Sime Darby Property : 2023 Integrated Report

Materiality

Information disclosed in this integrated report is relevant to our material matters, which have been determined by extensive stakeholder engagement, as well as internal evaluation. These material matters reflect existing and emerging risks and opportunities, which could affect our ability to create value and deliver on our Purpose, Vision, Mission and Values.

Scope and Boundary

This integrated report focuses on the activities, initiatives and key events that took place during the financial year from 1 January 2023 until 31 December 2023, unless stated otherwise. It covers the operations of the Sime Darby Property Group including our subsidiaries and joint ventures and associates.

Reporting Framework

Our integrated reporting process, as well as the contents of this report have been guided by the principles and requirements of:

• The Integrated Reporting Framework issued by the International Financial Reporting Standards ("IFRS") Foundation.

• The Main Market Listing Requirements ("MMLR") issued by Bursa Malaysia.
• Bursa Malaysia's Sustainability Guidelines (3rd Edition).
• The Malaysian Code on Corporate Governance ("MCCG") 2021 issued by Securities Commission Malaysia.
• GRI Standards, issued by the Global Reporting Initiative ("GRI").
• United Nations' Sustainable Development Goals ("UN SDGs").
• Taskforce on Climate-Related Financial Disclosures ("TCFD").
• Malaysian Financial Reporting Standards ("MFRS").
• Malaysia's Companies Act 2016.

Assurance

Contents of the entire report have been read and approved by the Management and Board of Directors. The financial statements included in this integrated report have been audited by PricewaterhouseCoopers PLT, Malaysia.

Forward-looking Statements

This integrated report contains certain forward-looking statements relating to future performance. Such statements are premised on current assumptions and circumstances, which could change, hence they necessarily involve uncertainty. Various factors could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

Directors' Responsibility Statement

The Board of Directors of Sime Darby Property acknowledges responsibility for ensuring the integrity of our Integrated Report 2023. In our opinion, the report presents a fair assessment of the Group's performance and addresses all key matters that are material to our ability to create value. This report was approved by the Board on 26 March 2024.

Dato' Rizal Rickman Ramli

Non-IndependentNon-Executive Chairman

Dato' Azmir Merican

Group Managing Director

Tells you where you can find more information online at

www.simedarbyproperty.com

Please scan the QR code for the following documents of the Company which are available at

https://www.simedarbyproperty.com/

investor-relations/shareholders

Innovation

Energy & Carbon Management

Urban

Biodiversity

Circularity

Water Management

Climate

Adaptation

Occupational Health & Safety

Community

Experience

Diversity &

Inclusion

Labour Standards & Practices

Responsible

Supply Chain

Management

Anti-Bribery & Corruption

Data & Cybersecurity

Reporting Framework

Integrated Report 2023

Contents

• Provides a comprehensive overview of the Group's financial and non-financial performance for 2023, as well as prospects based on our strategy.

Regulations Complied

• The Integrated Reporting Framework.
• Bursa Malaysia's Main Market Listing Requirements.
• Bursa Malaysia's Sustainability Guidelines (3rd Edition).
• The Malaysian Code on Corporate Governance 2021.
• Global Reporting Initiative Standards.
• United Nations' Sustainable Development Goals.
• Taskforce on Climate-Related Financial Disclosures.
• Malaysian Financial Reporting Standards.
• Companies Act 2016.

Sustainability Report 2023

Contents

• Provides a comprehensive overview of the Group's sustainability performance and initiatives for 2023.

Regulations Complied

• Bursa Malaysia's Main Market Listing Requirements on Sustainability Reporting.
• Bursa Malaysia's Sustainability Reporting Guide (3rd Edition).
• Global Reporting Initiative Sustainability Reporting Standards.
• The United Nations Sustainable Development Goals.
• Task Force on Climate-related Financial Disclosures Recommendations.

Feedback

We welcome all enquiries, comments and feedback on our Integrated Report in order to clarify issues and to further improve our reporting. Please channel your feedback or query to:

Group Corporate Communications

Level 8, Block G, No. 2

Jalan PJU 1A/7A, Ara Damansara

PJU 1A, 47301 Petaling Jaya, Selangor

Key Strategic Priorities

Broaden Income

Streams

Develop New Capabilities

Stakeholders

Employees

Customers

Vendors

Media

Deepen Competencies

Digital Transformation

Investors and Analysts

Debt Providers

Regulators

Key Risks

Joint Venture,

R6 Collaborations

• Strategic Partnerships

OUR EESG FRAMEWORK

Central to our strategy is the economic pillar, where innovation acts as the main driver across all our operations.

This approach, underpinned by strong governance, enables us to be responsible and forward- thinking in our action, aligning with our broader environmental and social stewardship goals.

ECONOMIC

SUSTAINABILITY

GOVERNANCEENVIRONMENT

PILLARS

SOCIAL

ADDRESSING OUR MATERIAL MATTERS

ECONOMIC

• Innovation
• Property Development
• Investment and Asset Management
• Land Bank Management

ENVIRONMENT

• Climate Adaptation
• Energy & Carbon Management
• Urban Biodiversity
• Water Management
• Circularity

SOCIAL

• Community Experience
• Occupational Health and Safety
• Responsible Supply Chain Management
• Marketing and Communication
• Corporate Social Responsibility
• Talent Management and Training Development
• Diversity and Inclusion

GOVERNANCE

• Corporate Governance and Compliance
• Data Privacy and Cybersecurity
  BURSA COMMON SUSTAINABILITY
  MATTERS:
• Labour Standards and Practices
• Anti-Briberyand Corruption

We are committed to achieving Net Zero

carbon emissions by

2050,aligning with the target of limiting global temperature rise to 1.5°C.

Our transformative Net Zero strategy tackles both Scope 1 and Scope 2 emissions. As a first step, we have set a bold target to achieve a

40%reductionin these

emissions by 2030.

By aligning with specific United Nations Sustainable Development Goals ("UN SDGs")relevanttoourcorebusiness,we ensure our sustainability efforts drive measurable social and environmental impact.

We achieve this through the integration of these UN SDGs across all our operations,ensuringaholisticapproach that delivers positive outcomes.

Dear Stakeholders,

Sime Darby Property delivered continued solid financial and operational performances in FY2023, notwithstanding escalating material prices, threat of inflationary pressures and a cautious outlook at the start of the year. The Group remained focused on creating sustained value and recorded its highest revenue and operating profit, since the 2017 demerger, of RM3.4 billion and RM606.4 million respectively. This demonstrates the unwavering trust and support of all stakeholders and customers, as well as the resilience and passion of TEAM Sime Darby Property in realising our Purpose to be a Value Multiplier for People, Businesses, Economies and the Planet.

Our SHIFT25 strategy continues to be the driving force in enabling the Group to push through challenges and capitalise on opportunities to deliver our targets. It has been heartening to see our employees fully engaged and working together as TEAM Sime Darby Property to execute our plans and achieve our goal of transforming from a pure-play developer to a real estate company.

The success of our strategies is reflected by the favourable response from customers, with our emphasis on delivering high-quality products and services that meet their evolving expectations being rewarded by a steady growth in launches and sales over the past three years. This has placed us firmly on the right trajectory towards our goal of building a best-in-class Property Development business.

"The Group remained focused on creating sustained value and recorded its highest revenue and operating profit, since the 2017 demerger, of RM3.4 billion and RM606.4 million respectively."

Simultaneously, we have remained dedicated to expanding our Investment & Asset Management ("IAM") business, aiming to cultivate strong and diversified recurring income streams for sustained long-term shareholder value. Over the past year, significant strides have been made under our Industrial Development Fund ("IDF"), with the construction of Metrohub 1 and 2 at the E-Metro Logistics Park, which is slated for completion in 2024, and managed to secure J&T Distribution Solutions Sdn Bhd as the first pre-committed tenant. Furthermore, we have also secured commitments for the remaining RM300 million to close the fund at RM1.0 billion.

Our productivity in 2023 was further highlighted by our concerted efforts to enhance ongoing operations via asset enhancement initiatives, alongside the actively exploration of new asset classes such as solar energy, with several promising prospects currently in our pipeline.

The progress we have unlocked since embarking on our SHIFT25 strategy has been encouraging; we have strengthened our fundamentals, pursued numerous new ventures and broadened our business model. Riding on this momentum and fortified by our robust financial standing, the Group is ideally positioned to forge ahead, seizing opportunities for expansion, growth and diversification with agility and determination.

A YEAR OF HIGHLIGHTS

It was a truly productive year for the Group on all fronts, marked by 37 product launches in our Property Development segment and the initiation of various exciting new projects in our IAM business, alongside enhancements to our management and operational pursuits across all segments.

The Group marked a key milestone by making its maiden foray into the affordable township sector through Seed Homes, Sime Darby Property's new portfolio to deliver innovative solutions in the affordable homes segment. Seed Homes had recently formed a strategic partnership

"Our SHIFT25 strategy continues to be the driving force in enabling the Group to push through challenges and capitalise on opportunities" to deliver our targets.

with Lagenda Properties to revolutionise affordable housing, and through this joint venture, we are combining our experience, expertise and strategic land bank ownership with Lagenda Properties' highly scalable model of developing self-sustainable affordable townships. Our ongoing efforts to launch our inaugural affordable township project in Gurun, Kedah, reflects our commitment to making homeownership more accessible to Malaysians.

Meanwhile, the Group has laid rousing new inroads into the renewable energy sector, aligning its efforts with the Malaysian government's new National Energy Transition Roadmap ("NETR"). In our commitment to spearheading the transition to renewable energy across the real estate industry, we have devised a three- pronged approach that will explore the implementation of residential, commercial and large-scale solar projects in the near future.

In tandem with our foray into renewable energy and commitment as a 'Force for Good', the Group has further solidified its long-term climate change ambitions. In November, we announced our pledge to achieve Net Zero emissions by 2050, with an intermediate target of attaining a 40% reduction in our Scope 1 and Scope 2 emissions by 2030. We firmly believe that adopting a Net Zero approach is crucial in mitigating global warming, and as such, we have implemented both near-term and long-term strategies to guide the transformation of our business for the betterment of the planet.

In 2023, our commitment to excellence was widely recognised by the industry, as we proudly received a total of 51 awards across various categories throughout the year. At the international level, our achievements were highlighted by two major wins at the FIABCI Prix d'Excellence Awards 2023, including a Gold in the Master Plan category for City of Elmina and a Silver in the Residential Mid-Rise category for Cantara Residences. These two developments were

similarly recognised in the Malaysian chapter of the FIABCI awards, taking top honours in their respective categories.

Meanwhile, we continued our winning streak at the StarProperty Awards 2023, with the standout achievement amongst nine accolades being our No.1 All Star ranking amid all real estate developers. Additionally, we maintained our Platinum ranking in the Property Development category at the Putra Brand Awards and received the esteemed Marketer of the Year award for the second consecutive year. Our consistent performance was further validated by our placement in the Top Ten Developers 2023 in the BCI Asia Awards, while we improved our rank from fourth to third in The Edge Malaysia's Top Property Developers Awards.

I am delighted to extend my heartfelt congratulations to our Director, Datuk Soam Heng Choon and Group Managing Director, Dato' Azmir Merican, for receiving the Outstanding Contribution

to the Real Estate Industry award and Outstanding Property CEO award respectively, at the Edge Property Excellence Awards 2023. Their dedication and contribution has guided us through a commendable transformational journey, and the Board is deeply appreciative of their efforts.

CREATING VALUE FOR STAKEHOLDERS

On the back of our solid performance in 2023, I am delighted to announce that the Board has declared a second single-tier dividend of 1.5 sen per share, contributing to a total dividend of 2.5 sen per share for the year, amounting to RM170 million. The Board's decision reflects confidence in our strategies to drive future value for our shareholders through recurring earnings, most notably by harnessing the potential of both our development pipeline and capital transaction capabilities to bolster funds management income.