CONTENTS Corporate Information 02 ... Distribution per unit (“DPU”) (sen) ... as MUJI, Daiso,...

CONTENTSCorporate Information 02

Financial Highlights 03

Portfolio Summary 05

Message from the Chairman and the Managing Director 06

Message from the Chief Executive Officer 09

IGB REIT Structure 13

Salient Features of IGB REIT 14

Management Reporting Structure 16

Profile of Directors 17

Profile of Management 21

Manager’s Report 23

Corporate Governance Statement 25

Audit Committee Report 32

Financial Review 35

Financial Statements 36

Statistics of Unitholders 84

�IGB Real Estate Investment TrustAnnual Report 2012

MANAGERIGBREITManagementSdnBhd(908168-A)

Level3�,TheGardensSouthTower,MidValleyCity,LingkaranSyedPutra,

59�00KualaLumpur,Malaysia

Telephone:603��898989

Telefax:603��89880�

COMPANY SECRETARYTinaChanLaiYin

REGISTRARIGBCorporationBerhad(ShareRegistrationDepartment)

Level3�,TheGardensSouthTower,MidValleyCity,LingkaranSyedPutra,

59�00KualaLumpur,Malaysia.

Telephone:603��898989

Telefax:603��89880�

TRUSTEEAmTrusteeBerhad(16303�-V)

Level��,BangunanAmBankGroup,55JalanRajaChulan,

50�00KualaLumpur,Malaysia

Telephone:603�036�633

Telefax:603�03�1914

PROPERTY MANAGERChartwellITACInternationalSdnBhd(5�31�-H)

SuiteA-6-3,Level6,BlockA,PutraMajestik,JalanKasipillay,

Batu�½,OffJalanIpoh,51�00KualaLumpur,Malaysia

Telephone:60340433998

Telefax:60340439388

AUDITORSPricewaterhouseCoopers(AF1146)

Level10,1Sentral,JalanTravers,KualaLumpurSentral,

50706KualaLumpur,Malaysia

Telephone:603�1731188

Telefax:603�1731�88

PRINCIPAL BANKERSHongLeongBankBerhad(97141-X)

Level5,WismaHongLeong,18JalanPerak,


Telephone:603�164�8�8

Telefax:603�164�503

PublicBankBerhad(6463-H)

HeadOffice,MenaraPublicBank,146JalanAmpang,


Telephone:603�1766000

Telefax:603�1639917

STOCK EXCHANGE LISTINGMainMarketofBursaMalaysiaSecuritiesBerhad

StockCode:5��7

StockName:IGBREIT

WEBSITE ADDRESSwww.igbreit.com

INVESTOR RELATIONSEmail:[email protected]

CorporateInformation

BOARD OF DIRECTORS

Independent Non-Executive ChairmanTanSriDato’Dr.LinSeeYan

Managing DirectorRobertTanChungMeng

Executive DirectorsTanBoonLee

DanielYongChen-I

ElizabethTanHuiNing

Independent Non-Executive DirectorsHalimbinHajiDin

LeChingTai@LeeChenChong

Non-Independent Non-Executive DirectorsTanLeiCheng

TanYeeSeng

3IGB Real Estate Investment Trust

Annual Report 2012

FinancialHighlights

Financial Period * Forecast Period * Variance 31 December 2012 31 December 2012Statement of Comprehensive Income RM’000 RM’000 RM’000

TotalRevenue 115,�85 110,718 4,567

NetPropertyIncome 76,174 74,084 �,090

DistributableIncome 6�,333 60,866 1,467

Distributionperunit(“DPU”)(sen) 1.83 1.79 0.04

AnnualisedDPU(sen) 6.50 6.36 0.14

*From�0September�01�to31December�01�.

Statement of Financial Position As at 31 December 2012

TotalAssetValue(RM’000) 4,89�,134

NetAssetValue(“NAV”)(afterdistributableincome)(RM’000) 3,484,044

NAVperunit(beforedistributableincome)(RM) 1.0431

NAVperunit(afterdistributableincome)(RM) 1.0�47

NAV PER UNIT PERFORMANCE (BEFORE DISTRIBUTABLE INCOME)

4IGB Real Estate Investment TrustAnnual Report 2012

FinancialHighlights(cont’d)

1.28

1.30

1.32

1.34

1.39

1.37

1.4 1.4

1.37

1.34 1.34 1.34 1.34

1.33

1.35

1.32

1.33 1.33

1.36

1.38

1.40

1.42

21DEC

28DEC

31DEC

14DEC

7DEC

30NOV

23NOV

16NOV

9NOV

2NOV

26OCT

19OCT

12OCT

5OCT

28SEP

21SEP

Trading performance

Closingpriceasat31December�01�(RM) 1.33

Highesttradedpriceduringthefinancialperiod(RM) 1.44

Lowesttradedpriceduringthefinancialperiod(RM) 1.31

Capitalappreciation 6.4%

Annualtotalreturn/Averagetotalreturnsincelisting 11.3%

Unitsincirculation(‘000) 3,400,000

Marketcapitalisationasat31December�01�(RM’000) 4,5��,000


Annual Report 2012

PortfolioSummary

PORTFOLIO COMPOSITION

Properties

Mid Valley Megamall The Gardens Mall

Landareaofmastertitle(sqft)

Tenure

Mastertitleinformation

Encumbrances/materiallimitationsinmastertitle(1)

Restrictionsininterestinmastertitle

Expressconditionsinmastertitle

Type

AppraisedValueasat31December�01�(RM’000)

Purchaseconsideration(RM’000)

NLAasat31December�01�(sqft)

GFAasat31December�01�(sqft)

Numberoftenanciesasat31December�01�

Occupancyrateasat31December�01�(%)

Numberofcarparkbaysasat31December�01�

Notes:(1) MidValleyCitySdnBhdhadon15August2012obtainedtheStateAuthority’sconsentforthetransferofMidValleyMegamallinfavourofAmTrusteeBerhad.(2) MidValleyCityDevelopmentsSdnBhdhadon16March2012obtainedtheStateAuthority’sconsentforthetransferofTheGardensMallinfavourofMidValley

CityGardensSdnBhd(“MVCG”),andMVCGhadinturnon15August2012,obtainedtheStateAuthority’sconsentforthetransferofTheGardensMallinfavourofAmTrusteeBerhad.

1,047,53�

Leasehold interest of 99 years expiring on 6June�103

PN 37075, Lot 80 Seksyen 95A, Bandar KualaLumpur, Daerah Kuala Lumpur, WilayahPersekutuanKualaLumpur

Trust caveat lodged by Amtrustee Berhadon behalf of IGB REIT vide presentationNo.15448/�01�on14September�01�

This land shall not be transferred, leased,securedorchargedexceptwiththeconsentoftheFederalTerritoryLandExecutiveCommitteeSecretariat (Tanahinitidakbolehdipindahmilik,dipajak,dicagarataudigadaimelainkandengankebenaran Jawatankuasa Kerja Tanah WilayahPersekutuanKualaLumpur)(1)

Thislandshallbeusedforcommercialbuildingonly(Tanahinihendaklah(Tanahinihendaklahhanyauntukbangunanperdagangansahaja)

Retail

3,500,000

3,440,000

1,751,864

6,107,103

475

99.8

6,10�

4�1,773

Leasehold interest of 99 years expiring on 6June�103

PN 37073, Lot 70 Seksyen 95A, Bandar KualaLumpur, Daerah Kuala Lumpur, WilayahPersekutuanKualaLumpur

• Privatecaveat lodgedbyAmTrusteeBerhadon behalf of IGB REIT vide presentationNo.1�690/�01�on�6July�01�

• Trust caveat lodged by AmTrustee Berhadon behalf of IGB REIT vide presentationNo.1447�/�01�on30August�01�

• Trust caveat lodged by Amtrustee Berhadon behalf of IGB REIT vide presentationNo.16049/�01�on�6September�01�

This land shall not be transferred, leased,securedorchargedexceptwiththeconsentoftheFederalTerritoryLandExecutiveCommitteeSecretariat(Tanah initidakbolehdipindahmilik,dipajak,dicagarataudigadaimelainkandengankebenaran Jawatankuasa Kerja Tanah WilayahPersekutuanKualaLumpur)(2)

Thislandshallbeusedforcommercialbuildingonly(Tanahinihendaklahhanyauntukbangunanperdagangansahaja)

Retail

1,�00,000

1,160,000

816,910

3,379,510

�06

99.5

4,1�8


MessagefromtheChairmanandtheManagingDirector

DEAR UNITHOLDERS,

ON BEHALF OF THE BOARD OF DIRECTORS, WE ARE DELIGHTED TO EXTEND OUR DEEPEST AND SINCERE APPRECIATION TO ALL UNITHOLDERS, TENANTS, BUSINESS PARTNERS AND THE AUTHORITIES, NAMELY SECURITIES COMMISSION MALAYSIA AND BURSA MALAYSIA SECURITIES BERHAD FOR THEIR COMMITTED SUPPORT DURING THE PUBLIC LISTING OF IGB REIT.

“ONTHEDAYOFLISTING,THEUNITPRICEOFIGBREITACHIEVEDAHIGHOFRM1.41AGAINSTIPOPRICE

OFRM1.25ANDCLOSEDAT RM1.39.“


Annual Report 2012

POISED FOR GREATNESS

Malaysia’s retail industry recorded sales growth of 6.9%in the first quarter of �01�, boosted by various incentivesintroducedbytheGovernmentsincelatelastyear.

Industry observers are cautiously optimistic about theperformanceofthelocalretailindustryforthefourthquarterdespitehopesofbonusesandyear-endpromotions.Thisisprimarily due to the uncertainty created by the timing ofimpending general election and less-than-stellar globaleconomic conditions. The local retail industry is cyclical,dependingonwhetherit’safestiveornon-festiveseason.

InMalaysia,domesticdemandisstillstrongandgoingshoppingis considered one of the most affordable family outings.Malaysian consumers will still remain cautious in their retailspending.Inlinewiththehostofcelebrationsthatthiscountryenjoys through our very own Four Seasons of Chinese NewYear,HariRaya,DeepavaliandChristmasyearendcelebrations,consumer spending and revenue generation will continuetoflourishandsustain itself inthe longrun.Howeverweareconfidentandremainbullishaboutourchancesandforeseeaprofitableoutcomefortheyeartocome.

Withproactivestepstakentoopenupnewsaleschannelsandnewmarketingstrategies,weexpectamarkedimprovementinfinancialperformancefortheyearahead.ThefocusthisyearwillbetoputIGBREIT’spropertyportfolioinastrongerpositioninthecompetitiveretailmarketthroughenhancedmanagementstrategiesandbrandrenewals.

ThiswillincreaseoursalesvolumeandprovidetheimpetusforIGBREITtoachieveasteadygrowthrateintheyearstocome.Newandinnovativemarketingstrategiesandincentivesarealsobeingintroducedthroughouttheyeartomotivatethefrontlinestafftodoubletheireffortsandpushforhigheryieldsandreturns.

FINANCIAL RESULTS

Forthefinancialperiodended31December�01�,IGBREITpostedapre-taxprofitofRM153.3millionwithtotalrevenueamountingtoRM115.3million.

IGBREIT’scurrentyearperiod-to-date,revenueandnetpropertyincome,mainlyfromtherentalincomeofMidValleyMegamallandTheGardensMallwereRM115.3millionandRM76.�millionrespectively.

WebelievethattherelativelyyoungTheGardensMallshouldactasthegrowthdriverforIGBREIT.Thismallisonlyfouryearsoldandhasgonethrough only one cycle of rental reversion. A very sizeable 54.�% of its occupied net lettable area will be expiring in financial year ending 31December�013.Thissecondroundofrentalreversionwillgivethemalltheopportunitytoenjoysignificantupwardrentalreversion.Webelievethereispotentialforroomforgrowthinrentsasthemall’sluxuryandpremiumbrandtenantshavetheabilitytopayhighrents,aswitnessedinthecitycentre.

IGBREITisalsoexpectedtocontinuouslyflourishinthefirsthalfof�013,triggeredbytheChineseNewYearcelebrations,year-endbonuspayoutsandgovernmentincentivessuchastheBantuanRakyat1Malaysia(BR1M).

REVIEW OF OPERATIONS

WithatotalretailassetvalueofRM4.7billion,IGBREIThasthelargestexposuretotheresilientretailindustryinMalaysiathroughaninitialportfoliomadeupoftwoassets,MidValleyMegamallandTheGardensMall.Futuregrowthinassetvaluewillbehelpedbyitslowassetleverageof�5%andtherightoffirstrefusal(ROFR)fortheretailpropertiesownedbyitssponsor,IGBCorporationBerhad.

In�01�,IGBREITcontinuedtofocusonenhancingtheperformanceandvalueofthemallsmainlyfromorganicgrowthwithassetenhancementinitiatives.

MessagefromtheChairmanandtheManagingDirector(cont’d)


Mid-Valley MegamallTherepositioningofMPHBookstorefromtheGroundFloortotheLowerGroundFloorofthemallhasyieldedenhancedrentalsduetostrategiclocationandincreaseoftrafficthere.

TheThirdFloortoNorthCourtwheretheFoodJunctionwaspreviouslylocatedhasalsobeenrefurbishedandaddedwithnewtenantssuchasMUJI,Daiso,OldTownWhiteCoffeeSignature,UrbanAdventureamongafew.FoodJunctionhasbeenrelocatedcloseby,andnowoffersnewandexcitingfoodfare,givingnewopportunitiesandchoicestovisitorsofthemall.

On-goingenhancementsarealwaysonourprioritylisttouplifttheretailexperienceforourcustomersalike.ThisdevelopmentcombinedwiththeconstantforesightbyIGBREIThasledto177tenancyrenewalsinthepastyear.MidValleyMegamallremainsamajorplayerintheretailsectorandisnodoubt,aleadingshoppingdestinationintheregionwithover36millionvisitorsthusfar.

The Gardens MallTheGardensMallcontinuedtoshowapositiveperformancein�01�,withoccupancyremainingat99.5%.49tenancieswererenewedand14newtenantsLancel,Tempur,LauraMercier,Blomus,Sticky,RoyceChocolates,DelectableTreats,MailBoxesEtc.,MyBagSpa,DKNYJeans,Maybank,TMLevin,VersaceCollection,andBlueCubewerewelcomed,includingFresca,ThaiUp!,FongLyeFusion,andDrMartenswhoopenedtheirfirststoresinthemall.

The mall underwent several asset enhancement initiatives for the year which include upgrading works for The Gardens Club, Surau,washrooms,backofhousecorridorsandloadingdocks,andLowerGroundnewcovedceilinginstallation.Newflower-petaldesignedpushcartswerealsoinstalledinthemallontheupperfloors.

OurGardensClubLoyaltyprogramhasnowbeenlaunchedfor3yearsandreachedover35,000signupssinceApril�009.Membershipcontinuestogrow.TherearestillacoupleofInternationalbrandnamestobeaddedinthenearfuturewithHermesandGucciamongthemix.

CREATING LASTING IMPRESSIONS IN THE REGION

IGBREITwashonouredwithBestREITDealOf TheYear�01�inSoutheastAsiaandMostInnovativeDealOfTheYear�01�inSoutheastAsiaatthe6thAlphaSoutheastAsiaAnnualDealandSolutionAwards�01�.

WithatotalassetvalueofRM4.7billion, IGBREITisoneofthelargestREITs inMalaysiabyassetsizebutitwouldhavethelargestretailexposurebyassetvalue.ItstotalretailportfolioofRM4.7billionislargerthanitsclosestcompetitors.IGBREIT’ssheersizeshouldenhanceitsvisibilityamonginvestorsandcontinuetogatheraccoladeswithintheregion,andifnot,theworldover.

PROSPECTS

TheMalaysianrealestateinvestmenttrusts(M-REITS)industrymayseeexcitingtimesaheadasvisibilityandinvestmentabilityimprovesamong international funds.The challenges include the sluggish global economy, the ability to attract talent back to Malaysia, a long-awaitedsluggishgeneralelectionandmanaging itsfiscaldeficit.Theeconomywill reviveoncetheuncertaintyofthegeneralelectionceasestobeardownonsentiment.

Inviewoftheforegoing,barringunforeseencircumstances,wethereforeexpectanothersatisfactoryyearforIGBREIT.

OnbehalfoftheBoard,wewishtoexpressoursincereappreciationtoallmanagementandemployeesfortheirendlesssupport,hardworkanddedication.Wewouldalsoliketoextendahugewordofthankstoallourunitholders,customers,financiers,businessassociatesandtherelevantauthoritiesfortheircontinuedconfidence,cooperationandsupport.

Weremainconfidentofcontinuingtodoourbestandinreturn,getrewardedforbeingthebestthereis.

TAN SRI DATO’ DR. LIN SEE YAN ROBERT TAN CHUNG MENGChairman ManagingDirector

MessagefromtheChairmanandtheManagingDirector(cont’d)


Annual Report 2012

MessagefromtheChiefExecutiveOfficer

BUILDING EMPIRES IS AKIN TO BUILDING RELATIONSHIPS, WHEREBY TRUST AND

INTEGRITY ARE KEY PLAYERS. BY PUTTING THIS INTO OUR DNA HERE AT IGB REIT, WE

STRONGLY BELIEVE WE ARE FIRMLY PLACED TO BE A LIFELONG STRATEGIC PARTNER

THAT HELPS ENHANCE OUR CLIENTS BRAND AND CORPORATE IMAGE. OUR AIM

AND GOAL REMAINS FOCUSED TO CONTINUOUSLY PROVIDE THEM WITH PROMPT,

RELIABLE AND QUALITY SERVICE THAT WILL BE UNRIVALLED BY MANY.

IGB REIT, THE SAME OLD QUALITY THAT JUST GOT BETTER IN TIME.

ALTHOUGHHAVINGONLYBEENESTABLISHEDFOR110DAYSBYTHEENDOF�01�,THEWEALTH

OFEXPERIENCECONTAINEDWITHINIGBREITSTRETCHESFARBEYOND.WEHAVEMAINTAINED

THETALENTTOFURTHERHARNESSTHEVALUEOFHIGHERREITINVESTMENTSFORIGBREIT.WE

AREPLEASEDTHATOURFIRSTREPORTHASCOMEWITHIGBREITSITTINGWITHANESTIMATED

VALUATIONOFRM4.7BILLION.


MessagefromtheChiefExecutiveOfficer(cont’d)

KEY PERFORMANCES OF 2012

Theyear thatpassedusbywasa reasonablygoodyear for IGBREIT. Inspiteof thesofteningmarketsentimentcoupledwiththeeconomic

slowdown,wemanagedtochalkupsatisfyingfinancialresultsforthefinancialyearunderreview.

Therecoveryintheworldeconomytowardstheendof�011gatheredmomentumin�01�.TheMalaysiaeconomyreboundedstrongly,with

significantincreasesingrossdomesticproduct(GDP)andretailsalesgrowth.

AccordingtotheMalaysianInstituteofEconomicResearch,consumerconfidencegallopedaheadto114.3inthefirstquarterof�01�,upfrom

106.3inthefourthquarterof�011.Headline inflationregisteredontheconsumerprice index(CPI)stoodatabenign�.3percent inJanuary

�01�,downfrom3.�percentin�011,accordingtotheMalaysianDepartmentofStatistics.Withaproventrackrecordinthemanagementand

operationofmalls,Malaysiahasoutlineditsambitionstostepintothelimelightasanexporterofexpertlydesignedretailcomplexes.

Despitethischallengingglobalscenario,onthedemandside,growthwillbesupportedbysustainedconsumerspendingreinforcedbystrong

investmentactivities.Consumerspendingisexpectedtopostastronggrowthbackedbyincreasinghouseholdincomeandstableemployment

conditions.

REVIEW OF OPERATIONS

IGBREIT’sshorttermoutlookremainsfavourable,drivenbyorganicgrowthatitsexistingretailassets–MidValleyMegamallandTheGardens

Mall.Therecentlyannouncedfourth-quarterfinancial results for theperiodendedDecember31,�01�werewithinanalystexpectations. IGB

REITpostedapretaxprofitofRM153.3millionandrevenueofRM115.3million.ThiscamefromthetotalrevenueofMidValleyMegamallandThe

GardensMall,whichstoodatRM79.8millionandRM35.5million,respectively.

Agoodexampleofhowmuchrentalratescanincreasebyconvertingoneanchortenant’sspaceintoafew,smallerlotsforspecialtytenantscan

beseenintherecentMPHBookstorecase.MPHBookstorewaspreviouslyamini-anchortenantofMidValleyMegamall,occupying33,000sqft

ontheprimeGroundFloorneartheCentreCourt.However,ithasbeenrelocatedtoalessstrategicplaceattheLowerGroundFloorwithitssize

cutto14,000sqft.Initsplace,interestingretailconceptsyieldingmuchhigherrentalrateshavebeenintroduced(Uniqlo,Forever�1,Quicksilver/

Roxy,MNGextension).Thistenantremixinghasconsiderablyincreasedrentalrates.

WhileMidValleyMegamallwillremainasthemainearningscontributor,TheGardensMall’searningsgrowthcouldoutpacethatofMidValley

Megamall,asitmaturesandcementsitspositioninthehigh-endretailmallsegment,thusnarrowingthecontributiongapbetweenthetwo

mallsoverthemediumterm.


Annual Report 2012


HUMAN CAPITAL

Ouremployeesareembodiedintheheartsofouroperations.Withthatfirmlyrooted,webelievethattheyshouldbevalued,harnessedand

prepared to further develop and consolidate themselves. Hence our human capital initiatives focused on providing ongoing training and

developmentsolutions,upskillingofservicestoenhancetheirhumanresourcesqualityandproductivity.

CORPORATE SOCIAL RESPONSIBILITY

AsCorporateSocialResponsibilityencompassessocietyandourdutytoserve,manyfacetsarecoveredinthisannualreport.SomeofIGBREIT’s

effortsinphilanthropyandvolunteerism,aswellasenvironment,healthandsafetyeventsarehighlighted.

Incelebrationofthemainfestivitieshere,MidValleyMegamall,togetherwithitspartnersbroughtsomemuchneededcheertosomedeserving

folksaround.

Atotalof17seniorcitizensfromDeLuxeRetirementHomewerefetedandtreatedduringtheChineseNewYearcelebrationsaswellasthe

HariRayaCharityeventwith40underprivilegedkidsfromRumahAmalBelianKasih(RABEKA)beingtreatedandfetedtomarktheauspicious

occasion.TheGardensMalldiditspartintheseasonalfestivitiestoobyholdingnumerouseventsthatwerein-houseaswellascollaborations

withotherpartnersandmediapartners.BesidesseasonalcampaignssuchasChineseNewYear,HariRayaandChristmas,themallhosteditsfirst

‘Beauty&Home’campaignwhichsawamixofcosmeticandskincareplayersaswellashometenants.Therewerealsosuccessfulfashionevents

includingtheSpringSummerFashionWeekandFallWintermediaeventthatalsoshowcasedthemall’sin-housemagazinecalled‘Gardens’.

IGBREIThasdevelopedanimportantrelationshipwithsocietyaswefeeltheyareourstrengthandwewillcontinuetoofferthemoursupportin

thisveryimportantendeavor.Withthatinmindafewinitiativeswerecarriedouttohelpthedisabled.AmongthemwereaMickeyMousethrough

theYearProjectfortheDownSyndromeAssociationofMalaysia.Theobjectivewastochannelallfundsraisedthroughapurchasewitha“purchase

program”atthemall.DuringChristmas,weheldaMeetSantafundraisingcampaignandthefundwerechannelledintopurchasingitemsand

servicesrequestedbyoneofthecharityhomes(SpasticChildren’sAssociationofSelangorandFederalTerritory)listedunder*GivingIsGold.org.

Wealsoplayedhoststoaveryspecialgroupofchildrenfromthe‘HouseofJoy’,whowereinvitedtothemallandtreatedtoanicemealwithDin

TaiFungrestaurantasco-hosts.DuringRaya,wevisited‘PersatuanKanak-kanakIstimewaHuluLangat’wheretheMarketingdepartmenthadthe

chancetointeractwiththechildren.Childrenfrom‘PersatuanKebajikanSriEden’wereinvitedtoTheGardensMallfortheafternoonandhadfun

buildinggingerbreadhousesandwereentertainedbyamagicianaswell.

1�IGB Real Estate Investment TrustAnnual Report 2012

THE YEAR AHEAD

Malaysia’seconomicoutlookisexpectedtoremainstablenextyear,supportedbycontinuedstrongdomesticconsumptionandinvestments.

Notwithstandingthesluggishglobaleconomicenvironment,webelievedomesticconsumerspendingwillremainhealthy.

Privateconsumptionisexpectedtogrowby6.5%,underpinningourGDPgrowthforecastof5%in�013. Importantly,webelievehousehold

disposableincomewillbesupportedbytheimplementationoftheminimumwagepolicyaswellasthevariouscashhandoutsannouncedby

theGovernmentduringBudget�013.

WeatIGBREITarealwaysstrivingtoenhancethevaluewithinbyconstantlysourcingforacquisitionopportunitieswithinthecountry.Through

thesteadyandundyingeffortsofourpeopleandmanagement,wearebullishandremainconfidentthatwearewellpositionedtocapitaliseon

thegrowthopportunitiesinMalaysiafortheyearahead.

APPRECIATION

Withallthegratitudeandappreciationinmyheart,Iwouldliketothankallunitholders,businesspartners,fellowcolleagues,tenantsandshoppers

fortheirsupport.

IwouldalsoliketoputonrecordourappreciationfortheguidanceandwisecounselofboththeTrusteeandourfellowmembersoftheBoard

oftheManager.Ilookforwardtotheyearaheadandtothenewandexcitingtimesaheadforusall.

ANTONY PATRICK BARRAGRYChiefExecutiveOfficer(CEO)



Annual Report 2012

IGBREITStructure

OtherUnitholders

SponsorIGBCorporation

Berhad

49.1% 50.9%

100%

ManagementFee

ManagementServices

RepresentsinterestsofUnitholders

Trustee’sFee

Property Manager

ChartwellITACInternationalSdn

Bhd

OwnershipofAssets(InvestedinTrustee) Income

PropertyManagementFee

PropertyManagementServices

IGB REITPortfolio

•MidValleyMegamall•TheGardensMall

TrusteeAmTrustee

Berhad

ManagerIGBREIT

ManagementSdnBhd


SalientFeaturesofIGBREIT

Fund Name IGBREIT

Fund Category Realestateinvestmenttrust

Fund Type Incomestabilityandgrowth

Fund Duration IGBREITshallterminateontheearlierof:

• theoccurrenceofanyoftheeventslistedinClause�6.�ofthedeedoftrustdated18July�01�(“Deed”);

• thedate999yearsafter�5July�01�i.e.thedateofestablishmentofIGBREIT;or

• thedateonwhichIGBREITisterminatedbytheManagerunderClause�6.1(b)oftheDeed

Approved Fund Size 3,550,000,000Units

Authorised Investments Real estate, unlisted single-purpose companies, real estate-related assets, non-real estate-related assets, cash,

deposits,moneymarketinstrumentsandanyotherinvestmentsnotspecifiedabovebutspecifiedasapermissible

investmentintheSecuritiesCommission’s(“SC”)GuidelinesonRealEstateInvestmentTrusts(“REITGuidelines”)or

asotherwisepermittedbytheSC

Authorised Investments TheinvestmentsofIGBREITaresubjecttothefollowinginvestmentslimitsimposedbytheREITGuidelines:

Limits • atleast50%ofIGBREIT’stotalassetvalue(“TAV”)mustbeinvestedinrealestateassetsatalltimes;and

• notmorethan�5%ofIGBREIT’sTAVmaybeinvestedinnon-realestate-relatedassetsand/orcash,deposits

andmoneymarketinstruments,

provided that investments in both real estate-related assets and non-real estate-related assets are limited as

follows:

• thevalueofIGBREIT’sinvestmentsinsecuritiesissuedbyanysingleissuermustnotexceed5%ofIGBREIT’s

TAV;

• thevalueofIGBREIT’sinvestmentsinsecuritiesissuedbyanygroupofcompaniesmustnotexceed10%of

IGBREIT’sTAV;and

• IGBREIT’sinvestmentinanyclassofsecuritiesmustnotexceed10%ofthesecuritiesissuedbyanysingleissuer,or

suchotherlimitsandinvestmentsasmaybepermittedbytheSCortheREITGuidelines

Distribution Policy 100%ofIGBREIT’sdistributableincomefrom�5July�01�to31December�014,andthereafteratleast90%of

IGBREIT’sdistributableincomeonahalf-yearlybasis(orsuchotherintervalsastheManagermaydetermineatits

absolutediscretion)

Borrowing Limitations Upto50%ofIGBREIT’sTAVatthetimetheborrowingisincurredorsuchhigheramountwiththepriorapprovalofthe

unitholdersorsuchotherlimitpermittedbytheREITGuidelinesfromtimetotime

Revaluation Policy AtleastonceeverythreeyearsbasedonanindependentprofessionalvaluationpursuanttotheREITGuidelines

orsuchothershorterintervalastheManagerdeemsnecessary

and Gearing Policy


Annual Report 2012

SalientFeaturesofIGBREIT(cont’d)

Management Fees TheManagermayelecttoreceivethemanagementfeeincashorunitsoracombinationofcashandunits(as

itmayinitssolediscretiondetermine).TheManagerisentitledundertheDeedtothefollowingmanagement

fees(exclusiveofservicetax,ifany):

• BaseFee:upto1.0%perannumofIGBREIT’sTAV(excludingcashandbankbalanceswhichareheldin

non-interestbearingaccount).TheManagerintendstochargeaBaseFeeof0.3%forFY�01�andFY�013

(FY�01�actual:RM4,045,746.46or�,979,47�units)

• PerformanceFee:5.0%perannumofIGBREIT’snetpropertyincome(“NPI”)intherelevantfinancialyear

(FY�01�actual:RM3,805,385.81or�,80�,954units)

• AcquisitionFee:1.0%ofthetotalpurchaseconsiderationofanyrealestateandrealestate-relatedassets

directlyorindirectlyacquiredfromtimetotimebytheTrusteeoroneormoreSPVsonbehalfonbehalfof

IGBREITpro-rated,ifapplicable,totheproportionofIGBREIT’sinterest.

• DivestmentFee:0.5%ofthetotalsaleconsiderationofanyrealestateandrealestate-relatedassetsdirectly

orindirectlysoldordivestedfromtimetotimebytheTrusteeoroneormoreSPVsonbehalfofIGBREIT

pro-rated,ifapplicable,totheproportionofIGBREIT’sinterest.

Financial Period (FY2012) �5July�01�to31December�01�

Quotation MainMarketofBursaSecurities

IPO Price RM1.�5

Minimum Investment 100unitsperboardlot

Stock Name/ Code IGBREIT/5��7


ManagementReportingStructure

Head of Operations/

Leasing (Mid Valley Megamall)

RennieLeeChaiTin

BOARD OF DIRECTORS

Chief Executive OfficerAntonyPatrickBarragry

Audit Committee

Internal Audit

Joint Chief Operating Officer (The Gardens Mall)

ElizabethTanHuiNing

Joint Chief Operating Officer (Mid Valley Megamall)

DanielYongChen-I

Chief Financial Officer

ChaiLaiSim

Head ofCompliance

TinaChan

Head of Marketing (Mid Valley Megamall)

KoChaiHuat

Head of Operations/

Leasing (The Gardens

Mall)

ElizabethTanHuiNing

Head of Marketing

(The Gardens Mall)

GabrielleTanHuiChween

Head of Investment

ChowYengKeet

Managing DirectorRobertTanChungMeng


Annual Report 2012

TAN SRI DATO’ DR. LIN SEE YANChairman,IndependentNon-ExecutiveDirector

TanSriDato’Dr.LinSeeYan,aged73,isanIndependentNon-ExecutiveDirector(“INED”)andChairmanoftheManager.HewasappointedtotheBoard

on�7April�01�.

Dr.Linisanindependentstrategicandfinancialconsultant.Priorto1998,hewasChairman/PresidentandChiefExecutiveOfficerofPacificBankGroup

andfor14yearspreviously,DeputyGovernorofBankNegaraMalaysia(theCentralBank),havingbeenacentralbankerfor34years.Dr.Lincontinues

toservethepublicinterest,includingMember,PrimeMinister’sEconomicCouncilWorkingGroup,aswellasamemberofanumberofkeyNational

Committees on Higher Education; Economic Advisor, Associated Chinese Chambers of Commerce & Industry of Malaysia; Board Director, Monash

UniversitySunwayCampusMalaysiaSdnBhd;andGovernor,AsianInstituteofManagement,Manila. Inaddition,Dr.Linsitsontheboardsofseveral

publiclistedcompaniesinMalaysia,includingKrisAssetsHoldingsBerhad(“KrisAssets”),AncomBerhad,GentingBerhad,JobStreetCorporationBerhad,

WahSeongCorporationBerhad(“WSCB”)andTopGloveCorporationBerhad,andanumberofbusinessenterprisesinMalaysia,SingaporeandIndonesia

engagedininsurance,mining,petroleumrelatedproducts,propertydevelopment,softwareandprivateequity.Dr.LinisChairmanEmeritusofHarvard

University’s Graduate School Alumni Association Council in Cambridge (USA) as well as President, Harvard Club of Malaysia. He is also Professor of

Economics(Adjunct),UniversitiUtaraMalaysiaandProfessorofBusiness&InternationalFinance(Adjunct),UniversityMalaysiaSabahandaTrusteeofthe

TunIsmailAliFoundation(PNB),HarvardClubofMalaysiaFoundation,MalaysianEconomicAssociationFoundationandJeffreyCheahFoundation.

ProfessionallyqualifiedintheUnitedKingdomasaCharteredStatistician,Dr.Linisalsobanker,economistandventureentrepreneur,havingreceived

threepost-graduatedegreesfromHarvardUniversity(includingaPhDinEconomics)wherehewasaMasonFellowandFordScholar.HeisaBritish

CharteredScientist.TanSri isanEisenhowerFellowandaFellowof the IMF Institute (WashingtonDC),RoyalStatisticalSociety (London),Malaysian

InstituteofBankers,MalaysianInsuranceInstitute,MalaysianInstituteofManagementandMalaysianEconomicAssociation.HeisalsoaDistinguished

FellowoftheInstituteofStrategicandInternationalStudiesinMalaysia.

ROBERT TAN CHUNG MENGManagingDirector,Non-IndependentExecutiveDirector

RobertTanChungMeng,aged60,istheManagingDirector(“MD”)oftheManagerandaNon-IndependentExecutiveDirector(“NIED”).Hewasappointed

totheBoardon�1March�01�.

He has extensive experience in property development, hotel construction, retail design and development as well as corporate management with

morethan30yearsexperienceinthepropertyindustry.AfterstudyingBusinessAdministrationintheUnitedKingdom,hewasattachedtoaChartered

Surveyor’sfirmforayear.HealsodevelopedahousingprojectinCentralLondonbeforereturningtoMalaysia.Hisstintinthepropertyindustrybegan

withIGBCorporationBerhad(“IGB”)in1995whenhewasmadeIGB’sJointMDandsubsequentlybecomingitsGroupMDin�001,apositionhecurrently

holdstoday.

He has been involved in various development projects carried out by IGB group, in particular MidValley City. From inception to the realisation of

MidValleyMegamallandTheGardensMall,hewasactivelyinvolvedineverystageoftheirdevelopments. Thefullfruitionofhisgrandvisionisthe

constructionanddevelopmentofMidValleyMegamallandTheGardensMallwhichspannedoveradecadeintoalandmarkretailcomplexinMalaysia.

HeisinstrumentaltothedevelopmentandsuccessofMidValleyMegamallandTheGardensMallandmoreimportantly,inretainingtheirpositionsas

primeretailplayersamidstincreasinglycompetitiveretaillandscape.Throughhismanagementandleadership,MidValleyMegamallandTheGardens

MallarenowtwoofthemostpopularshoppingmallsintheKlangValley,enjoyinganalmostfulloccupancyrateforthepastfewyears.

HeisalsotheGroupMDofKrisAssets,theNon-ExecutiveChairmanofWSCBandaDirectorofTan&TanDevelopmentsBerhad(“Tan&Tan”),aproperty

divisionofIGB.

ProfileofDirectors


ProfileofDirectors(cont’d)

HALIM BIN HAJI DINIndependentNon-ExecutiveDirector

HalimbinHajiDin,aged66,isanINED.HejoinedtheBoardon�7April�01�,andwasappointedthechairmanoftheAuditCommittee.

HeisaCharteredAccountantwhospentmorethan30yearsworkingformultinationalcorporationsandinternationalconsultingfirms.Heaccumulated18yearsofexperienceworkingintheOilandGasIndustry,ofwhich6yearswasspentasaboardmemberofCaltex/Chevron,responsibleforfinancialmanagement, before engaging in the consulting business. Prior to his appointment as a board member of Caltex Malaysia, he served as RegionalFinancialAdvisorforCaltexPetroleumCorporationDallas,Texasoverseeinginvestmentviabilityofthecorporation’sAsiansubsidiaries.

He also had an extensive experience in corporate recovery when he worked for Ernst &Whinney, London, United Kingdom in mid-1980’s. He wasappointedasManagingPartneroftheconsultingdivisionofErnst&YoungMalaysiain1995.HelaterbecametheCountryAdvisorofCapGeminiErnst&YoungConsultingMalaysiawhenCapGeminiofFrancemergedwithErnst&YoungConsulting.In�003,hewithtwopartnerstookovertheconsultingbusinessofCapGeminiErnst&YoungMalaysiathroughamanagementbuy-outandrebrandeditasInnovationAssociates,currentlyknownasTheIAGroup,whereheiscurrentlytheChairmanofthegroup.

HeisalsoanINEDofKrisAssets,WSCBandBNPParibasMalaysiaBerhad.

LE CHING TAI @ LEE CHEN CHONGIndependentNon-ExecutiveDirector

MrLeeChenChong,aged71,wasappointedtotheBoardon�7April�01�,andisanINED.

HeisaFellowoftheCharteredInstituteofBankers(FCIB),London,UnitedKingdomandspentatotalof34yearsincommercialandinternationalbankingwithlocalaswellasbanksoverseas.From197�to1984,hewastheChiefExecutiveOfficerofanoverseasbankintheCityofLondon.In1985,hereturnedtoMalaysiaandjoinedaMalaysia-Frenchjoint-venturebankinKualaLumpurasanExecutiveDirector.HewassubsequentlyappointedtheManagingDirectoruntilherelinquishedthepostinend1993.Thenext4yearssawhimspendtimeoverseasasChiefExecutiveOfficerandDirectorofinternationalbanksintheCzechRepublic,HungaryandMalta.

HeisanINEDofKrisAssetsandwasassociatedwithMulti-Purposegroupofcompaniesfrom1989untilhisretirementasExecutiveDirectorinend�000.HewasanExecutiveDirectorofIpmudaBerhadfromDecember�001untilretiringinJanuary�008.

TAN BOON LEENon-IndependentExecutiveDirector

TanBoonLee,aged49,isanExecutiveDirectoroftheManagerandaNIED.HewasappointedtotheBoardon�7April�01�.

HeholdsaBachelorofEconomicsfromMonashUniversity,AustraliaandaMastersinBusinessAdministrationfromCranfieldSchoolofManagement,UnitedKingdom.Hehas�5years’experienceinthepropertyandhotelindustry,providingmanagementandtechnicalassistancetohotelandhospitalityprojectsinMalaysiaandAsia.HewasPresidentoftheMalaysianAssociationofHotelOwners(MAHO)from�00�to�004.

He spearheaded IGB group’s growth into emerging economies of Myanmar and Cambodia in 1990’s via the group’s hotel division. He is currentlyinstrumentalinthegroup’sgrowthofthe“CititelExpress”brandinganewfour-starhotelinSydney.

HeispresentlyanExecutiveDirectorofIGB,aDirectorofKrisAssets,GoldisBerhad(“Goldis”),MacroKioskBerhadandSWHomeownersBerhad,andaDirectorandChiefExecutiveOfficerofTan&Tan.


Annual Report 2012


TAN LEI CHENG Non-IndependentNon-ExecutiveDirector

TanLeiCheng,aged55,wasappointedtotheBoardon�7April�01�,andisaNon-IndependentNon-ExecutiveDirector(“NINED”).

SheholdsaBachelorofCommercefromtheUniversityofMelbourne,AustraliaandaBachelorofLawfromKing’sCollege,London(LLBHons.),England.

SheisalsoamemberofLincoln’sInnandwasadmittedtotheEnglishBarin1983.

Shehasmorethan30yearsofexperienceinthepropertyindustryandthecorporatesector.ShewastheChiefExecutiveOfficerofTan&TanfromMarch

1995,apropertydevelopmentcompanythatwaslistedonBursaSecuritiesuntilGoldistookoveritslistingon8May�00�,followingthecompletionof

themergerbetweenIGB,Tan&TanandGoldis.SheispresentlytheExecutiveChairmanandChiefExecutiveOfficerofGoldis.Shealsositsontheboards

ofIGB,KrisAssets,MacroKioskBerhadandTan&Tan.SheisamemberoftheWorldPresidents’Organisation,MalaysiaChapterandaboardmemberof

KualaLumpurBusinessClubAdvisoryCouncil.

DANIEL YONG CHEN-I JointChiefOperatingOfficer(MidValleyMegamall)Non-IndependentExecutiveDirector

DanielYongChen-I,aged41,wasappointedtotheBoardon�7April�01�.HeisaNIEDandtheJointChiefOperatingOfficer(“COO”)(MidValleyMegamall)oftheManager.

HeisalawgraduatefromtheUniversityofBristol,England.HejoinedMidValleyCitySdnBhd(“MVC”)in1999asamemberofthepre-openingretaildevelopment team.HewasappointedanExecutiveDirectorofMVC in�003and is responsible foroverseeing themanagementandoperationofMidValleyMegamallsince.Hewasalsoinvolvedinthedesignandpre-openingofTheGardensMallfrom�004to�007.Hispriorworkexperience includes thedevelopmentofbespokesystemswithBYGSystemsLtd inEnglandandOperationalManagementwithWahSeongEngineeringSdnBhd,thedistributorandmanufacturerforToshibaElevatorandEscalatorsinMalaysia.

HeisaDirectorofKrisAssetsandthealternateDirectortoPaulineTanSuatMingontheboardofIGB.

ELIZABETH TAN HUI NING JointChiefOperatingOfficer(TheGardensMall)Non-IndependentExecutiveDirector

ElizabethTanHuiNing,aged�9,wasappointedtotheBoardon�7April�01�.SheisaNIED,theJointCOO(TheGardensMall)andHeadofOperations/Leasing(TheGardensMall)oftheManager.

ShegraduatedwithFirstClassHonoursfromCardiffUniversity,Wales,UnitedKingdomwithadegreeinBusinessAdministration(BSc)inJune�004.ShejoinedMidValleyCityGardenSdn.Bhd(“MVCG”)inAugust�004andsubsequentlyassumedherpresentroleastheDirectorofLeasingofMVCG.SheisresponsiblefortheconceptualisationandstrategyofthetenantmixofTheGardensMallaswellasoverseeingtheleasing,retaildevelopmentandcustomerservicedepartments.

SheisthealternateDirectortoRobertTanChungMengontheboardofKrisAssets.

�0IGB Real Estate Investment TrustAnnual Report 2012


TAN YEE SENGNon-IndependentNon-ExecutiveDirector

TanYeeSeng,aged3�,wasappointedtotheBoardon�7April�01�andisaNINED.

HeholdsaprofessionalDiplomaofArchitecture(RoyalInstituteofBritishArchitects,Part�)fromtheUniversityofEastLondon,UnitedKingdom.He

joinedIGBin�010asSeniorGeneralManager(PropertyDevelopment)division.Hispriorworkexperienceincludesbeingpartofthepre-openingteam

memberofGTowerwhichisownedbyGoldis,whereheoversawthecoordinationofbasebuilding,fitoutandoperations.Hewasalsoextensively

involvedintheaestheticrealisationofTheGardensMallwhileworkingatEnsigniaConstructionSdnBhd,theconstructionarmofIGB,whereheworked

asadesignarchitect.ThereheusedhistrainingtocreateandfinetunethefacadesandkeyelementsofTheGardensMallandMidValleyMegamall.He

hasalsobeenadesignarchitectatEricKuhneAssociatesinLondonwhereheworkedonseverallargemixed-useproposals.

HeisthealternateDirectortoTanBoonSengontheboardofIGB.

Notes:

1. AlldirectorsareMalaysian.

2. SaveforRobertTanChungMeng,TanBoonLee,TanLeiCheng,DanielYongChen-I,ElizabethTanHuiNingandTanYeeSeng,theDirectorshavenofamilyrelationshipwithanyDirectoroftheManagerand/ormajorunitholderofIGBREIT.

3. Save for the Directors’ interests in IGB REIT (as disclosed under Unitholdings of Directors and CEO) and the transactions with companiesrelatedtotheManager(asdisclosedinNotestotheFinancialStatements),noconflictofinteresthasarisenduringthefinancialyearunderreview.

4. AllDirectorshavenotbeenconvictedofanyoffence.

�1IGB Real Estate Investment Trust

Annual Report 2012

ProfileofManagement

ANTONY PATRICK BARRAGRY ChiefExecutiveOfficer

AntonyPatrickBarragry,aged61,aBritishbutapermanentresidentofMalaysia,wasappointedtheCEOoftheManageron1September�01�.

Heisaqualifiedarchitectwith36yearsofinternationalexperienceinthedesign,developmentandoperationsofmajormixed-usedevelopments.HispriorworkexperienceincludesPutraWorldTradeCentreinKualaLumpur,IGB’sRenaissanceKualaLumpurHotel,CiraganPalaceHotelinIstanbul,andJebelAliHoteldevelopmentinDubai.HewaspreviouslyProjectDirectorintheconstructionofMidValleyCityPhase1,includingMidValleyMegamall.AppointedasExecutiveDirectorofMVC in�00�,hespearheadedthedevelopmentofmorethan6millionsq ftofcommercial space inMidValleyCity’sPhases�,3and4.HewasalsoProjectDirectorforthedesignandconstructionofStGilesHotel,Heathrow,LondonandtheupgradingofIGB’sPangkorIslandBeachResort,a100-acrebeach-frontpropertyonPangkorIsland.HewastheChiefExecutiveOfficerofMVCGfromJanuary�008untilherelinquishedthepostinAugust�01�.

HeholdsaDiplomainArchitecturefromtheUniversityofSheffieldandisamemberoftheInternationalCouncilofShoppingCentresandTheInternationalReal-EstateFederation(“FIABCI”).

HehasnotbeenconvictedofanyoffencesandhasnoconflictofinterestwithIGBREIT,savefortheinterestinIGBREITasdisclosedinUnitholdingsofDirectorsandCEO.HedoesnothaveanyfamilyrelationshipwithanyDirectoroftheManagerand/ormajorunitholderofIGBREIT.

DANIEL YONG CHEN-IJointChiefOperatingOfficer(MidValleyMegamall)

DanielYongChen-IistheJointCOO(MidValleyMegamall)andaNIEDoftheManager.HisprofileispresentedintheProfileofDirectors.

ELIZABETH TAN HUI NINGJointChiefOperatingOfficer(TheGardensMall)

ElizabethTanHuiNingistheJointCOO(TheGardensMall),HeadofOperations/Leasing(TheGardensMall)andaNIEDoftheManager.HerprofileispresentedintheProfileofDirectors.

CHAI LAI SIMChiefFinancialOfficer

ChaiLaiSimistheChiefFinancialOfficer(“CFO”)oftheManager.

Shehasover30yearsofexperienceinaudit,corporatefinance,capitalmanagementstrategyincludingtreasury,financialaccountingandtaxationinpropertydevelopment,commercialandretailpropertyinvestmentandhospitalityindustries.ShebeganhercareerasanarticledstudentwithCoopers&Lybrand(nowknownasPriceWaterhouseCoopers)beforejoiningTan&TanastheGroupFinancialControllerin1993.FollowingthecompletionofthemergerbetweenTan&TanandIGBin�00�,shewasappointedtheSeniorGroupGeneralManagerofGroupFinanceandsubsequentlyassumedthepresentroleofGroupCFOofIGB.

SheisamemberofboththeMalaysianInstituteofAccountants(MIA)andtheMalaysianInstituteofCertifiedPublicAccountants(MICPA).

CHOW YENG KEETHeadofInvestment

ChowYengKeetistheHeadofInvestmentoftheManager.

HeispresentlytheGeneralManager,CorporateFinanceofIGBandDirectorofFinanceofMVC.Hehasworkingexperienceincorporatefinanceandadvisorycoveringmergersandacquisitions,equityanddebtfundraising,capitalmanagementandrestructuring,valuationsaswellastake-overoffers.HestartedhiscareerasCorporateFinanceExecutivewiththethenSimeMerchantBankersBerhadin1997.Thereafter,hewaswithCommerceInternationalMerchantBankersBerhad(nowknownasCIMBInvestmentBankBerhad)priortojoiningIGBin�004.Currently,heisinvolvedincorporatefinanceaswellasfinanceandaccountsofKrisAssetsgroup.

HeholdsaBachelorofEconomics(FirstClassHonours)fromUniversityofMalayaandisaFellowoftheAssociationofCharteredCertifiedAccountants.

��IGB Real Estate Investment TrustAnnual Report 2012

ProfileofManagement(cont’d)

RENNIE LEE CHAI TINHeadofOperations/Leasing(MidValleyMegamall)

RennieLeeChaiTinistheHeadofOperations/Leasing(MidValleyMegamall)oftheManager.SheisalsotheGeneralManagerofMVC.

ShejoinedMVCin1995.Shehasapproximately�0yearsofworkexperienceinleasingandoperationswithintheretailindustry.SheiscreditedwithbeingpartofthefoundingteaminthemarketingofMidValleyCity.HerpreviousworkexperienceincludestheleasingandmarketingofMahkotaParadeinMalacca,SubangParadeandIOIShoppingcentresinKualaLumpur.ShewasakeymemberofMidValleyMegamallpre-openingteam.

KO CHAI HUATHeadofMarketing(MidValleyMegamall)

KoChaiHuatistheHeadofMarketing(MidValleyMegamall)oftheManager.HeisalsotheDirectorofDesignofMVC.

HejoinedMVCin1999.Hehasapproximately�5yearsofworkexperienceinvisualmerchandisingaswellasadvertisingandpromotion.HewasformerlyVisualMerchandisingManageratAtriaShoppingCentreinKualaLumpur.Hedirects,conceptualiseandleadsalldesignsetupsforpromotionalactivitiesandeventsinMidValleyMegamall.HewasakeymemberofMidValleyMegamallpre-openingteam.HeholdsaDiplomainFineArts.

GABRIELLE TAN HUI CHWEENHeadofMarketing(TheGardensMall)

GabrielleTanHuiChweenistheHeadofMarketing(TheGardensMall)oftheManager.SheisalsotheDirectorofMarketingofMVCG.

SheholdsaBachelorofArtsinBusinessEconomicsfromtheUniversityofExeter,UnitedKingdomandaBachelorofFineArtsdegreeinfashiondesignand marketing from the American Intercontinental University, London, United Kingdom. She joined MVCG as the Head of Marketing in �007 andsubsequentlyassumedtheroleofDirectorofMarketing.SheoverseestheadvertisingandpromotionsactivitiesaswellasthepublicrelationsinitiativesatTheGardensMall.SheisalsoaDirectorofMVCG.

TINA CHAN LAI YINHeadofComplianceCompanySecretary

TinaChanistheHeadofComplianceandtheCompanySecretaryoftheManager.

Shehasabroadknowledgeandskill-baseincorporatesecretarialwork,havingdealtwithawiderangeofcorporateexercisesinthecourseofher�0yearsworkingexperience.SheispresentlytheCompanySecretaryof IGBgroup,apositionwhichshehasheldsince1997.SheheadsthecorporatesecretarialdivisionandisresponsiblefortheefficientadministrationofIGBgroup,particularlywithregardtoensuringcompliancewithstatutoryandregulatoryrequirementsincludingkeyareasrelatingtogovernanceandcompliancestructureswhichareimplementedthroughoutthegroup.Shealsooverseesthein-houseshareregistrardepartmentofIGB.SheisalsotheCompanySecretaryofKrisAssetsgroup.PriortojoiningIGB,shehadworkedinalegalfirm,RahmanHashim,V.T.RavindranandPartnerswhereshewastheCompanySecretarycumAdministratorandwaslaterattachedtoTan&Tan,herlastpositiontherebeingtheJointCompanySecretarywhereshehadbeensignificantlyinvolvedinthefloatationofTan&Tanin1993(thelistingstatusofwhichwasassumedbyGoldisfollowingthecompletionofthemergerbetweenTan&TanandIGBin�00�).

SheisanAssociateofTheInstituteofCharteredSecretariesandAdministrators.


Annual Report 2012

Manager’sReport

TheManagerofIGBRealEstateInvestmentTrust(“IGBREIT”),IGBREITManagementSdnBhd(“theManager”),ispleasedtosubmittheirreportand

auditedfinancialstatementstounitholdersofIGBREITforthefinancialperiodended31December�01�.

PRINCIPAL ACTIVITY AND INVESTMENT OBJECTIVES

IGBREITwasconstitutedpursuanttothetrustdeeddated18July�01�(“theDeed”)between IGBREITManagementSdnBhdandAmTrustee

BerhadandlistedonMainMarketofBursaMalaysiaSecuritiesBerhadon�1September�01�.Theprincipal investmentpolicyof IGBREIT isto

invest,directlyandindirectly,inadiversifiedportfolioofincomeproducingrealestateusedprimarilyforretailpurposesinMalaysiaandoverseasas

wellasrealestate-relatedassets.Realestateusedprimarilyforretailpurposeswouldincluderetailpropertiesandmixeduseddevelopmentswith

aretailcomponent.

Theprimaryobjectiveof IGBREIT istoprovideunitholderswithregularandstabledistributions,sustainable longtermunitprice,distributable

incomeandcapitalgrowth,whilemaintaininganappropriatecapitalstructure.

Investmentstrategies

TheManagerintendstoincreasetheincomeandconsequentlythevalueoftheassets,throughthefollowingstrategies:

• Activeassetmanagementstrategy

- ensuredcontinuedhighshoppertrafficatmalls;

- continualimprovementofrentalrateswhilemaintaininghighoccupancyrates;

- deliverqualityservicestotenantsandmaintainstrongtenantrelationship;

- aimed at improving operational efficiency and reducing operating cost without compromising on quality of services to tenants and

shoppers;and

- increasingnetlettableareaviaassetenhancementinitiatives.

• Acquisitiongrowthstrategy

- exploreacquisitionopportunitiesifsuchopportunitiesfitwithintheinvestmentcriteriaandinvestmentobjectivesofIGBREIT;and

- focusonacquisitionsthatareimmediatelyyieldaccretive,butwillalsoconsiderthosethatarenotimmediatelyyieldaccretivethatwillstill

addvaluetounitholdersoverthelongterm.

• Capitalandriskmanagementstrategy

- adoptandmaintainanappropriategearinglevelandactiveinterestratemanagementstrategy;

- diversifysourcesofdebtfundingtotheextentappropriate;

- maintainareasonablelevelofdebtservicecapability;

- securefavourabletermsoffunding;

- managingitsfinancialobligations;and

- managingtheexposurearisingfromadversemarketinterestrates,suchasthroughfixedrateborrowingstooptimisethecostofcapital.

REVIEW FOR FINANCIAL PERIOD ENDED 31 DECEMBER 2012

TheManagerconfirmedthatIGBREIThasachieveditsinvestmentobjectiveforthefinancialperiodfromdateofestablishment,�5July�01�to31

December�01�andthereisnochangeinthestrategiesadoptedasdisclosedinIGBREITinitialpublicofferingprospectus.

Therearenosignificantchangesinthestateofaffairsofthefundduringthefinancialperiodended31December�01�anduptothedateofthis

reportotherthanthosedisclosedinthefinancialstatements.


Manager’sReport(cont’d)

MALAYSIA RETAIL INDUSTRY REVIEW AND OUTLOOK

The world economic environment remained challenging in the third quarter of �01�. Amid the challenging economic conditions, the Malaysian

economyrecordedagrowthof5.�%(�Q,�01�:5.6%)duringthethirdquarterof�01�.Goingforward,themorechallenginginternationalenvironment

wouldpresentriskstoMalaysia’sgrowthprospects.Nevertheless,domesticdemandisexpectedtocontinuetobetheanchorofgrowth,supportedby

theexpansioninprivateconsumptionandinvestment.Publicspendingandinvestmentactivityarealsoexpectedtolendsupporttogrowth(Source:

EconomicandFinancialDevelopmentsinMalaysia,BankNegaraMalaysia).TheConsumerPriceIndex(CPI)forofNovember�01�showedanincreaseof

1.3%to105.5from104.1forthesamemonthin�011.CPIfortheperiodJanuary-November�01�increasedby1.7%to104.9comparedwith103.1in

thesameperiodin�011.ThisincreasewasbroughtaboutbyincreasesintheindicesofallthemaingroupsexceptthoseofCommunication(-0.7%)and

Clothing&Footwear(-0.6%).(Source:TheMalaysianEconomyinBrief,DepartmentofStatistics,Malaysia)

Afterconsideringcontinuedglobaleconomicfears,resilientdomesticdemandandmoderatedomesticinflation,BankNegaraMalaysiahasdecidedto

maintainitskeyovernightpolicyrate(OPR)at3%onitsmeetingon6September�01�.Consumerconfidenceisholdingupstrong,andthisisexpected

tocontinue,withtheConsumerSentimentsIndex(CSI)havingended3Q�01�at118.3points(3.4pointshigherquarteronquarter).

TheretailsectorinGreaterKualaLumpurcontinuestooutperformotherpropertysectors,evidencedbycontinuedinstitutionalinvestmentinterestin

qualityassetsandthereceptiontotheIGBREITbyinvestors.ParadigmandSetiaCityMall,thetwomajorretailcompletionssincethebeginningof�01�,

bothopenedto90%+levelsofoccupancy.SixnewcompletionsincludingNuSentralareexpectedin�013,increasingtotalretailsupplyby6%.Average

occupancyrateforasampleof5�significantretailcentersimprovedbynearly100basispointsto89.5%,partlydrivenbyalackofnewsupplyandstrong

demandforexistingretailspace.

Recentpatternsofdevelopmenthavefocusedaroundemergingtownshipsorareaspreviouslyunderservedbyqualityretailspace,andthistrendis

expectedtocontinue.Competitionamongso-called‘regional’retailcentresofabove1millionsqftnetlettableareaisconsiderable,withatleast3to

4suchadditionalcentersscheduledforcompletionby�016/�017.Primerentshaveincreasedbynearly150%overthepastdecade.Thelastroundof

notableincreaseswasin�010andsoexpectationsareforanotherroundofrentalgrowthin�013,atleastintheleadingcentres.

�01�sawtheopeningoftwosuburbanmallsi.e.SetiaCityMallandParadigm,bothlocatedinhighlypopulatedsuburbs,atstrongoccupancyratesof

over90%.Thisindicatedretailers’demandforqualitymallswithgoodmanagementandlargecatchmentareas.Malaysiaisincreasinglybecomingan

importantexpansionbaseforretailersfromtheWest,whoonthebackoftheEurozonesovereigndebtcrisiswhichhasaffectedretailsalesinthatregion,

arelookingeastforgrowthandsurvival.Goingforward,itisanticipatedthatMalaysiawouldseemoreinternationalretailersventuringintothemarket

directlyandmaynotviathetraditionalgatewaysofHongKongandSingapore.

Thenumberofprime-grademallsintheKlangValleyisscarceandtheyieldsofthesemallshavebeencompressed.Whilstthesemallsrarelybecome

availableforsaleinthemarket,itisanticipatedthatprime-grademallsintheKlangValleyarebeingsoughtafterbybothinvestorsandretailers.

(Source:CBRE,Malaysia)

MATERIAL LITIGATION

TheManagerisnotawareofanymateriallitigationsincethebalancesheetdateasat31December�01�uptothedateofthisreport.

CIRCUMSTANCES THAT MATERIALLY AFFECT THE INTERESTS OF UNITHOLDERS

Therearenocircumstanceswhichmateriallyaffecttheinterestsoftheunitholders.


Annual Report 2012

CorporateGovernanceStatement

IGBRealEstateInvestmentTrust(“IGBREIT”)isaREITestablishedinMalaysiaandconstitutedbythedeedoftrustdated18July�01�enteredintobetween

IGBREITManagementSdnBhd(the“Manager”)andAmTrusteeBerhad(the“Trustee”)andregisteredwiththeSecuritiesCommissionMalaysia(“SC”)on

�5July�01�(“Deed”).IGBREITwasestablishedwiththeprincipalinvestmentpolicyofinvesting,directlyandindirectly,inadiversifiedportfolioofincome

producingrealestateusedprimarilyforretailpurposes(includingretailpropertiesandmixed-usedevelopmentswitharetailcomponent)inMalaysia

andoverseas,aswellasrealestate-relatedassets,withthekeyobjectiveofprovidingunitholderswithregularandstabledistributions,sustainablelong

termunitpriceanddistributableincomeandcapitalgrowth,whilemaintaininganappropriatecapitalstructure.

IGBREITwaslistedontheMainMarketofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)on�1September�01�followingthecompletionofthe

acquisitionofMidValleyMegamallandTheGardensMall(collectively,“Properties”)on�0September�01�.AsIGBREITisanewlyestablishedREIT,and

exceptfortheProperties,IGBREIThasnothadanyportfolioofrealestatesinceestablishment.

TheBoardofDirectorsoftheManager(“Board”) iscommittedtoensurethatgoodcorporategovernanceispractisedwiththeultimateobjectiveof

protectingandenhancingunitholders’valueandthe longtermvalueof IGBREIT.Thepoliciesandpracticesof theManager, supportedbyexisting

internalcontrolprocesses,areregularlyauditedandreviewed,toensuretransparencyandaccountability.

ThefollowingsectionsdescribetheManager’scorporategovernancepoliciesandpractices,encompassingmeasuressetoutinSC’sGuidelinesonReal

EstateInvestmentTrusts(“REITGuidelines”),BursaSecurities’MainMarketListingRequirements(“MMLR”)andMalaysianCodeonCorporateGovernance

�01�(“MCCG�01�”).Exceptforthedeparturesexplainedinthisstatement,theDirectorsbelievethattheManagerhascompliedinallsubstantialrespects

withthebestpracticesofMCGG�01�andtheprovisionsinMMLR.

I. THE MANAGER

IGBREITisexternallymanagedandadministeredbytheManagerandaccordingly,ithasnopersonnelofitsown.TheManagerappointsexperienced

andqualifiedpersonneltohandletheday-to-dayoperationsofIGBREIT.AllDirectorsandemployeesoftheManagerareremuneratedbythe

Manager and not IGB REIT.The Manager also manages and supervises the service providers including the property manager, who provides

propertymanagement,marketingandmanagementservicesforthePropertiespursuanttothepropertymanagementagreement.

TheManagerisrequiredtoensurethatthebusinessandoperationsofIGBREITarecarriedoutandconductedinaproper,diligentandefficient

manner,andinaccordancewithacceptableandefficaciousbusinesspracticesintherealestateinvestmentindustryinMalaysia.Subjecttothe

provisionsoftheDeed,theManagerhasfullandcompletepowerofmanagementovertheassetsandliabilitiesofIGBREIT.

TheprimaryroleoftheManageristosetthestrategicbusinessdirectionandriskmanagementofIGBREITandmakingrecommendationsto

theTrusteeonacquisitions,divestmentsandenhancementofassetsofIGBREITinaccordancewithitsstatedbusinessstrategyandinvestment

criteria.

TheManager’smainresponsibilityistoseektoincreasetheincomeand,consequently,thevalueofthePropertiesthroughthefollowing:

(a) optimisingrentalrates,occupancyratesandnetlettableareasofthePropertiesinordertoimprovethereturnsfromIGBREIT’sproperty

portfolio;

(b) sourcing for and acquiring properties that fit within IGB REIT’s investment strategy to enhance returns to unitholders and improve

opportunitiesforfutureincomeandnetassetvaluegrowth;and

(c) endeavouringtoemployanappropriatemixofdebtandequityinfinancingacquisitions,andmanagingrefinancingriskandinterestrate

riskbyutilisinginterestratehedgingstrategiesincompliancewithREITGuidelines.


CorporateGovernanceStatement(cont’d)

II. BOARD OF DIRECTORS (“BOARD” or “DIRECTORS”)

(a) The Board

TheManagerisledandmanagedbyanexperiencedBoardwithawideandvariedrangeofexpertise.

TheBoardhastheoverallresponsibilityformanagingandgoverningtheManagerandIGBREITinthebestinterestsofunitholdersand

stakeholders.TheBoardprovidesleadershiptotheManager,setsthestrategicdirectionsandoverseesthemanagementofIGBREIT.

TheBoardassumes,amongothers,thefollowingkeyroles:

(i) Setobjectives,goalsandstrategicplansfortheManagerandIGBREITwithaviewofmaximisingunitholders’value.

(ii) FormulatepoliciesandoverseetheproperconductoftheManager(includingbudgetingapprovalandallotherfinancialmatters).

(iii) OverseetheconductofIGBREIT’sPropertiestoevaluatewhethertheyareproperlymanaged.

(iv) Consider management’s recommendations on key issues including acquisitions, divestments, funding and significant capital

expenditure.

(v) Overseetheriskmanagementprocesses, internalcompliancecontrolsand integrityofmanagement informationsystemsof the

ManagerandIGBREIT.

(vi) Monitorcompliancewithallrelevantlaws,legislativeandregulatoryrequirements(includingcontinuousdisclosure).

(vii) Determineandapprovethedistributionamountstounitholders.

TheBoardhasadoptedasetofinternalguidelines,whichsetoutauthoritylimitsfor,amongothers,capitalexpenditure,newinvestments

anddivestments,andoperationofbankaccounts.TheBoardapprovestransactionsexceedingcertainlimits,whiledelegatingauthorityfor

transactionsbelowthoselimitstotheManagingDirector(“MD”)andtheChiefExecutiveOfficer(“CEO”).Fortransactionsbelowacertain

level,theauthorityisdelegatedtothemanagementtofacilitateoperationalefficiency.

(b) Board Composition and Balance

TheDirectorswithproperty investmentandcommercialexperiencewithdiverseacademicbackgroundsprovideacollective rangeof

skillsandexpertisewhichisvitaltoeffectivelyleadtheManagerandIGBREIT.AbriefprofileofeachDirectorispresentedintheProfileof

Directors.

TheBoardasatthedateofthisstatementconsistsof9members;5Non-ExecutiveDirectors(“NEDs”)and4ExecutiveDirectors(“EDs”),with

3ofthe5NEDsbeingindependentDirectors(“INEDs”).ThisisincompliancewithMMLR’srequirementtohaveatleastonethirdofthe

BoardcomprisedofINEDs.TheEDsandNEDsareequalmembersoftheBoard,bothhavingfiduciarydutiestounitholdersandhaveoverall

collectiveresponsibilityforthedirectionandperformanceoftheManagerandIGBREIT.

ThereisaclearidentifiablerolesandresponsibilitiesforChairmanoftheBoard,MDandCEO.Thisistoensureanappropriatebalanceof

powerandauthoritytofacilitateeffectiveoversightandclearsegregationofduties.TheChairmanoftheBoardisanINED.Heassumes

responsibilityforthemanagementoftheBoardandensuresthatmembersoftheBoardandthemanagementworktogetherwithintegrity

and competency, and that the Board engages the management in constructive debate on strategies, business operations, enterprise

risksandotherplans.TheMDasarepresentativeoftheBoard,togetherwiththeCEO,isaccountabletotheBoardandresponsibleover

thebusinessdirectionandthestrategyimplementationofIGBREIT.TheCEOhastheoverallresponsibilityfortheday-to-dayoperational

managementofIGBREIT,includingexecutionoftheagreedbusinesspoliciesanddirectionssetbytheBoardandofalloperationaldecisions

inmanagingtheManagerandIGBREIT.

TheINEDs,allofwhomarepersonsofhighcalibreandintegrity,playimportantrolesbyexercisingindependentjudgementandobjective

participation in theproceedingsanddecision-makingprocessesof theBoard.Thepresenceof INEDs fulfilsapivotal role incorporate

accountabilitytoensurethattheinterestsofminorityunitholdersareproperlysafeguarded.Theothernon-INEDs(“NINEDs”)alsobringwith

themawiderangeofessentialbusinessandfinancialexperiencerelevanttotheManagerandIGBREIT.


Annual Report 2012


TheBoardisoftheviewthattakingintoaccountthenatureandscopeoftheoperationsoftheManager,thecurrentnumberof9Directors

remainsoptimumandconduciveforeffectivedeliberationsatBoardmeetingsandforefficientconductofBoardmeetings.

(c) Board Meetings and Access to Information

Directors are expected to prepare for, attend, and contribute meaningfully in all Board and applicable Board Committee meetings in

ordertodischargetheirobligations.Consistentwiththeirfiduciaryduties,Directorsareexpectedtomaintaintheconfidentialityofthe

deliberationsoftheBoardanditsCommittees.

Board meetings are scheduled at least once every quarter, to discuss and review IGB REIT’s business and affairs, with a focus on its

performanceandresultsaswellasmattersofmaterialconsequenceforIGBREITanditsunitholders.Additionalmeetingsmaybeconvened

aswarrantedbyspecificcircumstances.TofacilitateparticipationattheBoardmeetings,Directorsmayattendinperson,viatelephoneor

video-conference.BoardmeetingsarealsosupplementedbyresolutionscirculatedtotheDirectorsfordecisionbetweenthescheduled

meetings.TheBoardmetonceduringthefinancialperiodended31December�01�whichwasattendedbyallDirectors.

DirectorsreceiveagendatogetherwithafullsetofBoardpaperscontaininginformationrelevanttothebusinessofthemeetingsahead

ofthescheduledmeetingstoenableDirectorstoperuse,obtainadditionalinformationand/orseekfurtherexplanationsorclarificationon

thematterstobedeliberated.ThekeymanagementofficersoftheManagerareinvitedtoattendBoardmeetingstopresentreportson

mattersrelatingtotheirareasofresponsibility,andtobriefandprovidedetailstotheDirectorsonrecommendationsorreportssubmitted

totheBoard.Intheeventofpotentialconflictofinterest,theDirectorinsuchpositionwillmakeadeclarationinthemeetingandabstain

fromdeliberationanddecisionoftheBoardonthesubjectproposal.MatterstobeconsideredbytheBoardwillbeadoptedonthebasisof

amajorityofvotes.Inthecaseofanequalityofvote,theChairmanoftheBoardwillhaveacastingvote.ArecordoftheBoard’sdeliberation

oftheissuesdiscussedandconclusionsreachedindischargingitsdutiesandresponsibilitiesiscapturedintheminutesofeachmeeting.

MinutesofeachBoardmeetingarecirculatedtoeachBoardmemberpriortoconfirmationoftheminutesinthenextBoardmeeting.

DirectorsarealsonotifiedofanyannouncementreleasedtoBursaSecuritiesandtheimpendingrestrictionindealingwiththesecurities

ofIGBREITpriortotheannouncementofthefinancialresults.Directorsarealsoexpectedtoobserveinsidertradinglawsatalltimeseven

whendealingwithsecuritieswithinthepermittedtradingperiod.

DirectorshavefullandunrestrictedaccesstoallinformationandrecordsoftheManagerandIGBREITaswellastheadviceandservices

ofthemanagementandcompanysecretaryinfurtheranceoftheirduties.Directorsmayseekexternallegalorindependentprofessional

adviceonanymatterconcernedwiththedischargeoftheirresponsibilitiesastheymaydeemnecessaryandappropriate.

(d) Board Committees

The Board has entrusted specific responsibilities to several Board Committees, which operate within defined terms of reference.The

functionsandtermsofBoardCommitteesaswellasauthoritydelegatedbytheBoardtotheCommitteesarereviewedfromtimetotime

toensurethattheyarerelevantandup-to-date.TheCommitteesmeetascircumstancesdictate.ThechairmanoftherespectiveBoard

Committees reports to theBoardonanysalientmattersnotedby theCommitteesandwhich require theBoard’snotice,directionor

approval.TheminutesofCommittees’meetingsareincludedintheBoardpapers.

ThecompositionofBoardCommittees,theirattendanceattheCommittees’meetingsandtermsofreferencewereasfollows:

(i) AuditCommittee(“AC”)

ACcomprises3INEDsandaNINED,namelyHalimbinHajiDin(Chairman),TanSriDato’Dr.LinSeeYan,LeChingTai@LeeChen

ChongandTanLeiCheng,allofwhomhavetheappropriateaccountingexperienceorrelatedfinancialmanagementexpertise.

Withanindependentcomponentof75%andcomprisedofNEDs,thecompositionofACisfullycompliantwithMMLR.

TheroleofACistoassisttheBoardinfulfillingitsoversightresponsibilitiesforthefinancialreportingprocess,thesystemofinternal

controlandtheauditprocessoftheManagerandIGBREITaswellastheManager’sprocessformonitoringcompliancewithlaws

andregulations.AChasthepowertoconductorauthoriseinvestigationsintoanymatterswithinitstermsofreference.


ACmeetsat leastquarterly.ACmetonce in�01�andJanuary�013toassist theBoard indischarging its responsibility for the

integrityoftheCompany’squarterlyandyear-endfinancialresults,theassessmentoftheeffectivenessandefficiencyoftheinternal

controlsandgovernanceprocessesofIGBREITandmonitoringtheeffectivenessoftheinternalandexternalauditors.InJanuary

�013,ACalsometindependentlywiththeexternalauditorswithoutthepresenceofExecutiveBoardandmanagement.

(ii) NominationCommittee(“NC”)

NCcomprises3INEDsandaNINED,namelyTanSriDato’Dr.LinSeeYan(Chairman),HalimbinHajiDin,LeChingTai@LeeChen

ChongandTanLeiCheng.

NCrecommendssuitablecandidatesforappointmentstotheBoard,includingCommitteesoftheBoard.NCalsoconductannual

review of the structure, size and composition of the Board (including skills, knowledge, experience and gender diversity), the

performanceoftheBoard,itsCommitteesandindividualDirectorsandthoseDirectorswhoaredueforre-election/re-appointment

attheManager’sannualgeneralmeeting(“AGM”)aswellasreviewBoard’ssuccessionplans.

NCmeetsasandwhenrequired,andatleastonceayear.NCdidnotmeetin�01�asNCwasformedinJanuary�013.

(iii) RemunerationCommittee(“RC”)

RCcomprises3INEDsandtheMD,namelyTanSriDato’Dr.LinSeeYan(Chairman),HalimBinHajiDin,LeChingTai@LeeChen

ChongandRobertTanChungMeng.

RCrecommendstotheBoardthepolicyframeworkontermsofemploymentandonallelementsoftheremunerationofExecutive

Board. RC is authorised to review and approve the annual salary increments and bonuses of Executive Board, CEO and key

managementofficers.RCalsoreviewsNEDs’feesandmeetingallowancesandthereuponrecommendstotheBoardforapproval.

NoDirectorswillbeinvolvedindecidinghisorherownremuneration.

RCmeetsasandwhenrequired,andatleastonceayear.RCdidnotmeetin�01�asRCwasformedinJanuary�013.

(iv) InvestmentWorkingGroup(“IWG”)

TheIWG,comprisingtheExecutiveBoardandCEO,istaskedwiththeresponsibilitiestoreview,assessandconsiderinvestmentand

divestmentstrategiesofIGBREIT,withanaimtogrowIGBREITandimprovedistributionyields.

(e) Board Appointment and Evaluation

TheManager’sArticlesofAssociation(“AA”)providesthattheBoardhasthepowertoappointanypersontobeaDirector,eithertofilla

vacancyorasadditiontotheexistingDirectors.ShareholdersoftheManagermaybyordinaryresolutionremoveanyDirectorandappoint

anotherpersoninhisorherstead.OnethirdoftheBoardissubjecttoretirementbyrotationateachAGMwiththeexceptionofthefirst

AGMwherebyallDirectorsshallretirefromoffice.AretiringDirectorshallbeeligibleforre-election.TheDirectorstoretireineachyearare

thosewhohaveremainedinofficethelongestsincetheirlastelectionorappointment.Directorsover70yearsofagearealsorequiredto

submitthemselvesforre-appointmentannuallyincompliancewithSection1�9(6)oftheCompaniesAct1965.

Directorsarenotappointedforafixedterm.TheBoarddoesnotimposeatermoflimitation.Termlimitsholdthedisadvantageoflosing

theDirectorswhohavebeenabletodevelop,overaperiodoftime,increasinginsightintotheoperationsoftheManagerandIGBREIT,

andthereforeprovideanincreasingcontributiontotheBoardasawhole.

TheBoard issatisfiedthattheBoardaspresentlyconstituted isofsufficientsizeanddiversitywiththeappropriatemixofexperience,

competenciesandskillstocarryoutitsresponsibilities.TheBoardisalsooftheviewthattheBoardasawholehasperformedwellwith

theindividual’screditabilitytoaddvaluetotheBoard’sdeliberationsandexerciseobjectivejudgementindecision-makingprocesses,and

eachoftheDirectorhascommittedsufficienttimetothebusinessoftheManagerandcontributedtothegovernanceandoperationsof

theManagerandIGBREIT.AllINEDsasattheendof�01�areconsideredbytheBoardtobewhollyindependentofanypersonalbusiness

connectionwiththeManager.

InaccordancewithMMLR,eachmemberoftheBoardholdsnotmorethan5directorshipsinpubliclistedcompaniessaveforTanSriDato’

Dr.LinSeeYanwhowillcomplyinthecourseof�013.



Annual Report 2012

(f) Directors’ remuneration

TheremunerationoftheDirectorsispaidbytheManagerandnotIGBREIT.ThedeterminationoftheremunerationoftheDirectorsisa

matterfortheBoard.NoDirectormakesadecisionrelatingtohisorherownremuneration.Theremunerationstructuresaredesignedas

suchtoattractandretainDirectorsofthecalibreneededtosuccessfullycarryouttheManager’soperations.

The Executive Board and CEO have entered into service agreements with the Manager.The service agreement covers the terms of

employment, specifically salary and other benefits. NED’s remuneration reflects the experience, expertise and level of responsibilities

undertakenbytheindividualNEDconcerned.

Ingeneral,theremunerationoftheExecutiveBoardandCEOisstructuredonthebasisof linkingrewardstocorporateandindividual

performance.TheremunerationofNEDstakestheformprimarilyoffees,whichareagreedbytheBoardandapprovedbytheshareholders

of theManager.NEDsalso receivemeetingallowances forparticipation inmeetingsof theBoardandanyCommitteesmeetings.The

Directors’feespaidtoNEDsforFY�01�totalledRM1�7,500.

(g) Directors’ Continuing Education

TheBoardfirmlybelievesinthecontinuingeducationofindividualDirectorsformaintainingacurrentandeffectiveBoard.Accordingly,the

BoardencouragesDirectorstoparticipateinongoingeducationaswellasparticipationinaccrediteddirectoreducationprogrammes.

During FY�01�, all Directors had attended various training programmes, conferences and workshops which they have individually or

collectivelyconsideredas relevantanduseful incontributing to theeffectivedischargeof theirdutiesasDirectors.TheDirectorshad

attended/participatedinoneormoreofthefollowingtrainingprogrammes/conferences/workshopsin�01�:

• InternationalFinancialReportingStandards(“IFRS”)Convergence

• SingaporeInstituteofDirectors(“SID”)ConferenceonCorporateGovernanceintheNewNormal,Singapore

• SIDConferenceonListedCompanyDirectorProgrammeModule4onNominatingCommitteeEssentials

• SIDConferenceonListedCompanyDirectorProgrammeModule5onRemunerationCommitteeEssentials

• IntroductiontotheCompetitionAct�010

• FinancialInstitutionsDirectors’EducationProgramme–InternalCapitalAdequacyAssessmentProcess(“ICAAP”)

• UpdateonrecentfloodinThailandandnaturalcatastrophepoolandanoverviewofICAAP

• CreditDerivativesProducts

• GrowthThroughInnovation

• BursaSecurities’Half-dayGovernanceProgramme

• TalkonCustomerAnalyticsEvent

TheDirectorsarealsokeptinformedofthevariousrequirementsandupdatesissuedbyregulatoryauthorities.

III. INVESTOR RELATIONS AND UNITHOLDERS COMMUNICATION

TheBoardacknowledgestheneedforunitholdersandinvestorstobeinformedofallmaterialbusinessmattersaffectingIGBREIT.Inadditiontothe

variousdisclosuresandannouncementsmadetoBursaSecurities,thetimelyreleaseofquarterlyandannualfinancialresultsprovidesunitholders

andinvestingpublicwithanoverviewofIGBREIT’sperformance.TheManagerhasawebsiteatwww.igbreit.comfromwhichinvestors,analysts

andunitholderscanaccessdetailedinformationonIGBREIT’sbusinessesandlatestdevelopments.Allinformationreportedtothemarketvia

theregulatoryinformationserviceappearsassoonaspracticableonthecorporatewebsitetopromoteaccessibilityofinformationtoallmarket

participants.

Management of the Manager conducts regular dialogues, briefings and meetings with fund managers, financial analysts and the media to

provideupdatesandnewdevelopmentsaboutIGBREIT,basedonpermissibledisclosures.However,informationthatisprice-sensitiveorthat

mayberegardedasundisclosedmaterialinformationaboutIGBREITisnotdisclosedinthesesessionsuntilaftertheprescribedannouncement

toBursaSecuritieshasbeenmade.

WhilsttheManageraimstoprovidesufficientinformationtounitholdersandinvestorsaboutIGBREIT,italsorecognisesthatunitholdersand

investorsmayhavespecificqueriesandrequireadditionalinformation.Anyenquiriesoninvestorrelatedmattersmaybedirectedtothisemail

address:[email protected].



IV. ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

TheBoardiscommittedtoprovidingabalanced,clearandcomprehensiveassessmentofthefinancialperformanceandprospectsofIGB

REITinalldisclosuresmadetostakeholdersandregulatoryauthorities.

TheBoard,assistedbyAC,overseesthefinancialreportingprocessandthequalityofthefinancialreportingoftheManagerandIGBREIT.

ACreviewsandmonitorstheintegrityofIGBREIT’sannualandinterimfinancialstatements.ItalsoreviewstheappropriatenessofIGBREIT’s

accountingpoliciesandthechangestothesepoliciesaswellasensuresthesefinancialstatementscomplywithaccountingstandardsand

regulatoryrequirements.

TheStatementbyTheManagerinrespectofthepreparationoftheannualauditedfinancialstatementsofIGBREITfortheperiodended

31December�01�issetoutintheFinancialStatement.

(b) Internal Control

TheBoard is responsibletomaintainasoundsystemof internalcontrols thatprovidesreasonableassuranceofeffectiveandefficient

operations,andcompliancewithlawsandregulations,aswellaswithinternalprocedurestosafeguardunitholders’investmentandIGB

REIT’sassets.Whileacknowledgingtheirresponsibilityforthesystemofinternalcontrol,theDirectorsareawarethattheManager’ssystem

isdesignedtomanageratherthaneliminaterisksandthereforecannotprovideabsoluteassuranceagainstmaterialmisstatement,fraud

andloss.

TheManager’s internalaudit function isundertakenbythe internalauditdivisionof itsparentcompany, IGBCorporationBerhad.The

internalauditreportsdirectlytoAConmatterspertainingtotheManagerandIGBREIT.

(c) Relationship with the Auditors

Theappointmentoftheauditors,whomaybenominatedbytheManager,mustbeapprovedbytheTrustee.Theauditorsappointedmust

beindependentoftheManagerandtheTrustee.TheremunerationoftheauditorsmustbeapprovedbytheTrustee.

TheBoardmaintains,viatheAC,anactive,transparentandprofessionalrelationshipwiththeauditorsofIGBREIT.IGBREIT’sauditorsreport

theirfindingstomembersoftheACaspartoftheauditprocessonthestatutoryfinancialstatements.TheroleoftheACinrelationtothe

auditorsisdisclosedintheAuditCommitteeReport.

(d) Compliance Officer

TheManagerhasadesignatedcomplianceofficerworkingtowardsensuringthecompliancewithall legislations,rulesandguidelines

issuedbySCandBursaSecuritiesaswellastheDeed.

V. CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS

TheDeedprovidesthattheManager,theTrusteeandanydelegateofeitherofthemshallavoidconflictsofinterestarisingor,ifconflictsarise,shall

ensurethatIGBREITisnotdisadvantagedbythetransactionconcerned.TheManagermustnotmakeimproperuseofitspositioninmanaging

IGBREITtogain,directlyorindirectly,anadvantageforitselforforanyotherpersonortocausedetrimenttotheinterestofunitholders.

Indealingwithanyconflict-of-interestsituationsthatmayarise,theManager’spolicyisthatalltransactionscarriedoutfororonbehalfofIGB

REITaretobeexecutedontermsthatarebestavailabletoIGBREITandwhicharenolessfavourablethanarm’s-lengthtransactionsbetween

independentparties.



Annual Report 2012

Forrelatedpartytransactions(“RPTs”),theManagerhasestablishedprocedurestoensurethattransactionsinvolving,amongothers,theTrustee,

theManager,theDirectors,themajorunitholdersandpersonsconnectedwiththem,areconductedatarm’slengthandonnormalcommercial

terms,whicharegenerallynomorefavourablethanthoseextendedtounrelatedthirdparties,andinaccordancewithallapplicablerequirements

oftheREITGuidelinesand/orMMLRrelatingtothetransactioninquestion.AllRPTsarereviewedbyAConaquarterlybasis.Ifamemberofthe

Boardand/orAChasan interest inatransaction,theDirectorconcerned istoabstainfromparticipating inthereviewandrecommendation

processinrelationtothattransaction.TheManagershalladherestrictlytotheDeedwhichprohibitstheManageranditsrelatedpartiesfrom

votingwiththeirunitsat,orbeingpartofaquorumfor,anymeetingofunitholdersconvenedtoapproveanymatterinwhichtheManagerand

itsrelatedpartieshaveinterestintheoutcomeofthetransactionunlessanexemptionisobtainedfromtheSC.

DetailsoftherelatedpartytransactionsenteredintobyIGBREITduringthefinancialperiodended31December�01�aredisclosedintheNotes

totheFinancialStatements.

VI. CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

InformationonIGBREIT’sCSRactivitiesisdisclosedintheMessagefromtheChiefExecutiveOfficer.



AuditCommitteeReport

FORMATION

TheAuditCommittee(“AC”)wasestablishedbytheBoardoftheManageron7May�01�.

TheroleofACistoassisttheBoardinfulfillingitsoversightresponsibilitiesforthefinancialreportingprocess,thesystemofinternalcontrolandtheaudit

processoftheManagerandIGBREITaswellastheManager’sprocessformonitoringcompliancewithlawsandregulations.

COMPOSITION

ThemembersofACsinceitsestablishmentareasfollows:

EncikHalimbinHajiDin,ACChairman(INED)

TanSriDato’Dr.LinSeeYan(INED)

LeChingTai@LeeChenChong(INED)

TanLeiCheng(NINED)

TERMS OF REFERENCE

ACisgovernedbythefollowingtermsofreference:

(a) Membership

ACmembersshallbeappointedbytheBoardandshallconsistofnotlessthan3members,allofwhommustbeNEDs,withamajorityofthem,

includingthechairman,mustbeindependent.NoalternateDirectorshallbeappointedtoAC.

(b) Authority

ACshall,withinthelimitsofthepolicydeterminedandpowersdelegatedbytheBoard,hastheauthorityto-

(i) investigateanymatterwithinitstermsofreference;

(ii) obtaintheresourcesrequiredtoperformitsduties;

(iii) fullandunrestrictedaccesstoinformation,recordsanddocumentsrelevanttoitsactivities;

(iv) communicatedirectlywiththeexternalandinternalauditors,aswellasemployeesoftheManager;

(v) engage,consultandobtainexternallegalorindependentprofessionaladviceasnecessary;and

(vi) convene meetings with external and internal auditors, property manager or its service providers or all of them whenever deemed

necessary.

(c) Responsibilities

TheresponsibilitiesofACinclude-

(i) reviewandrecommendquarterlyresultsofIGBREITandannualfinancialstatementsofIGBREITandtheManagerfortheBoard’sapproval,

focusingprimarilyon:

• goingconcernassumptions;

• changesandimplementationofnewaccountingpoliciesandpractices;

• majorjudgementalareas,significantandunusualevents;and

• compliancewithaccountingstandardsandregulatoryrequirements.

(ii) reviewwithexternalauditorsofthefollowing:

• auditplansandauditreportsandtheextentofassistancerenderedbyemployeesoftheManager,propertymanageror itsservice

providers;

• evaluationofthesystemofinternalcontrols;

• issuesandreservationsarisingfromaudit;and

• auditfeeandanyquestionsofresignation,dismissalorreappointmentofexternalauditors.


Annual Report 2012

AuditCommitteeReport(cont’d)

(iii) reviewwithinternalauditorsofthefollowing:

• internalaudit’scharterwhichdefinestheindependentpurpose,authority,scopeandresponsibilityoftheinternalauditfunction;

• adequacyandrelevanceofthescope,functions,competencyandresourcesoftheinternalauditfunctionandthenecessaryauthority

tocarryoutitswork;

• auditplanofworkprogrammeandresultsoftheinternalauditprocessesincludingrecommendationsandactionstaken;

• effectivenessofthesystemofinternalcontrols,riskmanagementandgovernanceprocessesincludingcompliancewiththeoperational

manual,REITGuidelinesandMMLR;and

• assessmentoftheperformanceoftheinternalauditfunctionincludingthatofseniorstaffandanymatterconcerningtheirappointment

andtermination.

(iv) reviewRPTsandconflictofinterestsituationsthatmayarise,includinganytransaction,procedureorcourseofconductthatraisesquestions

ofmanagementintegrity.

(v) considerandrecommendthedistributionamountstounitholdersfortheBoard’sapproval.

(vi) reviewallprospectivefinancialinformationprovidedtotheregulatorsand/orthepublic.

(vii) preparereports,ifthecircumstancesariseoratleastonceayear,summarisingtheworkperformedbyACforinclusioninIGBREIT’sAnnual

Report.

(viii) reportpromptlytoBursaSecuritiesonanymatterreportedbyittotheBoardwhichhasnotbeensatisfactorilyresolvedresultinginbreach

ofMMLR.

(ix) actonanymattersasmaybedirectedbytheBoardfromtimetotime.

(d) Meetings

ACshallmeetatleast4timesayearanditsquorummustatalltimescomprisedatleast�INEDs.ACmeetingsmaybeheldbytelephoneor

video-conferenceorbycircularresolution.OtherBoardmembersandmanagementmayattendmeetingsuponinvitationofAC,toassistinits

deliberationsandresolutionsofmattersraised.

Atleasttwiceayear,ACshallmeetwithexternalauditorswithoutthepresenceofExecutiveBoardandemployeesoftheManager.Additional

meetingsmaybehelduponrequestbyanyACmember,internalorexternalauditors.

MinutesshallbekeptoftheproceedingsandtheresolutionsofAC.Minutesshallbesignedbythechairmanandmadeavailablepriortothenext

meetingandapprovedtherein.ACchairmanshallreporttotheBoardonanysalientmattersnotedbyACandwhichrequirestheBoard’snotice,

directionandapproval.ACminutesshallbeincludedintheBoardpapers.

MEETINGS AND ATTENDANCE

ACmetonceinFY�01�andJanuary�013,whichwereattendedbyallmembers.

TheMD,CFO,companysecretary, internalandexternalauditorswere invitedtoACmeetingstopresenttheirrespectivereportstoAC.Theexternal

auditorsattendedtwomeetings,onein�01�andtheother,inJanuary�013,topresenttheAuditors’AuditPlanFY�01�andAuditors’Reportonthe

annualfinancialstatementsof IGBREITforthefinancialperiodended31December�01�.ACalsometalonewithPwCinJanuary�013withoutthe

presenceofMD,CEOandmanagementoftheManagertomakeenquiriesinrelationtomanagement’sco-operationinfinancialreporting,andthestate

ofaffairsofinternalauditfunction.

SUMMARY OF ACTIVITIES

TheactivitiesofACforFY�01�andJanuary�013:

(a) Financial Reporting

(i) ReviewedandrecommendedfortheBoard’sapprovalthequarterlyresultsandannualfinancialstatementsofIGBREIT.


AuditCommitteeReport(cont’d)

(ii) ReviewedandrecommendedfortheBoard’sapprovaltheannualfinancialstatementsoftheManager.

(iii) Reviewedanddiscussedmanagementaccountswithmanagement.

(b) External Audit

(i) Reviewedandapprovedexternalauditors’auditplanandthescopefortheannualaudit.

(ii) RecommendedtotheBoardandendorsedbyTrusteeontheappointmentandremunerationofexternalauditors.

(iii) Reviewedanddirectedfollow-upaction,whenneeded,thefindingsofexternalauditorsontheresultsoftheexternalaudits.

(iv) Reviewedtheextentofassistancerenderedbymanagementandissuesandreservationsarisingfromstatutoryauditwithexternalauditors,

withoutthepresenceoftheMD,CEOandmanagementstaff.

(c) Internal Audit

(i) ConsideredtheIGBInternalauditfunctiontoperformtheinternalauditfunctionfortheManagerandoutlinedthescopeofitswork.

(ii) RecommendedtotheBoardontheappointmentandremunerationoftheinternalauditors.

(iii) Reviewedandapprovedinternalaudit’scharteraswellasannualauditplanwhichcoveredentitiesacrossallleveloperationswithinthe

Manager.

(iv) Reviewedreportsonspecialauditsperformedduringtheperiod.

(d) RPT

(i) ReviewedallRPTenteredintobyIGBREIT.

(ii) Reviewedanyconflictofinterestsituationthatmayariseincludinganytransaction,procedureorcourseofconductthatraisesquestionsof

managementintegrity.

AC’S CONTINUING EDUCATION

ThedetailsoftrainingprogrammeandseminarsattendedbyeachACmemberduringFY�01�aresetoutintheCorporateGovernanceStatementunder

“Directors’ContinuingEducation”.

INTERNAL AUDIT FUNCTION

TheinternalauditfunctionisoutsourcedandundertakenbytheManager’sparentcompany’sinternalauditdivision.Theinternalauditorscarriedout

thefollowingactivitiesduringFY�01�:

(a) PreparedtheannualauditplanforAC’sapproval.

(b) Performedspecialauditasrequestedbymanagementandissuedauditreportsontheresults.

(c) AttendedAC’smeetingtotableanddiscusstheauditreportsandfolloweduponmattersraised.

(d) PerformedcorporategovernancereviewandcompliancewithMMLR,MCCG�01�andREITGuidelines.

ThecostsincurredfortheinternalauditfunctionforFY�01�wereRM35,000.


Annual Report 2012

FinancialReview

SUMMARY OF FINANCIAL RESULTS

Financial Period * Forecast period * Variance 31 December 2012 31 December 2012 RM’000 RM’000 RM’000

TotalRevenue 115,�85 110,718 4,567

NetPropertyIncome 76,174 74,084 �,090

DistributableIncome 6�,333 60,866 1,467

Distributionperunit(DPU)(sen) 1.83 1.79 0.04

AnnualisedDPU(sen) 6.50 6.36 0.14

TOTAL REVENUE


MidValleyMegamall 79,834 78,43� 1,40�

TheGardensMall 35,451 3�,�86 3,165

Total 115,�85 110,718 4,567

NET PROPERTY INCOME


MidValleyMegamall 57,449 56,089 1,360

TheGardensMall 18,7�5 17,995 730

Total 76,174 74,084 �,090

*From20September2012to31December2012.

UTILISATION OF PROCEEDS

Atotalof3.4billionnewunitswereissuedbyIGBREITtosatisfypartofpurchaseconsiderationfortheinvestmentpropertiesi.e.MidValleyMegamalland

TheGardensMalltogetherwiththerelatedassetsasfollows:

Purchase Consideration Cash Consideration Units Consideration RM’000 ‘000 RM’000

MidValleyMegamall 3,440,000 �,730,000 710,000

MidValleyMegamallRelatedAssets 1,58� - 1,58�

TheGardensMall 1,160,000 670,000 490,000

TheGardensMallRelatedAssets 10,977 - 10,977

Total 4,61�,559 3,400,000 1,�1�,559

FINANCIALSTATEMENTS31DECEMBER�01�

Manager’s Report 37

Statement by The Manager 40

Trustee’s Report 41

Independent Auditors’ Report 42

Statement of Financial Position 44

Statement of Comprehensive Income 45

Statement of Changes in Net Asset Value 47

Statement of Cash Flows 48

Notes to the Financial Statements 49


Annual Report 2012

Manager’sReport

TheManagerof IGBRealEstate InvestmentTrust (“IGBREIT”), IGBREITManagementSdnBhd(“theManager”), ispleasedtosubmit their reportand

auditedfinancialstatementstounitholdersofIGBREITforthefinancialperiodended31December�01�.

PRINCIPAL ACTIVITY

IGBREITwasestablishedon�5July�01�pursuanttothedeedoftrustdated18July�01�(“theDeed”)betweentheManagerandAmTrusteeBerhad

(“theTrustee”)andlistedonMainMarketofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)on�1September�01�.Theprincipalinvestmentpolicy

ofIGBREITistoinvest,directlyandindirectly,inadiversifiedportfolioofincomeproducingrealestateusedprimarilyforretailpurposesinMalaysiaand

overseasaswellasrealestaterelatedassets.Realestateusedprimarilyforretailpurposeswouldincluderetailpropertiesandmixeduseddevelopment

witharetailcomponent.

DISTRIBUTION OF INCOME

IGBREIThaddeclaredadistributionperunitforthefinancialperiodended31December�01�of1.83senperunit.

RESERVES AND PROVISIONS

Allmaterialtransferstoorfromreservesandprovisionsduringthefinancialperiodareshowninthefinancialstatements.

DIRECTORS

TheDirectorswhohaveservedontheBoardoftheManager,sincethedateofestablishmentofIGBREITareasfollows:

TanSriDato’DrLinSeeYan

RobertTanChungMeng

TanBoonLee

HalimbinHajiDin

LeChingTai@LeeChenChong

TanLeiCheng

DanielYongChen-I

ElizabethTanHuiNing

TanYeeSeng

DIRECTORS’ BENEFITS

Duringandattheendofthefinancialperiod,noarrangementsubsistedtowhichtheManagerisaparty,withtheobjectorobjectsofenablingthe

DirectorsoftheManagertoacquirebenefitsbymeansoftheacquisitionofunitsinordebenturesofIGBREIToranyotherbodycorporate,otherthan

asdisclosedinDirectors’interest.

Forthefinancialperiodended31December�01�,noDirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthancertaindirectorsreceive

remunerationasaresultoftheiremploymentwithrelatedcorporations).



DIRECTORS’ INTEREST

ThefollowingDirectorsoftheManagerwhoheldofficeattheendofthefinancialperiodhad,accordingtotheregisterofunitholdingsinIGBREIT,

interestsintheunitsofIGBREITasfollows:-

Number of units of RM1.00 each Balance at 25.07.2012 (date of Disposal Balance at establishment) Addition /Transferred 31.12.2012

RobertTanChungMeng

Direct 0 7,�89,081 0 7,�89,081

Indirect 0 1,790,708,8�3 (�,4�3,800) 1,788,�85,0�3

TanLeiCheng

Direct 0 �,�03,74� (350,000) 1,853,74�

Indirect 0 345,7�� 0 345,7��

TanBoonLee

Direct 0 1,989,7�5 0 1,989,7�5

DanielYongChen-I

Direct 0 80�,13� 0 80�,13�

TanYeeSeng

Direct 0 907,�00 (�00,000) 707,�00

ElizabethTanHuiNing

Direct 0 750,000 0 750,000

Otherthanasdisclosedabove,theotherDirectorswhoheldofficeattheendofthefinancialperioddidnothaveinterestsintheunitsofIGBREIT.

OTHER INFORMATION ON THE FINANCIAL STATEMENTS

BeforethefinancialstatementsofIGBREITweremadeout,theManagertookreasonablesteps:

(a) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsand

satisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateallowancehadbeenmadefordoubtfuldebts;and

(b) toensurethatanycurrentassets,otherthandebts,whichwereunlikelytorealiseintheordinarycourseofbusinesstheirvaluesasshowninthe

accountingrecordsofIGBREIThadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.

Atthedateofthisreport,theManagerisnotawareofanycircumstances:

(a) whichwouldrendertheamountswrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebtsinthefinancialstatementsofIGB

REITinadequatetoanysubstantialextent;or

(b) whichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsofIGBREITmisleading;or

(c) whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesofIGBREITmisleadingorinappropriate.

Nocontingentorotherliabilityhasbecomeenforceableor is likelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthe

financialperiodoryearwhich,intheopinionoftheManager,willormayaffecttheabilityofIGBREITtomeetitsobligationswhentheyfalldue.


Annual Report 2012


OTHER INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED)

Atthedateofthisreport,theredoesnotexist:

(a) anychargeontheassetsofIGBREITwhichhasarisensincetheendofthefinancialperiodwhichsecurestheliabilityofanyotherperson;or

(b) anycontingentliabilityofIGBREITwhichhasarisensincetheendofthefinancialperiod.

Atthedateofthisreport,theManagerisnotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementswhichwould

renderanyamountstatedinthefinancialstatementsmisleading.

IntheopinionoftheManager:

(a) theresultsofIGBREIT’soperationsduringthefinancialperiodwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialand

unusualnature;and

(b) therehasnotarisenintheintervalbetweentheendofthefinancialperiodandthedateofthisreportanyitem,transactionoreventofamaterial

andunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsofIGBREITforthefinancialperiodinwhichthisreportismade.

ULTIMATE HOLDING COMPANY

TheDirectorsoftheManagerregardIGBCorporationBerhad,acompanyincorporatedinMalaysiaandlistedontheMainMarketofBursaSecurities,as

theultimateholdingcompany.

AUDITORS

Theauditors,PricewaterhouseCoopers,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfofIGBREITManagementSdnBhdinaccordancewitharesolutiondated�5February�013.

ROBERT TAN CHUNG MENG HALIM BIN HAJI DIN

MANAGINGDIRECTOR DIRECTOR


StatementbyTheManager

IntheopinionoftheDirectorsoftheManager,thefinancialstatementssetoutonpages44to83aredrawnupinaccordancewiththeprovisionsof

theDeed,theSecuritiesCommission’sGuidelinesonRealEstateInvestmentTrusts(“REITGuidelines”),applicablesecuritieslawsandMalaysianFinancial

ReportingStandardsand InternationalFinancialReportingStandardssoas togivea trueand fairviewof thefinancialpositionof IGBREITasat31

December�01�andofitsfinancialperformanceandcashflowsfortheperiodfromthedateofestablishmenton�5July�01�to31December�01�.

ForandonbehalfoftheManager,

IGB REIT MANAGEMENT SDN BHDSignedinaccordancewitharesolutionoftheDirectorsoftheManagerdated�5February�013:

ROBERT TAN CHUNG MENGMANAGINGDIRECTOR

HALIM BIN HAJI DINDIRECTOR

KualaLumpur

STATUTORY DECLARATION

I,ChaiLaiSim,theChiefFinancialOfficeroftheManagerprimarilyresponsibleforthefinancialmanagementof IGBREIT,dosolemnlyandsincerely

declarethatthefinancialstatementssetoutinpages44to83,are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclaration

conscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

CHAI LAI SIM

SubscribedandsolemnlydeclaredbytheabovenamedatKualaLumpuron�5February�013.

Beforeme:


Annual Report 2012

Trustee’sReporttoTheUnitholdersofIGBREIT(EstablishedinMalaysia)

WehaveactedasTrusteeofIGBREITforthefinancialperiodended31December�01�.Inouropinionandtothebestofourknowledge,theManager

hasmanagedIGBREITinaccordancewiththelimitationsimposedontheinvestmentpowersoftheManagerandtheTrusteeundertheDeed,theREIT

Guidelines,applicablesecuritieslawsandotherapplicablelawsduringthefinancialperiodthenended.

WehaveensuredtheproceduresandprocessesemployedbytheManagertovalueandpricetheunitsofIGBREITareadequateandthatsuchvaluation/

pricingiscarriedoutinaccordancewiththeDeedandotherregulatoryrequirements.

We also confirm the income distributions declared during the financial period ended 31 December �01� are in line with and are reflective of the

objectivesofIGBREIT.Incomedistributionshavebeendeclaredforthefinancialperiodended31December�01�asfollows:

1) Incomedistributionof1.83senperunitpayableon�8February�013.

ForandonbehalfoftheTrustee,

AMTRUSTEE BERHAD

TAN KOK CHEENGCHIEFEXECUTIVEOFFICER

KualaLumpur,

Date:�5February�013


IndependentAuditors’ReporttoTheUnitholdersofIGBREIT(EstablishedinMalaysia)

REPORT ON THE FINANCIAL STATEMENTS

WehaveauditedthefinancialstatementsofIGBREIT,onpages44to8�,whichcomprisesthestatementofthefinancialpositionasat31December�01�,

andthestatementsofcomprehensiveincome,changesinnetassetvalueandcashflowsfortheperiodfromthedateofestablishmenton�5July�01�

to31December�01�,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutinnotes1to�7.

DirectorsoftheManager’sresponsibilityforthefinancialstatements

TheDirectorsoftheManagerareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithMalaysian

FinancialReportingStandardsandInternationalFinancialReportingStandards.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheDirectors

determineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’responsibility

Ourresponsibility istoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithapproved

standardsonauditinginMalaysia.Thosestandardsrequirewecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonable

assuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures

selecteddependonourjudgment,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

Inmakingthoseriskassessments,weconsiderinternalcontrolrelevanttotheManager’spreparationandfairpresentationofthefinancialstatement

thatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressingan

opinionontheeffectivenessoftheManager’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthe

reasonablenessofaccountingestimatesmadebytheManager,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.


Annual Report 2012

IndependentAuditors’ReporttoTheUnitholdersofIGBREIT(continued)(EstablishedinMalaysia)

REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of IGB REIT as of 31 December �01� and of its financial

performanceandcashflowsfortheperiodfromthedateofestablishmenton�5July�01�to31December�01�inaccordancewithMalaysianFinancial

ReportingStandardsandInternationalFinancialReportingStandards.

OTHER REPORTING RESPONSIBILITIES

ThesupplementaryinformationsetoutinNote�8onpage83isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnotpart

of thefinancial statements.TheDirectorsof theManagerare responsible for thepreparationof thesupplementary information inaccordancewith

GuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysia

SecuritiesBerhaddated�0December�011(“BursaDirective”). Inouropinion,thesupplementary informationisprepared, inallmaterialrespects, in

accordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

OTHER MATTERS

ThisreportismadesolelytotheunitholdersofIGBREITandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontent

ofthisreport.

PRICEWATERHOUSECOOPERS SOO HOO KHOON YEAN(No.AF:1146) (No.�68�/10/13(J))

CharteredAccountants CharteredAccountant

KualaLumpur

Date:�5February�013


StatementofFinancialPositionasat31December�01�

2012 Note RM’000

Non-current assets Plantandequipment 5 1�,�66

Investmentproperties 6 4,700,000

Total non-current assets 4,71�,�66

Current assets

Tradeandotherreceivables 7 4�,116

Cashandbankbalances 8 137,75�

Total current assets 179,868

Total assets 4,89�,134

Financed by Unitholders’ fund

Unitholders’capital 9 4,�43,085

Accumulatedlosses (759,041)

Total unitholders’ fund 3,484,044

Non-current liabilities

Borrowings 10 1,193,38�

Payablesandaccruals 11 45,987

Total non-current liabilities 1,�39,369

Current liabilities

Borrowings 10 �7,606

Payablesandaccruals 11 141,115

Total current liabilities 168,7�1

Total liabilities 1,408,090

Total unitholders’ fund and liabilities 4,89�,134

Net asset value (“NAV”)

-beforeincomedistribution 3,546,377

-afterincomedistribution 3,484,044

Number of units in circulation (‘000 units) 3,400,000

NAV per unit (RM)

-beforeincomedistribution 1.0431

-afterincomedistribution 1.0�47

Theaccompanyingnotesformanintegralpartofthefinancialstatements.


Annual Report 2012

StatementofComprehensiveIncomeforTheFinancialPeriodFromDateofEstablishmenton�5July�01�to31December�01�

25.07.2012 (date of establishment) to 31.12.2012 Note RM’000

Grossrentalincome 88,119

Otherincome 1� �7,166

Total revenue 115,�85

Utilitiesexpenses (13,459)

Maintenanceexpenses (4,987)

Quitrentandassessment (�,960)

Otheroperatingexpenses 13 (17,705)

Property operating expenses (39,111)

Net property income 76,174

Changesinfairvalueofinvestmentproperties 100,000

Interestincome 315

Net investment income 176,489

Manager’smanagementfees 14 (7,851)

Trustees’fees (88)

Othertrustexpenses (41)

Borrowingcosts 15 (15,�17)

Profit before taxation 153,�9�

Taxation 16 -

Profit after taxation 153,�9�

Othercomprehensiveincome,netoftax -

Total comprehensive income attributable to unitholders 153,�9�

Profit after taxation is made up as follows:

Realised 53,�9�

Unrealised 100,000

153,�9�

Basic earnings per unit (sen) 17 4.51

Diluted earnings per unit (sen) 17 4.50



StatementofComprehensiveIncomeforTheFinancialPeriodFromDateofEstablishmenton�5July�01�to31December�01�(continued)


Totalcomprehensiveincome 153,�9�

Distributionperunit(sen)–final 18 1.83

Incomedistribution

Totalcomprehensiveincomeforthefinancialperiod 153,�9�

Less:Distributionadjustments A (90,959)

Totalavailableforincomedistribution 6�,333

Proposedforincomedistributionof1.83senperunitfor

periodfrom�5July�01�(dateofestablishment)to31December�01� (6�,333)

Balanceundistributed -

NoteA

Distributionadjustmentscomprise:

Changesoffairvalueoninvestmentproperties (100,000)

Manager’smanagementfeepayableinunits 7,851

Amortisationoffit-outincentives 614

Amortisationofcapitalisedborrowingcosts 170

Depreciationofplantandequipment 406

(90,959)



Annual Report 2012

StatementofChangesinNetAssetValueforTheFinancialPeriodFromDateofEstablishmenton�5July�01�to31December�01�

Retained earnings/ Unitholders’ (Accumulated Total capital losses) funds Note RM’000 RM’000 RM’000

As at 25 July 2012 - - -

Totalcomprehensiveincomefortheperiod

attributabletounitholders - 153,�9� 153,�9�

Incomedistribution 18 - (6�,333) (6�,333)

Nettotalcomprehensiveincomefortheperiod

attributabletounitholders - 90,959 90,959

Unitholders’ transactions

Issueofnewunitsatpar 3,400,000 - 3,400,000

Valuationofunitsissuedatfairvalue 850,000 - 850,000

Totalvalueofunitsissued 4,�50,000 - 4,�50,000

Effectoffairvalueadjustment

(duetounitsissued)foracquisition

ofinvestmentproperties* - (850,000) (850,000)

Listingexpenses (6,915) - (6,915)

Increaseinnetassetsresultingfrom

unitholders’transactions 4,�43,085 (850,000) 3,393,085

As at 31 December 2012 9 4,�43,085 (759,041) 3,484,044

* IGBREITadoptspredecessoraccountingasitsaccountingpolicytoaccountforbusinesscombinationsundercommoncontrol.Inaccordancewith

itspolicy,thedifferencebetweenthefairvalueoftheunitsissuedasconsiderationandtheaggregatecarryingamountsoftheassetsandliabilities

acquiredasofthedateofthebusinesscombinationisincludedinequity-accumulatedlosses.



StatementofCashFlowsforTheFinancialPeriodFromDateofEstablishmenton�5July�01�to31December�01�


Cash flows from operating activities Profitbeforetaxation 153,�9�

Adjustmentsfor:

Changesoffairvalueoninvestmentproperties (100,000)

Manager’smanagementfeepayableinunits 7,851

Amortisationoffit-outincentives 614

Borrowingcosts 15,�17

Interestincome (315)

Depreciationofplantandequipment 406

Operatingincomebeforechangesinworkingcapital 77,065

Netchangeintradeandotherreceivables (4�,730)

Netchangeinpayablesandaccruals 116,918

Net cash generated from operating activities 151,�53

Cash flows from investing activities

Acquisitionofinvestmentproperties* (1,�00,000)

Purchaseofplantandequipment (1�,67�)

Interestreceived 315

Net cash used in investing activities (1,�1�,357)

Cash flows from financing activities

Proceedsfromborrowings 1,�1�,559

Paymentoffinancingexpenses (6,788)

Paymentoflistingexpenses (6,915)

Cashheldundertrustee (�6,441)

Net cash generated from financing activities 1,17�,415

Net increase in cash and cash equivalents 111,311

Cashandcashequivalentsatdateofestablishment -

Cash and cash equivalents at end of period 8 111,311

Note *:Acquisitionofinvestmentproperties

Cashconsideration 1,�00,000

Issuanceofnewunits 3,400,000

6 4,600,000



Annual Report 2012

NotestoTheFinancialStatements

1 GENERAL

IGBREITisaMalaysia-domiciledrealestateinvestmenttrust(“REIT”)establishedon�5July�01�pursuanttotheDeedbetweentheManagerand

theTrustee.TheDeedisregulatedbytheSecuritiesCommissionAct1993,theSecuritiesCommission’sGuidelinesonRealEstateInvestmentTrusts,

theListingRequirementsofBursaSecurities,theRulesoftheDepositoryandtaxationlawsandrulings.IGBREITwillcontinueitsoperationsuntil

suchtimeasdeterminedbytheTrusteeandtheManagerasprovidedundertheprovisionsofClause�6oftheDeed.TheaddressesoftheManager’s

registeredofficeandprincipalplaceofbusinessareasfollows:

Registered office Principal place of business Level3�,TheGardensSouthTower MidValleyMegamallandTheGardensMall

MidValleyCity MidValleyCity

LingkaranSyedPutra LingkaranSyedPutra

59�00KualaLumpur 59�00KualaLumpur

IGBREITisaREITestablishedwiththeprincipalinvestmentpolicyofinvesting,directlyandindirectly,inadiversifiedportfolioofincomeproducing

realestateusedprimarilyforretailpurposesinMalaysiaandoverseasaswellasrealestate-relatedassets.

Realestateusedprimarilyforretailpurposeswillincluderetailpropertiesandmixed-usedevelopmentswitharetailcomponent.

TheManager’s keyobjective is toprovideunitholderswith regularandstabledistributions, sustainable long termunitpriceanddistributable

incomeandcapitalgrowth,whilemaintainingappropriatecapitalstructure.

IGBREITwaslistedontheMainMarketofBursaSecuritieson�1September�01�.

TheultimateholdingcompanyisIGBCorporationBerhad,acompanyincorporatedinMalaysiaandlistedontheMainMarketofBursaSecurities.

The financial statements for the financial period ended 31 December �01� were authorised for issue in accordance with a resolution by the

DirectorsoftheManageron�5February�013.

IGBREIThasentered intoserviceagreements in relationtothemanagementof IGBREITand itspropertyoperations.The feestructuresareas

follows:

(a) Property management fees

Thepropertymanager,ChartwellITACInternationalSdnBhd,isentitledtopropertymanagementfeeofRM�0,000permonth(excluding

servicetax).Inaddition,thepropertymanagerisalsoentitledtofulldisbursementofcostsandexpensesproperlyincurredintheoperation,

maintenance,managementandmarketingofthepropertiesheldbyIGBREIT(“PermittedExpenses”)aswellasfeesandreimbursementsfor

PermittedExpensespayabletoitsserviceproviders.


NotestoTheFinancialStatements(continued)

1 GENERAL (CONTINUED)

(b) Manager’s management fees

PursuanttotheDeed,theManagerisentitledtoreceivethefollowingfeesfromIGBREIT:

i) abasefee(“BaseFee”)ofupto1.0%perannumofthetotalassetvalueofIGBREIT(excludingcashandbankbalanceswhichareheld

innon-interestbearingaccounts).

ii) aperformancefee(“PerformanceFee”)ofupto5.0%perannumofnetpropertyincomeintherelevantfinancialperiod/year.

iii) 1.0%ofthetransactionvalue(beingtotalpurchaseconsideration)ofanyrealestateandrealestate-relatedassetsdirectlyandindirectly

acquiredfromtimetotimebytheTrusteeoroneormorespecialpurposevehicle(“SPV”)onbehalfofIGBREITpro-rated,ifapplicable,

totheproportionofIGBREIT’sinterest.

In the case of acquisition of SPVs or holding entities which holds real estate, 1.0% of the underlying value (as determined by an

independentvaluerappointedbytheTrustee)ofanyRealEstate(whicharedirectlyorindirectlyheldthroughoneormoreSPVsofIGB

REIT)pro-rated,ifapplicable,totheproportionofIGBREIT’sinterest.

Anypaymenttothirdpartyagentsorbrokersinconnectionwiththeacquisitionofanyrealestateandrealestate-relatedassetsforIGB

REITshallnotbepaidbytheManageroutoftheacquisitionfeereceivedortobereceivedbytheManager(butshallbebornebyIGB

REIT).

Fortheavoidanceofdoubt,noacquisitionfeeispayablewithrespecttoacquisitionofthesubjectpropertiesinconnectionwiththe

listingofIGBREITbutacquisitionfeeispayablewithrespecttoallothertransactions(whichincludesrelatedpartyandnon-related

partytransactions),includingacquisitionsfromthesponsor.

iv) 0.5%ofthetransactionvalue(beingtotalsaleconsideration)ofanyrealestateandrealestate-relatedassetsdirectlyorindirectlysold

ordivestedfromtimetotimebytheTrusteeoroneormoreSPVsonbehalfofIGBREITpro-rated,ifapplicable,totheproportionofIGB

REIT’sinterest.

In the case of divestment of SPVs or holding entities which holds real estate, 0.5% of the underlying value (as determined by an

independentvaluerappointedbytheTrustee)ofanyrealestate(whicharedirectlyorindirectlyheldthroughoneormoreSPVsofIGB

REIT)pro-rated,ifapplicable,totheproportionofIGBREIT’sinterest.

Anypaymenttothirdpartyagentsorbrokersinconnectionwiththesaleordivestmentofanyrealestateandrealestate-relatedassets

forIGBREITshallnotbepaidbytheManageroutofthedivestmentfeereceivedortobereceivedbytheManager(butshallbeborne

byIGBREIT).

Fortheavoidanceofdoubt,theDivestmentFeeispayablewithrespecttoalltransaction(whichincludesrelatedpartyandnon-related

partytransaction),includingdivestmentstotheSponsor,aswellasforcompulsoryacquisitions.


Annual Report 2012


1 GENERAL (CONTINUED)

(b) Manager’s management fees (continued)

ThepaymentoftheManager’smanagementfeeintheformofnewunitswillbeinaccordancewiththefollowingformula:

NewUnitstobeissuedaspaymentof =Manager’smanagementfee

theManager’smanagementfee payableinunits

MarketPrice

Forthispurpose,“MarketPrice”meansthevolumeweightedaveragemarketpriceoftheUnits forthe last5marketdaysprecedingthe

followingevents:

(i) inrespectoftheBaseFeeandPerformanceFee,theannouncementoftherelevantquarterlyfinancialreports;or

(ii) inrespectoftheacquisitionfeeanddivestmentfee,thecompletionoftherelevantacquisition/divestment,

(eacha“TriggerEvent”).

Withreferencetoanybookclosingdate,wheretheTriggerEventisbeforebuttheissuanceofthenewUnitsrelatingtosuchTriggerEventis

afterthesaidbookclosingdate,theMarketPricewillbefurtheradjustedfortheentitlementrelatingtosuchbookclosingdate.

TheManagerwillmakeanimmediateannouncementtoBursaSecuritiesdisclosingthenumberofnewunitstobeissuedandtheissue

priceofthenewunitswhennewunitsareissuedaspaymentformanagementfee.Paymentofthemanagementfeesinunitsshallalsobe

subjectedtoIGBREITcomplyingwiththepublicspreadrequirementsstatedintheListingRequirementsofBursaSecuritiesandtherebeing

noadverseimplicationsunderMalaysianCodeonTake-OversandMergers�010.

(c) Trustee’s fees

InaccordancetotheDeed,anannualtrusteeshipfeeofupto0.03%perannumofNAVistobepaidtoTrustee.



2 BASIS OF PREPARATION

(a) Statement of compliance

Thefinancial statementsof IGBREIThavebeenprepared inaccordancewith theprovisionsof theDeed,MalaysianFinancialReporting

Standard(“MFRS”)andInternationalFinancingReportingStandards.

ThepreparationoffinancialstatementsinconformitywithMFRSrequirestheuseofcertaincriticalaccountingestimatesandassumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements,andthereportedamountsofrevenuesandexpensesduringthereportedperiod.ItalsorequiresDirectorsoftheManagerto

exercisetheirjudgmentintheprocessofapplyingIGBREIT’saccountingpolicies.Althoughtheseestimatesandjudgmentarebasedonthe

DirectorsoftheManager’sbestknowledgeofcurrenteventsandactions,actualresultscoulddiffer.Theareasinvolvingahigherdegreeof

judgmentorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsaredisclosedinNote4.

(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to IGB REIT but not yet effective

IGBREITwillapplythenewstandards,amendmentstostandardsandinterpretationstoexistingstandardsinthefollowingperiod:

(i) Financialyearbeginningon/after1January�013

• AmendmenttoMFRS101“Presentationofitemsofothercomprehensiveincome”(effectivefrom1July�01�)requiresentitiesto

separateitemspresentedin‘othercomprehensiveincome’(“OCI”)inthestatementofcomprehensiveincomeintotwogroups,

basedonwhetherornottheymayberecycledtoprofitorlossinthefuture.

• MFRS13“Fairvaluemeasurement”(effectivefrom1January�013)aimstoimproveconsistencyandreducecomplexitybyproviding

aprecisedefinitionoffairvalueandasinglesourceoffairvaluemeasurementanddisclosurerequirementsforuseacrossMFRSs.

Therequirementsdonotextendtheuseoffairvalueaccountingbutprovideguidanceonhowitshouldbeappliedwhereitsuse

isalreadyrequiredorpermittedbyotherstandards.TheenhanceddisclosurerequirementsaresimilartothoseinMFRS7“Financial

instruments:Disclosures”,butapplytoallassetsandliabilitiesmeasuredatfairvalue,notjustfinancialones.

• AmendmenttoMFRS7“Financialinstruments:Disclosures”(effectivefrom1January�013)requiresmoreextensivedisclosures

focusingonquantitativeinformationaboutrecognisedfinancialinstrumentsthatareoffsetinthestatementoffinancialposition

andthosethataresubjecttomasternettingorsimilararrangementsirrespectiveofwhethertheyareoffset.


Annual Report 2012


2 BASIS OF PREPARATION (CONTINUED)

(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to IGB REIT but not yet effective (continued)

IGB REIT would apply the new standards, amendments to standards and interpretations to existing standards in the following period:

(continued)

(ii) Financialyearbeginningon/after1January�014

• Amendment to MFRS 13�“Financial instruments: Presentation” (effective from 1 January �014) does not change the current

offsettingmodelinMFRS13�.Itclarifiesthemeaningof‘currentlyhasalegallyenforceablerightofset-off’thattherightofset-off

mustbeavailabletoday(notcontingentonafutureevent)andlegallyenforceableforallcounterpartiesinthenormalcourseof

business.Itclarifiesthatsomegrosssettlementmechanismswithfeaturesthatareeffectivelyequivalenttonetsettlementwill

satisfytheMFRS13�offsettingcriteria.

(iii) Financialyearbeginningon/after1January�015

• MFRS 9 “Financial instruments - classification and measurement of financial assets and financial liabilities” (effective from 1

January�015)replacesthemultipleclassificationandmeasurementmodelsinMFRS139withasinglemodelthathasonlytwo

classification categories: amortised cost and fair value.The basis of classification depends on the entity’s business model for

managingthefinancialassetsandthecontractualcashflowcharacteristicsofthefinancialasset.

Theaccountingandpresentationforfinancialliabilitiesandforde-recognisingfinancialinstrumentshavebeenrelocatedfrom

MFRS139,withoutchange,exceptforfinancialliabilitiesthataredesignatedatfairvaluethroughprofitorloss(“FVTPL”).Entities

withfinancialliabilitiesdesignatedatFVTPLrecognisechangesinthefairvalueduetochangesintheliability’screditriskdirectly

inOCI.ThereisnosubsequentrecyclingoftheamountsinOCItoprofitorloss,butaccumulatedgainsorlossesmaybetransferred

withinequity.

TheguidanceinMFRS139onimpairmentoffinancialassetsandhedgeaccountingcontinuestoapply.

MFRS7requiresdisclosuresontransitionfromMFRS139toMFRS9.

Theadoptionoftheabovenewstandards,amendmentstostandardsandinterpretationtoexistingstandardsarenotexpectedtohavea

materialimpactonthefinancialresultsofIGBREIT.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

TheaccountingpoliciessetoutbelowhavebeenappliedconsistentlytotheperiodpresentedinthesefinancialstatementsbyIGBREIT.

(a) Business combination under common control

IGBREITappliespredecessoraccountingtoaccountforbusinesscombinationsundercommoncontroli.e.combinationinvolvingentities

orbusinessesundercommoncontrol.Underthepredecessoraccounting,assetsandliabilitiesacquiredarenotrestatedtotheirrespective

fairvaluesbutatthecarryingamountsfromtheconsolidatedfinancialstatementsoftheholdingcompany.Thedifferencebetweenany

considerationgivenandtheaggregatecarryingamountsoftheassetsandliabilities(atthedateofthetransaction)oftheacquiredbusiness

isrecordedasanadjustmenttoretainedearnings.Noadditionalgoodwillisrecognised.Acquisition-relatedcostsareexpensedasincurred.

The acquired business’ results and the related balance sheet items are recognised prospectively from the date on which the business

combinationbetweenentitiesundercommoncontroloccurred.

(b) Investment properties

Investmentpropertiesareheldforlongtermrentalyieldsorforcapitalappreciationorboth,andarenotsubstantiallyoccupiedbyIGBREIT.

Investmentpropertiesaremeasuredinitiallyatcost,includingrelatedtransactioncosts.Afterinitialrecognition,investmentpropertiesare

carriedatfairvalue.

Fairvalueisbasedoninvestmentmethod,wherecashflowsprojectionsarecapitalisedusingacapitalisationrate,whichtakesintoaccount

theunexpiredperiod,yieldandsinkingfund,whereapplicable.Changeinfairvaluesisrecognisedinprofitandlossfortheperiodinwhich

itarises.

Thefairvalueoftheinvestmentpropertyreflectsthemarketconditionsatthereportingdate.Itreflects,amongothers,rentalincomefrom

currentleasesandreasonableandsupportableassumptionsthatrepresentwhatknowledgeable,willingpartieswouldassumeaboutrental

incomefromfutureleasesinthelightofcurrentconditions.Italsoreflects,onasimilarbasis,anycashoutflowsthatcouldbeexpectedin

respectoftheproperty.Someofthoseoutflowsarereflectedinliabilitywhereasothersrelatetooutflowsthatarenotrecognisedinthe

financialstatementsuntilalaterdate.

Valuationsareperformedasofthefinancialpositiondatebyprofessionalvaluerswhoholdrecognisedandrelevantprofessionalqualifications

andhaverecentexperienceinthelocationandcategoryoftheinvestmentpropertybeingvalued.

Subsequentexpenditureiscapitalisedtotheasset’scarryingamountonlywhenitisprobablethatfutureeconomicbenefitsassociatedwith

theexpenditurewillflowtoIGBREITandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancecostsareexpensed

whenincurred.Whenpartofaninvestmentpropertyisreplaced,thecarryingamountofthereplacedpartisderecognised.

Investmentpropertiesarederecognisedwhentheyhavebeendisposed.Where IGBREITdisposesofapropertyat fairvalue inanarm’s

lengthtransaction, thecarryingvalue immediatelyprior tothesale isadjustedtothetransactionprice,andtheadjustment is recorded

withinnetgainfromfairvalueadjustmentoninvestmentproperty.


Annual Report 2012


3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Plant and equipment

Plantandequipmentarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.Costincludesexpenditurethat

isdirectlyattributabletotheacquisitionoftheitems.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenit isprobable

thatfutureeconomicbenefitsassociatedwiththeitemwillflowtoIGBREITandthecostoftheitemcanbemeasuredreliably.Thecarrying

amountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtothestatementofcomprehensiveincome

duringtheperiodinwhichtheyareincurred.

Plantandequipmentaredepreciatedonastraightlinebasistowrite-offthecostoftheassetstotheirresidualvaluesovertheirestimated

usefullives,summarisedasfollows:

Motorvehicles �0%

Furnitureandfittings 1�.5%

Equipment 1�.5%

Informationtechnologyequipment 331/3%

Plantandmachinery 10%

Residualvaluesandusefullivesofassetsarereviewed,andadjustedifappropriate,ateachreportingdate.Theassessmentofresidualvalues

andestimatedusefullivesofassetsiscarriedoutonanannualbasis.

Ateachreportingdate,IGBREITassesseswhetherthereisanyindicationofimpairment.Ifsuchindicationsexist,ananalysisisperformedto

assesswhetherthecarryingamountoftheassetisfullyrecoverable.Awrite-downismadeifthecarryingamountexceedstherecoverable

amount.Pleaserefertoaccountingpolicyonimpairmentofnon-financialassets.

Gainsandlossesondisposalsaredeterminedbycomparingnetdisposalproceedswithcarryingamountandareincludedinprofit/(loss)

fromoperationsinthestatementofcomprehensiveincome.

(d) Financial assets

Afinancialassetisanyassetthatiscash,acontractualrighttoreceivecashoranotherfinancialassetfromanotherenterprise,acontractual

righttoexchangefinancialinstrumentswithanotherenterpriseunderconditionsthatarepotentiallyfavourable,oranequityinstrumentof

anotherenterprise.

Financialassetsarerecognisedinthestatementoffinancialpositionwhen,andonlywhen,IGBREITbecomesapartytothecontractual

provisionsofthefinancialinstrument.

Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassetsnotatfairvaluethrough

profitorloss,directlyattributabletransactioncosts.

IGBREITclassifiesitsfinancialassetsasloansandreceivables.Theclassificationdependsonthepurposeforwhichthefinancialassetswere

acquired.IGBREITdeterminestheclassificationofitsfinancialassetsatinitialrecognition.




(d) Financial assets (continued)

Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.They

areincludedincurrentassets,exceptforamountsnotexpectedtoberealisedwithintwelve(1�)monthsaftertheendofthereporting

periodwhichshallbeclassifiedasnon-currentassets.IGBREIT’sloansandreceivablescomprise‘tradeandotherreceivables’and‘cashand

bankbalances’inthestatementoffinancialposition(Notes7and8).

Subsequenttoinitialrecognition,loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.

LoansandreceivablesarederecognisedifIGBREIT’scontractualrightstothecashflowsfromthefinancialassetsexpireorifIGBREITtransfers

thefinancialassettoanotherpartywithoutretainingcontrolortransfersubstantiallyalltherisksandrewardsoftheasset.

Gainsand lossesuponderecognition, impairment losses, and theamortisationof loansand receivablesare recognised in statementof

comprehensiveincome.

(e) Impairment of financial assets

IGBREITassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethatafinancialassetorgroupoffinancialassetsis

impaired.

Assetscarriedatamortisedcost

Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurredonlyifthereisobjectiveevidenceofimpairment

asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(“lossevent”)andthatlosseventhasanimpactonthe

estimatedfuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablyestimated.

ThecriteriathatIGBREITusestodeterminethatthereisobjectiveevidenceofanimpairmentlossinclude,amongstothers,thefollowing:

• Significantfinancialdifficultyoftheobligor;

• Abreachofcontract,suchasadefaultordelinquencyinpayments;

• IGBREIT,foreconomicorlegalreasonsrelatingtotheobligor’sfinancialdifficulty,grantingtotheobligoraconcessionthatIGBREIT

wouldnototherwiseconsider;

• Itbecomesprobablethattheobligorwillenterbankruptcyorotherfinancialdestress;

• Disappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficulties;or

• Observabledataindicatingthatthereisameasurabledecreaseintheestimatedfuturecashflowsfromaportfoliooffinancialassets

sincetheinitialrecognitionofthoseassets,althoughthedecreasecannotyetbeidentifiedwiththeindividualfinancialassetsinthe

portfolio,including:

(i) adversechangesinthepaymentstatusofobligorsintheportfolio;and

(ii) nationalorlocaleconomicconditionsthatcorrelatewithdefaultsontheassetsintheportfolio.


Annual Report 2012



(e) Impairment of financial assets (continued)

Ifanysuchevidenceexists,theamountofimpairmentlossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresent

valueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Theimpairmentlossisrecognisedin

statementofcomprehensiveincomeduringtheperiodinwhichitisincurred.

Thecarryingamountofthefinancialassets isreducedbytheimpairmentlossdirectlyforallfinancialassetswiththeexceptionoftrade

receivables,wherethecarryingamountisreducedthroughtheuseofanallowanceaccount.Whenatradereceivablebecomesuncollectible,

itiswrittenoffagainsttheallowanceaccount.

Inasubsequentperiod,iftheamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurring

aftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedtotheextentthatthecarryingamountofthe

assetdoesnotexceeditsamortisedcostatthereversaldate.Theamountofreversalisrecognisedinstatementofcomprehensiveincome

duringtheperiodinwhichsuchreversalisevidenced.

(f) Impairment of non-financial assets

Plantandequipmentarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynot

berecoverable.Animpairmentlossisrecognisedfortheamountbywhichthecarryingamountoftheassetexceedsitsrecoverableamount.

Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,

assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits).

Theimpairmentlossischargedtothestatementofcomprehensiveincomeduringtheperiodinwhichtheyareincurredandanysubsequent

increaseinrecoverableamountisrecognisedinthestatementofcomprehensiveincomeduringtheperiodinwhichtheyareincurred.

(g) Cash and cash equivalents

For thepurposeof thestatementsofcashflows,cashandcashequivalentsconsistofcash inhand,depositsheldatcallwith licensed

financialinstitutions,othershortterm,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless,andbankoverdrafts.

(h) Trade and other payables

Tradeandotherpayablesareobligations topay forgoodsorservices thathavebeenacquired in theordinarycourseofbusiness from

suppliersorvendors.Tradepayablesareclassifiedascurrentliabilitiesifpaymentisduewithinone(1)yearorless(orinthenormaloperating

cycleofthebusinessiflonger).Ifnot,theyarepresentedasnon-currentliabilities.Tradepayables,depositsreceivedfromtenantsandother

payablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.




(i) Unitholders’ capital

Unitholders’contributionsareclassifiedasequitywhenthereisnoobligationtotransfercashorotherassets,northeyareredeemableatthe

unitholders’option.Anyconsiderationreceivedordistributionspaidisaddedordeducteddirectlyfromequity.Incrementalexternalcosts

directlyattributabletotheissueofnewunitsareshowninequityasadeduction,netoftax,fromtheproceeds.

(j) Borrowing and borrowing costs

Borrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred.Insubsequentperiods,borrowingsarestatedatamortised

costusingtheeffectiveyieldmethod;anydifferencebetweenproceeds(netoftransactioncosts)andtheredemptionvalueisrecognisedin

thestatementofcomprehensiveincomeovertheperiodofborrowings.BorrowingsareclassifiedascurrentliabilitiesunlessIGBREIThasan

unconditionalrighttodefersettlementoftheliabilityforatleasttwelve(1�)monthsafterthereportingdate.

Borrowingscostsincurredfortheconstructionofanyqualifyingassetarecapitalisedduringtheperiodoftimethatisrequiredtocomplete

andpreparetheassetforitsintendeduseorsale.

Feespaidontheestablishmentofloanfacilitiesarerecognisedastransactioncostsoftheloantotheextentthatitisprobablethatsomeor

allofthefacilitywillbedrawn-down.Inthiscase,thefeeisdeferreduntilthedraw-downoccurs.Totheextentthereisnoevidencethatitis

probablethatsomeorallofthefacilitywillbedrawn-down,thefeeiscapitalisedasaprepaymentforliquidityandamortisedovertheperiod

ofthefacilitytowhichitrelates.

(k) Revenue recognition

Revenuecomprisesthe fairvalueof theconsiderationreceivedor receivable for thesaleofservices intheordinarycourseof IGBREIT’s

activities.Revenueisshownnetofrebatesanddiscounts.

Revenueincludesrentalincome,servicechargesandpromotionalchargesfromtenants.

Rental incomefromoperating leases is recognisedonastraight-linebasisover the leaseterm.When IGBREITprovides incentivesto its

tenants,thecostofincentivesisrecognisedovertheleaseterm,onastraight-linebasis,asareductionofrentalincome.Otherrentrelated

andcarparkincomearerecognisedintheaccountingperiodinwhichtheservicesbeingrendered.

Interestincomeisrecognisedonaneffectiveyieldbasis.

(l) Income tax

Taxisrecognisedinstatementofcomprehensiveincome,excepttotheextentthatitrelatestoitemsrecognisedinothercomprehensive

incomeordirectlyinequity.Inthiscase,thetaxisalsorecognisedinothercomprehensiveincomeordirectlyinequity,respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting

period.

Managementperiodicallyevaluatespositionstakenintaxreturnswithrespecttosituationsinwhichapplicabletaxregulationissubjectto

interpretation.Provisionsareestablishedwhereappropriateonthebasisofamountsexpectedtobepaidtothetaxauthorities.Thisliability

ismeasuredusingthesinglebestestimateofthemostlikelyoutcome.


Annual Report 2012



(m) Operating lease

Leasesofassetswhereasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.

Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtothestatementofcomprehensive

incomeonthestraightlinebasisduringtheleaseperiodinwhichtheyareincurred.

Propertiesleasedoutunderoperatingleasesareincludedasinvestmentproperties.

(n) Functional and presentation currency

Itemsincludedinthefinancialstatementsof IGBREITaremeasuredusingthecurrencyoftheprimaryeconomicenvironment inwhich

IGBREIToperates(“functionalandpresentationcurrency”).ThefinancialstatementsarepresentedinRinggitMalaysia,whichisIGBREIT’s

functionalandpresentationcurrency.

(o) Earnings per unit

IGBREIT’searningsperunit(“EPU”)arepresentedonbasicanddilutedformat.

BasicEPUiscalculatedbydividingthecomprehensiveincomeattributabletounitholdersofIGBREITbytheweightedaveragenumberof

unitsoutstandingduringtheperiod.

DilutedEPUisdeterminedbyadjustingthecomprehensiveincomeattributabletounitholdersagainsttheweightedaveragenumberof

unitsoutstandingadjustedfortheeffectsofalldilutivepotentialunits,whichmainlycomprisemanagementfeestotheManager.

(p) Segment reporting

Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecisionmaker.

Thechiefoperatingdecision-maker,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments,has

beenidentifiedastheChiefExecutiveOfficer,togetherwiththeJointChiefOperationOfficers,thatmakesstrategicdecisions.



4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

EstimatesandjudgementsarecontinuallyevaluatedbytheDirectorsoftheManagerandarebasedonhistoricalexperienceandotherfactors,

includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

IGBREITmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,rarelyequaltherelated

actualresults.Toenhancetheinformationcontentoftheestimates,certainkeyvariablesthatareanticipatedtohavematerialimpacttotheIGB

REIT’sresultsandfinancialpositionaretestedforsensitivitytochangesintheunderlyingparameters.Theestimatesandassumptionsthatmay

haveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearareoutlined

below.

Principalassumptionsforestimationoffairvalueofinvestmentproperties

The principal assumptions underlying estimation of fair value of investment properties are those related to the receipt of contractual rentals,

expectedfuturemarketrentals,voidperiods,sinkingfundsandmaintenancerequirements,andtherespectivecapitalisationrates.

Investmentpropertiesarestatedatfairvaluebasedonvaluationsperformedbyindependentprofessionalvaluerwhoholdarecognisedrelevant

professionalqualificationandhaverecentexperienceinthelocationsandcategoriesoftheinvestmentpropertiesvalued,HenryButcherMalaysia

SdnBhd.

Thevaluationsare regularlycompared toactualmarketyielddataandactual transactionsand those reportedby themarket,whenavailable.

Assumptionsusedaremainlybasedonmarketconditionsexistingateachreportingdate.

Changestocapitalisationrateandreversionusedintheinvestmentmethodonexistingunexpiredcontractualtermsby100basispoints,thefair

valueofinvestmentpropertieswouldbeanestimateofRM681millionlowerorRM458millionhigher,respectively.


Annual Report 2012


5 PLANT AND EQUIPMENT

Furniture Information Motor and technology Plant and vehicles fittings Equipment equipment machinery Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

Asatdateof

establishment,

�5July�01� - - - - - -

Additions 354 �,615 9,594 101 8 1�,67�

Asat31December�01� 354 �,615 9,594 101 8 1�,67�

Accumulated depreciation

Asatdateof

establishment,

�5July�01� - - - - - -

Depreciationchargefor

thefinancialperiod 18 81 �99 8 - 406

Asat31December�01� 18 81 �99 8 - 406

Carrying amounts

Asat31December�01� 336 �,534 9,�95 93 8 1�,�66

6 INVESTMENT PROPERTIES

2012 RM’000

Asatdateofestablishment,�5July�01� -

Acquisitionofinvestmentproperties 4,600,000

Netfairvaluegainrecognisedinstatementofcomprehensiveincome 100,000

Asat31December�01� 4,700,000

On�0September�01�,IGBREITacquiredtheinvestmentpropertiesofwhichtheconsiderationwassettledincashforRM1,�00,000andissuance

of3,400,000unitsinIGBREIT.

OneoftheinvestmentpropertiesischargedasasecurityforbankborrowingsasdisclosedinNote10.

Investmentpropertiesarestatedatfairvaluebasedonvaluationsperformedbyindependentprofessionalvaluerwhoholdsarecognisedrelevant

professionalqualificationandhasrecentexperienceinthelocationsandcategoriesoftheinvestmentpropertiesvalued,HenryButcherMalaysia

SdnBhd.Fairvalueisdeterminedprimarilybasedoninvestmentmethod.Inarrivingatthefairvalueusingtheinvestmentmethod,thecapitalisation

rateadoptedis5-6%andreversionis5.�5-6.�5%.Otherkeyparametersusedintheinvestmentmethodofvaluationareallowanceforvoidof3%,

carparkincomeof8%andotherincomeof8%.Basedonthevaluationbyindependentprofessionalvaluerdated9January�013,thefairvalueof

theMidValleyMegamallandTheGardensMallasat31December�01�wasRM3.5billionandRM1.�billionrespectively.Theinvestmentproperties

areleaseholdpropertieswithleaseexpiryyearin�103.



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Annual Report 2012


7 TRADE AND OTHER RECEIVABLES

2012 RM’000

Trade Tradereceivables �,494

Less:Allowanceforimpairmentoftradereceivables (170)

Tradereceivables–net �,3�4

Accruedbillings 6,555

8,879

Non-Trade Otherreceivables 15

Deposits 5

Amountowingbyultimateholdingcompany 36

Amountsowingbyrelatedcompanies �4,�76

�4,33�

Prepayments 8,905

33,�37

Totaltradeandotherreceivables 4�,116

Thecarryingamountsoftradeandotherreceivablesasat31December�01�approximatedtheirfairvalues.

Thecredittermsoftradereceivableswereseven(7)days.

Theamountowingbyultimateholdingcompanyisunsecured,repayableondemandandinterestfree.

Theamountsowingbyrelatedcompaniesareunsecured,repayableondemandandinterestfree.



7 TRADE AND OTHER RECEIVABLES (CONTINUED)

Asat31December�01�,tradereceivablesofRM�,3�4,000werepastduebutnotimpaired.SuchtradereceivablesareduefromtenantsinMid

ValleyMegamallandTheGardensMallwhohavepaidsecuritydepositsforthetenancyandwithnoknownrecenthistoryofdefault.Inaddition,

thehistoricalexperienceincollectionoftradereceivablesfallswithintherecordedallowance.

Theageinganalysisofthesetradereceivablesisasfollows:

2012 RM’000

8to30days 1,5�0

31to60days 804

�,3�4

Individuallyimpaired 170

Less:Allowanceforimpairmentoftradereceivables (170)

�,3�4

Movementofallowanceforimpairmentoftradereceivablesisasfollows:

2012 RM’000

Asatdateofestablishment,�5July�01� -

Allowanceforimpairmentoftradereceivables 170

Asat31December�01� 170

Theotherclasseswithintradeandotherreceivablesdonotcontainimpairedassets.

Themaximumexposuretocreditriskatthereportingdateisthecarryingvalueofeachclassofreceivablesmentionedabove.


Annual Report 2012


8 CASH AND CASH EQUIVALENTS 2012 RM’000

Cashinhand �90

Bankbalances 31,950

Depositsplacedwithlicensedbanks 105,51�

Cashandbankbalances 137,75�

Less:Restrictedcash (�6,441)

Cashandcashequivalents 111,311

Bankbalancesaredepositsheldatcallwithbanksandearnsnointerest.

Theweightedaverageeffectiveinterestrateofdepositswithlicensedbanksthatwaseffectiveatthereportingdatewas3.05%perannum.

Depositswithlicensedbankshaveanaveragematurityof�6days.

IncludedinthedepositsplacedwithlicensedbanksisanamountofRM�6.4millionwhichismaintainedinaDebtServiceReserveAccount

withthefacilityagenttocoveraminimumofsixmonthsinterestforasyndicatedfinancingfacilitygrantedtoIGBREIT(Note10).



9 UNITHOLDERS’ CAPITAL

2012 Number of units ’000

Approved fund size: Asatdateofestablishment,�5July�01�/endoffinancial

period 3,550,000

Number of units Value ’000 RM’000

Issued and fully paid up:

Atdateofestablishment,�5July�01� - -

Creationofunits

Issueofnewunitsatpar 3,400,000 3,400,000

Valuationofunitsissuedatfairvalue - 850,000

Totalvalueofunitsissued 3,400,000 4,�50,000

Listingexpenses - (6,915)

Asat31December�01� 3,400,000 4,�43,085


Annual Report 2012


10 BORROWINGS

2012 RM’000

Current (secured) : Syndicatedfinancingfacilities �7,606

Non-current (secured) : Syndicatedfinancingfacilities 1,�00,000

Less:Unamortisedtransactioncosts (6,618)

1,193,38�

TheTrustee,onbehalfofIGBREIT,asborrower,hasobtainedthesyndicatedfinancingfacilitiescomprisingthefollowing:

(a) Afixedratetermloanfacility(“FRTL”)ofuptoRM1,�00million;and

(b) Astandbyrevolvingcreditfacility(“SBRC”)ofuptoRM�0million.

Thematurityprofileofthesyndicatedfinancingfacilitiesasat31December�01�isasfollows:

<1 year 1 to 2 years 2 to 3 years >3 years Total RM’000 RM’000 RM’000 RM’000 RM’000

FRTL 14,900 0 0 1,193,38� 1,�08,�8�

SBRC 1�,706 0 0 0 1�,706

�7,606 0 0 1,193,38� 1,��0,988

Theweightedaverageeffectiveinterestratesasatthereportingdatewereasfollows:

2012 % per annum

Weightedaverageeffectiveinterestratesatreportingdate

FRTL 4.40%

SBRC 4.15%



10 BORROWINGS (CONTINUED)

ProceedsdrawnfromtheFRTLwereutilisedbyIGBREITtopartfinancetheacquisitionsofMidValleyMegamallandTheGardensMalltogether

withrelatedassets(“Acquisitions”)andtheproceedsdrawnfromtheSBRCwereutilisedbyIGBREITtopartfinancetheAcquisitionsandtofinance

itscapitalexpenditurerequirements.

TheFRTLhastenureoffive(5)yearsfromthedateoffirstdrawdownwithanoptiontoextendthesameforafurthertwo(�)yearsexercisableby

theTrustee.Forthefirstfive(5)years,theFRTLbearsafixedinterestrareof4.4%perannum.IntheeventtheFRTLisextended,theinterestratesfor

thesixthandtheseventhyearshallbesteppedupto5.0%perannum.

TheSBRChas tenureof seven (7) years fromthedateof fulfillmentofall conditionsprecedent.TheSBRCbearsafloating interest rateof the

aggregateeffectivecostsoffundsandamarginof0.7%perannum.

TheSyndicatedFinancingFacilitiesaresecuredagainst,amongothers,thefollowing:

(i) afirstpartyassignmentbytheTrusteeof itsrights, title, interestsandbenefits inMidValleyMegamallandunderthesaleandpurchase

agreement in relation toMidValleyMegamallpursuant to theAcquisitionandallotherdocumentsevidencing theTrustee’s interest in

MidValleyMegamall.IntheeventthesubdivisionofmastertitleiscompletedandaseparatestratatitleisissuedforMidValleyMegamall

(“MegamallStrataTitle”),afirstpartyfirst legalchargeshallbecreatedbytheTrusteeontheMegamallStrataTitleforthebenefitofthe

syndicatedlenders;

(ii) anundertakingfromtheTrusteeandtheManager;

(a) todepositallcashflowsgeneratedfromMidValleyMegamallintotherevenueaccount;and

(b) thatitshallnotdeclareormakeanydividendsordistributionsoutofthecashflowderivedfromMidValleyMegamalltotheUnitholdersif

aneventofdefaulthasoccurredunderthetermsoftheSyndicatedFinancingFacilities,andiscontinuingandhasnotbeenwaived;

(iii) a first party legal assignment and charge by theTrustee over all rights, interests, title and benefits relating to the following designated

accounts:

(a) therevenueaccountintowhichtheTrusteeshallcredit,amongothers,allincomeandinsuranceproceedsderivedfromorinrelation

toMidValleyMegamall;

(b) theoperatingaccountwhichistocapturefundstransferredfromtherevenueaccountforthepurposeofmanagingtheoperating

expenditureofMidValleyMegamall;and

(c) thedebtservicereserveaccountwhichistocapturefundstransferredfromtherevenueaccountforpurposesofmeetingthedebt

servicerequirement;

(iv) afirstpartylegalassignmentbytheTrusteeofalltheproceedsunderthetenancy/leaseagreementsinrelationtoMidValleyMegamall;

and

(v) afirstpartylegalassignmentoveralloftheTrustee’srights,interests,titlesandbenefitsandalltheinsurancepoliciesinrelationtoMidValley

Megamallandthesecurityagent(actingforandonbehalfofthesyndicatedlenders)beingnamedasthelosspayeeandbeneficiaryofthe

insurancepolicies.


Annual Report 2012


11 PAYABLES AND ACCRUALS

2012 Note RM’000

Non-current

Trade

Tenants’deposits a 45,987

45,987

Current

Trade

Tradepayables b 10,071

Tenants’deposits a �7,415

37,486

Non-Trade

Otherpayablesandaccruedexpenses 19,763

Amountduetoultimateholdingcompany c 69

Amountsduetorelatedcompanies d �1,464

Distributionpayabletounitholders 6�,333

103,6�9

Totalcurrentpayablesandaccruals 141,115

Totalpayablesandaccruals 187,10�

(a) Tenants’depositsareinrespectofrefundabledepositsreceivedfromtenantsfortenancyrelatedagreements.Tenancytenuresaregenerally

foraperiodofone(1)tothree(3)years.

(b) Credittermsfortradepayablesrangefrom30daysto90days.

(c) Amountduetoultimateholdingcompanyisinterest-freeandrepayableondemand.

(d) Amountsduetorelatedcompaniesareinterest-freeandrepayableondemand.



12 OTHER INCOME

25.07.2012 (date of establishment) to 31.12.2012 RM’000

Carparkincome 1�,�57

Advertisingandpromotionalincome 1,669

Utilitiesrecoverable 6,759

Kioskrentandotherleasingincome 4,846

Others 1,635

�7,166

13 OTHER OPERATING EXPENSES

Includedinotheroperatingexpensesarethefollowingexpenses:


Reimbursable* 14,�91

Others 3,414

17,705

*Reimbursablereferstocostsandexpensesincurredintheoperation,maintenance,managementandmarketingoftheinvestmentproperties.

14 MANAGER’S MANAGEMENT FEES

25.07.2012 (date of establishment) to 31.12.2012 RM’000 Basefee 4,046

Performancefee 3,805

7,851

100%ofthetotalManager’smanagementfeeswouldbepayableinunits.

15 BORROWING COSTS


Interestexpense 15,047

Amortisationoftransactioncosts 170

15,�17


Annual Report 2012


16 TAXATION


Reconciliation of tax expense Incomebeforetaxation 153,�9�

IncometaxusingMalaysiantaxrateof�5% 38,3�3

Non-deductibleexpenses 1,�09

Effectofincomeexemptedfromtax (39,53�)

0

PursuanttoSection61AoftheMalaysianIncomeTaxAct,1967(“Act”),incomeofIGBREITwillbeexemptedfromtaxprovidedthatatleast90%

ofitstotaltaxableincome(asdefinedintheAct)isdistributedtotheinvestorsinthebasisperiodofIGBREITforthatyearofassessmentwithin

twomonthsafterthecloseofthefinancialyear.Ifthe90%distributionconditionisnotcompliedwithorthe90%distributionisnotmadewithin

two(�)monthsafterthecloseofIGBREITfinancialyearwhichformsthebasisperiodforayearofassessment,IGBREITwillbesubjecttoincome

taxattheprevailingrateonitstotalincome.IncomewhichhasbeentaxedattheIGBREITlevelwillhavetaxcreditsattachedwhensubsequently

distributedtounitholders.

As IGBREITdeclared100%of itsdistributable incometounitholders forfinancialperiodended31December�01�,noprovision for income

taxationhasbeenmadeforthecurrentperiod.



17 EARNINGS PER UNIT (“EPU”) – BASIC AND DILUTED

The calculation of EPU is based on total comprehensive income attributable to unitholders for the period of RM153,�9�,000 divided by the

weightedaveragenumberofunitsincirculationduringthesameperiodof3,400,000,000.

25.07.2012 (date of establishment) to 31.12.2012 RM’000 Total comprehensive income -Realised 53,�9�

-Unrealised 100,000

-Total 153,�9�

Weighted average number of units in issue (‘000) 3,400,000

Basic EPU (sen)-Realised 1.57

-Unrealised �.94

-Total 4.51

Weighted average number of units (‘000)Weightedaveragenumberofunitsinissue 3,400,000

AdjustmentforManager’smanagementfeespayableinunits* 5,78�

WeightedaveragenumberofunitsfordilutedEPU 3,405,78�

Diluted EPU (sen)-Realised 1.56

-Unrealised �.94

-Total 4.50

Note *:

Note Number of units Value ‘000 RM’000

Manager’smanagementfeespayableinunits

-fromdateofestablishment,�5July�01�to30September

�01�atRM1.34perunit 648 869

-from1October�01�to31December�01�atRM1.36perunit 5,134 6,98�

14 5,78� 7,851


Annual Report 2012


18 DISTRIBUTION TO UNITHOLDERS

Distributiontounitholdersisfromthefollowingsources:


Totalcomprehensiveincomeattributetounitholdersforthefinancialperiodended

31December�01� 153,�9�

Less:Distributionadjustments (90,959)

Distributableincometounitholders 6�,333

Netdistributionperunit(sen) 1.83

* Withholdingtaxwillbedeductedfordistributionsmadetothefollowingcategoriesofunitholders:

Withholding tax rate 2012

Residentcorporate N/A^

Residentnon-corporate 10%

Non-residentindividual 10%

Non-residentcorporate �5%

Non-residentinstitutional 10%

^ totaxatprevailingrate



19 PORTFOLIO TURNOVER RATIO

2012

PortfolioTurnoverRatio(“PTR”)(times) -

ThecalculationofPTRisbasedontheaverageoftotalacquisitionsanddisposalsofinvestmentsinIGBREITforthefinancialperiodtotheaverage

netassetvalueduringtheperiod.

PTRisnilforIGBREITastherewerenonewacquisitionsanddisposalsofinvestmentsinIGBREITsincethedateofestablishmentof�5July�01�

to31December�01�exceptfortheinitialacquisitionoftheinvestmentpropertiesi.e.theAcquisitionduringtheinitialpublicofferingthatwas

completedon�0September�01�.

SincethebasisofcalculatingPTRcanvaryamongREITs,thereisnoconsistentorcoherentbasisforprovidinganaccuratecomparisonofIGBREIT’s

PTRagainstotherREITs.

20 MANAGEMENT EXPENSE RATIO

2012

Managementexpenseratio(“MER”)(%) 0.�3

ThecalculationoftheMERisbasedonthetotalfeesofIGBREITincurred,includingtheManager’smanagementfees,trustee’sfees,valuationfee,

auditfees,taxagent’sfeesandadministrativeexpenses,tothenetassetvalue(afterincomedistribution)duringthefinancialperiod.

SincethebasisofcalculatingMERcanvaryamongREITS,thereisnoconsistentorcoherentbasisforprovidinganaccuratecomparisonofIGB

REIT’sMERagainstotherREITs.

21 SEGMENT REPORTING

ThesegmentalfinancialinformationbybusinessorgeographicalsegmentsisnotpresentedasIGBREITonlycomprisesofonebusinessactivity,

whichistheownerandoperatorofMidValleyMegamallandTheGardensMallanditsentirebusinessisconductedinKualaLumpur.

TheManagerassessestheperformanceoftheoperatingsegmentsbasedonvariousfactors,includingbutnotlimitedto,ameasureofadjusted

earningsbeforeinterest,tax,depreciationandamortisation(“EBITDA”).TheEBITDAenablesperformancebenchmarkingassuchbasiseliminates

theeffectoffinancingandaccountingdecisionswhichmaynotbemadeatoperatinglevel.


Annual Report 2012


22 FINANCIAL INSTRUMENTS BY CATEGORY

Note 2012 RM ‘000 Loansandreceivablesatamortisedcost

Assetsasperstatementoffinancialposition:

-Tradeandotherreceivablesexcludingprepayments 7 33,�11

-Cashandbankbalancesexcludingcashinhand 8 137,46�

Totalfinancialassets 170,673

Otherfinancialliabilitiesatamortisedcost

Liabilitiesasperstatementoffinancialposition:

-Borrowings 10 1,��0,988

-Payablesandaccruals 11 187,10�

Totalfinancialliabilities 1,408,090



23 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES23.1 Financial risk factors

IGBREIT’sactivitiesexposeittoavarietyoffinancialrisks:marketrisk(includingfairvalueinterestraterisk),creditrisk,liquidityandcashflowrisk.

IGBREIT’soverallfinancialriskmanagementobjectiveistoensurethatitcreatesvalueforitsunitholders.IGBREITfocusesontheunpredictability

offinancialmarketsandseeks tominimisepotentialadverseeffectsonthefinancialperformanceof IGBREIT.Financial riskmanagement is

carriedoutthroughriskreviews,internalcontrolsystems,insuranceprogrammesandadherencetotheIGBREIT’sfinancialriskmanagement

policies.TheManagerregularlyreviewstheserisksandapprovesthetreasurypolicies,whichcoversthemanagementoftheserisks.

(a) Marketrisk

Fairvalueandcashflowinterestraterisk

IGBREIT interestrateriskarisesfromfixedratetermloanandrevolvingcredit.ThefixedratetermloantakenbyIGBREIT locks inthe

interest rate against any fluctuation. Hence, IGB REIT’s fixed rate term loan exposes it to fair value interest rate risk and the standby

revolvingcreditfacilityobtainedatvariablerateexposesIGBREITtoriskofchangeincashflowsinterestratesrisk.

IGBREIT’sincomeandoperatingcashflowsaresubstantiallyindependentofchangesinmarketinterestrates.Thisisduetoasignificant

portionoftheborrowingismadeupoffixedratetermloantakenbyIGBREITwhichlocksintheinterestrateagainstanyfluctuation.

Hence,IGBREIThasnosignificantexposuretocashflowinterestraterisk.TheManagerregularlyreviewstheinterestraterisksanddoes

notexpecttheimpacttobematerialtoIGBREIT.

SensitivityanalysisforinterestratechangesisunrepresentativeasIGBREITdoesnotusevariableratesinmanagingitsinterestraterisk.

(b) Creditrisk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to

outstandingreceivablesfromthetenants.

CreditrisksarisingfromoutstandingreceivablesfromthetenantsareminimisedandmonitoredbystrictlylimitingIGBREIT’sassociation

to business partners with high creditworthiness.Trade receivables are monitored on an on-going basis via the Manager’s reporting

procedures.Otherthantheanchortenants,namelyAeonBIG(formerlyknownasCarrefour),Aeon,Metrojaya,Isetan,RobinsonsandGSC

Signature,whichcontribute1�.8%oftherentalincome,IGBREITdoesnothaveanysignificantexposuretoanyindividualcustomeror

counterpartynordoesIGBREIThaveanymajorconcentrationofcreditriskrelatedtoanyfinancialinstruments.Creditriskwithrespectto

tradereceivablesislimitedduetoIGBREIT’snatureofbusinesswhichispredominatelyrentalrelatedandcash-based.IGBREIT’shistorical

experienceincollectionoftradereceivablesfallswithintherecordedallowances.Furthermore,thetenantshaveplacedsecuritydeposits

with IGB REIT which act as collateral. Due to these factors, no additional credit risk beyond amounts allowed for collection losses is

inherentinIGBREIT’stradereceivables.

Thedepositsareplacedwithcreditworthylicensedfinancialinstitutionswithhighcreditratingsassignedbycreditratingagencies.Based

ontheabove,IGBREITconsiderstheriskofmateriallossintheeventofnon-performancebyafinancialcounterpartytobeunlikely.


Annual Report 2012


23 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

23.1 Financial risk factors (continued)

(c) Liquidityandcashflowrisk

IGBREITmonitorsrollingforecastsofitsliquidityrequirementstoensureithassufficientcashtomeetoperationalneedswhilemaintaining

sufficientheadroomonitscommittedborrowingfacilities(Note10).

IGBREITmonitorsandmaintainsalevelofcashandcashequivalentsandbankfacilitiesdeemedadequatetofinanceitsoperations,to

distributeincometounitholders,andtomitigatetheeffectsoffluctuationsincashflows.Inaddition,theManageralsomonitorsand

observestheSecuritiesCommission’sGuidelinesonRealEstateInvestmentTrustconcerninglimitsontotalborrowingsfinancing.

Atthereportingdate,IGBREITheldcashandbankbalancesofRM137.75millionthatareexpectedtoreadilygeneratecashinflowsfor

managingliquidityrisk.

ThetablebelowanalysestheIGBREIT’snon-derivativefinancialliabilitiesintorelevantmaturitygroupingsbasedontheremainingperiod

atthereportingdatetothecontractualmaturitydate.Theamountsdisclosedinthetablearethecontractualundiscountedcashflows.

<1 year 1 to 2 years 2 to 3 years >3 years Total RM’000 RM’000 RM’000 RM’000 RM’000

At31December�01�

Borrowings 80,9�7 53,3�1 53,3�1 1,�86,694 1,474,�63

Payablesandaccruals 141,115 �3,938 ��,049 - 187,10�

23.2 Capital risk management

TheoverallcapitalmanagementobjectivesaretosafeguardIGBREIT’sabilitytocontinueasagoingconcerninordertoprovidereturnsfor

unitholdersandbenefitsforotherstakeholdersandtomaintainamoreefficientcapital.

TheManager’son-goingcapitalmanagementstrategyinvolvesadoptingandmaintaininganappropriategearinglevelandadoptinganactive

interest rate management strategy to manage the risks associated with refinancing and changes in interest rates.The Manager intends to

implementthisstrategyby(i)diversifyingsourcesofdebtfundingtotheextentappropriate,(ii)maintainingareasonablelevelofdebtservice

capability,(iii)securingfavourabletermsoffunding,(iv)managingitsfinancialobligationsand(v)whereappropriate,managingtheexposures

arisingfromadversemarketinterestrates,suchasthroughfixedrateborrowings,tooptimisethecostofcapital.



23 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

23.2 Capital risk management (continued)

Theborrowingstototalassetsratioasat31December�01�wasasfollows:

2012 RM’000

Totalborrowings 1,��0,988

Totalassets 4,89�,134

Borrowingstototalassetsratio(%) �4.96

TheDeedprovidesthattheManagershall,withtheapprovaloftheTrustee,foreachdistributionperiod,distributeall(orsuchotherpercentage

asdeterminedbytheManageratitsabsolutediscretion)ofIGBREIT’sdistributableincome.ItistheintentionoftheManagertodistributeatleast

90.0%ofIGBREIT’sdistributableincomeonahalf-yearlybasis(orsuchotherintervalasdeterminedbytheManageratitsabsolutediscretion).

Fortheperiodfromtheestablishmentdate,�5July�01�to31December�01�,IGBREITwilldistribute100%ofitsdistributableincome.Basedon

theprospectusinrespectoftheinitialpublicofferofIGBREITdated�7August�01�,theManagerintendstodistributeupto100%ofIGBREIT’s

distributableincomefortheperiodfromdateofestablishmentto31December�014.

Theactualproportionofdistributableincomedistributedtounitholdersbeyond31December�014,whichshallbeattheabsolutediscretion

oftheManager,maybegreaterthan90.0%ofIGBREIT’sdistributableincometotheextentthattheManagerbelievesitisappropriate,having

regardtoIGBREIT’sfundingrequirements,othercapitalmanagementconsiderationsandtheavailabilityoffunds.Distributionwhenmadewill

beinRinggitMalaysia.

23.3 Fair value of financial instruments

ThecarryingamountsoffinancialassetsandliabilitiesofIGBREITasatreportingdateapproximatedtheirfairvalues.

Thefairvaluesarebasedonthefollowingmethodologiesandassumptions:

a) Tradereceivables,otherreceivablesandpayableandaccruals

Tradereceivables,otherreceivablesandpayableandaccrualsareassumedtoapproximatetheirfairvaluesastheseitemsarenotmaterially

sensitivetotheshiftinmarketinterestrates.

b) Cashandbankbalances

Cashandbankbalanceswithmaturitieslessthanoneyear,thecarryingamountisareasonableestimateoffairvalue.

c) Borrowings

Thefairvalueoftheborrowingsisestimatedbasedondiscountedcashflowsusingprevailingmarketratesforborrowingswithsimilarrisk

profile.


Annual Report 2012


24 OPERATING LEASES

Leasesaslessor

IGBREITleasesoutitsinvestmentproperties(Note6)underoperatingleases.Thefutureminimumleasereceivablesundernon-cancellablelease

areasfollows:

2012 RM’000

Lessthanoneyear �86,307

Betweenoneandfiveyears 57�,615

858,9��

25 CAPITAL COMMITMENTS

Capitalexpenditureinrespectofthefollowinghasnotbeenprovidedforinthefinancialstatement:

2012 RM’000

Plantandequipment

AuthorisedbyDirectorsbutnotcontracted �,709

26 COMPARATIVE FIGURES

No comparative figures are presented as this is the first set of financial statements of IGB REIT prepared by the Manager since IGB REIT was

establishedon�5July�01�.

27 SIGNIFICANT TRANSACTIONS WITH PARTIES RELATED TO THE MANAGER

Thesignificantrelatedpartytransactionssetoutbelowarecarriedout inthenormalcourseofbusinessontermsandconditionsnegotiated

betweentheparties.

TheultimateholdingcompanyisIGBCorporationBerhad,acompanyincorporatedinMalaysiaandlistedontheMainMarketofBursaSecurities.



27 SIGNIFICANT TRANSACTIONS WITH PARTIES RELATED TO THE MANAGER (CONTINUED)

Related party Relationship

IGBCorporationBerhad HoldingcompanyandSponsorofIGBREIT

IGBPropertiesSdnBhd Afellowsubsidiary

IGBREITManagementSdnBhd Afellowsubsidiary

KrisAssetsHoldingsBerhad Afellowsubsidiary

MidValleyCitySdnBhd Afellowsubsidiary

MidValleyCityEnergySdnBhd Afellowsubsidiary

MidValleyCityEnterpriseSdnBhd Afellowsubsidiary

MidValleyCityGardensSdnBhd Afellowsubsidiary

MidValleyCityHotelsSdnBhd Afellowsubsidiary

MidValleyCityNorthTowerSdnBhd Afellowsubsidiary

MidValleyCitySouthTowerSdnBhd Afellowsubsidiary

MVCCentrepointNorthSdnBhd Afellowsubsidiary

MVCCentrepointSouthSdnBhd Afellowsubsidiary

MVECExhibitionandEventServicesSdnBhd Afellowsubsidiary

TanahPermataSdnBhd Afellowsubsidiary

TechnolticEngineeringSdnBhd Afellowassociate

StrassMediaSdnBhd AsubsidiaryofWahSeong(Malaya)Trading

Co.SdnBhd,whichisasubstantial

shareholderofIGBCorporationBerhad


Annual Report 2012



2012Significant related party transactions: RM ’000

Sales of services

1) Rentalofcarpark

-IGBCorporationBerhad 36

-MVCCentrepointNorthSdnBhd �44

-MidValleyCityHotelsSdnBhd �0

-TanahPermataSdnBhd 40

340

�) Utilitiescharges

-IGBPropertiesSdnBhd 135

-MidValleyCityEnterpriseSdnBhd 347

-MVCCentrepointSouthSdnBhd 168

-MVCCentrepointNorthSdnBhd 148

-MidValleyCityHotelsSdnBhd 669

-TanahPermataSdnBhd 315

-MidValleyCitySouthTowerSdnBhd 45�

-MidValleyCityNorthTowerSdnBhd 47�

�,706

3) Rentalofpremises

-MVECExhibitionandEventServicesSdnBhd 697

4) Rentaloflightbox

-StrassMediaSdnBhd 488




2012Significant related party transactions: RM ’000

Purchases of services1) Repairandmaintenance

-TechnolticEngineeringSdnBhd 167

�) Electricitycharges

-MidValleyCityEnergySdnBhd 3,6�4

3) Manager’smanagementfee

-IGBREITManagementSdnBhd 7,851

Significant related party balances as at reporting date:

Amount owing by

MidValleyCitySdnBhd 11,586

MidValleyCityGardensSdnBhd 11,0�6

Amount owing to

IGBREITManagementSdnBhd 7,851

KrisAssetsHoldingsBerhad 1�,097


Annual Report 2012


28 REALISED AND UNREALISED PROFITS OR LOSSES

TheanalysisoftheaccumulatedlossesofIGBREITasat31December�01�,intorealisedandunrealisedportions,pursuanttoParagraphs�.06and

�.�3ofMainMarketListingRequirementsofBursaSecurities,areasfollows:

2012 RM’000

Totalaccumulatedlosses

-realised (859,041)

-unrealised 100,000

(759,041)

ThedisclosureofrealisedandunrealiseddeficitsisbasedontheGuidanceofSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsor

LossesintheContextofDisclosuresPursuanttoListingRequirementsofBursaSecurities,issuedbytheMalaysianInstituteofAccountants.


APPROVED FUND SIZE3,550,000,000Units

ISSUED AND FULLY PAID UNITS3,400,000,000Units(votingright:1voteperUnit)

PUBLIC SPREADAsat31December�01�,publicshareholdingspreadofIGBREITwas46.55%** ExcludingunitholdingsheldbyDirectors,substantialunitholdersandassociatesoftheDirectorsorsubstantialunitholders,pursuanttothedefinitionof“public”undertheMMLR.

DISTRIBUTION OF UNITHOLDINGS

No. of % of No. of % ofRange of Unitholdings Unitholders Unitholders Issued Units Issued Units

Lessthan100 1,��3 5.36 40,405 0.00

100–1,000 7,933 34.75 3,8�3,946 0.11

1,000–10,000 9,575 41.95 41,175,481 1.�1

10,001–100,000 3,353 14.69 110,415,0�5 3.�5

100,001tolessthan5%ofIssuedUnits 743 3.�5 1,510,9�7,389 44.44

5%andaboveofIssuedUnits 1 0.00 1,733,617,754 50.99

Total 22,828 100.00 3,400,000,000 100.00

SUBSTANTIAL UNITHOLDERS (5% AND ABOVE)

Direct % of Deemed** % of Name of Unitholder No. of Units Issued Units No. of Units Issued Units

IGBCorporationBerhad 1,733,617,754 50.99 86,113 0.00

GoldisBerhad 41,�34,4�4 1.�1 1,735,338,497 51.04

RobertTanChungMeng 7,�89,081 0.�1 1,788,�85,0�3 5�.60

PaulineTanSuatMing 1,080,898 0.03 1,788,�85,0�3 5�.60

TonyTan@ChoonKeat 1,000,000 0.03 1,788,�85,0�3 5�.60

TanChinNamSdnBhd 4,�8�,888 0.13 1,785,506,556 5�.51

TanKimYeowSdnBhd �,879,665 0.08 1,785,405,358 5�.51

WahSeong(M)TradingCo.Sdn.Bhd. 6,079,99� 0.18 1,779,000,0�1 5�.3�

** DeemedtohaveinterestsinUnitsheldbyothercorporationsbyvirtueofSection6AoftheCompaniesAct1965

UNITHOLDINGS OF DIRECTORS AND CEO

Direct % of Deemed** % ofName of Director/ CEO No. of Units Issued Units No. of Units Issued Units

RobertTanChungMeng 7,�89,081 0.�1 1,788,�85,0�3 5�.60

TanBoonLee 1,989,7�5 0.06 - -

TanLeiCheng 1,853,74� 0.05 3�5,345 0.01

DanielYongChen-I 80�,13� 0.0� - -

ElizabethTanHuiNing 750,000 0.0� - -

TanYeeSeng 707,�00 0.0� - -

AntonyPatrickBarragry 581,300 0.0� - -

StatisticsofUnitholdersasat31December�01�


Annual Report 2012

TOP 30 UNITHOLDERS

% ofNo. Name of Unitholder No. of Units Issue Units

1 IGBCorporationBerhad 1,733,617,754 50.99� HSBCNominees(Asing)SdnBhd ExemptANforTheBankofNewYorkMellon(BNYMasE&A) 117,�00,000 3.453 MaybankNominees(Tempatan)SdnBhd MaybankTrusteesBerhadforPublicRegularSavingsFund(N14011940100) 69,441,5�8 �.044 CartabanNominees(Tempatan)SdnBhd ExemptANforEastspringInvestmentsBerhad 68,673,048 �.0�5 CitigroupNominees(Tempatan)SdnBhd ExemptANforAmericanInternationalAssuranceBerhad 66,749,491 1.966 MalaysiaNominees(Tempatan)SendirianBerhad GreatEasternLifeAssurance(Malaysia)Berhad(PAR1) 59,593,700 1.757 CitigroupNominees(Tempatan)SdnBhd EmployeesProvidentFundBoard 55,373,613 1.638 KumpulanWangPersaraan(Diperbadankan) 54,6�4,300 1.619 GoldisBerhad 41,�34,4�4 1.�110 HSBCNominees(Asing)SdnBhd ExemptANforHSBCPrivateBank(Suisse)S.A.(HongKongACCL) 34,463,3�8 1.0�11 AmanahrayaTrusteesBerhad PublicSmallcapFund 33,134,616 0.971� CitigroupNominees(Tempatan)SdnBhd EmployeesProvidentFundBoard(Nomura) 31,696,�36 0.9313 AmanahrayaTrusteesBerhad PublicDividendSelectFund �8,995,33� 0.8514 AmanahrayaTrusteesBerhad PublicSavingsFund �8,938,�76 0.8515 HSBCNominees(Asing)SdnBhd ExemptAnForCreditSuisse(SGBR-TST-Asing) �1,531,170 0.6316 CartabanNominees(Asing)SdnBhd GovernmentofSingaporeInvestmentCorporationPteLtdforGovernmentofSingapore(C) �1,016,949 0.6�17 HSBCNominees(Asing)SdnBhd ExemptANforJPMorganChaseBank,NationalAssociation(SaudiArabia) �0,000,000 0.5918 AmanahrayaTrusteesBerhad PBGrowthFund 18,314,19� 0.5419 PertubuhanKeselamatanSocial 18,054,�50 0.53�0 CIMBCommerceTrusteeBerhad PublicFocusSelectFund 15,�00,085 0.45�1 AmanahrayaTrusteesBerhad PublicEquityFund 13,776,468 0.41�� MalaysiaNominees(Tempatan)SendirianBerhad GreatEasternLifeAssurance(Malaysia)Berhad(LSF) 1�,517,000 0.37�3 HongLeongInvestmentBankBerhad(IVT-A) 1�,158,016 0.36�4 HSBCNominees(Asing)SdnBhd ExemptANforHSBCPrivateBank(Suisse)S.A.(SporeTSTACCL) 11,598,441 0.34�5 CimSecNominees(Asing)SdnBhd BankofSingaporeLimitedforMightyFinanceLimited 11,000,000 0.3��6 M&ANominee(Asing)SdnBhd MontegoAssetsLimited 10,336,916 0.30�7 CimsecNominees(Asing)SdnBhd BankofSingaporeLimitedforAmaraCompanyLimitedJ1840 10,000,000 0.�9�8 HwangDBSInvestmentBankBerhad–IVT(JBD) 10,000,000 0.�9�9 AmanahrayaTrusteesBerhad PublicIndexFund 9,3�7,�00 0.�730 AmanahrayaTrusteesBerhad PublicFar-EastProperty&ResortsFund 9,��,400 0.�7

StatisticsofUnitholdersasat31December�01�(cont’d)

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