably pricedresidential products is currently under construction.Phase 1A consisting of 141 units of single storeyterrace houses was opened for sale in July 2001 andreceived good response from the public. To-date,95% had been sold and is currently 65% developed.Phase 1B comprising of 127 units of double storeyterrace houses was launched in November 2001,and 25% of the units has been sold to-date. Theconversion for the remaining 546 acres intoresidential properties is still pending approval fromthe Authorities.46IGB Annual Report 2001

REVIEW OF OPERATIONSFederal HillsDespite numerous impediments which have causeddelay in the launch of this upmarket residentialdevelopment on an 18-acres piece of land in theexclusive enclave in Federal Hills, consisting ofdistinctive mixed development - residentialtownhouses, bungalows, luxurious condominium andsemi-detached houses, we are confident that thisdevelopment would finally be launched during theyear. This development, with freehold titles andlocated in a choice residential district, isexpected to be met with equal enthusiasm from thepublic, and the Group should be able to derivesubstantial profit contribution from this project.Earthwork has commenced in January 2002.INVESTMENT PROPERTIESMid Valley MegamallThe Mid Valley Megamall is the largest retail centrein Malaysia and is the first retail development to housethree anchor tenants, 23 junior and mini anchors and430 specialty shops over a net lettable area of 1.7million sq.ft. and 7,000 parking bays distributed over2.45 million sq. ft. Since its opening in November 1999,patronage to the Megamall has steadily increasedand averages 1.5 million customers a month.The Megamall is currently 99.5% occupied withtenants offering a comprehensive retail mix on fiveshopping floors. The shops at the Boulevard are 90%leased out and expected to be fully occupied byend 2002. The first batch of 156 tenancy renewalswere completed in September 2001 with some of theretail mix upgraded to a higher mid-marketposition and rental increased to achieve higher grossrentals for the Megamall. Another 200 shop lotswill be exercising their options to renew inNovember 2002.Tenants in the Megamall continue to trade well andenjoy good sales given the high traffic volume andincreased spending power of the customers. To winand keep these customers, the Megamall adoptsaggressive promotional and strategic advertisingcampaigns and constantly improves upon the levelof customer service. With several measures put inplace to address the traffic management issue anda more efficient operating system, the Megamallshould be able to sustain its present high level ofbusiness activity and continue to yield a steadystream of income in the future.Peer recognition has also won the Megamall theinternational and local industry awards for itscontribution to the retail industry in Malaysia. Asmentioned earlier, the Megamall was accorded theFIABCI Award of Distinction 2001 for Best RetailDevelopment; Kuala Lumpur City Hall’s Best andCleanest Shopping Centre Award 2001; andMalaysia Tourism Awards 2000 for the Best ShoppingCentre category.Menara IGBMenara IGB, the latest addition to our investmentproperty portfolio with a net lettable area of 213,000sq. ft., standing 26-storey tall above the podium ofthe Megamall, houses the Group’s head office andmost of its subsidiaries. Menara IGB performedwithin expectation despite the overhang in thecommercial property sector and suppressed rentalmarket. Tenancies have been secured for a total of172,000 sq. ft. or 80% of its net lettable area. Rentalincome increased to RM3.89 million from RM0.53million previously.IGB Annual Report 2001 47

REVIEW OF OPERATIONSHOTELSRenaissance Kuala Lumpur HotelThe Renaissance Kuala Lumpur Hotel performedwell and achieved improved results over thecomparable period in 2000. Year 2001 performanceexceeded 2000 by 2.6% despite the increasinglycompetitive trading situation, further aggravated bythe September 11 tragedy which caused a sharpdrop of business for the following two months as aresult of heavy room cancellations with consequentlylower food and beverage sales.Driven by the objective ‘To Manage Market Mix’, thehotel successfully increased by 4% its average roomrate to RM163 against year 2000 and averageoccupancy rate to 68.5% which was an improvementof 19%.Overall room inventory is expected to increase by3,000 rooms within Klang Valley. Competitions willgrow more intense with major entries of these 4 and5 star hotels, scheduled for opening in the secondhalf of 2002. With an insight of several major playerswho had recently renovated or had announcedrenovation and/or expansion plans, coupledwith the influx in rooms inventory, management’sstrategy and plan will have to be promptlyadministered in order to capitalize on theopportunity presented.The strategies developed for the year will be focusedon the hotel’s unique selling proposition to competewith the better positioned city hotels withaggressive marketing and sales strategies andactivities so as to stay competitive, maintain marketshares and thus ensuring revenue growth.Pan Pacific Resort PangkorThe Pan Pacific Resort Pangkor enjoyed higheroccupancy level and room rate followingmanagement’s aggressive marketing efforts andyield management strategies. The resort achievedan occupancy of 73.2%, which was 4.7% upcompared to year 2000. Average room rateincreased slightly by 4.8% when compared to 2000despite uncertainty in the international market withthe worldwide economic downturn. A stable basehowever has been forged for increases during year2002 when the global economy stabilizes.The platform for increased rates in 2001 wasachieved through increases in the high volumeTaiwanese sourced business and removal of addedbenefits in the European market. The domesticmarket has responded favorably to newspaperadvertising which added value but at substantiallyhigher rates than it was perceived the market wouldpay in the past. The inclusion of ‘All Day Dining’ hasincreased the food and beverage spent per guestin the resort whilst adding a greater benefit fortraveler. The conference room nights also continuedto increase with the implementation of the ‘valuefor money’ meetings and conference packages.The introduction of Revenue Management functionin the resort has allowed rates to be enhancedduring the peak periods and the low yield businessdirected to the slow periods. Management willbroaden this function in 2002 to encompass thefood and beverage operation especially theconference area.In efforts to remain competitive and to enhance thevalue of the resort, the Group had commencedrefurbishment and renovation on its rooms, decorsand facilities during the year with the painting of the48IGB Annual Report 2001

REVIEW OF OPERATIONSSea and Garden Wings, a new deck for the Hornbillrestaurant, erosion prevention on the beachfront,cushions and increased numbers of deck chairs whichhad all contributed to greater customer satisfactionand assisted in the increased of room rates. The giftshop has been moved to a prominent location thathas increased sales and the benefit of increasedactivities in the recreation area has also drawnmore revenue.In 2002, management will continue to strive forincreases in revenue by attracting higher spendinggroups and individuals through selective techniquesof Revenue Management. The introduction of plusplus (++) method of pricing will allow for increases inrates without obvious movement of individuals rates.It is essential for the resort to keep increasing thequality of the product through physical upgrade togive value for the increasing rate. Simultaneously,management will come up with customised productsthat are entirely responsive to market demand tomaintain its strong position in the market.Cititel Mid Valley HotelAdjacent to the Megamall is Cititel Mid Valley Hotel.This year is the first full year of operation for Cititel MidValley since its opening in September 2000.Positioned as the most business-friendly hotel in KualaLumpur with 646 rooms of standard and deluxecategories, Cititel Mid Valley is strategically locatedin the thriving shopping and business district of MidValley City. Patronage by tourists was strong and thehotel also enjoys repeat/regular customers. Thehotel occupancy for the year 2001 closed at 70.3%.The event of September 11 had a slight impact onthe hotel occupancy. However, room occupancyrecovered quickly. Gross operating revenue for theyear 2001 was RM20.6 million whilst the grossoperating profit was RM8.6 million. Generally, themarket acceptance of the product has been verypositive and the key challenges for the hotel for theyear 2002 is to continue to improve its servicestandards and in the general maintenance of thehotel. Pricing strategies vis-a-vis return on yield, theexecution of marketing programmes and costmanagement will continue to be the key areasof focus.St Giles Hotels2001 proved to be the most challenging year for theLondon hotel sector since the Gulf War. Domesticfood and mouth disease and September 11combined to bring an end to the upbeat cycle seenin the late 90’s, and London, in particular, bore thebrunt of the downturn. The US market, whichrepresents 28% of all inbound business to Londondisappeared. The Group’s associate hotels, St GilesHotel London and St Giles Hotel Heathrow performedas follows:(a)St Giles Hotel, LondonIn year 2001, total revenue was £13.9 millioncompared with the prior year’s £14.7 million.Overall average achieved rate was £62.98(£62.79 in 2000) at an overall occupancy of76.9% (80.9% in 2000). This yielded grossoperating profit of £7.3 million (52.8%)versus £7.6 million (52.1%), a result that wasonly achieved by the managementteam implementing very strict cost controlprocedures.The lack of demand for hotel rooms inLondon has created a price war forcing thehotel to discount its rates considerably toremain in parity with its competitors.IGB Annual Report 2001 49

REVIEW OF OPERATIONS(b)With the completion of the guestroomrefurbishment project and the opening of thenew meeting room suites, expectations forthe year 2002 are sustained growth inthe corporate market at an enhancedaverage rate.St Giles Hotel, HeathrowIn the year 2001, the hotel achieved £4.9million in total sales versus £4.7 million in 2000.Overall occupancy was 58.9% at an overallaverage rate of £56.75. Gross operating profitwas £2.3 million (45.9%) and pretax profit was£86k versus £120k in 2000. These figures havebeen achieved in a year of great turmoil andcost management has been essential sincethe effect of September 11.For the year 2002, the marketing initiative willbe to continue to build corporate awarenessof the hotel, build up average rate byimproving the business mix and further developthe web site (www.stgiles.com). Externalfloodlighting has been introduced to makethe local community more aware of thehotel building and external signs are to beimproved. Outline planning approval isbeing sought for a further 100 guestrooms tobe added to the existing site.The poor market condition is expected to continueinto the financial year 2002. The hotel has realignedits market focus to non-governmental organizationsand embassies in view of the country’s progressiveimprovement in cooperation with the internationalcommunity. Nonetheless, cost saving measures andoperational efficiency improvement will continue tobe given focus.New World SaigonThe performance of the New World Saigon inHo Chi Minh City, Vietnam also showed animprovement over the comparable period in 2000although the Vietnam market is still experiencingconsiderable slowdown due to low investmentgrowth and the glut of hotel rooms. The betterperformance was achieved through a morefocused and aggressive marketing efforts andpromotions. The year to date sales are up by USD1.09million or 9.8% benefiting from increase in roomsrevenue. A special package has been successfullyextended to overseas Vietnamese for their comingLunar New Year celebration. Total revenue for 2001was USD12.2 million, compared to USD11.1 million in2000, whilst occupancy at the hotel reached 68.3%from 58.0% in 2001. Management will continue toplace great emphasis on cost saving measures andoptimizing market share while maintaining efficientservice levels.MiCasa YangonMiCasa Hotel Apartments, the Group associatehotel in Yangon, Myanmar, performed withinexpectation amidst the unfavourable economicclimate and competitive trading environment.It achieved an occupancy rate of 67% in2001 compared to 59% in 2000, with positiveoperating profit.CONSTRUCTIONIJM, the Group’s 20.19% investment in theconstruction sector, performed remarkably well forthe year under review. IJM’s pretax profit surged 77%to RM210.41 million on a 39% rise in revenue toRM857.4 million. The improved results werecontributed mainly by the gain on disposal of its longterm overseas investments, and profit growth from50IGB Annual Report 2001

REVIEW OF OPERATIONSits construction, property development, manufacturingand quarrying as well as plantation divisions.The construction division maintained the mainstay ofthe group and account for 58.6% of its pretax profit.All other operating divisions, namely propertydevelopment, plantations, manufacturing andquarrying also showed improvement and maintainedtheir positive contribution to the group.During the financial year 2001, the constructiondivision secured a record RM1.77 billion worth ofconstruction contracts locally as well as overseas.Additionally, the leading position of IJM in theindustry was highlighted by the Builder of the Year2001 Award conferred by the Construction IndustryDevelopment Board.The year 2001 saw the completion and handing overof eight construction projects to clients. Notableprojects completed include the Pelabuhan TanjungPelepas Rail Link Project in Johor; Pantai MedicalCentre Extension in Bukit Pantai, Kuala Lumpur andChennai Bypass Phase 1 (connecting NH-4 andNh-5) in Tamil Nadu State, India.CORPORATE PLANS AND DIRECTIONIn line with the new corporate directions set forth inthe Merger, the Group had reviewed its activities,strategies and resources to rationalize its corebusinesses into strategic business groupings toimprove management efficiency, operationalstreamlining and the realization of synergies in a moreeffective manner as well as to bring eachdivision forward to fit in with the Group’s long termgrowth objectives. The Group’s businesseshave henceforth been strategized into distinctdivisions such as, property investment, propertydevelopment, property management, constructionmanagement and hotel. Property development andproperty management will spearhead the drive bythe Group to enhance its profitability and will bejoined by the Group’s other core businesses ofproperty investment, construction managementand hotel operations. Those non-core businesseswill be sold or downsized. At the same time, newbusiness ventures and opportunities, complementaryor synergistic to the Group, will continuously andproactively be pursued to widen the Group’searnings base.With the above objective in mind, high onthe Group’s agenda are efforts directed atstrengthening IGB from within and shaping a strongerfuture for the Group. To this end, the Group hasintensified its review directed towards maximizingvalue and returns from its assets. The Group will alsocontinually review all growth opportunities to ensurethey meet the strict criteria in terms of investmentreturn and impact on the Group’s financial position.In the Group’s continuing drive for constantexpansion and development, uppermost on the listof activities planned are to develop the balance ofthe existing site in Mid Valley City into its secondphase as well as to expand the hotel chains underthe Cititel brand. Plans are in place to expand theflagship of the Mid Valley Megamall to build a‘slightly higher class shopping mall’ as an extensionto the existing structure, with the objective toincrease visitations and add value to the centre. Theexpansion is also consistent with the Group’sstrategy to diversify its earning base by venturing intoproperty investments with sustained rental income.I must say that the unwavering support thatwe continue to enjoy from our customers isundoubtedly the strongest motivating factor for ourIGB Annual Report 2001 51

REVIEW OF OPERATIONSproposed expansion, and the Group shall remaincommitted to position the Mid Valley Megamallas the premier shopping centre in the industryand country.The luxury hotel market has become morecompetitive with an altogether familiar scenario offrequent influxes of new hotels into an alreadyoversupplied market. As a first step towardsmeeting this competition, the Group will undertaketo reposition its hotels. The idea of re-positioning is tostrengthen and perpetuate ‘Cititel’ as a brandidentity to dominate the mid range business hotelchains. The plan to expand the business class Cititelchain will lead to active pursuit of acquiring budgethotels in the region and Europe.Property development will remain the main stay ofthe Group’s business revenue. However, the right mixof exposure in commercial entities and hotels willfurther boost earnings and provide a consistent andgrowing earnings stream to the Group. Moreimportantly, it will position us favorably to benefit fromthe recurring rental profits and cash flow to funddevelopment activities as well as to give the Groupthe breather necessary to ride out any ripples in theeconomy in the future.Premised on the above therefore, the Group is wellpoised to improve upon its performance, and 2002should show a growth in profit barring adversedevelopments in the regional and global economies.CONCLUSIONI would like to thank my colleagues on the Board,the management team and staff of all levels for theirunabated dedication and good work. Theco-operation and support of all of you in acceptingthe corporate reorganization will further augment ourway forward. Together, we shall work towards settingnew directions for the Group and to propel IGBtowards its new destiny. I look forward to an excitingyear in 2002 as we pursue new challenges ahead.Robert Tan Chung MengManaging Director16 April 2002Notwithstanding the above, the Group iscommitted to ensuring that all its core businessactivities are able to meet the challenges arisingfrom the vicissitude of the ever-changing businessenvironment. Quality management, strongcorporate values and business dynamism shallcontinue to be the driving force to ensure thecore businesses remain at the forefront of theirrespective industries.52IGB Annual Report 2001

Leisure & Entertaiment at Mid Valley MegamallANALYSIS OF SHAREHOLDINGS AS AT 1 APRIL 2002

ANALYSIS OF SHAREHOLDINGSas at 1 April 2002SHARE CAPITALAuthorized Share Capital : RM1,200,000,000Issued and Paid-Up Capital : RM296,994,755-50Class of Shares : 2,000,000,000 Ordinary Shares of RM0.50 each and 200,000,000Irredeemable Convertible Preference Shares 2002/2007 of RM1.00 eachVoting Rights : One vote per Ordinary ShareDistribution of ShareholdingsRange of Shareholdings No. of % of No. of % ofShareholders Shareholders Shares SharesLess than 1,000 578 2.49 265,766 0.041,000 to 10,000 20,102 86.56 69,112,279 11.6410,001 to 100,000 2,375 10.23 59,099,854 9.95100,001 to less than 5% of issued shares 163 0.70 232,151,151 39.085% and above of issued shares 4 0.02 233,360,461 39.29Total 23,222 100.00 593,989,511 100.00Substantial Shareholders (excluding Bare Trustees) as per the Register of Substantial ShareholdersNumber of Shares% of % ofDirect Shares Deemed Shares1. Tan & Tan Developments Berhad 146,867,702 24.73 18,000,000 3.032. Amanah Raya Nominees (Tempatan) 81,000,000 13.64 - -Sdn Bhd for Skim Amanah SahamBumiputera3. Insas Berhad - - 44,277,000 7.454. Dato’ Tan Chin Nam 2,463,750 0.41 205,298,771 34.565. Robert Tan Chung Meng 186,000 0.03 203,946,771 34.346. Pauline Tan Suat Ming 78,125 0.01 177,204,369 29.837. Tony Tan Choon Keat - - 177,204,369 29.838. Tan Chin Nam Sdn Bhd 4,200,250 0.71 176,284,119 29.689. Tan Kim Yeow Sdn Bhd 1,837,000 0.31 175,367,369 29.5210. Wah Seong (Malaya) Trading Co. Sdn Bhd 3,263,887 0.55 171,092,232 28.8011. Employees Provident Fund Board 29,917,750 5.04 4,438,325 0.7554IGB Annual Report 2001

ANALYSIS OF SHAREHOLDINGSAS AT 1 APRIL 2002Thirty Largest Shareholders as per the Register of Members and the Record of DepositorsNo. ofShares% ofShares1. Amanah Raya Nominees (Tempatan) Sdn Bhd 81,000,000 13.64for Skim Amanah Saham Bumiputera2. RHB Capital Nominees (Tempatan) Sdn Bhd 70,787,461 11.92for Tan & Tan Developments Berhad3. Citicorp Nominees (Tempatan) Sdn Bhd 51,636,250 8.69for Tan & Tan Developments Berhad4. Employees Provident Fund 29,936,750 5.045. IJM Corporation Berhad 24,735,000 4.166. Tan & Tan Developments Berhad 24,443,991 4.127. Multistock Sdn Bhd 18,000,000 3.038. Insas Plaza Sdn Bhd 15,033,500 2.539. Permodalan Nasional Berhad 14,404,999 2.4310. Malaysia Nominees (Tempatan) Sendirian Berhad 10,130,000 1.71for Great Eastern Life Assurance (Malaysia) Berhad11. M & A Nominee (Asing) Sdn Bhd for M&A Securities (HK) Ltd/ 10,000,000 1.68M&A Investments Pte Ltd12. HSBC Nominees (Asing) Sdn Bhd for HRBS SG/Kenderlay Ltd 7,912,000 1.3313. M & A Nominee (Asing) Sdn Bhd for M&A Securities (HK) Ltd/ 7,000,000 1.18M&A Investments International Ltd14. M & A Nominee (Asing) Sdn Bhd for M&A Securities (HK) Ltd/ 6,500,000 1.09Dawnfield Pte Ltd15. M & A Nominee (Asing) Sdn Bhd for M&A Securities (HK) Ltd/ 4,319,000 0.73Pedigree Limited16. M & A Nominee (Asing) Sdn Bhd for M&A Securities (HK) Ltd/ 4,088,500 0.69Montego Assets Limited17. Tan Chin Nam Sdn Bhd 3,959,000 0.6718. SLW Sdn Bhd 3,936,458 0.6619. SPI Pte Ltd 3,492,500 0.5920. Alliancegroup Nominees (Tempatan) Sdn Bhd for PHEIM Asset 3,482,000 0.59Management Sdn Bhd/Employees Provident Fund Board21. Mayban Nominees (Asing) Sdn Bhd for DBS Bank/Timbarra 3,307,500 0.56Services Limited (200894)22. Pertubuhan Keselamatan Sosial 3,014,582 0.5123. Wah Seong (Malaya) Trading Co. Sdn Bhd 2,800,137 0.4724. Wah Seong Enterprises Sdn Bhd 2,561,405 0.4325. BBL Nominees (Tempatan) Sdn Bhd for Dato’ Tan Chin Nam 2,413,750 0.41(100171)IGB Annual Report 2001 55

ANALYSIS OF SHAREHOLDINGSas at 1 April 2002No. ofShares% ofShares26. Tentang Emas Sdn Bhd 2,357,500 0.4027. Eng Nominees (Asing) Sdn Bhd for OCBC 1,998,750 0.34Securities Private Limited/Hexacon Construction Pte Ltd28. Scanstell Sdn Bhd 1,928,000 0.3229. Tan Kim Yeow Sdn Bhd 1,837,000 0.3130. Citicorp Nominees (Tempatan) Sdn Bhd 1,806,250 0.30for Prudential Assurance Malaysia Berhad56IGB Annual Report 2001

ANALYSIS OF WARRANTHOLDINGSAS AT 1 APRIL 2002WARRANTS 1999/2004Issued : RM118,558,714Outstanding : RM118,558,214Distribution of WarrantholdingsNo. of % of No. of % ofRange of Warrantholdings Warrantholders Warrantholders Warrants WarrantsLess than 1,000 709 8.06 315,656 0.271,000 to 10,000 7,206 81.93 20,699,262 17.4610,001 to 100,000 807 9.18 22,554,046 19.02100,001 to less than 5% of outstanding warrants 71 0.81 37,977,250 32.035% and above of outstanding warrants 2 0.02 37,012,000 31.22Total 8,795 100.00 118,558,214 100.00Thirty Largest Warrantholders as per the Record of DepositorsNo. ofWarrants% ofWarrants1. RHB Capital Nominees (Tempatan) Sdn Bhd 23,372,000 19.71for Tan & Tan Developments Berhad2. Citicorp Nominees (Tempatan) Sdn Bhd 13,640,000 11.50for Tan & Tan Developments Berhad3. Multistock Sdn Bhd 5,265,000 4.444. IJM Corporation Berhad 4,947,000 4.175. Wah Seong (Malaya) Trading Co. Sdn Bhd 2,408,137 2.036. HSBC Nominees (Asing) Sdn Bhd for HRBS SG for Kenderlay Ltd 2,312,000 1.957. Tan Chin Nam Sdn Bhd 2,234,000 1.888. Employees Provident Fund 2,033,750 1.729. Chan Boon Hwee 1,800,000 1.5210. Tan Chin Nam 1,282,750 1.0811. Tan Kim Yeow Sdn Bhd 1,169,000 0.99IGB Annual Report 2001 57

ANALYSIS OF WARRANTHOLDINGSas at 1 April 2002No. ofWarrants% ofWarrants12. Mayban Nominees (Asing) Sdn Bhd for DBS Bank for 998,500 0.84Timbarra Services Limited (200894)13. SLW Sdn Bhd 787,291 0.6614. SPI Pte Ltd 698,500 0.5915. BAM Nominees (Tempatan) Sdn Bhd for 663,000 0.56Kumpulan Wang Simpanan Pekerja for Lee Chee Keong (EP0173)16. Wah Seong Enterprises Sdn Bhd 512,281 0.4317. Tentang Emas Sdn Bhd 471,500 0.4018. Citicorp Nominees (Tempatan) Sdn Bhd for Susy Ding (471873) 424,000 0.3619. Scanstell Sdn Bhd 386,000 0.3320. Pertubuhan Keselamatan Sosial 362,916 0.3121. HDM Nominees (Tempatan) Sdn Bhd for Saw Kok Leng (MEMO) 320,000 0.2722. Eng Nominees (Asing) Sdn Bhd for OCBC Securities Private Limited/ 311,750 0.26Hexacon Construction Pte Ltd23. Richard Teh Lip Heong 311,250 0.2624. Malaysia Nominees (Tempatan) Sendirian Berhad for 300,000 0.25Malaysian Trustees Berhad/Alliance Vision Fund (00-10033-000)25. TCL Nominees (Asing) Sdn Bhd for OCBC Securities 300,000 0.25(Hong Kong) Ltd/Rize Consultants Ltd26. Hong Leong Finance Berhad for Soin Chee Hong 300,000 0.2527. Teh Hoo Kim 281,000 0.2428. Tan An Huat 274,000 0.2329. Botly Nominees (Tempatan) Sdn Bhd for Loh Tuck Moon 270,000 0.2330. Cartaban Nominees (Asing) Sdn Bhd for SSBT Fund TC45/ 223,250 0.19California State Teachers Retirement System58IGB Annual Report 2001

Artist Impression of Desa Damansara 25 YEARS GROUP FINANCIAL HIGHLIGHTS

5 YEARS GROUP FINANCIAL HIGHLIGHTS1997 1998 1999 2000 2001TURNOVER RM ‘000 112,432 77,217 131,068 312,505 199,880PROFIT BEFORE TAXATION RM ‘000 124,383 16,510 32,309 45,951 61,926EARNINGS FOR THE YEAR RM ‘000 99,965 5,890 25,919 21,562 50,474ISSUED SHARECAPITAL (RM0.50) RM ‘000 237,116 237,117 296,397 296,977 296,995SHAREHOLDERS’ FUNDS RM ‘000 1,082,010 1,079,434 1,223,353 1,234,933 1,275,900TOTAL ASSETS RM ‘000 1,731,435 1,965,540 2,244,467 2,072,933 2,101,911EARNINGS PER SHARE * sen 21.1 1.2 5.5 3.6 8.5NET TANGIBLE ASSETPER SHARE RM 2.3 2.3 2.1 2.1 2.1GROSS DIVIDENDSPER SHARE sen 5.0 1.0 1.0 2.5 2.5DIVIDEND RATE % 10.0 2.0 2.0 5.0 5.0* Based on weighted average number of shares in issue during the year60IGB Annual Report 2001

Reports and financial statements for thefinancial year ended 31 December 2001Directors’ report 62-67Income statements 68Balance sheets 69-70Consolidated statement ofchanges in equity71Company statement of changes in equity 72Cash flow statements 73Notes to the financial statements 74-98Subsidiaries and Associates 99-100Statement by Directors 101Statutory Declaration 102Report of the Auditors to the members 103-104List of Properties Held 105-106(5745-A)

DIRECTORS’ REPORTfor the financial year ended 31 December 2001The Directors have pleasure in submitting their report to the members together with the audited financialstatements of the Group and Company for the financial year ended 31 December 2001.Principal activities and corporate informationThe principal activities of the Company during the financial year are those of investment holding and propertydevelopment. The principal activities of the subsidiaries and associates are set out on pages 99 and 100. Therehave been no significant changes in the nature of these activities during the financial year.The number of employees at the end of the financial year amounted to 713 (2000: 796) employees in the Groupand 58 (2000: 48) employees in the Company.The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on theMain Board of the Kuala Lumpur Stock Exchange.The address of the registered office of the Company is as follows:Penthouse, Menara IGBNo. 1, The Boulevard, Mid Valley CityLingkaran Syed Putra, 59200 Kuala LumpurFinancial resultsGroup CompanyRM ‘000 RM ‘000Profit after taxation 49,447 72,056Minority interests 1,027 0Net profit for the financial year 50,474 72,056DividendsDividends paid, declared or proposed since the end of the Company’s previous financial year are as follows:(a)(b)(c)RM ‘000In respect of the financial year ended 31 December 2000, as shown in theDirectors’ report for that financial year, a first and final dividend of 5% less tax at 28%paid on 16 July 2001. 10,691In respect of the financial year ended 31 December 2001, an interim dividend of3% less tax at 28% paid on 7 January 2002. 6,415In respect of the financial year ended 31 December 2001, a proposed final dividend of2% less tax at 28% 4,27662IGB Annual Report 2001

DIRECTORS’ REPORTfor the financial year ended 31 December 2001Reserves and provisionsAll material transfers to or from reserves or provisions during the financial year have been disclosed in thefinancial statements.Issue of sharesDuring the financial year, the Company’s issued and fully paid-up share capital was increased from RM296,976,536to RM296,994,756 by way of an issue of 36,439 new ordinary shares of RM0.50 each for cash on the exercise of36,439 Transferable Subscription Rights at an exercise price of RM1.59 each.The newly issued shares rank pari passu in all respects with the existing issued shares of the Company.Employees’ share option scheme (ESOS)The ESOS, which expired on 4 November 1997, has been extended for a period of five years. The main features ofthe ESOS are as follows:(a)(b)(c)(d)(e)The eligibility for participation in the ESOS shall be at the discretion of the ESOS Committee, appointed bythe Board of Directors;The total number of ordinary shares to be offered under the ESOS shall not exceed 10% of the issued andpaid-up ordinary share capital of the Company at any point of time during the existence of the ESOSwhich shall be in force for an extended period of five years expiring on 4 November 2002;The number of shares under options or option price or both so far as the option remain unexercised shallbe adjusted following any issue of additional shares in the issued share capital of the Company by way ofrights issue, capitalisation of profits or reserves or any sub-division and consolidation of theCompany’s shares;The option price at which the employees are offered to take up shares under the ESOS is the average ofthe mean market quotation of the shares of the Company as quoted in the Daily Official list issued by theKuala Lumpur Stock Exchange for the five market days preceding the respective dates of offer of theoptions, or the par value of the shares of the Company of RM0.50, whichever is higher; andThe persons to whom the options have been granted have no right to participate by virtue of the optionsin any share issue of any other company.As at 31 December 2001, options granted to subscribe for ordinary shares of RM0.50 each which have yet to beexercised are as follows:Exercise priceNumber of optionsgranted and unexercisedRM1.23 3,154,000RM1.86 132,000RM2.02 32,000RM2.27 63,000RM2.51 242,000RM2.56 48,0003,671,000IGB Annual Report 200163

DIRECTORS’ REPORTfor the financial year ended 31 December 2001Employees’ share option scheme (ESOS) (continued)The movements during the financial year in the number of options over the shares of the Company are as follows:Number of OptionsAt 1 January 2001 4,659,000Lapsed (988,000)At 31 December 2001 3,671,000The Company has been granted exemption by the Registrar of Companies vide their letter dated 21 February2002 from having to disclose the list of option holders and their holdings.The number of options unexercised of 3,671,000 will expire, if not exercised by 4 November 2002.DirectorsThe Directors in office since the date of the last report are:Tan Sri Abu Talib Bin OthmanRobert Tan Chung MengTan Boon SengTan Boon GarkLai MengDato’ Seri Khalid Ahmad Bin SulaimanAbdul Samad Bin Haji AliasOsman Bin Haji IsmailChua Seng Yong (alternate to Robert Tan Chung Meng)Jeffrey Heng Wah Yong (appointed on 17 September 2001)Dato’ Tan Chin Nam (retired on 30 May 2001)Chong Kim Weng (resigned on 30 May 2001)Mr Jeffrey Heng Wah Yong, the Director retiring pursuant to Article 89 of the Company’s Articles of Association,has expressed his wish not to stand for election at the forthcoming Annual General Meeting.In accordance with Article 85 of the Company’s Articles of Association, Mr Robert Tan Chung Meng, Mr Tan BoonSeng and Mr Tan Boon Gark retire by rotation at the forthcoming Annual General Meeting and, being eligible,offer themselves for re-election.64IGB Annual Report 2001

DIRECTORS’ REPORTfor the financial year ended 31 December 2001Directors’ interestsAccording to the Register of Directors’ Shareholdings, particulars of interests of Directors who held office at theend of the financial year in shares, warrants, Transferable Subscription Rights (“TSRs”) and share options in theCompany are as follows:In the CompanyNumber of Ordinary Shares of RM0.50 each1 January Addition Disposal 31 DecemberRobert Tan Chung MengDirect 186,000 0 0 186,000Indirect 203,946,771 0 0 203,946,771Tan Boon SengDirect 9,375 0 0 9,375Tan Boon GarkDirect 219,000 2,000 0 221,000Dato’ Seri Khalid Ahmad Bin SulaimanIndirect 125,250 0 0 125,250In the CompanyNumber of WarrantsDisposal/1 January Addition Exercised 31 DecemberRobert Tan Chung MengDirect 156,000 0 0 156,000Indirect 52,654,523 0 0 52,654,523Tan Boon SengDirect 1,875 0 0 1,875Tan Boon GarkDirect 20,000 0 0 20,000In the CompanyNumber of Transferable Subscription Rights (“TSRs”)Disposal/ Expired1 January Addition Exercised 11 DecemberRobert Tan Chung MengDirect 5,354 0 0 5,354Indirect 18,545,373 0 500,000 18,045,373Tan Boon SengDirect 803 0 0 803In the CompanyNumber of Option (ESOS) over ordinary shares of RM0.50 each1 January Granted Exercised 31 DecemberRobert Tan Chung Meng 500,000 0 0 500,000Lai Meng 70,000 0 0 70,000Chua Seng Yong 85,000 0 0 85,000Other than as disclosed above, none of the other Directors holding office at the end of the financial year heldany interests in the shares, warrants, TSRs and share options in the Company or its related corporations during thefinancial year.IGB Annual Report 200165

DIRECTORS’ REPORTfor the financial year ended 31 December 2001Directors’ benefitSince the end of the previous financial year, no Director has received or become entitled to receive a benefit(other than the fees and other emoluments paid as shown in note 5 to the financial statements) by reason of acontract made by the Company or by a related corporation with the Director or with a firm of which he is amember, or with a company in which he has a substantial financial interest.Except as disclosed above, neither during nor at the end of the financial year was the Company or any of itsrelated corporations a party to any arrangement whose object was to enable the Directors of the Company toacquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other bodycorporate.Statutory information on the financial statementsBefore the income statements and balance sheets were made out, the Directors took reasonable steps:(a)(b)to ascertain that proper action had been taken in relation to the writing off of bad debts and the makingof allowance for doubtful debts and satisfied themselves that all known bad debts had been written offand that adequate allowance had been made for doubtful debts; andto ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course ofbusiness their values as shown in the accounting records of the Group and Company had been writtendown to an amount which they might be expected so to realise.At the date of this report, the Directors are not aware of any circumstances:(a)(b)(c)which would render the amounts written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and Company inadequate to any substantial extent; orwhich would render the values attributed to current assets in the financial statements of the Group andCompany misleading; orwhich have arisen which render adherence to the existing method of valuation of assets or liabilities of theGroup and Company misleading or inappropriate.No contingent or other liability has become enforceable or is likely to become enforceable within the period oftwelve months after the end of the financial year which, in the opinion of the Directors, will or may affect theability of the Group or Company to meet their obligations when they fall due.At the date of this report, there does not exist:(a)(b)any charge on the assets of the Group or Company which has arisen since the end of the financial yearwhich secures the liability of any other person; orany contingent liability of the Group or Company which has arisen since the end of the financial year.At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this reportor the financial statements which would render any amount stated in the financial statements misleading.In the opinion of the Directors:(a)(b)the results of the Group’s and Company’s operations during the financial year were not substantiallyaffected by any item, transaction or event of a material and unusual nature except as disclosed in theincome statements and note 4 to the financial statements; andthere has not arisen in the interval between the end of the financial year and the date of this report anyitem, transaction or event of a material and unusual nature likely to affect substantially the results of theoperations of the Group and Company for the financial year in which this report is made.66IGB Annual Report 2001

DIRECTORS’ REPORTfor the financial year ended 31 December 2001Significant eventsOn 25 July 2000, the Company, Tan & Tan Developments Berhad (Tan & Tan) and Gold I S Berhad (formerly knownas Dimensi Subuh Sdn Bhd) had signed a Merger Agreement to merge the property related businesses of boththe Company and Tan & Tan. The acquisition of the entire equity interest in Tan & Tan by the Company for apurchase consideration of approximately RM644.82 million would be satisfied by RM50.0 million in cash, theissuance of 166,548,514 new ordinary shares of RM0.50 each in the Company (‘IGB Shares’)at an issue price ofRM2.50 per share and 178,444,836 Irredeemable Convertible Preference Shares (‘ICPS2002/2007’) at par. Inaddition, the Company has also announced a Bonus Issue of 380,269,012 new IGB Shares on the basis of one (1)new IGB Share for every two (2) existing IGB Shares held at 5.00 p.m. on 11 April 2002 and one (1) new IGB Sharefor every two (2) IGB Shares to be issued pursuant to the acquisition of the entire interest in Tan & Tan.All approvals have now been obtained from the relevant regulatory authorities as well as approvals from theshareholders of the Company and Tan & Tan.The Kuala Lumpur Stock Exchange (‘KLSE’) has also, vide its letter dated 28 January 2002, approved theadmission to the Official List of the KLSE for the listing of and quotation of all new securities to be issued arisingtherefrom including 178,444,836 ICPS2002/2007, up to 845,656,076 new IGB shares and up to 59,279,107additional new warrants 1999/2004 in the Company.In addition, a Court Order was obtained on 29 January 2002 from the High Court of Malaya sanctioning thescheme of arrangement under Section 176 of the Companies Act for the implementation of the Merger. TheCourt Order was filed with the Registrar of Companies on 31 January 2002. As such the Merger is deemedcompleted on 31 January 2002.AuditorsThe auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.Signed on behalf of the Board of Directors in accordance with their resolution dated 16 April 2002.Robert Tan Chung MengManaging DirectorAbdul Samad Bin Haji AliasDirectorKuala LumpurIGB Annual Report 200167

INCOME STATEMENTSfor the financial year ended 31 December 2001GroupCompanyNote 2001 2000 2001 2000RM’000 RM’000 RM’000 RM’000Revenue 3 199,880 312,505 17,754 27,218Cost of sales (129,261) (236,725) (690) (4,107)Gross profit 70,619 75,780 17,064 23,111Other operating income 29,203 20,652 27,420 34,436Administrative expenses (37,152) (32,917) (3,456) (1,702)Other operating expenses (39,969) (24,631) (16,482) (12,169)Profit from operations 4 22,701 38,884 24,546 43,676Finance costs 6 (46,289) (44,445) (14,130) (11,482)Share of results of associates 44,469 50,322 0 0Gain from disposal of an associate 41,045 1,190 67,678 12,754Profit from ordinary activities before tax 61,926 45,951 78,094 44,948Tax: 7Company and subsidiaries (3,091) (9,807) (6,038) (11,622)Associates (9,388) (14,250) 0 0(12,479) (24,057) (6,038) (11,622)Profit from ordinary activities after tax 49,447 21,894 72,056 33,326Minority interests 1,027 (332) 0 0Net profit for the financial year 50,474 21,562 72,056 33,326Earnings per share (sen) 9- basic 8.50 3.63- diluted Anti-dilutive Anti-dilutiveDividends per share (sen) 2.50 2.50 2.50 2.5068IGB Annual Report 2001

BALANCE SHEETSas at 31 December 2001GroupCompanyNote 2001 2000 2001 2000RM’000 RM’000 RM’000 RM’000Capital and reservesShare capital 10 296,995 296,977 296,995 296,977Share premium 252,622 252,582 252,622 252,582Revaluation and otherreserves 11 64,462 63,336 29,258 29,258Retained earnings 12 661,821 622,038 502,168 440,803Shareholders’ equity 1,275,900 1,234,933 1,081,043 1,019,620Minority interests 20,143 21,170 0 0Non current liabilitiesTerm loan 13 168,811 122,916 110,061 122,916Murabahah UnderwrittenNotes and SyndicatedFixed Rate Loan 14 285,000 379,500 0 0Deferred taxation 15 1,617 2,361 1,600 2,3001,751,471 1,760,880 1,192,704 1,144,836Represented by:Non current assetsProperty, plant andequipment 16 867,556 888,836 1,855 1,959Real property assets 47,397 47,397 38,086 38,086Subsidiaries 17 0 0 291,907 292,439Associates 18 541,811 600,428 247,846 295,163Other investments 19 44,742 97,085 2,900 2,900Current assetsDevelopment propertiesand expenditure 20 158,492 130,657 0 0Inventories 21 50,938 69,859 37,348 37,348Marketable securities 22 14,630 16,819 11,376 13,565Trade and other receivables 23 94,320 71,944 20,920 20,476Amount owing bysubsidiaries 24 0 0 730,012 688,251Amount owing byassociates 25 143,761 131,911 82,098 70,320Deposits with licensedbanks 29 127,832 11,722 113,150 0Cash and bank balances 29 10,432 6,275 1,455 727600,405 439,187 996,359 830,687IGB Annual Report 200169

BALANCE SHEETSas at 31 December 2001GroupCompanyNote 2001 2000 2001 2000RM’000 RM’000 RM’000 RM’000Less: Current liabilitiesTrade and other payables 26 193,454 191,592 67,060 63,157Amount owing tosubsidiaries 24 0 0 227,657 192,569Amount owing toassociates 25 42,898 38,779 17,443 13,925Bank borrowings 28 101,563 64,260 69,813 36,692Tax 8,249 6,731 0 (636)Proposed dividends 8 4,276 10,691 4,276 10,691350,440 312,053 386,249 316,398Net current assets 249,965 127,134 610,110 514,2891,751,471 1,760,880 1,192,704 1,144,83670IGB Annual Report 2001

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the financial year ended 31 December 2001Issued and fully paidordinary shares ofRM0.50 each Non-distributable DistributableRevaluationNumber of Nominal Share and other RetainedNote shares value premium reserves earnings TotalGroup ‘000 RM’000 RM’000 RM’000 RM’000 RM’000At 1 January 2001 593,953 296,977 252,582 63,336 622,038 1,234,933Net profit 0 0 0 0 50,474 50,474Dividends 8 0 0 0 0 (10,691) (10,691)Issue of shares:Transferable SubscriptionRights exercised 36 18 40 0 0 58Currency translationdifferences 11 0 0 0 (1,564) 0 (1,564)Revaluation ofhotel properties 11 0 0 0 2,690 0 2,690Net gain not recognisedin income statement 0 0 0 1,126 0 1,126At 31 December 2001 593,989 296,995 252,622 64,462 661,821 1,275,900At 1 January 2000 592,794 296,397 251,736 64,053 611,167 1,223,353Net profit 0 0 0 0 21,562 21,562Dividends 8 0 0 0 0 (10,691) (10,691)Issue of shares:ESOS share optionsexercised 1,159 580 846 0 0 1,426Warrants exercised * 0 0 0 0 0 0Currency translationdifferences 11 0 0 0 (717) 0 (717)At 31 December 2000 593,953 296,977 252,582 63,336 622,038 1,234,933*An issue of 500 new ordinary shares of RM0.50 each for cash on the exercise of warrants at an exercise priceof RM1.50 each. Share capital and share premium arising from this share issue amounted to RM250 andRM500 respectively.IGB Annual Report 200171

COMPANY STATEMENT OF CHANGES IN EQUITYfor the financial year ended 31 December 2001Issued and fully paidordinary shares ofRM0.50 each Non-distributable DistributableRevaluationNote Number of Nominal Share and other Retainedshares value premium reserves earnings TotalCompany ‘000 RM’000 RM’000 RM’000 RM’000 RM’000At 1 January 2001 593,953 296,977 252,582 29,258 440,803 1,019,620Net profit 0 0 0 0 72,056 72,056Dividends 8 0 0 0 0 (10,691) (10,691)Issue of shares:Transferable SubscriptionRights exercised 36 18 40 0 0 58At 31 December 2001 593,989 296,995 252,622 29,258 502,168 1,081,043At 1 January 2000 592,794 296,397 251,736 29,258 418,168 995,559Net profit 0 0 0 0 33,326 33,326Dividends 8 0 0 0 0 (10,691) (10,691)Issue of shares:ESOS shareoptions exercised 1,159 580 846 0 0 1,426Warrants exercised * 0 0 0 0 0 0At 31 December 2000 593,953 296,977 252,582 29,258 440,803 1,019,620*An issue of 500 new ordinary shares of RM0.50 each for cash on the exercise of warrants at an exercise price of RM1.50each. Share capital and share premium arising from this share issue amounted to RM250 and RM500 respectively.72IGB Annual Report 2001

CASH FLOW STATEMENTSfor the financial year ended 31 December 2001GroupCompanyNote 2001 2000 2001 2000RM’000 RM’000 RM’000 RM’000Operating activitiesReceipts from customers 171,717 299,713 4,083 60,811Payments to contractors, suppliers andemployees (128,481) (269,801) (16,453) (85,683)Cash flow from/(used in) operations 43,236 29,912 (12,370) (24,872)Interest paid (34,728) (30,162) (4,469) (3,181)Income taxes paid (7,968) (13,785) (5,536) (6,345)Net cash generated from/(used in)operating activities 540 (14,035) (22,375) (34,398)Investing activitiesProceeds from sale of shares in anassociate 124,047 19,044 124,047 19,044Proceeds from sale of investments 23,508 0 0 0Interest received 1,917 4,760 1,732 4,657Purchase of property, plant andequipment (10,867) (105,407) (235) (205)Proceeds from sale of property, plant andequipment 133 55 117 0Investment in subsidiaries 0 0 (1,000) 0Investment in associates (9,099) (4,815) (8,646) (4,815)Investment in other investments (82) 0 0 0Dividends received from subsidiaries 0 0 910 0Dividends received from associates 19,401 15,667 10,921 11,269Dividends received from investments 1,030 917 330 330Repayment from subsidiaries 0 0 35,088 0Repayment to subsidiaries 0 0 (28,384) (68,357)Advances to subsidiaries 0 0 0 (6,106)Repayment from associates 8,396 68,671 8,396 68,671Advances to associates (20,174) (51,581) (20,174) (30,798)Advances from associates 8,190 13,825 8,190 1,296Repayment to associates (4,733) (816) (4,672) (816)Net cash generated from/(used in)investing activities 141,667 (39,680) 126,620 (5,830)Financing activitiesProceeds from shares issued by the Company 58 1,426 58 1,426Repayment of bank borrowings (98,689) (134,032) (9,689) (135,097)Receipt of bank borrowings 90,000 23,000 30,000 10,000Dividends paid (10,691) (5,928) (10,691) (5,928)Advances from a related party 0 14,000 0 14,000Net cash (used in)/generated fromfinancing activities (19,322) (101,534) 9,678 (115,599)Foreign currencies exchange differenceon opening balances (5) 3 0 0Net increase/(decrease) in cash and cashequivalents during the financial year 122,880 (155,246) 113,923 (155,827)Cash and cash equivalents at beginningof financial year 12,426 167,672 (2,276) 153,551Cash and cash equivalents at end offinancial year 29 135,306 12,426 111,647 (2,276)IGB Annual Report 200173

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 20011. Principal activitiesThe principal activities of the Company during the financial year are those of investment holding and propertydevelopment. The principal activities of the subsidiaries and associates are set out on pages 99 and 100. Therehave been no significant changes in the nature of these activities during the financial year.2. Summary of significant accounting policiesThe following accounting policies have been used consistently in dealing with items considered material inrelation to the financial statements:(a)Basis of preparation of the financial statementsThe financial statements of the Group and Company have been prepared under the historical costconvention except as disclosed in this summary of significant accounting policies.The financial statements of the Group and Company have been prepared in accordance with theprovisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.(b)Basis of consolidationThe consolidated financial statements include the financial statements of the Company and all itssubsidiaries made up to the end of the financial year. Subsidiaries are those enterprises in which the Grouphas power to exercise control over the financial and operating policies so as to obtain benefits from theiractivities. Subsidiaries are consolidated from the date on which control is transferred to the Group and areno longer consolidated from the date that control ceases. Subsidiaries are consolidated using theacquisition method of accounting. Under the acquisition method of accounting, the results of thesubsidiaries acquired or disposed during the year are included in the consolidated income statementfrom the date of acquisition or up to the date of their disposal. Inter-company transactions are eliminatedon consolidation and consolidated financial statements reflect external transaction only. Wherenecessary, adjustments are made to the financial statements of subsidiaries to ensure consistency ofaccounting policies with those of the Group.(c)Goodwill on consolidationGoodwill or capital reserve arising on consolidation represents the excess or deficit of purchase price overthe fair value of the net assets of subsidiaries at the date of acquisition. Goodwill or capital reserve arisingon consolidation is written off against reserves.(d)SubsidiariesInvestments in subsidiaries are stated at cost. An allowance is made when the Directors are of the opinionthat there is a permanent diminution in the value of the investments.74IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2001(e)AssociatesThe Group treats as associates those enterprises in which a long term equity interest of between 20 to 50percent is held and where the Group exercises significant influence through management participation.Investments in associates are stated at cost or valuation. An allowance is made when the Directors are ofthe opinion that there is a permanent diminution in the value of the investments.The Group’s share of profits less losses of associates is included in the consolidated income statement andthe Group’s share of post-acquisition retained profits and reserves are added to the cost or valuation ofinvestments in the consolidated balance sheet. These amounts are taken from the latest audited financialstatements of associates with the same financial year end as the Company and where the financial yearends are not coterminous, the amounts are taken from the management financial statements made upto the financial year end of the Group. Where necessary, in applying the equity method, adjustments aremade to the financial statements of associates to ensure consistency of accounting policies of the Group.(f)InvestmentsInvestments in quoted and unquoted shares held as long term investments are stated at cost.An allowance is made when the Directors are of the opinion that there is a permanent diminution in valueof the investments. Permanent diminution in the value of an investment is recognised as an expense in thefinancial year in which diminution is identified.Short term investments in quoted shares are stated at the lower of cost and market value on theaggregate portfolio basis at the balance sheet date. Increases/decreases in the carrying amount arecredited/charged to the income statement.On disposal of an investment, the difference between net disposal proceeds and its carrying amount ischarged or credited to the income statement.(g)Property, plant and equipmentFreehold land is stated at cost or valuation. All other property, plant and equipment except for hotelproperties are stated at cost less accumulated depreciation. The valuations are performed byindependent professional valuers. Freehold land of the Group has not been revalued since the lastrevaluation in 1996. The Directors applied thetransitional provisions of International AccountingStandards (“IAS”) No.16 (Revised) Property, Plant and Equipment as adopted by the MalaysianAccounting Standards Board which allows these assets to be stated at their 1996 valuation.Accordingly, these assets have been stated at their last revalued amount.Financing costs on specific identifiable borrowings used to finance the acquisition of property, plant andequipment are capitalised and carried forward as part of property, plant and equipment. Capitalisationof borrowing costs cease when assets are ready for their intended use.IGB Annual Report 200175

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2001(g)Property, plant and equipment (continued)Hotel properties are stated at Directors’ valuation based on independent valuers’ reports. Additionssubsequent to the date of valuation are stated at cost. It is the Group’s policy to appraise the hotelproperties once in every five years by independent professional valuers based on their open marketvalues with additional valuations in the intervening years where market conditions indicate that thecarrying values on the revalued assets are materially different from the market values. Any surplus ordeficit arising therefrom will be dealt with in the Revaluation Surplus Account. A deficit, on individual hotelbasis, is set off against the Revaluation Surplus Account only to the extent of a surplus credited from theprevious revaluation of the hotel properties and the excess of the deficit is charged to the incomestatement.No depreciation is provided for the hotel properties as it is the Group’s practice to maintain theseproperties in such condition that the residual value is so high that depreciation would be insignificant.The related maintenance expenditure is dealt with in the income statement.Gains and losses on disposals are determined by comparing proceeds with carrying amount and areincluded in profit/(loss) from operations. On disposal of revalued assets, amounts in revaluation reserverelating to those assets are transferred to retained earnings.(h)DepreciationFreehold land and capital work-in-progress are not depreciated.Other lands have not been classified according to their tenure pending finalisation with the relevantauthorities. Depreciation has been provided over their estimated useful life of 99 years.Depreciation on other property, plant and equipment is calculated to write-off their cost on a straight linebasis over their estimated useful lives of the assets concerned. The annual rates are:%Buildings 2Plant and machinery 5 - 25Motor vehicles 20Office furniture, fittings and equipment 5 - 33 1/3Included in the office furniture, fittings and equipment are operating assets of subsidiaries engaged in thehotel business such as furnishing, linen, crockery and cutlery.(i)Real property assetsReal property assets consisting of land held for future development are stated at cost of acquisitionincluding all related costs incurred subsequent to the acquisition on activities necessary to prepare theland for its intended use.Such assets are transferred to development properties and expenditure when significant developmentwork is to be undertaken and is expected to be completed within the normal operating cycle.76IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2001(j)Construction contractsWhen the outcome of a construction contract can be reliably estimated, contract revenue and contractcosts are recognised over the period of the contract as revenue and expenses respectively. The Groupuses the percentage of completion method to determine the appropriate amount of revenue and coststo recognise in a given period; the stage of completion is measured by reference to the proportion thatcontract costs incurred for work performed to date bear to the estimated total costs for the contract.When the outcome of a construction contract cannot be estimated reliably, contract revenue isrecognised only to the extent of contract costs incurred that is probable will be recoverable; contractcosts are recognised when incurred.When it is probable that contract costs will exceed total contract revenue, the expected loss is recognisedas an expense immediately.The aggregate of the costs incurred and the profit/loss recognised on each contract is compared againstthe progress billings up to the period end. Where costs incurred and recognised profits (less recognisedlosses) exceed progress billings, the balance is shown as amounts due from customers on constructioncontracts under receivables, deposits and prepayments. Where progress billings exceed costs incurredplus recognised profits (less recognised losses), the balance is shown as amounts due to customers onconstruction contracts under payables.(k)Revenue recognitionIncome from property development is recognised on the percentage of completion method based onunits sold, and where the outcome of the development projects can be reliably estimated. Anticipatedlosses are provided for in full.Income from construction contracts (including joint venture projects) is recognised on the percentage ofcompletion method in cases where the outcome of the contract can be reliably estimated. In all cases,anticipated losses are provided for in full.Dividend income from investments is taken up as income when the shareholders’ right to receivepayment is established.Hotel revenue is recognised upon delivery of products and customer acceptance, and performance ofservices, net of sales taxes and discounts.Management fees, project management fees and rental income are recognised on accrual basis.Interest income is recognised on accrual basis unless collectibility is in doubt in which case the recognitionof such income is suspended.IGB Annual Report 200177

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2001(l)Development properties and expenditureDevelopment properties and expenditure are stated at cost and consist of freehold and leasehold land,development expenditure plus attributable profit less progress billings and provision for foreseeable losses.The related development costs common to the whole project comprise finance charges on borrowingsdirectly related to the financing of development and direct costs of construction. Costs chargedto the income statement are in respect of properties sold and comprised proportionate land anddevelopment costs.Development properties are classified as current assets when significant development work have beenundertaken and are expected to be completed within the normal operating cycle.(m)InventoriesAll inventories are valued at the lower of cost and net realisable value.Costs of unsold properties comprise proportionate cost of land and development expenditure.Costs of hotel operating supplies are determined on a first-in, first-out basis. Allowance is made for alldeteriorated, damaged, obsolete or slow-moving inventories.(n)ReceivablesKnown bad debts are written off and specific allowance is made for any considered to be doubtful ofcollection.(o)Foreign currenciesForeign currency transactions are converted into Ringgit Malaysia at the rates of exchange ruling on thetransaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheetdate are translated into Ringgit Malaysia at rates of exchange ruling on that date. Exchange differencesare reflected in the income statement.Income statements of foreign entities are translated into the Group’s reporting currency at averageexchange rates for the financial year and balance sheets are translated at exchange rates ruling at thebalance sheet date. Exchange differences arising from the retranslation of the net investment in foreignsubsidiaries and associates are taken to Exchange Fluctuation Reserve in shareholders’ equity.On disposal of the foreign entity, such translation differences are recognised in the income statementas part of the gain or loss on disposal.The principal closing rates used in translation of foreign currency amounts are as follows:Foreign currency 2001 2000RMRM1 US Dollar 3.800 3.8001 Singapore Dollar 2.050 2.1761 Sterling Pound 5.500 5.6541 Hong Kong Dollar 0.486 0.4861 Australian Dollar 1.934 2.09878IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2001(p)Deferred taxationProvision is made using the liability method for taxation deferred in respect of all timing differences exceptwhere it is considered reasonably probable that the tax effects of such deferrals will continue in theforeseeable future. Deferred tax benefits are not recognised in the financial statements unless there is areasonable expectation of realisation in the foreseeable future.(q)Cash and cash equivalentsCash and cash equivalents consists of cash in hand, bank balances, demand deposits, bank overdraftsand short term, highly liquid investments that are readily convertible to known amounts of cash and whichare subject to an insignificant risk of changes in value.3. RevenueGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Investment income 1,360 1,046 15,928 19,414Rental of properties 82,534 65,640 1,826 2,411Sale of development propertiesbilled to stages of completion 51,714 227,751 0 5,393Sale of services 38,933 18,068 0 0Contract revenue 25,339 0 0 0199,880 312,505 17,754 27,2184. Profit from operationsGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Profit from operations is stated aftercharging:Allowance for doubtful debt of:- Subsidiaries 0 0 8,552 8,280- Trade and other receivables 90 75 18 0Allowance for diminution in value of:- Investment in subsidiaries 0 0 1,532 0- Quoted investments 2,189 4,325 2,189 0- Unquoted investments 9,155 6,638 0 0Amortisation/Write off of deferred expenditure 0 261 0 0Auditors’ remuneration:- Current financial year 264 224 75 70- Underprovision in respect of priorfinancial year 19 0 0 0Contract costs 22,256 0 0 0Depreciation of property, plant and equipment 34,274 29,652 339 484Fees paid to a professional firm in whicha Director is a member 599 158 271 0Loss on disposal of quoted investments 18,061 0 0 0IGB Annual Report 200179

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 20014. Profit from operations (continued)GroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Profit from operations is stated aftercharging:Office rent 516 268 452 223Realised exchange losses 223 0 223 0Staff cost 25,770 28,609 2,380 2,950Write off of property, plant and equipment 85 0 0 0And crediting:Bad debts recovered 25 485 0 0Dividends received (gross) from:- Subsidiaries:- Unquoted in Malaysia 0 0 268 2,537- Associates:- Quoted in Malaysia 0 0 3,287 1,867- Quoted outside Malaysia 0 0 11,836 14,451- Unquoted 0 0 78 100- Quoted investments:- In Malaysia 1,011 459 459 459- Outside Malaysia 349 587 0 0Exchange gain:- Realised 1,820 0 0 0- Unrealised 1,124 450 0 0Interest income from:- Subsidiaries 0 0 21,928 27,612- Associates 0 765 0 765- Loan stocks 1,232 3,892 1,232 3,892- Fixed deposits 881 630 500 527Profit on disposal of property, plantand equipment 117 46 117 0Rental income 17 18 0 0Write back on allowance for doubtful debts 586 0 420 05. Directors’ remunerationGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Fees:- Directors of the Company 112 120 62 70- Other Directors 33 30 0 0Other emoluments:- Directors of the Company 1,288 1,263 1,252 1,058- Other Directors 915 589 0 02,348 2,002 1,314 1,128The Directors’ remuneration have been included in staff cost as disclosed in note 4.80IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 20016. Finance costsGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Finance costs are stated aftercharging/(crediting):Interest expense on borrowings 43,464 41,506 13,205 12,300Net exchange gain on foreigncurrency borrowings:- unrealised 0 (1,065) 0 (1,065)- realised (363) (1,160) (363) (1,160)7. TaxGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000In MalaysiaIncome tax - current- Company and subsidiaries (3,835) (8,397) (3,400) (5,010)- Associates (9,388) (9,595) 0 0Income tax - prior years 0 (1,410) 0 (1,410)Transfer from deferred taxation 744 0 700 0(12,479) (19,402) (2,700) (6,420)Outside MalaysiaIncome tax - current- Company 0 0 (3,338) (5,202)- Associates 0 (4,655) 0 00 (4,655) (3,338) (5,202)(12,479) (24,057) (6,038) (11,622)The effective tax rates of the Group and Company for the financial year were lower than the statutory tax rateprevailing in Malaysia because certain income were not subject to income tax.8. DividendsGroup and Company2001 2000RM ‘000 RM ‘000Interim dividend of 3% less tax at 28% (2000: Nil) 6,415 0Proposed final dividend of 2% less tax at 28% (2000: first andfinal dividend of 5% less tax at 28%) 4,276 10,69110,691 10,691IGB Annual Report 200181

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 20019. Earnings per shareBasicThe basic earnings per share has been calculated based on the Group’s net profit attributable to shareholdersfor the financial year of RM50,474,000 (2000: RM21,562,000) and the weighted average number of ordinary sharesin issue during the financial year of 593,989,000 (2000: 593,953,000).DilutedThe diluted earnings per share is not presented in the financial statements as the effect of the assumedconversion of the Warrants and ESOS share options during the financial year is anti-dilutive.10 Share capitalGroup and Company2001 2000Ordinary shares of RM0.50 each: RM ‘000 RM ‘000AuthorisedAt 1 January 1,000,000 1,000,000Irredemable Convertible Preference Shares 2002/2007 of RM1.00 each:AuthorisedAt 1 January 0 0Created during the financial year 200,000 0At 31 December 200,000 0Ordinary shares of RM0.50 each:Issued and fully paidAt 1 January 296,977 296,397Share options exercised 0 580Transferable Subscription Rights exercised 18 0Warrants exercised 0 0*At 31 December 296,995 296,977* An issue of 500 new ordinary shares of RM0.50 each for cash on the exercise of warrants at an exercise price of RM1.50each. Share capital and share premium arising from this share issue amounted to RM250 and RM500 respectively.The newly issued shares during the financial year rank pari passu in all respects with the existing issued shares of theCompany.As at 31 December 2001, IJM Corporation Berhad, an associate of the Company, held 24,735,000 (2000: 24,735,000)ordinary shares in the Company.As at 31 December 2001, the number of Warrants which has yet to be exercised is 118,558,214 (2000: 118,558,214).Pursuant to the Conditions stipulated in the Deed Poll, the Supplemental Deed Poll and the SecondSupplemental Deed Poll dated 22 October 1993, 19 November 1997 and 9 December 1998 respectively, theTransferable Subscription Rights 1993/2001 (‘TSR’), which were issued by the Company on 13 December 1993of which the expiry period was extended from 11 December 1998 to 11 December 2001, had expired on11 December 2001. The number of TSRs which had expired was 123,491,218.Each TSR had entitled its registered holder at any time before the maturity date, to subscribe for one (1) new ordinaryshare of RM0.50 each in the Company at the adjusted subscription price of RM1.59 per sharepayable in cash.82IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200110 Share capital (continued)Employees’ share option scheme (ESOS)The ESOS, which expired on 4 November 1997, has been extended for a period of five years. The main features ofthe ESOS are as follows:(a)(b)(c)(d)(e)The eligibility for participation in the ESOS shall be at the discretion of the ESOS Committee, appointed bythe Board of Directors;The total number of ordinary shares to be offered under the ESOS shall not exceed 10% of the issued andpaid-up ordinary share capital of the Company at any point of time during the existence of the ESOSwhich shall be in force for an extended period of five years expiring on 4 November 2002;The number of shares under options or option price or both so far as the option remain unexercised shallbe adjusted following any issue of additional shares in the issued share capital of the Company by wayof rights issue, capitalisation of profits or reserves or any sub-division and consolidation of theCompany’s shares;The option price at which the employees are offered to take up shares under the ESOS share options is theaverage of the mean market quotation of the shares of the Company as quoted in the Daily Official listissued by the Kuala Lumpur Stock Exchange for the five market days preceding the respective dates ofoffer of the options, or the par value of the shares of the Company of RM0.50, whichever is higher; andThe persons to whom the options have been granted have no right to participate by virtue of the optionsin any shares issue of any other company.As at 31 December 2001, options granted to subscribe for ordinary shares of RM0.50 each which have yet to beexercised are as follows:Number of optionsExercise price granted and unexercisedRM1.23 3,154,000RM1.86 132,000RM2.02 32,000RM2.27 63,000RM2.51 242,000RM2.56 48,0003,671,000The movements during the financial year in the number of options granted and unxexercised are as follow:Number of optionsAt 1 January 2001 4,659,000Lapsed (988,000)At 31 December 2001 3,671,000The Company has been granted exemption by the Registrar of Companies vide their letter dated 21 February2002 from having to disclose the list of option holders and their holdings.The number of options unexercised of 3,671,000 will expire, if not exercised by 4 November 2002.IGB Annual Report 2001 83

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200111. Revaluation and other reservesThe revaluation and other reserves comprise:GroupCompanyUndistributable 2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Exchange fluctuation reserves 15,252 16,816 0 0Surplus on revaluation of properties 41,798 39,108 0 0Surplus on revaluation of investmentin an associated company 29,258 29,258 29,258 29,258Capitalisation of revenue reservesin an associated compan 686 686 0 086,994 85,868 29,258 29,258Goodwill arising on consolidation (22,532) (22,532) 0 064,462 63,336 29,258 29,258Total revaluation and other reserves:At 1 January 63,336 71,293 29,258 29,258Exchange fluctuation reservesarising in the financial year (1,564) (717) 0 0Surplus on revaluation of properties 2,690 0 0 0Reclassification of gain on sale ofinvestments to retained earnings 0 (7,240) 0 0At 31 December 64,462 63,336 29,258 29,258The undistributable reserves are not distributable as cash dividends.12. Retained earningsSubject to agreement by the Inland Revenue Board, the Company has sufficient tax credit under Section 108 ofthe Income Tax Act, 1967 to frank the payment of net dividends of approximately RM89,000,000 (2000:RM80,000,000) out of its distributable reserves of RM502,168,000 (2000: RM440,803,000) as at 31 December 2001without incurring any additional tax liabilities. The Company also has tax exempt income as at 31 December2001 amounting to RM114,222,000 (2000: RM114,222,000) available for distribution as tax exempt dividends toshareholders.84IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200113. Term loansGroupCompany2001 2000 2001 2000Note RM ‘000 RM ‘000 RM ‘000 RM ‘000Secured 200,916 124,242 140,916 124,242Unsecured 0 6,363 0 6,363Total repayable 200,916 130,605 140,916 130,605Repayments within 12 months(included in current liabilities) 28 (32,105) (7,689) (30,855) (7,689)Repayments after 12 months(included in non current liabilities) 168,811 122,916 110,061 122,916Repayments due in:Not later than one year 32,105 7,689 30,855 7,689Later than one year and not laterthan five years 128,186 122,916 110,061 122,916Later than five years 40,625 0 0 0200,916 130,605 140,916 130,605All the term loans are obtained from various financial institutions at annual rates of interest that ranged from5.25% to 8.30% (2000: 4.20% to 8.80%) per annum.The term loans of RM200,916,000 (2000: RM124,242,000) and RM140,916,000 (2000: RM124,242,000) obtained bythe Group and Company respectively are secured by way of deposits of marketable securities with marketvalue of not less than the facility amount and fixed and collateral registered charges over certain landsand buildings, hotel properties and development properties of the Group as disclosed in notes 18, 19, 16and 20 respectively.14. Murabahah underwritten notes and syndicated fixed rate loanA subsidiary has been granted loan facilities by financial institutions for purpose of financing theconstruction of Phase I of Mid Valley up to a maximum of RM450.0 million comprising two (2) programmes, namely:(a)(b)Murabahah Underwritten Notes Issuance Facility (MUNIF) up to a maximum of RM250.0 million under theIslamic financing contract of Al-Murabahah; andSyndicated Fixed Rate Loan (SFRL) of RM200.0 million.The MUNIF and SFRL are secured by way of the following:(a)First legal mortgage on the subsidiary’s land together with the properties developed underPhase I of Mid Valley;IGB Annual Report 200185

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200114. Murabahah underwritten notes and syndicated fixed rate loan (Continued)(b)(c)(d)Corporate guarantee from the Company and subordination of all shareholders’ loan;Debenture over the assets of the subsidiary; andLegal assignments of:(i)all sales and purchase and tenancy agreements, the contractors’ performance bonds andinsurance contracts;(ii) Mid Valley project account; and(iii) the subsidiary’s rights on building contracts, design and drawings of Mid Valley.As at 31 December 2001, the total amount being issued/drawndown of RM315.5 million (2000: RM379.5 million)for purpose of financing the construction of Phase I of Mid Valley comprises:(a) RM115.5 million (2000: RM179.5 million) from MUNIF of which RM30.5 million is due for repayment on 19March 2002 and the remaining balances of RM40.0 million and RM45.0 million are due for repayment on19 March 2003 and 19 March 2004 respectively. The cost of financing for the MUNIF facility for the financialyear ranged from 4.20% to 4.72% (2000: 3.80% to 5.08%) per annum.(b)RM200.0 million (2000: RM200.0 million) from SFRL which will be repayable by ten (10) half-yearlyinstalments of RM20 million each, commencing at the end of the seventh year from the first drawdown on16 March 1998. This SFRL carries an interest rate of 9.50% (2000:9.50%) per annum.15. Deferred taxationGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000At 1 January 2,361 2,361 2,300 2,300Transfer to income statements (744) 0 (700) 0At 31 December 1,617 2,361 1,600 2,300Deferred taxation has been provided for all timing differences for the Company.Subject to agreement by the Inland Revenue Board, the amount of unutilised tax losses and unabsorbed capitalallowances of certain subsidiaries available for set off against their future income chargeable to tax of therespective subsidiaries amounted to RM106,377,000 and RM60,735,000 (2000: RM97,664,000 and RM66,117,000)respectively. The effect of the unutilised tax losses and unabsorbed capital allowances have not been accountedfor in arriving at the provision for deferred taxation of the Group.86IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200116. Property, plant and equipmentFreehold Leasehold Other Hotel Plant and Motor Office furniture, Capital work-The Group land land lands Buildings properties machinery vehicles fittings and equipment in-progress Total2001 RM ‘000 RM ‘000 RM’000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000At 1 JanuaryAt Cost 2,008 1,558 46,955 470,175 23,733 194,821 3,716 27,244 75,735 845,945At Valuation 26,999 0 0 0 62,199 0 0 0 0 89,198Additions 0 0 0 3,589 0 2,921 221 3,544 592 10,867Revaluation surplus 0 0 0 0 2,690 0 0 0 0 2,690Write back of over-accrual of cost 0 0 0 0 (462) 0 0 0 0 (462)Write off 0 0 0 0 0 0 (11) (74) 0 (85)Disposals 0 0 0 0 0 0 (624) (18) 0 (642)At 31 December 29,007 1,558 46,955 473,764 88,160 197,742 3,302 30,696 76,327 947,511Accumulated DepreciationAt 1 January 0 0 0 11,731 0 23,886 2,795 7,895 0 46,307Charge for the financial year 0 0 953 8,582 0 19,560 470 4,709 0 34,274Disposals 0 0 0 0 0 0 (624) (2) 0 (626)At 31 December 0 0 953 20,313 0 43,446 2,641 12,602 0 79,955Net Book ValueAt 31 December 2001At Valuation 26,999 0 0 0 64,427 0 0 0 0 91,426At Cost 2,008 1,558 46,002 453,451 23,733 154,296 661 18,094 76,327 776,13029,007 1,558 46,002 453,451 88,160 154,296 661 18,094 76,327 867,5562000At 1 JanuaryAt Cost 2,008 1,558 37,725 608,104 23,733 6,431 3,506 9,035 72,368 764,468At Valuation 26,999 0 0 0 62,199 0 0 0 0 89,198Additions 0 0 8,229 10,682 0 26,195 397 18,219 17,952 81,674Disposals 0 0 0 0 0 0 (187) (10) 0 (197)Reclassifications 0 0 1,001 (148,611) 0 162,195 0 0 (14,585) 0At 31 December 29,007 1,558 46,955 470,175 85,932 194,821 3,716 27,244 75,735 935,143Accumulated DepreciationAt 1 January 0 0 0 2,037 0 6,431 2,390 5,985 0 16,843Charge for the financial year 0 0 0 9,694 0 17,455 592 1,911 0 29,652Disposals 0 0 0 0 0 0 (187) (1) 0 (188)At 31 December 0 0 0 11,731 0 23,886 2,795 7,895 0 46,307Net Book ValueAt 31 December 2000At Valuation 26,999 0 0 0 62,199 0 0 0 0 89,198At Cost 2,008 1,558 46,955 458,444 23,733 170,935 921 19,349 75,735 799,63829,00 1,558 46,955 458,444 85,932 170,935 921 19,349 75,735 888,836IGB Annual Report 200187

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200116. Property, plant and equipment (continued)The CompanyOfficefurniture,Plant and Motor fittings andBuildings machinery vehicles equipment Total2001 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000At CostAt 1 January 1,359 5,251 1,724 1,859 10,193Additions 0 0 0 235 235Disposals 0 0 (353) 0 (353)At 31 December 1,359 5,251 1,371 2,094 10,075Accumulated DepreciationAt 1 January 214 5,251 1,563 1,206 8,234Charge for the financial year 28 0 144 167 339Disposals 0 0 (353) 0 (353)At 31 December 242 5,251 1,354 1,373 8,220Net Book ValueAt 31 December 2001 1,117 0 17 721 1,8552000At CostAt 1 January 1,359 5,251 1,724 1,654 9,988Additions 0 0 0 205 205At 31 December 1,359 5,251 1,724 1,859 10,193Accumulated DepreciationAt 1 January 187 5,251 1,248 1,064 7,750Charge for the financial year 27 0 315 142 484At 31 December 214 5,251 1,563 1,206 8,234Net Book ValueAt 31 December 2000 1,145 0 161 653 1,95988IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200116. Property, plant and equipment (continued)(a)Valuation(i) Freehold LandThe freehold land of a subsidiary stated at valuation were revalued on 8 August 1996 by the Directorsbased on valuations carried out by independent professional valuers based on a fair market valuebasis. The revaluation surplus of RM25,587,000, which is not distributable by way of cash dividends, hasbeen included in capital reserves of the Group.The tax effect in connection with the surplus arising on the revaluation of the freehold land is notprovided for as there is no foreseeable intention to dispose of the freehold land.The next book value of freehold land of the Group that would have been included in the financialstatements had this not been revalued and carried at cost is RM3,419,000 (2000:RM3,419,000).(ii) Hotel propertiesThe hotel properties of the Group stated at valuation were last revalued on 1 November 2001 by theDirectors based on valuations carried out on a fair market value basis by Elvin Fernandez, member ofthe Institute of Surveyors, Malaysia, a partner with Khong & Jaafar Sdn Bhd, an independent qualifiedvaluer. The revaluation surplus of RM2,228,563 has been included in the Revaluation Reserve Accountof the Group.The net book value of hotel properties that would have been included in the financial statements hadthey not been revalued is at cost of RM50,423,351 (2000:RM50,423,351).The tax effect in connection with the surplus arising on the revaluation of the hotel properties is notprovided for as there is no foreseeable intention to dispose of these properties.The hotel properties stated at valuation of RM64,427,000 (2000:RM62,199,000) have been charged assecurity for certain term loan facilities as disclosed in note 13.(b)(c)(d)Leasehold landLeasehold land with lease period of 99 years is not amortised as the Directors are of the opinion that thenon-amortisation of the long term lease has no material effect on the financial statements. The depreciationcharge for the financial year had the long term leasehold land been depreciated over its leaseholdperiod, amounted to RM15,700.Other landsOther lands have not been classified according to their tenure pending finalisation with the relevantauthorities. Depreciation has been provided over their estimated useful life of 99 years.Land and buildings, plant and machinely at cost of RM737,016,000 (2000:RM792,379,000)have been charged as security for certain term loan facilities as disclosed in notes 13 and 14.17. SubsidiariesCompany2001 2000RM ‘000 RM ‘000Unquoted shares, at cost 294,964 293,964Allowance for diminution in value (3,057) (1,525)291,907 292,439Details of subsidiaries are set out on pages 99 and 100.IGB Annual Report 200189

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200118. AssociatesGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Quoted, at costShares- In Malaysia 220,616 220,616 66,531 66,531- Outside Malaysia 0 30,937 0 30,937Loan stocks- Outside Malaysia 0 16,229 0 16,229Warrants- In Malaysia 4,815 4,815 4,815 4,815Unquoted sharesAt cost- In Malaysia 136,460 136,154 126,500 126,651- Outside Malaysia 45,101 46,167 0 0At valuation- In Malaysia 50,000 50,000 50,000 50,000456,992 504,918 247,846 295,163Group’s share of postacquisition reserves and retainedearnings less losses 141,303 151,994 0 0598,295 656,912 247,846 295,163Allowance for diminution in value (56,484) (56,484) 0 0541,811 600,428 247,846 295,163Group’s share of net assets 541,811 600,428Group’s share of contingent liabilities 15,282 17,075Market value of quoted investmentsSharesIn Malaysia 364,697 252,574 105,567 86,098Outside Malaysia 0 89,184 0 89,184Loan stocksOutside Malaysia 0 20,515 0 20,515WarrantsIn Malaysia 20,500 11,601 20,500 11,601385,197 373,874 126,067 207,398Investments in associates of the Group at cost of RM220,616,000 (2000: RM267,782,000) and of the Company atcost of RM66,531,000 (2000: RM113,697,000) have been charged as security for certain term loan facilities asdisclosed in note 13.The Group’s investment in an associate was revalued by the Directors in 1992 on the basis of its underlying netassets value. The revaluation surplus of RM29,258,000 has been credited to revaluation reserve. Other than thisinvestment, the Company has not adopted a policy of revaluing its investment in associates. The investment atvaluation has not been restated to cost as the amount is not material compared with the Group’s net assets.Details of associates are set out on page 100.90IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200119. Other investmentsGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000At costQuoted sharesIn Malaysia 0 65,880 0 0Outside Malaysia 36,239 36,239 0 0Unquoted sharesIn Malaysia 6,151 6,151 2,900 2,900Outside Malaysia 44,564 46,322 0 086,954 154,592 2,900 2,900Allowance for diminution in value (42,212) (57,507) 0 044,742 97,085 2,900 2,900Market value of quoted investmentsIn Malaysia 0 21,145Outside Malaysia 34,111 40,90834,111 62,053The quoted investments have been charged as security for certain term loan facilities as disclosed in note 13.20. Development properties and expenditureGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Land and development expenditure,at cost 167,854 281,170 0 0Attributable profitless foreseeable losses 4,991 82,327 0 0172,845 363,497 0 0Progress payments receivedand receivable (14,353) (232,840) 0 0158,492 130,657 0 0Land and development expenditure of the Group at cost of RM167,854,000 (2000: RM281,170,000) have beencharged as security for certain term loan facilities as disclosed in notes 13 and 14.IGB Annual Report 200191

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200121. InventoriesGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000At cost:Inventories of unsold properties 50,073 68,949 37,348 37,348Consumables 18 0 0 0Hotel operating supplies 847 910 0 050,938 69,859 37,348 37,348Inventories of unsold properties of the Group at cost of RM 12,725,000 (2000: RM31,601,000) have been chargedas security for certain term loan facilities as disclosed in notes 13 and 14.22. Marketable securitiesAt costGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Quoted in Malaysia:Shares 9,783 9,783 6,529 6,529Warrants 7,036 7,036 7,036 7,03616,819 16,819 13,565 13,565Allowance for diminution in value (2,189) 0 (2,189) 014,630 16,819 11,376 13,565Market value of quoted investmentsQuoted in Malaysia:Shares 9,783 10,434 9,783 10,434Warrants 4,847 7,551 4,847 7,55114,630 17,985 14,630 17,98523. Trade and other receivablesGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Trade receivables 55,588 47,481 1,147 1,906Less: Allowance for doubtful debts (2,662) (2,572) (932) (914)52,926 44,909 215 992Other receivables 33,229 24,975 17,553 20,626Less: Allowance for doubtful debt (1,490) (2,076) (1,094) (1,514)31,739 22,899 16,459 19,112Sundry deposits 1,999 2,053 385 372Prepayments 1,675 2,083 0 0Tax recoverable 5,981 0 3,861 094,320 71,944 20,920 20,47692IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200124. Amount owing by/to subsidiariesCompany2001 2000RM ‘000 RM ‘000Amount owing by subsidiaries 746,844 696,531Less: Allowance for doubtful debts (16,832) (8,280)730,012 688,251Amount owing to subsidiaries 227,657 192,569Amount owing by/to subsidiaries represents advances and are unsecured, have no fixed terms of repaymentand carried nominal interest rates on amount owing by subsidiaries (2000: nominal) except for an amount owingby a subsidiary of RM372,037,947 (2000: RM356,711,493) which carries interest at a rate of 6.0% (2000: 8.3%) perannum.25. Amount owing by/to associatesGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Amount owing by associates 147,238 135,388 85,575 73,797Less: Allowance for doubtful debts (3,477) (3,477) (3,477) (3,477)143,761 131,911 82,098 70,320Amount owing to associates 42,898 38,779 17,443 13,925Amount owing by/to associates represents advances and are unsecured, have no fixed terms of repaymentand interest free.26. Trade and other payablesGroupCompany2001 2000 2001 2000Note RM ‘000 RM ‘000 RM ‘000 RM ‘000Trade payables 53,147 95,688 10 10Accruals 85,528 62,988 44,785 46,653Dividend payable 6,415 0 6,415 0Other payables 20,803 16,755 14,969 15,507Tenants’ deposit received 14,660 16,161 881 987Amount due to customers on contract 27 12,901 0 0 0193,454 191,592 67,060 63,157Included in other payables is an advance of RM14,000,000 (2000: RM14,000,000) from a related party - WahSeong (M) Trading Co. Sdn Bhd (Note 32). The advance is unsecured, has no fixed terms of repayment andcarries interest at a rate of 7.0% (2000:7.0%) per annum.IGB Annual Report 200193

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200127. Construction contractsGroup2001 2000Note RM ‘000 RM ‘000Costs incurred to-date 59,374 38,157Attributable profit 3,345 2,20262,719 40,359Progress billings (75,620) (39,319)(12,901) 1,040Amount due (to)/ from customers on contracts 26 (12,901) 1,040Retention on contracts 3,123 028. Bank borrowingsGroupCompany2001 2000 2001 2000Note RM ‘000 RM ‘000 RM ‘000 RM ‘000UnsecuredCurrent portion of term loans 13 0 6,363 0 6,363Short term loans 16,000 51,000 16,000 26,000Bank overdrafts 2,958 5,571 2,958 3,003SecuredShort term loans 20,000 0 20,000 0Current portion of term loans 13 32,105 1,326 30,855 1,326Murabahah Underwritten Notes 14 30,500 0 0 0101,563 64,260 69,813 36,692The interest rates charged on the bank overdrafts and short term loans of the Group and Company for thefinancial year ranged from 4.20% to 8.30% (2000: 4.20% to 8.80%) per annum.94IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200129. Cash and cash equivalentsCash and cash equivalents included in the cash flow statements comprised the following balance sheet amounts:GroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Deposits with licensed banks 127,832 11,722 113,150 0Cash and bank balances 10,432 6,275 1,455 727Bank overdrafts (2,958) (5,571) (2,958) (3,003)135,306 12,426 111,647 (2,276)Included in the above is cash at bank amounting to RM405,355 and RM4,401 for the Group and Company(2000: RM413,368 and RM4,421) respectively, which are maintained in designated Housing DevelopmentAccounts pursuant to the Housing Developers (Control and Licensing) Act, 1966 and Housing Regulations, 1991 inconnection with the property development projects of the Group and of the Company.30. Segment reporting - GroupBusiness segments Property Investment Hotel andDevelopment Construction Holding Others Group2001 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000RevenueSegment revenue 157,160 23,399 1,107 18,214 199,880Profit before taxSegment results 43,392 551 (26,994) 508 17,457Share of results of associates (10,817) 40,715 11,008 3,563 44,46932,575 41,266 (15,986) 4,071 61,926Assets employedSegment assets 1,280,531 10,176 117,559 151,834 1,560,100Associates 103,214 275,808 726 162,063 541,8111,383,745 285,984 118,285 313,897 2,101,9112000RevenueSegment revenue 291,095 0 637 20,773 312,505Profit before taxSegment results 14,550 0 (9,812) (9,109) (4,371)Share of results of associates 5,057 21,820 11,391 12,054 50,32219,607 21,820 1,579 2,945 45,951Assets employedSegment assets 1,080,336 0 191,599 200,570 1,472,505Associates 114,484 229,140 97,162 159,642 600,4281,194,820 229,140 288,761 360,212 2,072,933IGB Annual Report 200195

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200130. Segment reporting - Group (continued)Analysis by geographical locationProfit TotalBefore AssetsTurnover Tax EmployedRM ‘000 RM ‘000 RM ‘0002001Malaysia 199,880 53,247 2,028,074Asia Pacific 0 (354) 5,833Others 0 9,033 68,004199,880 61,926 2,101,9112000Malaysia 312,505 36,107 1,876,550Asia Pacific 0 817 137,892Others 0 9,027 58,491312,505 45,951 2,072,93331. Contingent liabilitiesGroupCompany2001 2000 2001 2000RM ‘000 RM ‘000 RM ‘000 RM ‘000Secured guarantees of bankfacilities granted to:Subsidiaries 0 0 20,484 28,059Associates 0 1,300 0 1,3000 1,300 20,484 29,359The secured guarantees of bank facilities are secured by way of deposits of marketable securities with marketvalue of not less than the facility amount and fixed and collateral registered charges over certain lands andbuildings, hotel properties and development properties of the Group.32. Significant related party disclosuresIn addition to related party disclosures mentioned elsewhere in the financial statements, set out below are othersignificant related party transactions and balances. The related party transactions described below are carriedout on terms and conditions obtainable in transactions with unrelated parties.Group2001 2000RM’000 RM’000(i) Associated companiesDividend income:- Ipoh Limited 11,836 14,451- IJM Corporation Berhad 14,197 6,389- Negara Properties (M) Berhad 869 869Interest income from Loan stocks- Ipoh Limited 1,232 3,892Advances to:- Great Union Properties Sdn Bhd 11,462 10,69796IGB Annual Report 2001

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200132. Significant related party disclosures (continued)(ii) Other related parties RelationshipCahaya Utara Sdn BhdChan Hooi ChinGolden Screen Cinemas Sdn BhdIJM Construction Sdn BhdIPS Project Supply Sdn BhdSweat Club Sdn BhdWah Seong (M) Trading Co. Sdn BhdAn associate of Wah Seong (M) Trading Co. Sdn BhdClose member of family of Tan Boon Gark, a Director of theCompanyAn associate of Permodalan National Berhad, a significantshareholder of the CompanyA subsidiary of IJM Corporation Berhad, an associate of theGroupA subsidiary of Wah Seong (M) Trading Co. Sdn BhdA subsidiary of Tan & Tan Developments Berhad, asignificant shareholder of the CompanyA company in which Robert Tan Chung Meng, a Director ofthe company, has substancial financial interestGroup2001 2000RM’000RM’000Advances from:- Wah Seong (M) Trading Co. Sdn Bhd 0 14,000Management/Marketing fee income from:- Cahaya Utara Sdn Bhd 1,245 1,186Progress billings paid/payable:- IJM Construction Sdn Bhd 3,887 2,031Purchases of building materials from:- IPS Project Supply Sdn Bhd 3,367 6,678Rental income received/receivable from:- Golden Screen Cinemas Sdn Bhd 2,591 2,035- Sweat Club Sdn Bhd 1,107 0Sale of development properties to:- Chan Hooi Chin 1,498 0IGB Annual Report 200197

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 200132. Significant related party disclosures (continued)Significant outstanding balances arising from the above non-trade transactions during the financial year are asfollows:Type ofGrouptransaction 2001 2000RM’000 RM’000(i) AssociatesReceivables:- Great Union Properties Sdn Bhd Advances 11,462 10,697(ii)Other related party - Payable- Wah Seong (M) Trading Co. Sdn Bhd Advances 0 14,00033. Comparative figureThe following balance sheet comparative figures of the Group has been reclassified to conform with currentfinancial year’s presentation and the requirements of MASB 15.GroupAs previouslyAsreported restatedRM’000 RM’000Hotel properties 85,932 0Hotel properties included in Property, plant and equipment 0 85,93234. Significant eventsOn 25 July 2000, the Company, Tan & Tan Developments Berhad (Tan & Tan) and Gold I S Berhad (formerly knownas Dimensi Subuh Sdn Bhd) had signed a Merger Agreement to merge the property related businesses of boththe Company and Tan & Tan. The acquisition of the entire equity interest in Tan & Tan by the Company for apurchase consideration of approximately RM644.82 million would be satisfied by RM50.0 million in cash, theissuance of 166,548,514 new ordinary shares of RM0.50 each in the Company (‘IGB Shares’)at an issue price ofRM2.50 per share and 178,444,836 Irredeemable Convertible Preference Shares (‘ICPS2002/2007’) at par. Inaddition, the Company has also announced a Bonus Issue of 380,269,012 new IGB Shares on the basis of one (1)new IGB Share for every two (2) existing IGB Shares held at 5.00 p.m. on 11 April 2002 and one (1) new IGB Sharefor every two (2) IGB Shares to be issued pursuant to the acquisition of the entire interest in Tan & Tan.All approvals have now been obtained from the relevant regulatory authorities as well as approvals from theshareholders of the Company and Tan & Tan.The Kuala Lumpur Stock Exchange (‘KLSE’) has also, vide its letter dated 28 January 2002, approved theadmission to the Official List of the KLSE for the listing of and quotation of all new securities to be issued arisingtherefrom including 178,444,836 ICPS2002/2007, up to 845,656,076 new IGB shares and up to 59,279,107additional new warrants 1999/2004 in the Company.In addition, a Court Order was obtained on 29 January 2002 from the High Court of Malaya sanctioning thescheme of arrangement under Section 176 of the Companies Act for the implementation of the Merger. TheCourt Order was filed with the Registrar of Companies on 31 January 2002. As such the Merger is deemedcompleted on 31 January 2002.98IGB Annual Report 2001

SUBSIDIARIESSUBSIDIARIESPlace of Group’s Interest (%)Name of Company Principal Activities Incorporation 2001 2000Bagan Ajam Estate Sendirian Berhad Property Development Malaysia 100.0 100.0Cititel Hotel Management Sdn Bhd Hotel Management Malaysia 60.0 60.0ServicesCorpool Holdings Sdn Bhd Investment Holding Malaysia 100.0 100.0Permata Dunia Sdn Bhd Investment Holding Malaysia 100.0 100.0Dian Rezki Sdn Bhd Property Development Malaysia 100.0 100.0Ensignia Construction Sdn Bhd Construction Malaysia 100.0 100.0+ Grapevine Investments Pte Ltd Investment Holding Singapore 100.0 100.0Hai Aun Co Sendirian Berhad Property Development Malaysia 100.0 100.0ICDC Holdings Sdn Bhd Investment Holding Malaysia 100.0 100.0Express Management ConsultantsSdn Bhd Management Services Malaysia 100.0 100.0ICDC Management Sdn Bhd Management Services Malaysia 100.0 100.0ICDC Properties Sdn Bhd Dormant Malaysia 100.0 100.0Innovation & Concept Development Property Development Malaysia 100.0 100.0Co Sdn Bhd & ManagementPasirindu Sdn Bhd Dormant Malaysia 100.0 100.0IEH Corporation Sdn Bhd Investment Holding Malaysia 100.0 100.0IGB Project Management Services Sdn Bhd Project Management Malaysia 100.0 100.0Kemas Muhibbah Sdn Bhd Property Development Malaysia 100.0 100.0Intercontinental Aviation Services Sdn Bhd Investment Holding Malaysia 100.0 100.0Ipoh Garden Shopping Complex Sdn Bhd Property Holding Malaysia 100.0 100.0IT&T Engineering & Construction Sdn Bhd Construction Malaysia 100.0 100.0IGB Properties Sdn Bhd Property Investment Malaysia 100.0 100.0IGB Real Estate Sdn Bhd Dormant Malaysia 100.0 100.0Tanah Permata Sdn Bhd Hotelier Malaysia 100.0 100.0K Parking Sdn Bhd Investment Holding Malaysia 100.0 100.0Kilat Security Sdn Bhd Dormant Malaysia 100.0 100.0+ Lingame Company Limited Management Services Hong Kong 100.0 100.0* Auspicious Prospects Ltd Investment Holding Liberia 100.0 100.0* Bellegrove Pte Ltd Investment Holding Singapore 100.0 100.0Lucravest Holdings Sdn Bhd Investment Holding Malaysia 100.0 100.0Mid Valley City Sdn Bhd Property Development & Malaysia 90.3 90.3Property ManagementServicesMVC Centre Management Services Dormant Malaysia 90.3 90.3Sdn BhdX-Speed Skatepark Sdn Bhd Management of Skate Park Malaysia 90.3 90.3Mid Valley Food Management Sdn Bhd Dormant Malaysia 100.0 100.0MVEC Exhibition and Events Services Provision of Exhibition Malaysia 100.0 100.0Sdn Bhd ServicesMurni Properties Sdn Bhd Property Development Malaysia 100.0 100.0Pacific Land Sdn Bhd Investment Holding Malaysia 100.0 100.0* Beswell Limited Investment Holding Hong Kong 100.0 100.0Pangkor Island Resort Sdn Bhd Hotelier Malaysia 100.0 100.0PIR Management Services Sdn Bhd Management & Malaysia 100.0 100.0Maintenance ServicesIGB Annual Report 200199

SUBSIDIARIES AND ASSOCIATESSUBSIDIARIES (continued)Place of Group’s Interest (%)Name of Company Principal Activities Incorporation 2001 2000Pebbles Enterprise Sdn Bhd Property Development Malaysia 100.0 100.0Pekeliling Land Sdn Bhd Property Holding Malaysia 100.0 100.0Pekeliling Property Sdn Bhd Property Management Malaysia 100.0 100.0& ServicesPenang Garden Sdn Bhd Property Development Malaysia 100.0 100.0Plaza Permata Management Property Management Malaysia 100.0 100.0Services Sdn Bhd ServicesPrima Condominium Sdn Bhd Investment Holding Malaysia 100.0 100.0Primanah Property Sdn Bhd Property Development Malaysia 100.0 100.0Puncak Megah (M) Sdn Bhd Property Development Malaysia 100.0 100.0Riraiance Enterprise Sdn Bhd Investment Holding Malaysia 100.0 100.0Tanah Alam Sdn Bhd Property Development Malaysia 100.0 100.0X-Speed Sdn Bhd Management of Skate Park Malaysia 100.0 100.0ASSOCIATESPlace of Group’s Interest (%)Name of Company Principal Activities Incorporation 2001 2000* Asian Equity Limited Investment Holding British Virgin Islands 35.0 35.0* Crystal Centre Properties Investment Holding Hong Kong 45.0 45.0(International) LtdEarning Edge Sdn Bhd Investment Holding Malaysia 30.0 30.0+ Grapevine Investments (Hong Kong)Limited Investment Holding Hong Kong 50.0 50.0Great Union Properties Sdn Bhd Hotelier Malaysia 50.0 50.0+ Great Union Properties (S) Pte Ltd Hotel Marketing Singapore 50.0 50.0IJM Corporation Berhad Construction, Property Malaysia 20.2 20.2Development andInvestment Holding+ Ipoh Limited Property Holding Australia 0 20.6* Istaron Limited Investment Holding Hong Kong 50.0 50.0Johan Kekal Sdn Bhd Property Development Malaysia 50.0 50.0Kundang Properties Sdn Bhd Property Development Malaysia 50.0 50.0Macroland Holdings Sdn Bhd Property Development Malaysia 30.0 30.0* Micasa Hotel Limited Hotelier Myanmar 30.0 30.0* Negara Properties (M) Berhad Property Development Malaysia 24.6 24.6* New Commercial Investments Limited Investment Holding British Virgin Islands 35.0 35.0Rapid Alpha Sdn Bhd Construction Malaysia 50.0 0* Ravencroft Investments Incorporated Investment Holding British Virgin Islands 41.2 41.2* Saigon Inn Hotel Co Hotelier Vietnam 33.8 33.8* St Giles Hotel Ltd Hotelier United Kingdom 41.2 41.2* St Giles Hotel (Heathrow) Ltd Hotelier United Kingdom 35.0 35.0Sukatan Garisan Sdn Bhd Property Holding Malaysia 50.0 50.0* Weian Investments Pte Ltd Property Development Singapore 49.0 49.0& TradingWilson Parking Sdn Bhd Management of Car Malaysia 24.5 24.5Parks+ Companies audited by member firms of PricewaterhouseCoopers International* Companies not audited by PricewaterhouseCoopers100 IGB Annual Report 2001

STATEMENT BY DIRECTORSpursuant to Section 169(15) of the Companies Act, 1965We, Robert Tan Chung Meng and Abdul Samad Bin Haji Alias, two of the Directors of IGB Corporation Berhad,state that, in the opinion of the Directors, the financial statements set out on pages 68 to 101 are drawn up so asto exhibit a true and fair view of the state of affairs of the Group and Company as at 31 December 2001 and ofthe results and cash flows of the Group and Company for the financial year ended on that date in accordancewith the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.Signed on behalf of the Board of Directors in accordance with their resolution dated 16 April 2002.Robert Tan Chung MengManaging DirectorAbdul Samad Bin Haji AliasDirectorIGB Annual Report 2001101

STATUTORY DECLARATIONpursuant to Section 169(16) of the Companies Act, 1965I, Chai Lai Sim, the officer primarily responsible for the financial management of IGB Corporation Berhad, dosolemnly and sincerely declare that the financial statements set out on pages 68 to 101 are, in my opinion,correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of theprovisions of the Statutory Declarations Act, 1960.Chai Lai SimSubscribed and solemnly declared by the abovenamed Chai Lai Sim at Kuala Lumpur on 16 April 2002.Before me:Kok Yoon WahCommissioner for Oaths102 IGB Annual Report 2001

REPORT OF THE AUDITORSto the members of IGB Corporation Berhadfor the financial year ended 31 December 2001We have audited the financial statements set out on pages 68 to 101. These financial statements are theresponsibility of the Company’s Directors. Our responsibility is to express an opinion on these financial statementsbased on our audit.We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by Directors, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion.In our opinion:(a)the financial statements have been prepared in accordance with the provisions of the Companies Act,1965 and the applicable approved accounting standards in Malaysia so as to give a true and fair view of:(i)the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financialstatements; and(ii)the state of affairs of the Group and Company as at 31 December 2001 and of the results and cashflows of the Group and Company for the financial year ended on that date;and(b)the accounting and other records and the registers required by the Act to be kept by the Company andby the subsidiaries of which we have acted as auditors have been properly kept in accordance with theprovisions of the Act.IGB Annual Report 2001 103

REPORT OF THE AUDITORSto the members of IGB Corporation Berhadfor the financial year ended 31 December 2001The names of the subsidiaries of which we have not acted as auditors are indicated on pages 99 and 100 to thefinancial statements. We have considered the financial statements of these subsidiaries and the auditors’ reportsthereon.We are satisfied that the financial statements of the subsidiaries that have been consolidated with theCompany’s financial statements are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements and we have received satisfactory information andexplanations required by us for those purposes.The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and didnot include any comment made under subsection 3 of Section 174 of the Act.PricewaterhouseCoopers(AF: 1146)Chartered AccountantsShirley Goh(No. 1778/08/02 (J))Partner of the firmKuala Lumpur16 April 2002104 IGB Annual Report 2001

LIST OF PROPERTIESheld by IGB Corporation Berhad and ITS Subsidiariesas at 31 December 2001Location Description Area Tenure Net book Approximatevalue as at age of31.12.2001 building(RM ‘000)PN 1765 Lot 123 Sec 44 Land for future development 4,049 sm Leasehold 18,461 -Kuala Lumpur expiring26.3.2074CT 10823 Lot 15 Sec 88A Land for future development 20,446 sf Freehold 3,817 -Kuala LumpurCT 10824 Lot 16 Sec 88A Land for future development 20,364 sf Freehold 2,573 -Kuala LumpurNo.6 Jalan Kampar 50400 25-storey office building 214,000 sf Freehold 37,576 18 yrsKuala Lumpurknown as Plaza PermataLot Nos. 13041, 13042, 14905, Land for future development 60.83 acres Freehold 5,295 -14999, 15545, 21932, 41490,41491, 33567, 30323, 30324,30325 & 30218 All inMukim Hulu Kinta, PerakLot No. 44747 Mukim Land for future development 140.3 acres Leasehold 7,940 -Hulu Kinta, Perakexpiring29.7 2061Lot 45845 Kuala Lumpur Land currently under 3.5 acres Freehold 10,911 -development into 132 unitsluxury condominiumsCT 16118 Lot No. 40 Sec Land for future development 16,150 sf Freehold 879 -88A Kuala LumpurP.T.1Sec 44 Kuala Lumpur Land for future development 32,670 sf Leasehold 7,632 -expiring26.5 2073Mid Valley City 629-room Business Class Hotel - - 58,679 2 yrsLingkaran Syed Putraknown as Cititel Mid ValleyKuala LumpurMid Valley City 17-levels office building 212,000 sf - 53,377 2 yrsLingkaran Syed Putraknown as Menara IGBKuala LumpurGeran 17995 Lot. 110423 3-storey shopping complex 80,000 sf Freehold 3,864 19 yrsMukim Hulu Kinta, Perakknown as “Ipoh Garden Plaza”at Jalan Sultan Azlan ShahUtara, IpohIGB Annual Report 2001 105

LIST OF PROPERTIESheld by IGB Corporation Berhad and ITS Subsidiariesas at 31 December 2001Location Description Area Tenure Net book Approximatevalue as at age of31.12.2001 building(RM ‘000)Lot Nos. 3577 to 3580, 3588, 250-room Hotel known as 45.14 Freehold 91,426* 1 16 yrs3590, 3592, 3593, 3599 to 3604, “Pan Pacific Resort Pangkor” hectares3726, 3727, 3740, 3594, 3741,3744 to 3748, 3760, 3761,3939, 3731, 3566, 354 & 355Mukim Lumut, Pangkor IslandPT 290 Mukim Morib, Selangor Land for future development 20 acres Leasehold 1,478 -expiring16.8.2094Lot Nos. 1529, 1743 & 3484 Land for future development 63.12 acres Freehold 1,491 -Mukim Rawang, SelangorLot Nos. 2, 19, 21 to 27, 34, Part of land currently under 10.85 acres Freehold ) -37, 156, 157, 2143, 2372, 2373, development for Mid Valley )2375, 2377, 3978 Kuala Lumpur City )))Lot Nos. PT1 & PT4 Part of land currently under 38.49 Leasehold ) 914,461 -Kuala Lumpur development for Mid Valley acres expiring )City 5.5.2085 ))Lot No. 200 Kuala Lumpur Part of land currently under 0.82 acres Leasehold ) -development for Mid Valley expiring )City 26.11.2024 ))The above 50.16 acres of land in Mid ValleyCity is being developed/to be developed intothe following:1. Mid Valley Megamall (1,653,603 sf)2. Unsold signature offices (56,603 sf)3. Development rights for 5 office towers withbuilt-up area of 1,128,302 sf.4. Parcel 2 vacant commercial land for futuredevelopment (421,888 sf)5. Parcel 3 vacant commercial land for futuredevelopment (96,286 sf)6. Parcel 4 vacant land for residentialdevelopment* 1 Revalued on 1 November 2001 as disclosed in note 16 in the notes to the financial statements.106IGB Annual Report 2001

IGB CORPORATION BERHAD (5745-A)FORM OF PROXYNumber of ordinary shares heldI/We .................................................................................................................................................................................................(FULL NAME IN BLOCK CAPITALS)of ......................................................................................................................................................................................................being a member/members of IGB CORPORATION BERHAD (‘Company’), hereby appoint ...........................................of .....................................................................................................................................................................................................or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us on my/our behalf at theThirty-Eighth Annual General Meeting of the Company to be held at Bintang Ballroom, Level 5, Cititel Mid Valley,Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur on Wednesday, 29 May 2002 at 12.00 p.m. and at anyadjournment thereof. My/our proxy is to vote as indicated below:No. Resolutions For Against1. Adoption of Reports and Financial Statements2. Declaration of Final Dividend3. Re-election of Robert Tan Chung Meng4. Re-election of Tan Boon Seng5. Re-election of Tan Boon Gark6. Re-appointment of PricewaterhouseCoopers as Auditors7. Special Business:Ordinary Resolution - Section 132D, Companies Act, 1965: Issue of New Shares(Please indicate with an ‘X’ in the respective box of the resolution. Unless voting instructions are indicated in thespace above, the proxy will vote as he/she thinks fit.)Dated this day of 2002.........................................................................................Signature/Common Seal of Member(s)Notes:1. Every shareholder is entitled to appoint a proxy, and in the case of a corporation, to appoint a representative, to attend and vote in itsplace. A proxy need not be a shareholder of the Company.2. This Form of Proxy must be signed by the appointor or his attorney duly authorized in writing or, if the appointor is a corporation, eitherunder seal or under the hand of an officer or attorney duly authorized.3. You may not appoint more than two (2) proxies to attend and vote at the same meeting. Where two (2) proxies are appointed,the proportions of shareholdings to be represented by each proxy must be specified in order for the appointment to be valid.4. If this Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he/she thinks fit.5. This Form of Proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of suchpower or authority must be deposited at the registered office of the Company at Penthouse, Menara IGB, No. 1 The Boulevard,Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time appointed for holding the AnnualGeneral Meeting or at any adjournment thereof, or in the case of a poll, not less than 24 hours before the time appointed for thetaking of the poll.

2nd fold hereAFFIXSTAMPThe Company SecretaryIGB CORPORATION BERHAD (5745-A)Penthouse,Menara IGB,No. 1 The Boulevard, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur1st fold here

IGB Corporation Berhad(5745-A)Penthouse, Menara IGB, No.1, The Boulevard, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia.Tel : 2289 8989 Fax : 2289 8802